As filed with the Securities and Exchange Commission on August 16, 2013
No. 333-189121

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

Pre-Effective Amendment No. 3 to
Form F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

 
					
United Mexican States	 	4512	 	None	
(State or other jurisdiction of
incorporation or organization)	 	(Primary Standard Industrial
Classification Code Number)	 	(I.R.S. Employer
Identification No.)	
Av. Antonio Dovalí Jaime No. 70, 13 Floor, Tower B
Colonia Zedec Santa Fe
United Mexican States, D.F. 01210
+(52) 55-5261-6400
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

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

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

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

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

CALCULATION OF REGISTRATION FEE

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

 

E XPLANATORY  N OTE
This Pre-Effective Amendment No. 3 to Form F-1 Registration Statement (Registration No. 333-189121) of Controladora Vuela Compañía de Aviación, S.A.B. de C.V. is being filed solely to include exhibits to the Registration Statement not previously filed and to file revised exhibits in connection with the request for confidential treatment. Accordingly, Part I, the form of prospectus, has been omitted from this filing.
 
1

PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 6. Indemnification of Directors and Officers
The Registrant’s bylaws provide for the indemnification of the members of its board of directors and any committee, as well as the secretary, the assistant secretary and officers of the Registrant in connection with the performance of their duties, against any claim, suit, proceeding or investigation initiated in Mexico or in any jurisdiction where the Registrant’s shares or any other securities having as underlying asset such shares or other fixed-income or variable-income securities of the Registrant are registered or listed, or in any jurisdiction where the Registrant or the entities it controls operate; provided, however, that the indemnity will not apply if such claims, suits, proceedings or investigations result from gross negligence, willful misconduct or bad faith of the relevant indemnified party. Such indemnification includes the payment of any damage or loss that may have been caused by the conduct of such members of the board of directors or committee, secretary, assistant secretary or officers of the Registrant, and the amount needed, if deemed appropriate, to reach a settlement. Indemnification also includes all fees and expenses of legal counsel and other advisors working for the interests of the indemnified individuals. Pursuant to the Registrant’s bylaws, the board of directors retains the right to determine whether hiring of separate legal counsel and advisors to represent or advise the indemnified individuals is necessary.
Policies of insurance may be maintained by the Registrant under which the members of its board of directors and any committee, as well as the secretary, the assistant secretary and officers are insured, within the limits and subject to the limitations of the policies, against certain expenses in connection with the defense of, and certain liabilities which might be imposed as a result of, claims, suits, proceedings or investigations to which they are parties by reason of being or having been such members of the board of directors or committee, secretary, assistant secretary or officers of the Registrant.
Item 7. Recent Sales of Unregistered Securities
During the last three years, the Registrant made sales of the following unregistered securities:
(1) Through unanimous resolutions dated November 27, 2012, December 21, 2012 and December 26, 2012, the Registrant’s shareholders approved a corporate restructuring with the sole purpose of acquiring the shares held by other shareholders of Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., or Volaris Opco, in exchange for 86,040,097 Series A shares of capital stock of the Registrant. As a consequence, the Registrant increased its direct and indirect holding of the outstanding shares of Volaris Opco by acquiring on November 27, 2012 an additional 5.28% interest in the voting shares of Volaris Opco and on December 21, 2012 an additional 3.24% interest in the voting shares of Volaris Opco, increasing its ownership interest after both acquisitions to 97.95%. The difference of Ps.189.8 million between the consideration paid and the carrying value of the interest acquired has been recognized in additional paid-in capital within equity and attributed to the owners of the Registrant.
(2) In December 2012, the Registrant’s shareholders approved a share incentive plan for the benefit of certain executive officers. Under this plan, designated officers generally may receive up to 3.0% of the Registrant’s capital stock on a fully diluted basis immediately prior to the completion of the related performance condition (consummation of the global offering or change of control), exercisable after such performance condition and for a period of ten years. To implement the plan, the Registrant’s shareholders approved (i) the issuance of an aggregate of 25,164,126 Series A and Series B shares, representing 3.0% of the Registrant’s capital stock, (ii) the transfer of such shares to a Mexican trust for the benefit of certain officers and (iii) the execution of share sales agreements setting forth the terms and conditions upon which the officers will receive purchased shares from the trustee for the Mexican trust. On December 24, 2012, the trust was created and the share sales agreements were executed. On December 27, 2012, the trust acquired the aforementioned shares. The shares will accrue any dividends paid by the Registrant during the time elapsing prior to the delivery to officers upon payment therefor.
 
II-1

The sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act and/or Regulation S under the Securities Act. The Registrant believes that the recipients of the securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof. All recipients had adequate access, through their relationships with the Registrant, to information about it. There were no underwriters employed in connection with any of these transactions.
Item 8. Exhibits
(a) The following documents are filed as part of this registration statement:
The exhibit index attached hereto is incorporated herein by reference.
(b) Financial Statement Schedules
No financial statement schedules are provided because the information called for is not applicable or is shown in the financial statements or notes thereto.
Item 9. Undertakings
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(4) The Registrant will provide to the Underwriters at the closing specified in the Underwriting Agreement ADSs and CPOs in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.
 
II-2

SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this pre-effective amendment No. 3 to the Registration Statement on Form F-1 and has duly caused this pre-effective amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in Mexico City, Mexico, on this 16th day of August, 2013.

Controladora Vuela Compañía de Aviación, S.A.B. de C.V.	
		
By:	 	/ S /    J AIME P OUS        	
Name:	 	Jaime Pous	
Title:	 	General Counsel	
		
By:	 	/ S /    F ERNANDO S UÁREZ        	
Name:	 	Fernando Suárez	
Title:	 	Chief Financial Officer	
Pursuant to the requirements of the Securities Act, this pre-effective amendment No. 3 to the Registration Statement on Form F-1 has been signed by the following persons in the capacities indicated.
Date: August 16, 2013

Signature	  	Title	
		
*
Enrique Beltranena	  	Chief Executive Officer	
		
*
Fernando Suárez	  	Chief Financial Officer	
		
*
Carlos Alberto González	  	Corporate Controller Director	
		
*
Gilberto Perezalonso Cifuentes	  	Director and Chairman of the Board	
		
*
Pedro Carlos Aspe Armella	  	Director	
		
*
Brian H. Franke	  	Director	
		
*
William A. Franke	  	Director	
		
*
Harry F. Krensky	  	Director	
		
*
Roberto José Kriete Ávila	  	Director	
		
*
Rodolfo Montemayor Garza	  	Director	
 
II-3

			
Signature	  	Title	
		
*
Jorge Antonio Vargas Diez Barroso	  	Director	
		
*
José Luis Fernández Fernández	  	Independent Director	
		
*
Joaquín Alberto Palomo Déneke	  	Independent Director	
		
*
John A. Slowik	  	Independent Director	
		
*
Donald Puglisi	  	Authorized U.S. Representative	

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

		
*By:	 	/ S /    F ERNANDO S UÁREZ        	
	 	Fernando Suárez
Attorney-in-Fact
Pursuant to Power of Attorney	
 
II-4

EXHIBIT INDEX

Exhibit
Number	 	Exhibit	
		
1.1*	 	Form of Underwriting Agreement	
		
3.1*	 	By-laws of the Registrant (estatutos) (English translation)	
		
4.1*	 	Specimen certificate representing certificate for Series A share (English translation)	
		
4.2*	 	Specimen certificate representing a Certificado de Participación Ordinario (English translation)	
		
4.3*	 	Form of CPO Trust Agreement, between the Registrant and Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo (English translation)	
		
4.4*	 	Form of CPO Deed, among Nacional Financiera, Sociedad Nacional de Crédito, Institucíon de Banca de Desarrollo, Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero and Comisíon Nacional Bancaria y de Valores (English translation)	
		
4.5*	 	Form of Deposit Agreement among the Registrant, The Bank of New York Mellon, as depositary, and the Holders from time to time of American Depositary Shares issued thereunder, including the form of American Depositary Receipts	
		
4.6*	 	Form of American Depositary Receipt (included in Exhibit 4.5)	
		
4.7**	 	Form of Registration Rights Agreement among the Registrant and the shareholders named therein	
		
5.1*	 	Opinion of Ritch Mueller, S.C., Mexican legal counsel of the Registrant, as to the legality of the Series A shares and CPOs	
		
10.1†*	 	Engine Lease Agreement, dated as of November 24, 2009, between the Company, RRPF Engine Leasing Limited and Rolls-Royce & Partners Finance Limited	
		
10.2†*	 	Engine Lease Agreement, dated as of June 28, 2007, between the Company and Celestial Aviation Trading 50 Limited, as amended by the Engine Lease Extension & Amendment Agreement, dated as of March 27, 2013 between the Company and Wells Fargo Bank Northwest, National Association	
		
10.3†*	 	Amended and Restated Component Services and Pooling Agreement, dated as of February 10, 2009, between the Company and Aveos Fleet Performance Inc.	
		
10.4†*	 	Lease Agreement, dated as of August 21, 2008, between the Company and Engine Lease Finance Corporation	
		
10.5†	 	Fleet Hour Agreement, dated as of June 8, 2007 between the Company and IAE International Aero Engines AG including Side Letter dated as of May 31, 2012	
		
10.6†*	 	Lease Agreement, dated as of April 28, 2006, between the Company and Engine Lease Finance Corporation, as amended by the Lease Extension and Amendment Agreement No. 1, dated as of September 30, 2011 between the Company and Engine Lease Finance Corporation	
		
10.7†*	 	Lease Agreement, dated as of April 28, 2006, between the Company and Engine Lease Finance Corporation	
		
10.8†*	 	Aircraft Repair and Maintenance Service Agreement, dated as of March 6, 2007, between the Company and Aeromantenimiento, S.A.	
		
10.9†*	 	General Terms of Sale Agreement, dated as of December 8, 2006, between the Company and IAE International Aero Engines AG	
		
10.10†*	 	A320 Family Purchase Agreement, dated as of October 28, 2005, between the Company and Airbus S.A.S., including Amendment No. 1, dated as of June 22, 2007, Amendment No. 2, dated as of July 11, 2008, Amendment No. 3, dated as of January 30, 2009, Amendment No. 4, dated as of October 28, 2010, Amendment No. 5, dated as of December 15, 2010, Amendment No. 6, dated as of December 15, 2010, Amendment No. 7, dated as of January 4, 2011 and Amendments Nos. 8 and 9 both dated as of December 28, 2011	
		
10.11†*	 	Lease Agreement, dated as of March 9, 2007 between the Company Concesionaria Vuela and International Lease Finance Corporation	

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

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

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

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

IAE PROPRIETARY INFORMATION
 
Table of Contents

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

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

IAE INTERNATIONAL AERO ENGINES AG	 	A joint stock company organized and existing under the laws of Switzerland, with a place of business at 400 Main Street, M/S 121-10, East Hartford, Connecticut 06108, USA, (hereinafter called “ IAE ”).	
AND	 		
		
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.	 	A corporation organized and existing under the laws of Mexico with a place of business at Av. Prolongación Reforma # 490 Primer Piso, Colonia Lomas Santa Fe, Delegación Álvaro Obregón, México, Distrito Federal, C.P. 01210 Mexico (hereinafter called “ Vuela ”).	
	 		
(IAE and VUELA may be referred to herein collectively as the “ Parties ”, or individually as a “ Party ”.)
WHEREAS:
 
A.	Vuela is acquiring from Airbus ***** new firm A319 aircraft powered by new V2527M-A5 engines and up to *****new option V2500 powered A320 family aircraft, and is purchasing from IAE ***** new V2527M-A5 firm spare engines as well as any additional option V2500-A5 spare engines necessary to support option aircraft acquired by Vuela;	
 
B.	Vuela and IAE have entered a General Terms Agreement, of even date herewith, for the sale of the spare V2527M-A5 engines and the supply of certain support services and parts for V2527M-A5 engines; and	
 
C.	IAE and Vuela now wish to agree upon terms whereby IAE shall arrange for, manage and subcontract certain maintenance of Vuela’s Eligible Engines (as hereinafter defined).	
NOW THEREFORE IT IS AGREED AS FOLLOWS:
 
1.	Definitions	
 
 	1.1	“ Accessory ” or “ Accessories ” includes those items listed in Exhibit C to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible engines.	
 
 	1.2	“ Airbus ” shall mean Airbus Industrie SAS.	
 
 	1.3	“ Aircraft ” shall mean all or each of	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	1.3.1	The ***** Airbus A319 Firm Aircraft to be delivered in accordance with the schedule set forth in Exhibit B of the Support Contract, as such delivery schedule may be amended from time to time;	
 
 	1.3.2	Up to ***** new V2500-A5 powered Airbus A320 family aircraft which Vuela may acquire in addition to the Aircraft identified in Clauses 1.3.1 above.	
 
 	1.4	“ Aircraft Maintenance Manual ” or “ AMM ” means the aircraft maintenance manual published by Airbus for the Aircraft.	
 
 	1.5	“ Airworthiness Directive ” shall mean any applicable airworthiness directive issued by the Aviation Authority based on certification rules current as of the date of this Agreement.	
 
 	1.6	“ Aviation Authority ” shall mean the United States Federal Aviation Administration.	
 
 	1.7	“ Beyond Economic Repair ” shall mean wear, tear or damage to an item of Eligible Engine that is beyond economic repair.	
 
 	1.8	“ BFE Item ” shall mean those buyer furnished equipment items listed as such in Exhibit D of this Agreement.	
 
 	1.9	“ Business Day(s) ” shall mean a Day other than a Saturday, Sunday or holiday scheduled by law for commercial banking institutions in the City of New York, New York, United States.	
 
 	1.10	“ Day ” means a calendar day.	
 
 	1.11	“ DGAC ” shall mean the Dirección General de Aeronáutica Civil of Mexico.	
 
 	1.12	“ EBU Item ” shall mean those engine build up items listed as such in Exhibit D to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.	
 
 	1.13	“ Eligible Engine(s) ” shall mean (a) the new Engines operated by Vuela originally installed on the Aircraft, (b) the Spare Engines, and (c) any other Engines mutually agreed by the parties and listed in Exhibit A, in each case so long as such Engine is operated by Vuela. Exhibit A to this Agreement identifies the Eligible Engines as of the date hereof by serial number, and will be updated by the Parties from time to time to identify Eligible Engines by serial number as Vuela takes delivery of the Aircraft and the Spare Engines (or as the parties agree to cover other Engines under this Agreement).	
 
 	1.14	“ Eligible Engine Flight Cycles ” shall mean, for each Eligible Engine, the number of times the wheels of an Aircraft on which the Eligible Engine is installed leaves the ground on take-off during regularly scheduled revenue service.	
 
 	1.15	“ Eligible Engine Flight Hours ” shall mean, for each Eligible Engine, the sum total of each hour or part thereof (fractions thereof measured to two decimal places) elapsing from the moment the wheels of an Aircraft on which the Eligible Engine is installed leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	1.16	“ Eligible Removal ” shall mean the necessary removal of an Eligible Engine from an Aircraft during the Period of Cover following all reasonable and appropriate line maintenance actions and troubleshooting in accordance with the AMM and the FHA Manager’s recommendations, where such removal is due to (i) exceedance of AMM limits for continued operation as mutually agreed by Vuela and the FHA Manager to be necessary (such agreement not to be unreasonably withheld); (ii) Life Limited Parts time expiry, provided the last Shop Visit for the Eligible Engine was performed by IAE during the Period of Cover; or (iii) the written recommendation of the FHA Manager.	
 
 	1.17	“ Engine(s) ” shall mean the basic IAE V2500-A5 turbofan engine, described in the V2500 Turbofan Engine Model Specifications set forth in Exhibit A of the Support Contract, and which excludes Accessories, EBU Items and QEC Items.	
 
 	1.18	“ Engine Manual ” shall mean the IAE document which sets forth the requirements for Engine off-wing repair.	
 
 	1.19	“ Excess Work ” shall mean work undertaken by the Maintenance Center during a Shop Visit pursuant to this Agreement that is not covered by the FHA Rates, as further described in Clause 0 of this Agreement.	
 
 	1.20	“ Failure ” shall mean the breakage or malfunction of a Part (or Parts) rendering the Engine unserviceable and incapable of continued operation without corrective action which is not as a result of misuse, neglect, accident, maintenance error, or improper maintenance activities by any party other than IAE or the Maintenance Center.	
 
 	1.21	“ FHA ” shall mean this Fleet Hour Agreement.	
 
 	1.22	“ FHA Manager ” shall mean the manager provided by IAE for the support of the operation of this Agreement in accordance with the provisions of Clause 7 of this Agreement.	
 
 	1.23	“ FHA Rate(s) ” shall mean the rate(s) collectively as set forth in Clause 10.1 below.	
 
 	1.24	“ Foreign Object Damage ” shall mean damage to an Eligible Engine caused by the non-negligent ingestion of birds, hailstones or Runway Debris only.	
 
 	1.25	“ Life Limited Parts ” or “ LLPs ” shall mean the Parts identified in Chapter 5 of the V2500-A5 Engine Manual as having specific life limits.	
 
 	1.26	“ Maintenance Center ” shall mean the IAE shareholder maintenance center(s) designated by IAE and agreed by Vuela (such agreement not to be unreasonably withheld, conditioned, or delayed) from time to time to perform services under this Agreement and which is approved by the Aviation Authority as a certified repair station.	
 
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 	1.27	“ Maintenance Management Plan ” or “ MMP ” shall mean the then-current V2500 engine maintenance planning documents described in Clause 7 of this Agreement, as customized for Vuela.	
 
 	1.28	“ Miscellaneous Shop Visit ” shall mean any visit of an Eligible Engine to the Maintenance Center(s) following an Eligible Removal resulting from Failure of a Part in an Eligible Engine or any other unplanned cause and which does not result in a Restoration Shop Visit being undertaken.	
 
 	1.29	“ Part(s) ” shall mean Engine part(s) provided under this Agreement and delivered by IAE to Vuela as original equipment in an Eligible Engine, or Engine spare parts sold to Vuela by IAE or Engine spare parts delivered to the designated Maintenance Center in support of Eligible Engines, excluding Accessories, EBU Items and QEC Items.	
 
 	1.30	“ Period of Cover ” shall mean the applicable period for which IAE agrees to provide the services for each Eligible Engine pursuant to this Agreement, as set forth in Clause 3 of this Agreement.	
 
 	1.31	“ QEC Item ” shall mean those items listed as such in Exhibit D to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.	
 
 	1.32	“ Restoration Shop Visit ” shall mean any visit of an Eligible Engine to the Maintenance Center(s) following an Eligible Removal to accomplish Engine performance restoration sufficient to make the Eligible Engine serviceable in accordance with the then current revision of the MMP for the relevant Engine (or any successor to such MMP), IAE technical publications, Airworthiness Directives, and other IAE and Airworthiness Authority approved maintenance procedures, and which, as a minimum, includes a Level 3 refurbishment of the combustor and high pressure turbine.	
 
 	1.33	“ Runway Debris ” shall mean any stones, gravel, or other small organic objects commonly found on properly maintained commercial airport runways.	
 
 	1.34	“ Service Bulletin(s) ” shall mean those IAE target V2500-A5 service bulletins (excluding service bulletins for Accessories) as indicated in the MMP for Vuela, including service bulletins with a compliance code ***** which provide reliability and maintenance cost improvements;	
 
 	1.35	“ Shop Visit ” shall mean either a Restoration Shop Visit or a Miscellaneous Shop Visit, as applicable.	
 
 	1.36	“ Spare Engine(s) ” shall mean all or each of the new V2500-A5 Engines currently identified as Spare Engines in the Support Contract and either purchased or to be purchased by Vuela from IAE and to be delivered in accordance with the schedule set forth in Exhibit B of the Support Contract, as such delivery schedule may be amended from time to time in accordance with the Support Contract.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	1.37	“ Support Contract ” shall mean the V2500 General Terms Agreement, between IAE and Vuela dated of even date herewith, including all side letters and amendments thereto.	
 
 	1.38	“ Taxes ” shall mean imposts, taxes, duties, levies, fees, assessments or other like charges imposed by any government entity or taxing authority.	
 
 	1.39	“ Testable Engine ” shall mean an Eligible Engine with Accessories (including without limitation the Pneumatic Starter, ATA Code 80-13-41, and the Pneumatic Starter Valve, ATA Code 80-13-51) installed so as to enable the Engine to be tested either prior to or following its repair without the need for making use of units provided by the Maintenance Center, as further described in the applicable Engine Manual.	
 
 	1.40	“ Vuela Affiliates ” shall mean any subsidiaries or other affiliates of Vuela that are either wholly-owned or otherwise controlled by Vuela or its shareholders.	
 
 	1.41	“ Workscope ” shall mean an IAE written repair request to the Maintenance Center(s) compliant with the MMP that authorizes the Maintenance Center(s) to undertake work on Eligible Engines.	
 
2.	FHA Services	
IAE shall provide to Vuela the following FHA service coverage for the Period of Cover for each Eligible Engine:
 
 	2.1	Engine Shop Visit Coverage in accordance with the terms of Clause 4;	
 
 	2.2	Lease Engine Coverage in accordance with the terms of Clause 5;	
 
 	2.3	General FHA Services in accordance with the terms of Clause 7; and	
 
 	2.4	Excess Work as required in accordance with the terms of Clause 0.	
The provision of such coverage by IAE is subject to Vuela not being in material breach (beyond any applicable grace period) of its obligations under Clause 9.
 
3.	Period of Cover	
 
 	3.1	FHA coverage and payment as set forth in this FHA will begin for each Eligible Engine as of the date of each Engine’s initial entry into service and will remain in force and effect for each Eligible Engine as follows:	
 
 	3.1.1	For fifty percent (50%) of the Eligible Engines, until the expiration of ten (10) years after delivery of each such Eligible Engine (“ Period of Cover A ”); and	
 
 	3.1.2	For each of the remaining fifty percent (50%) of the Eligible Engines, until the later of (a) the expiration of ten (10) years after delivery of each such Eligible Engine; and (b) completion of two (2) Restoration Shop Visits for each such Eligible Engine (“ Period of Cover B ”).	
 
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 	3.2	Vuela shall have the option to elect which Period of Cover is applicable for each Eligible Engine within the constraints listed above by providing written notice to the IAE FHA Manager of its election for each Eligible Engine by no later than the date of induction for the first Restoration Shop Visit of each such Engine. For each Eligible Engine for which Vuela has not provided notice of its election prior to such Engine’s first Restoration Shop Visit, the applicable Period of Cover shall be Period of Cover A.	
 
 	3.3	In the event that after the Period of Cover for an Eligible Engine has been determined in accordance with 3.2 above, Vuela sells or otherwise transfers such Engine to a lessor or financier as part of a sale and leaseback or similar financing arrangement, then Vuela at its election may request in writing that such Eligible Engine be reallocated from Period of Cover A to Period of Cover B (or vice versa). Following IAE’s receipt of Vuela’s request, the Parties will mutually evaluate whether some or all of the Eligible Engines can be reallocated between the two Period of Cover options to accommodate Vuela’s change in financing while at the same time maintaining (a) the Period of Cover balance set forth in Clause 3.1 and (b) the economic effects of the previous allocation. If the Parties determine that such reallocation can be accomplished within the criteria set forth in the preceding sentence, the Parties will amend Exhibit A to this Agreement to reflect the agreed-upon reallocation.	
 
 	3.4	The Parties agree to amend Exhibit A to this Agreement from time to time to accurately reflect the Period of Cover applicable for each Eligible Engine, as determined in accordance with this Clause 3.	
 
4.	Shop Visit Coverage	
Following an Eligible Removal, the affected Eligible Engine shall be forwarded to the Maintenance Center. IAE shall provide Vuela with the proposed Workscope as early as possible (but in no event less than 3 days) prior to induction for a Shop Visit. IAE shall reasonably consider any modifications or additions to the Workscope proposed by Vuela and shall incorporate into such Workscope all such modifications or additions which are required to be made in accordance with the MMP and this Agreement. Notwithstanding the foregoing, the parties acknowledge that IAE shall have the ultimate control of the Workscope. IAE shall communicate the Workscope to the Maintenance Center and cause the Maintenance Center to complete the Shop Visit and provide Shop Visit reports with respect thereto in a timely manner. IAE shall pay to the Maintenance Center all charges directly incurred in respect of goods, work and services carried out during the Shop Visit, excluding charges for Excess Work (if such charges have been invoiced directly to Vuela), including for the following items:
 
 	4.1	Labor, new and used material, handling fees and charges, vendor fees, and test cell fees (including fuel and oil consumed at test) required to:	
 
 	4.1.1	perform Engine reconditioning and repair in accordance with the Workscope to make the Eligible Engine serviceable to the specifications established in accordance with the then current customized MMP for Vuela, IAE technical publications, Airworthiness Directives and other IAE or FAA approved maintenance procedures.	
 
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 	4.1.2	perform required Eligible Engine testing and retesting required by the Maintenance Center;	
 
 	4.1.3	inspect, repair or replace Parts as required by Airworthiness Directives;	
 
 	4.1.4	incorporate Service Bulletins ***** in accordance with the customized MMP;	
 
 	4.1.5	Remove, repair or replace LLPs, except as provided in Clause 8.1.16 below;	
 
 	4.1.6	provide Shop Visit documentation as follows:	
 
 	(a)	serviceability tag FAA Form 8130-3 or -4, as applicable, and FAA Form 337;	
 
 	(b)	a shop findings report on the services accomplished, including a report stating any damage detected and repairs accomplished;	
 
 	(c)	a list of all Service Bulletins and Airworthiness Directives incorporated;	
 
 	(d)	a list of all LLPs with associated times and cycles since new;	
 
 	(e)	test cell performance data;	
 
 	(f)	a list of Accessories by serial number.	
 
 	4.2	IAE’s obligations for an Eligible Engine Shop Visit caused by Foreign Object Damage shall be limited to the provision of repair work and Parts provided through the Maintenance Center to a maximum of ***** per event and such liability shall only be incurred to the extent that the damage is uninsured or not covered by insurance for failure to have met any deductible.	
 
5.	Lease Engine Support	
*****
 
 	5.2	IAE’s obligation to provide such V2500-A5 lease Engine to Vuela is contingent on Vuela being in compliance with its obligations under Clause 9 and Vuela demonstrating the availability of reasonably sufficient Spare Engines, Accessories, components and Parts to maintain proper support of the Eligible Engines.	
 
 	5.3	Unless otherwise agreed in writing by the FHA Manager, Vuela shall ship to IAE any lease Engines furnished pursuant to 5.1 above within the earlier of the thirty (30) days (as extended if applicable) as described above, or five (5) days after a Vuela Engine becomes available for installation at Vuela’s facilities.	
 
 	5.4	Should Vuela require a spare Engine to support a shop visit not covered by this Agreement or that does not otherwise meet the above conditions, all terms of the STOBL then in effect between IAE and Vuela, including all applicable rates, charges and fees, shall apply.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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6.	Transportation	
 
 	6.1	Following an Eligible Removal, Vuela shall deliver the affected Eligible Engines to the Maintenance Center in a Testable Engine configuration, with all Accessories attached and in a serviceable condition.	
 
 	6.2	Vuela shall be responsible for transportation of Eligible Engines to the applicable Maintenance Center, and the return of such Engines from the Maintenance Center, including risk of loss or damage during such transportation.	
 
7.	General Fleet Hour Agreement Services	
IAE shall provide the following additional services:
 
 	7.1	A customized MMP for the Eligible Engines will be produced for Vuela by IAE in consultation with Vuela, taking into account the specifics of the operation of the Aircraft and Eligible Engines. The MMP shall be determined in good faith and on a nondiscriminatory basis by IAE, and approved by Vuela (such approval not to be unreasonably withheld or delayed). The MMP shall establish maintenance requirements including LLP management, incorporation of applicable Service Bulletins and Aviation Authority Airworthiness Directive requirements and Eligible Engine removal planning.	
 
 	7.2	Engine monitoring data program services set forth in Exhibit E;	
 
 	7.3	The following FHA Engine management and maintenance planning services (which shall normally be undertaken by the FHA Manager):	
 
 	7.3.1	overall FHA program coordination;	
*****
 
8.	Excess Work	
 
 	8.1	If a Maintenance Center charges Vuela or IAE for Excess Work, such charges shall be paid for by Vuela directly to the Maintenance Center or, if the Maintenance Center has invoiced IAE for such charges, to IAE in accordance with Clause 10.3 of this Agreement. “Excess Work” shall mean any labor, material and other charges for Eligible Engines that arise from the following:	
 
 	8.1.1	repairs for inflight and/or ground accident damage, except Foreign Object Damage to the extent of IAE’s responsibility under Clause 4.2;	
 
 	8.1.2	Service Bulletins requested by Vuela which are not required in accordance with the MMP;	
 
 	8.1.3	Maintenance of any items other than Eligible Engines;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	8.1.4	Line Maintenance requirements, except if performed at a Shop Visit in accordance with the requirements of the MMP;	
 
 	8.1.5	Incremental shop visits or additional work that was not required to be performed in accordance with the requirements of the MMP and was requested and authorized by Vuela in order to enable it to meet any lease return conditions;	
 
 	8.1.6	Misuse, neglect, accident or maintenance error or improper maintenance activity by any party other than IAE or the Maintenance Center;	
 
 	8.1.7	The removal and replacement of non-IAE approved part(s) or repaired part(s) and damage caused by such part(s);	
 
 	8.1.8	Occurrences outside the course of Vuela’s normal business activities as a civil commercial airline, such occurrences including, but not limited to, acts of God, use by government agencies and services, acts of war, rebellion, seizure, terrorism, riots or other belligerent acts;	
 
 	8.1.9	Exceedance of Engine operating limits published by IAE;	
 
 	8.1.10	Work required to repair damage resulting from Engine operation in an abrasive or corrosive environment, excluding normal operations (for example ingestion of volcanic ash, fire extinguishing chemicals, or desiccants, etc.). *****	
 
 	8.1.11	Delivery to the Maintenance Center with missing or non-serviceable Parts or Accessories, requiring the use of units provided by the Maintenance Center to permit the testing of the Eligible Engine following its refurbishment;	
 
 	8.1.12	Delivery to the Maintenance Center with Parts or Accessories which require re-certification;	
 
 	8.1.13	The exchanging of QEC Items or EBU Items between installed Engines and Spare Engines or the provisioning of such QEC Items or EBU Items;	
 
 	8.1.14	Work requested by Vuela which is not covered by the terms of this Agreement;	
 
 	8.1.15	Charges associated with placing an Eligible Engine into a Testable Engine configuration, unless the Eligible Engine was delivered by Vuela to the Maintenance Center in a Testable Engine configuration;	
 
 	8.1.16	Charges for material and handling associated with replacing Life Limited Parts due to time expiry or MMP build requirements;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	8.1.17	Inspection, repair, or replacement of Accessories, QEC Items, EBU Items, or BFE Items, and provisioning, restocking, and availability of such items; or	
 
 	8.1.18	Charges associated with IAE’s provision to Vuela of any accident and disassembly reports and pictures or “dirty fingerprint” records that may be reasonably requested by Vuela from time to time.	
 
 	8.2	In addition to the above, at the discretion of IAE, “Excess Work” may mean any labor, material and other charges for Eligible Engines that arise from the failure of Vuela to undertake any of its obligations as set out in Clause 9 below. IAE shall provide ***** days’ notice that such failure shall result in Excess Work, during which time, Vuela may rectify such failure.	
 
 	8.3	In the event IAE determines that the Workscope for a Shop Visit of an Eligible Engine will consist entirely of Excess Work, then the FHA Manager shall so notify Vuela and obtain Vuela’s written authorization to proceed prior to the commencement of such work.	
 
9.	Obligations of Vuela	
Vuela agrees to fulfill, or to cause the Vuela Affiliates that operate or maintain the Aircraft and Engines to fulfill, the following responsibilities and perform the following tasks and to reasonably cooperate with IAE in the performance of IAE’s responsibilities hereunder.
 
 	9.1	Data and Procedures	
Vuela shall at its own expense maintain Eligible Engine electronic condition monitoring capabilities for each Eligible Engine, and with respect to information and data required for the performance of this Agreement, Vuela shall:
 
 	9.1.1	maintain, collect and provide to IAE performance trend monitoring data on each Eligible Engine in accordance with Exhibit E, maintain timely records in form and detail sufficient for the accurate and expeditious administration of the terms of this Agreement including the assessment of operating conditions relative to those set out in Clause 10.5 of this Agreement;	
 
 	9.1.2	make available, and provide access to IAE’s provider of electronic condition monitoring data analysis, all data collected in accordance with 9.1.1 above in an electronic format agreed to by IAE, as required for the operation and administration of this Agreement;	
 
 	9.1.3	implement and follow the IAE recommendations resulting from analysis of the performance trend monitoring data;	
 
 	9.1.4	within ***** Days after the end of each month during the Period of Cover, report to IAE, in an electronic format agreed to by IAE, the hours and cycles flown, take off derate, and temperature (ISA+X° C) for each flight by each Eligible Engine during the preceding month;	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	9.1.5	ensure that all data that is available to Vuela and requested by IAE to facilitate the correction and/or diagnosis of any problem causing an Eligible Engine Removal is promptly made available to IAE;	
 
 	9.1.6	ensure that each Eligible Engine delivered to the Maintenance Center is accompanied by a record of Eligible Engine total time and cycles, date of Eligible Engine removal, and reason for removal;	
 
 	9.1.7	upon written request from IAE, confirm the serial numbers of Eligible Engines installed on the Aircraft; and	
 
 	9.1.8	after Eligible Removals, ship Eligible Engines to the applicable Maintenance Center in a Testable Engine configuration.	
 
 	9.2	Engine Preparation for Transportation	
For the purposes of the transportation of Eligible Engines as required under this Agreement, Vuela shall:
 
 	9.2.1	unless otherwise mutually agreed in writing, make Eligible Engines available for shipment as soon as practicable following Eligible Removal, but in any event Vuela shall deliver Eligible Engines to the Maintenance Center prior to the scheduled induction date for each Eligible Engine Shop Visit;	
 
 	9.2.2	maintain in a serviceable condition one (1) IAE approved transportation stand per spare Engine plus one (1) additional serviceable IAE approved transportation stand; and	
 
 	9.2.3	at the time of an Eligible Removal, remove the Eligible Engine from the Aircraft, mount it on an IAE approved transportation stand and prepare such Eligible Engine for shipment, all in accordance with the procedures specified in the applicable IAE manuals.	
 
 	9.3	Operation, Maintenance and Troubleshooting of Eligible Engines	
Vuela shall operate, maintain and troubleshoot the Eligible Engines consistent with standard industry practice in accordance with the applicable Airbus operating, maintenance and troubleshooting manuals, the then current MMP for Vuela, and IAE’s written recommendations and instructions (including, but not limited to, service information letters, all operator wires and non-modification service bulletins, component maintenance manuals and Airworthiness Directives), provided that such recommendations and instructions are (i) reasonable with reference to industry standards, and (ii) apply generally to and are applied generally (on a non-discriminatory basis) to V2500-A5 engines and operators operating under similar conditions. Vuela shall incorporate the relevant provisions of the MMP into its then current airworthiness maintenance program.
 
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 	9.4	Administration	
Vuela shall cooperate with IAE to fulfill any reasonable administrative or other requirements of the Maintenance Center, including endorsement of Workscopes for Aviation Authority and DGAC requirements. Vuela shall accomplish quality audits and obtain certifications required by the Aviation Authority, the DGAC, and the Maintenance Center for accomplishment of work on the Eligible Engines at the Maintenance Center(s).
 
 	9.5	One Time Concessions	
Vuela shall not unreasonably withhold its approval of any IAE proposed utilization of on-wing or off-wing “One Time Concessions” on Eligible Engines.
 
 	9.6	Payment	
Vuela shall make payments as required in accordance with Clause 10 of this Agreement.
 
 	9.7	Records and Audit	
Vuela shall comply with the provisions of Clause 29 of this Agreement.
 
10.	FHA Rates and Payment	
 
 	10.1	FHA Rates	
 
 	10.1.1	The FHA Rate per Eligible Engine Flight Hour for Restoration Shop Visit Coverage during the Period of Cover for Eligible Engines on A319 and A320 Aircraft shall be as follows:	

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

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

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

 	iii)	the manner of method in which any of the Parts have been installed in the Aircraft; or	
 
 	iv)	the performance of a process not recommended in writing by IAE, or	
 
 	v)	the use or sale of the Parts delivered hereunder in combination with other new parts not delivered to Vuela by IAE.	
 
16.	Amendment	
This Agreement shall not be amended, changed, or modified in any way other than by agreement in writing, signed by the Parties hereto after the date of this Agreement, which is expressly stated to amend this Agreement.
 
17.	Assignment	
Neither Party may assign any of its rights or obligations hereunder without the written consent of the other Party, except that IAE may assign its rights to receive money hereunder, and may assign any or all of its rights and/or obligations hereunder to any of IAE’s shareholders. Any assignment made in violation of this Clause 17 shall be null and void. IAE shall support Vuela in its pursuit to secure a workmanship warranty from the Maintenance Center for the Eligible Engines at the end of the Period of Cover.
 
18.	Exhibits	
In the event of any conflict or discrepancy between the Exhibits (which are hereby incorporated by reference as part of this Agreement) and the Clauses of this Agreement, the Clauses of this Agreement shall prevail.
 
19.	Headings	
Captions, clause headings, and the Table of Contents are for convenience of reference only and shall not be deemed or construed in any way as forming a part of this Agreement, nor shall they govern or affect the interpretation of the language or provisions of this Agreement.
 
20.	Notices	
Any notice to be served pursuant to this Agreement shall be sent by registered mail, by internationally recognized overnight courier, or by facsimile (with the original notice sent by registered mail or internationally recognized overnight courier) to the applicable addresses indicated in 0.
 
21.	Exclusion of Other Provisions and Previous Understandings	
 
 	21.1	This Agreement is the sole and entire agreement of the Parties with respect to the subject matter hereof and shall apply to the exclusion of any other provisions on or attached to or otherwise forming part of any order form of Vuela, or any acknowledgment or acceptance by IAE, or of any other document which may be issued by either Party relating to such services.	
 
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IAE PROPRIETARY INFORMATION
 
 	21.2	The Parties agree that neither of them have placed any reliance whatsoever on any representations, agreements, statements or understandings made prior to the signature of this Agreement, whether orally or in writing, relating to such services, other than those expressly incorporated in this Agreement, which has been negotiated on the basis that its provisions represent their entire agreement relating to such services and shall supersede all such representations, agreements, statements and understandings.	
 
22.	Termination, Expiration and Events of Default	
 
 	22.1	Bankruptcy/Insolvency	
Either Party shall have the option, at its sole discretion, to terminate this Agreement upon the occurrence of any of the following events: (a) a receiver or trustee is appointed for any of the other Party’s property, or (b) the other Party is adjudicated or voluntarily becomes bankrupt under any bankruptcy or winding up laws or other similar legislation, or (c) the other Party becomes insolvent or makes an assignment for the benefit of creditors.
 
 	22.2	Failure to Make Payments or to Meet Obligations	
A non-defaulting Party shall have the right to declare an event of default and terminate this Agreement (i) if the other Party fails to pay any amount hereunder not reasonably subject to dispute when and as the same becomes due and payable and such default continues for a period of ***** or more; or (ii) if the other Party fails to perform any other material obligation under this Agreement and such default or failure shall not have been fully corrected within thirty (30) days after the non-defaulting Party gives notice thereof to the defaulting Party.
If Vuela fails to make any payment to IAE as set forth in Clause 10 of this Agreement (including any late interest due thereon) not reasonably subject to dispute and such default continues for a period of *****, then, without prejudice to IAE’s other rights which IAE may have in contract or in law, IAE reserves the right not to induct, to suspend all work on, or not to release from the Maintenance Center(s) any Eligible Engine, Accessory, EBU Item or QEC Item until full payment is made by Vuela to IAE.
The obligation of IAE to provide, or cause to be provided, the services set out in this Agreement shall be subject to the non-existence of a continuing event of default by Vuela, after the expiration of any applicable grace or cure period, in any payment or other obligation of Vuela under any other agreement in effect between the Parties (an “ Event of Default ”). Should any such Event of Default exist, IAE reserves the right not to induct, to stop all work on, or not to release from the Maintenance Center any Eligible Engine until such Event of Default is rectified by Vuela to IAE’s satisfaction.
*****
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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 	22.4	Expiration	
This Agreement shall be effective from the day and year first above written until the end of the Period of Cover for each Eligible Engine.
 
 	22.5	Effect of Termination or Expiration	
Except as otherwise set out in this Clause 22.5 and any rights or obligations arising under applicable law, the rights and obligations of the Parties under this Agreement shall terminate upon the termination or expiration of this Agreement, and Vuela shall no longer be provided with FHA coverage under the terms of this Agreement.
Upon any termination or expiration of this Agreement, all liabilities and obligations (including payment obligations) that have accrued prior to such termination or expiration (including payment for Excess Work) shall survive.
This Clause 22.5 and Clauses 25 and 26 of this Agreement shall survive any expiration or termination of this Agreement.
 
23.	Negation of Waiver	
Failure by either Party to enforce any term of this Agreement shall not constitute a waiver of such term.
 
24.	Severability And Partial Invalidity	
If any provision of this Agreement or the application thereof to either Party shall be invalid, illegal or unenforceable to any extent, the remainder of the Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.
 
25.	Governing Law	
This Agreement shall be construed and the performance thereof determined in accordance with the laws of the State of New York, United States of America2, without regard to its conflict of laws provisions. The Parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods.
The Parties irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York, United States of America, in connection with any suit, action or proceeding arising out of or relating to this Agreement and irrevocably waive to the fullest extent permitted by law, any objection to the laying of venue of any such suit, action or proceeding in any such court or any claim that any suit, action or proceeding has been brought in an inconvenient forum. Further, the Parties hereto agree to waive any rights either of them may have to a jury trial in connection with any such suit, action or proceeding.
 
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IAE PROPRIETARY INFORMATION

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

IAE International Aero Engines AG	  		  	Controladora Vuela Compañía de Aviación, S.A. de C.V.	
			
/s/ Robert G. J. Stire
Name	  		  	/s/ Andres Fabre
Name	
			
Robert G. J. Stire
Printed Name	  		  	Andres Fabre
Printed Name	
			
Commercial Director
Title	  		  	Technology Director
Title	
 
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IAE PROPRIETARY INFORMATION
 
Exhibit A
Eligible Engine List

No.	 	Thrust
Rating	 	Serial
Number	 	Delivery
Date	 	Period of
Cover	
1	 	V2527-A5	 	V12285	 	Mar-06	 	TBD	
2	 	V2524-A5	 	V12274	 	May-06	 	TBD	
3	 	V2524-A5	 	V12278	 	May-06	 	TBD	
4	 	V2524-A5	 	V12286	 	May-06	 	TBD	
5	 	V2524-A5	 	V12288	 	May-06	 	TBD	
6	 	V2527M-A5	 	V12487	 	Jan-07	 	TBD	
7	 	V2527M-A5	 	V12472	 	Jan-07	 	TBD	
8	 	V2527M-A5	 	V12545	 	Mar-07	 	TBD	
9	 	V2527M-A5	 	V12532	 	Mar-07	 	TBD	
10	 	V2527M-A5	 	V12559	 	Mar-07	 	TBD	
11	 	V2527M-A5	 	V12557	 	Mar-07	 	TBD	
12	 	V2527M-A5	 	V12561	 	Mar-07	 	TBD	
13	 	V2527M-A5	 	V12563	 	Mar-07	 	TBD	
14	 	V2527-A5	 	TBD	 	Nov-07	 	TBD	
15	 	V2527-A5	 	TBD	 	Nov-07	 	TBD	
16	 	V2527-A5	 	TBD	 	Jan-08	 	TBD	
17	 	V2527-A5	 	TBD	 	Jun-08	 	TBD	
18	 	V2527-A5	 	TBD	 	Jun-08	 	TBD	
19	 	V2527-A5	 	TBD	 	Jul-08	 	TBD	
20	 	V2527-A5	 	TBD	 	Jul-08	 	TBD	
21	 	V2527-A5	 	TBD	 	Oct-08	 	TBD	
22	 	V2527-A5	 	TBD	 	Oct-08	 	TBD	
23	 	V2527-A5	 	TBD	 	Jan-09	 	TBD	
24	 	V2527-A5	 	TBD	 	Jan-09	 	TBD	
25	 	V2527-A5	 	TBD	 	Mar-09	 	TBD	
26	 	V2527-A5	 	TBD	 	Mar-09	 	TBD	
27	 	V2527-A5	 	TBD	 	Jun-09	 	TBD	
28	 	V2527-A5	 	TBD	 	Jun-09	 	TBD	
29	 	V2527-A5	 	TBD	 	Jun-09	 	TBD	
30	 	V2527-A5	 	TBD	 	Sep-09	 	TBD	
31	 	V2527-A5	 	TBD	 	Sep-09	 	TBD	
32	 	V2527-A5	 	TBD	 	Nov-09	 	TBD	
33	 	V2527-A5	 	TBD	 	Nov-09	 	TBD	
34	 	V2527-A5	 	TBD	 	Mar-10	 	TBD	
35	 	V2527-A5	 	TBD	 	Mar-10	 	TBD	
 
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Exhibit B
IAE FHA Escalation Formula
 
1.	FHA Rates will be subject to escalation in accordance with the formula set forth below:	
*****
Where:
*****
Base Month shall mean the base month specified for the FHA Rates in the Proposal.
*****
For avoidance of doubt, the quarterly values of CIU2023211000000I will apply to each month of a given quarter.
 
2.	The values of the factors *****, and ***** respectively, shall be determined to the nearest fourth decimal place. If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number.	
 
3.	If the U.S. Department of Labor ceases to publish the above statistics or modifies the basis of their calculation, then IAE, in its sole discretion, shall select a substitute for such values from data published by the Bureau of Labor Statistics or otherwise make revisions to the escalation formula such that the escalation will as closely as possible approximate the result that would have been attained by continuing the use of the original escalation formula and values as they may have fluctuated during the applicable time period.	
 
4.	If the application of the formula contained in this Exhibit results in an FHAR for the month which is lower than FHARb, FHAR for the month will be set equal to FHARb.	
 
***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.
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Exhibit C
Accessories

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

IAE PROPRIETARY INFORMATION

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

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

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

IAE PROPRIETARY INFORMATION

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

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

IAE PROPRIETARY INFORMATION

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

IAE PROPRIETARY INFORMATION

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

IAE PROPRIETARY INFORMATION
 
Exhibit G
Excess Work Labor and Fee Rates

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

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

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

 

628 Hebron Ave, Suite 400
Glastonbury, CT 06033
USA
May 31, 2012.
Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V.
Av. Prolongación Reforma # 490, Primer Piso,
Colonia Santa Fe Peña Blanca, Delegación Álvaro
Obregón, México, Distrito Federal, C.P. 01210.
 
Subject:	Side Letter No. 3 to the Fleet Hour Agreement between IAE International Aero Engines AG and Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V.	
Ladies and Gentlemen:
We refer to the Fleet Hour Agreement bearing reference marks VOL_FHA-v8 (2007-JUN8) (Final) and dated June 18, 2007 between IAE International Aero Engines AG (“ IAE ”) and Controladora Vuela Compañía de Aviación, S.A. de C.V. (“ Vuela ”), such contract being hereinafter referred to as the “ FHA ”. Unless expressly stated to the contrary, terms used in this Side Letter No. 3 shall have the same meaning given to them in the FHA.
This Side Letter No. 3 sets forth the terms by which the parties will include certain additional Engines under the coverage of the FHA, which are or will be installed on the aircraft detailed herein, and amend certain FHA terms for the Eligible Engines.
1. Definitions
 
 	1.1.	The “ Incremental Engines ” are defined as follows:	
 
 	1.1.1.	The four (4) V2527M-A5 Engines bearing serial numbers V15528, V15543, V15554, and V15557 installed on the two (2) A319 Aircraft leased to Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (“ Volaris ”) by CIT Aerospace International bearing manufacturing serial numbers 4403 and 4422 and delivered to Volaris in August 2010 (the “ 2010 Leased Aircraft ”); and	
 
 	1.1.2.	The two (2) V2527-A5 Engines bearing serial numbers V15855 and V15857, which will be upgraded by Volaris or its lessor to V2527E-A5 Engines in 2012 at its cost, installed on one (1) A320 aircraft bearing serial number 4741, leased to Volaris by Avolon (the “ Avolon Aircraft ”); and	
 
 	1.1.3.	The eight (8) V2527E-A5 Engines bearing serial numbers V15912, V15917, V15946, V15954, V15934, V15955, V16042 and V16050 installed on the four (4) Aircraft numbers 13, 14, 15, and 16 from the initial Vuela purchase agreement order to be delivered in accordance with Exhibit B-1 of the Support Contract (the “ 2006 Purchased Aircraft ”); and	
 
Page 1 of 23

 	1.1.4.	The six (6) V2524-A5 Engines bearing serial numbers V11736, V11741, V12778, V12759, V12697, and V12701, which were originally installed on Airbus A319 aircraft bearing manufacturer’s serial numbers 2296, 3317, and 3252 leased to Volaris by CIT Aerospace International (the “ CIT Short Term Leased Aircraft ”); and	
 
 	1.1.5.	The two (2) V2527-A5 Engines bearing serial numbers V11674 and V11672, which will be upgraded by Volaris or its lessor to V2527E-A5 Engines in 2012 and which were originally installed on Airbus A320 aircraft bearing serial number 2204 leased to Volaris by Macquarie Air Finance (the “ Macquarie Short Term Leased Aircraft ”); and	
 
 	1.1.6.	The four (4) V2527-A5 Engines bearing serial numbers V12957, V12961, V12938 and V12972, which will be upgraded by Volaris or its lessor to V2527E-A5 Engines in 2012 at its cost, originally installed on Airbus A320 aircraft bearing serial number 3524 and 3543 leased to Volaris by Amentum Aircraft Leasing (the “ Amentum Short Term Leased Aircraft, ” and, together with the CIT Short Term Leased Aircraft and the Macquarie Short Term Leased Aircraft, the “ Short Term Leased Aircraft ”).	
 
 	1.2.	Upon execution of this Side Letter No. 3, each of the Incremental Engines shall be treated for all purposes as Eligible Engines in accordance with the FHA except as set forth in this Side Letter No. 3.	
 
 	1.3.	“ Engine Shop Visit Condition(s) ” shall mean, for each Eligible Engine, the Restoration Shop Visit entry conditions specified in Exhibit J.	
 
 	1.4.	“ Lease Return Condition(s) ” shall mean, for each Eligible Engine, the lease return conditions specified in Exhibit I.	
 
 	1.5.	“ Lease Return Date ” shall mean, for each Eligible Engine, the lease return date specified in Exhibit A.	
 
 	1.6.	Clause 1.3, Aircraft Definition, of the FHA is hereby deleted in its entirety and replaced with the following:	
 
 	“1.3	“ Aircraft ” shall mean all or each of	
 
 	1.3.1	the thirty (30) Firm Aircraft to be delivered in accordance with the schedule set forth in Exhibit B-1 of the Support Contract as such delivery schedule may be amended from time to time; and	
 
 	1.3.2	the four (4) Additional Aircraft (as defined in Side Letter No. 1 to the FHA); and	
 
 	1.3.3	the four (4) Leased Aircraft (as defined in Side Letter No. 2 to the FHA); and	
 
 	1.3.4	the one (1) leased A320 Aircraft (bearing manufacturing serial number 3672) leased to Volaris by Wells Fargo (hereby added to the definition of Leased Aircraft as set forth in Side Letter No. 2) and delivered to	
 
Page 2 of 23

 	Volaris in November 2008 with two (2) Engines (bearing serial numbers V13073 and V13079 and hereby added to the definitions of Leased Engines as defined by Side Letter No. 2) that were included in Exhibit A by Amendment No. 1 to the FHA; and	
 
 	1.3.5	the two (2) 2010 Leased Aircraft (as defined in this Side Letter No. 3); and	
 
 	1.3.6	the one (1) Avolon Aircraft (defined in this Side Letter No. 3); and	
 
 	1.3.7	the six (6) Short Term Leased Aircraft (as defined in this Side Letter No. 3).”	
 
 	1.7.	If Vuela leases additional V2500-A5 powered A320 family aircraft in the ordinary course of business, IAE and Vuela shall consider adding such aircraft to the FHA under mutually agreeable terms and conditions.	
 
 	1.8.	Clause 1.6, Aviation Authority, of the FHA is hereby deleted in its entirety and replaced with the following:	
 
 	“1.6	“ Aviation Authority ” shall mean: (i) the United States Federal Aviation Administration and (ii) the European Aviation Safety Agency.”	
 
 	1.9.	Clause 1.16, Eligible Removal, of the FHA is hereby deleted in its entirety and replaced with the following:	
 
 	“1.16	“ Eligible Removal ” shall mean the necessary removal of an Eligible Engine from an Aircraft during the Period of Cover following all reasonable and appropriate line maintenance actions and troubleshooting in accordance with the AMM and IAE Technical Services’ recommendations, where such removal is due to (i) exceedance of AMM limits for continued operation as mutually agreed by Vuela and IAE to be necessary (such agreement not to be unreasonably withheld); (ii) Life Limited Parts time expiry, provided the last Shop Visit for the Eligible Engine was performed by IAE during the Period of Cover; (iii) the written recommendation of IAE, which includes the technical reason for the removal; (iv) meet the Lease Return Conditions for such Eligible Engine; or (v) meet the Engine Shop Visit Conditions for such Eligible Engine.”	
 
Page 3 of 23

 	1.10.	Clause 1.32, Restoration Shop Visit, of the FHA is hereby deleted in its entirety and replaced with the following:	
 
 	“1.32	“ Restoration Shop Visit ” shall mean any visit of an Eligible Engine to the Maintenance Center(s) following an Eligible Removal to (i) accomplish Engine performance restoration, (ii) meet Lease Return Conditions, or (iii) meet Engine Shop Visit Conditions sufficient to make the Eligible Engine serviceable in accordance with the then current revision of the MMP for the relevant Engine (or any successor to such MMP), IAE technical publications, Airworthiness Directives, and other IAE and Airworthiness Authority approved maintenance procedures, and which, as a minimum, includes a Level 3 refurbishment of the combustor and high pressure turbine.”	
 
 	1.10	Clause 1.26, “Maintenance Center”, of the FHA is hereby deleted in its entirety and replaced with the following:	
 
 	“1.26	“ Maintenance Center ” shall mean any of the IAE shareholder maintenance center(s) designated by IAE and agreed by Vuela (such agreement not to be unreasonably withheld, conditioned, or delayed) from time to time to perform services under this Agreement and which is approved by the Aviation Authority and DGAC as a certified repair station, provided that Vuela has met its obligations to obtain Aviation Authority and DGAC approval under Clause 4.3. Notwithstanding the foregoing, IAE shall promptly provide Vuela with any and all necessary information reasonably requested by Vuela in order to meet the requirements of the Aviation Authority and DGAC, provided that IAE shall not bear any significant additional costs and/or liabilities in connection with obtaining and providing such information.”	
2. Period of Cover
Clauses 3.1 through Clause 3.4 are hereby stricken in their entirety and replaced with the following:
 
 	“3.1	FHA coverage and payment as set forth in this Agreement will begin for each Eligible Engine as of the date of each Engine’s initial entry into service, except for the Incremental Engines, which will begin FHA coverage and payment as set forth in this Agreement as of May 2012, and will remain in force and effect for each Eligible Engine until the Lease Return Date for each such Eligible Engine as detailed in Exhibit A; provided, however, that (i) such FHA coverage will include no more than two Restoration Shop Visits and will include Miscellaneous Shop Visit coverage until the Lease Return Date after the second Restoration Shop Visit; and (ii) if Vuela has extended its lease return date for such Eligible Engine with its lessor and if Vuela provides notice of the same to IAE in writing at least six (6) months prior to the Lease Return Date, IAE shall extend the coverages for an Eligible Engine as set forth in this FHA for up to twenty-four (24) months from the Lease Return Date (the “ Lease Return Extension Period ”).	
 
 	    	Notwithstanding any other provision of this Agreement to the contrary, in the event that the coverages for Eligible Engines as set forth in this FHA are extended as per this Clause 3.1(i) and (ii) and, as a result, an Eligible Engine experiences a second Restoration Shop Visit that would not have otherwise been required but for Vuela’s election to extend the FHA term through the Lease Return Extension Period, such Restoration Shop Visit shall not be covered under the FHA and shall be considered Excess Work.	
 
 	    	For the purposes of clarity, a Restoration Shop Visit that would have been required before Vuela extended the actual lease return date for an Eligible Engine pursuant to (ii) above and that occurs during the Lease Return Extension Period shall continue to be a Restoration Shop Visit covered under the FHA.	
 
 	3.2	In the event that (i) Vuela’s actual or contemplated Eligible Engine thrust ratings, lease return conditions, lease return dates, or engine shop visit conditions for Eligible Engines change relative to those set forth in Exhibit A, Exhibit I, or Exhibit J or (ii) Vuela ceases operation of an Aircraft and associated Engines during the period of cover set forth in Clause 3.1 (the changes described Section 3.2(i) and (ii) shall collectively be referred to as “ Operational Changes ”), Vuela shall notify IAE in writing of any such Operational Changes within sixty (60) days of Vuela’s knowledge of such Operational Changes. IAE shall then notify Vuela in writing within thirty (30) days of what adjustments, if any, to the FHA Rates set forth herein are required to incorporate and amend the FHA coverage set forth in this Agreement to include such Operational Changes and eliminate any negative impact of such Operational Changes to IAE. The Parties will then mutually agree within ninety (90) days to either (x) incorporate and amend the FHA coverage set forth in this Agreement to include such Operational Changes and make reasonable adjustments to the FHA Rates set forth herein to eliminate any negative impact of such Operational Changes to IAE or (y) leave the FHA coverage and FHA Rates unchanged.	
 
Page 4 of 23

 	3.3	Notwithstanding Clause 3.1, if at the time of the first Restoration Shop Visit of an Eligible Engine (i) Vuela instructs IAE to build such Eligible Engine for fewer LLP cycles than required for a full run as specified in the eMMP; and (ii) IAE and Vuela mutually agree prior to such Eligible Engine’s induction that a second Restoration Shop Visit for such Eligible Engine should not be required due to LLP time expiry or to satisfy Lease Return Conditions or Engine Shop Visit Conditions based on a reasonable and good faith interpretation of past and expected future operational data; and (iii) such Eligible Engine subsequently requires a second Restoration Shop Visit due to LLP time expiry or to satisfy Lease Return Conditions or Engine Shop Visit Conditions, then such second Restoration Shop Visit shall be ineligible for coverage under the FHA Rates and will be charged as Excess Work. For the purposes of clarity, if IAE and Vuela mutually agree at the time of the first Restoration Shop Visit of an Eligible Engine that a second Restoration Shop Visit for such Eligible Engine will be required due to LLP time expiry or to satisfy Lease Return Conditions or Engine Shop Visit Conditions based on a reasonable and good faith interpretation of past and expected future operational data pursuant to (ii) above, then such second Restoration Shop Visit shall be covered under the FHA.”	
3. Shop Visit Coverage
 
 	3.1	Clause 4.1.6 is hereby stricken in its entirety and replaced with the following:	
 
 	“4.1.6	provide Shop Visit documentation as follows:	
 
 	a)	serviceability tag FAA Form 8130-3 or -4, as applicable, and FAA Form 337;	
 
 	b)	a shop findings report on the services accomplished, including a report stating any damage detected and repairs accomplished;	
 
 	c)	a list of all Service Bulletins and Airworthiness Directives incorporated;	
 
 	d)	a list of all LLPs with associated times and cycles since new;	
 
 	e)	test cell performance data;	
 
 	f)	a list of Accessories by serial number; and	
 
 	g)	traceability and back-to-birth documentation for any LLPs replaced during a Shop Visit.”	
 
 	3.2	A new Clause 4.3 is hereby added to the FHA as follows:	
 
 	“4.3	IAE acknowledges that Vuela’s preferred Maintenance Center is ****and will allocate at least seventy percent (70%) of Restoration Shop Visits for Eligible Engines to **** for any given two (2) consecutive calendar year period provided (i) there is an induction slot available at **** at the planned date of the Restoration Shop Visit; (ii) **** maintains, at all times, the level of key performance metrics, including TAT and quality, specified in agreements	
 
Page 5 of 23

 	between IAE and ****; and (iii) **** remains a Maintenance Center within IAE’s aftermarket network of maintenance providers. Vuela shall maintain, at all times, approval from the Aviation Authority and DGAC for **** and at least two additional IAE shareholder maintenance centers as certified repair centers. Notwithstanding the foregoing, IAE shall promptly provide Vuela with any and all necessary information reasonably requested by Vuela in order to meet the requirements of the Aviation Authority and DGAC provided that IAE shall not bear any significant additional costs and/or liabilities in connection with obtaining and providing such information.”	
 
 	“3.3	A new Clause 4.4 is hereby added to the FHA as follows:	
 
 	“4.4	If Vuela believes that the Maintenance Center is responsible for continual and/or repetitive breaches of the quality, turnaround time and/or workmanship commitments in this FHA, Vuela shall notify IAE in writing providing full details accompanied by any supporting evidence. Within ten (10) business days of receipt of such notice from Vuela, Vuela and IAE will agree upon a date, time and place whereby senior management representatives from IAE and Vuela will meet to review such claim and supporting evidence. Should IAE agree with Vuela’s claim, then within ten (10) business days of such meeting, IAE shall arrange to conduct an audit of the Maintenance Center in light of Vuela’s claim and make appropriate recommendations. Should the Maintenance Center fail to comply with IAE’s recommendations, if any, within thirty (30) days or fail to achieve a consistent improvement in quality, turnaround time, and/or workmanship, as the case may be, as soon as reasonably practicable after receipt of IAE’s recommendations, Vuela shall have the right to change the designated Maintenance Center under this FHA.”	
4. Lease Engine Support
 
 	4.1.	All references within Clause 5 of the FHA to IAE’s Standard Terms of Business for Lease (“ STOBL ”) are hereby stricken and replaced with the “the International Air Transport Association (“ IATA ”)”.	
 
 	4.2.	Clause 5.2 is hereby stricken in its entirety and replaced with the following:	
 
 	“5.2	IAE’s obligation to provide such V2500-A5 lease Engine to Vuela is contingent on Vuela being in compliance with its obligations under Clause 9 and Vuela demonstrating the availability of reasonably sufficient Spare Engines, Accessories, components and Parts to maintain proper support of the Eligible Engines, including (i) at least a ****Spare Engine to installed Engine ratio and at least a total of ****available Spare Engines starting on ****, (ii) at least a ****Spare Engine to installed Engine ratio and at least a total of ****Spare Engines starting on ****, and (iii) at least an ****Spare Engine to installed engine ratio and at least ****Spare Engines starting on ****. The Spare Engine availability requirement is summarized as follows:	
 
Page 6 of 23

							
 	  	January 1, 2012	 	January 1, 2013	 	January 1, 2014	
Spare Engine to installed Engine ratio	  	Six percent
(6%)	 	Seven percent
(7%)	 	Eight percent
(8%)	
Minimum number of available Spare Engines	  	Five (5)	 	Five (5)	 	Six (6)	
 
 	  	Notwithstanding the foregoing, IAE shall not be obligated to waive the daily rental fee for an emergency lease pool Engine under Clause 5.1 if Vuela does not have at least an ****Spare Engine to installed Engine ratio and a minimum of six (6) available Spare Engines at the time of the AOG situation. The IAE emergency lease pool Engine daily rental fee for the calendar year 2012 is **** per day for a V2524-A5 engine and ****per day for a V2527-A5 engine, V2527M-A5 engine, or V2527E-A5 engine in January 2012 U.S. dollars. The IAE emergency lease pool Engine daily rental fee is subject to change by IAE starting in January 2014.”	
5. General Fleet Hour Agreement Services
Clause 7.1 is hereby stricken in its entirety and replaced with the following:
 
 	“7.1	A customized MMP for the Eligible Engines will be produced for Vuela by IAE in consultation with Vuela, taking into account the specifics of the operation of the Aircraft and Eligible Engines. The MMP shall be determined in good faith and on a nondiscriminatory basis by IAE, and approved by Vuela (such approval not to be unreasonably withheld or delayed). The MMP shall establish maintenance requirements including LLP management, incorporation of applicable Service Bulletins and Aviation Authority Airworthiness Directive requirements and Eligible Engine removal planning. IAE will manage the Eligible Engines’ maintenance requirements to maximize the usage of LLPs to the extent required to satisfy the Lease Return Dates, Lease Return Conditions and Engine Shop Visit Conditions as specified in this Side Letter No. 3.”	
6. FHA Rates and Payment
Clause 10.1 is hereby stricken in its entirety and replaced with the following:
 
 	“10.1	FHA Rates	
 
 	10.1.1	The FHA Rate per Eligible Engine Flight Hour for Restoration Shop Visit Coverage during the Period of Cover for Eligible Engines on A319 and A320 Aircraft shall be as follows:	
 
 	   	             Engine/Derate                           At RSV 1                  At RSV2	
 	  	****         	
 
 	  	IAE shall invoice Volaris at induction of the Eligible Engine into the Maintenance Center for a Restoration Shop Visit, an amount equal to the above applicable FHA Rate (escalated in accordance with Clause 10.2)	
 
Page 7 of 23

 	multiplied by the Eligible Engine Flight Hours flown by such Eligible Engine since new or if the Eligible Engine has had a prior Restoration Shop Visit, since its last Restoration Shop Visit. The above FHA Rates are subject to adjustment in accordance with the provisions of Exhibit H and Clause 3.2 to the extent applicable.	
 
 	10.1.2	The FHA Rate for Miscellaneous Shop Visit Coverage shall be ****per Eligible Engine Flight Hour during the Period of Cover. IAE shall invoice Vuela on a monthly basis in an amount equal to the FHA Rate for Miscellaneous Shop Visit Coverage (escalated in accordance with Clause 10.2) multiplied by the Eligible Engine Flight Hours flown in the previous month by Eligible Engines within their respective Periods of Cover.	
 
 	10.1.3	Notwithstanding Clause 10.1.1, for the first Restoration Shop Visit for the Eligible Engines listed in Exhibit K only, IAE shall invoice Vuela at induction of each such Eligible Engine into the Maintenance Center for its first Restoration Shop Visit an amount equal to (i) the FHA Rate Specified in this Clause 10.1.3 (escalated in accordance with Clause 10.2) multiplied by the number of Eligible Engine Flight Hours specified for such Eligible Engine in Exhibit K (“Pre-Side Letter No. 3 Flight Hours”) plus (ii) the applicable “At RSV1” FHA Rate specified in Clause 10.1.1 (escalated in accordance with Clause 10.2) multiplied by the Eligible Engine Flight Hours flown by such Eligible Engine since new less the number of Pre-Side Letter No. 3 Flight Hours for such Eligible Engine.	

Engine/Derate	 	At RSV 1	
		
*****	 	*****	
		
*****	 	*****	
		
*****	 	*****	
The above FHA Rates are subject to adjustment in accordance with the provisions of Exhibit H and Clause 3.2 to the extent applicable.
 
 	10.2	All FHA Rates in Clause 10.1 shall be paid in accordance with Clause 10.6.1 below, and are subject to escalation from the base month of January 2012 to the date of calculation of the applicable FHA Rate invoice in accordance with the formula set forth in Exhibit B.”	
7. General Conditions
Clause 10.5, General Conditions, is hereby stricken in its entirety and replaced with the following:
 
 	“10.5	General Conditions	
 
 	  	The FHA Rates are predicated upon Vuela:	
 
 	10.5.1	maintaining within its fleet of Aircraft an annual average flight cycle length of 1.82 hours per cycle (calculated from the moment the wheels of an Aircraft, on which any Eligible Engine is installed, leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing);	
 
 	10.5.2	maintaining an average engine thrust derate ******** relative to the V2527M-A5 and V2527E-A5 thrust rating, **** relative to the V2524-A5 thrust rating, or **** relative to the V2522-A5 thrust rating, as applicable;	
 
 	10.5.3	maintaining an average ambient temperature for take-off no greater than ISA ****; and	
 
 	10.5.4	taking delivery of all of the Aircraft and Spare Engines in accordance with the schedule set forth in Exhibit B of the Support Contract, as such delivery schedule may be amended from time to time in accordance with the Support Contract.	
 
 	  	IAE may make adjustments to the FHA Rates as set forth in Exhibit H, if there is a change in any of the operational conditions set forth in Clauses 10.5.1 through 10.5.3.”	
 
Page 8 of 23

8. Payment Grace Period
Clause 10.6.4 is hereby stricken in its entirety and replaced with the following:
 
 	“10.6.4	Should Vuela fail to make any payment to IAE required as set forth in this Clause 10, then, notwithstanding any rights which IAE may have in contract or in law, IAE reserves the right to assess interest on such late payment at the rate of **** of the outstanding amount per month from the date the payment was due to be made until the date such payment is received by IAE; provided, however, that IAE shall not charge Vuela interest on any such late payment for the Restoration Shop Visit FHA Rates specified under Clause 10.1.1 until thirty (30) days after the payment came due.”	
9. Escalation Protection
The first paragraph of Clause 11 is hereby stricken in its entirety and replaced with the following:
“Except as otherwise noted to the contrary, for the period beginning January 1, 2006 and for the term of this FHA (the “ Cap Period ”), IAE agrees to cap escalation for all credits, FHA Rates, and other items escalated in accordance with the formula in Exhibit B (“ Base Amounts ”) at a cumulative rate of ****, compounding annually, provided that for any year in which escalation exceeds ****over the previous year, such escalation overage above ****shall be shared ****by IAE and ****by Volaris as follows:”
10. Restoration Shop Visits
For a Restoration Shop Visit necessary to meet the Lease Return Condition of an Eligible Engine, such Restoration Shop Visit shall not occur more than one hundred and twenty (120) days prior to the Lease Return Date for such Eligible Engine provided that an induction slot in a Maintenance Center is available within such one hundred and twenty (120) day period.
11. Used Additional Engines – Specific Provisions
Notwithstanding any provisions in the FHA to the contrary, for the purpose of determining the FHA Rate per Eligible Engine Flight Hour for Restoration Shop Visit Coverage during the Period of Cover for the Eligible Engines bearing serial numbers V12557 and V12636, each such Eligible Engine shall be considered to have already completed one Restoration Shop Visit. Accordingly, the applicable “At RSV 2” rate specified in Clause 10.1.1 shall apply for the next Restoration Shop Visit of each such Eligible Engine.
12. Used Additional Engines – Specific Provisions
Notwithstanding any provisions in the FHA to the contrary, the Used Additional Engines with engine serial numbers V10645, V10648, V10657, and V10660 shall be considered to have already completed two Restoration Shop Visits. Accordingly, such Used Additional Engines shall not be eligible for any additional Restoration Shop Visits under the FHA.
13. Incremental Engines – Specific Provisions
Notwithstanding any provisions in the FHA to the contrary and for the avoidance of doubt, with respect to the Incremental Engines, the following shall apply:
For the purpose of calculating all invoices for Incremental Engines under Clause 10.1.1 of the FHA, IAE shall invoice Vuela an amount equal *****. Such FHA Rates are subject to adjustment in accordance with the provisions of Exhibit H of the FHA to the extent applicable, based on the operational parameters of the Incremental Engines.
14. New Aircraft Exclusivity
This Side Letter No. 3 is subject to Vuela and IAE terminating, in writing, and to the mutual satisfaction of Vuela and IAE, the aircraft exclusivity provisions of (i) Clause 2.2.1 of Amendment No. 1 to the V2500 General Terms of Sale between IAE and Vuela dated December 13, 2006 (as amended from time to time) (the “GTA”) and (ii) Clause 1.1.2 of Amendment No. 1 to Side Letter No. 1 of the GTA no later than July 31, 2012. In the event that Vuela and IAE do not reach an agreement by such date, this Side Letter No. 3 shall null and void.
15. Eligible Engine List
Exhibit A to the FHA is hereby deleted in its entirety and replaced with the revised Exhibit A attached hereto as Appendix 1.
16. Used Additional Engine List
Appendix 2 to Side Letter No. 1 to the FHA is hereby deleted in its entirety and replaced with the revised Appendix 2 attached hereto.
 
Page 9 of 23

17. Lease Return Conditions
Exhibit I, Eligible Engine Lease Return Conditions, is hereby added to the FHA and is attached hereto as Appendix 3.
18. Engine Shop Visit Conditions
Exhibit J, Eligible Engine Shop Visit Conditions, is hereby added to the FHA and is attached hereto as Appendix 4.
19. Pre-Side Letter No. 3 Flight Hours
Exhibit K, Pre-Side Letter No. 3 Flight Hours, is hereby added to the FHA and is attached hereto as Appendix 5.
Except as expressly amended by this Side Letter No. 3, all provisions of the FHA remain in full force and effect.

Very truly yours,	 		 	Agreed to and accepted on behalf of	
IAE International Aero Engines AG	 		 	Controladora Vuela Compañía de Aviación,
S.A.P.I. de C.V.	
			
/s/ William Gorton	 		 	/s/ Fernando Suárez Gerard	
Name   William Gorton	 		 	Name   Fernando Suárez Gerard	
			
Commercial Director	 		 	CFO	
Title	 		 	Title	
			
June 1, 2012	 		 	   	
Date	 		 	Date	
			
 	 		 	/s/ Holger Blankenstein	
	 		 	Name   Holger Blankenstein	
			
 	 		 	CCO	
	 		 	Title	
			
 	 		 	May 31, 2012	
	 		 	Date	
 
Page 10 of 23

Appendix 1
Exhibit A
Eligible Engine List

Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft Tail
Number	  	Aircraft Serial
Number	  	EIS Date	  	Delivery date to
Volaris	  	Lease Return
Date	
1	  	V2524-A5	  	V12891	  	N502VL	  	3463	  	18-Apr-08	  	18-Apr-08	  	18-Apr-18	
2	  	V2524-A5	  	V12908	  	N503VL	  	3491	  	21-Apr-08	  	21-Apr-08	  	21-Apr-18	
3	  	V2524-A5	  	V13000	  	N504VL	  	3590	  	22-Jul-08	  	22-Jul-08	  	22-Jul-18	
4	  	V2524-A5	  	V12893	  	N502VL	  	3463	  	18-Apr-08	  	18-Apr-08	  	18-Apr-18	
5	  	V2524-A5	  	V12912	  	N503VL	  	3491	  	21-Apr-08	  	21-Apr-08	  	21-Apr-18	
6	  	V2524-A5	  	V13002	  	N504VL	  	3590	  	22-Jul-08	  	22-Jul-08	  	22-Jul-18	
7	  	V2524-A5	  	V10660	  	N473TA	  	1140	  	29-Nov-99	  	08-Jun-06	  	29-Mar-13	
8	  	V2524-A5	  	V10657	  	N474TA	  	1159	  	13-Mar-00	  	19-Jan-06	  	27-Mar-13	
9	  	V2524-A5	  	V10645	  	N473TA	  	1140	  	29-Nov-99	  	06-Feb-06	  	29-Mar-13	
10	  	V2524-A5	  	V10648	  	N474TA	  	1159	  	13-Mar-00	  	19-Jan-06	  	27-Mar-13	
11	  	V2524-A5	  	V12144	  	XA-VOI	  	2657	  	01-Mar-06	  	01-Mar-06	  	01-Mar-18	
12	  	V2524-A5	  	V12170	  	XA-VOL	  	2666	  	01-Mar-06	  	01-Mar-06	  	28-Feb-18	
13	  	V2524-A5	  	V12146	  	XA-VOI	  	2657	  	01-Mar-06	  	01-Mar-06	  	01-Mar-18	
14	  	V2524-A5	  	V12172	  	XA-VOL	  	2666	  	01-Mar-06	  	01-Mar-06	  	28-Feb-18	
15	  	V2527E-A5	  	V13073	  	XA-VON	  	3672	  	10-Nov-08	  	10-Nov-08	  	09-Nov-16	
16	  	V2527E-A5	  	V13079	  	XA-VON	  	3672	  	10-Nov-08	  	10-Nov-08	  	09-Nov-16	
17	  	V2527E-A5	  	V13051	  	XA-VOM	  	3624	  	09-Oct-08	  	09-Oct-08	  	09-Oct-14	
18	  	V2527E-A5	  	V13053	  	XA-VOM	  	3624	  	09-Oct-08	  	09-Oct-08	  	09-Oct-14	
19	  	V2527E-A5	  	V16154	  	N509VL	  	5062	  	29-Mar-12	  	29-Mar-12	  	29-Mar-23	
20	  	V2527E-A5	  	V16151	  	N509VL	  	5062	  	29-Mar-12	  	29-Mar-12	  	29-Mar-23	
21	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Jun-12	  	Jun-12	  	Jun-23	
22	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Jun-12	  	Jun-12	  	Jun-23	
23	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Jun-12	  	Jun-12	  	Jun-23	
24	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Jun-12	  	Jun-12	  	Jun-23	
25	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Sep-12	  	Sep-12	  	Sep-23	
26	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Sep-12	  	Sep-12	  	Sep-23	
27	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Oct-12	  	Oct-12	  	Oct-23	
28	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Oct-12	  	Oct-12	  	Oct-23	
29	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Oct-12	  	Oct-12	  	Oct-23	
30	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Oct-12	  	Oct-12	  	Oct-23	
 
Page 11 of 23

															
Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft Tail
Number	  	Aircraft Serial
Number	  	EIS Date	  	Delivery date to
Volaris	  	Lease Return
Date	
31	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Nov-12	  	Nov-12	  	Nov-23	
32	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Nov-12	  	Nov-12	  	Nov-23	
33	  	V2527M-A5	  	V12886	  	XA-VOK	  	3450	  	28-Mar-08	  	28-Mar-08	  	27-Mar-15	
34	  	V2527M-A5	  	V12532	  	XA-VOD	  	3045	  	15-Mar-07	  	15-Mar-07	  	14-Sep-16	
35	  	V2527M-A5	  	V12545	  	XA-VOD	  	3045	  	15-Mar-07	  	15-Mar-07	  	14-Sep-16	
36	  	V2527M-A5	  	V12557	  	XA-VOE	  	3069	  	16-Mar-07	  	16-Mar-07	  	15-Sep-16	
37	  	V2527M-A5	  	V12559	  	XA-VOE	  	3069	  	16-Mar-07	  	16-Mar-07	  	15-Sep-16	
38	  	V2527M-A5	  	V12706	  	XA-VOH	  	3253	  	21-Sep-07	  	21-Sep-07	  	20-Mar-17	
39	  	V2527M-A5	  	V12708	  	XA-VOH	  	3253	  	21-Sep-07	  	21-Sep-07	  	20-Mar-17	
40	  	V2527M-A5	  	V12728	  	XA-VOJ	  	3279	  	19-Oct-07	  	19-Oct-07	  	18-Apr-17	
41	  	V2527M-A5	  	V12736	  	XA-VOJ	  	3279	  	19-Oct-07	  	19-Oct-07	  	18-Apr-17	
42	  	V2527M-A5	  	V12883	  	XA-VOK	  	3450	  	28-Mar-08	  	28-Mar-08	  	27-Mar-15	
43	  	V2527M-A5	  	V12472	  	N501VL	  	2979	  	19-Jan-07	  	19-Jan-07	  	18-Jan-19	
44	  	V2527M-A5	  	V12487	  	N501VL	  	2979	  	19-Jan-07	  	19-Jan-07	  	18-Jan-19	
45	  	V2527M-A5	  	V13093	  	XA-VOO	  	3705	  	13-Nov-08	  	13-Nov-08	  	13-Nov-14	
46	  	V2527M-A5	  	V13095	  	XA-VOO	  	3705	  	13-Nov-08	  	13-Nov-08	  	13-Nov-14	
47	  	V2527M-A5	  	V12274	  	XA-VOA	  	2771	  	30-May-06	  	30-May-06	  	29-May-18	
48	  	V2527M-A5	  	V12278	  	XA-VOA	  	2771	  	30-May-06	  	30-May-06	  	29-May-18	
49	  	V2527M-A5	  	V12286	  	XA-VOB	  	2780	  	30-May-06	  	30-May-06	  	29-May-18	
50	  	V2527M-A5	  	V12288	  	XA-VOB	  	2780	  	30-May-06	  	30-May-06	  	29-May-18	
51	  	V2527M-A5	  	V12476	  	XA-VOC	  	2997	  	17-Jan-07	  	17-Jan-07	  	16-Jan-19	
52	  	V2527M-A5	  	V12490	  	XA-VOC	  	2997	  	17-Jan-07	  	17-Jan-07	  	16-Jan-19	
53	  	V2527M-A5	  	V12561	  	XA-VOF	  	3077	  	28-Mar-07	  	28-Mar-07	  	30-Sep-16	
54	  	V2527M-A5	  	V12563	  	XA-VOF	  	3077	  	28-Mar-07	  	28-Mar-07	  	30-Sep-16	
55	  	V2527M-A5	  	V12636	  	XA-VOG	  	3175	  	22-Jun-07	  	22-Jun-07	  	31-Mar-17	
56	  	V2527M-A5	  	V12638	  	XA-VOG	  	3175	  	22-Jun-07	  	22-Jun-07	  	31-Mar-17	
57	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Mar-13	  	Mar-13	  	Mar-24	
58	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Mar-13	  	Mar-13	  	Mar-24	
59	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Mar-13	  	Mar-13	  	Mar-24	
60	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Mar-13	  	Mar-13	  	Mar-24	
 
Page 12 of 23

															
Engine
No.	  	Thrust Rating	  	ESN	  	Aircraft Tail
Number	  	Aircraft Serial
Number	  	EIS Date	  	Delivery date to
Volaris	  	Lease Return
Date	
61	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	May-13	  	May-13	  	May-24	
62	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	May-13	  	May-13	  	May-24	
63	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Jun-13	  	Jun-13	  	Jun-24	
64	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Jun-13	  	Jun-13	  	Jun-24	
65	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Sep-13	  	Sep-13	  	Sep-24	
66	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Sep-13	  	Sep-13	  	Sep-24	
67	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Mar-14	  	Mar-14	  	Mar-25	
68	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	Mar-14	  	Mar-14	  	Mar-25	
69	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	May-14	  	May-14	  	May-25	
70	  	V2527E-A5	  	TBD	  	TBD	  	TBD	  	May-14	  	May-14	  	May-25	
71	  	V2524-A5	  	V11736	  	XA-VOR	  	2296	  	01-Oct-04	  	19-Nov-10	  	18-Mar-14	
72	  	V2524-A5	  	V11741	  	XA-VOR	  	2296	  	01-Oct-04	  	19-Nov-10	  	18-Mar-14	
73	  	V2524-A5	  	V12697	  	XA-VOS	  	3252	  	20-Nov-07	  	01-Dec-10	  	14-Sep-13	
74	  	V2524-A5	  	V12701	  	XA-VOS	  	3252	  	20-Nov-07	  	01-Dec-10	  	14-Sep-13	
75	  	V2524-A5	  	V12778	  	XA-VOT	  	3317	  	19-Sep-07	  	24-Nov-10	  	23-Nov-13	
76	  	V2524-A5	  	V12759	  	XA-VOT	  	3317	  	19-Sep-07	  	24-Nov-10	  	23-Nov-13	
77	  	V2527E-A5	  	V15912	  	N505VL	  	4798	  	28-Jul-11	  	28-Jul-11	  	28-Jul-22	
78	  	V2527E-A5	  	V15917	  	N505VL	  	4798	  	28-Jul-11	  	28-Jul-11	  	28-Jul-22	
79	  	V2527E-A5	  	V15934	  	N507VL	  	4832	  	08-Sep-11	  	08-Sep-11	  	08-Sep-22	
80	  	V2527E-A5	  	V15946	  	N506VL	  	4828	  	29-Sep-11	  	29-Sep-11	  	29-Sep-22	
81	  	V2527E-A5	  	V15954	  	N506VL	  	4828	  	29-Sep-11	  	29-Sep-11	  	29-Sep-22	
82	  	V2527E-A5	  	V15955	  	N507VL	  	4832	  	08-Sep-11	  	08-Sep-11	  	08-Sep-22	
83	  	V2527E-A5	  	V16042	  	N508VL	  	4950	  	13-Dec-11	  	13-Dec-11	  	13-Dec-22	
84	  	V2527E-A5	  	V16050	  	N508VL	  	4950	  	13-Dec-11	  	13-Dec-11	  	13-Dec-22	
85	  	V2527E-A5	  	V15855	  	XA-VOX	  	4741	  	23-Jun-11	  	23-Jun-11	  	22-Jun-22	
86	  	V2527E-A5	  	V15857	  	XA-VOX	  	4741	  	23-Jun-11	  	23-Jun-11	  	22-Jun-22	
87	  	V2527E-A5	  	V11674	  	XA-VOU	  	2204	  	25-Jun-04	  	14-Apr-11	  	22-May-15	
88	  	V2527E-A5	  	V11672	  	XA-VOU	  	2204	  	25-Jun-04	  	14-Apr-11	  	22-May-15	
89	  	V2527E-A5	  	V12957	  	XA-VOV	  	3524	  	19-Jun-08	  	24-May-11	  	24-May-16	
90	  	V2527E-A5	  	V12961	  	XA-VOV	  	3524	  	19-Jun-08	  	24-May-11	  	24-May-16	
 
Page 13 of 23

															
Engine
No.	  	Thrust Rating	  	ESN	  	Aircraft Tail
Number	  	Aircraft Serial
Number	  	EIS Date	  	Delivery date to
Volaris	  	Lease Return
Date	
91	  	V2527E-A5	  	V12938	  	XA-VOW	  	3543	  	08-Jul-08	  	10-Jun-11	  	10-Jun-16	
92	  	V2527E-A5	  	V12972	  	XA-VOW	  	3543	  	08-Jul-08	  	10-Jun-11	  	10-Jun-16	
93	  	V2527M-A5	  	V15528	  	XA-VOP	  	4403	  	05-Aug-10	  	05-Aug-10	  	04-Aug-16	
94	  	V2527M-A5	  	V15543	  	XA-VOP	  	4403	  	05-Aug-10	  	05-Aug-10	  	04-Aug-16	
95	  	V2527M-A5	  	V15557	  	XA-VOQ	  	4422	  	26-Aug-10	  	26-Aug-10	  	25-Aug-16	
96	  	V2527M-A5	  	V15554	  	XA-VOQ	  	4422	  	26-Aug-10	  	26-Aug-10	  	25-Aug-16	
S1	  	V2527M-A5	  	V12285	  	NA	  	NA	  	02-Oct-07	  	01-Mar-06	  	27-Apr-18	
S2	  	V2527M-A5	  	V12671	  	NA	  	NA	  	03-Nov-09	  	09-Jun-07	  	28-Feb-13	
S3	  	V2527M-A5	  	V13063	  	NA	  	NA	  	12-May-10	  	31-Aug-08	  	21-Oct-13	
S4	  	V2527E-A5	  	V13183	  	NA	  	NA	  	02-Jul-10	  	01-Nov-09	  	13-Jul-17	
S5	  	V2527E-A5	  	V16007	  	NA	  	NA	  	22-Feb-12	  	01-Sep-11	  	29-Sep-17	
S6	  	V2527E-A5	  	Spare 6	  	NA	  	NA	  	TBD	  	TBD	  	TBD	
 
Page 14 of 23

Appendix 2
The Used Additional Aircraft delivered to Vuela as follows:

ESN	  	Delivered to Vuela	  		
V10657	  	29-Jan-06	  		
V10648	  	29-Jan-06	  		
V10645	  	16-Feb-06	  		
V10660	  	16-Feb-06	  		
 
Page 15 of 23

Appendix 3
Exhibit I
Eligible Engine Lease Return Conditions

 	  	 	  	 	  	 	  	Lease Return Conditions	
Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft
Serial
Number	  	Engine FH and FC
remaining at Lease
Return Date	  	Maximum Engine FH
and FC since last
Restoration Shop Visit
at Lease Return Date	  	Maximum LLP FC
since last
Restoration Shop
Visit	  	LLP FH and FC
remaining at Lease
Return Date	
1	  	V2524-A5	  	V12891	  	3463	  	4000FH & 3500FC	  	NA	  	NA	  	4000 FC	
2	  	V2524-A5	  	V12908	  	3491	  	4000FH & 3500FC	  	NA	  	NA	  	4000 FC	
3	  	V2524-A5	  	V13000	  	3590	  	4000FH & 3500FC	  	NA	  	NA	  	4000 FC	
4	  	V2524-A5	  	V12893	  	3463	  	4000FH & 3500FC	  	NA	  	NA	  	4000 FC	
5	  	V2524-A5	  	V12912	  	3491	  	4000FH & 3500FC	  	NA	  	NA	  	4000 FC	
6	  	V2524-A5	  	V13002	  	3590	  	4000FH & 3500FC	  	NA	  	NA	  	4000 FC	
7	  	V2524-A5	  	V10660	  	1140	  	6000FH & 4500FC	  	NA	  	7500 FC	  	4500 FC	
8	  	V2524-A5	  	V10657	  	1159	  	6000FH & 4500FC	  	NA	  	7500 FC	  	4500 FC	
9	  	V2524-A5	  	V10645	  	1140	  	6000FH & 4500FC	  	NA	  	7500 FC	  	4500 FC	
10	  	V2524-A5	  	V10648	  	1159	  	6000FH & 4500FC	  	NA	  	7500 FC	  	4500 FC	
11	  	V2524-A5	  	V12144	  	2657	  	NA	  	3000FH	  	NA	  	8000 FC	
12	  	V2524-A5	  	V12170	  	2666	  	NA	  	3000FH	  	NA	  	8000 FC	
13	  	V2524-A5	  	V12146	  	2657	  	NA	  	3000FH	  	NA	  	8000 FC	
14	  	V2524-A5	  	V12172	  	2666	  	NA	  	3000FH	  	NA	  	8000 FC	
15	  	V2527E-A5	  	V13073	  	3672	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
16	  	V2527E-A5	  	V13079	  	3672	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
17	  	V2527E-A5	  	V13051	  	3624	  	NA	  	10000FH & 6500FC	  	NA	  	5000 FC	
18	  	V2527E-A5	  	V13053	  	3624	  	NA	  	10000FH & 6500FC	  	NA	  	5000 FC	
19	  	V2527E-A5	  	V16154	  	5062	  	6000 FH	  	NA	  	NA	  	3000 FC	
20	  	V2527E-A5	  	V16151	  	5062	  	6000 FH	  	NA	  	NA	  	3000 FC	
21	  	V2527E-A5	  	TBD	  	TBD	  	6000 FH	  	NA	  	NA	  	3000 FC	
22	  	V2527E-A5	  	TBD	  	TBD	  	6000 FH	  	NA	  	NA	  	3000 FC	
23	  	V2527E-A5	  	TBD	  	TBD	  	6000 FH	  	NA	  	NA	  	3000 FC	
24	  	V2527E-A5	  	TBD	  	TBD	  	6000 FH	  	NA	  	NA	  	3000 FC	
25	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
26	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
27	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
28	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
29	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
30	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
 
Page 16 of 23

															
 	  	 	  	 	  	 	  	Lease Return Conditions	
Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft
Serial
Number	  	Engine FH and FC
remaining at Lease
Return Date	  	Maximum Engine FH
and FC since last
Restoration Shop Visit
at Lease Return Date	  	Maximum LLP FC
since last
Restoration Shop
Visit	  	LLP FH and FC
remaining at Lease
Return Date	
31	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
32	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
33	  	V2527M-A5	  	V12886	  	3450	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
34	  	V2527M-A5	  	V12532	  	3045	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
35	  	V2527M-A5	  	V12545	  	3045	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
36	  	V2527M-A5	  	V12557	  	3069	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
37	  	V2527M-A5	  	V12559	  	3069	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
38	  	V2527M-A5	  	V12706	  	3253	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
39	  	V2527M-A5	  	V12708	  	3253	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
40	  	V2527M-A5	  	V12728	  	3279	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
41	  	V2527M-A5	  	V12736	  	3279	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
42	  	V2527M-A5	  	V12883	  	3450	  	5000 FH & 3000 FC	  	8000FH & 4000FC	  	7500 FC	  	5000FH & 3000FC	
43	  	V2527M-A5	  	V12472	  	2979	  	6000FH & 4500FC	  	NA	  	7500 FC	  	4500 FC	
44	  	V2527M-A5	  	V12487	  	2979	  	6000FH & 4500FC	  	NA	  	7500 FC	  	4500 FC	
45	  	V2527M-A5	  	V13093	  	3705	  	NA	  	10000FH & 6500FC	  	NA	  	5000 FC	
46	  	V2527M-A5	  	V13095	  	3705	  	NA	  	10000FH & 6500FC	  	NA	  	5000 FC	
47	  	V2527M-A5	  	V12274	  	2771	  	NA	  	3000FH	  	NA	  	8000 FC	
48	  	V2527M-A5	  	V12278	  	2771	  	NA	  	3000FH	  	NA	  	8000 FC	
49	  	V2527M-A5	  	V12286	  	2780	  	NA	  	3000FH	  	NA	  	8000 FC	
50	  	V2527M-A5	  	V12288	  	2780	  	NA	  	3000FH	  	NA	  	8000 FC	
51	  	V2527M-A5	  	V12476	  	2997	  	NA	  	3000FH	  	NA	  	8000 FC	
52	  	V2527M-A5	  	V12490	  	2997	  	NA	  	3000FH	  	NA	  	8000 FC	
53	  	V2527M-A5	  	V12561	  	3077	  	NA	  	3000FH & 1500FC	  	1500FC	  	NA	
54	  	V2527M-A5	  	V12563	  	3077	  	NA	  	3000FH & 1500FC	  	1500FC	  	NA	
55	  	V2527M-A5	  	V12636	  	3175	  	NA	  	3000FH & 1500FC	  	1500FC	  	NA	
56	  	V2527M-A5	  	V12638	  	3175	  	NA	  	3000FH & 1500FC	  	1500FC	  	NA	
57	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
58	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
59	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
60	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
Engines 57 to 70: Lease Return Conditions will be determined at the time of such Engine’s
lease agreement signature. Data included for these Engines in this Exhibit I is a target and
not the final data.
 
Page 17 of 23

															
 	  	 	  	 	  	 	  	Lease Return Conditions	
Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft
Serial
Number	  	Engine FH and FC
remaining at Lease
Return Date	  	Maximum Engine FH
and FC since last
Restoration Shop Visit
at Lease Return Date	  	Maximum LLP FC
since last
Restoration Shop
Visit	  	LLP FH and FC
remaining at Lease
Return Date	
61	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
62	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
63	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
64	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
65	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
66	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
67	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
68	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
69	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
70	  	V2527E-A5	  	TBD	  	TBD	  	8000 FH	  	NA	  	NA	  	6000 FC	
71	  	V2524-A5	  	V11736	  	2296	  	NA	  	10500 FH	  	NA	  	4500 FC	
72	  	V2524-A5	  	V11741	  	2296	  	NA	  	10500 FH	  	NA	  	4500 FC	
73	  	V2524-A5	  	V12697	  	3252	  	NA	  	10500 FH	  	NA	  	4500 FC	
74	  	V2524-A5	  	V12701	  	3252	  	NA	  	10500 FH	  	NA	  	4500 FC	
75	  	V2524-A5	  	V12778	  	3317	  	NA	  	10500 FH	  	NA	  	4500 FC	
76	  	V2524-A5	  	V12759	  	3317	  	NA	  	10500 FH	  	NA	  	4500 FC	
77	  	V2527E-A5	  	V15912	  	4798	  	6000 FH	  	NA	  	NA	  	3000 FC	
78	  	V2527E-A5	  	V15917	  	4798	  	6000 FH	  	NA	  	NA	  	3000 FC	
79	  	V2527E-A5	  	V15934	  	4832	  	6000 FH	  	NA	  	NA	  	3000 FC	
80	  	V2527E-A5	  	V15946	  	4828	  	6000 FH	  	NA	  	NA	  	3000 FC	
81	  	V2527E-A5	  	V15954	  	4828	  	6000 FH	  	NA	  	NA	  	3000 FC	
82	  	V2527E-A5	  	V15955	  	4832	  	6000 FH	  	NA	  	NA	  	3000 FC	
83	  	V2527E-A5	  	V16042	  	4950	  	6000 FH	  	NA	  	NA	  	3000 FC	
84	  	V2527E-A5	  	V16050	  	4950	  	6000 FH	  	NA	  	NA	  	3000 FC	
85	  	V2527E-A5	  	V15855	  	4741	  	13000 FH & 6000 FC	  	NA	  	NA	  	15000 FC	
86	  	V2527E-A5	  	V15857	  	4741	  	13000 FH & 6000 FC	  	NA	  	NA	  	15000 FC	
87	  	V2527E-A5	  	V11674	  	2204	  	2000 FC	  	NA	  	NA	  	4500 FC	
88	  	V2527E-A5	  	V11672	  	2204	  	2000 FC	  	NA	  	NA	  	4500 FC	
89	  	V2527E-A5	  	V12957	  	3524	  	NA	  	7000FH & 7000FC	  	NA	  	4500 FC	
90	  	V2527E-A5	  	V12961	  	3524	  	NA	  	7000FH & 7000FC	  	NA	  	4500 FC	
Engines 57 to 70: Lease Return Conditions will be determined at the time of such Engine’s
lease agreement signature. Data included for these Engines in this Exhibit I is a target and
not the final data.
 
Page 18 of 23

															
 	  	 	  	 	  	 	  	Lease Return Conditions	
Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft
Serial
Number	  	Engine FH and FC
remaining at Lease
Return Date	  	Maximum Engine FH
and FC since last
Restoration Shop Visit
at Lease Return Date	  	Maximum LLP FC
since last
Restoration Shop
Visit	  	LLP FH and FC
remaining at Lease
Return Date	
91	  	V2527E-A5	  	V12938	  	3543	  	NA	  	7000FH & 7000FC	  	NA	  	4500 FC	
92	  	V2527E-A5	  	V12972	  	3543	  	NA	  	7000FH & 7000FC	  	NA	  	4500 FC	
93	  	V2527M-A5	  	V15528	  	4403	  	4000 FH	  	8000 FH	  	NA	  	8000 FC	
94	  	V2527M-A5	  	V15543	  	4403	  	4000 FH	  	8000 FH	  	NA	  	8000 FC	
95	  	V2527M-A5	  	V15557	  	4422	  	4000 FH	  	8000 FH	  	NA	  	8000 FC	
96	  	V2527M-A5	  	V15554	  	4422	  	4000 FH	  	8000 FH	  	NA	  	8000 FC	
S1	  	V2527M-A5	  	V12285	  	NA	  	NA	  	5000 FH	  	1000 FC	  	2500 FC	
S2	  	V2527M-A5	  	V12671	  	NA	  	NA	  	3000 FH	  	NA	  	7500 FC	
S3	  	V2527M-A5	  	V13063	  	NA	  	NA	  	3000 FH	  	NA	  	7500 FC	
S4	  	V2527E-A5	  	V13183	  	NA	  	NA	  	3000 FH	  	NA	  	7500 FC	
S5	  	V2527E-A5	  	V16007	  	NA	  	NA	  	6000 FH	  	NA	  	4500 FC	
S6	  	V2527E-A5	  	Spare 6	  	NA	  	6000 FH	  	NA	  	NA	  	3000 FC	
Engine S6: Lease Return Conditions will be determined at the time of such Engine’s
lease agreement signature. Data included for this Engine in this Exhibit I is a target and not the
final data.
Where:
“FC” = Flight Cycles*
“FH” = Flight Hours*
“NA” = Not Applicable
“Y” = Years*
 
*	will be based on IAE’s relevant historical records and good faith determination at the time of the shop visit.	
 
Page 19 of 23

Appendix 4
Exhibit J
Eligible Engine Shop Visit Conditions

 	  	 	  	 	  	 	  	Engine Shop Visit Conditions	
Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft Serial
Number	  	Engine FH and Time
Remaining at
Restoration Shop Visit
Exit	  	LLP FC remaining at
Restoration Shop Visit
Exit	
1	  	V2524-A5	  	V12891	  	3463	  	NA	  	NA	
2	  	V2524-A5	  	V12908	  	3491	  	NA	  	NA	
3	  	V2524-A5	  	V13000	  	3590	  	NA	  	NA	
4	  	V2524-A5	  	V12893	  	3463	  	NA	  	NA	
5	  	V2524-A5	  	V12912	  	3491	  	NA	  	NA	
6	  	V2524-A5	  	V13002	  	3590	  	NA	  	NA	
7	  	V2524-A5	  	V10660	  	1140	  	NA	  	NA	
8	  	V2524-A5	  	V10657	  	1159	  	NA	  	NA	
9	  	V2524-A5	  	V10645	  	1140	  	NA	  	NA	
10	  	V2524-A5	  	V10648	  	1159	  	NA	  	NA	
11	  	V2524-A5	  	V12144	  	2657	  	NA	  	NA	
12	  	V2524-A5	  	V12170	  	2666	  	NA	  	NA	
13	  	V2524-A5	  	V12146	  	2657	  	NA	  	NA	
14	  	V2524-A5	  	V12172	  	2666	  	NA	  	NA	
15	  	V2527E-A5	  	V13073	  	3672	  	11000 FH & 3Y	  	7500 FC	
16	  	V2527E-A5	  	V13079	  	3672	  	11000 FH & 3Y	  	7500 FC	
17	  	V2527E-A5	  	V13051	  	3624	  	NA	  	NA	
18	  	V2527E-A5	  	V13053	  	3624	  	NA	  	NA	
19	  	V2527E-A5	  	V16154	  	5062	  	8000 FC	  	NA	
20	  	V2527E-A5	  	V16151	  	5062	  	8000 FC	  	NA	
21	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
22	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
23	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
24	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
25	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
26	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
27	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
28	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
29	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
30	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
 
Page 20 of 23

											
 	  	 	  	 	  	 	  	Engine Shop Visit Conditions	
Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft Serial
Number	  	Engine FH and Time
Remaining at
Restoration Shop Visit
Exit	  	LLP FC remaining at
Restoration Shop Visit
Exit	
31	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
32	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
33	  	V2527M-A5	  	V12886	  	3450	  	11000 FH &3Y	  	7500 FC	
34	  	V2527M-A5	  	V12532	  	3045	  	11000 FH &3Y	  	7500 FC	
35	  	V2527M-A5	  	V12545	  	3045	  	11000 FH &3Y	  	7500 FC	
36	  	V2527M-A5	  	V12557	  	3069	  	11000 FH &3Y	  	7500 FC	
37	  	V2527M-A5	  	V12559	  	3069	  	11000 FH &3Y	  	7500 FC	
38	  	V2527M-A5	  	V12706	  	3253	  	11000 FH &3Y	  	7500 FC	
39	  	V2527M-A5	  	V12708	  	3253	  	11000 FH &3Y	  	7500 FC	
40	  	V2527M-A5	  	V12728	  	3279	  	11000 FH &3Y	  	7500 FC	
41	  	V2527M-A5	  	V12736	  	3279	  	11000 FH &3Y	  	7500 FC	
42	  	V2527M-A5	  	V12883	  	3450	  	11000 FH &3Y	  	7500 FC	
43	  	V2527M-A5	  	V12472	  	2979	  	7500 FC	  	NA	
44	  	V2527M-A5	  	V12487	  	2979	  	7500 FC	  	NA	
45	  	V2527M-A5	  	V13093	  	3705	  	NA	  	NA	
46	  	V2527M-A5	  	V13095	  	3705	  	NA	  	NA	
47	  	V2527M-A5	  	V12274	  	2771	  	NA	  	NA	
48	  	V2527M-A5	  	V12278	  	2771	  	NA	  	NA	
49	  	V2527M-A5	  	V12286	  	2780	  	NA	  	NA	
50	  	V2527M-A5	  	V12288	  	2780	  	NA	  	NA	
51	  	V2527M-A5	  	V12476	  	2997	  	NA	  	NA	
52	  	V2527M-A5	  	V12490	  	2997	  	NA	  	NA	
53	  	V2527M-A5	  	V12561	  	3077	  	13000 FH	  	NA	
54	  	V2527M-A5	  	V12563	  	3077	  	13000 FH	  	NA	
55	  	V2527M-A5	  	V12636	  	3175	  	13000 FH	  	NA	
56	  	V2527M-A5	  	V12638	  	3175	  	13000 FH	  	NA	
57	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
58	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
59	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
60	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
Engines 57 to 70: Engine Shop Visit Conditions will be determined at the time of such
Engine’s lease agreement signature. Data included for these Engines in this Exhibit J is a
target and not the final data.
 
Page 21 of 23

											
 	  	 	  	 	  	 	  	Engine Shop Visit Conditions	
Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft
Serial
Number	  	Engine FH and Time
Remaining at
Restoration Shop Visit
Exit	  	LLP FC remaining at
Restoration Shop Visit
Exit	
61	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
62	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
63	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
64	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
65	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
66	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
67	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
68	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
69	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
70	  	V2527E-A5	  	TBD	  	TBD	  	NA	  	NA	
71	  	V2524-A5	  	V11736	  	2296	  	16500 FH	  	8500 FC	
72	  	V2524-A5	  	V11741	  	2296	  	16500 FH	  	8500 FC	
73	  	V2524-A5	  	V12697	  	3252	  	16500 FH	  	8500 FC	
74	  	V2524-A5	  	V12701	  	3252	  	16500 FH	  	8500 FC	
75	  	V2524-A5	  	V12778	  	3317	  	16500 FH	  	8500 FC	
76	  	V2524-A5	  	V12759	  	3317	  	16500 FH	  	8500 FC	
77	  	V2527E-A5	  	V15912	  	4798	  	8000 FC	  	NA	
78	  	V2527E-A5	  	V15917	  	4798	  	8000 FC	  	NA	
79	  	V2527E-A5	  	V15934	  	4832	  	8000 FC	  	NA	
80	  	V2527E-A5	  	V15946	  	4828	  	8000 FC	  	NA	
81	  	V2527E-A5	  	V15954	  	4828	  	8000 FC	  	NA	
82	  	V2527E-A5	  	V15955	  	4832	  	8000 FC	  	NA	
83	  	V2527E-A5	  	V16042	  	4950	  	8000 FC	  	NA	
84	  	V2527E-A5	  	V16050	  	4950	  	8000 FC	  	NA	
85	  	V2527E-A5	  	V15855	  	4741	  	20000 FH	  	10000 FC	
86	  	V2527E-A5	  	V15857	  	4741	  	20000 FH	  	10000 FC	
87	  	V2527E-A5	  	V11674	  	2204	  	7000 FC	  	NA	
88	  	V2527E-A5	  	V11672	  	2204	  	7000 FC	  	NA	
89	  	V2527E-A5	  	V12957	  	3524	  	NA	  	NA	
Engines 57 to 70: Engine Shop Visit Conditions will be determined at the time of such
Engine’s lease agreement signature. Data included for these Engines in this Exhibit J is a
target and not the final data.
 
Page 22 of 23

											
 	  	 	  	 	  	 	  	Engine Shop Visit Conditions	
Engine
No.	  	Thrust
Rating	  	ESN	  	Aircraft Serial
Number	  	Engine FH and Time
Remaining at
Restoration Shop Visit
Exit	  	LLP FC remaining at
Restoration Shop Visit
Exit	
90	  	V2527E-A5	  	V12961	  	3524	  	NA	  	NA	
91	  	V2527E-A5	  	V12938	  	3543	  	NA	  	NA	
92	  	V2527E-A5	  	V12972	  	3543	  	NA	  	NA	
93	  	V2527M-A5	  	V15528	  	4403	  	16500 FH	  	10000 FC	
94	  	V2527M-A5	  	V15543	  	4403	  	16500 FH	  	10000 FC	
95	  	V2527M-A5	  	V15557	  	4422	  	16500 FH	  	10000 FC	
96	  	V2527M-A5	  	V15554	  	4422	  	16500 FH	  	10000 FC	
S1	  	V2527M-A5	  	V12285	  	NA	  	NA	  	RSV1 8000 FC RSV2 11000 FC	
S2	  	V2527M-A5	  	V12671	  	NA	  	NA	  	NA	
S3	  	V2527M-A5	  	V13063	  	NA	  	NA	  	RSV1 9000 FC RSV2 11000 FC	
S4	  	V2527E-A5	  	V13183	  	NA	  	NA	  	10000 FC	
S5	  	V2527E-A5	  	V16007	  	NA	  	NA	  	RSV1 8000 FC RSV2 11000 FC	
S6	  	V2527E-A5	  	Spare 6	  	NA	  	NA	  	NA	
Engine S6: Engine Shop Visit Conditions will be determined at the time of such
Engine’s lease agreement signature. Data included for this Engine in this Exhibit J is a target and not
the final data.
Where:
“FC” = Flight Cycles*
“FH” = Flight Hours*
“NA” = Not Applicable
“Y” = Years*
 
*	will be based on IAE’s relevant historical records and good faith determination at the time of the shop visit.	
Appendix 5
Exhibit K
Pre-Side Letter No. 3 Flight Hours

Existing
Engine No.	  	Engine Serial
Number	  	Eligible
Engine Flight
Hours Since EIS	 	
  1	  	V12278	  	 	19634.62	  	
  2	  	V12908	  	 	11423.20	  	
  3	  	V12472	  	 	20999.57	  	
  4	  	V12487	  	 	20999.57	  	
  5	  	V12671	  	 	17362.67	  	
  6	  	V12561	  	 	15268.50	  	
  7	  	V12286	  	 	22982.00	  	
  8	  	V13073	  	 	9693.32	  	
  9	  	V12288	  	 	21354.00	  	
10	  	V12476	  	 	20034.60	  	
11	  	V12532	  	 	20196.75	  	
12	  	V12545	  	 	20196.75	  	
13	  	V16007	  	 	705.30	  	
14	  	V12559	  	 	20093.40	  	
15	  	V12883	  	 	12760.90	  	
16	  	V12563	  	 	20141.60	  	
17	  	V12638	  	 	18829.40	  	
18	  	V12285	  	 	17194.31	  	
19	  	V12274	  	 	19002.79	  	
20	  	V12170	  	 	22963.73	  	
21	  	V12172	  	 	22963.73	  	
22	  	V12708	  	 	17919.25	  	
23	  	V12706	  	 	17919.25	  	
24	  	V12728	  	 	17866.50	  	
25	  	V12736	  	 	17866.50	  	
26	  	V13183	  	 	7380.78	  	
27	  	V12886	  	 	15859.45	  	
28	  	V12891	  	 	15880.90	  	
29	  	V12893	  	 	15880.90	  	
30	  	V13063	  	 	7888.62	  	
31	  	V12912	  	 	15765.32	  	
32	  	V13000	  	 	14383.45	  	
33	  	V13002	  	 	14383.45	  	
34	  	V13051	  	 	15131.85	  	
35	  	V13053	  	 	15131.85	  	
36	  	V12144	  	 	16588.21	  	
37	  	V13079	  	 	14482.00	  	
38	  	V13093	  	 	12892.20	  	
39	  	V13095	  	 	12892.20	  	
40	  	V12146	  	 	20639.52	  	
41	  	V16154	  	 	160.70	  	
42	  	V16151	  	 	160.70	  	
43	  	V12490	  	 	16954.82	  	
 
Page 23 of 23

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.26
DATED AUGUST 23, 2010
INTERNATIONAL LEASE FINANCE CORPORATION,
AS ASSIGNOR
MACQUARIE AEROSPACE IRELAND LIMITED,
AS ASSIGNEE
AND
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.
(SUCCESSOR TO CONCESIONARIA VUELA
COMPANIA DE AVIACION, S.A. DE C.V.),
AS LESSEE

ASSIGNMENT, ASSUMPTION AND AMENDMENT
AGREEMENT
RELATING TO ONE (1) AIRBUS A319-100 AIRCRAFT
MANUFACTURER’S SERIAL NUMBER 3590,
FAA REGISTRATION MARK N504VL

[COUNTERPART NO. [            ] OF [            ] SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN EFFECT IN ANY APPLICABLE JURISDICTION, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.]

CONTENTS

Clause	  	Page	 	
Section 1. Defined Terms	  	 	2	  	
Section 2. Effectiveness	  	 	2	  	
Section 3. Assignment, Assumption and Release	  	 	2	  	
Section 4. Lessee Consent and Agreement	  	 	4	  	
Section 5. Payments to Assignee	  	 	4	  	
Section 6. Payments to Assignor	  	 	4	  	
Section 7. Insurance	  	 	4	  	
Section 8. Identification Plates	  	 	5	  	
Section 9. Quiet Enjoyment	  	 	5	  	
Section 10. Post Effective Time	  	 	5	  	
Section 11. Cooperation	  	 	5	  	
Section 12. Representations and Warranties	  	 	6	  	
Section 13. Lease Representations and Warranties	  	 	8	  	
Section 14. Assignee Servicer and Assignments	  	 	9	  	
Section 15. Assignment	  	 	9	  	
Section 16. Notices	  	 	9	  	
Section 17. Modifications	  	 	10	  	
Section 18. Delivery of Documents by Fax or E-mail	  	 	10	  	
Section 19. Governing Law, Etc.	  	 	10	  	
Section 20. Further Assurances	  	 	10	  	
Section 21. Headings	  	 	10	  	
Section 22. Invalidity of any Provision	  	 	10	  	
Section 23. Survival	  	 	10	  	
ANNEX 1 Lease Documents	  				
ANNEX 2 Amendments to Lease Documents	  				
ANNEX 3 Form of Confirmation of Effective Time	  				
ANNEX 4 Insurance Information	  				
ANNEX 5 Lessee Conditions Precedent	  				
ANNEX 6 Notice of Removal and Discharge	  				
ANNEX 7 Federal Aviation Administration Conveyance and Engine Thrust Information	  				
ANNEX 8 Form of Lessee Acknowledgment	  				
 
- i -

			
ANNEX 9 Form of Letter of Quiet Enjoyment	  		
ANNEX 10 Assignor and Lessee Representations and Warranties	  		
ANNEX 11 Form of Guarantee	  		
ANNEX 12 Form of Assumption Agreement	  		
 
- ii -

THIS ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT (this “ Agreement ”), is entered into as of August 23, 2010, by and among (1) INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation (“ Assignor ”), (2) MACQUARIE AEROSPACE IRELAND LIMITED, a company organized under the laws of Ireland (“ Assignee ”), and (3) CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), a company organized under the laws of Mexico (“ Lessee ”).
PRELIMINARY STATEMENTS : 
WHEREAS , Assignor and Lessee have entered into an Aircraft Lease Agreement, dated as of March 9, 2007 (as amended and supplemented by Side Letter #1 to Aircraft Lease Agreement described as item 3 on Annex 1 hereto, the “ Lease ”), pursuant to which Assignor has leased to Lessee one (1) Airbus A319-100 (shown on the international registry as AIRBUS model A319) aircraft bearing manufacturer’s serial number 3590 and FAA registration mark N504VL together with two (2) IAE International Aero Engines AG model IAE V2524-A5 (shown on the international registry as INTERNATIONAL AERO ENGINES model V2500-A5) engines bearing manufacturer’s serial numbers V13000 and V13002, respectively (each of which has 550 or more rated take-off horsepower) (collectively and as more fully described in the Lease, the “ Aircraft ”), as more fully described in Annex 7 hereto.
WHEREAS , International Lease Finance Corporation (“ Seller ”) has agreed, among other things, to sell the Aircraft or cause its affiliate to sell the Aircraft to Macquarie Aerospace Limited (“ Buyer ”) or Buyer’s designee subject to the Lease and Buyer has agreed to purchase or cause its designee to purchase the Aircraft from Seller or Seller’s affiliate pursuant to an Aircraft Sale Agreement dated as of April 13, 2010 between Seller and Buyer (the “ Sale Agreement ”).
WHEREAS , Buyer has designated Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3590 Trust (“ New Owner ”) to purchase the Aircraft in accordance with the Sale Agreement and will cause New Owner to lease the Aircraft to Assignee pursuant to a head lease agreement.
WHEREAS , concurrently with the sale of the Aircraft to New Owner, Assignor will, subject to the terms and conditions of this Agreement, assign to Assignee all of its rights, obligations and interest to and under the Lease and all other agreements (including all Operative Documents as such term is defined in the Lease) described on Annex 1 hereto and delivered in connection with, or relating to, the leasing of the Aircraft and that affect the rights or obligations of the “LESSOR” or “LESSEE” thereunder as of or after the Effective Time (as defined below) (the “ Lease Documents ”), subject to the rights of Lessee (as more fully described in Section 3(a) below and collectively with the other assignments, assumptions, releases and covenants in Section 3, the “ Assignment ”).
WHEREAS , Assignor, Assignee and Lessee have agreed to enter into this Agreement in order to, among other things, (i) effect the Assignment, (ii) evidence Lessee’s acknowledgment of, and consent to, the Assignment and (iii) amend certain provisions of the Lease Documents.
 
- 1 -

NOW , THEREFOR , in consideration of and subject to the mutual covenants, terms and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:
Section 1. Defined Terms . Any and all initially capitalized terms used herein (including the Annexes hereto) and not otherwise defined herein shall have the meanings assigned thereto in the Lease.
Section 2. Effectiveness . Subject to satisfaction of or waiver by Lessee (in its sole discretion) of the conditions precedent set forth in Annex 5 hereto, the Assignment, the amendment to the Lease Documents described herein and in Annex 2 hereto and Lessee’s consent in Section 4 will take effect as of the time of the transfer of title to the Aircraft by Assignor to New Owner (the “ Effective Time ”), as evidenced by a Confirmation of Effective Time substantially in the form of Annex 3 hereto to be delivered to and acknowledged by Lessee from Assignor and Assignee at or promptly after the Effective Time (a “ Confirmation ”). Lessee agrees to countersign and deliver to Assignor and Assignee a copy of such Confirmation promptly upon receipt thereof.
Section 3. Assignment, Assumption and Release.
(a) Assignment.
(i) Effective as of the Effective Time, Assignor hereby assigns, conveys, transfers and sets over to Assignee except as may be otherwise expressly specified in the following sentence all of Assignor’s rights and obligations and Assignor’s interest in, to and under the Lease Documents, arising on and after the Effective Time, subject to the rights of Lessee under the Lease Documents. Notwithstanding any other term or agreement in this Agreement:
(x) Assignor is not assigning its rights and obligations under Article 6.4 of the Lease.
(y) Assignor shall continue to be responsible to perform the obligations of “LESSOR” under Article 6.4 of the Lease and in respect of any other obligation arising in connection with any other right retained by Assignor in accordance with the provisions hereof (those portions of the Lease Documents assigned under this Section 3(a)(i), hereinafter the “ Assigned Lease Documents ”).
(ii) Effective as of the Effective Time, Lessee, Assignor and Assignee hereby agree that, except with respect to the matters set forth in Section 3(a)(i)(x) above, Assignor shall have no further rights and obligations under the Assigned Lease Documents, except that the disclaimers and indemnities contained in Articles 8 (Disclaimers and Waivers) and 17 (Indemnities) of the Lease and any other provisions of the Lease Documents which are expressly stated to survive the expiration or termination of the leasing of the Aircraft under the Lease shall continue in full force and effect for the benefit of Assignor in addition to the Assignee in
 
- 2 -

accordance with the provisions of the Lease. Notwithstanding the above, Assignor and Lessee shall have the same rights and remedies against each other as each would have had under the Lease in respect of any rights and obligations arising, losses, liabilities or claims suffered or incurred or brought against or payments due to each other in respect of or attributable to the period prior to the Effective Time as if the Assignor had remained the “LESSOR” under the Lease.
(b) Assumption.
(i) Effective as of the Effective Time, Assignee hereby accepts and assumes all of Assignor’s rights and obligations assigned, conveyed, transferred and set over by Assignor pursuant to Section 3(a).
(ii) Assignee warrants, covenants and agrees with Lessee that on and after the Effective Time, Assignee will perform all obligations to be performed by Lessor under the Assigned Lease Documents that arise on or after the Effective Time and will be bound by all of the terms thereof.
(iii) Any reference to the rights of “LESSOR” under the Lease in connection with the right of “LESSOR” to assign such rights, shall include any “associated rights”, as defined in The Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment (the “ Cape Town Convention ”) in effect at the Effective Time of the Assignee in, and to, this Agreement and the Lease. Any such associated rights may consist of any of Assignee’s rights to procure payment or other performance by Lessee (as “debtor” under the Cape Town Convention) under this Agreement, the Lease and/or any other operative document associated with the Lease.
(c) Retained Obligations and Release. Subject to the terms of this Agreement including without limitation Sections 2 and 3(a) and except as otherwise provided therein, effective as of the Effective Time, Lessee hereby releases Assignor from any obligations of “LESSOR” under the Assigned Lease Documents which arise on or after the Effective Time including but not limited to any obligations with respect to the return to Lessee of any Security Deposit or the reimbursement of any Reserves, all of which obligations in respect of such Security Deposits and Reserves having been assumed by New Owner and Assignee.
 
- 3 -

Section 4. Lessee Consent and Agreement . Subject to the provisions hereof, and Lessee’s rights hereunder and under the Lease, Lessee hereby acknowledges and consents to the Assignment and to Assignor’s assignment to New Owner of all of Assignor’s reversionary rights and interest in the manufacturer warranties that were assigned to Lessee by Assignor pursuant to the Lease Documents and agrees that Assignee will be obligated to fulfill all of the obligations of Lessor under the Assigned Lease Documents which arise on and after the Effective Time and that and until otherwise notified in writing Lessee will perform for the benefit of Assignee all of Lessee’s obligations under the Assigned Lease Documents which arise on and after the Effective Time, save for its obligations in respect of any rights expressly retained by Assignor hereunder.
Section 5. Payments to Assignee . Lessee and Assignee hereby agree that on and after the Effective Time all Rent, Reserves, Security Deposits and other payments due from Lessee to Lessor under the Lease will be made by wire transfer to the bank account of Assignee described in Annex 2 hereto or to such other account in the United States or Ireland (unless otherwise agreed by Lessee), notified to Lessee pursuant to Section 16 (Notices) below.
Section 6. Payments to Assignor . Lessee and Assignee hereby agree that as of the Effective Time all Rent, Reserves, Security Deposits and other payments paid to Assignor in accordance with the Lease prior to the Effective Time shall be deemed to have been paid for all purposes under the Lease and the Reserves and Security Deposit shall be deemed to have been received by Assignee and Assignee covenants and agrees that it shall hold, apply, retain and reimburse the Reserves and Security Deposit or cause to be held, applied, released and reimbursed the Reserves and Security Deposit strictly in accordance with all relevant provisions of the Lease.
Section 7. Insurance . From and after the Effective Time and until otherwise notified in writing, Lessee will cause:
(a) New Owner to be named as loss payee for the Agreed Value under the hull insurances required to be maintained by Lessee under the Lease;
(b) Servicer (as defined in Section 14 below), New Owner, Sub-Servicer, Macquarie Bank Limited and the Persons providing financing to New Owner and their agents and security trustees identified on Annex 4 hereto and each of their respective successors and permitted assigns and each of their respective shareholders, directors, officers, agents, employees and, in the case of a trustee or security trustee, the institution acting as such in its individual capacity to be named as additional insureds under Lessee’s aviation and general third party liability insurance maintained by Lessee under the Lease;
(c) continue to name Assignor and each of its respective successors and permitted assigns and each of their respective shareholders, directors, officers, agents, employees and, in the case of a trustee or security trustee, the institution acting as such in its individual capacity as an additional insured under the third party liability insurances until the earlier to occur of the second anniversary of the Effective Time; and
 
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(d) each of the agreements described on Annex 4 hereto to be identified as “contracts” with respect to the insurances required under the Lease and this Section 7.
Section 8. Identification Plates . Lessee will as soon as is reasonably practical after the Effective Time, prepare at Assignee’s expense new identification plates for the Aircraft bearing the legends set forth in Annex 2 hereto, remove the existing identification plates and install the replacement identification plates on the Aircraft.
Section 9. Quiet Enjoyment . So long as no Default or Event of Default has occurred and is continuing, from and after the Effective Time, Assignee hereby agrees that neither it nor any person lawfully claiming through it will interfere with or otherwise disturb Lessee’s quiet, peaceful use, possession and enjoyment of the Aircraft.
Section 10. Post Effective Time . Assignor, Assignee and Lessee hereby agree that with effect on and from the Effective Time, the Lease shall be amended as set forth in Annex 2 hereto. Except as set out in this Agreement, the Lease shall remain unmodified and in full force and effect.
Section 11. Cooperation .
(a) The parties hereby agree to cooperate with one another in order to close the Assignment at a convenient time when the Aircraft is in a jurisdiction reasonably acceptable to Assignee, Assignor and Lessee on one of Lessee’s regular routes. Provided that Assignor notifies Lessee in writing of the proposed date of the Assignment a minimum of three (3) Business Days prior to such date, Lessee will provide Assignor notice of the scheduled route of the Aircraft for such date.
(b) Lessee agrees to provide promptly, but in any event, prior to the Effective Time, the following in the English language and in form and substance reasonably satisfactory to Assignor and Assignee:
(i) unless covered by the documents provided at Delivery, to Assignor and Assignee, an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Lessee naming the person or persons authorized to execute this Agreement and the documents delivered in connection therewith;
(ii) to Assignor and Assignee, an insurance certificate and, if applicable, broker’s letter of undertaking confirming that the insurances required under the Lease and under Section 7 of this Agreement are in effect;
 
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(iii) to Assignee, an executed Assumption Agreement substantially in the form of Annex 12 hereto; and
(iv) to Assignor and Assignee written confirmation, signed by Lessee, specifying the location of the Aircraft at the Effective Time.
(c) Subject to the provisions hereof and Lessee’s rights hereunder and under the Lease, Lessee hereby agrees to perform and do all such other and further acts and things and execute and deliver any and all such other instruments (including any notification to the Aviation Authority of changes in the ownership structure of the Aircraft) as Assignee may reasonably require to reflect the change in the identity of the owner and lessor of the Aircraft as contemplated by this Agreement and to perfect or protect the interests of Assignee, New Owner, LESSOR’s Lender (as defined in the Lease) and any other interest holder, and for the purpose of carrying out the intent of and giving Assignee full benefit of the Assignment including, but not limited to consenting electronically, at Assignee’s expense to a registration by Assignee of the international interest created by this Agreement pursuant to the Cape Town Convention on the international registry established pursuant to the Cape Town Convention.
(d) Assignee shall pay or reimburse Lessee for its reasonable out-of-pocket costs and expenses (including reasonable legal fees and expenses) in preparing, reviewing, negotiating and executing documents required by Lessor and Assignee or performing any other obligations under Article 24 of the Lease. As between Assignor and Assignee, nothing in this clause (d) shall modify the agreement of Seller and Buyer under Section 8.1(b) of the Sale Agreement.
(e) Upon return to Lessee of either the deregistration power of attorney provided to Assignor, marked “cancelled”, or a facsimile copy of the same, Lessee shall deliver to Assignee a replacement deregistration power of attorney in the form previously provided to Assignor pursuant to the Lease; provided that in the event that a facsimile copy is provided, Assignor shall deliver to Lessee the original copy, marked “cancelled”, via international express courier within seven (7) Business Days after the Closing Date.
Section 12. Representations and Warranties .
(a) Lessee Representations. Lessee represents and warrants to Assignor and Assignee as of the Effective Time the following:
(i) Lessee is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing under the laws of its jurisdiction of its organization;
(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Lessee (x) have been duly authorized by all necessary corporate action of Lessee and (y) do not and will not violate the charter, certificate of incorporation, by laws or other organizational instruments, any applicable law, rule or regulation or any provision in any existing agreement binding on it;
 
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(iii) this Agreement constitutes a valid, binding and enforceable agreement of Lessee except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights; and
(iv) all authorizations, consents, registrations and notifications required to be obtained by Lessee in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect.
(b) Assignor Representations. Assignor hereby represents and warrants to Lessee and Assignee as of the Effective Time the following:
(i) Assignor is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing and in good standing under the laws of the jurisdiction of its organization;
(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Assignor (x) have been duly authorized by all necessary corporate action of Assignor and (y) do not and will not violate the articles of incorporation, by laws or other organizational instruments of Assignor, any applicable law, rule or regulation or any provision in any existing agreement binding on Assignor;
(iii) this Agreement constitutes a valid, binding and enforceable agreement of Assignor except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights; and
(iv) all authorizations, consents, registrations and notifications required to be obtained by Assignor in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect.
(c) Assignee Representations. Assignee represents and warrants to Lessee and Assignor as of the Effective Time the following:
(i) Assignee is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing under the laws of the jurisdiction of its organization;
(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Assignee (x) have been duly authorized by all necessary corporate action of Assignee and (y) do not and will not violate the articles of incorporation, by-laws or other organizational instruments of Assignee, any applicable law, rule or regulation or any provision in any existing agreement binding on Assignee;
 
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(iii) this Agreement constitutes a valid, binding and enforceable agreement of Assignee except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights;
(iv) all authorizations, consents, registrations and notifications required to be obtained by Assignee in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect;
(v) the assignment and assumption contemplated hereby is in conformity with and subject to the provisions of Article 24 of the Lease and will not result in any increase in or to or the imposition of additional obligations or liabilities that are not de minimis;
(vi) Macquarie Aerospace Limited is the sole beneficiary of the MSN 3590 Trust; and
(vii) Assignee is an Irish tax resident.
(d) Assignee Covenant. Assignee covenants that so long as no Event of Default has occurred and is continuing, it will not permit New Owner to take or omit to take any action which would jeopardize the registration of the Aircraft on the FAA registry.
Section 13. Lease Acknowledgments, Representations and Warranties.
(a) Assignor, Assignee and Lessee hereby make the acknowledgments set forth on Annex 10.
(b) Each of Lessee and, unless otherwise stated, Assignor hereby makes the following representations and warranties as of the date hereof (unless otherwise noted):
(i) the Lease Documents are all described on Annex 1 hereto and such, together with this Agreement, constitute the entire agreement of Lessee and Assignor with respect to the leasing of the Aircraft;
(ii) the Lease is in full force and effect, and has not been modified or amended by any agreement between Assignor and Lessee which is currently in effect except to the extent set forth in the Lease Documents and, without waiver of or prejudice to Lessee’s rights under the Lease, Lessee has not exercised its option to extend the Lease Term;
(iii) the Aircraft was delivered on the Delivery Date in accordance with the terms of the Lease;
(iv) the Aircraft is not subject to a sublease;
(v) no Default in respect of the payment of Rent or any Event of Default has occurred and is continuing under the Lease;
 
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(vi) to Lessee’s knowledge and without waiver of or prejudice to any right, remedy or claim it may have, Lessee is not entitled as of the date hereof to any offset against Rent or any other amounts payable under the Lease Documents;
(vii) to Lessee’s knowledge, without waiver of or prejudice to any right, remedy or claim it may have, Lessee as of the date hereof has no claim against, and there are no actions by Lessee against, Assignor with respect to the Aircraft or the Lease Documents;
(viii) without waiver of or prejudice to any right, remedy or claim Lessee may have, Assignor has no unperformed Reserve payment obligations;
(ix) no unrepaired partial loss with a repair cost in excess of ***** or Total Loss has occurred in respect of the Aircraft or Engines;
(x) to Lessee’s knowledge, no notice of assignment of any Security Interest in the Lease has been received by the Lessee or, if the Lessee has received any such notice of assignment, it has subsequently received notice that such Security Interest has been terminated or will be terminated as of the Effective Time;
(xi) Lessee has not prepaid any Rent, the payment of which does not become due until after the Effective Time; and
(xii) Lessee is not subject to any voluntary bankruptcy, insolvency or reorganization proceeding.
Section 14. Assignee Servicer and Assignments . As of and with effect from the Effective Time, Macquarie Aircraft Leasing Services (Ireland) Limited will act as Assignee’s servicer for all matters related to the Lease and the Aircraft (in such capacity as servicer, the “ Servicer ”). Accordingly, with effect from the Effective Time and until Lessee receives notice from Assignee to the contrary, Lessee shall be entitled to and shall communicate with and deal with Servicer with respect to all matters relating to the Lease and the Aircraft to the exclusion of Assignor and Assignee and may rely on any communication, direction or determination made or purportedly made by Servicer. Subject to the provisions hereof and its rights under the Lease, upon written notice from Assignee, Lessee shall acknowledge and consent to any Security Interest Assignee grants in and to Assignee’s or New Owner’s rights to the Aircraft and under the Lease in the form of Annex 8 or such other form as may be reasonably acceptable to Lessee.
Section 15. Assignment . This Agreement will be binding upon and inure to the benefit of each party hereto and its respective successors and assigns as permitted under the Lease.
Section 16. Notices . Any notices hereunder will be in writing and will be delivered as and in the manner specified in the Assigned Lease Documents. The address of Assignee for notices under the Assigned Lease Documents is, until further notice, as set forth on Annex 2 hereto.
 
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Section 17. Modifications . This Agreement may not be amended or modified except by a written agreement signed by Assignor, Assignee and Lessee; provided that Assignee and Lessee shall be entitled to amend, modify or vary the terms of the Assigned Lease Documents after the Effective Time without reference to or the signature of Assignor.
Section 18. Delivery of Documents by Fax or E-mail . Delivery of an executed counterpart of this Agreement or of any other documents in connection with this Agreement by fax or email will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Agreement or other document by fax or email will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Agreement or such other document will not affect the validity or effectiveness of this Agreement or such other document.
Section 19. Governing Law, Etc . The provisions of the Lease, as amended by this Agreement, with respect to governing law, jurisdiction, service of process, waiver of trial by jury, venue and inconvenient forum are incorporated in this Agreement by reference as if such provisions were set forth herein.
Section 20. Further Assurances . Each party hereto agrees that it shall, at any time and from time to time, promptly and duly execute and deliver any and all such further instruments and documents and take such further action as may be reasonably required in order to obtain the full benefits of this Agreement and to implement the rights and powers herein granted.
Section 21. Headings . All section and paragraph headings and captions are purely for convenience and will not affect the interpretation of this Agreement. Any reference to a specific section or paragraph will be interpreted as a reference to such section or paragraph of this Agreement.
Section 22. Invalidity of any Provision . If any of the provisions of this Agreement become invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.
Section 23. Survival . Notwithstanding anything contained herein to the contrary, all agreements, indemnities, representations and warranties contained in this Agreement shall survive the Effective Time.
 
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IN WITNESS WHEREOF , the parties hereto or their duly authorized representatives have executed this Agreement as of the day and year first herein written.

INTERNATIONAL LEASE FINANCE CORPORATION,
as Assignor	  	MACQUARIE AEROSPACE IRELAND LIMITED
as Assignee	
			
By: /s/ Frederick S. Cromer	  	By: 	  	/s/ Aidan Culchrist	
Name: Frederick S. Cromer	  	Name:	  	Aidan Culchrist	
Title: Chief Financial Officer	  	Title:	  	Director	
			
	  	By:	  	/s/ James S. Simpson	
	  	Name:
Title:	  	James S. Simpson
Director	

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,
as Lessee	
		
By:	 	/s/ Alfonso Ascencio Triujeque	
Name:	 	Alfonso Ascencio Triujeque	
Title:	 	General Counsel	
		
By:	 	/s/ Fernando Suárez Gerard	
Name:	 	Fernando Suárez Gerard	
Title:	 	Director of Finance, CFO	

RECEIPT OF CHATTEL PAPER ORIGINAL
Receipt of the foregoing original counterpart of the Assignment, Assumption and Amendment Agreement dated August 23, 2010 by and among International Lease Finance Corporation as Assignor, Macquarie Aerospace Ireland Limited, as Assignee and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee in respect of that certain Airbus A319-100 aircraft bearing manufacturer’s serial number 3590, constituting the “Chattel Paper Original”, is hereby acknowledged.

MACQUARIE AEROSPACE IRELAND LIMITED	
		
By:	 	/s/ Aidan Culchrist	
Name:	 	Aidan Culchrist	
Title:	 	Director	
		
By:	 	/s/ James S. Simpson	
Name:	 	James S. Simpson	
Title:	 	Director	

ANNEX 1
LEASE DOCUMENTS
 
1.	Aircraft Lease Agreement dated as of March 9, 2007 between Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“Volaris”), as lessee and International Lease Finance Corporation (“ILFC”), as lessor.	
 
2.	Estoppel and Acceptance Certificate dated July 22, 2008 by Volaris.	
 
3.	Side Letter #1 to Aircraft Lease Agreement dated as of June 14, 2009 by and between ILFC and Volaris.	
 
4.	Assignment of Rights (Airframe) dated July 22, 2008 between ILFC and Volaris.	
 
5.	Airbus Consent dated July 22, 2008 by Airbus S.A.S. and acknowledged by ILFC and Volaris.	
 
6.	Assignment Agreement (Engines) dated July 22, 2008 among ILFC, Volaris and IAE International Aero Engines AG.	
 
Annex 1-1

ANNEX 2
AMENDMENTS TO LEASE DOCUMENTS
1. Reference . This Annex 2 to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010, by and among International Lease Finance Corporation , as Assignor, Macquarie Aerospace Ireland Limited, as Assignee and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee (the “ Assignment Agreement ”) sets forth the amendments to the Aircraft Lease Agreement dated as of March 9, 2007 (as amended and supplemented prior to the date of the Assignment Agreement, between Lessee and Assignor the “ Lease ”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Lease.
2. Amendments by Operation of Law Not Excluded . The amendments set forth in this Annex 2 hereto are intended to be the only amendments to the Lease to be effected upon the Effective Time except for such amendments to the language and operation of the Lease as are otherwise necessitated and effected by the execution of the Assignment Agreement or upon the effectiveness of the Assignment.
3. Amendments to Certain Definitions.
(a) The definition of “LESSOR” in the preamble of the Lease is deleted in its entirety and replaced with the following:
“MACQUARIE AEROSPACE IRELAND LIMITED, a company organized under the laws of Ireland, whose principal place of business is Level 1, South Bank House, Barrow Street, Dublin 4, Ireland (“ LESSOR ”).”
(b) The following definitions in Article 2.1 of the Lease are amended:
 
 	(i)	The definition of “APU” is amended such that the word “LESSOR” in part (c) of the definition is deleted and replaced with “OWNER”.	
 
 	(ii)	The definition of “Aviation Documents” is amended such that the word “LESSOR’s” in part (g) of the definition is deleted and replaced with “OWNER’s”.	
 
 	(iii)	The definition of “Engine” is amended such that the word “LESSOR” in part (c) of the definition is deleted and replaced with “OWNER”.	
 
 	(iv)	The definition of “LESSOR’s Lien” is amended such that the words “, OWNER, Owner Participant, Lessor’s Lender and/or Servicer” are inserted after the word “LESSOR”.	
 
 	(v)	The definition of “Operative Documents” is amended such that it also includes “Assignment Agreement” among the list of documents.	
 
Annex 2-1

 	(vi)	The definition of “Part” is amended such that the word “LESSOR” is deleted each time it appears and is replaced with “OWNER” and such that the words “which is owned by OWNER and (if LESSOR is not the OWNER) leased to LESSOR and leased by LESSOR to LESSEE hereunder” are inserted immediately following the words “or other item of equipment”.	
(c) The definition of LESSOR’s Lender in Article 24.3 is amended such that the word “OWNER” is inserted in lieu of the word “LESSOR” in the first line. Article 24.3 is further amended such that the word “OWNER’s” is inserted in lieu of the word “LESSOR’s” in the third line.
4. New Definitions . The following definitions shall be added to Article 2.1 of the Lease in the proper alphabetical order:
(a) ““ Assignment Agreement ” means the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 by and among International Lease Finance Corporation, as Assignor, Macquarie Aerospace Ireland Limited, as Assignee, and Lessee as Lessee.”
(b) ““ Assumption Agreement ” means the Assumption Agreement dated [        ] [            ] 2010 among LESSOR, MBL and LESSEE.”
(c) ““ MBL ” means Macquarie Bank Limited.”
(d) ““ Mortgagee ” any entity or entities to which OWNER grants a security interest in the Aircraft ad such entity’s or entities’ successors and assigns provided that LESSOR or OWNER has given notice of any such assignment.”
(e) ““ OWNER ” means Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3590 Trust, a national banking association, with its address at 299 South Main Street, MAC: U1228-120, Salt Lake City, Utah 84111, United States of America, the owner of the Aircraft.”
(f) ““ Owner Participant ” means Macquarie Aerospace Limited.”
(g) ““ Servicer ” means Macquarie Aircraft Leasing Services (Ireland) Limited or such other person as may be notified to LESSEE by the LESSOR.”
(h) ““ Sub-Servicer ” means any of Macquarie Aircraft Leasing Services (US), Inc., Macquarie Aircraft Leasing Services (UK) Ltd. and Macquarie Aircraft Leasing Services (Singapore) Pte. Ltd., and each of their respective successors, transferees and assigns.”
(i) ““ Tax Indemnitee ” means each of LESSOR, OWNER, Owner Participant, Servicer, any Mortgagee, any LESSOR’s Lender and each person with whom any of the foregoing files a consolidated tax return.
 
Annex 2-2

5. LESSOR’s Bank Account . Articles 1.12 (LESSOR’s Bank Account) and 5.6 (LESSOR’s Bank Account) of the Lease are amended by replacing details of the Lessor’s bank account with the following:
Bank: Citigroup Europe, plc
Swift: *****
IBAN: *****
Account: Macquarie Aerospace Limited Collections
*****
Ref.: MSN 3590
6. Maintenance of Aircraft
(a) In Article 12.4.2, the first, second, fourth and fifth references to “LESSOR” are each replaced with a reference to “OWNER”.
(b) In Articles 12.5 (Removal of Engines) and 12.6 (Removal of APU), each reference to “LESSOR” is replaced with a reference to “OWNER”.
(c) In Articles 12.8.1 and 12.8.2, each reference to “LESSOR” is replaced with a reference to “OWNER”.
(d) In Article 12.8.3, the words “LESSOR’s title” are replaced with the words “OWNER’s title” and the words “neither LESSOR nor its” are replaced with the words “none of LESSOR, OWNER or their”.
(e) In Article 12.9.5, the references to “LESSOR” on the third and penultimate lines are each replaced with a reference to “OWNER”.
7. Title and Registration
(a) In Article 14.1, the first reference to “LESSOR” is replaced with a reference to “OWNER”.
(b) In Article 14.2, the reference to “LESSOR” in the second line is replaced with a reference to “OWNER”, and the words “protect and perfect LESSOR’s interest” are replaced with the words “protect and perfect OWNER’s, LESSOR’s and Owner Participant’s respective interest”.
8. Nameplates .
(a) Article 15.1 of the Lease shall be amended by replacing the description of the legend on the Airframe identification plates with the following:
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 2-3

“THIS AIRCRAFT IS OWNED BY WELLS FARGO BANK NORTHWEST, N.A., NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE UNDER MSN 3590 TRUST
MANUFACTURER’S SERIAL NO: 3590”
(b) Article 15.2 of the Lease shall be amended by replacing the description of the legend on the Engine identification plates with the following:
“THIS ENGINE [INSERT MSN] IS OWNED BY WELLS FARGO BANK NORTHWEST, N.A., NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE UNDER MSN 3590 TRUST”
9. Tax Indemnity.
(a) Article 16.1 (General Obligation of LESSEE) of the Lease is amended by adding the words “or the City of Dublin” immediately after the words “the City or County of Los Angeles” and by replacing each reference to “LESSOR” with a reference to “each Tax Indemnitee”.
(b) Article 16.2(a) of the Lease is amended by adding after the words “the City or County of Los Angeles” the words “the City of Dublin or the Republic of Ireland or any political subdivision thereof”.
(c) Articles 16.2(a), 16.2(e), 16.2(g), 16.2(h), 16.2(i), 16.2(j), 16.3, 16.4, 16.5, 16.6, and 16.7 are amended by replacing each reference to “LESSOR” with a reference to “any Tax indemnitee”.
(d) Articles 16.2(d) is amended such that the first, second, fourth, and fifth references to “LESSOR” are each replaced with a reference to “any Tax indemnitee”.
(e) Articles 16.2(c), 16.2(h), and 16.5 are amended by replacing each reference to “LESSOR’s” with a reference to “each Tax Indemnitee’s”.
10. General Indemnity . Article 17.1 of the Lease is amended by replacing the words “LESSOR and its” with the words “LESSOR, OWNER, MBL, Servicer and their respective”.
11. Insurance . Article 18.4 is amended by replacing “LESSOR” with “OWNER” in the second line.
12. Loss, Damage and Requisition
(a) Article 19.4 (Surviving Engine(s)) is amended by replacing the words “LESSOR will transfer all its” with “LESSOR shall procure the transfer of all” and by deleting the words “on the part of LESSOR”.
(b) Articles 19.5.1 is amended by replacing the first occurrence of “LESSOR” with “OWNER” and by deleting the words “by LESSOR”.
 
Annex 2-4

(c) Article 19.5.2 is amended by replacing the second occurrence of “LESSOR” with “OWNER”.
(d) Articles 19.6.1 is amended by replacing the first occurrence of “LESSOR” with “OWNER” and by deleting the words “by LESSOR”.
(e) Article 19.6.2 is amended by replacing the second occurrence of “LESSOR” with “OWNER”.
13. Return of Aircraft . Article 23.9.13 is amended by replacing the first occurrence of “LESSOR’s” with “OWNER’s”.
14. Assignment .
(a) Article 24.2.1 is amended by replacing the words “LESSOR may” with “LESSOR or OWNER may, in each case subject to the terms, conditions and limitations set forth in this Article 24”.
(b) Article 24.2 is amended by adding the following provision as Article 24.2.3: “Any assignment, conveyance, transfer or other disposition by Owner and/or Owner Participant of all or any of their respective right, title and interest in, to or under the Lease and/or other Operative Documents and/or the Aircraft shall be subject to the terms, conditions and restrictions of this Article 24 to the same extent and with the same effect as if the same were an assignment, conveyance, transfer or other disposition of any or all of Lessor’s right, title or interest herein or in any other Operative Document or in respect of the Aircraft.”
(c) Article 24.4 (LESSEE Cooperation) is amended by adding to the end of the second sentence thereof the words “and executing and delivering a Lessee Acknowledgement substantially in the form of Annex 8 to the Assignment Agreement”.
15. Defaults of Lessee .
(a) Article 25.3(e) is amended by replacing “LESSOR” with “LESSOR and OWNER”.
(b) Article 25.6(c) is amended by replacing the words “LESSOR elects” with the words “LESSOR and OWNER elect” and by replacing reference to “LESSOR” in the fifth line with the words “LESSOR and OWNER”.
(c) Article 25.6(f) is amended by replacing “LESSOR’s” with the words “LESSOR’s or OWNER’s”.
16. Notices . Article 26.2 of the Lease shall be amended by replacing the address information relating to the Lessor set forth therein with the following:
MACQUARIE AEROSPACE IRELAND LIMITED
Level 1, South Bank House
Barrow Street
Dublin 4
 
Annex 2-5

Ireland
Attn: Aircraft Portfolio Administration
Fax: +353 1 238 3299
E-mail: notices@macquarie.aero
with a copy to:
Macquarie Aircraft Leasing Services (Ireland) Limited
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Attn: Aircraft Portfolio Administration
Fax: +353 1 238 3299
Macquarie Aircraft Leasing Services (US), Inc.
Suite 200
Two Embarcadero Center
San Francisco, CA 94111
Attn: Contracts Management Group
Fax: +1 415 829 6899
Macquarie Bank Limited
Corporate and Asset Finance Group
1 Martin Place
Sydney, NSW 2000
Australia
Attn: Peter Stokes
Fax: +61 2 8232 6013
17. Arbitration . Article 27 is deleted in its entirety and all references thereto in the Lease shall have no further effect.
18. Governing Law and Jurisdiction .
(a) Article 28.1 (California Law) is deleted in its entirety and replaced with the following:
“ New York Law . THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.”
 
Annex 2-6

(b) Article 28.2 (Non-Exclusive Jurisdiction in California) is deleted in its entirety and replaced with the following:
“ Non-exclusive Jurisdiction in New York . The parties hereto hereby irrevocably consent to the non-exclusive jurisdiction of the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York, and each party agrees to comply with all requirements necessary to effect the intent of this Article 28.2. Each of the parties hereto irrevocably consents to the service of process in any action or proceeding hereunder by the mailing of copies thereof by registered or certified airmail, postage prepaid, to such party at is respective address applicable pursuant to Article 26 (Notices). The provisions of this subsection (i) shall not limit the rights of any party to serve process in any other manner permitted by law or to obtain execution of judgment in any jurisdiction.”
(c) Article 28.3 (Protection of Interest in the Aircraft) is amended by deleting the words “NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ARTICLE 27”.
(d) Article 28.4 is amended by replacing part (c) with “(c) the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York.”
(e) Article 28.6 is amended by deleting the phrase “in accordance with Section 415.40 of the California Code of Civil Procedure”.
(f) Article 28.8 is amended by replacing the words “California (notwithstanding the conflict Laws of the State of California)” with the words “New York” and by replacing the words “Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles” with the words “New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York”.
 
Annex 2-7

ANNEX 3
FORM OF CONFIRMATION OF EFFECTIVE TIME
TO BE INTENTIONALLY OMITTED FOR FAA FILING PURPOSES
            , 2010
Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.
Re: Confirmation of Effective Time
Ladies & Gentlemen:
Reference is hereby made to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 by and among International Lease Finance Corporation, as Assignor, Macquarie Aerospace Ireland Limited, as Assignee, and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee (the “ Assignment Agreement ”) pertaining to one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 and registration mark N504VL. Any and all initially capitalized terms used herein shall have the meanings ascribed thereto in the Assignment Agreement, unless specifically defined herein.
In accordance with Section 2 of the Assignment Agreement, the undersigned hereby confirm to Lessee that the sale of the Aircraft to New Owner and the Assignment occurred today, [            ] [        ], 2010 (Time:             [Pacific time]) (the “ Effective Time ”).
Each of Existing Lessor and, by its acknowledgement below, Lessee hereby confirms that, as of the Effective Time, the Reserve rates and the Reserve balances held by Assignor pursuant to the terms and conditions of the Lease are as follows:

Type of Reserves	  	Rate of Reserves	  	Reserve Balances	
Airframe Reserves (6 Year Check):	  	***** calendar month	  	US$[______]	
Airframe Reserves (12 Year Check):	  	***** per calendar month	  	US$[______]	
Engine Performance Restoration Reserves for MSN V13000:	  	***** per Engine flight hour	  	US$[______]	
Engine Performance Restoration Reserves for MSN V13002:	  	***** per Engine flight hour	  	US$[______]	
Engine LLP Reserves for MSN V13000:	  	***** per Engine cycle	  	US$[______]	
Engine LLP Reserves for MSN V13002:	  	***** per Engine cycle	  	US$[______]	
Landing Gear Reserves:	  	***** per calendar month	  	US$[______]	
APU Reserves:	  	***** per APU hour	  	US$[______]	
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 3-1

			
Sincerely,	
	
INTERNATIONAL LEASE FINANCE CORPORATION	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
	
MACQUARIE AEROSPACE IRELAND LIMITED	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
Lessee hereby acknowledges receipt of the above Confirmation and (i) confirms the satisfaction or waiver of each of the conditions set forth in Annex 5 to the Assignment Agreement, (ii) confirms the Reserve rates and the Reserve balances held by Assignor pursuant to the terms and conditions of the Lease as specified above, and (iii) agrees to the effectiveness of the Assignment and the amendments to the Lease set forth in the Assignment Agreement, including Annex 2 thereto (each in accordance with the terms hereof and subject to the provisions of Article 24 of the Lease).

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
		
By:	 		
Name:	 		
Title:	 		
 
Annex 3-2

ANNEX 4
INSURANCE INFORMATION
 
I.	CONTRACT PARTIES	
 
A.	New Owner and Headlessor:	
Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3590 Trust (“ Owner Trustee ”)
299 South Main Street
MAC: U1228-120
Salt Lake City, Utah 84111
United States of America
Fax: +1 801-246-5053
 
B.	Assignee and Lessor	
Macquarie Aerospace Ireland Limited (“ MAL Ireland ”)
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Fax: +353 1 238 3299
 
C.	Owner Participant:	
Macquarie Aerospace Limited
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland
Fax: +353 1 238 3299
 
Annex 4-1

D.	Macquarie Aircraft Leasing Services (Ireland) Limited (“ Servicer ”)	
 
E.	Macquarie Aircraft Leasing Services (US), Inc. (MALSUS), Macquarie Aircraft Leasing Services (UK) Ltd. (MALSUK) and Macquarie Aircraft Leasing Services (Singapore) Pte. Ltd. (MALSSING), as Servicer Delegates	
 
F.	Macquarie Bank Limited	
 
G.	Prior Lessor and Assignor	
International Lease Finance Corporation (“ ILFC ”)
10250 Constellation Boulevard, 34th Floor
Los Angeles, California 90067
U.S.A.
Attention: Legal Department
Fax: 310 788 1990
Telephone: 310 788 1999
and, in respect of Legal Liability Insurances, Wells Fargo Bank Northwest, National Association (in its individual capacity), Macquarie AirFinance Ltd, and the above Contract Parties, and each of their respective successors and permitted assigns and transferees and each of their respective subsidiaries, shareholders, affiliates, directors, officers, agents, employees and servants, and, in the case of any trustee or security trustee, the institution in its individual capacity acting as such
 
II.	CONTRACTS :	
 
A.	Aircraft Lease Agreement dated as of March 9, 2007 between Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“ Volaris ”) and MAL Ireland as assignee of ILFC pursuant to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 between and among ILFC, MAL Ireland and Volaris, as supplemented and amended from time to time.	
 
B.	Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 between and among ILFC, as Assignor, MAL Ireland, as assignee and Volaris, as lessee.	
 
C.	Aircraft Sale Agreement dated as of April 13, 2010 between International Lease Finance Corporation and Macquarie Aerospace Limited	
 
D.	Head Lease Agreement dated as of [            ] [        ], 2010 between Owner Trustee and MAL Ireland.	
 
E.	Trust Agreement dated as of [            ] between the Owner Trustee and Owner Participant.	
 
Annex 4-2

F.	Assumption Agreement dated [            ] among Lessee, Lessor and Macquarie Bank Limited.	
 
G.	Servicing Agreement dated as of April 29, 2010 among Owner Participant, the Servicer and certain other entities as more particularly described therein.	
 
H.	Servicer Delegate Agreement dated as of April 29, 2010 between the Servicer and MALSUS.	
 
I.	Servicer Delegate Agreement dated as of April 29, 2010 between the Servicer and MALSUK.	
 
J.	Servicer Delegate Agreement dated as of April 29, 2010 between the Servicer and MALSSING.	
 
Annex 4-3

ANNEX 5
LESSEE CONDITIONS PRECEDENT
On or before the Effective Time, the following conditions shall have been satisfied or waived by Lessee:
 
 	a.	Lessee shall have received the following, all of which shall be in the English language and be reasonably satisfactory in form and substance to Lessee:	
 
 	i.	an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Assignor naming the person or persons authorized to execute this Agreement and the documents delivered in connection herewith;	
 
 	ii.	an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Assignee naming the person or persons authorized to execute this Agreement and the documents delivered in connection herewith; and	
 
 	iii.	with respect to Assignee, a certificate of tax residency in Ireland.	
 
 	b.	Lessee shall have received from Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as First Lien Security Trustee, Second Lien Security Trustee, Third Lien Security Trustee and Fourth Lien Security Trustee, a Notice of Removal and Discharge substantially in the form of Annex 6 hereto.	
 
 	c.	Lessee shall have received from Macquarie Aerospace Limited a guarantee substantially in the form of Annex 11 hereto.	
 
 	d.	The deregistration power of attorney originally issued by Lessee shall have been marked “cancelled” and returned to Lessee. For purposes of closing the transaction contemplated hereby, a copy of the cancelled original deregistration power of attorney sent to Lessee via facsimile on the Closing Date shall suffice, provided the original, marked “cancelled”, is delivered to Lessee via international express courier within seven (7) Business Days after the Closing Date.	
 
 	e.	Lessee shall have received an executed Letter of Quiet Enjoyment from New Owner substantially in the form attached hereto as Annex 9.	
 
 	f.	Lessee shall have received from Lessor and Macquarie Bank Limited an Assumption Agreement substantially in the form of Annex 12 hereto.	
 
Annex 5-1

ANNEX 6
NOTICE OF REMOVAL AND DISCHARGE
From: Wells Fargo Bank Northwest, National Association, as First Lien Security Trustee, Second Lien Security Trustee, Third Lien Security Trustee and Fourth Lien Security Trustee (collectively, the “ Security Trustees ”)
To: Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (the “ Lessee ”)
Date: [            ] [        ], 2010
 
Re:	Aircraft Lease Agreement dated as of March 9, 2007, currently between International Lease Finance Corporation (the “ Lessor ”) and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) (as the same may be amended, supplemented or otherwise modified, the “ Lease ”) relating to an Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 (the “ Aircraft ”).	
The purpose of this letter is to notify you that (i) the Aircraft has been removed as of             from International Lease Finance Corporation’s facility provided by an AIG affiliate with funding provided to the AIG affiliate by the Federal Reserve Bank of New York, (ii) all encumbrances and liens in favor of the Security Trustees are hereby released and discharged and (iii) any and all payments due under the Lease shall cease to be paid to the following account:
[INSERT ACCOUNT DETAILS FROM PRIOR NOTICE]
Very truly yours,
WELLS FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, not in its individual capacity but solely
as First Lien Security Trustee, Second Lien Security Trustee,
Third Lien Security Trustee and Fourth Lien Security Trustee

By:	 	 	
Name:	 	 	
Title:	 	 	
Confirmed and Acknowledged
International Lease Finance Corporation

By:	 	 	
Name:	 	 	
Title:	 	 	
 
Annex 6-1

ANNEX 7
FEDERAL AVIATION ADMINISTRATION CONVEYANCE AND ENGINE THRUST
INFORMATION
 
 	•	 	Aircraft Lease Agreement dated as of March 9, 2007 between International Lease Finance Corporation, as lessor and Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“Volaris”), as lessee, with Estoppel and Acceptance Certificate dated July 22, 2008 by Volaris attached thereto, with respect to the Airframe and the Engines (collectively, the “Lease”), which Lease was filed with the FAA as one instrument on July 22, 2008, and assigned conveyance number SB001783.	
 
Annex 7-1

ANNEX 8
FORM OF LESSEE ACKNOWLEDGEMENT
 
From:	MACQUARIE AEROSPACE IRELAND LIMITED (the “ Lessor ”)	
    	[NAME OF SECURITY TRUSTEE] (the “ Security Trustee ”)	
 
To:	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V. (the “ Lessee ”)	
[            ] [        ], 2010
Dear Sirs:
We refer to the lease agreement dated March 9, 2007 currently between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) (as supplemented and amended from time to time, the “ Lease Agreement ”) relating to one Airbus A319-100 with manufacturer’s serial number 3590 (together with the engines described in the Lease Agreement, the “ Aircraft ”) together with all related agreements (including, without limitation, any supplements or amendments) entered into in connection with, or relating to, the lease of the Aircraft and any letter of credit related thereto (together with the Lease Agreement, the “ Lease Documents ”);
All terms defined in the Lease Agreement (including terms expressly defined therein or by reference to another document or otherwise), unless the context otherwise requires, have the same meanings in this Lessee Acknowledgement (this “ Acknowledgment ”).
We hereby notify you, and for good and valuable consideration, the receipt of which is hereby acknowledged, you acknowledge and agree to the following:
1. By the Security Agreement made [DATE OF SECURITY AGREEMENT] (the “ Security Agreement ”) between, inter alios, the Lessor (as assignor) and the Security Trustee, the Lessor has assigned and encumbered to the Security Trustee, as security, all of its right, title and interest in and to all of its rights, title and interests, present and future, actual or contingent, in and to, inter alia the Lease Documents (other than in relation to the Excluded Property (as defined below)) and all other rights and benefits whatsoever accruing to it under the Lease Documents (collectively, the “ Lease Assignment Documents ”). By execution of the acknowledgement to this Acknowledgment you hereby consent, effective as of the date hereof, to the security assignment in favor of the Security Trustee described in the preceding sentence. In this Acknowledgment, “ Excluded Property ” means all right, title and interest, present or future (actual or contingent) of the Lessor in and to the operational indemnities contained in the Lease Documents, to the extent such indemnities are given expressly for the benefit of the Lessor or any of its directors, officers, employees, servants or agents only.
2. Until the Security Trustee serves a Relevant Notice (as defined below) on you, you shall continue to (a) deal directly with the Lessor in respect of the Lease Documents and the other Lease Assignment Documents to which you are party and (b) make payments as provided in the Lease Agreement.
 
Annex 8-1

3. If the Security Trustee delivers to you a written notice that it has exercised its rights under the Security Agreement (a “ Relevant Notice ”), then you shall thereafter perform, observe and comply with all terms of the Lease Documents and the other Lease Assignment Documents to which you are party for the benefit of the Security Trustee as if the Security Trustee were named in place of the Lessor as a party to the Lease Assignment Documents. After the Security Trustee delivers any Relevant Notice, you shall not recognize the exercise by the Lessor of any of its rights and powers under the Lease Assignment Documents unless and until requested to do so by the Security Trustee.
4. Save as expressly provided herein, we hereby confirm that none of your rights and obligations under the Lease Documents will be affected (including, without limitation, any obligations in respect of the payment of Rent, Reserves, Taxes or other amounts due and payable under the Lease) as a result of (a) the giving of this Acknowledgment or any Relevant Notice; or (b) the execution of the Lease Assignment.
5. This Acknowledgment is governed by New York law.
This Acknowledgment and the authorizations and instructions contained in this Acknowledgment are irrevocable unless and until you receive written notice to the contrary from the Security Trustee. This Acknowledgment and the instructions contained herein cannot be amended or modified without the written consent of the Security Trustee and the Lessor. The Security Trustee shall, in exercising any right, privilege or remedy under or in respect of the Lease be bound by and exercise the same in accordance with the terms of the Lease and, to the extent it receives any sums, whether of Rent, proceeds of Insurances, Reserves or otherwise, shall hold, invest, apply, retain and reimburse such sums as provided in the Lease but otherwise shall have no liability for the performance of, any other of the Lessor’s obligations under the Lease Assignment Documents unless expressly agreed to in writing by the Security Trustee.
By its signature below, Lessee expressly acknowledges receipt of the Acknowledgment and expressly and irrevocably agrees to the provisions contained in this Acknowledgment, including paragraph 3 hereof.
[Signature Page Follows]
 
Annex 8-2

	
Yours faithfully,	

FOR AND ON BEHALF OF
MACQUARIE AEROSPACE IRELAND LIMITED
(as Lessor)	

 	
For and on behalf of
[NAME OF SECURITY TRUSTEE]
(as Security Trustee)	

ACKNOWLEDGED AND AGREED
this             day of             , 20        
 
CONCESIONARIA VUELA COMPANIA
DE AVIACION, S.A .P.I . DE C.V. (as Lessee)
 
By:
Name:
Title:
 
By:
Name:
Title:	
 
Annex 8-3

ANNEX 9
FORM OF LETTER OF QUIET ENJOYMENT
[            ] [        ], 2010
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.
Prolongación Paseo de la Reforma #490
Piso 1 (Edificio GE)
Col. Santa Fe Peña Blanca
Del. Álvaro Obregón
01210 México, D.F.
México
Ladies and Gentlemen:
We confirm that we have received a copy and are aware of the terms of Aircraft Lease Agreement, dated March 9, 2007, as amended from time to time (the “ Lease ”), between Macquarie Aerospace Ireland Limited (“ Lessor ”) and yourselves (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) concerning that certain Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 (the “ Aircraft ”). Words and expressions defined in the Lease shall have the same respective meanings when used in this letter.
By a Security Agreement dated as of [DATE OF SECURITY AGREEMENT] and acceded to by the Lessor on [            ] (the “ Security Agreement ”) among, amongst others, Lessor and [NAME OF SECURITY TRUSTEE], as Security Trustee (“ Security Trustee ”), Lessor has assigned to the Security Trustee, as security, all of its rights, title and interest in, to and under the Lease and the other Collateral (as defined in the Security Agreement), including certain insurance proceeds.
We hereby confirm that so long as no Default or Event of Default shall have occurred and be continuing, we will not, through our own actions or through the actions of others lawfully claiming through or under us, interfere with your quiet, peaceful use, possession and enjoyment of the Aircraft in accordance with the terms of the Lease.
[Signature Page Follows]
 
Annex 9-1

	
Very truly yours,	

[NAME OF SECURITY TRUSTEE]	
(as Security Trustee)	
 
Annex 9-2

ANNEX 10
ASSIGNOR, ASSIGNEE AND LESSEE REPRESENTATIONS AND WARRANTIES
TO BE INTENTIONALLY OMITTED FOR FAA FILING PURPOSES
(d) Assignor, Assignee and Lessee hereby agree and acknowledge that immediately prior to the Effective Time, Assignor holds a cash Security Deposit in the amount of ***** pursuant to the terms and conditions of the Lease and that from and after the Effective Time, Assignee is deemed to have received and shall hold (subject to and in accordance with the provisions of the Lease) such Security Deposit;
(e) Assignor, Assignee and Lessee Acknowledgment. Assignor, Assignee and Lessee hereby agree and acknowledge as of the Effective Time that Rent under the Lease is ***** per month; and
(f) The Reserve Rates and balance of the reserve accounts as of             , 2010 are as set forth in Annex 3 hereof and as of the Effective Time such amounts shall be deemed to have been received by and shall be held by Assignee subject to and in accordance with the relevant provisions of the Lease.
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	
 
Annex 10-1

ANNEX 11
FORM OF GUARANTEE
THIS GUARANTEE AND UNDERTAKING (this “ Guarantee ”) is made on this [            ] day of [            ] 2010, between:
(1) MACQUARIE AEROSPACE LIMITED , a company incorporated under the laws of Bermuda (“ MAL ”); and
(2) CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V., a company incorporated under the laws of Mexico (“ Lessee ”).
NOW, THEREFORE , for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Clause 1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for all purposes of this Guarantee and shall be equally applicable both to the singular and plural forms of the terms defined. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Lease (as defined below).
“ Assumption Agreement ” means the assumption agreement dated [            ], among MBL, Lessor and Lessee.
“ Lease ” means the Aircraft Lease Agreement, dated as of March 9, 2007 between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), pursuant to which Lessor has leased to Lessee one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 and FAA registration mark N504VL together with two (2) IAE International Aero Engines AG V2524-A5 engines bearing manufacturer’s serial numbers V13000 and V13002.
“ Lessor ” means Macquarie Aerospace Ireland Limited, a company incorporated under the laws of Ireland.
“ New Owner ” means Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee of MSN 3590 Trust.
“ MBL ” means Macquarie Bank Limited, a company with limited liability with Australian Business Number 46 008 583 543 incorporated under the laws of Australia.
Clause 2. Representations and Warranties of MAL . MAL represents and warrants that:
2.1 this Guarantee constitutes a valid and binding agreement of MAL. MAL is duly incorporated, validly existing and in good standing under the laws of Bermuda. The transactions contemplated hereby and the execution, delivery and performance of this Guarantee by MAL (i) have been duly authorized by all necessary corporate action of MAL and (ii) are within MAL’s power and authority and do not and will not violate the constitutional documents of MAL, any applicable law, rule, regulation, judgment or court order or any provision in any existing agreement binding on MAL;
 
Annex 11-1

2.2 all authorizations, consents, registrations and notifications required to be obtained by MAL in connection with the entry into, performance, validity and enforceability of this Guarantee and the transactions contemplated by this Guarantee, have been (or will on or before the date hereof have been) obtained or effected (as appropriate) and are (or will be on their being obtained or effected) in full force and effect; and
2.3 on or prior to the date of this Guarantee, MAL has not and does not anticipate the need to (i) commence a voluntary case or other proceeding, or become subject to an involuntary case or other proceeding, seeking liquidation, reorganization, adjudication as bankrupt, winding-up, or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property; (ii) consent to any relief or to the appointment of or taking possession by any such official in any voluntary case or other proceeding commenced against it; (iii) sell, assign, transfer all or a material part of its assets; (iv) admit in writing its inability to pay its debts generally as they come due; (v) make a general assignment for the benefit of creditors; (v) cease to operate its business as a going concern; or (vi) commence any corporate action to authorize any of the foregoing.
Clause 3. Guarantee .
3.1 MAL, with effect from the date hereof, hereby unconditionally and irrevocably guarantees to Lessee the prompt payment and performance of Lessor’s obligations to Lessee under the Lease, and compliance by Lessor with, all obligations, covenants, terms, conditions and undertakings of Lessor contained in the Lease and the Operative Documents to which Lessor is a party in accordance with the terms thereof; provided, however, that such guarantee specifically excludes any and all obligations expressly assumed by MBL pursuant to the Assumption Agreement (such obligations of Lessor being referred to as the “ Guaranteed Obligations ”); and
3.2 MAL undertakes to Lessee that, if Lessor does not perform any of the Guaranteed Obligations when required to do so, it shall within two (2) Business Days of written demand from Lessee procure the performance by Lessor or perform itself the relevant Guaranteed Obligation.
3.3 MAL as a principal obligor and as a separate and independent stipulation shall indemnify Lessee upon written demand against any loss, liability or cost or expense suffered by Lessee (including reasonable attorneys’ fees and disbursements reasonably incurred by Lessee in the enforcement of this Guarantee) if (i) it does not perform the Guaranteed Obligations; and (ii) if any obligation guaranteed by it becomes unenforceable, void or illegal.
3.4 The guarantee set out in this Clause 3 shall be automatically terminated, without the requirement for any further action by any party, with effect from the occurrence of any transfer by Lessor of its rights and obligations under the Lease in conformity with Article 24 of the Lease, and MAL shall have no further liability or obligation hereunder with effect from such transfer save in respect of any liabilities or obligations arising prior to such transfer and any liabilities and obligations arising in connection with any rights retained by MAL, and save as expressly set out herein.
 
Annex 11-2

3.5 MAL shall not permit Lessor or New Owner to act or refrain from acting in any manner contrary to the provisions of the Lease.
Clause 4. Release . Once all the Guaranteed Obligations have been satisfied in full and MAL does not have any further actual or contingent liabilities thereunder, Lessee shall irrevocably and unconditionally release and discharge MAL from this Guarantee.
Clause 5. Miscellaneous .
5.1 Governing Law . THIS GUARANTEE SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT REFERENCE TO ANY CONFLICT OF LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
5.2 Successors and Assigns . The terms of this Guarantee shall be binding on, and inure to the benefit of, Lessee and MAL and their respective permitted successors and assigns.
5.3 Waiver of Notice and Defense . Except as provided in Clause 3.2, MAL hereby waives diligence, promptness, presentment, demand for payment or performance and protest and notice of protest, notice of acceptance and any other notice in respect of the Guaranteed Obligations or any part of them, and any defense arising by reason of any disability or other defense.
5.4 Jurisdiction . The parties agree that the courts of the United States District Court for the Southern District of New York, or any court sitting in the county of New York, New York, are to have non-exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) which may arise in connection with the legal relationships established by this Guarantee or otherwise arising in connection with this Guarantee. Nothing herein will prevent either party from bringing suit in any other appropriate jurisdiction. MAL further consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient or inappropriate court and agrees not to plead or claim the same.
5.5 Severability . Should any one or more of the provisions of this Guarantee be held to be invalid, illegal or unenforceable in any jurisdiction, the same shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity, illegality or unenforceability of a particular provision in a particular jurisdiction shall not render such provision invalid, illegal or unenforceable in any other jurisdiction.
5.6 Waivers, Amendments and Variations in Writing . The provisions of this Guarantee shall not be capable of being waived, amended or varied otherwise than by an express waiver or amendment in writing; and in particular any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver, amendment or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessee’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension of any variation or amendment of any such right.
 
Annex 11-3

5.7 Notices . All notices and other communications under, or in connection with, this Guarantee will, unless otherwise stated, be given and will become effective in the same manner as provided in Article 26 of the Lease.
The notice details of MAL are as follows:

Address:	  	c/o Macquarie Aircraft Leasing Services (Ireland) Limited
Level 1, South Bank House
Barrow Street
Dublin 4
Ireland	
Fax:	  	+353 1 238 3299	
Attention:	  	Contracts Management Group	
		
With a copy to:	  		
		
Address:	  	Macquarie Aircraft Leasing Services (US) Inc.
Two Embarcadero Center, Suite 200
San Francisco, CA 94111
U.S.A.	
Fax:	  	+ 1 415 829 6899	
Attention:	  	Contracts Management Group	
*     *     *
 
Annex 11-4

IN WITNESS WHEREOF , the parties hereto have executed and delivered this Guarantee on the date shown at the beginning of this Guarantee.

CONCESIONARIA VUELA COMPAÑÍA
DE AVIACIÓN, S.A.P.I. DE C.V.	  	MACQUARIE AEROSPACE LIMITED	
		
By:	  	By:	
Name:	  	Name:	
Title:	  	Title:	
		
By:	  		
Name:	  		
Title:	  		
 
Annex 11-5

ANNEX 12
FORM OF ASSUMPTION AGREEMENT
Assumption Agreement
 
Date	[Insert Date] 	
Parties
 
 	1.	Macquarie Aerospace Ireland Limited , a company duly organized and validly existing under the laws of Ireland having its registered office at Level 1, South Bank House, Barrow Street, Dublin 4, Ireland ( Lessor );	
 
 	2.	Macquarie Bank Limited ***** of No. 1 Martin Place, Sydney, NSW 2000 ( MBL ); and	
 
 	3.	Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. , a company duly organized and validly existing under the laws of Mexico having its office at Prolongación Paseo de la Reforma #490, Piso 1 (Edificio GE), Col. Santa Fe Peña Blanca, Del. Álvaro Obregón, México, D.F., México 01210 ( Lessee )	
It is agreed as follows.
 
1.	Interpretation	
 
1.1	Definitions	
The following definitions apply unless the context requires otherwise.
Aircraft means the A319-100 Aircraft bearing manufacturer’s serial number 3590 and United States registration mark N504VL.
Assumed Obligations means Lessor’s payment obligation under Articles 5.1.3 and 13 of the Lease, in each case which are existing on the date of this Assumption Agreement or which are incurred or become due at any time pursuant to and in accordance with the terms and conditions of the Lease.
Lease means the Aircraft Lease Agreement, dated as of March 9, 2007, as amended from time to time between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.).
 
*****	Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.	

Operative Document has the meaning given to it in the Lease.
 
1.2	Interpretation	
Headings are for convenience only and do not affect interpretation. The following rules apply unless the context requires otherwise.
 
 	(a)	The singular includes the plural and the converse.	
 
 	(b)	A gender includes all genders.	
 
 	(c)	Where a word or phrase is defined, its other grammatical forms have a corresponding meaning.	
 
 	(d)	A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them.	
 
 	(e)	A reference to a party to this Assumption Agreement or another agreement or document includes the party’s successors and permitted substitutes or assigns.	
 
 	(f)	Clause headings are for ease of reference only.	
 
 	(g)	A reference to (or to any specified provision of) this Assumption Agreement, any other Operative Document or any other document shall be construed as a reference to this Assumption Agreement, such other Operative Document, that provision or that document as in force for the time being and as amended, supplemented, modified, varied, assigned, novated or otherwise transferred in accordance with the terms applicable thereto or, as the case may be, with the agreement of the relevant parties, except to the extent prohibited by this Assumption Agreement.	
 
 	(h)	A reference to applicable law includes (i) applicable laws, statues, decrees, decree-laws, acts, codes, legislation, treaties, conventions and similar instruments and, in respect of any of the foregoing, any instrument passed in substitution therefore or for the purposes of consolidation thereof with any other instrument or instruments, in each case, as amended, modified, varied or supplemented from time to time, (ii) applicable final judgements, orders, determinations or awards of any court from which there is no right of appeal or if there is a right of appeal such appeal is not prosecuted within the allowable time, and (iii) applicable orders, guidelines, notice, rules and regulations of any Government Entity.	
 
1.3	Operative Document	
This Assumption Agreement is an Operative Document for the purpose of the Lease.

2.	Effect	
With effect on and from the date of this Assumption Agreement and for good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge:
 
 	(a)	MBL assumes the Assumed Obligations, and shall be substituted for Lessor under each Operative Document to the extent it applies to the Assumed Obligations, as if it had originally been a party to such Operative Document instead of Lessor; and	
 
 	(b)	MBL (i) is bound by and will comply with the provisions of each Operative Document to the extent it applies to the Assumed Obligations, (ii) assumes Lessor’s obligations and liabilities under and in relation to each Operative Document to the extent they apply to the Assumed Obligations, and (iii) enjoys all the rights and benefits of Lessor under the Operative Documents to the extent they apply to the Assumed Obligations.	
 
 	(c)	MBL will not be liable for any payment owed to Lessee under an Operative Document which does not arise from or relate to the Assumed Obligations.	
 
 	(d)	Subject to the provisions of (a) through (c) above, Lessor is irrevocably and unconditionally discharged and released from the Assumed Obligations;	
 
3.	Automatic release	
Once all the Assumed Obligations have been irrevocably and unconditionally satisfied in full and MBL does not have any further actual or contingent liabilities thereunder, Lessee shall irrevocably and unconditionally release and discharge MBL from this Assumption Agreement.
 
4.	Governing law	
 
 	(a)	This Assumption Agreement is governed by the laws of New York.	
 
 	(b)	The parties hereto hereby irrevocably consent to the non-exclusive jurisdiction of the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York. Nothing herein will prevent either party from bringing suit in any other appropriate jurisdiction.	
Each of the attorneys executing this Assumption Agreement states that the attorney has no notice of revocation of the attorney’s power of attorney.

			
MACQUARIE AEROSPACE IRELAND LIMITED, as Lessor	
		
By:	 	 	
Name:
Title:	 		
	
MACQUARIE BANK LIMITED	
		
By:	 	 	
Name:
Title:	 		
		
By:	 	 	
Name:
Title:	 		
	
CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. P.I. DE C.V., as Lessee	
		
By:	 	 	
Name:
Title:	 		
		
By:	 	 	
Name:
Title:	 		

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.36
AIRCRAFT LEASE AGREEMENT [4798]
Dated as of April 14, 2011
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-200 Aircraft
Manufacturer’s Serial No: 4798
United States Registration Mark N505VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	 	 	  	Page	 	
			
CLAUSE 1.	 	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	 	Definitions	  	 	1	  	
1.2	 	Interpretation	  	 	13	  	
			
CLAUSE 2.	 	REPRESENTATIONS AND WARRANTIES	  	 	14	  	
			
2.1	 	Lessee’s Representations and Warranties	  	 	14	  	
2.2	 	Lessor’s Representations and Warranties	  	 	17	  	
2.3	 	No Prejudice	  	 	19	  	
			
CLAUSE 3.	 	CONDITIONS PRECEDENT	  	 	19	  	
			
3.1	 	Lessor’s Conditions Precedent	  	 	19	  	
3.2	 	Waiver	  	 	22	  	
3.3	 	Lessee’s Conditions Precedent	  	 	22	  	
			
CLAUSE 4.	 	COMMENCEMENT	  	 	22	  	
			
4.1	 	Term of Leasing	  	 	22	  	
4.2	 	Delivery	  	 	23	  	
4.3	 	Licenses	  	 	23	  	
4.4	 	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
			
CLAUSE 5.	 	DISCLAIMERS	  	 	25	  	
			
5.1	 	General Disclaimers	  	 	25	  	
5.2	 	Deficiencies and Delays	  	 	26	  	
5.3	 	Repairs and Replacement	  	 	26	  	
			
CLAUSE 6.	 	RENT AND OTHER PAYMENTS	  	 	26	  	
			
6.1	 	Rent	  	 	26	  	
6.2	 	Security	  	 	26	  	
6.3	 	Maintenance Payments	  	 	27	  	
6.4	 	Payment Obligations Unconditional	  	 	27	  	
6.5	 	Currency of Payments	  	 	28	  	
6.6	 	Currency Indemnity	  	 	28	  	
6.7	 	Authorizations for Payments	  	 	28	  	
6.8	 	Set-off	  	 	28	  	
6.9	 	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
			
CLAUSE 7.	 	FEES AND EXPENSES	  	 	29	  	
			
CLAUSE 8.	 	GENERAL UNDERTAKINGS	  	 	29	  	
			
8.1	 	Duration	  	 	29	  	
8.2	 	Notice of Event of Default; Certificate	  	 	30	  	
8.3	 	Financial and Other Information	  	 	30	  	
8.4	 	Existence	  	 	32	  	
8.5	 	ERISA	  	 	32	  	
8.6	 	Lessee’s Jurisdiction	  	 	32	  	
8.7	 	Cape Town Convention	  	 	32	  	
			
CLAUSE 9.	 	OPERATIONAL UNDERTAKINGS	  	 	34	  	
			
9.1	 	Registration, Title and Nameplates	  	 	34	  	
9.2	 	Liens	  	 	36	  	
9.3	 	Possession and Subleases	  	 	37	  	
9.4	 	Information and Records	  	 	38	  	
9.5	 	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	 	Right of Inspection	  	 	41	  	
			
CLAUSE 10.	 	MAINTENANCE AND REPAIR	  	 	42	  	
			
10.1	 	General	  	 	42	  	
10.2	 	Specific Requirements	  	 	42	  	
10.3	 	Substitution of Parts; Ownership	  	 	43	  	
10.4	 	Pooling of Parts	  	 	45	  	
10.5	 	Permitted Modifications	  	 	45	  	
			
CLAUSE 11.	 	ENGINES	  	 	46	  	
			
11.1	 	General Principles	  	 	46	  	
11.2	 	Removal of Engines	  	 	47	  	
			
CLAUSE 12.	 	TITLE	  	 	48	  	
			
CLAUSE 13.	 	MANUFACTURER’S WARRANTIES	  	 	48	  	
			
CLAUSE 14.	 	INSURANCES	  	 	48	  	
			
14.1	 	Obligation to Insure	  	 	48	  	
14.2	 	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	 	Terms Specific to Hull Insurance	  	 	49	  	
14.4	 	Liability Insurance with Respect to the Aircraft	  	 	50	  	
14.5	 	Provisions Relating to all Insurance	  	 	50	  	
14.6	 	Information	  	 	51	  	
14.7	 	Additional Insurance; No Lien	  	 	52	  	
14.8	 	Failure to Insure	  	 	53	  	
14.9	 	Settlement of Claims	  	 	53	  	
 
(ii)

							
14.10	 	Assignment	  	 	53	  	
14.11	 	Post Termination	  	 	54	  	
			
CLAUSE 15.	 	LOSS, DAMAGE AND REQUISITION	  	 	54	  	
			
15.1	 	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	 	Total Loss of Engine(s)	  	 	54	  	
15.3	 	Other Loss or Damage	  	 	56	  	
15.4	 	Requisition	  	 	56	  	
			
CLAUSE 16.	 	DEFAULT	  	 	56	  	
			
16.1	 	Events of Default	  	 	56	  	
16.2	 	Rights and Remedies	  	 	59	  	
16.3	 	Power of Attorney	  	 	62	  	
16.4	 	Mitigation Credit	  	 	63	  	
			
CLAUSE 17.	 	REDELIVERY	  	 	63	  	
			
17.1	 	Redelivery	  	 	63	  	
17.2	 	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	 	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	 	Compliance after Term	  	 	65	  	
17.5	 	Deregistration and Export	  	 	66	  	
17.6	 	Ferry Flight	  	 	66	  	
17.7	 	Storage	  	 	66	  	
			
CLAUSE 18.	 	INDEMNITIES.	  	 	67	  	
			
18.1	 	General Indemnities	  	 	67	  	
18.2	 	General Tax Indemnity	  	 	69	  	
18.3	 	Notice and Contest Rights	  	 	71	  	
18.4	 	Mitigation	  	 	73	  	
18.5	 	Payments on After-Tax Basis	  	 	73	  	
18.6	 	No Deductions or Withholdings	  	 	73	  	
18.7	 	Tax Benefit	  	 	74	  	
18.8	 	Reports	  	 	74	  	
18.9	 	Continuation of Indemnities	  	 	75	  	
18.10	 	Forms	  	 	75	  	
18.11	 	Non-Parties	  	 	75	  	
			
CLAUSE 19.	 	FURTHER PROVISIONS	  	 	75	  	
			
19.1	 	Nature of Lessee’s Obligations	  	 	75	  	
19.2	 	Benefit of Agreement	  	 	76	  	
19.3	 	Further Assurances	  	 	77	  	
19.4	 	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	 	Delegation	  	 	78	  	
19.6	 	Evidence of Indebtedness	  	 	78	  	
19.7	 	Applications of Moneys	  	 	78	  	
 
(iii)

							
19.8	 	Notices	  	 	78	  	
19.9	 	Invalidity of any Provision	  	 	79	  	
19.10	 	Lessor’s Right to Remedy	  	 	79	  	
19.11	 	Entire Agreement	  	 	79	  	
19.12	 	Governing Law	  	 	79	  	
19.13	 	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	 	Waiver of Jury Trial	  	 	81	  	
19.15	 	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	 	Confidentiality	  	 	81	  	

SCHEDULE 1	 	AIRCRAFT DESCRIPTION	
		
SCHEDULE 1A	 	AIRCRAFT DOCUMENTS	
		
SCHEDULE 2	 	LEASE SUPPLEMENT	
		
SCHEDULE 3	 	CERTIFICATE	
		
SCHEDULE 4	 	REDELIVERY CONDITION	
		
SCHEDULE 5	 	MONTHLY MAINTENANCE STATUS REPORT	
		
SCHEDULE 6	 	FORM OF QUIET ENJOYMENT LETTER	
		
SCHEDULE 7	 	TECHNICAL ACCEPTANCE CERTIFICATE	
		
SCHEDULE 8	 	PART A LESSEE FURNISHED EQUIPMENT	
		
	 	PART B IN FLIGHT ENTERTAINMENT	
		
SCHEDULE 9	 	LESSEE’S CONDITIONS PRECEDENT	
		
SCHEDULE 10	 	PERMITTED SUBLESSEES	
		
SCHEDULE 11	 	IRREVOCABLE POWER OF ATTORNEY	
		
ANNEX A	 	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [4798] dated as of April 14, 2011 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [4798] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.
 
-1-

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 4798, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
-3-

“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Lessor Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
 
-4-

“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
 
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“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means a date in July, 2011, to be advised by the Manufacturer.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
 
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“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
 
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“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement 4798 dated on or about the date hereof between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
 
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“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
 
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(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
 
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(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to
 
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have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2010 have been prepared in accordance with Mexican generally accepted accounting principles and practices (“GAAPP”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards and fairly present the results of its operations for that period and its financial condition at December 31, 2010 and, in particular, to the extent required by International Financial Reporting Standards accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2010, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
 
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(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are
 
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required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
 
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(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
 
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(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee (i) approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft and to a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
 
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(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or default by Lessee under any other Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF [WILMINGTON TRUST COMPANY], AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
 
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(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the
 
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Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
 
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CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE
 
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LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
 
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(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
 
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6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or
 
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currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until
 
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expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall
 
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fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
 
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8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town	
 
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 	Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number [            ], and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are [            ] engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
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 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things
 
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(including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
 
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(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
 
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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
 
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(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
 
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(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
 
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9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
 
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(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set
 
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forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership .
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and
 
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model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
 
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10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications .
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
 
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(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
 
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(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights
 
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whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the
 
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U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
 
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14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
 
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(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
 
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14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any
 
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such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
 
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(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in
 
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form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
 
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(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
 
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(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
 
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(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
 
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(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice),
 
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Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
 
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No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
 
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(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
 
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(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable
 
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discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding
 
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60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
 
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(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this
 
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Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair,
 
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replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
 
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(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without
 
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Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall
 
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determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
 
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(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return
 
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or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
 
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19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security
 
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Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement
 
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may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
299 South Main Street, 12 th Floor
MAC: U1228-120
Salt Lake City, UT 84111
			
Telephone:	 	(801) 246-5630	
Attention:	 	Corporate Trust Services	
 
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with a copy to:
JSA Aircraft 4798, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
			
Telephone:	 	(415) 821-8300	
Attention:	 	General Counsel	
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
			
Telephone:	 	(52 55) 5261-6400	
Attention:	 	General Counsel	
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
 
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The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any
 
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claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are
 
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within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [4798] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial and Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement	
		
By:	 	/s/ Alejandra M. Llopis Loza	
Name:	 	Alejandra M. Llopis Loza	
Title:	 	Attorney in Fact	
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
-Signature Page-
Aircraft Lease Agreement, msn. 4798

CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-200 Aircraft
Manufacturer’s Serial Number: 4798
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: As specified in the Technical Acceptance Certificate.
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: July, 2011
Seating Configuration: 174 Economy Class

Weights & Capacity	  	Tonnes	
		
Maximum Take Off Weight	  	*****	
Maximum Landing Weight	  	*****	
Maximum Zero Fuel Weight	  	*****	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
Schedule 1A-2

 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO – TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [            ], 20    , between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of                  , 2011 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-200 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N             , Manufacturer’s Serial No.             ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers              and             .
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is $        .
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
 
Schedule 2-1

5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
	 	Name:	 	 	
	 	Title:	 	 	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
	 	Name:	 	 	
	 	Title:	 	 	
		
By:	 	 	
	 	Name:	 		
	 	Title:	 		
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,                      of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [            ] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-200 Aircraft, manufacturer’s serial number             (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	 	Office	 	Signature	

 	 	 	 	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this      day of              20    .

By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 3-2

I, the undersigned,                      of Lessee, DO HEREBY CERTIFY that              is a duly elected and qualified                      of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this      day of             , 20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe:	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
 
 	b)	Engines:	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 		  	Report Data From	  		
				
Aircraft S/N	 		  	Report Data To	  		
				
Type	 		  		  		
				
Total Flight Hours	 		  	FH Utilization for Period	  		
				
Total Cycles	 		  	FC Utilization for Period	  		
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
 	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  		  		  		  		  		  		
Part Number	  		  		  		  		  		  		
S/N	  		  		  		  		  		  		
TSN	  		  		  		  		  		  		
CSN	  		  		  		  		  		  		
Currently Installed Equipment
( Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  		  		  		  		  		  		
Part Number	  		  		  		  		  		  		
S/N	  		  		  		  		  		  		
TSN	  		  		  		  		  		  		
CSN	  		  		  		  		  		  		
TSO	  		  		  		  		  		  		
CSO	  		  		  		  		  		  		
DSO	  		  		  		  		  		  		
LLP First Limiter Remaining (cycles)	  		  		  		  		  		  		
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	 	 	 	NEXT CHECK DUE	
CHECK TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	 	 	 	CHECK TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  		  		  		  		 		 	A-Check	  		  		  		  		
C-Check	  		  		  		  		 		 	C-Check	  		  		  		  		
D-Check	  		  		  		  		 		 	D-Check	  		  		  		  		
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

	
	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  		  		
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.

Signed:	

(Lessee)	 		
Title:	 	 	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [                    ]
Re: Aircraft Lease Agreement [MSN] dated as of [            ] 2011 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-200 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,	
[Beneficiary][Security Trustee]	
		
By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                     
Aircraft Lease Agreement [ MSN ] dated as of             , 2011 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                      relating to Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at          hours on             , 20     being the Delivery Date at                                         :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$        ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are              and             ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:             :	

Total Flight Hours Since New	    	 	  		
Total Cycles Since New	    	 	  		
Flight Hours Since Last C-Check:	    	N/A	  		
Calendar Months Since Last D-Check	    	N/A	  		
Flight Hours Since Last D-Check	    	N/A	  		
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	

Position	    	1	    	2	  		
Serial No:	    	[              ]	    	[              ]	  		
				
Total Flight Hours:	    	 	    	 	  		
Total Cycles:	    	 	    	 	  		
				
Flight Hours since last Engine Performance Restoration:	    	N/A	    	N/A	  		
				
Cycles since last Engine Performance Restoration:	    	N/A	    	N/A	  		
				
Cycles remaining to next expected Engine Performance Restoration	    	 	    	 	  		
 
 	(c)	APU Model:	

Serial No:	    	 	  		
			
Total [Flight]/[APU] Hours:	    	 	  		
			
Total Cycles:	    	 	  		
			
[APU]/[Flight] Hours since the APU Heavy Repair:	    	N/A	  		
 
 	(d)	Landing Gear:	

Position	    	LH Main	    	Nose	    	RH Main	  		
					
Model:	    	 	    	 	    	 	  		
					
Serial No:	    	 	    	 	    	 	  		
					
Total Flight Hours:	    	 	    	 	    	 	  		
					
Total Cycles:	    	 	    	 	    	 	  		
					
Flight Hours since last Landing Gear Overhaul:	    	N/A	    	N/A	    	N/A	  		
					
Cycles since last Landing Gear Overhaul:	    	N/A	    	N/A	    	N/A	  		
 
Schedule 7-2

 	(e)	Fuel on Board:	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
July 2011
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	MSN 4798	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
 
Schedule 8-1

CONFIDENTIAL TREATMENT REQUESTED

*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
 
Schedule 8-2

CONFIDENTIAL TREATMENT REQUESTED

*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Schedule 8-3

CONFIDENTIAL TREATMENT REQUESTED

*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
 
Schedule 8-4

CONFIDENTIAL TREATMENT REQUESTED

*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
 
Schedule 8-5

CONFIDENTIAL TREATMENT REQUESTED

*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant - General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
SSBFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Jul-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	4798	
A/C Type:	  	320-200	  	Issue	  	6	  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-6

CONFIDENTIAL TREATMENT REQUESTED

*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
BFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual
Delivery
Date	  	Delivery
Date	  	Jul-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	4798	
A/C Type:	  	320-200	  	Issue	  	5	  		  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C
Qty	  	A/C
Qty	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Schedule 8-7

CONFIDENTIAL TREATMENT REQUESTED
 
PART B
IN FLIGHT ENTERTAINMENT

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Jul-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	4798	
A/C Type:	  	320-200	  	Issue	  	6	  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-8

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney
 
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]
 
The undersigned, [                                        ] in its capacity as [                    ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated                  , 2011 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [    ] dated [                    ] (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number [            ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.	  	Formato de Poder Irrevocable
 
[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]
 
El suscrito, en su carácter de [                                        ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2011 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [    ] de fecha [                    ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante [            ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.	
		
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [    ] dated [                    ] and JSA AIRCRAFT [                    ], LLC(each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:	  	PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [    ] de fecha [            ] y JSA AIRCRAFT [                    ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:	
		
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
Schedule 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documentsrequired for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.
 
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.
 
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.
 
De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
 
Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
		
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or	  		
 
Schedule 11-2

			
that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.
 
SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.
 
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.
 
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.
 
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.
 
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.
 
TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.
 
CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.
 
QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
Schedule 11-3

CONFIDENTIAL TREATMENT REQUESTED
ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
2. Maintenance Payments .
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
 
ANNEX A-1

CONFIDENTIAL TREATMENT REQUESTED
 
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
 
ANNEX A-2

CONFIDENTIAL TREATMENT REQUESTED
 
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
 
ANNEX A-3

CONFIDENTIAL TREATMENT REQUESTED
 
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
 
ANNEX A-4

CONFIDENTIAL TREATMENT REQUESTED
 
V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
4. AD Cost Sharing .
(a) With respect to each AD ***** to be performed by Lessee during the Term, the cost of compliance for which exceeds ***** Lessor shall reimburse Lessee for a portion of such work in accordance with the following formula:
*****
(b) Lessor’s obligation to make any payments under this Clause 4 shall be conditioned upon ***** and receipt by Lessor no later than ***** of invoices and proper documentation ***** in support of the invoices and verifying that *****
 
ANNEX A-5

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.37
AIRCRAFT LEASE AGREEMENT [5207]
Dated as of June 26, 2012
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as owner trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,
as Lessee,
Concerning:
Lease of one (1) Airbus A320-233 Aircraft
Manufacturer’s Serial No: 5207
United States Registration Mark N510VL
Two (2) IAE International Aero V2527E-A5 Engines
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	 	 	  	Page	 	
CLAUSE 1.	 	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	 	Definitions	  	 	1	  	
1.2	 	Interpretation	  	 	14	  	
			
CLAUSE 2.	 	REPRESENTATIONS AND WARRANTIES	  	 	15	  	
			
2.1	 	Lessee’s Representations and Warranties	  	 	15	  	
2.2	 	Lessor’s Representations and Warranties	  	 	18	  	
2.3	 	No Prejudice	  	 	20	  	
			
CLAUSE 3.	 	CONDITIONS PRECEDENT	  	 	20	  	
			
3.1	 	Lessor’s Conditions Precedent	  	 	20	  	
3.2	 	Waiver	  	 	23	  	
3.3	 	Lessee’s Conditions Precedent	  	 	24	  	
			
CLAUSE 4.	 	COMMENCEMENT	  	 	24	  	
			
4.1	 	Term of Leasing	  	 	24	  	
4.2	 	Delivery	  	 	24	  	
4.3	 	Licenses	  	 	25	  	
4.4	 	Quiet Enjoyment; Lessor Party Covenants	  	 	25	  	
			
CLAUSE 5.	 	DISCLAIMERS	  	 	26	  	
			
5.1	 	General Disclaimers	  	 	26	  	
5.2	 	Deficiencies and Delays	  	 	27	  	
5.3	 	Repairs and Replacement	  	 	27	  	
			
CLAUSE 6.	 	RENT AND OTHER PAYMENTS	  	 	27	  	
			
6.1	 	Rent	  	 	27	  	
6.2	 	Security	  	 	28	  	
6.3	 	Maintenance Payments	  	 	28	  	
6.4	 	Payment Obligations Unconditional	  	 	28	  	
6.5	 	Currency of Payments	  	 	29	  	
6.6	 	Currency Indemnity	  	 	29	  	
6.7	 	Authorizations for Payments	  	 	30	  	
6.8	 	Set-off	  	 	30	  	
6.9	 	Lessor’s Account; Receipt of Payment	  	 	30	  	
 
(i)

							
 	 	 	  	Page	 	
CLAUSE 7.	 	FEES AND EXPENSES	  	 	30	  	
			
CLAUSE 8.	 	GENERAL UNDERTAKINGS	  	 	31	  	
			
8.1	 	Duration	  	 	31	  	
8.2	 	Notice of Event of Default; Certificate	  	 	31	  	
8.3	 	Financial and Other Information	  	 	32	  	
8.4	 	Existence	  	 	33	  	
8.5	 	ERISA	  	 	34	  	
8.6	 	Lessee’s Jurisdiction	  	 	34	  	
8.7	 	Cape Town Convention	  	 	34	  	
			
CLAUSE 9.	 	OPERATIONAL UNDERTAKINGS	  	 	35	  	
			
9.1	 	Registration, Title and Nameplates	  	 	35	  	
9.2	 	Liens	  	 	38	  	
9.3	 	Possession and Subleases	  	 	38	  	
9.4	 	Information and Records	  	 	40	  	
9.5	 	Lawful and Safe Operation; Costs of Operation	  	 	41	  	
9.6	 	Right of Inspection	  	 	43	  	
			
CLAUSE 10.	 	MAINTENANCE AND REPAIR	  	 	43	  	
			
10.1	 	General	  	 	43	  	
10.2	 	Specific Requirements	  	 	44	  	
10.3	 	Substitution of Parts; Ownership	  	 	45	  	
10.4	 	Pooling of Parts	  	 	46	  	
10.5	 	Permitted Modifications	  	 	47	  	
			
CLAUSE 11.	 	ENGINES	  	 	48	  	
			
11.1	 	General Principles	  	 	48	  	
11.2	 	Removal of Engines	  	 	49	  	
			
CLAUSE 12.	 	TITLE	  	 	50	  	
			
CLAUSE 13.	 	MANUFACTURER’S WARRANTIES	  	 	50	  	
			
CLAUSE 14.	 	INSURANCES	  	 	50	  	
			
14.1	 	Obligation to Insure	  	 	50	  	
14.2	 	Insurance with Respect to the Aircraft	  	 	51	  	
14.3	 	Terms Specific to Hull Insurance	  	 	51	  	
14.4	 	Liability Insurance with Respect to the Aircraft	  	 	52	  	
14.5	 	Provisions Relating to all Insurance	  	 	52	  	
14.6	 	Information	  	 	53	  	
14.7	 	Additional Insurance; No Lien	  	 	54	  	
14.8	 	Failure to Insure	  	 	55	  	
14.9	 	Settlement of Claims	  	 	55	  	
 
(ii)

							
 	 	 	  	Page	 	
14.10	 	Assignment	  	 	55	  	
14.11	 	Post Termination	  	 	56	  	
			
CLAUSE 15.	 	LOSS, DAMAGE AND REQUISITION	  	 	56	  	
			
15.1  	 	Total Loss of Aircraft or Airframe	  	 	56	  	
15.2  	 	Total Loss of Engine(s)	  	 	56	  	
15.3  	 	Other Loss or Damage	  	 	58	  	
15.4  	 	Requisition	  	 	58	  	
			
CLAUSE 16.	 	DEFAULT	  	 	58	  	
			
16.1  	 	Events of Default	  	 	58	  	
16.2  	 	Rights and Remedies	  	 	61	  	
16.3  	 	Power of Attorney	  	 	64	  	
16.4  	 	Mitigation Credit	  	 	65	  	
			
CLAUSE 17.	 	REDELIVERY	  	 	65	  	
			
17.1  	 	Redelivery	  	 	65	  	
17.2  	 	Condition of Aircraft and the Aircraft Documents	  	 	65	  	
17.3  	 	Inspection; Corrections; Additional Work	  	 	66	  	
17.4  	 	Compliance after Term	  	 	68	  	
17.5  	 	Deregistration and Export	  	 	68	  	
17.6  	 	Ferry Flight	  	 	68	  	
17.7  	 	Storage	  	 	69	  	
			
CLAUSE 18.	 	INDEMNITIES	  	 	69	  	
			
18.1  	 	General Indemnities	  	 	69	  	
18.2  	 	General Tax Indemnity	  	 	71	  	
18.3  	 	Notice and Contest Rights	  	 	74	  	
18.4  	 	Mitigation	  	 	75	  	
18.5  	 	Payments on After-Tax Basis	  	 	75	  	
18.6  	 	No Deductions or Withholdings	  	 	75	  	
18.7  	 	Tax Benefit	  	 	76	  	
18.8  	 	Reports	  	 	76	  	
18.9  	 	Continuation of Indemnities	  	 	77	  	
18.10	 	Forms	  	 	77	  	
18.11	 	Non-Parties	  	 	77	  	
			
CLAUSE 19.	 	FURTHER PROVISIONS	  	 	78	  	
			
19.1  	 	Nature of Lessee’s Obligations	  	 	78	  	
19.2  	 	Benefit of Agreement	  	 	78	  	
19.3  	 	Further Assurances	  	 	79	  	
19.4  	 	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	79	  	
19.5  	 	Delegation	  	 	80	  	
19.6  	 	Evidence of Indebtedness	  	 	80	  	
19.7  	 	Applications of Moneys	  	 	80	  	
 
(iii)

							
 	 	 	  	Page	 	
19.8  	 	Notices	  	 	80	  	
19.9  	 	Invalidity of any Provision	  	 	81	  	
19.10	 	Lessor’s Right to Remedy	  	 	81	  	
19.11	 	Entire Agreement	  	 	81	  	
19.12	 	Governing Law	  	 	82	  	
19.13	 	Jurisdiction; Service of Process; Inconvenient Forum	  	 	82	  	
19.14	 	Waiver of Jury Trial	  	 	83	  	
19.15	 	Lease for U.S. Federal Income Tax Law Purposes	  	 	84	  	
19.16	 	Confidentiality	  	 	84	  	

SCHEDULE 1	 	AIRCRAFT DESCRIPTION	  		
			
SCHEDULE 1A	 	AIRCRAFT DOCUMENTS	  		
			
SCHEDULE 2	 	LEASE SUPPLEMENT	  		
			
SCHEDULE 3	 	CERTIFICATE	  		
			
SCHEDULE 4	 	REDELIVERY CONDITION	  		
			
SCHEDULE 5	 	MONTHLY MAINTENANCE STATUS REPORT	  		
			
SCHEDULE 6	 	FORM OF QUIET ENJOYMENT LETTER	  		
			
SCHEDULE 7	 	TECHNICAL ACCEPTANCE CERTIFICATE	  		
			
SCHEDULE 8	 	PART A             LESSEE FURNISHED EQUIPMENT	  		
			
	 	PART B             IN FLIGHT ENTERTAINMENT	  		
			
SCHEDULE 9	 	LESSEE’S CONDITIONS PRECEDENT	  		
			
SCHEDULE 10	 	[RESERVED]	  		
			
SCHEDULE 11	 	IRREVOCABLE POWER OF ATTORNEY	  		
			
SCHEDULE 12	 	FORM OF EUROCONTROL LETTER	  		
			
ANNEX A	 	CERTAIN DEFINITIONS AND PAYMENTS	  		
 
(iv)

AIRCRAFT LEASE AGREEMENT [5207 ] dated as of June 26, 2012 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as owner trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Antonio Dovali Jaime No. 70, Torre B, Piso 13, Col. Zedec Santa Fe, Delegación Alvaro Obregon, CP 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [5207] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Owner pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft Ireland 5207 Limited, a private limited liability company incorporated in Ireland, having its registered address at 70 Sir John Rogerson’s Quay, Dublin, Ireland, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Owner at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Coface ” means Compagnie Francaise d’Assurance pour le Commerce Extérieur.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
 
-3-

“ Damage Notification Threshold ” has the meaning provided in Annex A.
“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Owner Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ ECA Finance Party ” means (i) Crédit Agricole CIB (“CA”), in its capacity as lender, national agent, facility agent and security trustee under the ECA Loan Agreement dated on or about June 27, 2012 relating to the Aircraft, and the transferees, successors and assigns of CA in any such capacity and (ii) ECGD, Coface and Euler Hermes.
“ ECGD ” means The Secretary of State of Her Britannic Majesty’s Government acting by the Export Credits Guarantee Department.
 
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“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Owner and leased to Lessor under the Head Lease and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Owner pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Owner pursuant to this Agreement.
“ Engine Manufacturer ” means IAE International Aero Engines A.G.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ EU ETS ” means both (a) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC and (b) Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, together with any related, connected or successive law, statute, decree, constitution, regulation, authorization, judgment, injunction or other directive of any Government Entity of the European Union.
“ Euler Hermes ” means Euler Hermes Deutschland A.G.
“ Eurocontrol ” means the European Organisation for the Safety of Air Navigation.
 
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“Eurocontrol Letter ” means a letter in the form set out in Schedule 12 hereto.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, Head Leases, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Owner or Lessor or any third party by way of security for, or as a guarantee of the performance by, Owner, Lessor or any Affiliate of Owner or Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
“ Forward Purchase Agreement ” means that certain Forward Purchase Agreement dated 14 April 2011 entered into by and between Seller (as defined therein) and Beneficiary, as purchaser, as the same may be thereafter amended and/or supplemented.
“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
 
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“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ Head Lease ” means the lease between Lessor, as lessee, and Owner, as lessor, with respect to the Aircraft.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: each Lessor Party, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Owner in accordance with this Agreement.
“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
 
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“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor, Owner or an Affiliate of Lessor or Owner in relation to Lessor’s, Owner’s or such Affiliate’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders, and any ECA Finance Party.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s or Owner’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Party ” means Owner, Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
 
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“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s or Owner’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document, and which includes requirements for long-term storage during extended periods of non-use of the Aircraft.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
 
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“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, the Forward Purchase Agreement, the Participation Agreement and the Financing Documents.
“ Owner ” means Jackson Square A320 Leasing (Ireland) Limited, a private limited liability company incorporated in Ireland.
“ Owner Certificate of Acceptance ” means the certificate of acceptance from Owner confirming acceptance of the Aircraft from the Manufacturer.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in-flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Owner pursuant to this Agreement.
“ Participation Agreement ” means that certain Step-In Agreement dated 14 April 2011 entered into among the Seller, the Manufacturer, and the Beneficiary, among others, as the same may be thereafter amended and/or supplemented.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien created by or pursuant to or permitted by the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any person holding all relevant certificates and consents for the operation of the Aircraft whose habitual base of operation is not located in a Prohibited Country and which is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and
 
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substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
“ PMA Part ” means a Part which has not been manufactured by or with the written permission of the original manufacturer of that Part.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Prohibited Country ” means any state, country or jurisdiction (a) which is subject to any sanction or embargo by the United Nations, the European Union (or the United Kingdom, France or Germany), the United States of America, the State of Registration or the Habitual Base or (b) with which any of France, Germany or the United Kingdom does not maintain diplomatic relations.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Owner.
“ Return Location ” has the meaning provided in Clause 17.1.
 
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“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means on or about June 27, 2012.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means each Lessor Party, and each Lender, and each of their respective Affiliates, officers, directors, agents and employees.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
 
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“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor or the Security Trustee as loss payee under Lessee’s policies of insurance/reinsurance receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement (5207) dated as of June 25, 2012 between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the
 
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Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
 
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(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
 
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(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor or Owner in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor and Owner in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
 
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(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2011 have been prepared in accordance with IFRS and fairly present the results of its operations for that period and its financial condition at December 31, 2011 and, in particular, to the extent required by IFRS accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2011, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
 
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(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor or Owner to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
 
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(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
 
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(vii) on the Delivery Date, Lessor shall have received whatever rights in the Aircraft as were conveyed to it by Owner under the Head Lease and shall have all requisite authority to lease the Aircraft to Lessee hereunder;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, and JSA in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of DeBee Gilchrist, FAA counsel, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
 
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(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft, and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
 
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(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transacting user entity with the International Registry and has granted authorization to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a priority search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or under the Forward Purchase Agreement, or default by Lessee under any Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY JACKSON SQUARE A320 LEASING (IRELAND) LIMITED, IS MORTGAGED TO CRÉDIT AGRICOLE CIB AS SECURITY TRUSTEE, IS LEASED TO WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE) AND IS SUB-LEASED TO CONCESIONARIA VUELA COMPAŇIA DE AVIACIÓN, S.A.P.I. DE C.V. - VOLARIS”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney in favor of Lessor and the Security Trustee, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
 
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3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Forward Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Forward Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer under the Purchase Agreement (as amended by the Purchase Agreement Assignment) or Participation Agreement, as applicable. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that
 
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Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to or at the direction of Lessor or, as applicable, the Security Trustee, of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the
 
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Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS
 
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HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights,
 
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powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the
 
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laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of any Lessor Party or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
 
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6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Participation Agreement, the Purchase Agreement, the Forward Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe
 
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and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true
 
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and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Owner and leased to Lessor in accordance with the terms of the Head Lease, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or Owner, acknowledge before any judicial or administrative authority the right of ownership of Owner and the
 
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leasehold interest of Lessor in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or Owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
 
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8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver the IDERA to the Lessor, and the Lessor shall promptly secure its recordation by the relevant Aviation Authority should the Aircraft become registered in the name of the Lessee;	
 
 	(c)	If the IDERA has been filed with the relevant Aviation Authority, the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number 5207, and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are International Aero Engines V2500- A5 engines as more particularly described in the Technical Acceptance Certificate;	
 
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 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft with the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Owner as owner and the Security Trustee as trustee on behalf of the Lenders as creditors in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition to the Replacement Engine being vested in the Owner, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each
 
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other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Owner or Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things (including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Owner or Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor, Owner and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(r) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
 
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(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor, Owner and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Owner and the Aircraft is leased to Lessee by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Owner and Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
 
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(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to a Permitted Sublessee that is a solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
 
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(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14;
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Owner, Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Owner’s rights as owner and lessor of the Aircraft under the Head Lease, Lessor’s rights as lessor of the Aircraft hereunder and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
 
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Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
 
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(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Owner, Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all (i) laws, statutes, decrees, regulations, authorizations, judgments, injunctions and other directives of any Government Entity (including, without limitation, when and if the Aircraft is operated to, from or within European airspace, EU ETS legislation, including any international treaty or similar instrument or agreement relating thereto which is applicable to Volaris), (ii) any treaty, pact, compact or other binding agreement to which any Government Entity is a signatory and (iii) any judicial or administrative interpretation with binding characteristics or application of those described in (i) and (ii), is a signatory or party which in each case is then applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof or the failure to comply with which would result in any criminal liability on the part of any Indemnitee and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
 
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(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions in each case relevant to the export, location, use, leasing or financing of the Aircraft or matters arising therefrom, and the effect of which prohibition order (or similar order or directive), sanction or restriction is to prohibit flights to and from such jurisdiction or to prevent the Aircraft from remaining at such jurisdiction; in each case, in violation of such prohibition order (or similar order or directive), sanction or restriction except as may be necessary to safeguard the Aircraft, passengers or crew in the case of urgent circumstances resulting from atmospheric or climatic conditions, technical failure or other reasonable safety concerns (provided that in such case, Lessee shall take all measures to remove the Aircraft from such location as soon as such circumstances or conditions shall cease) whether made by or under:
(i) any Government Entity of the State of Registration, the Habitual Base, France, Germany, the United Kingdom or the United States of America; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over any Lessor Party, or any Lender, of which Lessee has notice, or over the Aircraft;
(iv) the United Nations Security Council or the European Union;
(g) obtain and maintain in full force, and operate the Aircraft in accordance with, all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses
 
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of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and be continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; provided that, unless an Event of Default has occurred and is continuing, and without in any way affecting the right of the ECA Finance Parties to perform their own annual inspection, the Lessor agrees that, should the ECA Finance Parties elect to perform an inspection during any calendar year, Lessor shall coordinate with the ECA Finance Parties so as to participate in such inspection or shall rely on the inspection report generated by the ECA Finance Parties for such calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall include a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor, any Lender or any ECA Finance Party shall have any obligation to make any inspection.
9.7 EU Operations . In the event the Aircraft is at any time to be operated in any jurisdiction in which Eurocontrol has jurisdiction over airport operations, Lessee shall, prior to commencing such operations, provide Lessor and the Lenders with a Eurocontrol Letter.
CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
 
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(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory requirements, all mandatory requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
 
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(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership.
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. For so long as the financing with respect to the Aircraft provided by the ECA Finance Parties remains outstanding, and unless otherwise permitted under subsequent Financing
 
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Documents, PMA Parts may not be installed on the Airframe; provided, that Lessor shall promptly notify Lessee should Lessor become aware of a change in ECA policy regarding the use of PMA Parts, and in such event Lessor and Lessee will take appropriate action to permit Lessee to make use of cosmetic, non-structural and non-critical interior cabin PMA Parts to the extent permitted by the new ECA policy.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become the property of Owner subject to the Head Lease and this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Owner, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Owner, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Owner (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Owner) remain with Owner free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Owner.
10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
 
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(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Owner until the Part which replaced it becomes the property of Owner or is replaced by a Part which thereupon becomes the property of Owner, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Owner remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Owner, or will, upon fitting, become the property of Owner.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Owner free of all Liens (other than Permitted Liens); provided
 
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that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor or Owner, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Owner; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Owner at all times and the Removed Engine shall remain subject to this Agreement and the Security
 
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Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor, Owner or any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Owner.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Owner, Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Owner, Lessor and any Lender, that it will respect the interests of Owner, Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Owner. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the
 
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airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Owner, Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Owner subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Owner or Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Owner or Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have and to cause Owner to enforce such rights as it may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Owner or Lessor, as the case may be, including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself, Owner and/or Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such
 
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insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include each Lessor Party and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
 
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14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
 
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(e) provide that no Lessor Party nor any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against any Lessor Party and any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days’ notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to any Lessor Party or any Lender, to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Owner, Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, except as constituted by this Agreement and the Operative Documents.
 
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14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Owner transfers the Aircraft or Lessor transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Owner or Lessor, as the case may be, may have from time to time under such insurances. In addition, if Owner transfers title to the Aircraft or Lessor transfers such rights in this Agreement and thereafter Lessor ceases to be lessor of the Aircraft or Owner ceases to be the owner of the Aircraft(any such person
 
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effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay or cause to be paid the Agreed Value to the Security Trustee for the benefit of the “Contract Parties” under Lessee’s policy of reinsurance, within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full of the Agreed Value as set forth above and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Owner acquires (at no expense to Lessor)
 
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title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Owner and Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition of title by Owner, be an Engine as defined herein.
(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Owner and become subject to this Agreement, the Head Lease and any Security Documents executed by Owner or Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Owner with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Owner, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Owner’s, Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Owner and Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Owner and Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Owner all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Owner, Lessor and the Lenders, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will or will cause Owner to, transfer to or at the direction of Lessee without recourse or warranty (except
 
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as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Owner’s or Lessor’s, as the case may be, right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
 
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(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
 
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(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Owner or Lessor in respect of the Aircraft hereunder or under the Head Lease, as applicable, is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
 
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(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor or Owner sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor or, without duplication of such costs and damages, any Lessor Party as a result of an Event of Default, including, but not limited
 
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to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to the residual interest of Lessor or, without duplication of such loss, cost, expense, liability or damage, any Lessor Party in the Aircraft, sustained by such Lessor Party due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
 
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(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to
 
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repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”). Lessee’s redelivery of the Aircraft to Lessor in accordance with the terms of this Agreement will be evidenced by execution and delivery by Lessor and Lessee of a redelivery acceptance certificate in form and substance satisfactory to Lessor and Lessee.
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
 
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(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
 
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(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
 
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17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the
 
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Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
 
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(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or (in the case of any Indemnitee other than an ECA Finance Party) recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than (i) any Claim made against an ECA Finance Party, which Lessee may defend or compromise only upon receipt of the prior written consent of such ECA Finance Party and (ii) with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and
 
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expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax
 
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indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
 
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(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement; provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
 
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18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent
 
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thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee; provided that in no event will Lessee control any contest as it relates to an ECA Finance Party without such ECA Finance Party’s prior written consent. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
 
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18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
 
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18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
 
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CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
19.2 Benefit of Agreement .
(a) Lessor Transfer . Each of Lessor, Owner and Owner Participant may at its own expense assign or transfer its interest in the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document, in each case, to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender or head lessor as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents. Lessor shall procure that each of Owner and Owner Participant shall agree, in writing, in favor of Lessee, to be bound by the provisions of this Clause 19.2
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry
 
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that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Owner, Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in
 
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writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
 
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(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
260 N. Charles Lindbergh Drive
MAC: U1240-026
Salt Lake City, UT 84116
Telephone: (801) 246-6000
Attention: Corporate Trust Department
with a copy to:
JSA Aircraft Ireland [5207] Limited c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone: (415) 821-8300
Attention: General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Antonio Dovali Jaime No. 70
Torre B, Piso 13
Col. Zedec Santa Fe
Delegación Alvaro Obregon
CP 01210 México, D.F.
México
Telephone: (52 55) 1105 2300
Attention: General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
 
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19.12 Governing Law . (a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
(b) NOTWITHSTANDING AND WITHOUT PREJUDICE TO SECTION 19.12(a), IN CASE ANY LEGAL ACTION, SUIT OR PROCEEDING IS BROUGHT IN ANY COURT OF COMPETENT JURSIDICTION IN THE UNITED MEXICAN STATES OR ANY POLITICAL SUBDIVISION THEREOF TO RECOVER THE AIRCRAFT OR ANY PART THEREOF (OR ANY LEGAL ACTION, SUIT OR PROCEEDING RELATED THERETO TO RECOVER ASSETS OR THAT CAN RESULT IN THE ATTCHMENT OF ASSETS IS BROUGHT IN ANY OF THE AFORESAID COURTS), THE PARTIES HERETO HEREBY AGREE, PURSUANT TO ARTICLE VIII (2) OF THE PROTOCOL TO THE CONVENTION ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT, THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED MEXICAN STATES, EXCEPT TO THE EXTENT THAT THE PARTY BRINGING ANY SUCH LEGAL ACTION, SUIT OR PROCEEDING ELECTS AT THE TIME OF THE COMMENCEMENT THEREOF THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, IN WHICH CASE AND TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SUCH RIGHTS AND/OR OBLIGATIONS, AS THE CASE MAY BE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATES OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement or any of the Operative Documents (“Proceedings”) may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), and in the case of Proceedings brought to recover the Aircraft, (or Proceedings related thereto to recover assets or that could result in the attachment of assets), in any court located in the Federal District of Mexico or in any other jurisdiction where the Aircraft (or the
 
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assets to be recovered or attached) may be located. By execution and delivery of this Agreement, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such Proceedings, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby and hereby irrevocably waives any right to resort to any other jurisdiction to which it may be entitled by virtue of its present or future domicile or otherwise.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring Proceedings or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any Proceeding arising out of or relating to this Agreement or any of the other Operative Documents brought in the State of New York and the Supreme Court of the State of New York (and all related appellate courts) and, in the case of Proceedings brought to recover the Aircraft (or Proceedings related thereto to recover assets or that could result in the attachment of assets) in any court located in the Federal District of Mexico or in any other jurisdiction where the Aircraft (or the assets to be recovered or attached) may be located, and hereby further irrevocably waives any claim that any Proceedings in any of the aforesaid courts has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any Proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such Proceedings are brought in an inconvenient forum, that the venue of such Proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all
 
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other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal
 
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Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [5207] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
		
By:	 	/s/ Mario E. Geyne	
Name:	 	Mario E. Geyne	
Title:	 	Financial and Fleet Planning Director	

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement	
		
By:	 	/s/ David Wall	
Name:	 	David Wall	
Title:	 	Assistant Vice President	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
 
-Signature Page-
Aircraft Lease Agreement, msn 5207

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-233 Aircraft
Manufacturer’s Serial Number: 5207
Engine Manufacturer and Model: IAE International Aero Engines A.G. V2500-A5
Engine Serial Numbers: V16294 and V16300
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: P-5119.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: 12B12182 (Nose); 12MDG2639 (LH Gear); 12MDG2670 (RH Gear)
Date of Manufacture: June, 2012
Seating Configuration: 174 Economy Class

Weights & Capacity	  	Tonnes	 	
Maximum Take Off Weight	  	 	77.0	  	
Maximum Landing Weight	  	 	66.0	  	
Maximum Zero Fuel Weight	  	 	62.5	  	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO – TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ 5207 ], dated June     , 2012, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ 5207 ] dated as of June 26, 2012 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-233 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N510VL, Manufacturer’s Serial No.5207; and
Engines: Two IAE International Aero Engines A.G. V2527E-A5 engines installed thereon bearing Engine Manufacturer’s Serial Numbers V16294 and V16300 (each of which engines has 1,750 or more lbs. of thrust).
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is as set forth in the Technical Acceptance Certificate.
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
 
Schedule 2-1

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement, Lessor	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., Lessee	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned, an officer of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“ Lessee ”), a sociedad anónima promotora de inversión de capital variable organized and existing under the laws of Mexico, DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement [5207] dated as of June 26, 2012 (as the same may be supplemented, amended or modified from time to time, the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement (5207) and Lessee, relating to that certain Airbus A320-233 Aircraft, manufacturer’s serial number 5207 (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. Attached hereto as Exhibit A is a copy of the constitutional documents and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
3. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which resolution also includes the power of attorney and which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
4. Each person whose name, title and signature appears in the attached Exhibit C hereto have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions set opposite their names and the signatures set opposite their names are their genuine signatures.
5. The representations and warranties of Lessee under Section 2.1 of the Lease and each of the other Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
7. No Event of Default or default by Lessee under the Lease or any other Lessee’s Document have occurred and is continuing as of this date or would arise by reason of the occurrence of the transactions contemplated in the Lessee’s Documents.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this     day of         20    .

By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 3-2

I, the undersigned,                     of Lessee, DO HEREBY CERTIFY that                     is a duly elected and qualified                     of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this     day of         , 20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe :	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
 
 	b)	Engines :	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg
 	  	 	  		  	Report Data From	  	 	
Aircraft S/N
 	  	 	  		  	Report Data To	  	 	
Type

Total Flight Hours
 	  	 	  		  	FH Utilization for Period	  	 	
	  		  		  		  		
Total Cycles
 	  	 	  		  	FC Utilization for Period	  	 	
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
Currently Installed Equipment
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
TSO	  	 	  	 	  	 	  	 	  	 	  	 	
CSO	  	 	  	 	  	 	  	 	  	 	  	 	
DSO	  	 	  	 	  	 	  	 	  	 	  	 	
LLP First Limiter
Remaining (cycles)	  	 	  	 	  	 	  	 	  	 	  	 	
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	 	 	 	NEXT CHECK DUE	
CHECK
TYPE	 	CHECK #	 	TOTAL
HRS	 	TOTAL
CYC	 	DATE	 	 	 	CHECK
TYPE	 	CHECK #	 	TOTAL
HRS	 	TOTAL
CYC	 	DATE	
A-Check	 	 	 	 	 	 	 	 	 		 	A-Check	 	 	 	 	 	 	 	 	
C-Check	 	 	 	 	 	 	 	 	 		 	C-Check	 	 	 	 	 	 	 	 	
D-Check	 	 	 	 	 	 	 	 	 		 	D-Check	 	 	 	 	 	 	 	 	
TECHNICAL ACTIVITY DURING PERIOD
 
 	1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

 	2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

    	
    	
DEFERRAL LIST
 
 	3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
 	4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  	 	  	 	
AD STATUS REPORT
 
 	5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.
Signed:

 
(Lessee)	
Title:	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Lessor Party][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (“ Lessee ”)
Dated: [                    ]
Re: Aircraft Lease Agreement [5207] dated as of June 26, 2012 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-233 aircraft bearing manufacturer’s serial number 5207 (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
[Lessor Party][Security Trustee]

By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement	
DATE:                     
Aircraft Lease Agreement [5207] dated as of June 26, 2012 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. relating to Airbus A320-233 Aircraft, manufacturer’s serial number 5207 (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at      hours on             , 20     being the Delivery Date at                     :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$            ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are V16294 and V16300;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No: 5207:	

	 	Total Flight Hours Since New	  		  		
	 	Total Cycles Since New	  		  		
	 	Flight Hours Since Last	  		  		
	 	C-Check:	  	N/A	  		
	 	Calendar Months Since Last	  		  		
	 	D-Check	  	N/A	  		
	 	Flight Hours Since Last	  		  		
	 	D-Check	  	N/A	  		
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5:	

	 	Position	  	1	  	2	  		  		
	 	Serial No:	  	V16294	  	V16300	  		  		
						
	 	Total Flight Hours:	  		  		  		  		
	 	Total Cycles:	  		  		  		  		
						
	 	Flight Hours since last	  		  		  		  		
	 	Engine Performance Restoration:	  	N/A	  	N/A	  		
						
	 	Cycles since last	  		  		  		  		
	 	Engine Performance Restoration:	  	N/A	  	N/A	  		
					
	 	Cycles remaining to next expected Engine Performance Restoration	  		  		  		
 
 	(c)	APU Model: Honeywell P/N 3800708-1	

	 	Serial No:                     P-5119	  		  		  		
					
	 	Total [Flight]/[APU] Hours:	  		  		  		
					
	 	Total Cycles:	  		  		  		
					
	 	[APU]/[Flight] Hours since	  		  		  		
	 	the APU Heavy Repair:	  		  	N/A	  		
 
 	(d)	Landing Gear:	

	  	Position	  	LH Main	  	Nose	  	RH Main	  		
			
	  	Model:	  	Messier Dowty Messier Dowty Messier DowtySerial No:	
	  	12MDG2639	  	12B12181	  	12MDG2670	  		  		
						
	  	Total Flight	  		  		  		  		
						
	  	Hours:	  		  		  		  		
						
	  	Total Cycles:	  		  		  		  		
					
	  	Flight Hours since
last Landing Gear Overhaul:	  	N/A	  	N/A	  	N/A	
						
	  	Cycles since	  		  		  		  		
	  	last Landing Gear Overhaul:	  	N/A	  	N/A	  	N/A	
 
Schedule 7-2

 	(e)	Fuel on Board:	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
June 2012
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC    	  	Title	 	  MSN TBD  	 	  Comments  	
 	  	Introduction of A320-200 Standard Specification at Issue 6	 	X	 	 	
 	  	Introduction of A320-200 Standard Specification at Issue 7	 	X	 	 	
ATA 02    	  	Certification	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 03    	  	Weights	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 03    	  	Placards and markings	 	 	 	 	
*****    	  	*****	 	*****	 	 	
(No ATA #)    	  	Air Conditioning	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 22    	  	Auto Flight	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 23    	  	Communications	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 25    	  	Cabin & cockpit	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 29    	  	Hydraulic Power	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 31    	  	Indicating/Recording	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 32    	  	Landing gear	 	 	 	 	
*****    	  	*****	 	*****	 	 	
ATA 33    	  	Lights	 	 	 	 	
*****    	  	*****	 	*****	 	 	
 
Schedule 8-1

							
ATA 34	  	Navigation	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 35	  	Oxygen	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 38	  	Water/Waste	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 46	  	ATSU	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 47	  	Inerting Gas System	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 49	  	APU	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 51	  	Structure	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 52	  	Doors	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 55	  	Stabilizers	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 56	  	Windows	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 57	  	Wings	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 71	  	Power Plant - General	 	 	 	 	
*****    	  	 	 	*****	 	 	
ATA 72	  	Engines	 	 	 	 	
*****    	  	 	 	*****	 	 	

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  		  	Delivery Date  	  	Mar-12  	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  		  	MSN	  	TBD	
A/C Type:	  	320-200	  	Issue  	  	6	  		  		
ATA/Item	  	Description	  	Manufacturer	  	P/N  	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	 	  	*****	  	*****	
 
Schedule 8-2

													
Airline:	 	CONCESIONARIA VUELA COMPANIA DE AVIACION	  		  	Contractual  
Delivery
Date	  	Delivery  
Date	  	Mar-12  	
Operator:	 	CONCESIONARIA VUELA COMPANIA DE AVIACION	  		  	MSN	  	MSN	  	TBD	
A/C Type:	 	320-200	  	Issue  	  	5	  		  		  		
ATA/Item	 	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	  	A/C Qty	
*****	 	*****	  	*****	  	*****  	  	*****	  	*****	  	*****	
 
Schedule 8-3

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-4

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary, Owner and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
[Reserved]
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY/PODER IRREVOCABLE
 
Form of Irrevocable Power of Attorney
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]
The undersigned, [            ] in its capacity as [            ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated              , 2012 (the “Lease”) entered it by and between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [    ] dated [                    ] (the “Lessor”) and the Company with respect to one Airbus A320-233 bearing manufacturer’s serial number [    ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [    ] dated [    ] and CRÉDIT AGRICOLE CIB (each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Federal Civil Code and its correlative articles of the several Civil Codes ruling in the federal entities of the Mexican United States, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:
 
(i)	request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America;	
 
(ii)	to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign;	
Formato de Poder Irrevocable
[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]
El suscrito, en su carácter de [            ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2012 (el “Arrendamiento”) celebrado por y entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [    ] de fecha [    ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-233 con número de serie del fabricante [    ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.
PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [    ] de fecha [    ] y CRÉDIT AGRICOLE CIB (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los establecido en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil Federal y sus artículos correlativos de los diversos Códigos Civiles que rigen en las entidades federativas de los Estados Unidos Mexicanos, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:
 
(i)	solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del Registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América;	
 
(ii)	solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera;	

Schedule 11-1

(iii)	to request and obtain the removal of the Aircraft from the operation permits of Lessee before the DGAC;	
 
(iv)	to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located;	
 
(v)	to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located;	
 
(vi)	to notify the termination of the Lease to the RAM or any other relevant authority;	
 
(vii)	to perform any acts and execute any documents required for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form;	
 
(viii)	in case of an event of total loss of the Aircraft and/or the Engines (as such term is defined in the Lease), to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases;	
 
(ix)	to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and	
 
(x)	to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.	
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ” procedure; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to

(iii)	solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
(iv)	solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre;	
 
(v)	realizar todos los trámites necesarios y conducentes para la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave;	
 
(vi)	notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes;	
 
(vii)	realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera;	
 
(viii)	en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores (según dicho es definido en el Arrendamiento), para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación;	
 
(ix)	solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y	
 
(x)	delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.	
De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y desistirse de cualquier acción o procedimiento incluidos el juicio de amparo; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y absolver posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no

Schedule 11-2

represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).
For purposes of this power of attorney, the term “Aircraft” includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.
SECOND.- This Power of Attorney is granted to be exercised within the Mexican United States and/or the United States of America according to the Inter-American Convention on the Legal Regime of Powers of Attorney to be Used Abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.
THIRD.- This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.
FOURTH.- Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.
limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federales, estatales o municipales de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).
Para todos los efectos previstos en este poder, el término “Aeronave” incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que en un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de los Estados Unidos Mexicanos y/o los Estados Unidos de América de conformidad con la Convención Interamericana del Régimen Legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, la Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.
TERCERA.- Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.
CUARTA.- Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil firmado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.

 
Schedule 11-3

FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.
In terms of Article VI of the Washington Protocol, the Spanish language which appears in this instrument is the authorized translation of the English language which also appears in this instrument, in all of its parts.
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	 		
Name:	 	[ — ]	 		
Title:	 	[ — ]	 		
QUINTA.- La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.
De conformidad con el Artículo VI del Protocolo de Washington, el idioma español que aparece en este instrumento es la traducción autorizada del idioma inglés que también aparece en este instrumento, en todas sus partes.
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

Por:	 	 	 		
Nombre:	 	[ — ]	 		
Cargo:	 	[ — ]	 		

Schedule 11-4

SCHEDULE 12
FORM OF EUROCONTROL LETTER
[PRINT ON LESSEE HEADED PAPER]
DATE                     
The Director of the Central Route Charges Office
European Organisation for the Safety of Air Navigation (EUROCONTROL)
Rue de la Fusée, 96
1130 BRUXELLES
BELGIUM
Dear Sirs
AUTHORISATION LETTER
Aircraft model Airbus A320-200: registration mark N510VL, MSN 5207 - the “Aircraft”
We have leased the above Aircraft from Wells Fargo Bank Northwest, National Association (not in its individual capacity, but solely as owner trustee) (the “ Lessor ”) in accordance with a lease agreement dated [ — ] between us and the Lessor (the “ Initial Sub-Lease ”).
We hereby authorise you to provide the Lessor (or its duly authorised representative) with a general statement of account in relation to air navigation charges incurred by us and due to EUROCONTROL. Access to the statement(s) of account will be provided in accordance with the procedures established by EUROCONTROL.
The authorisation contained in this letter may only be revoked or amended by a written instruction signed by us and the Lessor.
Yours faithfully,
For and on behalf of
[LESSEE]

 	 	(Name)	
		
 	 	(Title)	
 
Schedule 12-1

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” $337,500.00, such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
*****
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
 
Annex A-1

V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

   	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

   	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : ****** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
 
Annex A-2

Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** days after receipt of Lessor’s invoice.
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
Annex A-3

 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

   	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Annex A-4

V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

   	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
4. AD Cost Sharing .
(a) With respect to each AD ***** to be performed by Lessee during the Term, the cost of compliance for which exceeds ***** Lessor shall reimburse Lessee for a portion of such work in accordance with the following formula:
*****
(b) Lessor’s obligation to make any payments under this Clause 4 shall be conditioned upon ***** and receipt by Lessor no later than ***** of invoices and proper documentation ***** in support of the invoices and verifying that *****
 
Annex A-5

Exhibit 10.38
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
AIRCRAFT LEASE AGREEMENT [4828]
Dated as of April 14, 2011
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-200 Aircraft
Manufacturer’s Serial No: 4828
United States Registration Mark N506VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	  	 	  	Page 	 	
			
CLAUSE 1.	  	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	  	Definitions	  	 	1	  	
1.2	  	Interpretation	  	 	13	  	
			
CLAUSE 2.	  	REPRESENTATIONS AND WARRANTIES	  	 	14	  	
			
2.1	  	Lessee’s Representations and Warranties	  	 	14	  	
2.2	  	Lessor’s Representations and Warranties	  	 	17	  	
2.3	  	No Prejudice	  	 	19	  	
			
CLAUSE 3.	  	CONDITIONS PRECEDENT	  	 	19	  	
			
3.1	  	Lessor’s Conditions Precedent	  	 	19	  	
3.2	  	Waiver	  	 	22	  	
3.3	  	Lessee’s Conditions Precedent	  	 	22	  	
			
CLAUSE 4.	  	COMMENCEMENT	  	 	22	  	
			
4.1	  	Term of Leasing	  	 	22	  	
4.2	  	Delivery	  	 	23	  	
4.3	  	Licenses	  	 	24	  	
4.4	  	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
			
CLAUSE 5.	  	DISCLAIMERS	  	 	25	  	
			
5.1	  	General Disclaimers	  	 	25	  	
5.2	  	Deficiencies and Delays	  	 	26	  	
5.3	  	Repairs and Replacement	  	 	26	  	
			
CLAUSE 6.	  	RENT AND OTHER PAYMENTS	  	 	26	  	
			
6.1	  	Rent	  	 	26	  	
6.2	  	Security	  	 	26	  	
6.3	  	Maintenance Payments	  	 	27	  	
6.4	  	Payment Obligations Unconditional	  	 	27	  	
6.5	  	Currency of Payments	  	 	28	  	
6.6	  	Currency Indemnity	  	 	28	  	
6.7	  	Authorizations for Payments	  	 	28	  	
6.8	  	Set-off	  	 	28	  	
6.9	  	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
CLAUSE 7.	  	FEES AND EXPENSES	  	 	29	  	
			
CLAUSE 8.	  	GENERAL UNDERTAKINGS	  	 	30	  	
			
8.1	  	Duration	  	 	30	  	
8.2	  	Notice of Event of Default; Certificate	  	 	30	  	
8.3	  	Financial and Other Information	  	 	30	  	
8.4	  	Existence	  	 	32	  	
8.5	  	ERISA	  	 	32	  	
8.6	  	Lessee’s Jurisdiction	  	 	32	  	
8.7	  	Cape Town Convention	  	 	32	  	
			
CLAUSE 9.	  	OPERATIONAL UNDERTAKINGS	  	 	34	  	
			
9.1	  	Registration, Title and Nameplates	  	 	34	  	
9.2	  	Liens	  	 	36	  	
9.3	  	Possession and Subleases	  	 	37	  	
9.4	  	Information and Records	  	 	38	  	
9.5	  	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	  	Right of Inspection	  	 	41	  	
			
CLAUSE 10.	  	MAINTENANCE AND REPAIR	  	 	42	  	
			
10.1	  	General	  	 	42	  	
10.2	  	Specific Requirements	  	 	42	  	
10.3	  	Substitution of Parts; Ownership	  	 	43	  	
10.4	  	Pooling of Parts	  	 	45	  	
10.5	  	Permitted Modifications	  	 	45	  	
			
CLAUSE 11.	  	ENGINES	  	 	46	  	
			
11.1	  	General Principles	  	 	46	  	
11.2	  	Removal of Engines	  	 	47	  	
			
CLAUSE 12.	  	TITLE	  	 	48	  	
			
CLAUSE 13.	  	MANUFACTURER’S WARRANTIES	  	 	48	  	
			
CLAUSE 14.	  	INSURANCES	  	 	48	  	
			
14.1	  	Obligation to Insure	  	 	48	  	
14.2	  	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	  	Terms Specific to Hull Insurance	  	 	49	  	
14.4	  	Liability Insurance with Respect to the Aircraft	  	 	50	  	
14.5	  	Provisions Relating to all Insurance	  	 	50	  	
14.6	  	Information	  	 	51	  	
14.7	  	Additional Insurance; No Lien	  	 	52	  	
14.8	  	Failure to Insure	  	 	53	  	
14.9	  	Settlement of Claims	  	 	53	  	
 
(ii)

							
14.10	  	Assignment	  	 	53	  	
14.11	  	Post Termination	  	 	54	  	
			
CLAUSE 15.	  	LOSS, DAMAGE AND REQUISITION	  	 	54	  	
			
15.1	  	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	  	Total Loss of Engine(s)	  	 	54	  	
15.3	  	Other Loss or Damage	  	 	56	  	
15.4	  	Requisition	  	 	56	  	
			
CLAUSE 16.	  	DEFAULT	  	 	56	  	
			
16.1	  	Events of Default	  	 	56	  	
16.2	  	Rights and Remedies	  	 	59	  	
16.3	  	Power of Attorney	  	 	62	  	
16.4	  	Mitigation Credit	  	 	63	  	
			
CLAUSE 17.	  	REDELIVERY	  	 	63	  	
			
17.1	  	Redelivery	  	 	63	  	
17.2	  	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	  	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	  	Compliance after Term	  	 	65	  	
17.5	  	Deregistration and Export	  	 	66	  	
17.6	  	Ferry Flight	  	 	66	  	
17.7	  	Storage	  	 	66	  	
			
CLAUSE 18.	  	INDEMNITIES	  	 	67	  	
			
18.1	  	General Indemnities	  	 	67	  	
18.2	  	General Tax Indemnity	  	 	69	  	
18.3	  	Notice and Contest Rights	  	 	71	  	
18.4	  	Mitigation	  	 	73	  	
18.5	  	Payments on After-Tax Basis	  	 	73	  	
18.6	  	No Deductions or Withholdings	  	 	73	  	
18.7	  	Tax Benefit	  	 	74	  	
18.8	  	Reports	  	 	74	  	
18.9	  	Continuation of Indemnities	  	 	75	  	
18.10	  	Forms	  	 	75	  	
18.11	  	Non-Parties	  	 	75	  	
			
CLAUSE 19.	  	FURTHER PROVISIONS	  	 	75	  	
			
19.1	  	Nature of Lessee’s Obligations	  	 	75	  	
19.2	  	Benefit of Agreement	  	 	76	  	
19.3	  	Further Assurances	  	 	77	  	
19.4	  	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	  	Delegation	  	 	78	  	
19.6	  	Evidence of Indebtedness	  	 	78	  	
19.7	  	Applications of Moneys	  	 	78	  	
 
(iii)

							
19.8	  	Notices	  	 	78	  	
19.9	  	Invalidity of any Provision	  	 	79	  	
19.10	  	Lessor’s Right to Remedy	  	 	79	  	
19.11	  	Entire Agreement	  	 	79	  	
19.12	  	Governing Law	  	 	79	  	
19.13	  	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	  	Waiver of Jury Trial	  	 	81	  	
19.15	  	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	  	Confidentiality	  	 	81	  	

SCHEDULE 1	  	AIRCRAFT DESCRIPTION	
		
SCHEDULE 1A	  	AIRCRAFT DOCUMENTS	
		
SCHEDULE 2	  	LEASE SUPPLEMENT	
		
SCHEDULE 3	  	CERTIFICATE	
		
SCHEDULE 4	  	REDELIVERY CONDITION	
		
SCHEDULE 5	  	MONTHLY MAINTENANCE STATUS REPORT	
		
SCHEDULE 6	  	FORM OF QUIET ENJOYMENT LETTER	
		
SCHEDULE 7	  	TECHNICAL ACCEPTANCE CERTIFICATE	
			
SCHEDULE 8	  	PART A	  	LESSEE FURNISHED EQUIPMENT	
			
	  	PART B	  	IN FLIGHT ENTERTAINMENT	
		
SCHEDULE 9	  	LESSEE’S CONDITIONS PRECEDENT	
		
SCHEDULE 10	  	PERMITTED SUBLESSEES	
		
SCHEDULE 11	  	IRREVOCABLE POWER OF ATTORNEY	
		
ANNEX A	  	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [4828] dated as of April 14, 2011 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [4828] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.
 
-1-

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
-2-

“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 4828, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
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“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Lessor Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
 
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“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
 
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“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means a date in September, 2011, to be advised by the Manufacturer.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
 
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“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
 
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“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement 4828 dated on or about the date hereof between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
 
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“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
 
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(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
 
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(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
 
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(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2010 have been prepared in accordance with Mexican generally accepted accounting principles and practices (“GAAPP”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards and fairly present the results of its operations for that period and its financial condition at December 31, 2010 and, in particular, to the extent required by International Financial Reporting Standards accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2010, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
 
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(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are
 
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required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
 
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(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
 
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(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee (i) approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft and to a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
 
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(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or default by Lessee under any other Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF [WILMINGTON TRUST COMPANY], AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
 
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(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
 
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4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
 
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CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
 
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5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
 
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(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
 
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6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or
 
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currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
 
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CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall
 
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fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
 
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8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town	
 
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 	Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number [                    ], and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are [            ] engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
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 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things
 
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(including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
 
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(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
 
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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
 
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(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
 
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(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
 
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9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
 
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(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set
 
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forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership .
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and
 
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model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
 
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10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
 
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(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
 
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(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights
 
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whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the
 
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U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
 
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14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
 
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(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
 
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14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any
 
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such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
 
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(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in
 
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form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
 
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(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
 
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(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
 
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(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
 
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(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
 
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(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
 
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No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
 
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(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
 
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(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable
 
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discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location
 
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selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
 
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(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such
 
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participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the
 
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Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
 
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(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without
 
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Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall
 
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determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
 
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(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return
 
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or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
 
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19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security
 
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Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement
 
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may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
299 South Main Street, 12 th Floor
MAC: U1228-120
Salt Lake City, UT 84111
Telephone:     (801) 246-5630
Attention:       Corporate Trust Services
 
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with a copy to:
JSA Aircraft 4828, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone:     (415) 821-8300
Attention:      General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
Telephone:     (52 55) 5261-6400
Attention:      General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
 
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This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that
 
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such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that
 
-81-

disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [4828] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial And Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust
Agreement	
		
By:	 	/s/ Alejandra M. Llopis Loza	
Name:	 	Alejandra M. Llopis Loza	
Title:	 	Attorney in Fact	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
-Signature Page-
Aircraft Lease Agreement, msn. 4828

CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-200 Aircraft
Manufacturer’s Serial Number: 4828
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: As specified in the Technical Acceptance Certificate.
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: September, 2011
Seating Configuration: 174 Economy Class

Weights & Capacity	  	Tonnes	
Maximum Take Off Weight	  	*****	
Maximum Landing Weight	  	*****	
Maximum Zero Fuel Weight	  	*****	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO - TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [            ], 20    , between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of              , 2011 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-200 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N            , Manufacturer’s Serial No.             ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers             and             .
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is $            .
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
 
Schedule 2-1

5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,             of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [                    ] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-200 Aircraft, manufacturer’s serial number             (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	 	Office	 	Signature	

			

 	 	 	 	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this      day of         20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-2

I, the undersigned,                 of Lessee, DO HEREBY CERTIFY that                 is a duly elected and qualified                 of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this      day of         , 20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe :	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to the *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
 
 	b)	Engines :	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 		 		  	Report Data From	  		  		
						
Aircraft S/N	 		 		  	Report Data To	  		  		
						
Type	 		 		  		  		  		
						
Total Flight Hours	 		 		  	FH Utilization for Period	  		  		
						
Total Cycles	 		 		  	FC Utilization for Period	  		  		
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
							
Type/Model	  		  		  		  		  		  		
							
Part Number	  		  		  		  		  		  		
							
S/N	  		  		  		  		  		  		
							
TSN	  		  		  		  		  		  		
							
CSN	  		  		  		  		  		  		
Currently Installed Equipment
(Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
							
Type/Model	  		  		  		  		  		  		
							
Part Number	  		  		  		  		  		  		
							
S/N	  		  		  		  		  		  		
							
TSN	  		  		  		  		  		  		
							
CSN	  		  		  		  		  		  		
							
TSO	  		  		  		  		  		  		
							
CSO	  		  		  		  		  		  		
							
DSO	  		  		  		  		  		  		
							
LLP First Limiter Remaining (cycles)	  		  		  		  		  		  		
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	 	  	NEXT CHECK DUE	
CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	  	 	  	CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  		  		  		  		  		  	A-Check	  		  		  		  		
C-Check	  		  		  		  		  		  	C-Check	  		  		  		  		
D-Check	  		  		  		  		  		  	D-Check	  		  		  		  		
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

	
	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  		  		
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.

Signed:	 		

(Lessee)	
Title:	 	 	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [                    ]
Re: Aircraft Lease Agreement [MSN] dated as of [            ] 2011 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-200 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,	
[Beneficiary][Security Trustee]	
		
By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                     
Aircraft Lease Agreement [ MSN ] dated as of               , 2011 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                      relating to Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at          hours on              , 20      being the Delivery Date at                      :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$          ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are              and              ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:          :	

Total Flight Hours Since New	  	                    	
Total Cycles Since New	  	                        	
Flight Hours Since Last	  		
C-Check:	  	            N/A    	
Calendar Months Since Last	  		
D-Check	  	            N/A    	
Flight Hours Since Last	  		
D-Check	  	            N/A    	
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	
Position                        1                                                      2                                                                     
Serial No:                    [                      ]                                [                       ]                                                 
Total Flight
Hours:                                                                                                                                                        
Total Cycles:                                                                                                                                                       
 
Flight Hours since last                                                                                                                                                       
Engine Performance Restoration:                 N/A                               N/A                                                                                               
Cycles since last
Engine Performance Restoration:                 N/A                               N/A                                                                                       
Cycles remaining
to next expected
Engine Performance Restoration                                                                                                                        
 
 	(c)	APU Model:                                         	
Serial No:                                              
Total [Flight]/[APU] Hours:                                                      
Total Cycles:                                                                                  
[APU]/[Flight] Hours since
the APU Heavy Repair:                                     N/A         
 
 	(d)	Landing Gear:	

Position	  	LH Main	  	Nose	  	RH Main	
				
Model:	  	                    	  	                    	  	                    	
				
Serial No:	  	                    	  	                    	  	                    	
				
Total Flight	  		  		  		
				
Hours:	  	                    	  	                    	  	                    	
				
Total Cycles:	  	                    	  	                    	  	                    	
				
Flight Hours since
last Landing Gear Overhaul:	  	    N/A    	  	    N/A    	  	        N/A        	
				
Cycles since	  		  		  		
last Landing Gear Overhaul:	  	            N/A    	  	      N/A      	  	      N/A        	
 
Schedule 7-2

 	(e)	Fuel on Board:	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
September 2011
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	 	Title	  	MSN 4828	 	Comments	
	 	Introduction of A320-200 Standard Specification at Issue 6	  	X	 		
	 	Introduction of A320-200 Standard Specification at Issue 7	  	X	 		
ATA 02	 	Certification	  		 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
ATA 03	 	Weights	  		 		
*****	 	*****	  	*****	 		
 
Schedule 8-1

CONFIDENTIAL TREATMENT REQUESTED

ATA 03	 	Placards and markings	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
	 	Air conditioning	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 22	 	Auto Flight	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 23	 	Communications	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
 
Schedule 8-2

CONFIDENTIAL TREATMENT REQUESTED

*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 25	 	Cabin & cockpit	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
 
Schedule 8-3

CONFIDENTIAL TREATMENT REQUESTED

*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 29	 	Hydraulic Power	  		  		
*****	 	*****	  	*****	  		
 
Schedule 8-4

CONFIDENTIAL TREATMENT REQUESTED

*****	 	*****	  	*****	  		
ATA 31	 	Indicating/Recording	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 32	 	Landing gear	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 33	 	Lights	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 34	 	Navigation	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
ATA 35	 	Oxygen	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 38	 	Water/Waste	  		  		
*****	 	*****	  	*****	  		
ATA 46	 	ATSU	  		  		
*****	 	*****	  	*****	  	*****	
ATA 47	 	Inerting Gas System	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
 
Schedule 8-5

CONFIDENTIAL TREATMENT REQUESTED

ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant - General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
SSBFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Sep-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	4828	
A/C Type:	  	320-200	  	Issue	  	6	  		  		
						
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-6

CONFIDENTIAL TREATMENT REQUESTED

*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-7

CONFIDENTIAL TREATMENT REQUESTED
BFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual Delivery Date	  	Delivery Date	  	Sep-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	4828	
A/C Type:	  	320-200	  	Issue	  	5	  		  		  		
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C
Qty	  	A/C
Qty	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Schedule 8-8

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-9

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney
 
[THIS FORM OF POA MUST BE GRANTED BY
LESSEE IN A PUBLIC DEED PREPARED BY A
MEXICAN NOTARY PUBLIC]
 
The undersigned, [                    ] in its capacity as [                    ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated             , 2011 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [                    ] dated [                    ] (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number [            ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.
 
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [                    ] dated [                    ] and JSA AIRCRAFT [            ], LLC (each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:
 
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	Formato de Poder Irrevocable
 
[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]
 
El suscrito, en su carácter de [                    ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2011 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante [            ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.
 
PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] y JSA AIRCRAFT [            ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:
 
(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
SCHEDULE 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documentsrequired for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.
 
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.
 
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).
 
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.
 
De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
 
Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
 
SCHEDULE 11-2

			
that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.
 
SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.
 
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.
 
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.
 
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.
 
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.
 
TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.
 
CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.
 
QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
SCHEDULE 11-3

CONFIDENTIAL TREATMENT REQUESTED
ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = *****, where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
*****
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
ANNEX A-1

CONFIDENTIAL TREATMENT REQUESTED
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
 
ANNEX A-2

CONFIDENTIAL TREATMENT REQUESTED
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
 
ANNEX A-3

CONFIDENTIAL TREATMENT REQUESTED
The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
ANNEX A-4

CONFIDENTIAL TREATMENT REQUESTED
V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
4. AD Cost Sharing .
(a) With respect to each AD ***** to be performed by Lessee during the Term, the cost of compliance for which exceeds ***** Lessor shall reimburse Lessee for a portion of such work in accordance with the following formula:
*****
(b) Lessor’s obligation to make any payments under this Clause 4 shall be conditioned upon ***** and receipt by Lessor no later than ***** of invoices and proper documentation ***** in support of the invoices and verifying that *****
 
ANNEX A-5

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.39
AIRCRAFT LEASE AGREEMENT [4832]
Dated as of April 14, 2011
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-200 Aircraft
Manufacturer’s Serial No: 4832
United States Registration Mark N507VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.          OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

							
   	  	 	  	Page	 	
CLAUSE 1. DEFINITIONS AND INTERPRETATION	  	 	1	  	
        1.1	  	Definitions	  	 	1	  	
1.2	  	Interpretation	  	 	13	  	
		
CLAUSE 2. REPRESENTATIONS AND WARRANTIES	  	 	14	  	
2.1	  	Lessee’s Representations and Warranties	  	 	14	  	
2.2	  	Lessor’s Representations and Warranties	  	 	17	  	
2.3	  	No Prejudice	  	 	19	  	
		
CLAUSE 3. CONDITIONS PRECEDENT	  	 	19	  	
3.1	  	Lessor’s Conditions Precedent	  	 	19	  	
3.2	  	Waiver	  	 	22	  	
3.3	  	Lessee’s Conditions Precedent	  	 	22	  	
		
CLAUSE 4. COMMENCEMENT	  	 	22	  	
4.1	  	Term of Leasing	  	 	22	  	
4.2	  	Delivery	  	 	23	  	
4.3	  	Licenses	  	 	24	  	
4.4	  	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
		
CLAUSE 5. DISCLAIMERS	  	 	25	  	
5.1	  	General Disclaimers	  	 	25	  	
5.2	  	Deficiencies and Delays	  	 	26	  	
5.3	  	Repairs and Replacement	  	 	26	  	
		
CLAUSE 6. RENT AND OTHER PAYMENTS	  	 	26	  	
6.1	  	Rent	  	 	26	  	
6.2	  	Security	  	 	26	  	
6.3	  	Maintenance Payments	  	 	27	  	
6.4	  	Payment Obligations Unconditional	  	 	27	  	
6.5	  	Currency of Payments	  	 	28	  	
6.6	  	Currency Indemnity	  	 	28	  	
6.7	  	Authorizations for Payments	  	 	28	  	
6.8	  	Set-off	  	 	28	  	
6.9	  	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
   	  	 	  	Page	 	
CLAUSE 7. FEES AND EXPENSES	  	 	29	  	
		
CLAUSE 8. GENERAL UNDERTAKINGS	  	 	30	  	
        8.1	  	Duration	  	 	30	  	
8.2	  	Notice of Event of Default; Certificate	  	 	30	  	
8.3	  	Financial and Other Information	  	 	30	  	
8.4	  	Existence	  	 	31	  	
8.5	  	ERISA	  	 	32	  	
8.6	  	Lessee’s Jurisdiction	  	 	32	  	
8.7	  	Cape Town Convention	  	 	32	  	
		
CLAUSE 9. OPERATIONAL UNDERTAKINGS	  	 	34	  	
9.1	  	Registration, Title and Nameplates	  	 	34	  	
9.2	  	Liens	  	 	36	  	
9.3	  	Possession and Subleases	  	 	37	  	
9.4	  	Information and Records	  	 	38	  	
9.5	  	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	  	Right of Inspection	  	 	41	  	
		
CLAUSE 10. MAINTENANCE AND REPAIR	  	 	41	  	
10.1	  	General	  	 	41	  	
10.2	  	Specific Requirements	  	 	42	  	
10.3	  	Substitution of Parts; Ownership	  	 	43	  	
10.4	  	Pooling of Parts	  	 	44	  	
10.5	  	Permitted Modifications	  	 	45	  	
		
CLAUSE 11. ENGINES	  	 	46	  	
11.1	  	General Principles	  	 	46	  	
11.2	  	Removal of Engines	  	 	47	  	
		
CLAUSE 12. TITLE	  	 	48	  	
		
CLAUSE 13. MANUFACTURER’S WARRANTIES	  	 	48	  	
		
CLAUSE 14. INSURANCES	  	 	48	  	
14.1	  	Obligation to Insure	  	 	48	  	
14.2	  	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	  	Terms Specific to Hull Insurance	  	 	49	  	
14.4	  	Liability Insurance with Respect to the Aircraft	  	 	49	  	
14.5	  	Provisions Relating to all Insurance	  	 	50	  	
14.6	  	Information	  	 	51	  	
14.7	  	Additional Insurance; No Lien	  	 	52	  	
14.8	  	Failure to Insure	  	 	52	  	
14.9	  	Settlement of Claims	  	 	53	  	
14.10	  	Assignment	  	 	53	  	
14.11	  	Post Termination	  	 	53	  	
 
(ii)

							
   	  	 	  	Page	 	
CLAUSE 15. LOSS, DAMAGE AND REQUISITION	  	 	54	  	
        15.1	  	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	  	Total Loss of Engine(s)	  	 	54	  	
15.3	  	Other Loss or Damage	  	 	56	  	
15.4	  	Requisition	  	 	56	  	
		
CLAUSE 16. DEFAULT	  	 	56	  	
16.1	  	Events of Default	  	 	56	  	
16.2	  	Rights and Remedies	  	 	59	  	
16.3	  	Power of Attorney	  	 	62	  	
16.4	  	Mitigation Credit	  	 	62	  	
		
CLAUSE 17. REDELIVERY.	  	 	63	  	
17.1	  	Redelivery	  	 	63	  	
17.2	  	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	  	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	  	Compliance after Term	  	 	65	  	
17.5	  	Deregistration and Export	  	 	66	  	
17.6	  	Ferry Flight	  	 	66	  	
17.7	  	Storage	  	 	66	  	
		
CLAUSE 18. INDEMNITIES	  	 	67	  	
18.1	  	General Indemnities	  	 	67	  	
18.2	  	General Tax Indemnity	  	 	69	  	
18.3	  	Notice and Contest Rights	  	 	71	  	
18.4	  	Mitigation	  	 	73	  	
18.5	  	Payments on After-Tax Basis	  	 	73	  	
18.6	  	No Deductions or Withholdings	  	 	73	  	
18.7	  	Tax Benefit	  	 	74	  	
18.8	  	Reports	  	 	74	  	
18.9	  	Continuation of Indemnities	  	 	75	  	
18.10	  	Forms	  	 	75	  	
18.11	  	Non-Parties	  	 	75	  	
		
CLAUSE 19. FURTHER PROVISIONS	  	 	75	  	
19.1	  	Nature of Lessee’s Obligations	  	 	75	  	
19.2	  	Benefit of Agreement	  	 	75	  	
19.3	  	Further Assurances	  	 	77	  	
19.4	  	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	  	Delegation	  	 	78	  	
19.6	  	Evidence of Indebtedness	  	 	78	  	
19.7	  	Applications of Moneys	  	 	78	  	
 
(iii)

							
   	  	 	  	Page	 	
19.8	  	Notices	  	 	78	  	
19.9	  	Invalidity of any Provision	  	 	79	  	
        19.10	  	Lessor’s Right to Remedy	  	 	79	  	
19.11	  	Entire Agreement	  	 	79	  	
19.12	  	Governing Law	  	 	79	  	
19.13	  	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	  	Waiver of Jury Trial	  	 	81	  	
19.15	  	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	  	Confidentiality	  	 	81	  	
 
SCHEDULE 1	AIRCRAFT DESCRIPTION	
 
SCHEDULE 1A	AIRCRAFT DOCUMENTS	
 
SCHEDULE 2	LEASE SUPPLEMENT	
 
SCHEDULE 3	CERTIFICATE	
 
SCHEDULE 4	REDELIVERY CONDITION	
 
SCHEDULE 5	MONTHLY MAINTENANCE STATUS REPORT	
 
SCHEDULE 6	FORM OF QUIET ENJOYMENT LETTER	
 
SCHEDULE 7	TECHNICAL ACCEPTANCE CERTIFICATE	
 
SCHEDULE 8	PART A LESSEE FURNISHED EQUIPMENT	
 
    	PART B IN FLIGHT ENTERTAINMENT	
 
SCHEDULE 9	LESSEE’S CONDITIONS PRECEDENT	
 
SCHEDULE 10	PERMITTED SUBLESSEES	
 
SCHEDULE 11	IRREVOCABLE POWER OF ATTORNEY	
 
ANNEX A	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [4832] dated as of April 14, 2011 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [4832] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
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“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 4832, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
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“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Lessor Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
 
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“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
 
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“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means a date in September, 2011, to be advised by the Manufacturer.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
 
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“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
 
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“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement 4832 dated on or about the date hereof between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
 
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“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
 
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(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
 
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(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
 
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(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2010 have been prepared in accordance with Mexican generally accepted accounting principles and practices (“GAAPP”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards and fairly present the results of its operations for that period and its financial condition at December 31, 2010 and, in particular, to the extent required by International Financial Reporting Standards accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2010, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
 
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(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are required to authorize Lessor to sign and deliver, and to perform the
 
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transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
 
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(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
 
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(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee (i) approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft and to a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
(g) a summary of the Maintenance Program;
 
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(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or default by Lessee under any other Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
 
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“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF [WILMINGTON TRUST COMPANY], AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
 
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(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
 
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4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
 
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CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
 
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5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
 
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(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
 
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6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or
 
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currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
 
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CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
 
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(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
 
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(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town	
 
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 	Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number [              ], and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are [                      ] engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
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 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things
 
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(including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
 
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(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
 
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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
 
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(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
 
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(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
 
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9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
 
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(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
 
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(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
 
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(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership.
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
 
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(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
 
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Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from
 
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any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
 
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11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
 
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CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
 
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14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
 
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(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
 
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(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
 
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(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including,
 
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without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
 
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CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing,
 
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Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
 
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15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
 
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(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or
 
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winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
 
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(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
 
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(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
 
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(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
 
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No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
 
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(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
 
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(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
 
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(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
 
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(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
 
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CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
 
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(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
 
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18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply
 
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only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
 
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(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have
 
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occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest
 
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of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
 
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(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
 
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18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee
 
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shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
 
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19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
 
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19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
299 South Main Street, 12 th Floor
MAC: U1228-120
Salt Lake City, UT 84111
Telephone: (801) 246-5630
Attention: Corporate Trust Services
 
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with a copy to:
JSA Aircraft 4832, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone: (415) 821-8300
Attention: General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
Telephone: (52 55) 5261-6400
Attention: General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
 
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This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
 
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Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that
 
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disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [4832] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial and Fleet Planning Director	

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement	
		
By:	 	/s/ Alejandra M. Llopis Loza	
Name:	 	Alejandra M. Llopis Loza	
Title:	 	Attorney in Fact	
COUNTERPART NO.              OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
 
-Signature Page-
Aircraft Lease Agreement, msn. 4832

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-200 Aircraft
Manufacturer’s Serial Number: 4832
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: As specified in the Technical Acceptance Certificate.
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: September, 2011
Seating Configuration: 174 Economy Class

Weights & Capacity	  	Tonnes	  		
Maximum Take Off Weight	  	*****	  		
Maximum Landing Weight	  	*****	  		
Maximum Zero Fuel Weight	  	*****	  		

Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
Schedule 1A-2

 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO - TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks—Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks—Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [              ], 20__, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of              , 2011 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-200 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N              , Manufacturer’s Serial No.               ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers              and              .
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is $              .
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
 
Schedule 2-1

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
			
        Name:	 	 	
			
        Title:	 	 	

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
			
        Name:	 	 	
			
        Title:	 	 	

By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,              of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [__] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	  	Office	  	Signature	

 	  	 	  	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this              day of              20__.

		
By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 3-2

I, the undersigned,              of Lessee, DO HEREBY CERTIFY that              is a duly elected and qualified              of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this              day of              , 20__.

		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
2. Check and Part Lives
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
a) Airframe :
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
b) Engines :
At the date of redelivery, no individual Engine shall *****. A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
c) APU:
The APU will be in serviceable condition and will have *****. The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
d) Landing Gear:
 
 	(i)	The Landing Gear shall *****. In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

e) Components:
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 	 	  	Report Data From	  	 	
				
Aircraft S/N	 	 	  	Report Data To	  	 	
				
Type	 	 	  		  		
				
Total Flight Hours	 	 	  	FH Utilization for Period	  	 	
				
Total Cycles	 	 	  	FC Utilization for Period	  	 	
Installed Equipment at Delivery
(Engines, APU, Landing Gear)

 	  	Engines/APU	  	Landing Gear	
 	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  		  		  		  		  		  		
Part Number	  		  		  		  		  		  		
S/N	  		  		  		  		  		  		
TSN	  		  		  		  		  		  		
CSN	  		  		  		  		  		  		
Currently Installed Equipment
(Engines, APU, Landing Gear)

 	  	Engines/APU	  	Landing Gear	
 	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  		  		  		  		  		  		
Part Number	  		  		  		  		  		  		
S/N	  		  		  		  		  		  		
TSN	  		  		  		  		  		  		
CSN	  		  		  		  		  		  		
TSO	  		  		  		  		  		  		
CSO	  		  		  		  		  		  		
DSO	  		  		  		  		  		  		
LLP First Limiter Remaining (cycles)	  		  		  		  		  		  		

Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	NEXT CHECK DUE	
CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	  	CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  		  		  		  		  	A-Check	  		  		  		  		
C-Check	  		  		  		  		  	C-Check	  		  		  		  		
D-Check	  		  		  		  		  	D-Check	  		  		  		  		
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	
 
2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  		  		
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.
Signed:

(Lessee)
Title:                       
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To:     CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [ ]
Re:     Aircraft Lease Agreement [MSN] dated as of [ ] 2011 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-200 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
[Beneficiary][Security Trustee]

By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:	 		
Title:	 		

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                                     
Aircraft Lease Agreement [ MSN ] dated as of                       , 2011 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                              relating to Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at              hours on                  , 20      being the Delivery Date at                                                       :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$                              ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are              and              ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:              :	

	  	Total Flight Hours Since New	  	 	  		
	  	Total Cycles Since New	  	 	  		
	  	Flight Hours Since Last	  		  		
	  	C-Check:	  	N/A	  		
	  	Calendar Months Since Last	  		  		
	  	D-Check	  	N/A	  		
	  	Flight Hours Since Last	  		  		
	  	D-Check	  	N/A	  		
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	
Position                             1                              2
Serial No:                          [                  ]            [                  ]
Total Flight
Hours:                                                                             
Total Cycles:                                                                                     
Flight Hours since last
Engine Performance Restoration:             N/A                 N/A
Cycles since last
Engine Performance Restoration:             N/A                 N/A
Cycles remaining
to next expected
Engine Performance Restoration                                                    
 
(c)	APU Model:                                                                  	
Serial No:                                                                       
Total [Flight]/[APU] Hours:                                                          
Total Cycles:                                                              
[APU]/[Flight] Hours since
the APU Heavy Repair:                             N/A
 
(d)	Landing Gear:	
Position                         LH Main         Nose         RH Main
Model:                                                                                                           
Serial No:                                                                                            
Total Flight
Hours:                                                                                   
Total Cycles:                                                                                   
Flight Hours since
last Landing Gear Overhaul:             N/A             N/A             N/A

Schedule 7-2

Cycles since
last Landing Gear Overhaul:                 N/A                 N/A                 N/A
 
 	(e)	Fuel on Board:                                                                  	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
September 2011
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	MSN 4828	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
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ATA 03	  	Weights	  		  		
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Schedule 8-1

							
ATA 03	  	Placards and markings	  		  		
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	  	Air conditioning	  		  		
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ATA 22	  	Auto Flight	  		  		
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ATA 23	  	Communications	  		  		
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Schedule 8-2

							
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ATA 25	  	Cabin & cockpit	  		  		
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Schedule 8-3

							
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Schedule 8-4

							
ATA 29	  	Hydraulic Power	  		  		
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ATA 31	  	Indicating/Recording	  		  		
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ATA 32	  	Landing gear	  		  		
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ATA 33	  	Lights	  		  		
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ATA 34	  	Navigation	  		  		
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ATA 35	  	Oxygen	  		  		
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ATA 38	  	Water/Waste	  		  		
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ATA 46	  	ATSU	  		  		
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ATA 47	  	Inerting Gas System	  		  		
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Schedule 8-5

							
ATA 49	  	APU	  		  		
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ATA 51	  	Structure	  		  		
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ATA 52	  	Doors	  		  		
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ATA 55	  	Stabilizers	  		  		
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ATA 56	  	Windows	  		  		
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ATA 57	  	Wings	  		  		
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ATA 71	  	Power Plant—General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
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SSBFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	  	Delivery Date	  	Sep-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	  	MSN	  	4832	
A/C Type:	  	320-200	  	 	Issue	  	  	 	6	  	  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
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Schedule 8-6

											
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BFE
 
Schedule 8-7

													
Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual
Delivery
Date	  	Delivery
Date	  	Sep-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	4832	
A/C
Type:	  	320-200	  	Issue	  	5	  		  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Schedule 8-8

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-9

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney	  	Formato de Poder Irrevocable	
		
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]	  	[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]	
		
The undersigned, [                  ] in its capacity as [                  ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated          , 2011 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [          ] dated [          ] (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number [          ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.	  	El suscrito, en su carácter de [                  ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha                  , 2011 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [                  ] de fecha [          ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante [          ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.	
		
FIRST.—The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [          ] dated [          ] and JSA AIRCRAFT [          ], LLC(each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:	  	PRIMERA.—La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [          ] de fecha [          ] y JSA AIRCRAFT [          ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:	
		
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
SCHEDULE 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documents required for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.	
		
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “amparo”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.	  	De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.	
		
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).	  	Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
 
SCHEDULE 11-2

			
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.	
		
SECOND.—This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.	  	SEGUNDA.—Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.	
		
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.	  	TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.	
		
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.	  	CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.	
		
FIFTH.—The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
SCHEDULE 11-3

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = *****, where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****.
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****.
“ Discount Rate ” means *****.
“ Security Amount ” means at any time the amount equal to *****.
*****
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****.
(b) *****per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
 
ANNEX A-1

V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH:

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be
 
ANNEX A-2

applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
 
ANNEX A-3

The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
 
(b)	US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.	
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for *****. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
ANNEX A-4

V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
4. AD Cost Sharing .
(a) With respect to each AD ***** to be performed by Lessee during the Term, the cost of compliance for which exceeds ***** Lessor shall reimburse Lessee for a portion of such work in accordance with the following formula:
*****
(b) Lessor’s obligation to make any payments under this Clause 4 shall be conditioned upon ***** and receipt by Lessor no later than ***** of invoices and proper documentation ***** in support of the invoices and verifying that *****
 
ANNEX A-5

Exhibit 10.40
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
AIRCRAFT LEASE AGREEMENT [4950]
Dated as of April 14, 2011
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-233 Aircraft
Manufacturer’s Serial No: 4950
United States Registration Mark N508VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.      OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	  	 	  	Page 	 	
			
CLAUSE 1.	  	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	  	Definitions	  	 	1	  	
1.2	  	Interpretation	  	 	13	  	
			
CLAUSE 2.	  	REPRESENTATIONS AND WARRANTIES	  	 	14	  	
			
2.1	  	Lessee’s Representations and Warranties	  	 	14	  	
2.2	  	Lessor’s Representations and Warranties	  	 	17	  	
2.3	  	No Prejudice	  	 	19	  	
			
CLAUSE 3.	  	CONDITIONS PRECEDENT	  	 	19	  	
			
3.1	  	Lessor’s Conditions Precedent	  	 	19	  	
3.2	  	Waiver	  	 	22	  	
3.3	  	Lessee’s Conditions Precedent	  	 	22	  	
			
CLAUSE 4.	  	COMMENCEMENT	  	 	22	  	
			
4.1	  	Term of Leasing	  	 	22	  	
4.2	  	Delivery	  	 	23	  	
4.3	  	Licenses	  	 	23	  	
4.4	  	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
			
CLAUSE 5.	  	DISCLAIMERS	  	 	25	  	
			
5.1	  	General Disclaimers	  	 	25	  	
5.2	  	Deficiencies and Delays	  	 	26	  	
5.3	  	Repairs and Replacement	  	 	26	  	
			
CLAUSE 6.	  	RENT AND OTHER PAYMENTS	  	 	26	  	
			
6.1	  	Rent	  	 	26	  	
6.2	  	Security	  	 	26	  	
6.3	  	Maintenance Payments	  	 	27	  	
6.4	  	Payment Obligations Unconditional	  	 	27	  	
6.5	  	Currency of Payments	  	 	28	  	
6.6	  	Currency Indemnity	  	 	28	  	
6.7	  	Authorizations for Payments	  	 	28	  	
6.8	  	Set-off	  	 	28	  	
6.9	  	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
 	  	 	  	Page 	 	
			
CLAUSE 7.	  	FEES AND EXPENSES	  	 	29	  	
			
CLAUSE 8.	  	GENERAL UNDERTAKINGS	  	 	29	  	
			
8.1	  	Duration	  	 	29	  	
8.2	  	Notice of Event of Default; Certificate	  	 	30	  	
8.3	  	Financial and Other Information	  	 	30	  	
8.4	  	Existence	  	 	31	  	
8.5	  	ERISA	  	 	32	  	
8.6	  	Lessee’s Jurisdiction	  	 	32	  	
8.7	  	Cape Town Convention	  	 	32	  	
			
CLAUSE 9.	  	OPERATIONAL UNDERTAKINGS	  	 	34	  	
			
9.1	  	Registration, Title and Nameplates	  	 	34	  	
9.2	  	Liens	  	 	36	  	
9.3	  	Possession and Subleases	  	 	37	  	
9.4	  	Information and Records	  	 	38	  	
9.5	  	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	  	Right of Inspection	  	 	41	  	
			
CLAUSE 10.	  	MAINTENANCE AND REPAIR	  	 	41	  	
			
10.1	  	General	  	 	41	  	
10.2	  	Specific Requirements	  	 	42	  	
10.3	  	Substitution of Parts; Ownership	  	 	43	  	
10.4	  	Pooling of Parts	  	 	44	  	
10.5	  	Permitted Modifications	  	 	45	  	
			
CLAUSE 11.	  	ENGINES	  	 	46	  	
			
11.1	  	General Principles	  	 	46	  	
11.2	  	Removal of Engines	  	 	47	  	
			
CLAUSE 12.	  	TITLE	  	 	48	  	
			
CLAUSE 13.	  	MANUFACTURER’S WARRANTIES	  	 	48	  	
			
CLAUSE 14.	  	INSURANCES	  	 	48	  	
			
14.1	  	Obligation to Insure	  	 	48	  	
14.2	  	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	  	Terms Specific to Hull Insurance	  	 	49	  	
14.4	  	Liability Insurance with Respect to the Aircraft	  	 	50	  	
14.5	  	Provisions Relating to all Insurance	  	 	50	  	
14.6	  	Information	  	 	51	  	
14.7	  	Additional Insurance; No Lien	  	 	52	  	
14.8	  	Failure to Insure	  	 	53	  	
14.9	  	Settlement of Claims	  	 	53	  	
 
(ii)

							
 	  	 	  	Page 	 	
			
14.10	  	Assignment	  	 	53	  	
14.11	  	Post Termination	  	 	54	  	
			
CLAUSE 15.	  	LOSS, DAMAGE AND REQUISITION	  	 	54	  	
			
15.1	  	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	  	Total Loss of Engine(s)	  	 	54	  	
15.3	  	Other Loss or Damage	  	 	56	  	
15.4	  	Requisition	  	 	56	  	
			
CLAUSE 16.	  	DEFAULT	  	 	56	  	
			
16.1	  	Events of Default	  	 	56	  	
16.2	  	Rights and Remedies	  	 	59	  	
16.3	  	Power of Attorney	  	 	62	  	
16.4	  	Mitigation Credit	  	 	62	  	
			
CLAUSE 17.	  	REDELIVERY	  	 	63	  	
			
17.1	  	Redelivery	  	 	63	  	
17.2	  	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	  	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	  	Compliance after Term	  	 	65	  	
17.5	  	Deregistration and Export	  	 	66	  	
17.6	  	Ferry Flight	  	 	66	  	
17.7	  	Storage	  	 	66	  	
			
CLAUSE 18.	  	INDEMNITIES	  	 	67	  	
			
18.1	  	General Indemnities	  	 	67	  	
18.2	  	General Tax Indemnity	  	 	69	  	
18.3	  	Notice and Contest Rights	  	 	71	  	
18.4	  	Mitigation	  	 	73	  	
18.5	  	Payments on After-Tax Basis	  	 	73	  	
18.6	  	No Deductions or Withholdings	  	 	73	  	
18.7	  	Tax Benefit	  	 	74	  	
18.8	  	Reports	  	 	74	  	
18.9	  	Continuation of Indemnities	  	 	75	  	
18.10	  	Forms	  	 	75	  	
18.11	  	Non-Parties	  	 	75	  	
			
CLAUSE 19.	  	FURTHER PROVISIONS	  	 	75	  	
			
19.1	  	Nature of Lessee’s Obligations	  	 	75	  	
19.2	  	Benefit of Agreement	  	 	76	  	
19.3	  	Further Assurances	  	 	77	  	
19.4	  	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	  	Delegation	  	 	78	  	
19.6	  	Evidence of Indebtedness	  	 	78	  	
19.7	  	Applications of Moneys	  	 	78	  	
 
(iii)

							
 	  	 	  	Page 	 	
			
19.8	  	Notices	  	 	78	  	
19.9	  	Invalidity of any Provision	  	 	79	  	
19.10	  	Lessor’s Right to Remedy	  	 	79	  	
19.11	  	Entire Agreement	  	 	79	  	
19.12	  	Governing Law	  	 	79	  	
19.13	  	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	  	Waiver of Jury Trial	  	 	81	  	
19.15	  	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	  	Confidentiality	  	 	81	  	

SCHEDULE 1	  	AIRCRAFT DESCRIPTION	
		
SCHEDULE 1A	  	AIRCRAFT DOCUMENTS	
		
SCHEDULE 2	  	LEASE SUPPLEMENT	
		
SCHEDULE 3	  	CERTIFICATE	
		
SCHEDULE 4	  	REDELIVERY CONDITION	
		
SCHEDULE 5	  	MONTHLY MAINTENANCE STATUS REPORT	
		
SCHEDULE 6	  	FORM OF QUIET ENJOYMENT LETTER	
		
SCHEDULE 7	  	TECHNICAL ACCEPTANCE CERTIFICATE	
			
SCHEDULE 8	  	PART A	  	LESSEE FURNISHED EQUIPMENT	
			
	  	PART B	  	IN FLIGHT ENTERTAINMENT	
		
SCHEDULE 9	  	LESSEE’S CONDITIONS PRECEDENT	
		
SCHEDULE 10	  	PERMITTED SUBLESSEES	
		
SCHEDULE 11	  	IRREVOCABLE POWER OF ATTORNEY	
		
ANNEX A	  	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [4950] dated as of April 14, 2011 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [4950] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
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“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 4950, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
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“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Lessor Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
 
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“ Engine Manufacturer ” means IAE International Aero Engines AG.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
 
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“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means a date in November, 2011, to be advised by the Manufacturer.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
 
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“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
 
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“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement 4950 dated on or about the date hereof between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
 
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“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
 
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(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
 
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(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
 
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(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2010 have been prepared in accordance with Mexican generally accepted accounting principles and practices (“GAAPP”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards and fairly present the results of its operations for that period and its financial condition at December 31, 2010 and, in particular, to the extent required by International Financial Reporting Standards accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2010, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
 
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(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are
 
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required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
 
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(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
 
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(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
 
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(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or default by Lessee under any other Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF [WILMINGTON TRUST COMPANY], AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
 
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(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
 
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4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
 
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CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
 
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5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to the ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
 
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(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
 
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6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or
 
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currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
 
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CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall
 
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fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
 
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8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town	
 
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 	Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number [    ], and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are [            ] engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
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 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things
 
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(including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
 
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(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
 
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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
 
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(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
 
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(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
 
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9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
 
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(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
 
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(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership .
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and
 
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shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
 
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(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided
 
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that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security
 
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Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed
 
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Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
 
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14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
 
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14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
 
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(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
 
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14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any
 
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such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
 
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(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in
 
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form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
 
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(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
 
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(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
 
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(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
 
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(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
 
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(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
 
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No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
 
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(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
 
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(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable
 
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discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60
 
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days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
 
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(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
 
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18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair,
 
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replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
 
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(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without
 
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Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall
 
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determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
 
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(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return
 
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or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
 
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19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security
 
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Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement
 
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may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
299 South Main Street, 12 th Floor
MAC: U1228-120
Salt Lake City, UT 84111
Telephone:     (801) 246-5630
Attention:       Corporate Trust Services
 
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with a copy to:
JSA Aircraft 4950, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone:     (415) 821-8300
Attention:      General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
Telephone:     (52 55) 5261-6400
Attention:      General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
 
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This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that
 
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such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that
 
-81-

disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [4950] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	Mario E. Geyne Pliego	
Title:	 	Financial and Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust
Agreement	
		
By:	 	/s/ Alejandra M. Llopis Loza	
Name:	 	Alejandra M. Llopis Loza	
Title:	 	Attorney in Fact	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
-Signature Page-
Aircraft Lease Agreement, msn. 4950

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-200 Aircraft
Manufacturer’s Serial Number: 4950
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: As specified in the Technical Acceptance Certificate.
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: November, 2011
Seating Configuration: 174 Economy Class

Weights & Capacity	  	Tonnes	
Maximum Take Off Weight	  	*****	
Maximum Landing Weight	  	*****	
Maximum Zero Fuel Weight	  	*****	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO - TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [            ], 20    , between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of              , 2011 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-200 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N            , Manufacturer’s Serial No.             ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers             and             .
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is $            .
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
 
Schedule 2-1

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,             of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [                    ] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-200 Aircraft, manufacturer’s serial number             (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	 	Office	 	Signature	

			

 	 	 	 	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this      day of         20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-2

I, the undersigned,                 of Lessee, DO HEREBY CERTIFY that                 is a duly elected and qualified                 of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this      day of         , 20    .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe :	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to the *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****	
 
 	b)	Engines :	
At the date of redelivery, no individual Engine shall *****. A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have *****. The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall *****. In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 		 		  	Report Data From	  		  		
						
Aircraft S/N	 		 		  	Report Data To	  		  		
						
Type	 		 		  		  		  		
						
Total Flight Hours	 		 		  	FH Utilization for Period	  		  		
						
Total Cycles	 		 		  	FC Utilization for Period	  		  		
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
							
Type/Model	  		  		  		  		  		  		
							
Part Number	  		  		  		  		  		  		
							
S/N	  		  		  		  		  		  		
							
TSN	  		  		  		  		  		  		
							
CSN	  		  		  		  		  		  		
Currently Installed Equipment
(Engines, APU, Landing Gear ) 

 	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
							
Type/Model	  		  		  		  		  		  		
							
Part Number	  		  		  		  		  		  		
							
S/N	  		  		  		  		  		  		
							
TSN	  		  		  		  		  		  		
							
CSN	  		  		  		  		  		  		
							
TSO	  		  		  		  		  		  		
							
CSO	  		  		  		  		  		  		
							
DSO	  		  		  		  		  		  		
							
LLP First Limiter Remaining (cycles)	  		  		  		  		  		  		
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	 	  	NEXT CHECK DUE	
CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	  	 	  	CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  		  		  		  		  		  	A-Check	  		  		  		  		
C-Check	  		  		  		  		  		  	C-Check	  		  		  		  		
D-Check	  		  		  		  		  		  	D-Check	  		  		  		  		
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

	
	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  		  		
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.

Signed:	 		

(Lessee)	
Title:	 	 	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [                    ]
Re: Aircraft Lease Agreement [MSN] dated as of [            ] 2011 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-200 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,	
[Beneficiary][Security Trustee]	
		
By	 	 	
Name:	 		
Title:	 		
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:	 		
Title:	 		
		
By:	 	 	
Name:	 		
Title:	 		
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                     
Aircraft Lease Agreement [ MSN ] dated as of               , 2011 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                      relating to Airbus A320-200 Aircraft, manufacturer’s serial number              (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at          hours on              , 20      being the Delivery Date at                      :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$          ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are              and              ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:          :	

Total Flight Hours Since New	  	                    	
Total Cycles Since New	  	                        	
Flight Hours Since Last	  		
C-Check:	  	            N/A    	
Calendar Months Since Last	  		
D-Check	  	            N/A    	
Flight Hours Since Last	  		
D-Check	  	            N/A    	
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	
Position                        1                                                      2                                                                     
Serial No:                    [                      ]                                [                       ]                                                 
Total Flight
Hours:                                                                                                                                                        
Total Cycles:                                                                                                                                                       
 
Flight Hours since last                                                                                                                                                       
Engine Performance Restoration:                 N/A                               N/A                                                                                               
Cycles since last
Engine Performance Restoration:                 N/A                               N/A                                                                                       
Cycles remaining
to next expected
Engine Performance Restoration                                                                                                                        
 
 	(c)	APU Model:                                         	
Serial No:                                              
Total [Flight]/[APU] Hours:                                                      
Total Cycles:                                                                                  
[APU]/[Flight] Hours since
the APU Heavy Repair:                                     N/A         
 
 	(d)	Landing Gear:	

Position	  	LH Main	  	Nose	  	RH Main	
				
Model:	  	                    	  	                    	  	                    	
				
Serial No:	  	                    	  	                    	  	                    	
				
Total Flight	  		  		  		
				
Hours:	  	                    	  	                    	  	                    	
				
Total Cycles:	  	                    	  	                    	  	                    	
				
Flight Hours since
last Landing Gear Overhaul:	  	    N/A    	  	    N/A    	  	        N/A        	
				
Cycles since	  		  		  		
last Landing Gear Overhaul:	  	            N/A    	  	      N/A      	  	      N/A        	
 
Schedule 7-2

 	(e)	Fuel on Board:	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
November 2011
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	 	Title	  	MSN 4828	 	Comments	
	 	Introduction of A320-200 Standard Specification at Issue 6	  	X	 		
	 	Introduction of A320-200 Standard Specification at Issue 7	  	X	 		
ATA 02	 	Certification	  		 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 	*****	
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
*****	 	*****	  	*****	 		
ATA 03	 	Weights	  		 		
*****	 	*****	  	*****	 		
 
Schedule 8-1

							
ATA 03	 	Placards and markings	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
	 	Air conditioning	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 22	 	Auto Flight	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 23	 	Communications	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
 
Schedule 8-2

							
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 25	 	Cabin & cockpit	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
 
Schedule 8-3

							
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	******	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 29	 	Hydraulic Power	  		  		
*****	 	*****	  	*****	  		
 
Schedule 8-4

							
*****	 	*****	  	*****	  		
ATA 31	 	Indicating/Recording	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 32	 	Landing gear	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 33	 	Lights	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 34	 	Navigation	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  	*****	
ATA 35	 	Oxygen	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
ATA 38	 	Water/Waste	  		  		
*****	 	*****	  	*****	  		
ATA 46	 	ATSU	  		  		
*****	 	*****	  	*****	  	*****	
ATA 47	 	Inerting Gas System	  		  		
*****	 	*****	  	*****	  		
*****	 	*****	  	*****	  		
 
Schedule 8-5

							
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
******	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant - General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
SSBFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Nov-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	4950	
A/C Type:	  	320-200	  	Issue	  	6	  		  		
						
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-6

											
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-7

BFE

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual Delivery Date	  	Delivery Date	  	Nov-11	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	4950	
A/C Type:	  	320-200	  	Issue	  	5	  		  		  		
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C
Qty	  	A/C
Qty	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-8

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney
 
[THIS FORM OF POA MUST BE GRANTED BY
LESSEE IN A PUBLIC DEED PREPARED BY A
MEXICAN NOTARY PUBLIC]
 
The undersigned, [                    ] in its capacity as [                    ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated             , 2011 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [                    ] dated [                    ] (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number [            ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.
 
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [                    ] dated [                    ] and JSA AIRCRAFT [            ], LLC (each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:
 
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	Formato de Poder Irrevocable
 
[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]
 
El suscrito, en su carácter de [                    ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2011 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante [            ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.
 
PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] y JSA AIRCRAFT [            ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:
 
(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
SCHEDULE 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documentsrequired for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.
 
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.
 
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).
 
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.
 
De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
 
Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
 
SCHEDULE 11-2

			
that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.
 
SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.
 
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.
 
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.
 
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.
 
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.
 
TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.
 
CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.
 
QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
SCHEDULE 11-3

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = *****, where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****.
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****.
“ Discount Rate ” means *****.
“ Security Amount ” means at any time the amount equal to *****.
*****.
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
 
ANNEX A-1

Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be

applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.

The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof,*****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	

V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	1.5	 	2.0	 	2.5	 	3.0	 	3.5	 	4.0	
5% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
10% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
15% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
20% Derate	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
4. AD Cost Sharing .
(a) With respect to each AD ***** to be performed by Lessee during the Term, the cost of compliance for which exceeds ***** Lessor shall reimburse Lessee for a portion of such work in accordance with the following formula:
*****
(b) Lessor’s obligation to make any payments under this Clause 4 shall be conditioned upon ***** and receipt by Lessor no later than ***** of invoices and proper documentation ***** in support of the invoices and verifying that *****

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.41
AIRCRAFT LEASE AGREEMENT [5062]
Dated as of March 15, 2012
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
(d/b/a VOLARIS),
as Lessee,
Concerning:
Lease of one (1) Airbus A320-233 Aircraft
Manufacturer’s Serial No: 5062
United States Registration Mark N509VL
Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines
COUNTERPART NO.             OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

 	  	 	  	Page	 	
CLAUSE 1.	  	DEFINITIONS AND INTERPRETATION	  	 	1	  	
			
1.1	  	Definitions	  	 	1	  	
1.2	  	Interpretation	  	 	13	  	
			
CLAUSE 2.	  	REPRESENTATIONS AND WARRANTIES	  	 	14	  	
			
2.1	  	Lessee’s Representations and Warranties	  	 	14	  	
2.2	  	Lessor’s Representations and Warranties	  	 	17	  	
2.3	  	No Prejudice	  	 	19	  	
			
CLAUSE 3.	  	CONDITIONS PRECEDENT	  	 	19	  	
			
3.1	  	Lessor’s Conditions Precedent	  	 	19	  	
3.2	  	Waiver	  	 	22	  	
3.3	  	Lessee’s Conditions Precedent	  	 	22	  	
			
CLAUSE 4.	  	COMMENCEMENT	  	 	23	  	
			
4.1	  	Term of Leasing	  	 	23	  	
4.2	  	Delivery	  	 	23	  	
4.3	  	Licenses	  	 	24	  	
4.4	  	Quiet Enjoyment; Lessor Party Covenants	  	 	24	  	
			
CLAUSE 5.	  	DISCLAIMERS	  	 	25	  	
			
5.1	  	General Disclaimers	  	 	25	  	
5.2	  	Deficiencies and Delays	  	 	26	  	
5.3	  	Repairs and Replacement	  	 	26	  	
			
CLAUSE 6.	  	RENT AND OTHER PAYMENTS	  	 	26	  	
			
6.1	  	Rent	  	 	26	  	
6.2	  	Security	  	 	27	  	
6.3	  	Maintenance Payments	  	 	27	  	
6.4	  	Payment Obligations Unconditional	  	 	27	  	
6.5	  	Currency of Payments	  	 	28	  	
6.6	  	Currency Indemnity	  	 	28	  	
6.7	  	Authorizations for Payments	  	 	28	  	
6.8	  	Set-off	  	 	29	  	
6.9	  	Lessor’s Account; Receipt of Payment	  	 	29	  	
 
(i)

							
CLAUSE 7.	  	FEES AND EXPENSES	  	 	29	  	
			
CLAUSE 8.	  	GENERAL UNDERTAKINGS	  	 	30	  	
			
8.1	  	Duration	  	 	30	  	
8.2	  	Notice of Event of Default; Certificate	  	 	30	  	
8.3	  	Financial and Other Information	  	 	31	  	
8.4	  	Existence	  	 	32	  	
8.5	  	ERISA	  	 	32	  	
8.6	  	Lessee’s Jurisdiction	  	 	32	  	
8.7	  	Cape Town Convention	  	 	33	  	
			
CLAUSE 9.	  	OPERATIONAL UNDERTAKINGS	  	 	34	  	
			
9.1	  	Registration, Title and Nameplates	  	 	34	  	
9.2	  	Liens	  	 	37	  	
9.3	  	Possession and Subleases	  	 	37	  	
9.4	  	Information and Records	  	 	39	  	
9.5	  	Lawful and Safe Operation; Costs of Operation	  	 	40	  	
9.6	  	Right of Inspection	  	 	41	  	
			
CLAUSE 10.	  	MAINTENANCE AND REPAIR	  	 	42	  	
			
10.1	  	General	  	 	42	  	
10.2	  	Specific Requirements	  	 	43	  	
10.3	  	Substitution of Parts; Ownership	  	 	43	  	
10.4	  	Pooling of Parts	  	 	45	  	
10.5	  	Permitted Modifications	  	 	45	  	
			
CLAUSE 11.	  	ENGINES	  	 	46	  	
			
11.1	  	General Principles	  	 	46	  	
11.2	  	Removal of Engines	  	 	47	  	
			
CLAUSE 12.	  	TITLE	  	 	48	  	
			
CLAUSE 13.	  	MANUFACTURER’S WARRANTIES	  	 	48	  	
			
CLAUSE 14.	  	INSURANCES	  	 	49	  	
			
14.1	  	Obligation to Insure	  	 	49	  	
14.2	  	Insurance with Respect to the Aircraft	  	 	49	  	
14.3	  	Terms Specific to Hull Insurance	  	 	49	  	
14.4	  	Liability Insurance with Respect to the Aircraft	  	 	50	  	
14.5	  	Provisions Relating to all Insurance	  	 	50	  	
14.6	  	Information	  	 	51	  	
14.7	  	Additional Insurance; No Lien	  	 	52	  	
14.8	  	Failure to Insure	  	 	53	  	
14.9	  	Settlement of Claims	  	 	53	  	
14.10	  	Assignment	  	 	53	  	
14.11	  	Post Termination	  	 	54	  	
 
(ii)

							
			
CLAUSE 15.	  	LOSS, DAMAGE AND REQUISITION	  	 	54	  	
			
15.1	  	Total Loss of Aircraft or Airframe	  	 	54	  	
15.2	  	Total Loss of Engine(s)	  	 	54	  	
15.3	  	Other Loss or Damage	  	 	56	  	
15.4	  	Requisition	  	 	56	  	
			
CLAUSE 16.	  	DEFAULT	  	 	56	  	
			
16.1	  	Events of Default	  	 	56	  	
16.2	  	Rights and Remedies	  	 	59	  	
16.3	  	Power of Attorney	  	 	62	  	
16.4	  	Mitigation Credit	  	 	63	  	
			
CLAUSE 17.	  	REDELIVERY	  	 	63	  	
			
17.1	  	Redelivery	  	 	63	  	
17.2	  	Condition of Aircraft and the Aircraft Documents	  	 	63	  	
17.3	  	Inspection; Corrections; Additional Work	  	 	64	  	
17.4	  	Compliance after Term	  	 	65	  	
17.5	  	Deregistration and Export	  	 	66	  	
17.6	  	Ferry Flight	  	 	66	  	
17.7	  	Storage	  	 	67	  	
			
CLAUSE 18.	  	INDEMNITIES	  	 	67	  	
			
18.1	  	General Indemnities	  	 	67	  	
18.2	  	General Tax Indemnity	  	 	69	  	
18.3	  	Notice and Contest Rights	  	 	72	  	
18.4	  	Mitigation	  	 	73	  	
18.5	  	Payments on After-Tax Basis	  	 	73	  	
18.6	  	No Deductions or Withholdings	  	 	73	  	
18.7	  	Tax Benefit	  	 	74	  	
18.8	  	Reports	  	 	75	  	
18.9	  	Continuation of Indemnities	  	 	75	  	
18.10	  	Forms	  	 	75	  	
18.11	  	Non-Parties	  	 	75	  	
			
CLAUSE 19.	  	FURTHER PROVISIONS	  	 	76	  	
			
19.1	  	Nature of Lessee’s Obligations	  	 	76	  	
19.2	  	Benefit of Agreement	  	 	76	  	
19.3	  	Further Assurances	  	 	77	  	
19.4	  	Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	77	  	
19.5	  	Delegation	  	 	78	  	
19.6	  	Evidence of Indebtedness	  	 	78	  	
19.7	  	Applications of Moneys	  	 	78	  	
 
(iii)

							
19.8	  	Notices	  	 	78	  	
19.9	  	Invalidity of any Provision	  	 	79	  	
19.10	  	Lessor’s Right to Remedy	  	 	79	  	
19.11	  	Entire Agreement	  	 	79	  	
19.12	  	Governing Law	  	 	80	  	
19.13	  	Jurisdiction; Service of Process; Inconvenient Forum	  	 	80	  	
19.14	  	Waiver of Jury Trial	  	 	81	  	
19.15	  	Lease for U.S. Federal Income Tax Law Purposes	  	 	81	  	
19.16	  	Confidentiality	  	 	82	  	

SCHEDULE 1	  	AIRCRAFT DESCRIPTION	
		
SCHEDULE 1A	  	AIRCRAFT DOCUMENTS	
		
SCHEDULE 2	  	LEASE SUPPLEMENT	
		
SCHEDULE 3	  	CERTIFICATE	
		
SCHEDULE 4	  	REDELIVERY CONDITION	
		
SCHEDULE 5	  	MONTHLY MAINTENANCE STATUS REPORT	
		
SCHEDULE 6	  	FORM OF QUIET ENJOYMENT LETTER	
		
SCHEDULE 7	  	TECHNICAL ACCEPTANCE CERTIFICATE	
		
SCHEDULE 8	  	PART A         LESSEE FURNISHED EQUIPMENT	
		
	  	PART B         IN FLIGHT ENTERTAINMENT	
		
SCHEDULE 9	  	LESSEE’S CONDITIONS PRECEDENT	
		
SCHEDULE 10	  	PERMITTED SUBLESSEES	
		
SCHEDULE 11	  	IRREVOCABLE POWER OF ATTORNEY	
		
ANNEX A	  	CERTAIN DEFINITIONS AND PAYMENTS	
 
(iv)

AIRCRAFT LEASE AGREEMENT [5062 ] dated as of March 15, 2012 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [5062] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
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“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft 5062, LLC (formerly known as JSA Aircraft A320-A, LLC), a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
“ Damage Notification Threshold ” has the meaning provided in Annex A.
 
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“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Re-Novation, (b) the Bill of Sale, (c) the Lessor Certificate of Acceptance, (d) the Delivery Purchase Agreement Assignment, and (e) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg, Germany
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.
“ Engine Manufacturer ” means IAE International Aero Engines AG.
 
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“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
 
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“ Forward Purchase Agreement ” means that certain Forward Purchase Agreement dated 14 April 2011 entered into by and between Seller (as defined therein) and Beneficiary, as purchaser, as the same may be thereafter amended and/or supplemented.
“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
 
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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.
“ Lessor Party ” means Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
 
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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
 
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“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, the Forward Purchase Agreement, the Participation Agreement and the Financing Documents.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.
“ Participation Agreement ” means that certain Step-In Agreement dated 14 April 2011 entered into among the Seller, the Manufacturer, and the Beneficiary, among others, as the same may be thereafter amended and/or supplemented.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
 
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“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Re-Novation ” means the novation agreement to be delivered by the Beneficiary, as buyer under the Participation Agreement, to the Seller, at or prior to Delivery.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Lessor.
“ Return Location ” has the meaning provided in Clause 17.1.
 
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“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means on or about March 30, 2012.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
 
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“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement (5062) dated as of March 15, 2012 between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than
 
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New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
 
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(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
 
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(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
 
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(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2011 have been prepared in accordance with IFRS and fairly present the results of its operations for that period and its financial condition at December 31, 2011 and, in particular, to the extent required by IFRS accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2011, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
 
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(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
 
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(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
 
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(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;
(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
 
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(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft, and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
 
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(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or under the Forward Purchase Agreement, or default by Lessee under any Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
 
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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF WILMINGTON TRUST COMPANY, AS SECURITY TRUSTEE”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
 
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CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Forward Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Forward Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer under the Purchase Agreement (as amended by the Purchase Agreement Assignment) or Participation Agreement, as applicable. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the
 
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Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
 
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(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
 
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(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
 
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6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative
 
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Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
 
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6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Participation Agreement, the Purchase Agreement, the Forward Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
 
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CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
 
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8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
 
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8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
 
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8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;	
 
 	(c)	the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number 5062, and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are IAE V2527E-A5 Select One engines as more particularly described in the Technical Acceptance Certificate;	
 
 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
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 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
 
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(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Lessor as owner of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Lessor as owner of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things (including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s).
 
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Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
 
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Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
 
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(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
 
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9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
 
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(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:
(i) any Government Entity of the State of Registration or the Habitual Base; or
 
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(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;
(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
 
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10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership.
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in
 
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Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.
 
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10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
 
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(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
 
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(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
 
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Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Lessor and any Lender, that it will respect the interests of Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.
 
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CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
 
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In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);
(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that
 
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such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
 
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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
 
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(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.
14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
14.10 Assignment . If Lessor transfers the Aircraft or transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy
 
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the same rights and protection as Lessor, as the case may be, may have from time to time under such insurances. In addition, if Lessor transfers the Aircraft or such rights and thereafter ceases to be lessor of the Aircraft or the beneficial owner of the Aircraft under the Trust Agreement or the trustee under the Trust Agreement, respectively (any such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the
 
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destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.
(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
 
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Upon compliance with clauses (i) through (vi) above, Lessor will transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Lessor’s right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
 
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(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
 
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(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
 
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(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
 
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(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
 
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(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
 
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Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
 
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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”).
17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
 
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(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which
 
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are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry
 
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Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under
 
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Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
 
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(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an
 
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Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
 
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(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such
 
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Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
 
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18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable
 
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appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
 
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(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
 
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18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
 
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CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
19.2 Benefit of Agreement .
(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee
 
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undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
 
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(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
 
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to Lessor at:
Wells Fargo Bank Northwest, National Association
260 N. Charles Lindbergh Drive
MAC: U1240-026
Salt Lake City, UT 84116
Telephone: (801) 246-6000
Attention: Corporate Trust Department
with a copy to:
JSA Aircraft 5062, LLC
c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone: (415) 821-8300
Attention: General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca
01210, México, D.F.
Telephone: (52 55) 5261-6400
Attention: General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
 
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19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.
This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.
19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in
 
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the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
 
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19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [5062] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS)	
		
By:	 	/s/ Mario E. Geyne	
Name:	 	Mario E. Geyne	
Title:	 	Financial and Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement	
		
By:	 	/s/ David Wall	
Name:	 	David Wall	
Title:	 	Assistant Vice President	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
 
-Signature Page-
Aircraft Lease Agreement, msn 5062

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-233 Aircraft
Manufacturer’s Serial Number: 5062
Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)
Engine Serial Numbers: V16154 and V16151
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.
Date of Manufacture: March, 2012
Seating Configuration: 174 Economy Class

Weights & Capacity	    	    Tonnes    	  	 	
Maximum Take Off Weight	    	*****	  		
Maximum Landing Weight	    	*****	  		
Maximum Zero Fuel Weight	    	*****	  		
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
Schedule 1A-1

 	e)	Structural Repair Manual;	
 
 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO - TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
 
10)	APU	
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ MSN ], dated [                    ], 2012, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of                     , 2012 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-233 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N            , Manufacturer’s Serial No.             ; and
Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers             and             (each of which engines has 1,750 or more lbs. of thrust).
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is as set forth in the Technical Acceptance Certificate.
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
 
Schedule 2-1

5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, Lessor	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), Lessee	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned,             of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [        ] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-233 Aircraft, manufacturer’s serial number             (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.

Name	  	Office	 	Signature	

 	  	 	 	 	

 	  	 	 	 	

 	  	 	 	 	
3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this             day of             20    .

By:	 	 	
	 	    Name:
    Title:	
 
Schedule 3-2

I, the undersigned,                     of Lessee, DO HEREBY CERTIFY that                     is a duly elected and qualified             of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this             day of             , 20    .

By:	 	 	
Name:
Title:	
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
 
 	1.	General Condition	
 
 	(a)	The Aircraft shall:	
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
 
 	2.	Check and Part Lives	
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe:	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to the *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to the *****	
 
 	b)	Engines:	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

 
Aircraft Reg	  	 	  		  	Report Data From	  	 	  		
 
Aircraft S/N	  	 	  		  	Report Data To	  	 	  		
 
Type	  	 	  		  		  		  		

Total Flight Hours	  	 	  		  	FH Utilization for Period	  	 	  		

Total Cycles	  	 	  		  	FC Utilization for Period	  	 	  		
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
Currently Installed Equipment
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
TSO	  	 	  	 	  	 	  	 	  	 	  	 	
CSO	  	 	  	 	  	 	  	 	  	 	  	 	
DSO	  	 	  	 	  	 	  	 	  	 	  	 	
LLP First Limiter Remaining (cycles)	  	 	  	 	  	 	  	 	  	 	  	 	
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	 	 	NEXT CHECK DUE	
CHECK
TYPE	 	CHECK
#	 	TOTAL
HRS	 	TOTAL
CYC	 	DATE	  	 	 	CHECK
TYPE	 	CHECK
#	 	TOTAL
HRS	 	TOTAL
CYC	 	DATE	
A-Check	 	 	 	 	 	 	 	 	  		 	A-Check	 	 	 	 	 	 	 	 	
C-Check	 	 	 	 	 	 	 	 	  		 	C-Check	 	 	 	 	 	 	 	 	
D-Check	 	 	 	 	 	 	 	 	  		 	D-Check	 	 	 	 	 	 	 	 	
TECHNICAL ACTIVITY DURING PERIOD
 
 	  1.	Engine, APU and Landing Gears – details of removal activity	
					
S/N OFF	  	S/N ON	  	REASON / CAUSE	

 	  2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

 	

 
	
DEFERRAL LIST
 	
 	3.	See following pages for current open deferrals report.	

AIRCRAFT ACCIDENT/INCIDENT REPORT	
 
 	4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  	 	  	 	
 
Schedule 5-2

AD STATUS REPORT
 
5.	See following pages for current AD status report.	

AIRCRAFT STATUS CERTIFICATION	
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.
Signed:

 	
(Lessee)	
Title:	 	 	
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)
Dated: [    ]
Re: Aircraft Lease Agreement [MSN] dated as of [ ] 2012 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-233 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.
Very truly yours,
[Beneficiary][Security Trustee]

By	 	 	
Name:
Title:	
 
Schedule 6-1

Agreed and Accepted :
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (D/B/A VOLARIS)

By:	 	 	
Name:
Title:	
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement	
DATE:                                                  
Aircraft Lease Agreement [ MSN ] dated as of                     , 2012 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and                     relating to Airbus A320-233 Aircraft, manufacturer’s serial number             (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at             hours on             , 20     being the Delivery Date at                     :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$            ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are             and             ;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No:             :	

Total Flight Hours Since New	  		  		
	  	 	  		
Total Cycles Since New	  		  		
	  	 	  		
Flight Hours Since Last
C-Check:	  	        N/A    	  		
	  	 	  		
Calendar Months Since Last
D-Check	  	        N/A    	  		
	  	 	  		
Flight Hours Since Last
D-Check	  	        N/A    	  		

 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5 Select One (or better):	

Position	  	1	 	2	
Serial No:	  	[                                  ]	 	[                                  ]	
			
Total Flight	  		 		
Hours:	  		 		
	  	 	 	 	
Total Cycles:	  		 		

Flight Hours since last
Engine Performance Restoration:	  	N/A	 	N/A	

Cycles since last
Engine Performance Restoration:	  	N/A	 	N/A	

Cycles remaining
to next expected
Engine Performance Restoration	  		 		

 	(c)	APU Model:                            	

Serial No:	  		

Total [Flight]/[APU] Hours:	  		

Total Cycles:	  		

[APU]/[Flight] Hours since
the APU Heavy Repair:	  	N/A	

 	(d)	Landing Gear:	

Position	  	LH Main	  	Nose	  	RH Main	
				
Model:	  		  		  		

Serial No:	  		  		  		

Total Flight Hours:	  		  		  		

Total Cycles:	  		  		  		

Flight Hours since
last Landing Gear Overhaul:	  	N/A	  	N/A	  	N/A	

Cycles since
last Landing Gear Overhaul:	  	N/A	  	N/A	  	N/A	

Schedule 7-2

 	(e)	Fuel on Board:            	
 
 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

	

By:	 	 	

Name:	 	 	

Title:	 	 	
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
March 2012
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	MSN TBD	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
				
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
				
ATA 02	  	Certification	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 03	  	Weights	  		  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-1

							
				
ATA 03	  	Placards and markings	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
	  	Air conditioning	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 22	  	Auto Flight	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 23	  	Communications	  		  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-2

							
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 25	  	Cabin & cockpit	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-3

							
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-4

							
				
ATA 29	  	Hydraulic Power	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 31	  	Indicating/Recording	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 32	  	Landing gear	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 33	  	Lights	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 34	  	Navigation	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
ATA 35	  	Oxygen	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 38	  	Water/Waste	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 46	  	ATSU	  		  		
				
*****	  	*****	  	*****	  	*****	
				
ATA 47	  	Inerting Gas System	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-5

							
				
ATA 49	  	APU	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 51	  	Structure	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 52	  	Doors	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 55	  	Stabilizers	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 56	  	Windows	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
ATA 57	  	Wings	  		  		
				
*****	  	*****	  	*****	  		
				
ATA 71	  	Power Plant—General	  		  		
				
*****	  	*****	  	*****	  	*****	
				
ATA 72	  	Engines	  		  		
				
*****	  	*****	  	*****	  		

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Mar-12	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	TBD	
A/C Type:	  	320-200	  	Issue	  	6	  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-6

											
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  	*****	  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
 
Schedule 8-7

													
Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual
Delivery Date	  	Delivery Date	  	Mar-12	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	TBD	
A/C Type:	  	320-200	  	Issue	  	5	  		  		  		

ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Schedule 8-8

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-9

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
PERMITTED SUBLESSEES
-Any airline affiliate of Avianca-TACA Ltd.
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY

Form of Irrevocable Power of Attorney	  	Formato de Poder Irrevocable	
		
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]	  	[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]	
		
The undersigned, [            ] in its capacity as [            ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated             , 2012 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [        ] dated [        ] (the “Lessor”) and the Company with respect to one Airbus A320-233 bearing manufacturer’s serial number [        ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.	  	El suscrito, en su carácter de [            ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha             , 2012 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [        ] de fecha [        ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-233 con número de serie del fabricante [        ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.	
		
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [        ] dated [        ] and JSA AIRCRAFT [        ], LLC(each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:	  	PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [        ] de fecha [        ] y JSA AIRCRAFT [        ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:	
		
(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the	  	(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
 
SCHEDULE 11-1

			
DGAC; (iv) to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located; (v) to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located; (vi) to notify the termination of the Lease to the RAM or any other relevant authority; (vii) to perform any acts and execute any documents required for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form; (viii) in case of an event of total loss of the Aircraft and/or the Engines, to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases; (ix) to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and (x) to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.	  	(iv) solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre; (v) realizar todos los trámites necesarios y conducentes a la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave; (vi) notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes; (vii) realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera; (viii) en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores, para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación; (ix) solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y (x) delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.
 	
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ”; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.	  	De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y abandonar cualquier acción o procedimiento incluidos el “amparo”; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y liberar posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.
 	
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).	  	Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federal, estatal o municipal de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
 
SCHEDULE 11-2

			
For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.	  	Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.	
SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.	  	 
SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.	
THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.	  	 
TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.	
		
FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.	  	 
CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.	
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	 
QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
 
SCHEDULE 11-3

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
2. Maintenance Payments .
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
ANNEX A-1

V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.
 
ANNEX A-2

Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
 
ANNEX A-3

The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
ANNEX A-4

V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	  	1.5	  	2.0	  	2.5	  	3.0	  	3.5	  	4.0	
5% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20% Derate	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
4. AD Cost Sharing .
(a) With respect to each AD ***** to be performed by Lessee during the Term, the cost of compliance for which exceeds ***** Lessor shall reimburse Lessee for a portion of such work in accordance with the following formula:
*****
(b) Lessor’s obligation to make any payments under this Clause 4 shall be conditioned upon ***** and receipt by Lessor no later than ***** of invoices and proper documentation ***** in support of the invoices and verifying that *****
 
ANNEX A-5

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.42
AIRCRAFT LEASE AGREEMENT [5212]
Dated as of June 26, 2012
Between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity but solely as owner trustee under the Trust Agreement,
as Lessor,
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,
as Lessee,
Concerning:
Lease of one (1) Airbus A320-233 Aircraft
Manufacturer’s Serial No: 5212
United States Registration Mark N511VL
Two (2) IAE International Aero V2527E-A5 Engines
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS

   	  	Page	 	
CLAUSE 1. DEFINITIONS AND INTERPRETATION	  	 	1	  	
		
1.1 Definitions	  	 	1	  	
1.2 Interpretation	  	 	14	  	
		
CLAUSE 2. REPRESENTATIONS AND WARRANTIES	  	 	15	  	
		
2.1 Lessee’s Representations and Warranties	  	 	15	  	
2.2 Lessor’s Representations and Warranties	  	 	18	  	
2.3 No Prejudice	  	 	20	  	
		
CLAUSE 3. CONDITIONS PRECEDENT	  	 	20	  	
		
3.1 Lessor’s Conditions Precedent	  	 	20	  	
3.2 Waiver	  	 	23	  	
3.3 Lessee’s Conditions Precedent	  	 	24	  	
		
CLAUSE 4. COMMENCEMENT	  	 	24	  	
		
4.1 Term of Leasing	  	 	24	  	
4.2 Delivery	  	 	24	  	
4.3 Licenses	  	 	25	  	
4.4 Quiet Enjoyment; Lessor Party Covenants	  	 	25	  	
		
CLAUSE 5. DISCLAIMERS	  	 	26	  	
		
5.1 General Disclaimers	  	 	26	  	
5.2 Deficiencies and Delays	  	 	27	  	
5.3 Repairs and Replacement	  	 	27	  	
		
CLAUSE 6. RENT AND OTHER PAYMENTS	  	 	27	  	
		
6.1 Rent	  	 	27	  	
6.2 Security	  	 	28	  	
6.3 Maintenance Payments	  	 	28	  	
6.4 Payment Obligations Unconditional	  	 	28	  	
6.5 Currency of Payments	  	 	29	  	
6.6 Currency Indemnity	  	 	29	  	
6.7 Authorizations for Payments	  	 	30	  	
6.8 Set-off	  	 	30	  	
6.9 Lessor’s Account; Receipt of Payment	  	 	30	  	
 
(i)

					
CLAUSE 7. FEES AND EXPENSES	  	 	30	  	
		
CLAUSE 8. GENERAL UNDERTAKINGS	  	 	31	  	
		
8.1 Duration	  	 	31	  	
8.2 Notice of Event of Default; Certificate	  	 	31	  	
8.3 Financial and Other Information	  	 	32	  	
8.4 Existence	  	 	33	  	
8.5 ERISA	  	 	34	  	
8.6 Lessee’s Jurisdiction	  	 	34	  	
8.7 Cape Town Convention	  	 	34	  	
		
CLAUSE 9. OPERATIONAL UNDERTAKINGS	  	 	35	  	
		
9.1 Registration, Title and Nameplates	  	 	35	  	
9.2 Liens	  	 	38	  	
9.3 Possession and Subleases	  	 	38	  	
9.4 Information and Records	  	 	40	  	
9.5 Lawful and Safe Operation; Costs of Operation	  	 	41	  	
9.6 Right of Inspection	  	 	43	  	
		
CLAUSE 10. MAINTENANCE AND REPAIR	  	 	44	  	
		
10.1 General	  	 	44	  	
10.2 Specific Requirements	  	 	44	  	
10.3 Substitution of Parts; Ownership	  	 	45	  	
10.4 Pooling of Parts	  	 	47	  	
10.5 Permitted Modifications	  	 	47	  	
		
CLAUSE 11. ENGINES	  	 	48	  	
		
11.1 General Principles	  	 	48	  	
11.2 Removal of Engines	  	 	49	  	
		
CLAUSE 12. TITLE	  	 	50	  	
		
CLAUSE 13. MANUFACTURER’S WARRANTIES	  	 	50	  	
		
CLAUSE 14. INSURANCES	  	 	51	  	
		
14.1 Obligation to Insure	  	 	51	  	
14.2 Insurance with Respect to the Aircraft	  	 	51	  	
14.3 Terms Specific to Hull Insurance	  	 	51	  	
14.4 Liability Insurance with Respect to the Aircraft	  	 	52	  	
14.5 Provisions Relating to all Insurance	  	 	52	  	
14.6 Information	  	 	53	  	
14.7 Additional Insurance; No Lien	  	 	54	  	
14.8 Failure to Insure	  	 	55	  	
14.9 Settlement of Claims	  	 	55	  	
14.10 Assignment	  	 	56	  	
14.11 Post Termination	  	 	56	  	
 
(ii)

					
CLAUSE 15. LOSS, DAMAGE AND REQUISITION	  	 	56	  	
		
15.1 Total Loss of Aircraft or Airframe	  	 	56	  	
15.2 Total Loss of Engine(s)	  	 	57	  	
15.3 Other Loss or Damage	  	 	58	  	
15.4 Requisition	  	 	58	  	
		
CLAUSE 16. DEFAULT	  	 	59	  	
		
16.1 Events of Default	  	 	59	  	
16.2 Rights and Remedies	  	 	61	  	
16.3 Power of Attorney	  	 	64	  	
16.4 Mitigation Credit	  	 	65	  	
		
CLAUSE 17. REDELIVERY	  	 	65	  	
		
17.1 Redelivery	  	 	65	  	
17.2 Condition of Aircraft and the Aircraft Documents	  	 	66	  	
17.3 Inspection; Corrections; Additional Work	  	 	67	  	
17.4 Compliance after Term	  	 	68	  	
17.5 Deregistration and Export	  	 	68	  	
17.6 Ferry Flight	  	 	69	  	
17.7 Storage	  	 	69	  	
		
CLAUSE 18. INDEMNITIES	  	 	69	  	
		
18.1 General Indemnities	  	 	69	  	
18.2 General Tax Indemnity	  	 	71	  	
18.3 Notice and Contest Rights	  	 	74	  	
18.4 Mitigation	  	 	76	  	
18.5 Payments on After-Tax Basis	  	 	76	  	
18.6 No Deductions or Withholdings	  	 	76	  	
18.7 Tax Benefit	  	 	76	  	
18.8 Reports	  	 	77	  	
18.9 Continuation of Indemnities	  	 	77	  	
18.10 Forms	  	 	77	  	
18.11 Non-Parties	  	 	78	  	
		
CLAUSE 19. FURTHER PROVISIONS	  	 	78	  	
		
19.1 Nature of Lessee’s Obligations	  	 	78	  	
19.2 Benefit of Agreement	  	 	78	  	
19.3 Further Assurances	  	 	79	  	
19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language	  	 	80	  	
19.5 Delegation	  	 	80	  	
19.6 Evidence of Indebtedness	  	 	80	  	
19.7 Applications of Moneys	  	 	80	  	
19.8 Notices	  	 	81	  	
 
(iii)

					
19.9 Invalidity of any Provision	  	 	81	  	
19.10 Lessor’s Right to Remedy	  	 	82	  	
19.11 Entire Agreement	  	 	82	  	
19.12 Governing Law	  	 	82	  	
19.13 Jurisdiction; Service of Process; Inconvenient Forum	  	 	83	  	
19.14 Waiver of Jury Trial	  	 	84	  	
19.15 Lease for U.S. Federal Income Tax Law Purposes	  	 	84	  	
19.16 Confidentiality	  	 	84	  	
		
SCHEDULE 1 AIRCRAFT DESCRIPTION	  				
		
SCHEDULE 1A AIRCRAFT DOCUMENTS	  				
		
SCHEDULE 2 LEASE SUPPLEMENT	  				
		
SCHEDULE 3 CERTIFICATE	  				
		
SCHEDULE 4 REDELIVERY CONDITION	  				
		
SCHEDULE 5 MONTHLY MAINTENANCE STATUS REPORT	  				
		
SCHEDULE 6 FORM OF QUIET ENJOYMENT LETTER	  				
		
SCHEDULE 7 TECHNICAL ACCEPTANCE CERTIFICATE	  				
		
SCHEDULE 8 PART A LESSEE FURNISHED EQUIPMENT	  				
		
                           PART B IN FLIGHT ENTERTAINMENT	  				
		
SCHEDULE 9 LESSEE’S CONDITIONS PRECEDENT	  				
		
SCHEDULE 10 [RESERVED]	  				
		
SCHEDULE 11 IRREVOCABLE POWER OF ATTORNEY	  				
		
SCHEDULE 12 FORM OF EUROCONTROL LETTER	  				
		
ANNEX A CERTAIN DEFINITIONS AND PAYMENTS	  				
 
(iv)

AIRCRAFT LEASE AGREEMENT [5212 ] dated as of June 26, 2012 between:
 
(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as owner trustee under the Trust Agreement (as defined below) (“ Lessor ”); and	
 
(2)	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Antonio Dovali Jaime No. 70, Torre B, Piso 13, Col. Zedec Santa Fe, Delegación Alvaro Obregon, CP 01210, México, D.F. (“ Lessee ”).	
IT IS AGREED as follows:
CLAUSE 1. DEFINITIONS AND INTERPRETATION .
1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:
“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.
“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.
“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.
“ Agreed Value ” shall have the meaning set forth in Annex A.
“ Agreement ” means this Aircraft Lease Agreement [5212] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Owner pursuant to this Agreement.
“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.
“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.
“ Airframe ” means the Aircraft, excluding the Engines.
“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.
“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).
“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.
“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.
“ APU Hour ” means each hour or part thereof that the APU is operated.
“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).
“ Basic Rent Amount ” has the meaning provided in Annex A.
 
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“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.
“ Beneficiary ” means JSA Aircraft Ireland 5212 Limited, a private limited liability company incorporated in Ireland, having its registered address at 70 Sir John Rogerson’s Quay, Dublin, Ireland, its successors and permitted assigns.
“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.
“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Owner at Delivery.
“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.
“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.
“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.
“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Coface ” means Compagnie Francaise d’Assurance pour le Commerce Extérieur.
“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).
“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.
 
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“ Damage Notification Threshold ” has the meaning provided in Annex A.
“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.
“ Default Rate ” has the meaning provided in Annex A.
“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.
“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.
“ Delivery Date ” means the date on which Delivery occurs.
“ Delivery Documents ” means (a) the Bill of Sale, (b) the Owner Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.
“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.
“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.
“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.
“ ECA Finance Party ” means (i) Crédit Agricole CIB (“CA”), in its capacity as lender, national agent, facility agent and security trustee under the ECA Loan Agreement dated on or about June 29, 2012 relating to the Aircraft, and the transferees, successors and assigns of CA in any such capacity and (ii) ECGD, Coface and Euler Hermes.
“ ECGD ” means The Secretary of State of Her Britannic Majesty’s Government acting by the Export Credits Guarantee Department.
 
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“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Owner and leased to Lessor under the Head Lease and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Owner pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Owner pursuant to this Agreement.
“ Engine Manufacturer ” means IAE International Aero Engines A.G.
“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.
“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ EU ETS ” means both (a) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC and (b) Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, together with any related, connected or successive law, statute, decree, constitution, regulation, authorization, judgment, injunction or other directive of any Government Entity of the European Union.
“ Euler Hermes ” means Euler Hermes Deutschland A.G.
“ Eurocontrol ” means the European Organisation for the Safety of Air Navigation.
 
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“Eurocontrol Letter ” means a letter in the form set out in Schedule 12 hereto.
“ Event of Default ” means any of the events referred to in Clause 16.1.
“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.
“ Expiry Date ” means the one hundred thirty-second (132 nd ) monthly anniversary of the Delivery Date.
“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.
“ Financing Documents ” means all Loan Agreements, Security Documents, Head Leases, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Owner or Lessor or any third party by way of security for, or as a guarantee of the performance by, Owner, Lessor or any Affiliate of Owner or Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).
“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.
“ Forward Purchase Agreement ” means that certain Forward Purchase Agreement dated 14 April 2011 entered into by and between Seller (as defined therein) and Beneficiary, as purchaser, as the same may be thereafter amended and/or supplemented.
“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.
 
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“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.
“ Head Lease ” means the lease between Lessor, as lessee, and Owner, as lessor, with respect to the Aircraft.
“ IATA ” means the International Air Transport Association.
“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.
“ IFE ” means the equipment and components listed on Part B of Schedule 8.
“ Indemnitee ” means: each Lessor Party, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.
“ International Interest ” has the meaning given to such term in the Cape Town Convention.
“ International Registry ” means the international registry established pursuant to the Cape Town Convention.
“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.
“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.
“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.
“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Owner in accordance with this Agreement.
“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.
“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of
this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.
 
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“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor, Owner or an Affiliate of Lessor or Owner in relation to Lessor’s, Owner’s or such Affiliate’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders, and any ECA Finance Party.
“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s or Owner’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.
“ Lessor Party ” means Owner, Lessor, the Beneficiary, and JSA.
“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.
“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.
“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.
 
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“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.
“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s or Owner’s acquisition or continuing ownership of the Aircraft.
“ Maintenance Payments ” has the meaning provided in Annex A.
“ Maintenance Payments Date ” means the *****
“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).
“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document, and which includes requirements for long-term storage during extended periods of non-use of the Aircraft.
“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.
“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.
“ Manufacturer ” means Airbus, S.A.S.
“ Mexico ” means the United Mexican States.
 
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“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.
“ Mitigation Credit ” has the meaning set forth in Clause 16.4.
“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, the Forward Purchase Agreement, the Participation Agreement and the Financing Documents.
“ Owner ” means Jackson Square A320 Leasing (Ireland) Limited, a private limited liability company incorporated in Ireland.
“ Owner Certificate of Acceptance ” means the certificate of acceptance from Owner confirming acceptance of the Aircraft from the Manufacturer.
“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in-flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Owner pursuant to this Agreement.
“ Participation Agreement ” means that certain Step-In Agreement dated 14 April 2011 entered into among the Seller, the Manufacturer, and the Beneficiary, among others, as the same may be thereafter amended and/or supplemented.
“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien created by or pursuant to or permitted by the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.
“ Permitted Sublessee ” means any person holding all relevant certificates and consents for the operation of the Aircraft whose habitual base of operation is not located in a Prohibited Country and which is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.
 
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“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.
“ PMA Part ” means a Part which has not been manufactured by or with the written permission of the original manufacturer of that Part.
“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.
“ Prohibited Country ” means any state, country or jurisdiction (a) which is subject to any sanction or embargo by the United Nations, the European Union (or the United Kingdom, France or Germany), the United States of America, the State of Registration or the Habitual Base or (b) with which any of France, Germany or the United Kingdom does not maintain diplomatic relations.
“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.
“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.
“ Rent ” means Basic Rent and Supplemental Rent.
“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):
(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);
(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and
(c) title to which is capable of passing, free from Liens, to the Owner.
“ Return Location ” has the meaning provided in Clause 17.1.
 
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“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.
“ Scheduled Delivery Date ” means on or about June 29, 2012.
“ Security ” has the meaning provided in Clause 6.2.
“ Security Amount ” has the meaning provided in Annex A.
“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.
“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.
“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).
“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.
“ Tax Indemnitee ” means each Lessor Party, and each Lender, and each of their respective Affiliates, officers, directors, agents and employees.
“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.
“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.
 
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“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.
“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor or the Security Trustee as loss payee under Lessee’s policies of insurance/reinsurance receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.
“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.
“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“ Trust Agreement ” means Trust Agreement (5212) dated as of June 25, 2012 between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.
“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the
 
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Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.
“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.
“ US$, US Dollars or $ ” means the lawful currency of the United States of America.
1.2 Interpretation .
(a) References in this Agreement to:
(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;
(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;
(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;
(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;
(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);
(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);
 
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(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;
(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;
(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and
(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.
(b) Headings are for ease of reference only.
(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.
CLAUSE 2. REPRESENTATIONS AND WARRANTIES .
2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
 
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(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;
(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;
(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;
(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor or Owner in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor and Owner in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;
(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;
 
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(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;
(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;
(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2011 have been prepared in accordance with IFRS and fairly present the results of its operations for that period and its financial condition at December 31, 2011 and, in particular, to the extent required by IFRS accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2011, except as otherwise previously disclosed to Lessor in writing;
(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;
(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;
 
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(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;
(m) no Default or Event of Default has occurred and is continuing;
(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;
(o) assuming that no part of the assets to be used by Lessor or Owner to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and
(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.
2.2 Lessor’s Representations and Warranties .
(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:
(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;
 
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(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;
(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);
(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);
(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;
 
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(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;
(vii) on the Delivery Date, Lessor shall have received whatever rights in the Aircraft as were conveyed to it by Owner under the Head Lease and shall have all requisite authority to lease the Aircraft to Lessee hereunder;
(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and
(ix) Lessor is a Citizen of the United States.
2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.
CLAUSE 3. CONDITIONS PRECEDENT .
3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:
(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);
(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, and JSA in form and substance reasonably acceptable to Lessor and the Lenders;
(iii) an opinion of DeBee Gilchrist, FAA counsel, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance acceptable to Lessor and the Lenders;
 
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(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;
(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;
(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;
(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:
(i) a certified copy of an extract of the board of directors resolution of the Lessee approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;
(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;
(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;
(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft, and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;
(v) any other consents or authorizations required by the Aviation Authority and the DGAC;
(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;
(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;
 
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(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;
(g) a summary of the Maintenance Program;
(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;
(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;
(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;
(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;
(l) confirmation that Lessee has duly registered itself as a transacting user entity with the International Registry and has granted authorization to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;
(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a priority search certificate from the International Registry confirming the same;
(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;
(o) no Event of Default hereunder or under the Forward Purchase Agreement, or default by Lessee under any Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;
(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;
 
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(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;
(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:
“THIS AIRCRAFT/ENGINE IS OWNED BY JACKSON SQUARE A320 LEASING (IRELAND) LIMITED, IS MORTGAGED TO CRÉDIT AGRICOLE CIB AS SECURITY TRUSTEE, IS LEASED TO WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE) AND IS SUB-LEASED TO CONCESIONARIA VUELA COMPAŇIA DE AVIACIÓN, S.A.P.I. DE C.V.—VOLARIS”.
(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;
(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;
(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;
(v) an Irrevocable Power of Attorney in favor of Lessor and the Security Trustee, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;
(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and
(x) the Delivery Documents.
3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.
 
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3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.
CLAUSE 4. COMMENCEMENT .
4.1 Term of Leasing .
(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.
(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Forward Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Forward Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.
(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.
4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer under the Purchase Agreement (as amended by the Purchase Agreement Assignment) or Participation Agreement, as applicable. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that
 
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Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.
4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.
4.4 Quiet Enjoyment; Lessor Party Covenants .
(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.
(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to or at the direction of Lessor or, as applicable, the Security Trustee, of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).
(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.
 
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(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.
(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).
CLAUSE 5. DISCLAIMERS .
5.1 General Disclaimers .
(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.
(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS
 
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HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.
(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.
5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.
5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.
CLAUSE 6. RENT AND OTHER PAYMENTS .
6.1 Rent .
(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.
(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights,
 
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powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.
6.2 Security.
(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.
(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.
(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.
6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.
6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the
 
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laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of any Lessor Party or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.
6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).
6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:
(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;
(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and
(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.
For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.
 
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6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.
6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.
6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.
CLAUSE 7. FEES AND EXPENSES .
Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Participation Agreement, the Purchase Agreement, the Forward Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe
 
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and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.
CLAUSE 8. GENERAL UNDERTAKINGS .
8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.
8.2 Notice of Event of Default; Certificate .
(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.
(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.
(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.
(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.
 
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8.3 Financial and Other Information .
(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.
(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.
(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.
(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.
(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Owner and leased to Lessor in accordance with the terms of the Head Lease, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or Owner, acknowledge before any judicial or administrative authority the right of ownership of Owner and the
 
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leasehold interest of Lessor in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or Owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.
8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:
(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and
(b) no Event of Default shall have occurred and be continuing as a result thereof.
Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.
 
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8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.
8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.
8.7 Cape Town Convention. Lessor and Lessee agree:
 
 	(a)	that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;	
 
 	(b)	the Lessee shall execute and deliver the IDERA to the Lessor, and the Lessor shall promptly secure its recordation by the relevant Aviation Authority should the Aircraft become registered in the name of the Lessee;	
 
 	(c)	If the IDERA has been filed with the relevant Aviation Authority, the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;	
 
 	(d)	as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;	
 
 	(e)	the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number 5212, and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are International Aero Engines V2500- A5 engines as more particularly described in the Technical Acceptance Certificate;	
 
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 	(f)	this Agreement shall be registered as a contract of lease in respect of the Aircraft with the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;	
 
 	(g)	the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;	
 
 	(h)	the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Owner as owner and the Security Trustee as trustee on behalf of the Lenders as creditors in respect of the relevant Financing Documents; and	
 
 	(i)	if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition to the Replacement Engine being vested in the Owner, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.	
CLAUSE 9. OPERATIONAL UNDERTAKINGS .
9.1 Registration, Title and Nameplates .
(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each
 
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other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.
(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Owner or Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things (including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Owner or Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor, Owner and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.
(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(r) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:
“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”
 
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(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor, Owner and Lender as permitted under the Operative Documents).
Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.
(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Owner and the Aircraft is leased to Lessee by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.
(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.
(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.
(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:
(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;
(ii) no Event of Default has occurred and is continuing;
(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the
 
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perfection of Owner and Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and
(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).
Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.
Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.
9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.
9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to a Permitted Sublessee that is a solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
 
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(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14;
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Owner, Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Owner’s rights as owner and lessor of the Aircraft under the Head Lease, Lessor’s rights as lessor of the Aircraft hereunder and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.
 
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Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).
Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
9.4 Information and Records .
(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.
(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.
(c) Lessee shall promptly on becoming aware of the same notify Lessor of:
(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;
(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;
 
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(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and
(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Owner, Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.
(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.
9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:
(a) comply and procure compliance with all (i) laws, statutes, decrees, regulations, authorizations, judgments, injunctions and other directives of any Government Entity (including, without limitation, when and if the Aircraft is operated to, from or within European airspace, EU ETS legislation, including any international treaty or similar instrument or agreement relating thereto which is applicable to Volaris), (ii) any treaty, pact, compact or other binding agreement to which any Government Entity is a signatory and (iii) any judicial or administrative interpretation with binding characteristics or application of those described in (i) and (ii), is a signatory or party which in each case is then applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof or the failure to comply with which would result in any criminal liability on the part of any Indemnitee and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;
(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;
(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;
(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;
 
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(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;
(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions in each case relevant to the export, location, use, leasing or financing of the Aircraft or matters arising therefrom, and the effect of which prohibition order (or similar order or directive), sanction or restriction is to prohibit flights to and from such jurisdiction or to prevent the Aircraft from remaining at such jurisdiction; in each case, in violation of such prohibition order (or similar order or directive), sanction or restriction except as may be necessary to safeguard the Aircraft, passengers or crew in the case of urgent circumstances resulting from atmospheric or climatic conditions, technical failure or other reasonable safety concerns (provided that in such case, Lessee shall take all measures to remove the Aircraft from such location as soon as such circumstances or conditions shall cease) whether made by or under:
(i) any Government Entity of the State of Registration, the Habitual Base, France, Germany, the United Kingdom or the United States of America; or
(ii) any Government Entity of the country in which such location is situated; or
(iii) any Government Entity having jurisdiction over any Lessor Party, or any Lender, of which Lessee has notice, or over the Aircraft;
(iv) the United Nations Security Council or the European Union;
(g) obtain and maintain in full force, and operate the Aircraft in accordance with, all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and
(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.
 
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Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.
9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and be continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; provided that, unless an Event of Default has occurred and is continuing, and without in any way affecting the right of the ECA Finance Parties to perform their own annual inspection, the Lessor agrees that, should the ECA Finance Parties elect to perform an inspection during any calendar year, Lessor shall coordinate with the ECA Finance Parties so as to participate in such inspection or shall rely on the inspection report generated by the ECA Finance Parties for such calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall include a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor, any Lender or any ECA Finance Party shall have any obligation to make any inspection.
9.7 EU Operations . In the event the Aircraft is at any time to be operated in any jurisdiction in which Eurocontrol has jurisdiction over airport operations, Lessee shall, prior to commencing such operations, provide Lessor and the Lenders with a Eurocontrol Letter.
 
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CLAUSE 10. MAINTENANCE AND REPAIR .
10.1 General . Lessee shall at all times during the Term:
(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);
(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;
(c) comply or procure compliance with all Aviation Authority mandatory requirements, all mandatory requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;
(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;
(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;
(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and
(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.
10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:
 
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(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;
(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;
(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;
(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;
(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and
(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.
10.3 Substitution of Parts; Ownership.
(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version
 
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thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. For so long as the financing with respect to the Aircraft provided by the ECA Finance Parties remains outstanding, and unless otherwise permitted under subsequent Financing Documents, PMA Parts may not be installed on the Airframe; provided, that Lessor shall promptly notify Lessee should Lessor become aware of a change in ECA policy regarding the use of PMA Parts, and in such event Lessor and Lessee will take appropriate action to permit Lessee to make use of cosmetic, non-structural and non-critical interior cabin PMA Parts to the extent permitted by the new ECA policy.
(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become the property of Owner subject to the Head Lease and this Agreement and be free and clear of any Lien other than Permitted Liens.
(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Owner, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Owner, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Owner (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).
(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:
(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);
(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;
(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and
(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Owner) remain with Owner free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Owner.
 
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10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:
(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and
(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Owner until the Part which replaced it becomes the property of Owner or is replaced by a Part which thereupon becomes the property of Owner, and at which time, the title to the Part which has been replaced will pass to Lessee.
Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Owner remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Owner, or will, upon fitting, become the property of Owner.
10.5 Permitted Modifications.
(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.
(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.
 
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(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Owner free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor or Owner, if at the time of such removal each of the following conditions are fulfilled:
(i) either:
(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Owner; or
(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;
(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;
(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and
(iv) no Event of Default shall have occurred and be continuing.
CLAUSE 11. ENGINES .
11.1 General Principles .
(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.
(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.
 
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(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.
(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Owner at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor, Owner or any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Owner.
11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:
(i) such engine is leased to or is owned by Lessee;
(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and
(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Owner, Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;
Provided that:
(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);
(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.
 
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Lessee shall from time to time, on request, procure that any person to whom possession of the Removed Engine is given and any lessor of, or person having a Lien on, an aircraft on which the Removed Engine is installed acknowledges in writing for the benefit of Owner, Lessor and any Lender, that it will respect the interests of Owner, Lessor and any Lender(s) in the Removed Engine and it will not seek to exercise any rights whatsoever in relation to the Removed Engine for so long as it remains owned by Owner. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Owner, Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.
CLAUSE 12. TITLE .
Title to the Aircraft shall remain vested in Owner subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.
CLAUSE 13. MANUFACTURER’S WARRANTIES .
Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Owner or Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Owner or Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have and to cause Owner to enforce such rights as it may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Owner or Lessor, as the case may be, including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself, Owner and/or Lessor.
 
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CLAUSE 14. INSURANCES .
14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.
14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:
(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;
(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and
(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.
14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:
(a) include each Lessor Party and each Lender as additional insureds for their respective rights and interests;
(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;
(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and
(d) provide that all insurance proceeds shall be payable in US Dollars.
 
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In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).
14.4 Liability Insurance with Respect to the Aircraft .
(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.
(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:
(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;
(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and
(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.
14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:
(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;
(b) specifically reference this Agreement;
(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);

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(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;
(e) provide that no Lessor Party nor any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against any Lessor Party and any Lender except in respect of unpaid premiums in respect of the Aircraft;
(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days’ notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and
(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.
14.6 Information .
(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.
(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.
(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.
 
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(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.
(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.
14.7 Additional Insurance; No Lien .
(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.
(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to any Lessor Party or any Lender, to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.
(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Owner, Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.
 
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(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, except as constituted by this Agreement and the Operative Documents.
14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):
(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or
(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.
14.9 Settlement of Claims .
(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.
(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.
 
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14.10 Assignment . If Owner transfers the Aircraft or Lessor transfers or assigns its rights hereunder or under the other Operative Documents as permitted by Clause 19.2 of this Agreement, Lessee will, upon request, promptly procure that the transferee or assignee (including, without limitation, any Lender) shall be added as a further additional insured to any of the insurances referred to in this Clause 14 so as to enjoy the same rights and protection as Owner or Lessor, as the case may be, may have from time to time under such insurances. In addition, if Owner transfers title to the Aircraft or Lessor transfers such rights in this Agreement and thereafter Lessor ceases to be lessor of the Aircraft or Owner ceases to be the owner of the Aircraft(any such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.
14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.
CLAUSE 15. LOSS, DAMAGE AND REQUISITION .
15.1 Total Loss of Aircraft or Airframe .
(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).
(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay or cause to be paid the Agreed Value to the Security Trustee for the benefit of the “Contract Parties” under Lessee’s policy of reinsurance, within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.
(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full of the Agreed Value as set forth above and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.
 
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15.2 Total Loss of Engine(s) .
(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Owner acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Owner and Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition of title by Owner, be an Engine as defined herein.
(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Owner and become subject to this Agreement, the Head Lease and any Security Documents executed by Owner or Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Owner with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Owner, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Owner’s, Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Owner and Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Owner and Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Owner all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.
Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the
 
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United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Owner, Lessor and the Lenders, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.
Upon compliance with clauses (i) through (vi) above, Lessor will or will cause Owner to, transfer to or at the direction of Lessee without recourse or warranty (except as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Owner’s or Lessor’s, as the case may be, right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.
Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.
15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.
15.4 Requisition .
(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.
(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.
(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.
 
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CLAUSE 16. DEFAULT .
16.1 Events of Default . Each of the following shall constitute an Event of Default:
(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;
(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;
(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;
(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;
(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;
(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;
(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;
 
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(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;
(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;
(j) Lessee suspends or ceases to carry on its business as an air carrier;
(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;
(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;
(m) The existence, validity, enforceability or priority of the rights of Owner or Lessor in respect of the Aircraft hereunder or under the Head Lease, as applicable, is challenged by Lessee or Lessee’s Affiliates;
(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or
 
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any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;
(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or
(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.
16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):
(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or
(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or
(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:
(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor or Owner sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);
 
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(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor or, without duplication of such costs and damages, any Lessor Party as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;
(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;
(v) any loss, cost, expense or liability, or damage to the residual interest of Lessor or, without duplication of such loss, cost, expense, liability or damage, any Lessor Party in the Aircraft, sustained by such Lessor Party due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and
(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or
 
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(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;
(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);
(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;
it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and
 
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(b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.
In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.
Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).
Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.
No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.
16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in
 
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respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.
16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:
(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or
(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.
CLAUSE 17. REDELIVERY .
17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”). Lessee’s redelivery of the Aircraft to Lessor in accordance with the terms of this Agreement will be evidenced by execution and delivery by Lessor and Lessee of a redelivery acceptance certificate in form and substance satisfactory to Lessor and Lessee.
 
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17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:
(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;
(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);
(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;
(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;
(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.
 
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17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:
(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;
(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;
(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and
(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.
Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.
 
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17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):
(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.
(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.
17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:
(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;
(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;
 
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(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.
17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.
17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.
CLAUSE 18. INDEMNITIES .
18.1 General Indemnities .
(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:
(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);
 
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(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or
(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.
(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):
(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;
(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or (in the case of any Indemnitee other than an ECA Finance Party) recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;
(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or
(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.
(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than (i) any Claim made against an ECA Finance Party, which Lessee may defend or compromise
 
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only upon receipt of the prior written consent of such ECA Finance Party and (ii) with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.
18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):
 
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(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;
(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;
(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);
(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the
 
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jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);
(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;
(f) a Tax that would not have been imposed but for a Lessor’s Lien;
(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;
(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;
(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;
(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;
(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;
(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and
 
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(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;
provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.
18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in
 
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the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee; provided that in no event will Lessee control any contest as it relates to an ECA Finance Party without such ECA Finance Party’s prior written consent. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.
 
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18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.
18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.
18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:
(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;
(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;
(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and
(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.
18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2,
 
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18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.
18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.
18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.
18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in
 
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order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.
18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.
CLAUSE 19. FURTHER PROVISIONS .
19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).
19.2 Benefit of Agreement .
(a) Lessor Transfer . Each of Lessor, Owner and Owner Participant may at its own expense assign or transfer its interest in the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document, in each case, to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender or head lessor as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents. Lessor shall procure that each of Owner and Owner Participant shall agree, in writing, in favor of Lessee, to be bound by the provisions of this Clause 19.2
(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.
 
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(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.
Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.
19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Owner, Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.
 
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19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .
(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.
(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.
(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.
(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.
19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.
19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.
19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.
 
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19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:
(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:
to Lessor at:
Wells Fargo Bank Northwest, National Association
260 N. Charles Lindbergh Drive
MAC: U1240-026
Salt Lake City, UT 84116
Telephone: (801) 246-6000
Attention: Corporate Trust Department
with a copy to:
JSA Aircraft Ireland 5212 Limited c/o Jackson Square Aviation, LLC
559 Pacific Avenue
San Francisco, CA 94133
Telephone: (415) 821-8300
Attention: General Counsel
to Lessee at:
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)
Antonio Dovali Jaime No. 70
Torre B, Piso 13
Col. Zedec Santa Fe
Delegación Alvaro Obregon
CP 01210 México, D.F.
México
Telephone: (52 55) 1105 2300
Attention: General Counsel
19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.
 
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19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.
19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.
19.12 Governing Law . (a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
(b) NOTWITHSTANDING AND WITHOUT PREJUDICE TO SECTION 19.12(a), IN CASE ANY LEGAL ACTION, SUIT OR PROCEEDING IS BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE UNITED MEXICAN STATES OR ANY POLITICAL SUBDIVISION THEREOF TO RECOVER THE AIRCRAFT OR ANY PART THEREOF (OR ANY LEGAL ACTION, SUIT OR PROCEEDING RELATED THERETO TO RECOVER ASSETS OR THAT CAN RESULT IN THE ATTACHMENT OF ASSETS IS BROUGHT IN ANY OF THE AFORESAID COURTS), THE PARTIES HERETO HEREBY AGREE, PURSUANT TO ARTICLE VIII (2) OF THE PROTOCOL TO THE CONVENTION ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT, THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED MEXICAN STATES, EXCEPT TO THE EXTENT THAT THE PARTY BRINGING ANY SUCH LEGAL ACTION, SUIT OR PROCEEDING ELECTS AT THE TIME OF THE COMMENCEMENT THEREOF THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, IN WHICH CASE AND TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SUCH RIGHTS AND/OR OBLIGATIONS, AS THE CASE MAY BE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATES OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).
 
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19.13 Jurisdiction; Service of Process; Inconvenient Forum.
Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement or any of the Operative Documents (“Proceedings”) may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), and in the case of Proceedings brought to recover the Aircraft, (or Proceedings related thereto to recover assets or that could result in the attachment of assets), in any court located in the Federal District of Mexico or in any other jurisdiction where the Aircraft (or the assets to be recovered or attached) may be located. By execution and delivery of this Agreement, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such Proceedings, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby and hereby irrevocably waives any right to resort to any other jurisdiction to which it may be entitled by virtue of its present or future domicile or otherwise.
Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring Proceedings or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any Proceeding arising out of or relating to this Agreement or any of the other Operative Documents brought in the State of New York and the Supreme Court of the State of New York (and all related appellate courts) and, in the case of Proceedings brought to recover the Aircraft (or Proceedings related thereto to recover assets or that could result in the attachment of assets) in any court located in the Federal District of Mexico or in any other jurisdiction where the Aircraft (or the assets to be recovered or attached) may be located, and hereby further irrevocably waives any claim that any Proceedings in any of the aforesaid courts has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any Proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such Proceedings are brought in an inconvenient forum, that the venue of such Proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.
Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.
 
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19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.
19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.
19.16 Confidentiality .
(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.
 
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(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.
[Remainder of Page Intentionally Left Blank; Signature Page Follows.]
 
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [5212] to be executed as of the date first above written.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
		
By:	 	/s/ Mario E. Geyne	
Name: Mario E. Geyne	
Title: Financial and Fleet Planning Director	
	
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement	
		
By:	 	/s/ David Wall	
Name: David Wall	
Title: Assistant Vice President	
COUNTERPART NO.     OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.
-Signature Page-
Aircraft Lease Agreement
MSN 5212

SCHEDULE 1
AIRCRAFT DESCRIPTION
Aircraft Manufacturer, Model and Series: Airbus A320-233 Aircraft
Manufacturer’s Serial Number: 5212
Engine Manufacturer and Model: IAE International Aero Engines A.G. V2500-A5
Engine Serial Numbers: V16302 and V16304
Auxiliary Power Unit Manufacturer: *****
Auxiliary Power Unit Serial Number: P-5131].
Landing Gear Part Numbers: *****
Landing Gear Serial Numbers: 12B12481 (Nose); 12MDG2645 (LH Gear); 12MDG2676 (RH Gear)
Date of Manufacture: June, 2012
Seating Configuration: 174 Economy Class

Weights & Capacity	  	Tonnes	
Maximum Take Off Weight	  	*****	
Maximum Landing Weight	  	*****	
Maximum Zero Fuel Weight	  	*****	
 
Schedule 1-1

SCHEDULE 1A
AIRCRAFT DOCUMENTS
The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.
Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.
All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.
 
1)	Certificates	
 
 	a)	Certificate of Airworthiness;	
 
 	b)	Certificate of Registration;	
 
 	c)	Aircraft De-Registration Confirmation (if applicable);	
 
 	d)	Export Certificate of Airworthiness issued by the last country of registry (if applicable);	
 
 	e)	Noise Limitation Certificate (AFM page) (if applicable); and	
 
 	f)	Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:	
 
 	i)	Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;	
 
 	ii)	Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iii)	Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	iv)	Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;	
 
 	v)	Carpets;	
 
 	vi)	Curtains;	
 
 	vii)	Interior Surfaces (if refurbished); and	
 
2)	Manuals	
 
 	a)	Reference Regulatory Agency approved Airplane Flight Manual;	
 
 	b)	Weight and Balance Control and Cargo Loading Manual and Supplements;	
 
 	c)	Operations Manual (Manufacturer’s generic);	
 
 	d)	Quick Reference Handbook (Manufacturer’s generic);	
 
 	e)	Structural Repair Manual;	
 
Schedule 1A-1

 	f)	Aircraft Maintenance Manual;	
 
 	g)	Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:	
 
 	i)	Galleys;	
 
 	ii)	Coffee Makers, Ovens, Hot Jugs and other galley equipment;	
 
 	iii)	Lavatories;	
 
 	iv)	Toilet Assemblies;	
 
 	v)	Closets;	
 
 	vi)	Class Dividers;	
 
 	vii)	Passenger Seats;	
 
 	h)	Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);	
 
 	i)	Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;	
 
 	j)	Aircraft Wiring Diagrams;	
 
 	k)	Engine shop manual and IPC;	
 
 	l)	APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);	
 
 	m)	Fault Isolation Manual, if applicable;	
 
 	n)	Schematics Manual, if applicable;	
 
 	o)	Summary of Lessee’s Maintenance Program;	
 
 	p)	List of Certification Maintenance Requirements;	
 
 	q)	Master Minimum Equipment List;	
 
 	r)	Configuration Deviation List; and	
 
 	s)	Fault Reporting Manual, if applicable.	
 
3)	Airworthiness Directives Documentation	
 
 	a)	The Aircraft shall have all records associated with A.D. compliance:	
 
 	i)	A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:	
 
 	(1)	A.D. number and revision number;	
 
 	(2)	A.D. title;	
 
 	(3)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;	
 
 	(4)	Engineering documentation reference;	
 
 	(5)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	(6)	Specify terminated or repetitive status;	
 
 	(7)	Date of initial accomplishment;	
 
 	(8)	Date of last maintenance accomplishment, if repetitive;	
 
 	(9)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	(10)	The means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
Schedule 1A-2

 	(11)	Details of any alternate means of compliance, including references, intervals, and applicability;	
 
 	b)	The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;	
 
 	c)	Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;	
 
 	d)	Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and	
 
 	e)	Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.	
 
4)	Engineering Documentation	
 
 	a)	A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;	
 
 	b)	Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:	
 
 	i)	SB number and revision number;	
 
 	ii)	SB title;	
 
 	iii)	Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;	
 
 	iv)	Engineering documentation reference;	
 
 	v)	Manufacturer’s Service Bulletin reference and cross-references where appropriate;	
 
 	vi)	Specify terminated or repetitive status;	
 
 	vii)	Date of accomplishment of each portion of such engineering document;	
 
 	viii)	Date of last maintenance accomplishment, if repetitive;	
 
Schedule 1A-3

 	ix)	Name and serial number of the internal maintenance form used to document accomplishment, if applicable;	
 
 	x)	Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);	
 
 	c)	FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);	
 
 	d)	A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;	
 
 	e)	Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:	
 
 	i)	engineering orders;	
 
 	ii)	drawings;	
 
 	iii)	parts lists;	
 
 	iv)	installation documentation;	
 
 	v)	engineering analysis as submitted to obtain the STC approval;	
 
 	vi)	all manual supplements (MM, IPC, WD, AFM);	
 
 	vii)	maintenance program supplements;	
 
 	viii)	any and all reference documents referenced by documents contained in this section 4(e);	
 
 	f)	Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and	
 
 	g)	Digital Flight Data Recorder System technical description	
 
5)	Aircraft Maintenance Status Summaries	
 
 	a)	Certified current Time in Service (Flight Hours & Cycles);	
 
 	b)	Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;	
 
 	c)	Certified status of structural tasks, including SSI (including last accomplished and next due);	
 
 	d)	Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;	
 
 	e)	Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);	
 
Schedule 1A-4

 	f)	Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO – TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;	
 
 	g)	Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;	
 
 	h)	List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and	
 
 	i)	Declaration of Aircraft Accident/Incident Report and major repairs, if any.	
 
6)	Aircraft Maintenance Records	
 
 	a)	Aircraft maintenance log from the past 12 months;	
 
 	b)	Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;	
 
 	c)	A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);	
 
 	d)	C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);	
 
 	e)	Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);	
 
 	f)	Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;	
 
 	g)	Last Weight & Balance Report including Schedule;	
 
 	h)	Compass Swing Report;	
 
 	i)	Last Test Flight Report;	
 
 	j)	Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;	
 
 	k)	Service Difficulty Reports (if any);	
 
 	l)	Aircraft Historical Log;	
 
 	m)	Last Flight Data Recorder read-out;	
 
 	n)	Weighing reports; and	
 
 	o)	Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.	
 
7)	Configuration Status	
 
 	a)	FAA or EASA approved and certified LOPA;	
 
 	b)	Galley Drawings;	
 
 	c)	Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;	
 
 	d)	Inventory Listing of Avionics installed units;	
 
Schedule 1A-5

 	e)	Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;	
 
 	f)	List of applicable STC’s;	
 
 	g)	Aircraft Detail Specification;	
 
 	h)	Aircraft Inspection Record;	
 
 	i)	Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and	
 
 	j)	Electrical Load Analysis documents and data.	
 
8)	Manufacturer Historical Records at New Delivery	
 
 	a)	Copy of EASA Form 52 Aircraft Statement of Conformity;	
 
 	b)	Manufacturer’s AD Report;	
 
 	c)	Manufacturer’s Inspection Report, Initial Equipment list;	
 
 	d)	Manufacturer’s repair/alteration report or statement that no such report was produced;	
 
 	e)	Manufacturer’s SB Report;	
 
 	f)	Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and	
 
 	g)	Rigging document.	
 
9)	Engine Records	
 
 	a)	Engine log book or Engine Data Submittal;	
 
 	b)	Current Disk Sheet (LLP Sheet) signed and certified;	
 
 	c)	Manufacturer Delivery Documents;	
 
 	d)	Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;	
 
 	e)	Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;	
 
 	f)	On Wing Repair records;	
 
 	g)	Engine Log Book/ Master Records of Installation/Removals;	
 
 	h)	Last Borescope Report, including video if available;	
 
 	i)	Test Cell Run Report;	
 
 	j)	Certified Statement that Engines are not involved in an accident;	
 
 	k)	Certified “On-Watch” statement;	
 
 	l)	List of “On-Watch Items” items requiring repetitive inspections;	
 
 	m)	List of repetitive inspections that are not required by AD;	
 
 	n)	List of technical variances or maintenance requirements unique to the particular Engine;	
 
 	o)	Engine Trend Monitoring data for the last 12 months of operation;	
 
 	p)	Last engine run and power assurance report;	
 
 	q)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation	
 
Schedule 1A-6

 	of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
 	r)	Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;	
 
 	s)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	t)	Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation.	
10) APU
 
 	a)	Certified Statement on Status of APU;	
 
 	b)	In house modifications (if applicable);	
 
 	c)	Approved Release to Service Certification for installed units;	
 
 	d)	APU Log Book/ Master Record of Installation/ Removals;	
 
 	e)	APU Shop Visit Reports & reason for removal, for all APU shop visits;	
 
 	f)	Dirty finger print shop work cards and material data sheets for all APU shop visits;	
 
 	g)	Statement of APU hours to Aircraft Flying hours (if applicable);	
 
 	h)	APU Borescope Report;	
 
 	i)	Last Test Run Report;	
 	j)	All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;	
 
Schedule 1A-7

 	k)	Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;	
 
 	l)	APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of the discrepancy;	
 
 	iii)	Supporting analysis and documentation;	
 
 	m)	APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:	
 
 	i)	Approval form;	
 
 	ii)	Complete description of repair;	
 
 	iii)	Supporting analysis and documentation; and	
 
 	n)	Current disk sheet (LLP) signed and certified, if applicable.	
 
11)	Components	
 
 	a)	FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;	
 
 	b)	FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;	
 
 	c)	Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;	
 
 	d)	Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.	
 
12)	Landing Gear	
 
 	a)	Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;	
 
 	b)	Last shop visit report; and	
 
 	c)	Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;	
 
Schedule 1A-8

13)	Damage and Repairs	
 
 	a)	Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;	
 
 	b)	All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.	
 
 	c)	All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;	
 
 	d)	A repair and dent map shall be provided which includes the following:	
 
 	i)	Drawing or description of the location, type and form of the repair;	
 
 	ii)	Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;	
 
 	iii)	A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.	
 
14)	Software	
 
 	a)	A certified listing of onboard loadable software and databases to include the following:	
 
 	i)	ATA chapter;	
 
 	ii)	nomenclature;	
 
 	iii)	part number;	
 
 	iv)	revision date;	
 
 	v)	expiration date; and	
 
 	b)	Procedures for obtaining downloadable software from the internet, if applicable.	
 
15)	Electronic Format	
Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.
 
Schedule 1A-9

SCHEDULE 2
LEASE SUPPLEMENT
THIS LEASE SUPPLEMENT [ 5212 ], dated June     , 2012, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“Lessee”).
Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ 5212 ] dated as of June 26, 2012 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.
NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-233 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:
Airframe: FAA Registration Number N511VL, Manufacturer’s Serial No.5212; and
Engines: Two IAE International Aero Engines A.G. V2527E-A5 engines installed thereon bearing Engine Manufacturer’s Serial Numbers V16302 and V16304 (each of which engines has 1,750 or more lbs. of thrust).
2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is as set forth in the Technical Acceptance Certificate.
3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.
 
Schedule 2-1

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.
5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement, Lessor	
		
By:	 	 	
	 	Name: 	 	 	
	 	Title:	 	 	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., Lessee	
		
By:	 	 	
	 	Name:	 	 	
	 	Title:	 	 	
 
Schedule 2-2

SCHEDULE 3
CERTIFICATE
I, the undersigned, an officer of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“ Lessee ”), a sociedad anónima promotora de inversión de capital variable organized and existing under the laws of Mexico, DO HEREBY CERTIFY that:
1. This Certificate is furnished in accordance with the Aircraft Lease Agreement [5212] dated as of June 26, 2012 (as the same may be supplemented, amended or modified from time to time, the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement (5212) and Lessee, relating to that certain Airbus A320-233 Aircraft, manufacturer’s serial number 5212 (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.
2. Attached hereto as Exhibit A is a copy of the constitutional documents and by-laws of Lessee together with all amendments thereto adopted through the date hereof.
3. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which resolution also includes the power of attorney and which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.
4. Each person whose name, title and signature appears in the attached Exhibit C hereto have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions set opposite their names and the signatures set opposite their names are their genuine signatures.
5. The representations and warranties of Lessee under Section 2.1 of the Lease and each of the other Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.
6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.
7. No Event of Default or default by Lessee under the Lease or any other Lessee’s Document have occurred and is continuing as of this date or would arise by reason of the occurrence of the transactions contemplated in the Lessee’s Documents.
 
Schedule 3-1

IN WITNESS WHEREOF, I have hereunto set my hand this          day of          20    .

By:	 	 	
	 	Name:	
	 	Title:	
 
Schedule 3-2

I, the undersigned,                  of Lessee, DO HEREBY CERTIFY that                  is a duly elected and qualified                  of Lessee and the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this                  day of         , 20        .

By:	 	 	
Name:	 		
Title:	 		
 
Schedule 3-3

SCHEDULE 4
REDELIVERY CONDITIONS
At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:
1. General Condition
(a) The Aircraft shall:
 
 	(i)	be clean by international commercial airline standards;	
 
 	(ii)	have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;	
 
 	(iii)	Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).	
 
 	•	 	“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.	
 
 	(iv)	There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.	
 
 	(v)	There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.	
 
Schedule 4-1

 	(vi)	The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.	
 
 	(vii)	A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.	
 
 	(viii)	If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.	
 
 	(ix)	If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.	
 
 	(x)	The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.	
 
Schedule 4-2

 	(xi)	The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.	
 
 	(xii)	Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.	
 
 	•	 	In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.	
 
 	(xiii)	Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.	
 
 	(xiv)	There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.	
 
Schedule 4-3

 	(xv)	Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.	
2. Check and Part Lives
Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:
 
 	a)	Airframe :	
 
 	(i)	The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to the *****	
 
 	(ii)	The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to the *****	
 
 	b)	Engines :	
At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.
 
 	c)	APU:	
The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 st of each year thereafter.
 
 	d)	Landing Gear:	
 
 	(i)	The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.	
 
 	(ii)	The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.	
 
Schedule 4-4

 	e)	Components:	
Each time controlled component (as listed in the MPD but excluding any Engine LLP, the APU and Landing Gear) will have no less than ***** Flight Hours (with respect to MPD specified Flight Hour limit), ***** (with respect to MPD specified Cycle limit) and ***** (with respect to MPD specified calendar limit) remaining to next scheduled removal, shop inspection or overhaul. Any time controlled component having an MPD interval of less than ***** Flight Hours, ***** Cycles and ***** Months shall have a full replacement interval remaining until its next shop inspection, removal or overhaul.
 
Schedule 4-5

SCHEDULE 5
Monthly Maintenance Status Report

Aircraft Reg	 	 	    	Report Data From	  	 	
Aircraft S/N	 	 	    	Report Data To	  	 	
Type	 	 	    		  		
	 		    		  		
Total Flight Hours	 	 	    	FH Utilization for Period	  	 	
	 		    		  		
Total Cycles	 	 	    	FC Utilization for Period	  	 	
Installed Equipment at Delivery
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
Currently Installed Equipment
( Engines, APU, Landing Gear ) 

   	  	Engines/APU	  	Landing Gear	
	  	Engine 1	  	Engine 2	  	APU	  	Left	  	Nose	  	Right	
Type/Model	  	 	  	 	  	 	  	 	  	 	  	 	
Part Number	  	 	  	 	  	 	  	 	  	 	  	 	
S/N	  	 	  	 	  	 	  	 	  	 	  	 	
TSN	  	 	  	 	  	 	  	 	  	 	  	 	
CSN	  	 	  	 	  	 	  	 	  	 	  	 	
TSO	  	 	  	 	  	 	  	 	  	 	  	 	
CSO	  	 	  	 	  	 	  	 	  	 	  	 	
DSO	  	 	  	 	  	 	  	 	  	 	  	 	
LLP First Limiter Remaining (cycles)	  	 	  	 	  	 	  	 	  	 	  	 	
 
Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED	  	 	  	NEXT CHECK DUE	
CHECK
TYPE	  	CHECK
#	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	  	 	  	CHECK
TYPE	 	  	CHECK #	  	TOTAL
HRS	  	TOTAL
CYC	  	DATE	
A-Check	  	 	  	 	  	 	  	 	  		  	 	A-Check	  	  	 	  	 	  	 	  	 	
C-Check	  	 	  	 	  	 	  	 	  		  	 	C-Check	  	  	 	  	 	  	 	  	 	
D-Check	  	 	  	 	  	 	  	 	  		  	 	D-Check	  	  	 	  	 	  	 	  	 	
TECHNICAL ACTIVITY DURING PERIOD
 
1.	Engine, APU and Landing Gears – details of removal activity	

S/N OFF	  	S/N ON	  	REASON / CAUSE	

2.	Major Maintenance – description of any major modifications/alterations, and/or major maintenance checks.	

   	
   	
DEFERRAL LIST
 
3.	See following pages for current open deferrals report.	
AIRCRAFT ACCIDENT/INCIDENT REPORT
 
4.	Description of any aircraft accident/incident since last reporting period:	

Date	  	Station	  	Details	
None	  	   	  	   	
AD STATUS REPORT
 
5.	See following pages for current AD status report.	
 
Schedule 5-2

AIRCRAFT STATUS CERTIFICATION
I CERTIFY THAT THE CONTENT OF THIS REPORT TO BE TRUE AND ACCURATE TO THE BEST OF MY KNOWLEDGE.

Signed:	 		 		 		 		

(Lessee)	 		 		 		 		
Title:	 	 	 		 		 		
Return by e-mail to : utilization@jacksonsquareaviation.com
 
Schedule 5-3

SCHEDULE 6
FORM OF QUIET ENJOYMENT LETTER
From: [Lessor Party][Security Trustee], as Security Trustee (“Security Trustee”)
To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (“ Lessee ”)
Dated: [     ]
Re: Aircraft Lease Agreement [5212] dated as of June 26, 2012 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-233 aircraft bearing manufacturer’s serial number 5212 (as more particularly described in the Lease, the “ Aircraft ”)
Ladies and Gentlemen:
All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.
1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.
2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,
[Lessor Party][Security Trustee]	
		
By	 	 	
Name:	
Title:	
 
Schedule 6-1

			
Agreed and Accepted:	
	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
		
By:	 	 	
Name:	
Title:	
 
Schedule 6-2

SCHEDULE 7
TECHNICAL ACCEPTANCE CERTIFICATE
 
TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement	
DATE:                                              
Aircraft Lease Agreement [5212] dated as of June 26, 2012 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. relating to Airbus A320-233 Aircraft, manufacturer’s serial number 5212 (the “Aircraft”)
Terms used in this Certificate bear the meanings given to such terms in the Lease.
Lessee confirms that as at              hours on                 , 20     being the Delivery Date at                    :
 
 	(i)	the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;	
 
 	(ii)	the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;	
 
 	(iii)	the Basic Rent Amount is US$                    ;	
 
 	(iv)	the manufacturer’s serial numbers of the installed Engines are V16302 and V16304;	
 
 	(v)	the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:	
 
 	(a)	Airframe Serial No: 5212:	

Total Flight Hours Since New	  	_______________	
Total Cycles Since New	  	______________	
Flight Hours Since Last C-Check:	  	N/A	
Calendar Months Since Last D-Check	  	N/A	
Flight Hours Since Last D-Check	  	N/A	
 
Schedule 7-1

 	(b)	Engine Type: IAE V2527E-A5:	

Position	  	1	  	2	
Serial No:	  	V16302	  	V16304	
			
Total Flight	  		  		
Hours:	  		  		
	  	 	  	 	
Total Cycles:	  		  		

Flight Hours since last
Engine Performance Restoration:	  	N/A	  	N/A	

Cycles since last
Engine Performance Restoration:	  	N/A	  	N/A	

Cycles remaining
to next expected
Engine Performance Restoration	  		  		

(c)    APU Model: Honeywell P/N 3800708-1	  		  		
			
Serial No:	  	P-5131	  		
			
Total Flight/APU Hours:	  		  		

Total Cycles:	  		  		

APU]/[Flight Hours since
the APU Heavy Repair:	  		  	N/A	

 	(d)	Landing Gear:	

				
Position	 	LH Main	 	Nose	 	RH Main	
				
Model:
Serial No:	 	Messier Dowty
12MDG2645	 	Messier Dowty
12B12481	 	Messier Dowty
12MDG2676	

Total Flight Hours:	 		 		 		

Total Cycles:	 		 		 		

Flight Hours since
last Landing Gear Overhaul:	 	N/A	 	N/A	 	N/A	

Cycles since
last Landing Gear Overhaul:	 	N/A	 	N/A	 	N/A	

 	(e)	Fuel on Board:                      	
 
Schedule 7-2

 	(f)	Status of components or Parts with time/cycle and calendar limits (see attached sheet); and	
 
 	(g)	All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;	
 
 	(vi)	the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;	
 
 	(vii)	the Aircraft is insured in accordance with the Lease;	
 
 	(viii)	the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;	
 
 	(ix)	no Event of Default has occurred and is continuing;	
 
 	(x)	attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;	
 
 	(xi)	attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and	
 
 	(xii)	attached is a schedule listing the Aircraft Manuals.	

 	
		
By:	 	 	
		
Name:	 	 	
		
Title:	 	 	
 
Schedule 7-3

SCHEDULE 8
PART A
LESSEE FURNISHED EQUIPMENT
June 2012
SCN
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	MSN TBD	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
				
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
			
ATA 02 Certification	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
			
ATA 03 Weights	  		  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-1

							
ATA 03 Placards and markings	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
	  	Air conditioning	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
			
ATA 22 Auto Flight	  		  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-2

							
ATA 23 Communications	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
		
ATA 25 Cabin & cockpit	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-3

							
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-4

							
ATA 29 Hydraulic Power	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
		
ATA 31 Indicating/Recording	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
		
ATA 32 Landing gear	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
		
ATA 33 Lights	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
		
ATA 34 Navigation	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  	*****	
		
ATA 35 Oxygen	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
		
ATA 38 Water/Waste	  		
				
*****	  	*****	  	*****	  		
		
ATA 46 ATSU	  		
				
*****	  	*****	  	*****	  	*****	
		
ATA 47 Inerting Gas System	  		
				
*****	  	*****	  	*****	  		
 
Schedule 8-5

							
*****	  	*****	  	*****	  		
		
ATA 49 APU	  		
				
*****	  	*****	  	*****	  		
		
ATA 51 Structure	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
		
ATA 52 Doors	  		
				
*****	  	*****	  	*****	  		
		
ATA 55 Stabilizers	  		
				
*****	  	*****	  	*****	  		
		
ATA 56 Windows	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
				
*****	  	*****	  	*****	  		
		
ATA 57 Wings	  		
				
*****	  	*****	  	*****	  		
		
ATA 71 Power Plant—General	  		
				
*****	  	*****	  	*****	  	*****	
		
ATA 72 Engines	  		
				
*****	  	*****	  	*****	  		

Airline:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Delivery Date	  	Mar-12	
Operator:	  	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	TBD	
A/C Type:	  	320-200	  	Issue	  	6	  		  		
						
ATA/Item	  	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C Qty	
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****    	
 
Schedule 8-6

											
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  	*****	  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	
						
*****	  	*****	  	*****	  	*****	  		  	*****	

Airline:	 	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	Contractual Delivery Date	  	Delivery Date	  	Mar-12	
Operator:	 	CONCESIONARIA VUELA COMPANIA DE AVIACION	  	MSN	  	MSN	  	TBD 	
A/C
Type:	 	320-200	  	Issue	  	5	  		  		  		
							
ATA/Item	 	Description	  	Manufacturer	  	P/N	  	Unit	  	A/C
Qty	  	A/C
Qty	
*****	 	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Schedule 8-7

PART B
IN FLIGHT ENTERTAINMENT
NONE
 
Schedule 8-8

SCHEDULE 9
LESSEE’S CONDITIONS PRECEDENT
Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:
(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;
(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;
(c) Lessor shall have tendered the Aircraft for delivery pursuant to Clause 4.2 hereof; and
(d) Lessee shall have received from each of Beneficiary, Owner and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.
 
Schedule 9-1

SCHEDULE 10
[Reserved]
 
Schedule 10-1

SCHEDULE 11
IRREVOCABLE POWER OF ATTORNEY/PODER IRREVOCABLE

Form of Irrevocable Power of Attorney	  	Formato de Poder Irrevocable	
[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]	  	[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]	
		
The undersigned, [            ] in its capacity as [            ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated         , 2012 (the “Lease”) entered it by and between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [            ] dated [            ] (the “Lessor”) and the Company with respect to one Airbus A320-233 bearing manufacturer’s serial number [            ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.	  	El suscrito, en su carácter de [            ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha         , 2012 (el “Arrendamiento”) celebrado por y entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-233 con número de serie del fabricante [            ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.	
		
FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [            ] dated [            ] and CRÉDIT AGRICOLE CIB (each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Federal Civil Code and its correlative articles of the several Civil Codes ruling in the federal entities of the Mexican United States, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:	  	PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [            ] de fecha [            ] y CRÉDIT AGRICOLE CIB (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los establecido en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil Federal y sus artículos correlativos de los diversos Códigos Civiles que rigen en las entidades federativas de los Estados Unidos Mexicanos, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:	
		
(i)     request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America;	  	(i)     solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del Registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América;	
 
Schedule 11-1

			
(ii)     to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign;	  	(ii)     solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera;	
		
(iii)   to request and obtain the removal of the Aircraft from the operation permits of Lessee before the DGAC;	  	(iii)   solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;	
		
(iv)    to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located;	  	(iv)    solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre;	
		
(v)     to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located;	  	(v)     realizar todos los trámites necesarios y conducentes para la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave;	
		
(vi)    to notify the termination of the Lease to the RAM or any other relevant authority;	  	(vi)    notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes;	
		
(vii)  to perform any acts and execute any documents required for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form;	  	(vii)  realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera;	
		
(viii)  in case of an event of total loss of the Aircraft and/or the Engines (as such term is defined in the Lease), to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases;	  	(viii)  en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores (según dicho es definido en el Arrendamiento), para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación;	
		
(ix)    to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and	  	(ix)    solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y	
		
(x)     to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.	  	(x)     delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.	
		
Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ” procedure; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.	  	De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y desistirse de cualquier acción o procedimiento incluidos el juicio de amparo; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y absolver posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.	
 
Schedule 11-2

			
		
Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).	  	Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federales, estatales o municipales de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).	
		
For purposes of this power of attorney, the term “Aircraft” includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.	  	Para todos los efectos previstos en este poder, el término “Aeronave” incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que en un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.	
		
SECOND.- This Power of Attorney is granted to be exercised within the Mexican United States and/or the United States of America according to the Inter-American Convention on the Legal Regime of Powers of Attorney to be Used Abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.	  	SEGUNDA.- Este poder se otorga para ser ejercitado dentro de los Estados Unidos Mexicanos y/o los Estados Unidos de América de conformidad con la Convención Interamericana del Régimen Legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, la Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.	
		
THIRD.- This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.	  	TERCERA.- Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.	
		
FOURTH.- Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.	  	CUARTA.- Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil firmado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.	
 
Schedule 11-3

			
		
FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.	  	QUINTA.- La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.	
		
In terms of Article VI of the Washington Protocol, the Spanish language which appears in this instrument is the authorized translation of the English language which also appears in this instrument, in all of its parts.	  	De conformidad con el Artículo VI del Protocolo de Washington, el idioma español que aparece en este instrumento es la traducción autorizada del idioma inglés que también aparece en este instrumento, en todas sus partes.	

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
					
By:	 	 	 		 	Por:	 	 	
Name:	 	[•]	 		 	Nombre:	 	[•]	
Title:	 	[•]	 		 	Cargo:	 	[•]	
 
Schedule 11-4

SCHEDULE 12
FORM OF EUROCONTROL LETTER
[PRINT ON LESSEE HEADED PAPER]
DATE                         
The Director of the Central Route Charges Office
European Organisation for the Safety of Air Navigation (EUROCONTROL)
Rue de la Fusée, 96
1130 BRUXELLES
BELGIUM
Dear Sirs
AUTHORISATION LETTER
Aircraft model Airbus A320-200: registration mark N511VL, MSN 5212—the “Aircraft”
We have leased the above Aircraft from Wells Fargo Bank Northwest, National Association (not in its individual capacity, but solely as owner trustee) (the “ Lessor ”) in accordance with a lease agreement dated [ Ÿ ] between us and the Lessor (the “ Initial Sub-Lease ”).
We hereby authorise you to provide the Lessor (or its duly authorised representative) with a general statement of account in relation to air navigation charges incurred by us and due to EUROCONTROL. Access to the statement(s) of account will be provided in accordance with the procedures established by EUROCONTROL.
The authorisation contained in this letter may only be revoked or amended by a written instruction signed by us and the Lessor.
Yours faithfully,
For and on behalf of

[LESSEE]	  		  		
			
 	  	(Name)	  		
			
 	  	(Title)	  		
 
Schedule 12-1

ANNEX A
CERTAIN DEFINITIONS AND PAYMENTS
1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:
“ Agreed Value ” means *****
“ Basic Rent Amount ” *****, such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:
Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.
“ Damage Notification Threshold ” means *****
“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****
“ Discount Rate ” means *****
“ Security Amount ” means at any time the amount equal to *****
*****
Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:
Airframe “SC Checks ”: *****
(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	

V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
The above amounts assume an average thrust de-rate of 10%.
(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.
Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.
APU : US ***** per APU Hour for the APU Heavy Repair.
The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.
Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.

Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).
Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.
*****
All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.
If on any occasion following a qualified Maintenance Payments contribution event:
 
 	•	 	The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.	
 
 	•	 	The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.	
No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.
The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).

If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****
3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):
Airframe SC Checks : *****
(b) ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.
Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:
V2527E-A5 SelectOne (or better) 27,000 lbs. thrust – from Delivery through the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
V2527E-A5 SelectOne 27,000 lbs. thrust – as a mature Engine following the first Engine Performance Restoration of the core modules – US $ / FH :

 	  	1.0	 	  	1.5	 	  	2.0	 	  	2.5	 	  	3.0	 	  	3.5	 	  	4.0	 	
5% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
10% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
15% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
20% Derate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	

The above amounts assume an average thrust de-rate of 10%.
(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.
Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).
APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.
The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.
The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).
4. AD Cost Sharing .
(a) With respect to each AD ***** to be performed by Lessee during the Term, the cost of compliance for which exceeds ***** Lessor shall reimburse Lessee for a portion of such work in accordance with the following formula:
*****
(b) Lessor’s obligation to make any payments under this Clause 4 shall be conditioned upon ***** and receipt by Lessor no later than ***** of invoices and proper documentation ***** in support of the invoices and verifying that *****

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.43
AIRCRAFT LEASE AGREEMENT [A]
DATED AS OF APRIL 12, 2011
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number TBD

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of April 12, 2011 the following:	
		
Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 17 Limited	
		
Trust Agreement:	  	that certain Trust Agreement dated as of February 28, 2011 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing the manufacturer’s serial number set forth in Lease Supplement No. 1, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	means the United States of America.	
		
Duration of Term:	  	One hundred thirty-two (132) months	
		
Manufacturer:	  	Airbus S.A.S	
		
Purchase Option applies:	  	No.	
	
Payments	
		
*****	  	As set forth in Schedule D.	
 
1

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	September, 2012.	
		
Final Delivery Date:	  	March 31, 2013.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
 
2

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:	  	An FAR certified maintenance facility in Mexico or El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing.	
		
Redelivery Condition Requirements:	  	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	  	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:	  	As set forth in Schedule C.	
	
Other	

Account for payments:	  		 		
			
	  	Transfer To :	 	*****	
			
	  	SWIFT Code :	 	*****	
			
	  	For Credit To :	 	*****	
			
	  	Account No:	 	*****	
			
	  	Sort Code:	 	*****	
			
	  	IBAN:	 	*****	
			
	  	US Correspondent Bank Details:	 	*****	
			
	  	US Correspondent Bank SWIFT Code:	 	*****	
 
3

					
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest,
National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn :     Corporate Trust Department
 
Fax :     (801) 246-5053
 
E-mail: CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 17 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn : Contracts Leader
 
Fax : +353 61 706867
 
E-mail : asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma
490 piso 1
Col. Santa Fe Pena Blanca
01210 Mexico D.F.
Delegacion Alvaro Obregon,
Mexico
 
Attn : Director Juridicio
 
Fax : +52 55 616460
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		  		 	LESSEE:	
				
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		  		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V.	
						
By:	 	/s/ Carlos Sierra	 		  		 	By:	 	/s/ Mario E. Geyne	
Name: Carlos Sierra	 		  		 	Name: Mario E. Geyne	
Title:	 		  		 	Title: Financial and Fleet Planning Director	
Signed at:	 		  		 	Signed at:	
-Signature Page-
-Aircraft Lease Agreement [A]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is required by applicable law or regulation or is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement.
 
A-1

EXHIBIT A
 
Exhibit A

	

							
A320 RFC	    	Title	  	2012
deliveries	  	Comments	
	    	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	    	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	    	Certification	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 03	    	Weights	  		  		
*****	    	*****	  	*****	  		
ATA 03	    	Placards and markings	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
	    	Air conditioning	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 22	    	Auto Flight	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 23	    	Communications	  		  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
 
Page 1 of 3

							
A320 RFC	    	Title	  	2012
deliveries	  	Comments	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 25	    	Cabin & cockpit	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 29	    	Hydraulic Power	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
 
Page 2 of 3

							
A320 RFC	    	Title	  	2012
deliveries	  	Comments	
ATA 31	    	Indicating/Recording	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 32	    	Landing gear	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 33	    	Lights	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 34	    	Navigation	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  	*****	
ATA 35	    	Oxygen	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 38	    	Water/Waste	  		  		
*****	    	*****	  	*****	  		
ATA 46	    	ATSU	  		  		
*****	    	*****	  	*****	  	*****	
ATA 47	    	Inerting Gas System	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 49	    	APU	  		  		
*****	    	*****	  	*****	  		
ATA 51	    	Structure	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 52	    	Doors	  		  		
*****	    	*****	  	*****	  		
ATA 55	    	Stabilizers	  		  		
*****	    	*****	  	*****	  		
ATA 56	    	Windows	  		  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
*****	    	*****	  	*****	  		
ATA 57	    	Wings	  		  		
*****	    	*****	  	*****	  		
ATA 71	    	Power Plant – General	  		  		
*****	    	*****	  	*****	  	*****	
ATA 72	    	Engines	  		  		
*****	    	*****	  	*****	  		
 
Page 3 of 3

 

 

 

 

 

 

SCHEDULE B
Redelivery Condition Requirements

		
Redelivery Check	  	The applicable complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next ***** Flight Hours, ***** Cycles and ***** months in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage, empennage and wings paint stripped prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be ***** lbs.	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition	  	Any replacement life limited Part installed in the Landing Gear	
Requirements:	  	and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-1

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Benefits”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the Subpart F Benefits, Lessee agrees that in each calendar year during the Term:	
 
 	(i)	the Aircraft will be located outside the United States more than ***** per cent of the time; or	
 
 	(ii)	more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.	
For the purpose of (i) and (ii) above, reference to the United States includes the Commonwealth of Puerto Rico and for (ii) above, any flight between two points in the United States, without an intervening stop in a foreign jurisdiction of at least ***** hours, is considered to be a flight traversed entirely within the United States and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the airframe, that Lessor may reasonably request in writing to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for the Subpart F Benefits.
 
(b)    (i)	Indemnity for breach of usage covenant: The remedy for the breach of any of the covenants contained in this clause shall be the right to receive indemnity payments specified in this paragraph (b) from Lessee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written request from Lessor certifying that there has been a loss of Subpart F Benefits describing in reasonable detail the circumstances of such loss, the amount of such loss and the breach causing such loss.	
 
 	(ii)	Lessee’s indemnity obligation for Lessor’s or the relevant Tax Indemnitee’s entitlement to the Subpart F Benefits shall be the amount of U. S. income tax that would not have been incurred but for the loss or disallowance of the Subpart F Benefits that relates to any breach of the covenant set forth in paragraph (a) plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee as a result of the loss or disallowance of the Subpart F Benefits. The amount of any such payment shall be made taking into account the principles of Section 5.10 of the Common Terms Agreement.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

Guarantee	
		
Guarantee required:	  	*****	
		
Guarantor:	  	*****	
	
Payments	
		
Rent:	  	The Rent payable in advance in respect of each Rental Period during the Term will be calculated as follows:
 
*****
 
“Quotation Date” means the date ***** prior to Delivery Date
 
On the Quotation Sate, ***** dealers ***** and request each dealer for quotes on ***** “Quotes” and ***** shall provide the numerical amounts of such Quotes to ***** it being hereby acknowledged and agreed by ***** that it shall use such Quotes ***** For the avoidance of doubt, the credit spreads calculated will be in the form of percentage but the for the purposes of the formula above will be expressed as a number than a percentage. On the Quotation Date, *****	
		
Supplemental Rent
Applies:	  	*****	
		
Supplemental Rent Redelivery Adjustment Payments Applies:	  	*****	
		
Lessor Maintenance Contribution Obligation Applies:	  	***** in accordance with the provisions set forth below in lieu of the provisions of Section 7.2 of the Common Terms Agreement:
 
Provided no Default has occurred and is continuing, *****	

		
Assumed Ratio
Adjustment Table:                    	  	Applicable Assumed Ratio Adjustment Table for each Engine prior to the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
		
	  	Applicable Assumed Ratio Adjustment Table for each Engine following the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	

		
Engine Supplemental
Rent Rate:	  	*****	
		
Engine LLP
Supplemental Rent Rate:	  	*****	
		
Airframe 4C/6 Year
Check Supplemental Rent Rate	  	***** for each calendar *****	
		
Airframe 8C/12 Year
Check
Supplemental Rent Rate:	  	***** for each calendar *****	
		
APU Supplemental Rent
Rate:	  	*****	
		
Landing Gear
Supplemental
Rent Rate:	  	***** for each calendar *****	
		
Annual Supplemental
Rent
Adjustment:	  	*****	
		
Deposit:	  	Lessee shall pay a Deposit ***** in an amount equal to the sum *****
 
        a)  ***** and
 
        b)  *****
 
Lessee shall have the option to replace all or part of the Deposit *****	
	
Technical	
		
AD Sharing Applies:	  	*****	
		
AD Threshold:	  	*****	
		
AD Factor:	  	*****	
		
AD Compliance Period:	  	*****	
		
Airframe Structural
Check	  	*****	
	
Insurance	
		
Agreed Value:	  	*****	
		
Damage Notification
Threshold:	  	*****	
		
Deductible Amount:	  	*****	
		
Minimum Liability
Coverage:	  	*****	

D-2

 
F-1

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.44
AIRCRAFT LEASE AGREEMENT [B]
DATED AS OF APRIL 12, 2011
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number TBD

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.
The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of April 12, 2011 the following:

Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 17 Limited	
		
Trust Agreement:	  	that certain Trust Agreement dated as of February 28, 2011 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing the manufacturer’s serial number set forth in Lease Supplement No. 1, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	means the United States of America.	
		
Duration of Term:	  	One hundred thirty-two (132) months	
		
Manufacturer:	  	Airbus S.A.S	
		
Purchase Option applies:	  	No.	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
 
1

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	September, 2012.	
		
Final Delivery Date:	  	March 31, 2013.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
 
2

					
Redelivery	
		
Redelivery Location:	 	An FAR certified maintenance facility in Mexico or El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing.	
		
Redelivery Condition Requirements:	 	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	 	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:	 	As set forth in Schedule C.	
	
Other	
			
Account for payments:	 		  		
	 	Transfer To :	  	*****	
			
	 	SWIFT Code :	  	*****	
			
	 	For Credit To :	  	*****	
			
	 	Account No:	  	*****	
			
	 	Sort Code:	  	*****	
			
	 	IBAN:	  	*****	
			
	 	US Correspondent
Bank Details:	  	*****	
			
	 	US Correspondent
Bank SWIFT Code:	  	*****	
 
3

					
Notice Details:	 	Lessor
 
Wells Fargo Bank Northwest, National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn:     Corporate Trust Department
 
Fax:       (801) 246-5053
 
E-mail: CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 17 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490 piso 1
Col. Santa Fe Pena Blanca
01210 Mexico D.F.
Delegacion Alvaro Obregon, Mexico
 
Attn: Director Juridicio
 
Fax: +52 55 616460
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		  		 	LESSEE:	
				
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		  		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V.	
						
By:	 	/s/ Carlos Sierra	 		  		 	By:	 	/s/ Mario E. Geyne	
Name: Carlos Sierra	 		  		 	Name: Mario E. Geyne	
Title:	 		  		 	Title: Financial and Fleet Planning Director	
Signed at:	 		  		 	Signed at:	
-Signature Page-
-Aircraft Lease Agreement [B]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is required by applicable law or regulation or is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement.
-Signature Page-
-Aircraft Lease Agreement [B]-

EXHIBIT A

							
A320 RFC	  	Title	  	2012
deliveries	 	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	 		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	 		
ATA 02	  	Certification	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 03	  	Weights	  		 		
*****	  	*****	  	*****	 		
ATA 03	  	Placards and markings	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
	  	Air conditioning	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 22	  	Auto Flight	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 23	  	Communications	  		 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
 
Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	 	Comments	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 25	  	Cabin & cockpit	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 29	  	Hydraulic Power	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
 
Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	 	Comments	
ATA 31	  	Indicating/Recording	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 32	  	Landing gear	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 33	  	Lights	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 34	  	Navigation	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 	*****	
ATA 35	  	Oxygen	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 38	  	Water/Waste	  		 		
*****	  	*****	  	*****	 		
ATA 46	  	ATSU	  		 		
*****	  	*****	  	*****	 	*****	
ATA 47	  	Inerting Gas System	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 49	  	APU	  		 		
*****	  	*****	  	*****	 		
ATA 51	  	Structure	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
ATA 52	  	Doors	  		 		
*****	  	*****	  	*****	 		
ATA 55	  	Stabilizers	  		 		
*****	  	*****	  	*****	 		
ATA 56	  	Windows	  		 		
*****	  	*****	  	*****	 		
*****	  	*****	  	*****	 		
VOI56D001B	  	Installation of dummy windows according to referenced cabin layout	  	X	 		
ATA 57	  	Wings	  		 		
*****	  	*****	  	*****	 		
ATA 71	  	Power Plant – General	  		 		
*****	  	*****	  	*****	 	*****	
ATA 72	  	Engines	  		 		
*****	  	*****	  	*****	 		
 
Page 3 of 3

 

 

 

 

 

 

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	  	The applicable complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next ***** Flight Hours, ***** Cycles and ***** months in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage, empennage and wings paint stripped prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be *****.	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-1

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Benefits”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the Subpart F Benefits, Lessee agrees that in each calendar year during the Term:	
 
 	(i)	the Aircraft will be located outside the United States more than ***** per cent of the time; or	
 
 	(ii)	more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.	
For the purpose of (i) and (ii) above, reference to the United States includes the Commonwealth of Puerto Rico and for (ii) above, any flight between two points in the United States, without an intervening stop in a foreign jurisdiction of at least ***** hours, is considered to be a flight traversed entirely within the United States and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the airframe, that Lessor may reasonably request in writing to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for the Subpart F Benefits.
 
(b)    (i)	Indemnity for breach of usage covenant: The remedy for the breach of any of the covenants contained in this clause shall be the right to receive indemnity payments specified in this paragraph (b) from Lessee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written request from Lessor certifying that there has been a loss of Subpart F Benefits describing in reasonable detail the circumstances of such loss, the amount of such loss and the breach causing such loss.	
 
 	(ii)	Lessee’s indemnity obligation for Lessor’s or the relevant Tax Indemnitee’s entitlement to the Subpart F Benefits shall be the amount of U. S. income tax that would not have been incurred but for the loss or disallowance of the Subpart F Benefits that relates to any breach of the covenant set forth in paragraph (a) plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee as a result of the loss or disallowance of the Subpart F Benefits. The amount of any such payment shall be made taking into account the principles of Section 5.10 of the Common Terms Agreement.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

Guarantee	
		
Guarantee required:	  	*****	
		
Guarantor:	  	*****	
	
Payments	
		
Rent:	  	The Rent payable in advance in respect of each Rental Period during the Term will be calculated as follows:
 
*****
 
“Quotation Date” means the date ***** prior to Delivery Date
 
On the Quotation Sate, ***** dealers ***** and request each dealer for quotes on ***** “Quotes” and ***** shall provide the numerical amounts of such Quotes to ***** it being hereby acknowledged and agreed by ***** that it shall use such Quotes ***** For the avoidance of doubt, the credit spreads calculated will be in the form of percentage but the for the purposes of the formula above will be expressed as a number than a percentage. On the Quotation Date, *****	
		
Supplemental Rent
Applies:	  	*****	
		
Supplemental Rent Redelivery Adjustment Payments Applies:	  	*****	
		
Lessor Maintenance Contribution Obligation Applies:	  	***** in accordance with the provisions set forth below in lieu of the provisions of Section 7.2 of the Common Terms Agreement:
 
Provided no Default has occurred and is continuing, *****	

		
Assumed Ratio
Adjustment Table:                    	  	Applicable Assumed Ratio Adjustment Table for each Engine prior to the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
		
	  	Applicable Assumed Ratio Adjustment Table for each Engine following the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
D-2

			
		
Engine Supplemental
Rent Rate:	  	*****	
		
Engine LLP
Supplemental Rent Rate:	  	*****	
		
Airframe 4C/6 Year
Check Supplemental Rent Rate	  	***** for each calendar *****	
		
Airframe 8C/12 Year
Check
Supplemental Rent Rate:	  	***** for each calendar *****	
		
APU Supplemental Rent
Rate:	  	*****	
		
Landing Gear
Supplemental
Rent Rate:	  	***** for each calendar *****	
		
Annual Supplemental
Rent
Adjustment:	  	*****	
		
Deposit:	  	Lessee shall pay a Deposit ***** in an amount equal to the sum *****
 
        a)  ***** and
 
        b)  *****
 
Lessee shall have the option to replace all or part of the Deposit *****	
	
Technical	
		
AD Sharing Applies:	  	*****	
		
AD Threshold:	  	*****	
		
AD Factor:	  	*****	
		
AD Compliance Period:	  	*****	
		
Airframe Structural
Check	  	*****	
	
Insurance	
		
Agreed Value:	  	*****	
		
Damage Notification
Threshold:	  	*****	
		
Deductible Amount:	  	*****	
		
Minimum Liability
Coverage:	  	*****	
 
D-3

 
F-1

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.45
AIRCRAFT LEASE AGREEMENT [C]
DATED AS OF APRIL 12, 2011
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number TBD

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of April 12, 2011 the following:	
		
Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 19 Limited	
		
Trust Agreement:	  	that certain Trust Agreement dated as of February 28, 2011 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing the manufacturer’s serial number set forth in Lease Supplement No. 1, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	means the United States of America.	
		
Duration of Term:	  	One hundred thirty-two (132) months	
		
Manufacturer:	  	Airbus S.A.S	
		
Purchase Option applies:	  	No.	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
 
1

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	October, 2012.	
		
Final Delivery Date:	  	March 31, 2013.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
****	  	****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
 
2

					
			
*****	  	As set forth in Schedule D.	  		
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:	  	An FAR certified maintenance facility in Mexico or El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing.	
		
Redelivery Condition Requirements:	  	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	  	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican ****	
		
Subpart F Indemnity:	  	As set forth in Schedule C.	
	
Other	
			
Account for payments:	  	Transfer To :	  	*****	
			
	  	SWIFT Code :	  	*****	
			
	  	For Credit To :	  	*****	
			
	  	Account No:	  	*****	
			
	  	Sort Code:	  	*****	
			
	  	IBAN:	  	*****	
			
	  	US Correspondent Bank Details:	  	*****	
			
	  	US Correspondent Bank SWIFT Code:	  	*****	
 
3

					
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest,
National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn:    Corporate Trust Department
 
Fax:      (801) 246-5053
 
E-mail: CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 19 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma 490 piso 1
Col. Santa Fe Pena Blanca
01210 Mexico D.F.
Delegacion Alvaro Obregon,
Mexico
 
Attn: Director Juridicio
 
Fax: +52 55 616460
 
E-mail: sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		  		 	LESSEE:	
				
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		  		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V.	
						
By:	 	/s/ Carlos Sierra	 		  		 	By:	 	/s/ Mario E. Geyne	
Name: Carlos Sierra	 		  		 	Name: Mario E. Geyne	
Title:	 		  		 	Title: Financial and Fleet Planning Director	
Signed at:	 		  		 	Signed at:	
-Signature Page-
-Aircraft Lease Agreement [C]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is required by applicable law or regulation or is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement.

EXHIBIT A

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
 
Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant – General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
 
Page 3 of 3

 

 

 

 

 

 

SCHEDULE B
Redelivery Condition Requirements

		
Redelivery Check	  	The applicable complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next ***** Flight Hours, ***** Cycles and ***** months in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage, empennage and wings paint stripped prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be *****	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
 
B-1

			
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Benefits”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the Subpart F Benefits, Lessee agrees that in each calendar year during the Term:	
 
 	(i)	the Aircraft will be located outside the United States more than ***** per cent of the time; or	
 
 	(ii)	more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.	
For the purpose of (i) and (ii) above, reference to the United States includes the Commonwealth of Puerto Rico and for (ii) above, any flight between two points in the United States, without an intervening stop in a foreign jurisdiction of at least ***** hours, is considered to be a flight traversed entirely within the United States and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the airframe, that Lessor may reasonably request in writing to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for the Subpart F Benefits.
 
(b)    (i)	Indemnity for breach of usage covenant: The remedy for the breach of any of the covenants contained in this clause shall be the right to receive indemnity payments specified in this paragraph (b) from Lessee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written request from Lessor certifying that there has been a loss of Subpart F Benefits describing in reasonable detail the circumstances of such loss, the amount of such loss and the breach causing such loss.	
 
 	(ii)	Lessee’s indemnity obligation for Lessor’s or the relevant Tax Indemnitee’s entitlement to the Subpart F Benefits shall be the amount of U. S. income tax that would not have been incurred but for the loss or disallowance of the Subpart F Benefits that relates to any breach of the covenant set forth in paragraph (a) plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee as a result of the loss or disallowance of the Subpart F Benefits. The amount of any such payment shall be made taking into account the principles of Section 5.10 of the Common Terms Agreement.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

Guarantee	
		
Guarantee required:	  	*****	
		
Guarantor:	  	*****	
	
Payments	
		
Rent:	  	The Rent payable in advance in respect of each Rental Period during the Term will be calculated as follows:
 
*****
 
“Quotation Date” means the date ***** prior to Delivery Date
 
On the Quotation Sate, ***** dealers ***** and request each dealer for quotes on ***** “Quotes” and ***** shall provide the numerical amounts of such Quotes to ***** it being hereby acknowledged and agreed by ***** that it shall use such Quotes ***** For the avoidance of doubt, the credit spreads calculated will be in the form of percentage but the for the purposes of the formula above will be expressed as a number than a percentage. On the Quotation Date, *****	
		
Supplemental Rent
Applies:	  	*****	
		
Supplemental Rent Redelivery Adjustment Payments Applies:	  	*****	
		
Lessor Maintenance Contribution Obligation Applies:	  	***** in accordance with the provisions set forth below in lieu of the provisions of Section 7.2 of the Common Terms Agreement:
 
Provided no Default has occurred and is continuing, *****	

		
Assumed Ratio
Adjustment Table:                    	  	Applicable Assumed Ratio Adjustment Table for each Engine prior to the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
		
	  	Applicable Assumed Ratio Adjustment Table for each Engine following the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
D-1

			
		
Engine Supplemental
Rent Rate:	  	*****	
		
Engine LLP
Supplemental Rent Rate:	  	*****	
		
Airframe 4C/6 Year
Check Supplemental
Rent Rate	  	***** for each calendar *****	
		
Airframe 8C/12 Year
Check
Supplemental Rent Rate:	  	***** for each calendar *****	
		
APU Supplemental Rent
Rate:	  	*****	
		
Landing Gear
Supplemental
Rent Rate:	  	***** for each calendar *****	
		
Annual Supplemental
Rent
Adjustment:	  	*****	
		
Deposit:	  	Lessee shall pay a Deposit ***** in an amount equal to the sum *****
 
        a)  ***** and
 
        b)  *****
 
Lessee shall have the option to replace all or part of the Deposit *****	
	
Technical	
		
AD Sharing Applies:	  	*****	
		
AD Threshold:	  	*****	
		
AD Factor:	  	*****	
		
AD Compliance Period:	  	*****	
		
Airframe Structural
Check	  	*****	
	
Insurance	
		
Agreed Value:	  	*****	
		
Damage Notification
Threshold:	  	*****	
		
Deductible Amount:	  	*****	
		
Minimum Liability
Coverage:	  	*****	
 
D-2

 
F-1

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.46
AIRCRAFT LEASE AGREEMENT [D]
DATED AS OF APRIL 12, 2011
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number TBD

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of April 12, 2011 the following:	
		
Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 19 Limited	
		
Trust Agreement:	  	that certain Trust Agreement dated as of February 28, 2011 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing the manufacturer’s serial number set forth in Lease Supplement No. 1, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
 
1

			
State of Registry:	  	means the United States of America.	
		
Duration of Term:	  	One hundred thirty-two (132) months	
		
Manufacturer:	  	Airbus S.A.S	
		
Purchase Option applies:	  	No.	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	November, 2012.	
		
Final Delivery Date:	  	March 31, 2013.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:	  	An FAR certified maintenance facility in Mexico or El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing.	
 
2

					
Redelivery Condition Requirements:	  	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	  	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:	  	As set forth in Schedule C.	
	
Other	
		
Account for payments:	  	Transfer To: *****
 
SWIFT Code: *****
 
For Credit To: *****
 
Account No: *****
Sort Code: *****
 
IBAN: *****
 
US Correspondent
Bank Details: *****
 
US Correspondent
Bank SWIFT Code: *****	
			
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest,
National Association, as
Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn: Corporate Trust Department
 
Fax: (801) 246-5053
 
E-mail: CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 19 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Prolongación Paseo de la Reforma
490 piso 1
Col. Santa Fe Pena Blanca
01210 Mexico D.F.
Delegacion Alvaro Obregon,
Mexico
 
Attn: Director Juridicio
 
Fax: +52 55 616460
 
E-mail:
sergio.rabago@volaris.com.mx	
	  	Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  		
 
3

ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
4

IN WITNESS WHEREOF , the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	  	 	  	LESSEE:	
			
WELLS FARGO BANK NORTHWEST, N.A., not in its individual capacity, but solely as Owner Trustee under the Trust Agreement	  		  	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
					
By:	  	/s/ David Wall	  		  	By:	  	/s/ Mario E. Geyne	
Name:   David Wall	  		  	Name:   Mario E. Geyne	
Title:   Assistant Vice President	  		  	Title:   Financial and Fleet Planning Director	
Signed at:   Utah	  		  	Signed at:	
-Signature Page-
-Aircraft Lease Agreement [D]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is required by applicable law or regulation or is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement.
 
A-1

EXHIBIT A

-Exhibit A-

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
 
Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant – General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
 
Page 3 of 3

 

 

 

 

 

 

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	  	The applicable complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next ***** Flight Hours, ***** Cycles and ***** months in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage, empennage and wings paint stripped prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be ***** lbs.	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
 
B-1

			
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Benefits”).
(a) Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the Subpart F Benefits, Lessee agrees that in each calendar year during the Term:
(i) the Aircraft will be located outside the United States more than ***** percent of the time; or
(ii) more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.
For the purpose of (i) and (ii) above, reference to the United States includes the Commonwealth of Puerto Rico and for (ii) above, any flight between two points in the United States, without an intervening stop in a foreign jurisdiction of at least ***** hours, is considered to be a flight traversed entirely within the United States and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the airframe, that Lessor may reasonably request in writing to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for the Subpart F Benefits.
(b)(i) Indemnity for breach of usage covenant: The remedy for the breach of any of the covenants contained in this clause shall be the right to receive indemnity payments specified in this paragraph (b) from Lessee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written request from Lessor certifying that there has been a loss of Subpart F Benefits describing in reasonable detail the circumstances of such loss, the amount of such loss and the breach causing such loss.
(ii) Lessee’s indemnity obligation for Lessor’s or the relevant Tax Indemnitee’s entitlement to the Subpart F Benefits shall be the amount of U.S. income tax that would not have been incurred but for the loss or disallowance of the Subpart F Benefits that relates to any breach of the covenant set forth in paragraph (a) plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee as a result of the loss or disallowance of the Subpart F Benefits. The amount of any such payment shall be made taking into account the principles of Section 5.10 of the Common Terms Agreement.
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

Guarantee	
		
Guarantee required:	  	*****	
		
Guarantor:	  	*****	
	
Payments	
		
Rent:	  	The Rent payable in advance in respect of each Rental Period during the Term will be calculated as follows:
 
*****
 
“Quotation Date” means the date ***** prior to Delivery Date
 
On the Quotation Sate, ***** dealers ***** and request each dealer for quotes on ***** “Quotes” and ***** shall provide the numerical amounts of such Quotes to ***** it being hereby acknowledged and agreed by ***** that it shall use such Quotes ***** For the avoidance of doubt, the credit spreads calculated will be in the form of percentage but the for the purposes of the formula above will be expressed as a number than a percentage. On the Quotation Date, *****	
		
Supplemental Rent
Applies:	  	*****	
		
Supplemental Rent Redelivery Adjustment Payments Applies:	  	*****	
		
Lessor Maintenance Contribution Obligation Applies:	  	***** in accordance with the provisions set forth below in lieu of the provisions of Section 7.2 of the Common Terms Agreement:
 
Provided no Default has occurred and is continuing, *****	

		
Assumed Ratio
Adjustment Table:                    	  	Applicable Assumed Ratio Adjustment Table for each Engine prior to the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
		
	  	Applicable Assumed Ratio Adjustment Table for each Engine following the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
D-1

			
		
Engine Supplemental
Rent Rate:	  	*****	
		
Engine LLP
Supplemental Rent Rate:	  	*****	
		
Airframe 4C/6 Year
Check Supplemental Rent Rate	  	***** for each calendar *****	
		
Airframe 8C/12 Year
Check
Supplemental Rent Rate:	  	***** for each calendar *****	
		
APU Supplemental Rent
Rate:	  	*****	
		
Landing Gear
Supplemental
Rent Rate:	  	***** for each calendar *****	
		
Annual Supplemental
Rent
Adjustment:	  	*****	
		
Deposit:	  	Lessee shall pay a Deposit ***** in an amount equal to the sum *****
 
        a)  ***** and
 
        b)  *****
 
Lessee shall have the option to replace all or part of the Deposit *****	
	
Technical	
		
AD Sharing Applies:	  	*****	
		
AD Threshold:	  	*****	
		
AD Factor:	  	*****	
		
AD Compliance Period:	  	*****	
		
Airframe Structural
Check	  	*****	
	
Insurance	
		
Agreed Value:	  	*****	
		
Damage Notification
Threshold:	  	*****	
		
Deductible Amount:	  	*****	
		
Minimum Liability
Coverage:	  	*****	
 
D-2

			

 

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.47
Agreement
on
Technical Services for A319/A320 Aircraft

between	  	Concesionaria Vuela Compañía de Aviación
S.A.P.I. de C.V.
Av. Antonio Dovalí Jaime No. 70, Torre B, Piso 13
Col. Zedec Santa Fe
01210, México D.F., México
(hereinafter referred to as VOLARIS)	
		
and	  	Lufthansa Technik AG
Weg beim Jäger 193
22335 Hamburg
Germany
(hereinafter referred to as LHT	

	  	- 1 -	  		

			

 
 
Contents
BASIC AGREEMENT

Preamble	  	 	5	  	
		
1 SCOPE OF AGREEMENT	  	 	6	  	
		
2 Definitions and Abbreviations	  	 	7	  	
		
3 Cooperation between the Parties and Responsibilities towards the Airworthiness Authorities/ Third Parties / manage/m™	  	 	13	  	
		
4 Subcontracting	  	 	16	  	
		
5 Turnaround Time, Performance Date	  	 	17	  	
		
6 Prices and Price Adjustment	  	 	18	  	
		
7 Payment Terms	  	 	20	  	
		
8 Security for payment	  	 	23	  	
		
9 Quality and Warranty	  	 	24	  	
		
10 Delivery and Redelivery	  	 	26	  	
		
11 Liability and Indemnification – Insurance	  	 	27	  	
		
12 Term and Termination	  	 	28	  	
		
13 Confidentiality, No Transfer of Intellectual Property Rights	  	 	29	  	
		
14 Notices and Communication	  	 	31	  	
		
15 Law and jurisdiction	  	 	32	  	
		
16 Miscellaneous	  	 	34	  	

Basic Agreement	  	- 2 -	  	Execution Version	

			

 
 
ATTACHMENTS / ANNEXE

Basic Agreement	  	- 3 -	  	Execution Version	

			

 
 
BASIC AGREEMENT

Basic Agreement	  	- 4 -	  	Execution Version	

			

 
 
This Agreement is made and entered into as of this xx day of June, 2012 , between Concesionaria Vuela Compañia de Aviación S.A.P.I. de C.V., a company organized under the laws of Mexico having its registered offices at Av. Antonio Dovalí Jaime No. 70, Torre B, Piso 13, Col. Zedec Santa Fe, 01210 Mexico City, Mexico (hereinafter referred to as “Volaris”) and Lufthansa Technik AG, a company incorporated under the Laws of the Federal Republic of Germany, having its registered offices at Weg beim Jäger 193, 22335 Hamburg, Germany (hereinafter referred to as “ LHT ” or “ Lufthansa Technik ”)
Preamble
WHEREAS LHT is a corporation in the business of providing aircraft-related technical services, such as, but not limited to, the Maintenance of aircraft, Engines and Components and is duly authorized and certified in accordance with the EASA Part-145, EASA Part 21, and FAA Part-145 requirements and/or aviation requirements of certain other authorities; and
WHEREAS Volaris wishes to have certain aircraft-related Services performed by LHT in accordance with such standards and experience and in accordance with the relevant provisions hereof, and
WHEREAS LHT wishes to perform such Services for Volaris in accordance with LHT’s quality standards and experience and as described herein.
NOW THEREFORE for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and in connection of mutual promises and covenants set forth hereunder, Volaris and LHT agree upon the following:

Basic Agreement	  	- 5 -	  	Execution Version	

			

 
 
1 SCOPE OF AGREEMENT
The Basic Agreement sets forth the general terms of the contractual relationship between LHT and Volaris and the provisions contained herein shall apply to any Attachments, Annexes or any other documents referencing or amending this Agreement.
The Services to be provided by LHT are defined and specified in the respective Attachments. They shall be performed under applicable aviation Authority approvals or the applicable aviation Authority approvals of LHT’s Subcontractors in accordance with the respective Maintenance Data and in accordance with the terms and conditions of this Agreement.
Capitalized terms used in this Basic Agreement shall have the meaning ascribed to them in Article 2 and – to the extent used in one of the Attachments – shall have an identical meaning throughout the entire Agreement, unless otherwise defined with reference to the deviation in the respective Attachment.

Basic Agreement	  	- 6 -	  	Execution Version	

			

 
 
2 DEFINITIONS AND ABBREVIATIONS
The following terms, expressions and abbreviations shall have the following meanings:
 
Agreement	This Basic Agreement, and all Attachments and General Annexes, all as the same may be modified, supplemented or amended from time to time in accordance with the provisions hereof.	
 
Airworthiness	An aircraft or Component is airworthy if it conforms to the applicable approved type, i.e. if it complies with the valid type certificate data sheet and if the Maintenance was carried out in accordance with the applicable Maintenance requirements and if the aircraft or Component was released to service and, in each case, complies with the requirements of the applicable airworthiness Authorities.	
 
AAR/AD	Any mandatory aviation authority requirement, including, but not limited to FAA Airworthiness Directives, EASA Airworthiness Directives, LBA “Lufttuechtigkeitsanweisungen”, DGAC “Consignes de Navigabilités” and Mexican DGAC directives and other mandatory orders.	
 
AOG	Aircraft on Ground.	
 
APU	Auxiliary Power Unit.	
 
APU	Operating Hour	
Each full or partial hour that the APU is in operation.
 
ATA 300	Air Transport Association specification 300.	
 
Attachments	All specific attachments with corresponding annexes, side letters and any other mutually agreed documents referencing this Agreement that state to be a part of this Agreement.	
Attachment Assumptions
Has the meaning set forth in Article 6.3.1.
 
Authority	Either the approving authority(ies) of the aircraft operator or the approving authority of the Maintenance organization, production organization, design organization and/or the continuing airworthiness management organization or, as the context requires or permits, both.	
Base Maintenance
All scheduled Maintenance activities in accordance with the operator’s approved Maintenance Program. For non-routine Maintenance activities, criteria according to AMC 145.A-10 shall apply.

Basic Agreement	  	- 7 -	  	Execution Version	

			

 
 
Basic Agreement
This document has the meaning set forth in Article 1.
 
Beneficiary	Has the meaning set forth in Article 13.3.	
 
BER	Beyond Economic Repair	
 
Business Day	Any Day on which banks are open in Hamburg, Germany, Mexico City, Mexico and, in relation to payments, New York, New York.	
CLP                     In respect of any Component, the Catalog List Price for such Component most recently published by the original equipment manufacturer for such Component.
 
Components	Devices, modules or individual parts of an aircraft, including Engines, flight equipment and/or emergency equipment. They are always identified by a part number in the Maintenance or operational documents issued by the respective aircraft or Component design organization.	
Confidential Information
Has the meaning set forth in Article 13.1.
 
Consumables	Semi-finished products such as metal or plastic sheets or profiles, etc., fluids such as cleaning agents, pickling agents, primers, paints, etc. for surface treatment, adhesives, additional material for welding or plasma jet welding or other material or additives such as lubricants or fuels that are used for Maintenance or operation of aircraft or Components. They are distinguished from Components or Standard Parts in that they can never be used without processing. They are identified by a standard or other specification (or by a part number in exceptional cases) in the Maintenance and operational documents issued for the respective aircraft by a design organization.	
 
CRS	Certificate of release to service	
 
CSN	Cycles Since New; means the aggregate number of Flight Cycles of an aircraft or an Engine, as applicable, since its manufacturing date.	
Data Release Agreement
An agreement in the form as attached to this Agreement signed by Volaris and by which Volaris authorizes Airbus to give LHT access to customized data included in the Airbus On-Line Services subject to the applicable rules and limits imposed by Airbus.
 
Day	Calendar day	
 
Delivery	The act of Volaris giving LHT possession of an aircraft, Engine or a Component to be serviced.	
 
DGAC	The French Direction Générale de l’Aviation Civile	

Basic Agreement	  	- 8 -	  	Execution Version	

			

 
 
DOD	Domestic Object Damage; damage of Material caused by objects which are part of the damaged aircraft or Engine.	
 
EASA	European Aviation Safety Agency also being the approving authority of the LHT design organisation and for each European STC (if applicable and/or required).	
 
Engine	A basic engine assembly and its accessories.	
Engine Flight Hour
Each full or partial hour that the Engine is in operation.
Excluded Taxes
shall mean Taxes based on income, capital gains, net worth or property payable by LHT or any subcontractor or affiliate of LHT to any tax authority in Germany or any other jurisdiction in which LHT, or any of its subcontractor(s) maintains a place of business or permanent establishment; (b) Taxes of any nature which are not directly related to the services rendered Volaris hereunder or the presence of any Component in the taxing jurisdiction; (c) Taxes of any nature to the extent the same relate to services or goods provided to any other person or entity other than Volaris; Taxes for which LHT, any affililate or subcontrator becomes liable by reason of its willful misconduct, or gross negligence or breach of agreement or as a result of any failure to file any tax or similar return or declaration in a timely mannerExpendable                     An item for which no authorized repair procedure exists and for which standard cost of repair exceeds cost of replacement, including Standard Parts. Expendable inventory is controlled by quantity and its scrapped after removal.
Fixed Price (F/P)
A predetermined price or a fee for Services in accordance with Article 7.2.
 
Flat Rate (F/R)	A price or fee for Services on a recurring reference, e.g. ‘Flight Hour’, in accordance with Article 7.1.	
 
Flight Cycle	One take-off and landing event.	
 
Flight Hour	Each hour that the aircraft is airborne.	
 
FOD	Foreign Object Damage, any damage to an aircraft, Engine or other aircraft part that is caused by any external impact, including, but not limited to, objects which are not part of such aircraft, Engine or other aircraft part (other than as a result of any act or omission of either Party, any of its affilates, subcontracors or employees or agents which constitute the negligence or willful misconduct of either Party or any of its affliates, subcontractors, employees or agents) and/or lightning.	
General Annex
Those documents named General Annexes and attached to this Agreement.

Basic Agreement	  	- 9 -	  	Execution Version	

			

 
 
Interchangeability
Means that design, function and characteristics of a certain Component or part are sufficiently alike to be replaceable with each other under applicable Airworthiness laws and regulations, in the understanding that PMA Parts are not allowed..
 
JPM	Joint Procedures Manual.	
 
Layover Period	Any downtime of an aircraft during which Maintenance of aircraft, aircraft Parts, Engine or Components is performed.	
 
LBA	The German Luftfahrtbundesamt.	
Line Maintenance
All routine Maintenance activities in accordance with the operator’s approved Maintenance Program. For non-routine Maintenance activities, criteria according to AMC 145.A-10 shall apply.
 
LLP	Life Limited Parts	
 
LRU	Line Replaceable Unit: Component which can be readily changed on an aircraft during Line Maintenance operations.	
 
Maintenance	One or a combination of the following actions: Overhaul, repair, inspection, testing, replacement, modification or rectification of discrepancies on an aircraft, an Engine or a Component.	
Maintenance Data
Approved data for an aircraft or Component which has been issued by the design organization which has developed the aircraft or Component or another approved design organization, such as, but not limited to, LHT as EASA Part 21/J, FAA and Mexican DGAC approved design organisation, to define the extent of Maintenance to be performed on an aircraft or a Component.
Maintenance Program
A Maintenance program that has been approved by the authority of the country of aircraft registration.
 
manage/ m ™	Has the meaning set forth in Article 3.5.	
 
Material	Components, Consumables, Expendables and Raw Material, in each case meeting the requirements of this Agreement and any and all requirements and standards of the National Authority, the FAA and EASA, as applicable.	
Mexican DGAC
The Direccion General de Aeronautica Civil of the United Mexican States

Basic Agreement	  	- 10 -	  	Execution Version	

			

 
 
Minimum Flight Hours
A certain number of Flight Hours during a certain period, agreed between the Parties for the purposes of calculating the minimum Flat Rate payment by Volaris.
 
Modification	The alteration of the aircraft, any Material or other aircraft-related part, such as Components, Engines, APU’s or LDG’s in conformity with an approved standard.	
 
MRO	Maintenance Repair Organization	
 
NAA	National Aviation Authority means the approving Authority of the aircraft operator, as applicable.	
 
OEM	Original equipment manufacturer.	
OEM Catalog List Price
The most current OEM Officially Published Catalog List Price, without any discount or reductions, made public and available to any customer.
 
Party/Parties	LHT or Volaris / LHT and Volaris collectively.	
Planned Flight Hours
The estimated number of Flight Hours during a certain period as agreed between the Parties for the purposes of calculating Volaris’s Flat Rate payment.
 
Raw Material	Semi-finished products such as metal or plastic sheets or profiles, etc. Raw Materials are distinguished from Components in that they can never be used without processing and are identified by a standard or other specification (or by a part number in exceptional cases) in the Maintenance and operational documents issued for the respective aircraft by a design organization.	
 
Redelivery	The act of LHT giving Volaris possession of an aircraft, Engine or a Component.	
Release to Service
The issuance of a CRS by the Maintenance organization approved by the responsible Authority confirming, unless otherwise specified, that the Maintenance Services listed therein have been carried out in conformity with the applicable requirements (e.g. EASA Part-145, FAA Part-145, the National Authority requirements) by appropriate authorized personnel of the Maintenance organization and in accordance with the applicable Maintenance organization exposition, and that the aircraft or Component has been released to service.
 
SB	Service Bulletin.	
Serviceable Condition
The status required for the issuance of a CRS.
 
Services	The work to be performed by LHT as agreed in the Attachments	

Basic Agreement	  	- 11 -	  	Execution Version	

			

 
 
Standard Parts	Individual parts that are identified by a standard rather than by a part number in the Maintenance or operational documents issued by the respective aircraft or aircraft Component design organization or any other approved design organisation, such as but not limited to, LHT as an EASA Part 21/J approved design organisation.	
Standard OEM Warranty
The warranty that is given by the OEM of the Material concerned to any customer according to its published warranty terms.
 
STC	Supplemental type certificate.	
 
Subcontractor	Any person, legal or natural (other than employees of LHT and Suppliers), engaged by LHT to support LHT in the performance of its obligations under this Agreement.	
 
Supplier	Any person, legal or natural, supplying Material to a Party, the manufacturing of which is not such Party’s own contractual obligation vis-à-vis the other Party under this Agreement, e.g. off-the-shelf-parts or OEM parts and documentation.	
 
Taxes	Any and all present and future taxes, duties, withholdings, levies, assessments, imposts, fees and other governmental charges of all kinds (including without limitation, any value added or similar tax and any stamp, documentary, registration or similar tax) and any amount treated as such whenever created or imposed and whether of the government of Germany or elsewhere and whether imposed by a local, municipal, governmental, state, federal or other body and, will include, without limitation, all fines, penalties, costs, charges and expenses payable in connection with any failure to pay or delay in paying the same (except and to the extent that any such fines, penalties, costs, charges and expenses arise as a result of acts or omissions or delay of LHT, any affiliate or subcontractor) but not “Excluded Taxes” and references to “Taxes” will be construed accordingly.	
 
TC	Type certificate.	
Time and Material
A price or fee for Services based on 1. the applicable man-hour and / or machine-hour rates for the actual time spent and 2. the applicable prices for the Material spent, in accordance with Article 7.3.
 
TSN	Time Since New; means the aggregate number of Flight Hours of an aircraft or an Engine or APU Operating Hour, as applicable, since its manufacturing date.	
Turnaround Time / TAT
The period of time between scheduled Delivery and Redelivery, unless expressly otherwise stated in an Attachment.
Value Added Tax
Sales tax or value added tax on any goods and services, sales or turnover tax, taxes on the importation of goods, customs duties, imposition or levy of a like nature including, without limitation, value added tax payable under the German VAT Act 1993 as amended or supplemented from time to time.

Basic Agreement	  	- 12 -	  	Execution Version	

			

 
 
3 COOPERATION BETWEEN THE PARTIES AND RESPONSIBILITIES TOWARDS
THE AIRWORTHINESS AUTHORITIES/ THIRD PARTIES / MANAGE/M™
 
3.1	Communication	
The Parties agree to establish a communication system and to define meetings and points of contact in order to enable Volaris and LHT to comply with their mutual obligations under the applicable Airworthiness regulations.
 
3.2	Liaison Person	
Each Party shall nominate at least one person to secure the necessary liaison between Volaris and LHT.
 
3.3	Responsibility towards the Authorities/ Third Parties	
Notwithstanding LHT’s obligations under this Agreement, Volaris shall be solely responsible for Volaris’ compliance with all applicable requirements imposed by any Authority or government agency or instrumentality. LHT shall grant Volaris access to any and all necessary information concerning LHT’s compliance with EASA-requirements, FAA-requirements and NAA-requirements, as applicable, in order for Volaris to exercise its Airworthiness responsibility and obtain and maintain, in accordance with applicable law and on a timely basis, all Airworthiness certifications which are required under EASA, FAA.
For the avoidance of doubt this Agreement does not affect the contractual relationship between Volaris and third parties. Volaris shall remain the prime contractor in relation to the aircraft and Components manufacturers or to the lessor, if applicable, of the aircraft and Components.
In particular, LHT shall not have the responsibility towards the Authority or the manufacturer or other Supplier to follow-up manufacturer’s and other Supplier’s SBs or AARs issued by the respective Authority unless otherwise stipulated herein.
Notwithstanding the foregoing, LHT shall cooperate reasonably with Volaris in connection with Volaris’ compliance with all covenants and obligations of Volaris affecting Maintenance and redelivery of Aircraft, Engines and Components including, without limitation, all information, reporting and inspection covenants and obligations.
 
3.4	Maintenance Data	
 
3.4.1	Responsibility of Volaris for supply of Maintenance Data	
Volaris shall provide to LHT the required Maintenance Data no later than on the date specified in the Attachments and ensure that the Maintenance Data reflect the current status of the respective aircraft, Engine or Component.

Basic Agreement	  	- 13 -	  	Execution Version	

			

 
 
If Volaris does not provide Maintenance Data on time or if such Maintenance Data does not reflect the current status of the respective aircraft, Engine or Component, and provided LHT has complied with its obligations under this Section 3.4.1, LHT may, but is not obliged to take appropriate actions to collect Maintenance Data to be able to start or continue performing the agreed Services.
 
3.4.2	Right to access and use Maintenance Data	
Volaris will make reasonable commercial efforts to provide LHT a non-exclusive, royalty-free license, limited to the services performed under this Agreement (including the right to grant sublicenses to LHT’s Subcontractors) to use all trade secrets and copyrights belonging to Volaris and related to the Maintenance Data solely for the purposes of performing the Services under this Agreement. LHT shall ensure that such trade secrets and copyrights related to such Maintenance Data are used solely for the purposes of performing its obligations or, the the case of a Subcontractor, such Subcontractor’s obligations under this Agreement.
Volaris shall make reasonable commercial efforts to ensure that LHT can access Maintenance Data electronically. To the extent LHT and the respective OEM have an agreement regarding LHT’s access and use of such data, Volaris shall, at no cost to Volaris, comply with any reasonable requirements of LHT and the OEM to secure access to such data. Volaris shall in particular execute upon LHT’s request all necessary agreements (e.g. the MRO Airbus World Data Release Agreement, if applicable).
 
3.4.3	Cost for provisioning and access to Maintenance Data	
Any cost, expenses, royalties or other charges, incurred by LHT or LHT’s Subcontractors in connection with the provisioning, access and use of any Maintenance Data shall be borne by the Party as agreed in the respective Attachment.
 
3.5	manage/m™	
To the extent stated in the Attachments, LHT provides a web-based Technical Operation Websuite (“ manage/ m ™ ”) for certain Services. manage/ m ™ enables Volaris to establish and manage its core operation functions relating to those Services on a web-based system and supports Volaris in the fulfilment of its obligations towards the Authorities as an aircraft operator.
 
3.6	Reporting of failures, malfunctions or defects attributable to LHT originated design	
If in the course of operation a failure, malfunction or defect or other occurrence, which causes or might cause adverse effects on the continuing airworthiness of the product, part or appliance and if such are attributable to or otherwise result from an LHT originated design change, arises, Volaris shall notify the LHT Office of Airworthiness HAM TT/L without unreasonable delay under Fax-No. +49 40 5070 4855 or E-mail: hamtolmus@lht.dlh.de or mobile no. +49 172 4044 238.

Basic Agreement	  	- 14 -	  	Execution Version	

			

 
 
Such notification shall include all reasonable and relevant details, e.g. operating conditions, flight hour and cycle information of the affected product and other data allowing LHT to investigate such failure, malfunction or defect to the LHT attributable design change and establish corrective action, as necessary.
LHT shall inform Volaris and all involved authorities on any known unsafe condition resulting from a LHT design, as required by FAA and/or in EASA Part 21A.3.

Basic Agreement	  	- 15 -	  	Execution Version	

			

 
 
4 SUBCONTRACTING
 
4.1	LHT may subcontract Services to any other EASA//FAA/NAA-approved Maintenance facility.	
The Services provided by LHT may be subcontracted to any other Maintenance facility to which LHT’s Authority approved management system has been extended. LHT may, subject to all applicable provisions hereof, provide a Subcontractor with such information about Volaris that is required to perform the subcontracted Services.
 
4.2	LHT shall inform Volaris about any engagement of a Subcontractor and shall supply Volaris with relevant information about the Subcontractor. Subcontracting of a Base Maintenance check of an aircraft or a complete workshop Maintenance check or overhaul of an Engine shall be subject to Volaris’ prior written approval.	
 
4.3	The engagement of a Subcontractor shall not affect LHT’s obligations, including, without limitation, warranty obligations as stipulated in Article 9, vis-à-vis Volaris under this Agreement and LHT shall remain fully responsible for the timely and proper performance of such obligations.	

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5 TURNAROUND TIME, PERFORMANCE DATE
 
5.1	The Parties agree that the required Turnaround Times or/and other performance dates and time limits are set forth in Attachments to this Agreement.	
 
5.2	Further to Article 11.1, the Parties agree that it shall be deemed not to be LHT’s fault and LHT shall not be held liable if ***** such as but not limited to:	
 
5.2.1	***** which shall mean ***** causing cessation, slowdown or interruption of work, general interruption in transportation;	
 
5.2.2	***** which were unforeseen and which could not have been expected and which have an impact on the Services to be performed and, in each case, were not caused by or in connection with and are not attributable to *****	
 
5.2.3	Material ordered in a timely manner from Suppliers not being delivered *****	
 
5.2.4	*****	
 
5.2.5	*****	
 
5.2.6	*****	
 
5.3	***** will use reasonable efforts to minimize the impact that a delay under Art. 5.2 may cause *****	

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6 PRICES AND PRICE ADJUSTMENT
 
6.1	Prices	
The applicable prices for the Services and Material are specified in the Attachments (and corresponding Annexes) to this Basic Agreement.
 
6.2	Escalation	
Unless expressly otherwise stated in the relevant Attachments all prices shall be revised and automatically adjusted *****
The prices have been calculated assuming that the Services involve a certain Material and labor element. The ratio of that labor and Material element is set forth in the applicable Attachment..
 
6.2.1	The portion of the prices corresponding to the labor portion of the Services shall be adjusted in accordance with *****	
The price adjustment shall equal *****
The following formula shall apply:
*****
*****
*****
The year-on-year percentage change for the year t is calculated as follows:
(Index t / Index t-1) * 100 – 100 = X t
For example: The percentage change for the year 2008 (t = 2008 and t-1= 2007) equals:
(114.6 / 113.8) * 100 – 100 = 0.7%
 
6.2.2	The portion of the prices corresponding to the Material portion of the Services shall be adjusted in accordance *****.	
 
6.2.3	Volaris hereby accepts any adjustment made in accordance with article 6.2.	
 
6.3	Changes of Assumptions	
 
6.3.1	In the event that ***** the Parties shall, upon such Party’s request, negotiate in good faith an adjustment of the relevant prices.	
 
6.3.2	In the event that the Parties cannot reach agreement on an adjustment ***** such Party shall be entitled to *****.	
 
6.4	Taxes	
 
6.4.1	All prices under this Agreement are exclusive of any Value Added Tax or similar tax on the sale of goods or services, which tax, if any, will be payable by Volaris in addition thereto and at the same time. Subject to this Article 6.4.1, all payments made by Volaris under this Agreement shall be made gross without any tax deductions or withholdings of a similar nature.	

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6.4.2	If Volaris is required by law to make any deduction or withholding of any Tax from any payment hereunder, it shall do so and the sum due from Volaris in respect of such payment will be increased to the extent necessary to ensure that, after the making of such deduction or withholding, LHT receives and retains (free of any liability in respect of any such deduction or withholding) a net sum equal to the sum it would have received and retained had no deduction or withholding been required to be made.	
 
6.4.3	LHT shall be responsible for Excluded Taxes Volaris shall assume full responsibility for and indemnify and hold harmless LHT on LHT’s demand from and against any and all Taxes and customs duties of any nature whatsoever which may arise from this Agreement and the transaction, contemplated hereby. In the event any such Taxes or customs duties are recoverable, LHT shall use reasonable efforts to recover such Taxes or customs duties paid.	

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7 PAYMENT TERMS
As consideration for LHT’s Services under this Agreement, the Parties may agree on Flat Rate payments, Fixed Price payments or prices calculated on a Time and Material basis.
 
7.1	Flat Rates	
To the extent that the Parties agree upon “ Flat Rate ” payments for certain Services in the Attachments, the following shall apply:
 
7.1.1	Volaris shall pay to LHT the Flat Rate payment ***** or, if such Day is not a Business Day, on the last Business Day preceding such Day.	
 
7.1.2	In the event that a Flat Rate is based on Flight Hours, the Parties shall agree upon a number of Planned Flight Hours and Minimum Flight Hours in the relevant Attachment. The monthly Flat Rate payment of Volaris shall be based on the Planned Flight Hours of the respective month.	
 
7.1.3	Volaris shall supply LHT with the monthly Flight Hours and monthly Flight Cycles once per month.	
 
7.1.4	In the event that during any given calendar year the actual Flight Hours are lower than the Planned Flight Hours, LHT shall credit to Volaris, on the following monthly invoice *****	
 
7.1.5	In the event that during any given calendar year the actual Flight Hours exceed the Planned Flight Hours, Volaris shall ***** Volaris shall make such payment *****.	
 
7.1.6	This Article 7.1 shall apply respectively in the event that the Flat Rate is not based on Flight Hours but on Engine Flight Hours or APU Operating Hours or any other recurring reference.	
 
7.2	Fixed Prices	
To the extent that the Parties agree upon “ Fixed Prices ” for certain Services in the Attachments, the following shall apply:
 
7.2.1	Volaris shall pay the Fixed Price *****.	
 
7.2.2	*****	
 
7.3	Pricing on the basis of Time and Material	
To the extent that the Parties agree upon pricing on the basis of “ Time and Material ” for certain Services in the Attachments, the following shall apply:
 
7.3.1	*****	
 
7.3.2	In deviation to article 7.3.1, for payments exceeding an amount of *****.	
 
7.3.2.1	LHT may issue a supplementary invoice for any actually performed Services not included in the aforementioned invoice. This supplementary invoice shall be issued within ***** after Redelivery and be paid within ***** from *****.	
 
7.4	Other pricing terms / Invoicing	

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7.4.1	Any other charges calculated on a monthly basis shall be payable *****.	
 
7.4.2	LHT shall be entitled to dispatch all invoices electronically (e-billing) by e-mail or via upload to Volaris’s server. This will not yet apply for settlement via IATA Clearing House. Special requirements concerning e-billing in Volaris’s country (e.g. verification, archiving) have to be fulfilled by Volaris. In case LHT dispatches the invoices by e-mail the e-mail shall contain the invoice as well as related documentation, if any, and shall fully substitute a hard copy invoice. All such electronic invoices shall be dispatched to the below e-mail address of Volaris. Volaris’s mailbox shall have a capacity to receive e-mails up to 5 MB in size and be permanently accessible. To the extent that Volaris provides LHT with the required digital key, LHT will send electronic invoices by encrypted e-mail. Volaris names the following contact person in the event of any transmission problems: *****.	
 
7.5	LHT Bank Accounts and Address for Payments by Check	
 
7.5.1	Payments by bank transfer to LHT in EURO shall be made to:	
Lufthansa Technik AG
Account No. *****
*****
Bank-Code *****
SWIFT-Address *****
IBAN: *****
Or
Lufthansa Technik AG
Account No. *****
*****
Bank-Code *****
SWIFT-Address *****
IBAN: *****
 
7.5.2	Payments by bank transfer to LHT in United States dollars shall be made to:	
Lufthansa Technik AG
Lufthansa Technik AG
Account No. *****
*****
ABA/Bank-Code *****
SWIFT-Address *****
 
7.5.3	In case of payments to LHT by check drawn on a US-Bank, the check shall be sent by first class mail to:	
Lufthansa Technik AG
*****
*****
 
7.5.4	Any fees charged in connection with the transfer of funds between Volaris and LHT shall be born by *****.	
 
7.6	Disputes	
 
7.6.1	Any dispute of Volaris with regard to a payment obligation shall not affect Volaris’s obligation to make payment of the undisputed part of such payment obligation. Such dispute must be made in writing, stating the date and number of the concerned invoice, the reason for Volaris’s objection and the disputed amount.	
 
7.6.2	In case of a dispute LHT and Volaris shall negotiate in good faith to resolve such dispute within *****.	

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7.6.3	If such dispute is resolved in favour of LHT, Volaris shall pay to LHT the amount determined by such negotiations within ***** after the end of negotiations. Such dispute shall have no impact on the initial due date.	
 
7.6.4	Volaris agrees that any dispute with regard to a payment obligation and any claim for reimbursement shall be made within ***** after the respective Services have been performed. Volaris shall be precluded from raising any such dispute or claim if not made within this period.	
 
7.7	Late Payment Charge	
 
7.8	Should Volaris fail to make any payment when due hereunder, such amount shall bear interest at the rate of ***** per annum from the date due until but exclusive of the date when paid.	

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8 SECURITY FOR PAYMENT
 
8.1	Transfer of title	
Title to all Material supplied by LHT under this Agreement shall remain with LHT until complete payment of all amounts due under this Agreement.For avoidance of doubt, title of Materials provided by Volaris shall remain with Volaris until such point.
 
8.2	Volaris security	
Volaris shall provide LHT with an unconditional and irrevocable stand-by letter of credit in the amount as specified in the respective Attachment, securing all amounts due and payable to LHT. Any cost and fees associated with such bank guarantee shall be borne by Volaris.
LHT is not required to commence or continue Services until such security is provided.
 
8.3	Retention right / lien	
In the event that Volaris fails to comply with its payment obligations under this Agreement, LHT has by virtue of its Services performed a contractual right of retention and a contractual lien with respect to the serviced item of Volaris in its custody as well as with respect to other items of Volaris in LHT’s custody to secure any undisputed claims of LHT against Volaris arising out of and/or in connection with the payment for Services performed under this Agreement as well as to secure any claims of affiliates of LHT against Volaris. These rights as well as a set-off right may also be claimed for amounts due and owing in respect of Services performed or Material supplied by LHT to Volaris under and in accordance with the requirements of this Agreement previously. The right of retention and the lien as well as a right to set off any due claims of LHT against Volaris with claims of Volaris against LHT may *****
LHT shall also have the right to stop current Services *****

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9 QUALITY AND WARRANTY
 
9.1	Quality	
 
9.1.1	LHT shall perform all Services under this Agreement in accordance with LHT’s Authority approved management system and in conformity with all requirements of the FAA, EASA and the National Authority.	
 
9.1.2	Upon prior written request by Volaris to LHT, Volaris, the NAA and the FAA shall have the right to perform quality audits of LHT’s organization. If the audit refers to an LHT’s Subcontractor, Volaris will request LHT to perform such audit. In the event that such audit leads to any objections, the Parties shall meet and discuss appropriate remedies to reinstate compliance with LHT’s Authority approved management system, and /or (as applicable) to effectuate compliance with the requirements of EASA, the FAA and the National Authority.	
 
9.2	Warranty	
 
9.2.1	Subject to the limitations of Article 9.2.2, LHT warrants that all Services performed and all Material manufactured by LHT or its Subcontractors shall be free from defects in workmanship and shall in all material aspects comply with the quality system described in Article 9.1.	
 
9.2.2	The warranty is limited as follows, unless expressly agreed otherwise in the Attachments:	
9.2.2.1 A defect shall only be subject to warranty if it arises within ***** or within ***** whichever may occur first.
9.2.2.2 A warranty claim must be raised by Volaris within ***** after the defect has become reasonably apparent and LHT must be provided with the defective part for inspection and repair within an additional ***** after the warranty claim has been raised. If a defect arises on a non-removable part of an aircraft the Parties shall in good faith agree how to remedy such defect in a way convenient for Volaris and reasonably acceptable for LHT.
9.2.2.3 LHT does not warrant any defect in Material not manufactured by LHT or a Subcontractor or services not provided by LHT or a Subcontractor.
For such Material or services not covered by this warranty any assignable rights to warranty granted to LHT by its Suppliers shall be assigned to Volaris. LHT shall support Volaris in pursuing such warranty claim.
9.2.2.4 The defective part must not have been serviced, repaired, overhauled, maintained or modified by anyone other than LHT or its Subcontractors unless otherwise agreed.
9.2.2.5 If upon Volaris’ special request LHT or its Subcontractors perform a provisional repair the Material installed and the Services performed during such repair are not subject to warranty.

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9.2.2.6 Material must at all times have been stored, handled and operated in accordance with manufacturer’s published recommendations.
 
9.2.3	LHT shall correct any defect covered by this warranty at its own cost and expense at one of its technical facilities or at any other place Volaris and LHT may agree upon from time to time. In such case Volaris shall arrange at its own risk and expense for the removal and the transport of the defective parts to and from the location where the repair shall be made and for the reinstallation of the respective parts.	
 
9.2.4	The warranty set forth in this Article 9.2 shall be ***** in case of any ***** Article 11 shall remain unaffected.	
 
9.3	Flat Rate Agreement	
 
9.3.1	Defective Services or Material covered by a Flat Rate agreement shall be corrected without reference to Articles 9.2.1 to 9.2.3, unless otherwise agreed in the Attachments.	
Upon termination of such Flat Rate agreement the remedy contained in Article 9.2.3 shall be fully available to Volaris under the terms and conditions stated in Article 9.2. In such case the time periods stated therein shall begin at the date an aircraft, Engine or Component was last redelivered to Volaris.
 
9.3.2	The Parties agree that any warranty claim of Volaris against its Suppliers as well as any other comparable credits or benefits relating to Services and an aircraft, Engine or Material covered by a Flat Rate shall be to the benefit of LHT.	
Volaris hereby assigns its claims relating to such warranties, credits or benefits to LHT and undertakes to transfer any proceeds, credits or benefits obtained directly from its Supplier to LHT. Volaris shall make any further declarations eventually necessary to effect such assignment and/or transfer; Article 9.4 shall apply respectively. In the event that LHT is legally or otherwise prevented from pursuing any assigned claims directly, Volaris shall pursue such claims in close cooperation with LHT and any corresponding proceeds shall be passed on to LHT.
 
9.3.3	Volaris further guarantees to LHT that any aircraft or Material serviced by LHT under a Flat Rate agreement is at least covered by a Standard OEM Warranty and that LHT will be able to obtain the benefit of such Standard OEM Warranty.	
 
9.4	Warranty Handling	
In the event that Volaris either assigns warranty claims to LHT for enforcement in LHT’s name or appoints LHT as an agent for the administration of warranty claims for enforcement on Volaris’s behalf, the Parties shall confirm such assignment or appointment by completing and signing General Annex Warranty Handling or any other appropriate documentation provided by LHT. Volaris shall make available to LHT any documents and information required to administer and enforce the respective claims.

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10 DELIVERY AND REDELIVERY
 
10.1	Terms of Delivery and Redelivery	
Unless otherwise agreed herein, the Delivery and Redelivery terms shall be set forth in the Attachments.
 
10.2	Shipping arrangements	
Volaris may request that LHT supports Volaris in arranging for shipment of the Material or aircraft concerned. Any shipment arrangements made by LHT shall be in accordance with the Incoterms set forth in the Attachments, if no such Incoterms are stated in the Attachments, shipment arrangement made by LHT shall be in the name and on behalf of Volaris.
 
10.3	CRS / Acceptance Certificate	
Upon completion of the Services and at the latest upon Redelivery, LHT and/or its authority approved Subcontractor, as the case may be, shall issue and provide to Volaris a CRS, unless Volaris issues the CRS through its own approved organization.
Upon Redelivery, Volaris shall sign and provide to LHT a document of acceptance to confirm that the agreed Services have been completed in accordance with this Agreement or stating any objections. In the event that the aforementioned signed document is not provided to LHT prior to or upon Redelivery, the Services shall be deemed to have been completed as agreed.
 
10.4	Packaging	
Any Material shall be packed for shipment using appropriate shipping containers that are in compliance with ATA 300 specification. To the extent that shipping containers are provided by LHT Volaris shall return such reusable shipping containers to LHT after Redelivery within ten (10) Business Days unless otherwise agreed in writing.

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11 LIABILITY AND INDEMNIFICATION – INSURANCE
 
11.1	Liability and Indemnification	
 
11.1.1	Each Party will be liable towards the other Party for damage to or loss of property and for the injury to or death of any person caused by the gross negligence or the willful misconduct of its directors, officers, employees, agents or Subcontractors in connection with or as a result of the Services rendered under this Agreement.	
 
11.1.2	LHT will indemnify and hold harmless Volaris, its directors, officers, employees, agents and Subcontractors from and against all claims of third parties related to damage, loss, injury or death caused by the gross negligence or the willful misconduct of LHT, its directors, officers, employees, agents or Subcontractors.	
 
11.1.3	Volaris will indemnify and hold harmless LHT, its directors, officers, employees, agents and Subcontractors from and against all claims of third parties related to damages, loss, injury or death unless such damage, loss, injury or death is caused by the gross negligence or the willful misconduct of LHT, its directors, officers, employees, agents or Subcontractors.	
 
11.1.4	The liability and indemnification include *****. However, under no circumstances will the liability in Article 11.1 include *****, provided however, that this Article 11.1.4 *****	
 
11.1.5	The Parties agree that the liability and indemnification set forth in Article 11.1 is ***** and that each Party *****	
 
11.2	Insurance	
 
11.2.1	During the term and for a minimum period of ***** after the termination or expiration of this Agreement Volaris will effect and maintain and will provide LHT with a certificate of insurance evidencing the following coverages:	
11.2.1.1 *****
11.2.1.2 *****
11.2.1.3 *****
 
11.2.2	The insurances named in Article 11.2.1.1 and Article 11.2.1.2 and any other insurances of Volaris by which Volaris insures its property will contain *****	
In case Material is leased or loaned to Volaris by LHT *****
 
11.2.3	***** will be named as additional insureds with regard to *****	
 
11.2.4	All of the insurances will provide in favor of *****	
 
11.2.5	Termination of Insurances	
In case any of the insurances are not provided or are revoked or canceled at any time for any reason, LHT will have the right to *****.

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12 TERM AND TERMINATION
 
12.1	The Basic Agreement shall remain in force and be effective at least as long as one Attachment is still effective.	
 
12.2	Subject to Article 12.1, the Basic Agreement shall be concluded for a minimum term of five (5) years until 01.07.2017.	
In the event of a material breach of this Agreement by a Party, the other Party may terminate this Agreement as a whole or—if the material breach relates only to a particular Attachment—the Attachment concerned by prior written notice, unless the breaching Party cures the breach within ***** after having been notified by the non-breaching Party of the respective breach.
 
12.3	Either party may terminate this agreement as a whole or any of the Attachments ***** if *****	
 
12.4	Unless otherwise agreed in the Attachments, in the event that prior to the expiration of this Agreement or any of its Attachments Volaris no longer operates an aircraft, an Engine or a Component which is subject to the Services under this Agreement, *****	
 
12.5	The premature termination of this Agreement as a whole or any Attachment by act of the Parties or otherwise shall not relieve the Parties of any liabilities, obligations, expenses or charges accrued up to the date when such termination takes effect and shall be without prejudice to any rights accruing to either Party up to said date of termination.	

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13 CONFIDENTIALITY, NO TRANSFER OF INTELLECTUAL PROPERTY RIGHTS
 
13.1	The Parties shall treat as strictly confidential the provisions of this Agreement, including the document itself as well as individual provisions contained therein (“Confidential Information”). Confidential Information shall include, but not be limited to, the contents of the negotiations leading up to this Agreement, any business, technical and strategic data disclosed by the other Party or its Subcontractors at any time for any reason—comprising any and all such information in oral or visual form—including but not limited to prices for Materials and Services, the scope of Services offered, legal provisions, Turnaround Times and man-hours needed.	
 
13.2	Neither Party shall disclose any Confidential Information to any employee, except where such disclosure is reasonably necessary in order to fulfill the obligations of such party under this Agreement and the employee commits to comply with the respective Party’s confidentiality obligations, in the understanding that all claims shall be addressed to the applicable Party and not its employees. Either Party may disclose Confidential Information to its certified accountants, auditors and attorneys, such persons to be instructed to adhere to the terms of this Article and as required by applicable law and may disclose such Confidential Information as required by applicable laws, regulations and legal process, including applicable securities laws and regulations. In case Volaris is not the owner of the aircraft, Engine, Material or Component serviced subject to this Agreement LHT and Volaris may upon request by the owner and/or lessor of such aircraft, Engine, Material or Component disclose to the owner and/or lessor Confidential Information regarding such aircraft, Engine, Material or Component. LHT and Volaris may disclose Confidential Information to their respective affiliates, subsidiaries, shareholders, officers and directors. Confidential Information shall only be disclosed to a Subcontractor if such Subcontractor has agreed, in favour of the Party whose information is disclosed, to limitations on disclosure substantially similar to those set forth in this Article 13.2.	
 
13.3	Any Party receiving Confidential Information from the other Party in connection with this Agreement (“Recipient”) shall not be bound by the confidentiality obligations under this Article 13 if the Recipient can prove that the Confidential Information:	
was already known to the public prior to the date the Beneficiary received said information;
has become known to the public after the date the Beneficiary received said information, except if the Beneficiary is the originator of the publication of said information;
has been communicated to him at any date by a third party with the right to communicate it;

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must be disclosed by binding and final order of a competent court or authority, in which case the Beneficiary will immediately inform the other Party about such mandatory disclosure and limit the disclosure to the extent legally permissible.
The aforementioned exceptions to the confidentiality obligations under this Article 13 shall apply to a combination of single pieces of Confidential Information only if such combination is subject to one of the aforementioned exceptions but not if only each individual piece of Confidential Information is subject of said exceptions.
 
13.4	All obligations of confidentiality imposed under this Article 13 shall survive the term of this Agreement for a period of five (5) years.	
 
13.5	LHT shall at all time retain all right, title and interest in and to its intellectual property contained in the Services, products and processes, including but not limited to all rights under patents, copyrights, trademarks and trade secrets which belong to LHT and all renewals and extensions thereto. The disclosure of any documents, data and other information in connection with this Agreement, including without limitation when such disclosure is made in fulfillment of a contractual obligation hereunder, shall not be construed as a grant or transfer of such rights.	

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14 NOTICES AND COMMUNICATION
 
14.1	Except as otherwise stated in Article 7.4.3, for messages and correspondence exchanged in connection with this Agreement in day-to-day business, each Party may notify the other Party in writing about suitable postal, e-mail or other addresses and telephone numbers. The addresses given in Article 14.4 below may also be used.	
 
14.2	No Party may claim that the other Party has received such messages or correspondence if other addresses than those exchanged or given below were used.	
 
14.3	Messages sent by e-mail or other electronic means shall be deemed received only when the message has been opened by the recipient. The burden of proof for the receipt and time of receipt of such messages shall lie with the Party sending the message.	
 
14.4	Whenever written notification or notice is required under this Agreement such notification or notice shall be given by mail or internationally recognized courier service to the following address:	
 
 	Postal Address:	Lufthansa Technik AG	
 	    	Dept.: Marketing and Sales, HAM TS	
 	    	Weg beim Jäger 193 (P.O. Box 63 03 00)	
 	    	22335 Hamburg	
 	    	Germany	
 
 	Postal Address:	Volaris	
 	    	Av. Antonio Dovalí Jaime No. 70, Torre B, Piso 13,	
 	    	Col. Zedec Santa Fe	
 	    	01210 Mexico City, Mexico	
 
14.5	Volaris shall report Flight Hours and Flight Cycles, if required, by using the Lufthansa Technik Customer Lounge web application “Airborne” accessible at www.lufthansa-technik.com .	
Contact addresses for individual communication are:

        e- mail address:	  	abadzfe@lht.dlh.de	
		
        Phone:	  	+49-40-5070 -2699 or -2912	
		
        Fax:	  	+49-40-5070-5008	
		
        Telex:	  	HAMIDLH	

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15 LAW AND JURISDICTION
 
15.1	Governing Law	
This Agreement and any dispute shall be governed by and construed in accordance with the laws of the State of New York, U.S.A. without regard to its conflicts of laws principles (other than Sections 5-1401 of the General Obligations Law of the State of New York).
 
15.2	Dispute Resolution / Arbitration	
 
15.2.1	Prior to commencing arbitration, the Parties may, if they so agree, seek the opinion of the relevant manufacturer in relation to the Services under dispute with a view to settling the dispute in good faith. This procedure shall not prejudice either Party’s right to commence arbitration at any time.	
 
15.2.2	Any dispute between the Parties out of or in connection with this Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three (3) arbitrators appointed in accordance with the Rules. The place of arbitration shall be New York, New York. The language of the arbitration shall be English. All proceedings in the arbitration shall be scheduled and conducted so that the arbitral tribunal may render the award as expeditiously as possible.	
 
15.2.3	The award shall be final and binding. No Party shall seek recourse to a court of law or other authorities to appeal or otherwise set aside the award. The award shall be in writing and in English, and shall specify the factual and legal basis for the award. The award may be enforced in any court having jurisdiction.	
 
15.2.4	The Parties consent to the exclusive jurisdiction of the United States District Court for the Southern District of New York in any action, suit or proceeding with respect to the enforcement of the arbitration agreement, this Article 15.2 and to the non-exclusive jurisdiction of that court with respect to the enforcement of any award thereunder.	
 
15.2.5	Nothing in this Agreement shall prevent any Party, before an arbitration has commenced pursuant to this Article 15.2, from seeking interim or injunctive relief from any court of competent jurisdiction, provided however such application is made before the arbitral tribunal is constituted. The arbitral tribunal shall have the authority, inter alia, to order interim measures of protection, to award monetary compensation, to order specific performance of this Agreement, and to issue declaratory relief. After the constitution of the arbitral tribunal, only the arbitral tribunal shall have the authority to issue interim or injunctive relief.	
 
15.2.6	The Parties agree to keep any arbitration confidential, and shall not disclose to any person the existence of the arbitration, any document submitted or exchanged in connection with it, any oral submissions or testimony, any transcripts, or any award, unless such disclosure is required by law.	

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15.2.7	The Parties agree that this Agreement and the resulting obligations and relationships are commercial and that the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Inter-American Convention on International Commercial Arbitration of 1975 apply to this Agreement and to any order or arbitral award resulting from any arbitration conducted in accordance with this Agreement.	
 
15.2.8	The Parties hereby appoint:	
For Volaris:
CT Corporation System
111 Eighth Avenue, 13th Floor
New York, New York 10011.
For LHT:
Lufthansa Technik Logistik of America LLC
Attn.: MOLINS, ARTHUR
Street: 1640 HEMPSTEAD TURNPIKE
City: 11554 New York, NY
Phone-No: +1-516-296-9234
 
15.2.9	as its agent for service of process in New York in any dispute; provided, however, that the agent may be replaced by another agent in New York upon thirty (30) Days’ written notice. Service of process on the designated agent at the designated address shall be deemed, for all purposes, to be due and effective service, and service shall be deemed completed whether or not forwarded to or received by the respective Party. Any correspondence sent to a Party’s agent for service of process shall also be copied to the Party directly pursuant to Article 14.4; provided, however, that the failure to copy any Party directly shall not affect the effectiveness of any service of process.	
 
15.2.10	The prevailing Party, if any, shall be entitled to recover its reasonable costs, including agreed arbitrators’ fees and expenses, and reasonable attorneys’ fees and expenses.	
 
15.2.11	NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY DISPUTE.	

Basic Agreement	  	- 33 -	  	Execution Version	

			

 
 
16 MISCELLANEOUS
 
16.1	Change of Law / Compliance with foreign export and import regulations	
 
16.1.1	The Parties have agreed that certain laws and regulations regarding certification and regulatory requirements are to be observed in the performance of Services under this Agreement. Neither Party can foresee to what extent those laws and regulations will change after the execution of this Agreement. LHT will use all reasonable efforts to mitigate any impact on the performance and the agreed terms of the Services because of a change of laws, regulations or their interpretation by the relevant Authority, any such impact and any resulting additional cost incurred by LHT, to the extent it arises solely as a result of a change by the Government of Mexico or the NAA shall be the responsibility of and be borne by Volaris; otherwise, the same shall be borne by LHT, unless Volaris would have to bear such costs if it would perform the Services itself.	
 
16.1.2	Article 16.1.2 shall apply respectively if LHT is not able to comply with any export or import regulations of other countries than Germany without measurable negative impact on the agreed terms of the Services. LHT shall not be held responsible for any such impact, even if due to such impact certain Services cannot be performed at all.	
 
16.2	Assignment	
Volaris agrees that LHT may assign its rights under this Agreement in total or in part to any of LHT’s affiliates, in which case LHT shall inform Volaris of such assignment. LHT shall also have the right to assign its obligations under this Agreement in total or in part with the prior written consent of Volaris, which shall not be unreasonably withheld or delayed. The assignee shall perform the Services under this Agreement in the quality and standards and in accordance with the terms and conditions set forth in this Agreement. Any other assignment of rights or obligations arising from this Agreement shall require the prior written approval of the other Party. Form of Agreement
 
16.2.1	Two counterpart originals of this Agreement shall be signed and executed by the Parties. One original shall remain with each Party. Each page of each original of the Agreement shall be initialed by each Party.	
 
16.2.2	This Agreement shall not be varied in terms or amended except by an instrument in writing explicitly named an amendment to this Agreement and signed by duly authorized representatives of the Parties.	
 
16.2.3	This Agreement is the entire understanding between the Parties subject matter herein. There are no oral, written or implied agreements with regard to the subject matter herein. In no event shall any general terms and conditions for purchase and/or sale of either Party apply.	
 
16.2.4	All communication between the Parties shall be in English and all documentation shall be made available to the other Party in English. In case any other language is used or any document including this Agreement is translated into any other language it shall be for convenience only. The version in English shall be binding.	

Basic Agreement	  	- 34 -	  	Execution Version	

			

 
 
16.3	Incoterms	
Any reference to any Incoterm shall be a reference to Incoterms 2010.
 
16.4	Order of Precedence	
In the event that a provision in an Attachment, General Annex or any related contractual document with reference to the Basic Agreement deviates from or conflicts with a provision in the Basic Agreement the provision in such Attachment, General Annex or any related contractual document with reference to the Basic Agreement shall prevail only if explicit reference is made to the conflicting or deviating provision of the Basic Agreement which it shall supersede. Article 12.1 shall remain unaffected.
 
16.5	Waiver and Severability	
 
16.5.1	The failure by either Party to enforce any of the provisions of this Agreement shall not be construed as a waiver of its rights.	
 
16.5.2	Nothing contained in this Agreement shall require either Party to take any action contrary to the law or to any order or regulation of any government or contrary to any permit or authorization granted to either Party by any governmental authority. If any of the provisions of this Agreement are held unlawful or otherwise ineffective by any court of competent jurisdiction, the remainder of this Agreement shall remain in full force and the unlawful or otherwise ineffective provision shall be substituted by a new provision reflecting the intent of the provision so substituted.	
 
16.6	Export Clause	
 
16.6.1	Each of LHT and Volaris shall comply with all applicable domestic and foreign export compliance requirements, including applicable US export laws and regulations (e.g. ITAR, EAR and OFAC sanctions regulations) and those of other relevant foreign jurisdictions. Upon reasonable request of a Party, the other Party shall promptly provide appropriate certifications as required by such applicable export laws and regulations to the extent necessary to ensure or evidence compliance with such applicable export laws and regulations.	
---------- signature page to follow ----------

Basic Agreement	  	- 35 -	  	Execution Version	

			

 
 
---signature page to Basic Agreement between LHT and Volaris---
IN WITNESS WHEREOF Volaris and LHT have caused this Agreement to be executed as of the Day and year written below.

Hamburg, Germany
 
Date:	 		 	For and on behalf of
 
Lufthansa Technik AG:	
					
	 	/s/ Joerg Femerling	 		 		 	/s/ Burkhard Andrich	
Name:	 	Joerg Femerling	 		 		 	Dr. Burkhard Andrich	
Title:	 	Sales Director	 		 		 	Senior Vice President	
	 		 		 		 	Aircraft Component Services
Lufthansa Technik AG	

Mexico City, Mexico	 		 	For and on behalf of	
	
Date: Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.:	
					
	 	/s/ Holger Blakenstein	 		 		 	/s/ Fernando Suárez Gerard	
Name:	 	Holger Blakenstein	 		 		 	Fernando Suárez Gerard	
Title:	 	Director Commercial
CCO	 		 		 	Director de Finanzas
CFO	

Basic Agreement	  	- 36 -	  	Execution Version	

			

 
 
ATTACHMENT 1: TOTAL COMPONENT SUPPORT (TCS)

TCS Attachment	  	- 1 -	  	Execution Version	

			

 
 
1 GENERAL
This TCS Attachment is an Attachment to the Basic Agreement between the Parties, dated August 15th, 2012.
During the term of this TCS Attachment LHT shall perform Component support services for Volaris as agreed upon hereunder.

TCS Attachment	  	- 2 -	  	Execution Version	

			

 
 
2 DEFINITIONS
Capitalized terms contained herein shall have the meaning ascribed to them in Article 2 of the Basic Agreement and as follows:

“50_50”	 	A set amount of part numbers listed in the column “Package” of the positive list in Article 17 of Annex TCS.	
		
“Agreed HBS Level”	 	Has the meaning set forth in Article 17 of Annex TCS.	
		
“Common Modification Standard”	 	Has the meaning set forth in Article 3.1.5.	
		
“Component Pool”	 	A pool or pools of Components that are owned, maintained and administered by LHT at one of its facilities and that LHT makes available to Aircraft operators within a short period of time.	
		
“Deemed Removal Date”	 	Has the meaning set forth in Article 5.3.	
		
“Flat Rate Components”	 	Components marked as “Flat Rate Components” in Article 17 of Annex TCS and removed from Volaris’ Aircraft and Engines.	
		
“Home Base”	 	The location listed in Article 17 of Annex TCS where the Maintenance of Volaris Aircraft is regularly performed.	
		
“Home Base Stock”	 	The stock of Home Base Stock Components owned by LHT.	
		
“Home Base Stock Components”	 	The Components defined in the list referenced in Article 17 of Annex TCS and located at Volaris’ Home Base owned by LHT	
		
“Home Base Stock Replacement”	 	Has the meaning set forth in Article 3.1	
		
“Home Base Stock Replenishment”	 	Has the meaning set forth in Article 3.1	
		
“Initial Procurement”	 	The procurement of the Home Base Stock and its allocation at Volaris’ Home Base	
		
“Non Pool Component”	 	A Component to which Volaris has no access to the Component Pool. These are those Components in Article 17 of Annex TCS not marked as “Pool Components” as well as any other Component removed from Volaris Aircraft.	

TCS Attachment	  	- 3 -	  	Execution Version	

			

 

“pbth”	 	A set amount of part numbers listed in the column “Package” of the positive list in Article 17 of Annex TCS.	
		
“Pool Access Fee”	 	The fee for accessing the Pool Components as set out in Article 0 of Annex TCS (Pool Access Fee).	
		
“Pool Aircraft”	 	Those Volaris Aircraft marked as Pool Aircraft in Article 0 of Annex TCS (Volaris’ Aircraft and Engines) for which Volaris has access to the Component Pool.	
		
“Pool Component”	 	A Flat Rate Component in the Home Base Stock or the Component Pool to which Volaris is granted access for its Pool Aircraft. Those Components are marked as “Pool Components” in Article 17 of Annex TCS.	
		
“Pool Component Adjustment”	 	Has the meaning set forth in Article 3.1.5.	
		
“Provisioning Period”	 	The Provisioning Period is measured from the time when LHT receives Volaris’ written request and until LHT provides the relevant Pool Component according to the Incoterms agreed in Article 5.1.	
		
“Removal Date”	 	Has the meaning set forth in Article 5.3.	
		
“Return Pool Component”	 	Pool Components to be returned by Volaris to LHT because:
 
•   the Pool Component is unserviceable and Volaris has received a serviceable Pool Component ; or
 
•   the serviceable Pool Component delivered by LHT is not needed for installation; or
 
•   the Agreed HBS Level for this Pool Component is exceeded.	
		
“TCS Attachment”	 	This Attachment entitled “Total Component Support (TCS)”.	
		
“Volaris’ Aircraft and Engines”	 	Has the meaning set forth in Article 0 of Annex TCS.	
References in this Attachment shall be references to Articles of this TCS Attachment or its Annex, unless expressly otherwise stated herein.

TCS Attachment	  	- 4 -	  	Execution Version	

			

 
 
3 SCOPE OF SERVICES
 
3.1	Component Pool	
LHT shall grant Volaris access to serviceable Pool Components available in the Component Pool in order to replace Volaris’ unserviceable Components by serviceable Components on a 1:1 forward exchange basis.
Volaris may request during the term of this Agreement Pool Components in order to:
 
 	•	 	replace unserviceable Pool Components from the Pool Aircraft during a line maintenance or heavy maintenance.	
 
 	•	 	replace Pool Components in the Aircraft due to Modifications, layovers or hard times.	
 
 	•	 	replace Pool Components on attrition due to upgrades, retrofits, service bulletins, airworthiness directives or reliability improvements.	
 
 	•	 	Replace Pool Components in the Aircraft due to Soft Times.	
 
 	•	 	replace Pool Components in the Home Base Stock that have to be replaced due to a change in Modification standard or the expiry of storage limits (“ Home Base Stock Replacement ”).	
 
 	•	 	replenish the quantity of Pool Components in the Home Base Stock to the Agreed HBS Level (“ Home Base Stock Replenishment ”). Such replenishment may be refused if:	
 
 	•	 	— Volaris loaned a Pool Component to a third party (Article 3.1.7),	
 
 	•	 	— Volaris exchanged a Pool Component with a third party and received in exchange a Pool Component that is in need of repair or Modification before it can be used by Volaris (Article 3.1.7).	
3.1.1     Requesting Pool Components
Volaris shall request in writing (or in accordance with any other procedure agreed upon) Pool Components and related AOG Services at LHT’s service desk which will be available twenty-four (24) hours a day, seven (7) days a week.
3.1.2     Content and Time Frame
 
 	A)	Volaris shall place a request for Pool Components at LHT in writing (or according to any other procedure agreed upon) immediately after the necessity therefore has arisen. Such request shall contain:	

TCS Attachment	  	- 5 -	  	Execution Version	

			

 
 
 	•	 	the part number,	
 
 	•	 	the request category as specified in Article 3.1.3,	
 
 	•	 	Tailsign in case of an AOG, CRIT or SCHEDULED request,	
 
 	•	 	the scheduled replacement date and any other relevant information relating to such request.	
 
 	B)	Category “SCHEDULED” requests shall be made within the following time frames:	
 
 	•	 	In case of Base Maintenance, at least four (4) weeks before the scheduled replacement date,	
 
 	•	 	In case of a component exchange due to a Modification, as soon as possible but at least two (2) months prior to the scheduled replacement date,	
 
 	•	 	in all other cases at least ten (10) Days before the scheduled replacement date, except for those AD’s or mandatory Service Bulletin, where a timeframe is established.	
3.1.3     Provisioning Periods
LHT shall provide the requested Pool Components to Volaris within the time frames set out in the table below.

Request Category	  	Description	  	Prerequisites	  	Provisioning Period	  	Target Service Level	
AOG	  	*****	  	*****	  	*****	  	*****	
CRIT A	  	*****	  	*****	  	*****	  	*****	
CRIT B	  	*****	  	*****	  	*****	  	*****	
SCHEDULED	  	*****	  	*****	  	*****	  	*****	
SCHEDULED AD’s or mandatory Service Bulletin	  	*****	  	*****	  	*****	  	*****	
REPLENISHMENT	  	*****	  	*****	  	*****	  	*****	
Note 1: *****
Note 2: *****
Note 3: *****
Note 4: *****

TCS Attachment	  	- 6 -	  	Execution Version	

			

 
 
3.1.3.1     Target Service Level Parameters
LHT shall fulfil the “ Target Service Levels ” as stated in the right column of the table above. In this respect, the following shall apply:
 
 	A)	The Target Service Levels shall only be relevant if Volaris complies with its obligations under this Agreement.	
 
 	B)	To meet the agreed Target Service Levels, LHT may *****	
 
 	C)	When calculating the Target Service Level parameters, a request will be disregarded for calculation purposes if any of the following applies:	
 
 	(i)	The request is made during the first *****; or *****	
 
 	(ii)	The request is made during the *****; or	
 
 	(iii)	*****; or	
 
 	(iv)	*****; or	
 
 	(v)	The Agreed HBS Level has not been established for the respective Pool Component.	
 
 	(vi)	Volaris fails to fulfil its obligations to deliver the component to LHT in accordance with the Purchase Terms Agreement.	
 
 	D)	The service level parameters actually achieved according to 3.1.3.2 by LHT shall be measured *****	
3.1.3.2     Penalty Application:
The Parties agree that the provision set forth in this Article 3.1.3.2 *****.
 
 	A.	Penalties for LHT: In the event that LHT fails to comply with the Target Service Level specified in section 3.1.3. as calculated in accordance with section 3.1.3.1 paragraph D) above, LHT shall pay Volaris the penalty described below:	
 
 	    	Service Level measurement will be *****	
 
 	    	Discount for low performance will be *****	

TCS Attachment	  	- 7 -	  	Execution Version	

			

 
 
For avoidance of doubt, an example of Service Level measurement and discount is described below:

	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
AOG	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Crit A	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Crit B	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Scheduled	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Replenishment	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
Total	  	*****	  	*****	  	*****	  		  		  		  		
Weighted deviation from target	  		  		  		  	*****	
Cumulative Invoice (Pool Rate)	  		  		  		  	*****	
Adjustment (credit/debit)	  		  		  		  		  	*****	
 
 	B.	Penalties for Volaris: In the event that Volaris fails to comply with the following Performance Parameters, Volaris shall pay LHT the penalty described below:	

Performance Parameters	  	*****	  	*****	
Return Pool Components:	  	*****	  	*****	
***** of Return Pool Components removed in Mexico to be delivered to the freight forwarder within ***** after *****. For San Salvador fourteen (14) days after Deemed Removal Date	  		  		
***** AOG and CRIT A requests as defined 3.1.3.4	  	*****	  	*****	
***** of Removal Reason as specified below	  	*****	  	*****	

TCS Attachment	  	- 8 -	  	Execution Version	

			

 
 
Removal Reasons
Unserviceable Flat Rate Components delivered to LHT shall be accompanied with Post Flight Reports (“PFR”) in addition to the required documentation. In case that no PFR is available Volaris has to ensure that a qualified removal reason description is stated in the removal tag to prevent redundant trouble shooting in the LHT workshops.
It is the target of Volaris to ensure that ***** of the removed Flat Rate Components are accompanied with such PFR’s and/ or qualified removal reasons.
For the avoidance of doubt, in the event that the actual Volaris Performance Parameters are as follows:
 
 	•	 	Return Pool Components: *****	
 
 	•	 	Quota for AOG and CRIT A: *****	
 
 	•	 	Removal Reason: ***** Components are accompanied with PFR and/ or qualified removal reasons.	
Solely as an example, the percentage figure of the Target Service Level for all categories will be reduced by:
*****
 
 	C.	Starting on February 1 st 2014, the Parties will make annual reconciliations on the amounts that each Party owes the other as a result of the application of the penalties described in subparagraphs A. and B. above. LHT and Volaris agree that if amounts are due to the other Party as a consequence of the penalties described above, they will set-off such amounts on the next applicable invoice.	
 
 	D.	The Parties agree the penalties set forth in this Article may be subject to modifications as agreed by both Parties in writing, as their intention is to maintain and improve performance.	
3.1.3.3 AOG-Service
For category “AOG” requests, the following shall apply:
 
 	A)	In the event of an AOG. *****	
 
 	B)	Should LHT not be able to meet the Target Service Level, it will undertake all reasonable measures to *****	
 
 	    	Both Parties shall communicate and agree on who will perform such *****	
The reasonable expenses of ****** shall be reimbursed to *****
******
*****
The parties agree that the provision set forth above *****

TCS Attachment	  	- 9 -	  	Execution Version	

			

 
 
3.1.3.4 Quota of AOG and CRIT A requests
Volaris shall make reasonable efforts to maintain AOG and CRIT A requests in ***** If such range cannot be achieved, Volaris and LHT may review Home Base Stock list and quantities or other possible adjustment factors. The periodical measurement shall be *****
3.1.4 Provision of interchangeable Pool Components
LHT may alternatively provide an interchangeable Pool Component to Volaris together with Interchangeability information available to LHT.
LHT shall provide VOLARIS with a proposed list of interchangeable part numbers according to LHT IT system at the beginning of the contract and on a regular basis *****. The sole responsibility for the confirmation of the Interchangeability remains with Volaris.
LHT will provide to Volaris a fully interchangeable Pool Component (in accordance to the relevant interchangeable information). LHT provides Pool Components with same FFF in comparison to the removed one. All Pool Components provided by LHT meets the agreed pool standard.
3.1.5 Adjustment of the List of Pool Components
Any Modification to the Pool list and Home Base Stock shall be mutually agreed by LHT and Volaris every ***** as well as any change on fee resulting from such modification.
LHT shall be entitled to define in its sole discretion a common Modification standard for the Component Pool (“Common Modification Standard”). LHT shall maintain the Common Modification Standard for all Pool Components.
LHT and Volaris may agree to—in deviation from Article 15.4.2 of the Basic Agreement—exclude such Pool Component from the Component Pool and adjust the Pool Access Fee accordingly. After their exclusion from the Component Pool these Components shall be treated as Non Pool Components.
3.1.6 Transfer of Title
Transfer of title of Pool Components shall be governed by the following provisions:
 
 	A)	Title to each serviceable Pool Component shipped by LHT to Volaris shall remain with LHT until the Return Pool Component that it replaces has been received by LHT, whereupon title to the serviceable Pool Component shall transfer to Volaris and simultaneously title to the Return Pool Component shall transfer to LHT.	

TCS Attachment	  	- 10 -	  	Execution Version	

			

 
 
 	B)	Title to each serviceable Home Base Component taken out of the Home Base Stock to be installed in a pool aircraft, shall remain with LHT until the Return Pool Component that it replaces has been received by LHT, whereupon title to the serviceable Home Base Component shall transfer to Volaris and simultaneously title to the Return Pool Component shall transfer to LHT.	
 
 	C)	However, in the case of leased Pool Aircraft, if the lease terms do not permit the installation of a Component that is subject to a retention of title in favour of LHT, the title to the serviceable Pool Component shall pass to Volaris (or Pool Aircraft lessor) upon its installation on such leased Pool Aircraft, and simultaneously title to the Return Pool Component shall transfer to LHT.	
 
 	D)	If the Return Pool Component has not been received by LHT within the time frames outlined in Article 5.3 and LHT therefore purchases a Component at the expense of Volaris as permitted by Article 5.3.4, then	
 
 	i)	the Component shall be owned by LHT,	
 
 	ii)	title of the serviceable Pool Component provided to Volaris shall pass to Volaris upon LHT’s receipt of payment by Volaris of the sums payable to LHT in respect of its purchase of the Component in accordance with that Article,	
 
 	iii)	title to the Return Pool Component shall remain with Volaris.	
However, if Article 3.1.6 B) above applies and thus title to the Return Pool Component has already passed to LHT upon the installation of the serviceable Pool Component on the leased Pool Aircraft
 
 	E)	In case of Home Base Stock allocated by LHT:	
Other than set forth in Article 8.1 of the Basic Agreement, title to Pool Components and Home Base Stock Components shall transfer as follows:
Title to each Home Base Stock Component taken out of the Home Base Stock to be installed on a Pool Aircraft shall remain with LHT until the replaced Return Pool Component has been received by LHT. Upon receipt by LHT, title to the serviceable Pool Component or the Home Base Stock Component, as the case may be, transfers to Volaris. At the same time the title to the Return Pool Component transfers to LHT. The Title to all Pool Components for Home Base Stock Replacement and Home Base Stock Replenishment remains with LHT.
Title shall transfer pursuant to each of the provisions above free and clear of all liens, encumbrances and other third party rights.

TCS Attachment	  	- 11 -	  	Execution Version	

			

 
 
3.1.7 Impact of Volaris exchange on ad-hoc basis
Volaris may exchange Pool Components within its Home Base Stock with third parties on a 1:1 exchange basis, provided that LHT has given its consent in advance of the exchange (such consent not to be unreasonably withheld). LHT shall be entitled to deny the use of Home Base Stock for any purpose other than to replace Return Pool Components removed from Pool Aircraft if such other use would increase the likelihood of increased requests by Volaris to LHT under Article 3.1. If a Pool Component received by Volaris pursuant to an exchange with a third party is subsequently sent to LHT for repair or Modification, the repair and Modification (if any) shall be charged to Volaris on a Time and Material basis.
Volaris may, on an ad hoc basis only and at its own cost, loan Pool Components from a source other than LHT to support its fleet (for example on line stations), but shall promptly inform LHT of such ad hoc occurrences.
 
3.2	Home Base Stock	
In order to fulfil short term requirements, e.g. for No-Go and MEL A items, and, consequently, to reach high technical dispatch reliability Volaris shall maintain a Home Base Stock.
Such Home Base Stock is an integral part of the pool concept acting as a local emergency stock with eliminated shipping time.
The Home Base Stock shall only be used by Volaris to replace Pool Components removed from Pool Aircraft or spare engines/APUs. It may be used for other purposes only after prior written consent of LHT (which shall not be unreasonably withheld).
As the Home Base Stock is part of the entire Component Pool LHT may withhold its consent for such alternative use in cases where this will likely lead to increased AOG or CRIT A requests by Volaris.
The Home Base Stock has been defined in Article 17, Annex TCS.

TCS Attachment	  	- 12 -	  	Execution Version	

			

 
 
3.2.1 Material Delivery and Allocation
LHT has decided to deliver to ***** the required Home Base Stock in accordance with this TCS Attachment.
*****
LHT shall provide the Pool Components defined in the Agreed HBS Level.
LHT shall perform all reasonable efforts to ensure that the Home Base Stock will be fully established to the Agreed HBS Level. The task shall be completed ***** service level performance and return performance shall be measured officially.
3.2.2 Management of Home Base
For the effective management of the Component Pool through LHT it is essential that Volaris manages its Home Base Stock to fulfil Volaris’ operational requirements. Volaris shall ensure that the Home Base Stock is maintained to the Agreed HBS Level by promptly:
 
 	(i)	*****	
 
 	(ii)	*****	
 
 	(iii)	*****	
3.2.3 Adjustment of the Home Base Stock
Whenever parameters with influence on the Home Base Stock change (for example changed Pool Aircraft, Volaris line stations or Authority regulations), the composition of the Home Base Stock shall be adjusted respectively, if necessary. The following procedure will apply: Volaris shall inform LHT of the changed parameters, whereupon LHT shall recommend the respective adjustment to the Home Base Stock. The Parties shall then mutually in good faith define the final adjustments without delay, and LHT shall then add the additional Pool Components to the Home Base Stock. In the event that the Parties cannot agree on the final adjustment, the service level parameters have to be adjusted.
3.2.4 Access Right of LHT
LHT shall be entitled to access anytime the premises where the Home Base Stock is stored, in order to verify compliance with this TCS Attachment. LHT will inform Volaris at least ***** in advance prior to such a planned visit.
*****
3.2.5 Home Base stock Allocation
LHT shall provide to Volaris the Home Base Components defined in the Agreed HBS Level.
All allocated Home Base Components must be *****
Volaris shall ensure that the following requirements are fulfilled during the time the Home Base Components are stored at the Volaris storage location:

TCS Attachment	  	- 13 -	  	Execution Version	

			

 
 
Home Base Components shall be *****
***** each Home Base Component.
***** Home Base Components shall be *****
General storage condition: *****
Access to the storage location *****
*****
Maintenance activities on Home Base Components during storage: *****
The condition of Home Base Components shall be *****
*****
***** if Volaris does not comply with its obligations under this TCS Agreement.
The Parties agree that the provision set forth above *****
3.2.5.1 Material Allocation Period
The Material allocation period corresponds to the term of this TCS Attachment, except if the Home Base allocation is terminated earlier in accordance with the provisions set forth herein or otherwise agreed by the Parties. In case the Material allocation period is terminated prematurely partially or in whole Article 10.3 shall apply.
3.2.5.2 Amendments
The scope of the Material allocation, including the Material allocation period, may be changed at any time by mutual agreement duly signed by the legal representative of both Parties between the Parties.
3.2.5.3 Release of Home Base Components to LHT
***** Volaris shall promptly return all Home Base Components to LHT in accordance with *****
3.2.5.4 Shipping
With reference to Article 9 of the Basic Agreement, the initial delivery to Volaris and the redelivery to LHT of the Home Base Components shall be made in accordance with the following Incoterms 2010:

To Volaris	  	To LHT	
*****	  	*****	

TCS Attachment	  	- 14 -	  	Execution Version	

			

 
 
3.3	Maintenance of Components	
3.3.1 Maintenance / Modifications
LHT shall perform the applicable Services, such as repair, overhaul, test and Modification on all Flat Rate Components, in order to return these Components into Serviceable Condition. Such Services will be performed in accordance with the applicable Maintenance Data and as set forth in Article 1 of the Basic Agreement.
Modifications shall be performed on the following basis:
 
 	•	 	mandatory Modifications required by EASA or FAA	
 
 	•	 	Modifications upon Volaris’ written request (only Components which are not Flat Rate Components).	
 
 	•	 	Modifications considered cost-effective by LHT. A Modification shall be considered cost-effective if LHT reasonably expects that the savings on Maintenance of the Component will exceed the cost for Modification of such component. Such savings shall be estimated based on a three years period.	
 
 	•	 	Modifications considered for reliability improvement.	
 
 	•	 	To ensure the common Modification Standard of the Component Pool.	

	  	Note:	  	For Non Flat Rate Component modifications or reliability improvement suggested by Volaris, LHT shall offer Volaris a preferred rate.	
3.3.2 Turnaround Time for Non Pool Components
LHT shall perform the respective Maintenance on the Non Pool Components within the average Turnaround Times (TAT):
 
 	•	 	Avionics = *****	
 
 	•	 	None avionics: = *****	
 
 	•	 	Engine parts = *****	
 
 	•	 	Subcontractors = *****	

TCS Attachment	  	- 15 -	  	Execution Version	

			

 
 
The average TAT is the sum of all completed TAT per part number (per full contractual year), divided by the number of completed Component repair events per range of such part number.
For Maintenance on Pool Components, no TAT applies.
3.3.3 Exchange or Loan of Non Pool Components
In order to reduce the TAT of Non Pool Components, LHT may propose an exchange free of charge for an unserviceable Component with a serviceable Component owned by LHT.
Title of the Non Pool Component exchanged will transfer between the Parties with Redelivery of the exchange Component to Volaris.
Volaris may, in its own discretion and at its cost, request a serviceable Component on the basis of a 1:1 exchange or loan. The provisioning of such Component will be subject to availability and conclusion of a separate agreement between the Parties at the terms set forth in Article 12 of Annex TCS.
In the event of an exchange or loan, LHT may provide an interchangeable Component to Volaris. The sole responsibility for the confirmation of the Interchangeability remains with Volaris.
3.3.4 Material required for Maintenance
All Material, including Modification Material, required to perform Maintenance on Components shall be provided by LHT, unless—in the event of Non Pool Components—Volaris has requested in writing to provide the Material and has confirmed that it is able to deliver the Material on time and in accordance with Article 6.2.5.
In case Material required for Modifications of Non Pool Components is supplied by the respective manufacturer or Supplier free of charge or at a certain discount, *****

TCS Attachment	  	- 16 -	  	Execution Version	

			

 
 
4 SIGNING BONUS
***** with an amount of three million five hundred thousand (3,500,000) USD . A payment with an amount of two million (2,000,000) USD upon contract signature, whereas the remaining one million five hundred thousand (1,500,000) USD shall be paid in the form of annual credit notes of seven hundred and fifty thousand (750,000) USD each in 2013 and 2014 to be balanced with invoices on technical services issued by LHT. The initial two million (2,000,000) USD may be balanced with any open invoices due to LHT. LHT shall pay interest at a rate of five per cent (5%) per annum on any unbalanced amount of the initial two million (2,000,000) USD.

TCS Attachment	  	- 17 -	  	Execution Version	

			

 
 
5 DELIVERY/ REDELIVERY
 
5.1	Shipping	
With reference to Article 10 of the Basic Agreement, the Components shall be shipped according to the following Incoterms:

Components covered by	  	To Volaris	 	To LHT	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
The cost associated with shipping of Components to and from ***** shall be borne by *****
Upon Volaris’ written request *****
It shall be the shipping Party’s responsibility to ensure that all Components are shipped using the appropriate shipping containers according to ATA 300 specification.
In the event of AOG requests, LHT shall make use of the fastest standard transport options available according to LHT’s reasonable discretion. At Volaris’ written request, the Pool Components shall be personally delivered by an on-board courier. Any costs associated with such transportation shall be borne by Volaris.
 
5.2	Receiving Inspection	
LHT shall inspect a Component upon its arrival at the agreed LHT Maintenance facility for visible defects. Any visible defects discovered during that inspection are deemed *****
Volaris shall inspect a Component upon its arrival at the agreed location for visible defects. Any visible defects discovered during that inspection are deemed *****

TCS Attachment	  	- 18 -	  	Execution Version	

			

 
 
5.3	Time Frames for Delivery of Pool Components to LHT	
5.3.1 Return Pool Component
Volaris shall deliver all Return Pool Components ***** to LHT within a period of ***** after the Deemed Removal Date (“Removal Date”).
In the case of removals from Pool Aircraft performed in any station ***** Volaris shall deliver Return Pool Components to LHT within a period ***** after the Deemed Removal Date.
The Deemed Removal Date will be ***** (“Deemed Removal Date”).
For avoidance of doubt, the delivery date shall be deemed *****
The Parties agree that this article 5.3.1 shall *****
5.3.2 Serviceable Pool Component no longer required
If Volaris does no longer require a serviceable Pool Component on the date specified in its request to LHT, Volaris shall return such Pool Component to LHT as set on 5.3.1.
For the avoidance of doubt, Volaris shall (unless otherwise agreed with LHT) return such Pool Component to LHT even if the Pool Component is subsequently required but at a later date.
5.3.3 Loan Fee in the event of delayed return
If Volaris has not delivered back to LHT a Return Pool Component or a Pool Component to be returned according to Article 5.3.2 within the time frames defined above, LHT shall be entitled to charge Volaris *****
Such fee will apply from (and including) *****
5.3.4 Replacement purchase in the event of delayed return
In addition to Article 5.3.3 above and if a Pool Component has not been received by LHT ***** after the Deemed Removal Date, LHT *****
*****
 
5.4	Redelivery of Material for non Flat Rate Components to Volaris	
On Volaris’ request, Material removed from any unserviceable non Flat Rate Component and neither re-installed nor exchanged shall be returned to Volaris together with the respective Component. Such request shall be made in writing latest with the Delivery of the Component.

TCS Attachment	  	- 19 -	  	Execution Version	

			

 
 
If such Material was subject to Maintenance or repair that could not be completed until Redelivery, it shall be returned to Volaris as soon as reasonably possible thereafter.
 
5.5	BER	
5.5.1 BER of Pool Components
If a Pool Component returned to LHT is BER (as defined in Article 12.3 of Annex TCS), LHT shall inform Volaris about the serial number of the relevant Pool Component, the Pool Aircraft from which the Pool Component was removed and LHT’s findings. ***** except for BER caused by Volaris (e.g. mishandling), in which case, LHT shall dispose the Component at Volaris’ expense against payment ***** of the respective Component’s *****.
5.5.2 BER of Non Pool Components
*****
 
5.6	Rogue Unit:	
Volaris reserves the right to refuse Pool Parts/ Exchanges where the Part is recognized as a “Rogue Part”. A Rogue Part is defined as a Part that has been removed from an aircraft ***** within the last ***** regardless of whether a failure was found or not. If a Part has been identified as a Rogue Part before the start of the definitive contract, it will be paid for under “Time and Material” Pricing. If a Part becomes a Rogue Part under the Service Provider’s maintenance care under the Program Services, it is the responsibility of the Service Provider to replace the Rogue Part.
In order to isolate potential Rogue Parts during the course of the Agreement, Volaris reserves the right to request a “full in-depth investigation” for those parts that have ***** during the last ***** and have been determined to be NFF. If a part fails a consecutive third time within the last twelve months, then it shall be considered under the Rogue Parts procedure.

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6 DOCUMENTATION AND APPROVAL
 
6.1	Certification	
Each Component shall be provided to Volaris with the relevant CRS certificate according to EASA Part-145.A.42 and/or an equivalent FAA release.
 
6.2	Documentation	
6.2.1 Documentation
Volaris shall send the Components to LHT with the documentation and information set forth in Article 16 of Annex TCS (Specific Documents).
In the event that Volaris does not provide such documentation together with the Component, LHT shall ask Volaris to provide such documentation. In case documentation is not available at all LHT shall be entitled to repair/overhaul the respective Component at Volaris’ expense.
In the event that LHT does not provide such documentation together with the Component, Volaris shall ask LHT to provide such documentation. In case documentation is not available at all, Volaris shall claim for another unit or be entitled to purchase, lease or acquire in any other way the respective Component at LHT’s expense in case LHT does not provide the second unit in the required period of time.
6.2.2 Maintenance Records
LHT shall make available the Maintenance records as listed in Article 16 of Annex TCS to Volaris upon Redelivery of the Components.
6.2.3 Supply of and Responsibility for documentation
Volaris will provide LHT with all required documentation listed in Article 16 of Annex TCS no later than on the date specified therein.
Without prejudice to any further requirements in Article 3 of the Basic Agreement, Volaris hereby warrants that LHT and its Subcontractors are granted the right to use such documentation for the purpose of this Agreement.
It is the responsibility of Volaris that the documentation is supplied and to assure that the documentation reflects the current technical status of the Components.
In case the data does not reflect the Component status necessary, or is not supplied to LHT in time, LHT may, but is not under obligation to, undertake measures as are necessary to begin/continue with the Services. The cost of such measures provided by LHT will be charged to Volaris.

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Any cost associated with the access and/ or use of any documentation by LHT and/ or its Subcontractors shall be borne by Volaris.
6.2.4 Supply of Documentation in Electronic Form
If documentation is to be accessed in electronic form by LHT, Volaris will ensure that LHT is granted access to and is granted the right to use such data in electronic form. To the extent LHT and the respective OEM have an agreement regarding LHT’s access to and use of such data, Volaris will comply with any reasonable requirements of LHT and/or the OEM to secure such access to and use of such data.
Volaris shall send all Return Pool Components to LHT and LHT shall send all serviceable Pool Components to Volaris with the documentation and information set forth in Article 16 of Annex TCS at the times specified therein.
6.2.5 Certification of Material
All Material used by LHT or its Subcontractors shall have EASA—and/or FAA-certification.
Any Material provided by Volaris or purchased by LHT on behalf of Volaris must carry the certification and documentation required by FAA Part 145 and/or EASA Part-145.A.42.

TCS Attachment	  	- 22 -	  	Execution Version	

			

 
 
7 PRICES/CHARGES
 
7.1	Pool Access Fee	
Volaris shall pay a Component Pool Access Fee as set forth in Article 10.17.1 of Annex TCS.
 
7.2	Additional Administration Fee	
*****
7.2.1 Flat Rate
Work performed and Material consumed on Flat Rate Components as listed in Article 17 of Annex TCS shall be charged per aircraft Flight Hour (FH) as specified in Article 10.17.1 of Annex TCS.
Volaris shall pay for all Flight Hours flown but in any case per aircraft ***** specified in Article 10.12 and Article 10.19 of Annex TCS.
7.2.2 Exclusions from the Flat Rate
The Flat Rate charges do not include those items listed in Article 10.18 of Annex TCS. Those exclusions shall be charged on a Time and Material basis pursuant to Article 10.20.

TCS Attachment	  	- 23 -	  	Execution Version	

			

 
 
7.2.3 No Failure Found Rate (NFF Rate)
Without additional charge the Flat Rate includes an NFF Rate at 15% (fifteen per cent) as a yearly average calculated over the calendar year. All NFF events above such value will be charged at seven hundred and fifty (750) USD per event. All NFF events below NFF Rate fifteen per cent (15%) and calculated in the period described in this same article 6.3.1 will be credited to Volaris at a rate of seven hundred and fifty (750) USD per event.
The criteria to determine NFF will be Airbus official policy as amended from time to time.
If, after one year from the execution of this Attachment, Volaris’ NFF rate is higher than defined under Article 10.22.4 of Annex TCS Volaris and LHT shall jointly review and Volaris shall take appropriate corrective actions. LHT’s rights under Article 6.3 of the Basic Agreement shall remain unaffected.
The NFF Rate will be calculated by using the following formula:

A removal is unjustified if the acceptance test in accordance with the respective component Maintenance manual is passed without any findings.
7.2.4 Changes in Flat Rate Assumptions
*****
Such adjustment shall be calculated *****
7.2.5 Maintenance of non Flat Rate Components
All Components removed from Volaris’ Aircraft and Engines which are non Flat Rate Components as per Article 17 of Annex TCS or excluded from the Flat Rate as per Article 10.18 of Annex TCS and Services relating thereto shall be charged according to the Time and Material rates defined in Article 10.20 of Annex TCS, unless the Parties agreed separately on a Fixed Price.

TCS Attachment	  	- 24 -	  	Execution Version	

			

 
 
7.3	Transportation	
Volaris shall pay for transportation for all items listed in the column “Package” marked as pbth listed in the positive list of Article 17 of Annex TCS as specified in Article 10.17.2.
 
7.4	Attachment Assumptions	
The fees set forth in Articles 7.1 to 7.2 hereof are based on the Attachment Assumptions specified in Article 10.22.1 of Annex TCS. Articles 7.2.3 and 7.2.4 shall remain unaffected.

TCS Attachment	  	- 25 -	  	Execution Version	

			

 
 
8 SECURITIES
***** shall provide ***** with a security in cash corresponding to the amount of *****
The parties may agree to substitute the security as set forth in the paragraph above ***** Any cost and fees associated with ***** shall be borne by *****
Other types of securities must be agreed upon in advance between the two Parties and included in writing in this Attachment.

TCS Attachment	  	- 26 -	  	Execution Version	

			

 
 
9 WARRANTY
 
9.1	LHT’s Warranty	
In accordance with Article 9.2.2.1 of the Basic Agreement a defect shall be regarded as subject to warranty if the same defect arises within ***** after Redelivery of the Component, whichever may occur first.
This warranty does not apply *****
 
9.2	OEM Warranties	
For Flat Rate Components LHT will perform warranty administration on behalf of Volaris. The provisions of Article 9 of the Basic Agreement shall apply.
Volaris shall provide all necessary documents and/ data which are required to claim such warranty rights, including, but not limited to, those specified in Article 16 of Annex TCS.
In case the warranty claim assigned from Volaris to LHT is rejected by the Original Equipment Manufacturer (OEM) because Volaris failed to provide LHT with such Specific Documents / data, or Volaris supplied such data later than defined, Volaris shall pay the related repair cost on a Time and Material basis.
 
9.3	Liability	
In addition to Article 11.1 (Liability and Indemnification), but subject to Article 9.2 (Warranty) of the Basic Agreement, *****
LHT shall not be held responsible for shortages of Pool Components resulting from *****

TCS Attachment	  	- 27 -	  	Execution Version	

			

 
 
10 TERM AND TERMINATION
 
10.1	Conditions Precedent	
This TCS Attachment shall only become effective *****
*****
LHT shall be entitled to waive the aforementioned condition *****
 
10.2	Fix Term and Termination	
This TCS Attachment shall be concluded for a fix term of six (6) years from the date of the fulfilment of the conditions precedent according to Article 10.1. After the fixed six (6) year period, the TCS-Attachment shall automatically terminate unless the Parties agree on an additional contract period. The Parties shall agree on such extension two (2) months prior to the end of the original term.
In the event that Volaris does not comply with its obligations under the Purchase Agreement *****
Article 12 of the Basic Agreement remains unaffected.
 
10.3	Premature Termination	
10.3.1 *****
In the event that this TCS Attachment is terminated prematurely, *****
*****
*****
*****
10.3.2 *****
In case of early termination due to a material breach or insolvency of Volaris, Volaris shall *****
This Article 10.3.2 will automatically substitute any additional penalty due for this premature termination as stated in the Basic Agreement signed by both Parties.
 
10.4	Termination due to malperformance	
If the Performance Measurement, as shown in Article 3.1.3 is not achieved during ***** consecutive ***** or during ***** within a period of *****.
Not withstanding the above, Article 10.3 shall apply ***** The parties agree that the provision set forth above shall *****

TCS Attachment	  	- 28 -	  	Execution Version	

			

 
 
10.5	Termination for market conditions	
This Agreement will allow a market review at *****. If during these reviews, Volaris is offered ***** LHT will have an opportunity to match the new market pricing. If the new offer presented by LHT is not at or below the new comparative market offer, then *****
Volaris will provide to LHT a summary of the relevant information, prepared *****. The offer has to reflect ***** LHT shall have ***** to present an offer *****
If the alternative offer cannot be matched by LHT *****
 
10.6	Maintenance Facility	
LHT shall render the Services at one or more of the Maintenance facilities listed in Article 11 of Annex TCS (Maintenance Facilities) but may perform Services also at other Maintenance facilities approved by LHT.
 
10.7	LHT to Solely Support Volaris	
During the term of this Attachment, all Flat Rate Components removed from Volaris’ Aircraft and Engines shall only be serviced by LHT in accordance with this TCS Attachment.
In the event Volaris adds further aircraft and/or Engines of the same aircraft family as specified in Article 0 of Annex TCS to its fleet, these aircraft and Engines shall also be considered Volaris’ Aircraft and Engines within the meaning of this TCS Attachment. Accordingly, the Components of these additional Volaris Aircraft and Engines which qualify as Flat Rate Components and/or Pool Components—see Article 17 of Annex TCS (List of Covered Components)—shall from the start of operation of the additional aircraft be treated like Flat Rate Components and/or Pool Components under this TCS Attachment and be solely maintained by LHT in accordance with the terms of this TCS Attachment. The Pool Access Fee and the Flat Rate as agreed in Articles 7.1 and 7.2 shall also apply to the additional aircraft and Engines. Without prejudice to the foregoing, if an additional aircraft or Engine has a different basic configuration than the aircraft specified in Article 0 of Annex TCS LHT and Volaris will negotiate in good faith about an adjustment of the list of Flat Rate Components according to Article 17.1 of Annex TCS (Adjustment of Flat Rate Components and Pool Components).
 
10.8	Cost for provisioning and access to Maintenance Data	
Subject to Article 3.4 of the Basic Agreement, any cost, expenses, royalties or other charges, incurred by LHT or LHT’s Subcontractors in connection with the provisioning, access and use of any Maintenance Data that ***** shall be borne by *****.
 
10.9	Subcontractors	
If Volaris believes that the Subcontractor is responsible for continual and/or repetitive breaches of the quality, turnaround time and/or workmanship commitments in this Agreement, Volaris shall notify LHT in writing providing full details accompanied by any supporting evidence. Within five (5) Business Days of receipt of such notice from Volaris, Volaris and LHT will agree upon a date, time and place whereby senior management representatives from LHT and Volaris will meet to review such claim and supporting evidence. Should LHT agree with Volaris’ claim, then within five (5) business days of such meeting, LHT shall arrange

TCS Attachment	  	-29 -	  	Execution Version	

			

 
 
to conduct an audit of the Subcontractor in light of Volaris claim and make appropriate recommendations. Should the Subcontractor fail to comply with LHT’s recommendations, if any, within fifteen (15) days or fail to achieve a consistent improvement in quality, turnaround time, and/or workmanship, as the case may be, as soon as reasonably practicable after receipt of LHT’s recommendations, Volaris shall have the right to refuse the designated Subcontractor under this Agreement.
10.10 Warehousing Support
Within the agreed rates, as per Article 13 *****
Additionally, the Parties will make their best efforts to *****

TCS Attachment	  	- 30 -	  	Execution Version	

			

 

									
Hamburg, Germany
 
Date:	 		 	For and on behalf of
 
LUFTHANSA TECHNIK AG:	
					
Name:	 	 	 		 		 	 	
Title:	 	 	 		 		 	 	

Mexico City, Mexico
 
Date:	 		 	For and on behalf of
 
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.:	
					
Name:	 	 	 		 		 	 	
Title:	 	 	 		 		 	 	

TCS Attachment	  	- 31 -	  	Execution Version	

			

 
 
ANNEX TCS/ TOTAL COMPONENT SUPPORT

TCS Attachment	  	- 32 -	  	Execution Version	

			

 

EFH:	  	Engine Flight Hour	  	FH:	  	Aircraft Flight Hour	
				
10.11	  	Volaris’ Aircraft and Engines	  		  		

No.	  	TAIL	  	MSN	  	*****	  	*****	  	*****	  	MODEL	  	TYPE	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
1	  	N473TA	  	1140	  	*****	  	*****	  	*****	  	1999	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
2	  	N474TA	  	1159	  	*****	  	*****	  	*****	  	2000	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
3	  	XA-VOI	  	2657	  	*****	  	*****	  	*****	  	2006	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
4	  	XA-VOL	  	2666	  	*****	  	*****	  	*****	  	2006	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
5	  	XA-VOA	  	2771	  	*****	  	*****	  	*****	  	2006	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
6	  	XA-VOB	  	2780	  	*****	  	*****	  	*****	  	2006	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
7	  	N501VL	  	2979	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
8	  	XA-VOC	  	2997	  	*****	  	*****	  	*****	  	2007	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
9	  	XA-VOD	  	3045	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
10	  	XA-VOE	  	3069	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
11	  	XA-VOF	  	3077	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
12	  	XA-VOG	  	3175	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
13	  	XA-VOH	  	3253	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
14	  	XA-VOJ	  	3279	  	*****	  	*****	  	*****	  	2007	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
15	  	XA-VOK	  	3450	  	*****	  	*****	  	*****	  	2008	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
16	  	N502VL	  	3463	  	*****	  	*****	  	*****	  	2008	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
17	  	N503VL	  	3491	  	*****	  	*****	  	*****	  	2008	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
18	  	N504VL	  	3590	  	*****	  	*****	  	*****	  	2008	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
19	  	XA-VOM	  	3624	  	*****	  	*****	  	*****	  	2008	  	A320-233	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
20	  	XA-VON	  	3672	  	*****	  	*****	  	*****	  	2008	  	A320-233	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
21	  	XA-VOO	  	3705	  	*****	  	*****	  	*****	  	2008	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
22	  	XA-VOP	  	4403	  	*****	  	*****	  	*****	  	2010	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
23	  	XA-VOQ	  	4422	  	*****	  	*****	  	*****	  	2010	  	A319-133	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
24	  	XA-VOR	  	2296	  	*****	  	*****	  	*****	  	2004	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
25	  	XA-VOS	  	3252	  	*****	  	*****	  	*****	  	2007	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
26	  	XA-VOT	  	3317	  	*****	  	*****	  	*****	  	2007	  	A319-132	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
27	  	XA-VOU	  	*****	  	*****	  	*****	  		  	2004	  	A320-232	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
28	  	XA-VOV	  	*****	  		  	*****	  		  	2008	  	A320-232	  		  	*****	  	*****	  	*****	  	*****	  	*****	
29	  	XA-VOW	  	*****	  		  	*****	  		  	2008	  	A320-232	  		  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		

TCS Attachment	  	- 33 -	  	Execution Version	

			

 

*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		
*****	  	*****	  		  		  	*****	  		  	*****	  		  		  		  		  		  		  		

TCS Attachment	  	- 34 -	  	Execution Version	

			

 

 
					
TCS Attachment	  	- 35 -	  	Execution Version	

			

 
 
10.12 Flight Hours per year, Leg Length

A/C-Type
(A/C; Engine)	  	Planned FH per
AC	 	Minimum FH
per AC for
MRO	 	Minimum
quantity of AC for
pool	 	FH /Cycle
Ratio	
*****	  	*****	 	*****	 	*****	 	*****	
*****
10.13 Home Base
The home base shall be allocated as needed in Volaris’ facilities. LHT will deliver components for the Home Base at *****.

TCS Attachment	  	- 36 -	  	Execution Version	

			

 
 
10.14 Price Validity
The prices specified in the present Article Error! Reference source not found. of Annex TCS shall be valid upon execution of this Agreement and until December 31 st 2012 and shall be adjusted in accordance with the arrangements set forth in the Basic Agreement.
10.15 Pool Access Fee

Pool Aircraft type	  	Charge
[USD/FH]	 	
*****	  	 	*	**** 	
10.16 Additional Administration Fee for Home Base Components
For the Services according to Article 3.2.5 *****
10.17 Component Maintenance Services
10.17.1 Price for Flat Rate Components
[USD per FH]

A/C age A/C type	  	*****	 	*****
year	 	*****
year	 	*****
year	 	*****
year	 	***** year and
following	
*****	  	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
The dates of aircraft manufacture are defined in Article 0 of this Annex TCS (Volaris’ Aircraft and Engines).
*****
10.17.2 Price for transportation of Flat Rate Components
[USD per FH]

TCS Attachment	  	- 37 -	  	Execution Version	

			

 

Transportation	  	Charge
[USD/FH]	 	
*****	  	 	*	**** 	
10.18 Flat Rate Component Exclusions
 
 	•	 	Services to meet *****	
 
 	•	 	Services with respect to Components that *****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	*****	
 
 	•	 	Services required because of *****	
 
 	•	 	Services required because of *****	
 
 	•	 	Services related to *****	
 
 	•	 	Replacement of components *****	
 
 	•	 	The costs of Modification exceeding *****	
 
 	•	 	*****	
 
 	•	 	Services for Components covered by OEM Warranty as per Article 9.2 if *****	

TCS Attachment	  	- 38 -	  	Execution Version	

			

 
 
10.19 Fleet Utilization Adjustment Factor (Fleet Average)
A/C type

FH per Cyc	  	 	*	**** 	
FH per Year	  				
*****	  	 	*	**** 	
*****	  	 	*	**** 	
*****	  	 	*	**** 	
*****	  	 	*	**** 	
*****	  	 	*	**** 	

TCS Attachment	  	- 39 -	  	Execution Version	

			

 
 
10.20 Time and Material rates
10.20.1 Man-Hour Rates

Type of Service	  	Rate per hour in USD	
Component Maintenance Services	  	*****	
The rate of 49 USD per hour are intended for the components repaired under the 50 – 50 cost share model and as defined in the 50 – 50 table under Article 16.
10.20.2 Machine-Hour Rates

Type of Service	  	Rate per hour in USD	
Pneumatic test field	  	*****	
ATEC-6000	  	*****	
10.20.3 Handling Charge

 	  	Handling	 	Ceiling per Order [USD]	
 	  	Charge	 	Minimum	 	Maximum	
Subcontracted Work	  	*****	 	*****	 	*****	
Material	  	*****	 	*****	 	*****	
Material shall be charged at the manufacturer’s CLP plus a handling charge defined in the table above.
Subcontracted work shall be charged at the Subcontractor’s invoice plus a handling charge defined in the table above.
10.21 Material Sale
10.21.1 Handling Charge

 	  	Handling	 	Ceiling per Order [USD]	
 	  	Charge	 	Minimum	 	Maximum	
Material	  	*****	 	*****	 	*****	
10.22 Attachment Assumptions
10.22.1 *****

TCS Attachment	  	- 40 -	  	Execution Version	

			

 
 
10.22.2 Minimum Number of Aircraft / Minimum Number of Flight Hours
During the term of this TCS Attachment, Volaris shall have a minimum *****
During the term of this TCS Attachment, Volaris shall operate a minimum of *****
10.22.3 Removal Practice
The decision to remove components from Aircraft is to be *****
10.22.4 NFF Rate
The NFF Rate in accordance with Article *****
10.22.5 Ratio of Material and Labor element

Material	  	Labor	
*****	  	*****	
The annual escalation for the prices under Article 12.2.1 shall be capped ***** or the OEM material increase for the given year within the contract period of five years. *****
10.22.6 AOG and Crit A Requests
Volaris shall maintain AOG and CRIT A requests at a maximum of ***** of the total number of requests, pursuant to article 3.1.3.4 herein.
10.22.7 Volaris Assumptions:
If the following assumptions for Volaris change, the parties shall *****
10.22.8 Flight hours
During the term of this TCS Attachment, Volaris shall have a minimum of *****
10.22.9 Minimum number of Aircraft
During the term of this TCS Attachment Volaris shall have a minimum ***** Aircrafts.
10.22.10 Consequences
In the event that the Parties cannot agree on an adjustment within ***** Volaris shall be entitled to *****

TCS Attachment	  	- 41 -	  	Execution Version	

			

 
 
11 MAINTENANCE FACILITIES
LHT Hamburg
LHT Frankfurt
LTCS Avionics Tulsa

TCS Attachment	  	- 42 -	  	Execution Version	

			

 
 
12 1:1 EXCHANGE / LOAN CONDITIONS
 
12.1	Material Loan	
Subject to availability ***** may loan components *****
 
12.2	Material Exchange	
Subject to availability ***** may exchange components *****
12.3 BER
A Component shall be “beyond economical repair” for the purposes of this TCS Attachment if *****

TCS Attachment	  	- 43 -	  	Execution Version	

			

 
 
16 TCS SPECIFIC DOCUMENTS

Article	  	Document/
Information	  	Source of Acceptance	  	Supplied by	  	Supplied until/with	  	Media	  	Quantity	  	Remarks	
Airworthiness Data	  		  		  		  		  		  		  		
	  	*****	  		  	*****	  	*****	  		  		  	*****	
	  	*****	  		  	*****	  	*****	  		  		  		
	  	*****	  		  	*****	  	*****	  		  		  	*****	
	  	*****	  		  	*****	  	*****	  		  		  	*****	
Incoming Conditions	  	*****	  		  	*****	  	*****	  		  		  		
Maintenance Records	  	*****	  		  	*****	  	*****	  		  		  		
	  	*****	  		  	*****	  	*****	  	*****	  		  		
Warranty Handling Data Only for controlled components	  	*****	  		  	*****	  	*****	  		  		  		
	  	*****	  		  		  	*****	  		  		  		

TCS Attachment	  	- 44 -	  	Execution Version	

			

 

Article	  	Document/
Information	  	Source of Acceptance	  	Supplied by	  	Supplied
until/with	  	Media	  	Quantity	  	Remarks	
	  	*****	  		  		  	*****	  		  		  	*****	
	  	*****	  		  		  	*****	  		  		  	*****	
	  	*****	  		  		  	*****	  		  		  	*****	
	  	*****	  		  		  	*****	  	*****	  		  	*****	
	  	*****	  		  		  	*****	  	*****	  		  		
	  	*****	  		  		  	*****	  	*****	  		  	*****	
	  	*****	  		  		  	*****	  		  		  		
	  	*****	  		  		  	*****	  		  		  	*****	

TCS Attachment	  	- 45 -	  	Execution Version	

			

 
 
17 LIST OF COVERED AND HOME BASE COMPONENTS
 
17.1	The list of covered and Home Base Components is set out on the attached list.Adjustment of Flat Rate Components and Pool Components	
The list of Flat Rate Components and, accordingly, the relevant Flat Rate may be adjusted by an amendment agreement between the Parties.
The list of Pool Components and, accordingly, the relevant Pool Access Fee may be adjusted by an amendment agreement between the Parties.

TCS Annexes	  	- 46 -	  	Execution Version	

			

 

No	  	Pool Non Pool	  	ATA	  	Part Number	  	PN family	  	Package	  	Description	  	ESS	  	new HB Rec. 40 AC	  	new HB Rec. 48 AC	  	new HB Rec. 61 AC	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 47 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 48 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 49 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 50 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 51 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 52 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 53 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 54 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 55 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 56 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 57 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 58 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 59 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 60 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 61 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 62 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 63 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 64 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 65 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 66 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 67 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 68 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 69 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 70 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 71 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 72 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 73 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 74 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 75 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 76 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 77 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 78 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 79 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 80 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 81 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 82 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 83 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 84 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 85 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 86 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 87 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 88 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 89 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 90 -	  	Execution Version	

			

 

*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  	******	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

TCS Annexes	  	- 91 -	  	Execution Version	

			

 
 
18 GENERAL ANNEX WARRANTY HANDLING
PART I: WARRANTY ASSIGNMENT / APPOINTMENT AS AGENT FOR WARRANTY ADMINISTRATION
On                      LHT and Volaris entered into an Agreement on                      . This Agreement includes the below listed Attachments under which LHT agreed to render certain services to Volaris with respect to certain Volaris aircraft, Engines or Components (individually the “ Attachment ” or collectively the “ Attachments ”).
Assignment of warranty claims
As of the day of the signing of the respective Attachment listed below (“Assignment Date”) Volaris hereby assigns to LHT all contractual and statutory warranty claims Volaris may have against the manufacturer or any other third party with respect to the aircraft, Engines or Components or any other Material that is or becomes a part thereof after the Assignment Date and is serviced by LHT under the Attachment. LHT hereby accepts such assignment. Volaris shall notify the manufacturer or third party concerned about the assignment with the form according to part II of this General Annex Warranty Handling.
Name of Attachment                     Date (Assignment Date)
Appointment as agent for administration of warranty claims
As of the day of the signing of the respective Attachment listed below (“ Appointment Date ”) Volaris hereby appoints LHT as Volaris’ agent to administer all contractual and statutory warranty claims Volaris may have against the manufacturer or any other third party with respect to the aircraft, Engines or Components or any other Material that is or becomes a part thereof after the Appointment Date and is serviced by LHT under the Attachment. LHT hereby accepts such appointment. In particular, LHT shall have the right to receive any payments made by the manufacturer as a result of claims made LHT on behalf of Volaris. Volaris shall notify the manufacturer or third party concerned about the appointment with the form according to part II of this General Annex Warranty Handling.

TCS Annexes	  	- 92 -	  	Execution Version	

			

 

Name of Attachment
 
Hamburg, Germany
 
Date:	 		 	Date (Appointment Date)
 
For and on behalf of
 
LUFTHANSA TECHNIK AG:	
					
Name:	 	 	 		 		 	 	
Title:	 	 	 		 		 	 	

Mexico City, Mexico
 
Date:	 		 	For and on behalf of
 
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.:	
					
Name:	 	 	 		 		 	 	
Title:	 	 	 		 		 	 	

TCS Annexes	  	- 93 -	  	Execution Version	

			

 
 
PART II: Volaris’ Warranty Assignment / Administration
Notice to OEM
To Whom it may concern
Subject: Warranty Adminstration LETTER
VOLARIS has signed a comprehensive maintenance agreement with Lufthansa Technik AG (“ LHT ”), which includes the [ x ] assignment to LHT of contract rights related to warranty claims (“ Assignment ”) and/ or [ x ] the appointment of LHT as our agent to administer warranty claims (“ Appointment ”), pursuant to the terms of the agreement(s) listed below. Such rights include, without limitation, the right to receive any payments made by the manufacturer (“ Manufacturer ”) as a result of warranty claims made by LHT on our behalf. Volaris confirms to Manufacturer that it owns or controls the rights it purports to transfer.
The Assignment and/or Appointment, as the case may be, only applies to warranty claims made during the period of time from the date a notice is received and acknowledged by Manufacturer from LHT with this letter attached, until the date of receipt by Manufacturer of written notice to the contrary from either LHT or Volaris. Such notices will be addressed to the particular address provided by Manufacturer to LHT for such purposes and we agree that such notice will only be effective with regard to Manufacturer if received by Manufacturer at such address. We agree that all actions taken by LHT or agreements entered into by LHT during the period prior to Manufacturer‘s receipt of such notice are final and binding on Volaris. Communications with Volaris should be addressed as follows:

 	 		  		  		  		
 	 		  		  		  		
 	 	.	  		  		  		

TCS Annexes	  	- 94 -	  	Execution Version	

			

 
 
Appointment : We request that Manufacturer accepts warranty claims from LHT on our behalf with regard to the following agreement(s) and aircraft:
Assignment : We request that Manufacturer accept warranty claims assigned by us to LHT with regard to the following agreement(s) and aircraft:
Volaris authorizes Manufacturer to treat LHT as if Volaris were making warranty claims itself and request that Manufacturer settle such claims as appropriate with LHT. Volaris agrees that, by rendering a remedy to LHT, Manufacturer will have complied with its warranty obligation and that Manufacturer owes such remedy only once.
Yours sincerely,

 	 	(signature)	  		  		  		
 	 	(printed name)	  		  		  		
 	 	(title)	  		  		  		
 	 	(date)	  		  		  		

TCS Annexes	  	- 95 -	  	Execution Version	

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.48
AIRCRAFT LEASE AGREEMENT [A]
DATED AS OF DECEMBER 31, 2012
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number 5488

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of December 31, 2012 the following:	
		
Lessee:	 	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	 	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	 	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	 	Celestial Aviation Trading 4 Limited	
		
Trust Agreement:	 	that certain Trust Agreement (2013 A320-200 A) dated as of December 7, 2012 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	 	As set forth in Schedule D.	
		
Guarantor:	 	As set forth in Schedule D.	
		
Aircraft:	 	One (1) Airbus A320-200 aircraft bearing manufacturer’s serial number 5488, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	 	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	 	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	 	United States of America	
		
*****	 	*****	
		
Manufacturer:	 	Airbus S.A.S	
	
Payments	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
 
1

			
		
*****	 	*****	
		
*****	 	*****	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	 	February 2013.	
		
Final Delivery Date:	 	December 31, 2014.	
		
Delivery Location:	 	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	 	*****	
		
Lease Supplement:	 	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
	
Insurance	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
		
*****	 	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:	 	An FAR certified maintenance facility in El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing (the “Redelivery Location”) or such other location where the Lessee and	
 
2

			
	 	Lessor are satisfied that any applicable Taxes are minimised, other than Taxes which the Lessee or Lessor may agree in writing to bear , provided that:
 
(a)    the Final Inspection of the Aircraft shall occur at Lessee’s facility at Mexico City International Airport;
 
(b)    following the Final Inspection, and provided Lessee has complied with its obligations under Section 12 and Schedule 6 of the Common Terms Agreement, Lessor will deliver to Lessee a technical acceptance certificate (“Technical Acceptance Certificate”) confirming that the Aircraft meets the Redelivery Condition whilst the Aircraft is located in Mexico City;
 
(c)    immediately following Lessor’s execution of the Technical Acceptance Certificate, Lessee shall ferry the Aircraft from Mexico City to the Redelivery Location (the “Ferry Flight”); and
 
immediately following the arrival and redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, and provided Lessee has complied with its obligations under the Lease, Lessor will (a) deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with the Lease which acknowledgement shall be without prejudice to Lessor’s accrued and continuing rights under the Lease or any Other Agreement and (b) transfer an amount in Dollars equal to the actual cost incurred by Lessee in respect of the fuel, ferry permits and landing and air navigation charges required to complete the Ferry Flight to such account as Lessee shall designate in writing to Lessor.	
		
Redelivery Condition Requirements:	 	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	 	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican residents. If the foregoing *****	
		
Subpart F Indemnity:	 	As set forth in Schedule C.	
	
Other	
		
Account for payments:	 	Transfer To:                    *****	
		
	 	SWIFT Code:                 *****	
		
	 	For Credit To:                *****	
		
	 	Account No:                     *****	
		
	 	Sort Code:                       *****	
		
	 	IBAN:                               *****	
		
	 	US Correspondent          *****
Bank Details:               	
		
	 	US Correspondent          *****
Bank SWIFT Code:  	
 
3

					
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest, National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn: Corporate Trust Department
 
Fax: (801) 246-5053
 
E-mail:
CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 4 Limited
c/o GE Capital Aviation Services
Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Avenida Antonio Dovalí Jaime 70
piso 13, torre B
Col. Zedec Santa Fe
01210 Mexico D.F.
Delegacion Alvaro Obregon, Mexico
 
Attn: Director Juridico
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		 	LESSEE:	
			
WELLS FARGO BANK NORTHWEST, N.A., not in its individual capacity, but solely as Owner Trustee under the Trust Agreement	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
					
By:	 	/s/ Carlos Sierra	 		 	By:	 	/s/ Mario E. Geyne	
Name:	 	Carlos Sierra	 		 	Name:	 	Mario E. Geyne	
Title:	 	 	 		 	Title:	 	Financial and Fleet Planning Director	
Signed at:	 	 	 		 	Signed at:	 	 	
-Signature Page-
-Aircraft Lease Agreement [A]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is:
 
(a)	required by applicable law or regulation; or	
 
(b)	is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement; or	
 
(c)	is either an upgrade of the Detail Specification to Issue 8 or is made due to the evolution on the specifications prior to Delivery.	
 
A-1

EXHIBIT A
 
-Exhibit A-

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120951-08	
SCHEDULE E
Volaris A320-300 Specifications

Engines:	  	*****	
Maximum Take-Off Weight (tones):	  	*****	
Maximum Zero Fuel Weight (tones):	  	*****	
Configuration:	  	174 or 177 or 179 seats as selected by Lessee, provided there is no change to current Galley and Toilet configuration.	
A320-200 Standard Specification Issue 7 – dated 1 st March 07 – Reference D 000 02000 with Sharklets Installed.
A320-200 SCN LIST:
A320-200 Standard Specification Ref issue 7

A320 RFC	  	Title	
	  	*****	
	  	*****	
ATA 02 Certification	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 03 Weights	
*****	  	*****	
*****	  	*****	
ATA 03 Placards and markings	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
Air Conditioning	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 22 Auto Flight	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 23 Communications	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 23 Communications	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 29 Hydraulic Power	
*****	  	*****	
*****	  	*****	
ATA 31 Indicating/Recording	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 32 Landing Gear	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 33 Lights	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 34 Navigation	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 35 Oxygen	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 38 Water/Waste	
*****	  	*****	
ATA 46 ATSU	
*****	  	*****	
*****	  	*****	
ATA 47 Inerting Gas System	
*****	  	*****	
*****	  	*****	
ATA 49 APU	
*****	  	*****	
ATA 51 Structure	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 52 Doors	
*****	  	*****	
ATA 55 Stabilizer	
*****	  	*****	
ATA 56 Windows	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 57 Wings	
*****	  	*****	
ATA 71 Power Plant - General	
*****	  	*****	
ATA 72 Engines	
*****	  	*****	

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120950-08	

 

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120950-08	

 

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120950-08	

 

					
			
	  	Concesionaria Vuela Compañía de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120950-08	

 

Volaris A320 – Estimated SCN Invoice GECAS financed 2012 aircrafts
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 1 of 3

Volaris A320 – Estimated SCN Invoice GECAS financed 2012 aircrafts
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	2012
deliveries	  	Comments	
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 2 of 3

Volaris A320 – Estimated SCN Invoice GECAS financed 2012 aircrafts
A320-200 STANDARD SPECIFICATION Ref. Issue 5.1

A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
VOI56D001B	  	Installation of dummy windows according to referenced cabin layout	  	X	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant – General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
 
Page 3 of 3

 

	

 

   	

	

	

	

	

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	 	The next relevant complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next check interval stipulated in the Manufacturer’s Maintenance Planning Document (previously defined by the Manufacturer as “C” check intervals and, as of the date of this Agreement, ***** Flight Hours, *****Cycles and ***** Months) in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished.	
		
Airworthiness Standard:	 	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date which requirements are not further restrictive than those required to operate under FAR part 129.	
		
Configuration:	 	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	 	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage and empennage paint stripped, and the wings paint sanded prior to the application of the livery paint.	
		
Airworthiness Directives	 	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	 	The Engine Thrust Setting shall be *****	
		
Minimum Engine Cycles:	 	***** Cycles.	
		
Minimum Engine LLP Cycles:	 	***** Cycles.	
		
Minimum Engine Flight Hours:	 	***** Flight Hours.	
		
Required EGT Margin	 	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	 	***** months.	
		
Minimum Landing Gear Cycles:	 	***** Cycles.	
		
Landing Gear:	 	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
 
B-1

			
Minimum Component Calendar Life:	 	***** months.	
		
Minimum Component Cycles:	 	***** Cycles.	
		
Minimum Component Flight Hours:	 	***** Flight Hours.	
		
Minimum APU Limit:	 	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	 	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Assumption”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the treatment contemplated by the Subpart F Assumption, Lessee agrees that in each calendar year during the Term the Aircraft will be used for the transportation of passengers or property between airports at least one of which is located outside of the United States and the Aircraft will be used predominantly outside the United States.	
For the purpose of paragraph (a), the Aircraft will be considered to be used predominantly outside the United States if either:
1) the Aircraft will be located outside the United States more than ***** per cent of the time; or
2) more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.
For the purpose of paragraph (a), references to the United States include the Commonwealth of Puerto Rico and the possessions of the United States (American Samoa, The Commonwealth of the Northern Mariana Islands, Guam, and The U. S. Virgin Islands) and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the Airframe, that Lessor may reasonably request to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for achieving the treatment contemplated by the Subpart F Assumption.
 
(b)	Remedies: If Lessee breaches any of the covenants contained in paragraph (a), Lessor or the relevant Tax Indemnitee shall be entitled to receive as an indemnity, subject to Section 5.10 of the Common Terms Agreement, the amount of U. S. income tax that would not have been incurred but for the loss of the tax treatment contemplated by the Subpart F Assumption relating in whole, or in part, to such breach plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written notice from Lessor describing in reasonable detail the circumstances of such loss, the amount of such loss, and the payment due.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

	
Guarantee	
		
Guarantee required:	  	*****	
		
Guarantor:	  	*****	
	
Payments	
		
Rent:	  	Rent shall be payable monthly in advance in an amount calculated pursuant to the formula below:
 
*****
On the Quotation Date (as defined below), GECAS shall provide either:
*****
***** shall request each dealer for quotes on ****
 
For purposes hereof, the term “ Quotation Date ” means the date ***** prior to the delivery date of each aircraft.	
		
Supplemental Rent Applies:	  	*****	
		
Supplemental Rent Redelivery Adjustment Payments Applies:	  	*****	
		
Lessor Maintenance Contribution Obligation Applies:	  	*****
Provided no Default has occurred and is continuing, Lessor will pay (as a separate and independent obligation and not as a return of Supplemental Rent) the following amounts to Lessee by way of *****
 
*****
 
*****
 
*****
 
*****
 
*****
 
*****
 
(E) In respect of any amounts which, but for the continuance of an Event of Default, would have been paid to or for the benefit of Lessee pursuant to paragraphs*****
 
All invoices submitted for a Lessor contribution must *****
 
Lessor accepts that Lessee may not be able to *****	

Assumed Ratio
Adjustment Table:                    	  	Applicable Assumed Ratio Adjustment Table for each Engine prior to the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
		
	  	Applicable Assumed Ratio Adjustment Table for each Engine following the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	

		
Engine Supplemental Rent Rate:	  	In lieu of Lessee making full cash Engine Supplemental Rent payments on a monthly basis, Lessee shall
 
(a)    *****
 
(i)     ***** and
 
(ii)    ***** following the completion of the ***** and
 
(b)    *****	
		
Engine Supplemental Rent Letter of Credit:	  	Lessee shall provide ***** on the ***** with irrevocable, standby Letters of Credit which shall secure Lessee’s *****
 
Lessee agrees that it shall provide a such Supplemental Rent Letter of *****
 
*****
 
*****
 
*****
 
Following redelivery of the Aircraft in accordance with the Lease, *****	
		
Engine
Refurbishment:	  	For the purposes of this Aircraft Lease Agreement, Lessor and Lessee
agree that:
 
(a)     Engine Refurbishment shall mean, with respect to any Engine, an engine shop visit at which a *****
 
(b)     Engine Manufacturer Maintenance Management Plan shall mean the recommended maintenance program for an Engine issued by the Engine Manufacturer as in effect at the time of any applicable determination; and
 
(c)    Engine Supplemental Rent payments made by Lessee and any payment by Lessor by way of *****
 
LPC: *****
FAN: *****
HPC: *****
HPT: *****
LPT: *****	
		
Engine LLP
Supplemental Rent
Rate:	  	*****	
 
D-1

			
		
Airframe 6 Year Structural Check Supplemental Rent Rate:	  	***** for each calendar *****	
		
Airframe 12 Year Structural Check Supplemental Rent Rate:	  		

APU Supplemental Rent
Rate:	  	*****	
		
Landing Gear Supplemental
Rent Rate:	  	***** for each calendar *****	
		
Annual Supplemental Rent
Adjustment:	  	***** The Supplemental Rent Rates shown will be escalated from *****	
		
Deposit:	  	Lessee shall pay a Deposit ***** in an amount equal to the sum of ***** payable at the following times and in the following amounts:
 
a)      ***** and
 
b)      an amount equal to *****
 
Lessee shall have the option to replace all or part of the Deposit *****	
	
Technical	
		
AD Sharing Applies:	  	*****	
		
AD Threshold:	  	*****	
		
AD Factor:	  	*****	
		
AD Compliance Period:	  	*****	
		
Airframe Structural Check	  	*****	
		
PMA Parts	  	PMA Parts may be installed in the Airframe provided always that such parts:
 
(a)    *****
 
(b)    *****
 
Lessor and Lessee agree to continue to discuss, in good faith, whether *****	
		
Airframe 4C/6 Year Check
Supplemental Rent	  	The definition of “Airframe 4C/6 Year Check Supplemental Rent” in the CTA shall be amended and restated in its entirety as follows and all references in the CTA to “Airframe 4C/6 Year Check Supplemental Rent” shall be deemed references to Airframe 6 Year Check Supplemental Rent: *****	
		
Airframe 8C/12 Year Check
Supplemental Rent	  	The definition of “Airframe 8C/12 Year Check Supplemental Rent” in the CTA shall be amended and restated in its entirety as follows and all references in the CTA to “Airframe 8C/12 Year Check Supplemental Rent” shall be deemed references to Airframe 12 Year Check Supplemental Rent: *****	
	
Insurance	
		
Agreed Value:	  	*****	
		
Damage Notification
Threshold:	  	*****	
		
Deductible Amount:	  	*****	
		
Minimum Liability
Coverage:	  	*****	
	
Other	
		
Permitted Sub-Lessees	  	*****	
 
D-2

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.49
AIRCRAFT LEASE AGREEMENT [B]
 
DATED AS OF DECEMBER 31, 2012
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number 5510

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of December 31, 2012 the following:	
		
Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 4 Limited	
		
Trust Agreement:	  	that certain Trust Agreement (2013 A320-200 B) dated as of December 7, 2012 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing manufacturer’s serial number 5510, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	United States of America	
		
Duration of Term:	  	*****	
		
Manufacturer:	  	Airbus S.A.S	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
 
1
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

			
		
*****	  	*****	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	March 2013.	
		
Final Delivery Date:	  	December 31, 2014.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
 
2
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

					
	
Redelivery	
		
Redelivery Location:	 	An FAR certified maintenance facility in El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing (the “Redelivery Location”) or such other location where the Lessee and Lessor are satisfied that any applicable Taxes are minimised, other than Taxes which the Lessee or Lessor may agree in writing to bear , provided that:
 
(a)    the Final Inspection of the Aircraft shall occur at Lessee’s facility at Mexico City International Airport;
 
(b)    following the Final Inspection, and provided Lessee has complied with its obligations under Section 12 and Schedule 6 of the Common Terms Agreement, Lessor will deliver to Lessee a technical acceptance certificate (“Technical Acceptance Certificate”) confirming that the Aircraft meets the Redelivery Condition whilst the Aircraft is located in Mexico City;
 
(c)    immediately following Lessor’s execution of the Technical Acceptance Certificate, Lessee shall ferry the Aircraft from Mexico City to the Redelivery Location (the “Ferry Flight”); and
 
immediately following the arrival and redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, and provided Lessee has complied with its obligations under the Lease, Lessor will (a) deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with the Lease which acknowledgement shall be without prejudice to Lessor’s accrued and continuing rights under the Lease or any Other Agreement and (b) transfer an amount in Dollars equal to the actual cost incurred by Lessee in respect of the fuel, ferry permits and landing and air navigation charges required to complete the Ferry Flight to such account as Lessee shall designate in writing to Lessor.	
		
Redelivery Condition Requirements:	 	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	 	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:	 	As set forth in Schedule C.	
	
Other	
			
Account for payments:	 		  	*****	
			
	 	Transfer To :	  	*****	
			
	 	SWIFT Code :	  	*****	
			
	 	For Credit To :	  	*****	
			
	 	Account No:	  	*****	
			
	 	Sort Code:	  	*****	
			
	 	IBAN:	  	*****	
			
	 	US Correspondent
Bank Details:	  	*****	
			
	 	US Correspondent Bank
SWIFT Code:	  	*****	
 
3
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

					
Notice Details:	 	Lessor
 
Wells Fargo Bank Northwest, National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn : Corporate Trust Department
 
Fax : (801) 246-5053
 
E-mail:
CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 4 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn : Contracts Leader
 
Fax : +353 61 706867
 
E-mail : asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Avenida Antonio Dovalí Jaime 70 piso 13, torre B
Col. Zedec Santa Fe
01210 Mexico D.F.
Delegacion Alvaro Obregon, Mexico
 
Attn : Director Juridico
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
 
4
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5
Aircraft Lease Agreement — A320-200 Aircraft MSN 5510

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		 	LESSEE:	
			
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V.	
					
By:	 	/s/ Carlos Sierra	 		 	By:	 	/s/ Mario E. Geyne	
Name:	 	Carlos Sierra	 		 	Name:	 	Mario E. Geyne	
Title:	 	 	 		 	Title:	 	Financial and Fleet Planning Director	
Signed at:	 	 	 		 	Signed at:	 	 	
-Signature Page-
-Aircraft Lease Agreement [B]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is:
 
(a)	required by applicable law or regulation; or	
 
(b)	is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement; or	
 
(c)	is either an upgrade of the Detail Specification to Issue 8 or is made due to the evolution on the specifications prior to Delivery.	
 
A-1

EXHIBIT A

 
Exhibit A

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20120950-08	
SCHEDULE E
Volaris A320-300 Specifications

Engines:	  	*****	
Maximum Take-Off Weight (tones):	  	*****	
Maximum Zero Fuel Weight (tones):	  	*****	
Configuration:	  	174 or 177 or 179 seats as selected by Lessee, provided there is no change to current Galley and Toilet configuration.	
A320-200 Standard Specification Issue 7 – dated 1 st March 07 – Reference D 000 02000 with Sharklets Installed.
A320-200 SCN LIST:
A320-200 Standard Specification Ref issue 7

A320 RFC	  	Title	
	  	*****	
	  	*****	
ATA 02 Certification	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 03 Weights	
*****	  	*****	
*****	  	*****	
ATA 03 Placards and markings	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
Air Conditioning	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 22 Auto Flight	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 23 Communications	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 23 Communications	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 29 Hydraulic Power	
*****	  	*****	
*****	  	*****	
ATA 31 Indicating/Recording	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 32 Landing Gear	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 33 Lights	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 34 Navigation	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 35 Oxygen	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 38 Water/Waste	
*****	  	*****	
ATA 46 ATSU	
*****	  	*****	
*****	  	*****	
ATA 47 Inerting Gas System	
*****	  	*****	
*****	  	*****	
ATA 49 APU	
*****	  	*****	
ATA 51 Structure	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 52 Doors	
*****	  	*****	
ATA 55 Stabilizer	
*****	  	*****	
ATA 56 Windows	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 57 Wings	
*****	  	*****	
ATA 71 Power Plant - General	
*****	  	*****	
ATA 72 Engines	
*****	  	*****	

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20820950-08	

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20120950-08	

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20120950-08	

					
	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	  	Ref: 20120950-08	

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
 
Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant – General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
 
Page 3 of 3

 

	

 

	

 

	

 

	

 

	

 

	

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	  	The next relevant complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next check interval stipulated in the Manufacturer’s Maintenance Planning Document (previously defined by the Manufacturer as “C” check intervals and, as of the date of this Agreement, ***** Flight Hours, ***** Cycles and ***** Months) in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished.	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date which requirements are not further restrictive than those required to operate under FAR part 129.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage and empennage paint stripped, and the wings paint sanded prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be *****	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
		
Minimum Component Calendar Life:	  	***** months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
 
B-1

			
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Assumption”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the treatment contemplated by the Subpart F Assumption, Lessee agrees that in each calendar year during the Term the Aircraft will be used for the transportation of passengers or property between airports at least one of which is located outside of the United States and the Aircraft will be used predominantly outside the United States.	
For the purpose of paragraph (a), the Aircraft will be considered to be used predominantly outside the United States if either:
1) the Aircraft will be located outside the United States more than ***** per cent of the time; or
2) more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.
For the purpose of paragraph (a), references to the United States include the Commonwealth of Puerto Rico and the possessions of the United States (American Samoa, The Commonwealth of the Northern Mariana Islands, Guam, and The U. S. Virgin Islands) and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the Airframe, that Lessor may reasonably request to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for achieving the treatment contemplated by the Subpart F Assumption.
 
(b)	Remedies: If Lessee breaches any of the covenants contained in paragraph (a), Lessor or the relevant Tax Indemnitee shall be entitled to receive as an indemnity, subject to Section 5.10 of the Common Terms Agreement, the amount of U. S. income tax that would not have been incurred but for the loss of the tax treatment contemplated by the Subpart F Assumption relating in whole, or in part, to such breach plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written notice from Lessor describing in reasonable detail the circumstances of such loss, the amount of such loss, and the payment due.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

	
Guarantee	
		
Guarantee required:	  	*****	
		
Guarantor:	  	*****	
	
Payments	
		
Rent:	  	Rent shall be payable monthly in advance in an amount calculated pursuant to the formula below:
 
*****
On the Quotation Date (as defined below), GECAS shall provide either:
*****
***** shall request each dealer for quotes on ****
 
For purposes hereof, the term “ Quotation Date ” means the date ***** prior to the delivery date of each aircraft.	
		
Supplemental Rent Applies:	  	*****	
		
Supplemental Rent Redelivery Adjustment Payments Applies:	  	*****	
		
Lessor Maintenance Contribution Obligation Applies:	  	*****
Provided no Default has occurred and is continuing, Lessor will pay (as a separate and independent obligation and not as a return of Supplemental Rent) the following amounts to Lessee by way of *****
 
*****
 
*****
 
*****
 
*****
 
*****
 
*****
 
(E) In respect of any amounts which, but for the continuance of an Event of Default, would have been paid to or for the benefit of Lessee pursuant to paragraphs*****
 
All invoices submitted for a Lessor contribution must *****
 
Lessor accepts that Lessee may not be able to *****	

																			
		
Assumed Ratio
Adjustment Table:                    	  	Applicable Assumed Ratio Adjustment Table for each Engine prior to the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
		
	  	Applicable Assumed Ratio Adjustment Table for each Engine following the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	

Engine Supplemental Rent Rate:	  	In lieu of Lessee making full cash Engine Supplemental Rent payments on a monthly basis, Lessee shall
 
(a)    *****
 
(i)     ***** and
 
(ii)    ***** following the completion of the ***** and
 
(b)    *****	
		
Engine Supplemental Rent Letter of Credit:	  	Lessee shall provide ***** on the ***** with irrevocable, standby Letters of Credit which shall secure Lessee’s *****
 
Lessee agrees that it shall provide a such Supplemental Rent Letter of *****
 
*****
 
*****
 
*****
 
Following redelivery of the Aircraft in accordance with the Lease, *****	
		
Engine
Refurbishment:	  	For the purposes of this Aircraft Lease Agreement, Lessor and Lessee
agree that:
 
(a)     Engine Refurbishment shall mean, with respect to any Engine, an engine shop visit at which a *****
 
(b)     Engine Manufacturer Maintenance Management Plan shall mean the recommended maintenance program for an Engine issued by the Engine Manufacturer as in effect at the time of any applicable determination; and
 
(c)    Engine Supplemental Rent payments made by Lessee and any payment by Lessor by way of *****
 
LPC: *****
FAN: *****
HPC: *****
HPT: *****
LPT: *****	
		
Engine LLP
Supplemental Rent
Rate:	  	*****	
 
B-2

			
		
Airframe 6 Year Structural Check Supplemental Rent Rate:	  	***** for each calendar *****	
		
Airframe 12 Year Structural Check Supplemental Rent Rate:	  		

APU Supplemental Rent
Rate:	  	*****	
		
Landing Gear Supplemental
Rent Rate:	  	***** for each calendar *****	
		
Annual Supplemental Rent
Adjustment:	  	***** The Supplemental Rent Rates shown will be escalated from *****	
		
Deposit:	  	Lessee shall pay a Deposit ***** in an amount equal to the sum of ***** payable at the following times and in the following amounts:
 
a)      ***** and
 
b)      an amount equal to *****
 
Lessee shall have the option to replace all or part of the Deposit *****	
	
Technical	
		
AD Sharing Applies:	  	*****	
		
AD Threshold:	  	*****	
		
AD Factor:	  	*****	
		
AD Compliance Period:	  	*****	
		
Airframe Structural Check	  	*****	
		
PMA Parts	  	PMA Parts may be installed in the Airframe provided always that such parts:
 
(a)    *****
 
(b)    *****
 
Lessor and Lessee agree to continue to discuss, in good faith, whether *****	
		
Airframe 4C/6 Year Check
Supplemental Rent	  	The definition of “Airframe 4C/6 Year Check Supplemental Rent” in the CTA shall be amended and restated in its entirety as follows and all references in the CTA to “Airframe 4C/6 Year Check Supplemental Rent” shall be deemed references to Airframe 6 Year Check Supplemental Rent: *****	
		
Airframe 8C/12 Year Check
Supplemental Rent	  	The definition of “Airframe 8C/12 Year Check Supplemental Rent” in the CTA shall be amended and restated in its entirety as follows and all references in the CTA to “Airframe 8C/12 Year Check Supplemental Rent” shall be deemed references to Airframe 12 Year Check Supplemental Rent: *****	
	
Insurance	
		
Agreed Value:	  	*****	
		
Damage Notification
Threshold:	  	*****	
		
Deductible Amount:	  	*****	
		
Minimum Liability
Coverage:	  	*****	
	
Other	
		
Permitted Sub-Lessees	  	*****	
 
B-3

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
Exhibit 10.50
AIRCRAFT LEASE AGREEMENT [C]
DATED AS OF DECEMBER 31, 2012
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number 5595

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.
The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of December 31, 2012 the following:

Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 40 Limited	
		
Trust Agreement:        	  	that certain Trust Agreement (2013 A320-200 C) dated as of December 7, 2012 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing manufacturer’s serial number 5595, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines *****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	United States of America	
		
Duration of Term:	  	One hundred forty-four (144) months	
		
Manufacturer:	  	Airbus S.A.S	
	
Payments	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	*****	
		
*****	  	*****	
 
1

			
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:	  	May 2013.	
		
Final Delivery Date:	  	December 31, 2014.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
*****	  	*****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Insurance	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
		
*****	  	As set forth in Schedule D.	
	
Redelivery	
		
Redelivery Location:    	  	An FAR certified maintenance facility in El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing (the “Redelivery Location”) or such other location where the Lessee and Lessor are satisfied that any applicable Taxes are minimised, other than Taxes which the Lessee or Lessor may agree in writing to bear , provided that:
 
(a)      the Final Inspection of the Aircraft shall occur at Lessee’s facility at Mexico City International Airport;	
 
2

					
	 	(b)     following the Final Inspection, and provided Lessee has complied with its obligations under Section 12 and Schedule 6 of the Common Terms Agreement, Lessor will deliver to Lessee a technical acceptance certificate (“Technical Acceptance Certificate”) confirming that the Aircraft meets the Redelivery Condition whilst the Aircraft is located in Mexico City;
 
(c)     immediately following Lessor’s execution of the Technical Acceptance Certificate, Lessee shall ferry the Aircraft from Mexico City to the Redelivery Location (the “Ferry Flight”); and
 
immediately following the arrival and redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, and provided Lessee has complied with its obligations under the Lease, Lessor will (a) deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with the Lease which acknowledgement shall be without prejudice to Lessor’s accrued and continuing rights under the Lease or any Other Agreement and (b) transfer an amount in Dollars equal to the actual cost incurred by Lessee in respect of the fuel, ferry permits and landing and air navigation charges required to complete the Ferry Flight to such account as Lessee shall designate in writing to Lessor.	
		
Redelivery Condition Requirements:	 	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	 	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican *****	
		
Subpart F Indemnity:    	 	As set forth in Schedule C.	
	
Other	
			
Account for payments:    	 	Transfer To:	  	*****	
			
	 	SWIFT Code:	  	*****	
			
	 	For Credit To:	  	*****	
			
	 	Account No:	  	*****	
			
	 	Sort Code:	  	*****	
			
	 	IBAN:	  	*****	
			
	 	US Correspondent Bank Details:	  	*****	
			
	 	US Correspondent Bank SWIFT Code:    	  	*****	
 
3

					
Notice Details:	  	Lessor
 
Wells Fargo Bank Northwest, National
Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn: Corporate Trust Department
 
Fax: (801) 246-5053
 
E-mail:
CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 40 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Avenida Antonio Dovalí Jaime 70
piso 13, torre B
Col. Zedec Santa Fe
01210 Mexico D.F.
Delegacion Alvaro Obregon, Mexico
 
Attn: Director Juridico
 
E-mail:
sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
4

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
5

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		 	LESSEE:	
			
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		 	CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.	
					
By: 	 	/s/ Carlos Sierra	 		 	By: 	 	/s/ Mario E. Geyne	
Name:	 	Carlos Sierra	 		 	Name:	 	Mario E. Geyne	
Title:	 	 	 		 	Title:	 	Financial and Fleet Planning Director	
Director Signed at:                                                                             	 		 	Signed at:                                                                                         	
-Signature Page-
-Aircraft Lease Agreement [C]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
*****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is:
 
(a)	required by applicable law or regulation; or	
 
(b)	is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement; or	
 
(c)	is either an upgrade of the Detail Specification to Issue 8 or is made due to the evolution on the specifications prior to Delivery.	

EXHIBIT A

Concesìon arìa Vuela Compañìa de Aviación, S.A.P.I. de C.V. Ref. 20120950-08
SCHEDULE E
Volaris A320-300 Specifications

Engines:	  	*****	
Maximum Take-Off Weight (tones):	  	*****	
Maximum Zero Fuel Weight (tones):	  	*****	
Configuration:	  	174 or 177 or 179 seats as selected by Lessee, provided there is no change to current Galley and Toilet configuration.	
A320-200 Standard Specification Issue 7 – dated 1 st March 07 – Reference D 000 02000 with Sharklets Installed.
A320-200 SCN LIST:
A320-200 Standard Specification Ref issue 7

A320 RFC	  	Title	
	  	*****	
	  	*****	
ATA 02 Certification	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 03 Weights	
*****	  	*****	
*****	  	*****	
ATA 03 Placards and markings	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
Air Conditioning	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 22 Auto Flight	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 23 Communications	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 23 Communications	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 29 Hydraulic Power	
*****	  	*****	
*****	  	*****	
ATA 31 Indicating/Recording	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 32 Landing Gear	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 33 Lights	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 34 Navigation	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 35 Oxygen	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 38 Water/Waste	
*****	  	*****	
ATA 46 ATSU	
*****	  	*****	
*****	  	*****	
ATA 47 Inerting Gas System	
*****	  	*****	
*****	  	*****	
ATA 49 APU	
*****	  	*****	
ATA 51 Structure	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 52 Doors	
*****	  	*****	
ATA 55 Stabilizer	
*****	  	*****	
ATA 56 Windows	
*****	  	*****	
*****	  	*****	
*****	  	*****	
ATA 57 Wings	
*****	  	*****	
ATA 71 Power Plant - General	
*****	  	*****	
ATA 72 Engines	
*****	  	*****	

Concesìon arìa Vuela Compañìa de Aviación, S.A.P.I. de C.V. Ref. 20120950-08

Concesìon arìa Vuela Compañìa de Aviación, S.A.P.I. de C.V. Ref. 20120950-08

Concesìon arìa Vuela Compañìa de Aviación, S.A.P.I. de C.V. Ref. 20120950-08

					
			
	  	Concesìon arìa Vuela Compañìa de Aviacíon, S.A.P.I. de C.V.	  	Ref. 20120950-08	

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
	  	Introduction of A320-200 Standard Specification at Issue 6	  	X	  		
	  	Introduction of A320-200 Standard Specification at Issue 7	  	X	  		
ATA 02	  	Certification	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 03	  	Weights	  		  		
*****	  	*****	  	*****	  		
ATA 03	  	Placards and markings	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
	  	Air conditioning	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 22	  	Auto Flight	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 23	  	Communications	  		  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
 
Page 1 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 25	  	Cabin & cockpit	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 29	  	Hydraulic Power	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
 
Page 2 of 3

							
A320 RFC	  	Title	  	2012
deliveries	  	Comments	
ATA 31	  	Indicating/Recording	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 32	  	Landing gear	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 33	  	Lights	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 34	  	Navigation	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  	*****	
ATA 35	  	Oxygen	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 38	  	Water/Waste	  		  		
*****	  	*****	  	*****	  		
ATA 46	  	ATSU	  		  		
*****	  	*****	  	*****	  	*****	
ATA 47	  	Inerting Gas System	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 49	  	APU	  		  		
*****	  	*****	  	*****	  		
ATA 51	  	Structure	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 52	  	Doors	  		  		
*****	  	*****	  	*****	  		
ATA 55	  	Stabilizers	  		  		
*****	  	*****	  	*****	  		
ATA 56	  	Windows	  		  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
*****	  	*****	  	*****	  		
ATA 57	  	Wings	  		  		
*****	  	*****	  	*****	  		
ATA 71	  	Power Plant – General	  		  		
*****	  	*****	  	*****	  	*****	
ATA 72	  	Engines	  		  		
*****	  	*****	  	*****	  		
 
Page 3 of 3

	

Page 4 of 6

	

-Exhibit A-

	

-Exhibit A-

	

-Exhibit A-

	

-Exhibit A-

	

-Exhibit A-

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	  	The next relevant complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next check interval stipulated in the Manufacturer’s Maintenance Planning Document (previously defined by the Manufacturer as “C” check intervals and, as of the date of this Agreement, ***** Flight Hours, ***** Cycles and ***** Months) in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished.	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than ***** days prior to the Expiry Date which requirements are not further restrictive than those required to operate under FAR part 129.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than ***** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage and empennage paint stripped, and the wings paint sanded prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be *****.	
		
Minimum Engine Cycles:	  	***** Cycles.	
		
Minimum Engine LLP Cycles:	  	***** Cycles.	
		
Minimum Engine Flight Hours:	  	***** Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	***** months.	
		
Minimum Landing Gear Cycles:	  	***** Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than ***** wear.	
 
B-1

			
		
Minimum Component Calendar Life:	  	*****months.	
		
Minimum Component Cycles:	  	***** Cycles.	
		
Minimum Component Flight Hours:	  	***** Flight Hours.	
		
Minimum APU Limit:	  	There shall not be more than ***** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	
 
B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Assumption”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the treatment contemplated by the Subpart F Assumption, Lessee agrees that in each calendar year during the Term the Aircraft will be used for the transportation of passengers or property between airports at least one of which is located outside of the United States and the Aircraft will be used predominantly outside the United States.	
For the purpose of paragraph (a), the Aircraft will be considered to be used predominantly outside the United States if either:
1) the Aircraft will be located outside the United States more than ***** per cent of the time; or
2) more than ***** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.
For the purpose of paragraph (a), references to the United States include the Commonwealth of Puerto Rico and the possessions of the United States (American Samoa, The Commonwealth of the Northern Mariana Islands, Guam, and The U. S. Virgin Islands) and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the Airframe, that Lessor may reasonably request to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for achieving the treatment contemplated by the Subpart F Assumption.
 
(b)	Remedies: If Lessee breaches any of the covenants contained in paragraph (a), Lessor or the relevant Tax Indemnitee shall be entitled to receive as an indemnity, subject to Section 5.10 of the Common Terms Agreement, the amount of U. S. income tax that would not have been incurred but for the loss of the tax treatment contemplated by the Subpart F Assumption relating in whole, or in part, to such breach plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee. Any such indemnity payments will be due within ***** days after Lessee’s receipt of a written notice from Lessor describing in reasonable detail the circumstances of such loss, the amount of such loss, and the payment due.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

	
Guarantee	
		
Guarantee required:	  	*****	
		
Guarantor:	  	*****	
	
Payments	
		
Rent:	  	Rent shall be payable monthly in advance in an amount calculated pursuant to the formula below:
 
*****
On the Quotation Date (as defined below), GECAS shall provide either:
*****
***** shall request each dealer for quotes on ****
 
For purposes hereof, the term “ Quotation Date ” means the date ***** prior to the delivery date of each aircraft.	
		
Supplemental Rent Applies:	  	*****	
		
Supplemental Rent Redelivery Adjustment Payments Applies:	  	*****	
		
Lessor Maintenance Contribution Obligation Applies:	  	*****
Provided no Default has occurred and is continuing, Lessor will pay (as a separate and independent obligation and not as a return of Supplemental Rent) the following amounts to Lessee by way of *****
 
*****
 
*****
 
*****
 
*****
 
*****
 
*****
 
(E) In respect of any amounts which, but for the continuance of an Event of Default, would have been paid to or for the benefit of Lessee pursuant to paragraphs*****
 
All invoices submitted for a Lessor contribution must *****
 
Lessor accepts that Lessee may not be able to *****	

Assumed Ratio
Adjustment Table:                    	  	Applicable Assumed Ratio Adjustment Table for each Engine prior to the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	 	*****    	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
		
	  	Applicable Assumed Ratio Adjustment Table for each Engine following the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle
Ratio:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
										
	  	Engine
Supplemental
Rent Rate:	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	

Engine Supplemental Rent Rate:	  	In lieu of Lessee making full cash Engine Supplemental Rent payments on a monthly basis, Lessee shall
 
(a)    *****
 
(i)     ***** and
 
(ii)    ***** following the completion of the ***** and
 
(b)    *****	
		
Engine Supplemental Rent Letter of Credit:	  	Lessee shall provide ***** on the ***** with irrevocable, standby Letters of Credit which shall secure Lessee’s *****
 
Lessee agrees that it shall provide a such Supplemental Rent Letter of *****
 
*****
 
*****
 
*****
 
Following redelivery of the Aircraft in accordance with the Lease, *****	
		
Engine
Refurbishment:	  	For the purposes of this Aircraft Lease Agreement, Lessor and Lessee
agree that:
 
(a)     Engine Refurbishment shall mean, with respect to any Engine, an engine shop visit at which a *****
 
(b)     Engine Manufacturer Maintenance Management Plan shall mean the recommended maintenance program for an Engine issued by the Engine Manufacturer as in effect at the time of any applicable determination; and
 
(c)    Engine Supplemental Rent payments made by Lessee and any payment by Lessor by way of *****
 
LPC: *****
FAN: *****
HPC: *****
HPT: *****
LPT: *****	
		
Engine LLP
Supplemental Rent
Rate:	  	*****	
 
D-1

			
		
Airframe 6 Year Structural Check Supplemental Rent Rate:	  	***** for each calendar *****	
		
Airframe 12 Year Structural Check Supplemental Rent Rate:	  		

APU Supplemental Rent
Rate:	  	*****	
		
Landing Gear Supplemental
Rent Rate:	  	***** for each calendar *****	
		
Annual Supplemental Rent
Adjustment:	  	***** The Supplemental Rent Rates shown will be escalated from *****	
		
Deposit:	  	Lessee shall pay a Deposit ***** in an amount equal to the sum of ***** payable at the following times and in the following amounts:
 
a)      ***** and
 
b)      an amount equal to *****
 
Lessee shall have the option to replace all or part of the Deposit *****	
	
Technical	
		
AD Sharing Applies:	  	*****	
		
AD Threshold:	  	*****	
		
AD Factor:	  	*****	
		
AD Compliance Period:	  	*****	
		
Airframe Structural Check	  	*****	
		
PMA Parts	  	PMA Parts may be installed in the Airframe provided always that such parts:
 
(a)    *****
 
(b)    *****
 
Lessor and Lessee agree to continue to discuss, in good faith, whether *****	
		
Airframe 4C/6 Year Check
Supplemental Rent	  	The definition of “Airframe 4C/6 Year Check Supplemental Rent” in the CTA shall be amended and restated in its entirety as follows and all references in the CTA to “Airframe 4C/6 Year Check Supplemental Rent” shall be deemed references to Airframe 6 Year Check Supplemental Rent: *****	
		
Airframe 8C/12 Year Check
Supplemental Rent	  	The definition of “Airframe 8C/12 Year Check Supplemental Rent” in the CTA shall be amended and restated in its entirety as follows and all references in the CTA to “Airframe 8C/12 Year Check Supplemental Rent” shall be deemed references to Airframe 12 Year Check Supplemental Rent: *****	
	
Insurance	
		
Agreed Value:	  	*****	
		
Damage Notification
Threshold:	  	*****	
		
Deductible Amount:	  	*****	
		
Minimum Liability
Coverage:	  	*****	
	
Other	
		
Permitted Sub-Lessees	  	*****	
 
D-2

Exhibit 10.51
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
ENGINE LEASE EXTENSION AND AMENDMENT AGREEMENT
Dated March 27 2013
between
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
(not in its individual capacity except as expressly set
forth herein but solely as owner trustee)
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. as
Lessee
in respect of
Engine Lease Agreement dated 28 June 2007
relating to one (1) IAE V2527M-A5 engine bearing serial number V12671
 
Engine Lease Extension & Amendment Agreement – ESN V12671

THIS ENGINE LEASE EXTENSION & AMENDMENT AGREEMENT (“ Agreement ”) is made on March 27, 2013
BETWEEN:
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (not in its individual capacity except as expressly set forth herein but solely as owner trustee) with its principal place of business at 260 North Charles Lindbergh Drive, MAC: U1240-026, Salt Lake City, UT 84116, United States of America ( “Lessor” ); and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (previously known as Concesionaria Vuela Compañía de Aviación, S.A. de C.V.), a sociedad anónima promotora de inversión de capital variable (previously, a sociedad anónima de capital variable) organized under the laws of Mexico ( “Lessee” ).
WHEREAS:
 
(A)	On the terms and conditions of an Engine Lease Agreement dated 28 June 2007 (as amended, assigned, assumed, modified and supplemented from time to time) (the “ ELA ”), incorporating by reference the terms of an Engine Lease Common Terms Agreement dated as of June 28, 2007 between GE Commercial Aviation Services Limited (now known as GE Capital Aviation Services Limited) and Lessee (the “ Common Terms Agreement ” or “ CTA ”), as amended, modified or supplemented from time to time (collectively, the “ Lease ”), Lessee has on lease from Lessor one (1) IAE V2527M-A5 engine bearing serial number V12671 (the “Engine” )	
 
(B)	Lessor and Lessee wish to enter into this Agreement for the purpose of amending the Lease as provided below and in particular to extend the term of the Lease until 28 February 2018.	
IT IS AGREED as follows:
 
1.	INTERPRETATION	
Definitions : Capitalised terms used but not defined in this Agreement shall mean the same as when used in the Lease. References to a Clause or Schedule, unless otherwise stated, are references to clauses and schedules of this Agreement.
 
2.	REPRESENTATIONS AND WARRANTIES	
Lessor and Lessee now repeat the representations and warranties they made in the Lease, though as if made with reference to the facts and circumstances now existing and the references in such representations and warranties to “this Agreement” shall instead be construed as references to the Lease as hereby amended.
 
3.	LEASE AMENDMENTS	
Subject to satisfaction of the conditions precedent specified in Clause 4 below (or as otherwise indicated below):
 
 	(a)	Lease extension : The period for which the Engine is leased to Lessee pursuant to the Lease is extended from 28 February 2013 to 28 February 2018. Accordingly, the definition of “Scheduled Expiry Date” in Section 1.1 of the ELA shall be amended and restated as “ Scheduled Expiry Date means 28 February 2018”.	
 
 	(b)	Rent : Effective from 01 March 2013 (the “ Extension Date ”) until the expiration of the Term, Part III of Schedule B of the ELA shall be amended and restated in its entirety to read as follows:	
“The Rent payable in respect of each Rental Period during the Term shall be *****, payable in advance on each Rent Date.”
 
Engine Lease Extension & Amendment Agreement – ESN V12671
 
1

 	(c)	Agreed Value : Effective from 01 March 2013 (the “ Extension Date ”) until the expiration of the Term, the definition of Agreed Value in Part I of Schedule B of the ELA shall be amended and restated in its entirety to read as follows:	
“Agreed Value *****, it being agreed, however, that, notwithstanding the foregoing, the Agreed Value shall be decreased by ***** on and with effect from each anniversary of the Delivery Date during the Term.”
 
 	(d)	Supplemental Rent Definitions : The Lease shall be further amended as follows:	
 
 	(i)	The definition of Assumed Ratio in Part V of Schedule B of the ELA shall be amended and restated to read as follows:	
“Assumed Ratio means a ***** ratio (*****).”
 
 	(ii)	The definition of Assumed Ratio Adjustment in Part V of Schedule B of the ELA shall be amended and restated to read as follows:	
“Assumed Ratio Adjustment : For the purposes of Section 5.4 (Supplemental Rent) of the CTA, any adjustment from the Assumed Ratio shall be based upon the following table:

Ratio	  	*****	 	  	*****	 	  	*****	 	  	*****	 	  	*****	 	  	*****	 	  	*****	 	
Engine Supplemental Rent Rate	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	  	 	*****	  	
 
 	(iii)	The definition of Engine LLP Supplemental Rent in Part V of Schedule B of the ELA shall be amended and restated to read as follows:	
Engine LLP Supplemental Rent means in respect of the LLP for each Engine ***** for each Engine Cycle operated by that Engine during that calendar month or any part of such calendar month during the Term.
 
 	(iv)	The definition of Engine Supplemental Rent Rate in Part V of Schedule B of the ELA shall be amended and restated to read as follows:	
“Engine Supplemental Rent Rate : means in respect of the Engine, ***** for each Engine Flight Hour (or fraction thereof) operated by that Engine, regardless of whether the Engine is operated at a thrust rating of ***** or ***** during the Term.”
 
4.	CONDITIONS PRECEDENT	
 
4.1	Lessee shall provide the following, which are conditions precedent to Lessor’s obligations under this Agreement, in form and substance satisfactory to Lessor within 30 days from the date hereof (or as otherwise indicated below).	
 
 	(a)	Corporate Documents : a copy of the resolutions of the shareholders of Lessee approving the terms of, and transactions contemplated by, this Agreement, resolving that it enter into this Agreement, and authorising a specified person or persons to execute this Agreement;	
 
Engine Lease Extension & Amendment Agreement – ESN V12671
 
2

 	(b)	Approvals : evidence of the issue of each filing, approval, license and consent which may be required by applicable Law in relation to, or in connection with the performance by Lessee of any of its respective obligations under this Agreement and the transactions contemplated by this Agreement;	
 
 	(c)	Insurances : certificates of insurance, an undertaking from Lessee’s insurance broker and other evidence satisfactory to Lessor of Lessee’s due compliance with the provisions of the Lease (as amended hereby) regarding Insurances;	
 
 	(d)	Process Agent Letter : Receipt by Lessor of evidence that the process agent appointment is extended to the new Schedule Expiry Date, i.e. 28 February 2018 or a new process agent has been appointed until that date;	
 
 	(e)	Filings : evidence of a filing and registration of this Agreement with the Air Authority and the International Registry; and	
 
 	(f)	Legal Opinion : a legal opinion from Lessee’s counsel acceptable to Lessor confirming that Lessee has received all required corporate approvals for this Agreement and that the person executing and delivering this Agreement on behalf of Lessee has the requisite corporate authority to do so and further confirming that this Lease and Lessee’s obligations thereunder are enforceable in accordance with their terms.	
Lessor’s obligations under this Agreement shall only take effect when Lessor notifies Lessee in writing ( “Lessor Notice” ) that Lessor is satisfied that the above conditions have been fulfilled.
 
4.2	Further Conditions Precedent : Lessor’s obligations under this Agreement are also subject to the conditions precedent that as of the date of the Lessor Notice: (a) the representations and warranties of Lessee (both under Clause 2 of this Agreement and under the Lease) shall be true and correct and (b) no Default shall have occurred and be continuing or might result from the leasing of the Engine to Lessee.	
 
4.3	Waiver : The conditions specified in this Clause 4 are for the sole benefit of Lessor and may be waived or deferred (in whole or in part and with or without conditions) by Lessor.	
 
5.	MISCELLANEOUS	
 
5.1	Further Assurances : Lessee agrees from time to time to do and perform such other and further acts and execute and deliver any and all such other instruments as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and to carry out and effect the intent and purpose of this Agreement.	
 
5.2	Counterparts : This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by fax or email will be deemed as effective as delivery of an originally executed version. Any party delivering an executed version of this Agreement by fax or email shall also deliver an originally executed counterpart but the failure to do so will not affect the validity or effectiveness of this Agreement.	
 
Engine Lease Extension & Amendment Agreement – ESN V12671
 
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5.3	Governing Law and Jurisdiction : This Agreement and all non contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with the Governing Law, and the provisions of Sections 15.8 (Governing Law; Jurisdiction; WAIVER OF JURY TRIAL) of the CTA shall apply to this Agreement as if set out in full.	
 
5.4	Variation : The provisions of this Agreement shall not be varied otherwise than by an instrument in writing executed by or on behalf of Lessor and Lessee.	
 
5.5	Invalidity of any Provision : If any provision of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.	
 
5.6	Costs and Expenses : Each party shall bear its own fees, costs and expenses in connection with the preparation, negotiation and completion of this Agreement and performance of the transactions contemplated hereby.	
 
6.	CONTINUATION OF LEASE	
Save as expressly amended by this Agreement, the Lease shall continue in full and unvaried force and effect as the legal, valid and binding rights and obligations of each of Lessor and Lessee enforceable in accordance with their respective terms.
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day and year first above written.
 
Engine Lease Extension & Amendment Agreement – ESN V12671
 
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IN WITNESS WHEREOF, the parties hereto have executed this Engine Lease Extension & Amendment Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Engine Lease Extension & Amendment Agreement.
LESSOR:

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (not in its individual capacity, except as expressly set forth herein,	
but solely as Owner Trustee under the Trust Agreement)	
		
By:	 	/s/ Jessi Saba Mussali	
		
Name:	 	Jessi Saba Mussali	
		
Title:	 	Attorney in Fact	
		
Signed at:	 	 	
LESSEE:

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,	
		
By:	 	/s/ Mario E. Geyne	
		
Name:	 	Mario E. Geyne	
		
Title:	 	Financial and Fleet Planning Director	
		
Signed at:	 	 	

Exhibit 10.52
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
[Translation for information purposes only]
REVOLVING CREDIT LINE AGREEMENT
REVOLVING CREDIT LINE AGREEMENT (THE “ AGREEMENT ”) DATED JULY 27, 2011, ENTERED INTO BY AND BETWEEN DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, DIVISIÓN FIDUCIARIA, ACTING SOLELY AS TRUSTEE OF TRUST NUMBER F/1498, REPRESENTED HEREIN BY CARLOS JÁUREGUI BALTAZAR (HEREINFATER THE “ BORROWER ”); BANCO SANTANDER (MEXICO), S.A., INSTITUCIÓN DE BANCA MÚTLIPLE, GRUPO FINANCIERO SANTANDER, (“ SANTANDER ”, OR THE “ ADMINISTRATIVE AGENT ”) REPRESENTED HEREIN BY MAURICIO REBOLLEDO FERNÁNDEZ AND OSVALDO RANCÉ CACHAFEIRO, AS LENDER AND ADMINISTRATIVE AGENT AND BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C. (“ BANCOMEXT ”), REPRESENTED HEREIN BY EDUARDO MUÑIZ JUÁREZ AND RICARDO RAMOS SAN MARTÍN, AS LENDER (HEREINAFTER SANTANDER AND BANCOMEXT MAY BE REFFERRED TO COLLECTIVELY AS THE “ BANKS ”, OR INDIVIDUALLY AS, APPLICABLE, THE “ BANK ”); AND CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., REPRESENTED HEREIN BY FERNANDO SUÁREZ GERARD (HEREINAFTER REFERRED TO AS “ CONTROLADORA ”) AND CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., REPRESENTED HEREIN BY FERNANDO SUÁREZ GERARD (HEREINAFTER “ CONCESIONARIA ”, HEREINAFTER, CONTROLADORA AND CONCESIONARIA, MAY BE REFERRED TO, INDIVIDUALLY, EACH A “ JOINT OBLIGOR ”, AND JOINTLY THE “ JOINT OBLIGORS ”), PURSUANT TO THE FOLLOWING RECITALS, REPRESENTATIONS, DEFINITIONS AND CLAUSES:
RECITALS
I. On October 28, 2005, Controladora, as the original purchaser (the “ Original Purchaser ” named the original purchaser in the Original Purchase Agreement), and Airbus S.A.S. (“ Airbus ”) as seller (the “ Seller ”, named seller , in the Original Purchase Agreement) entered into an aircraft purchase agreement (named Purchase Agreement “ Original Purchase Agreement ”), pursuant to which, in accordance with the terms and conditions set forth therein, Airbus agreed to sell and Controladora agreed to purchase and receive, among others, seven (7) Airbus aircraft, model A320 identified with rank numbers from 24 (twenty four) to 30 (thirty), along with its engines, manuals and technical documents related to each of them (the “ Financed Aircraft ”, named as the Financed Aircraft in the Step-In Agreement referred in recital VI of this Agreement), as described with more detail in the Original Purchase Agreement which, together with other aircraft, were the object of the Original Purchase Agreement.
II. On July 27, 2011, Controladora as trustor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as the trustee, entered into an irrevocable trust agreement identified with number F/1497, (the “ Trust PDP Santander/Bancomext 1 ”), for the purpose stated in such document.

III. On July 27, 2011, once the Trust PDP Santander/Bancomext 1 has been executed, Controladora, the trustee of the Trust PDP Santander/Bancomext 1, as the immediate purchaser, and Airbus, entered into an Aircraft Purchase Agreement Novation with respect to the Financed Aircraft (defined in the Step-In Agreement as the “ First PA Novation ”) in order to partially novate and amend the terms of such Original Purchase Agreement (defined in the Step-In Agreement as the First Novated Purchase Agreement) (hereinafter, as may be amended, supplemented or novated from time to time, the “ First Novated Purchase Agreement ”). Pursuant to the terms and subject to the conditions set forth in the First Novated Purchase Agreement, Airbus agreed to sell and the Trustee of the Trust PDP Santander/Bancomext 1 agreed to purchase and to receive the Financed Aircraft, pursuant to the First Novated Purchase Agreement, which would become part of the Trust PDP Santander/Bancomext 1 assets in trust.
IV. On July 27, 2011, in accordance with the instructions and powers granted in favor of the Trustee of the Trust PDP Santander/Bancomext 1, such Trustee, as Trustor and acting exclusively as trustee under said Trust PDP Santander/Bancomext 1, entered into, with Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as trustee, the irrevocable Administration trust number F/1498 (the “ Trust PDP Santander/Bancomext 2 ), for the purpose set forth therein.
V. On July 27, 2011, in accordance with the instructions and powers granted in favor of the trustee of the Trust PDP Santander/Bancomext 1 and of the trustee of the Trust PDP Santander/Bancomext 2, them and Airbus, entered into an Aircraft Purchase Agreement Novation with respect to the Financed Aircraft (defined on the Step-In Agreement as the Second PA Novation) (the “ Second PA Novation ”), to partially novate and amend the terms of such First Novated Purchase Agreement (defined in the Step-In Agreement as Second Novated Purchase Agreement (hereinafter, as may be amended, supplemented or novated from time to time, the “ Second Novated Purchase Agreement ” and together with the Purchase Agreement and the First Novation, the “ Novated Purchase Agreement ”), as well as to assign all rights and obligations part of the assets in trust of the Trust PDP Santander/Bancomext 1 estate in favor of the assets in trust of the Trusr PDP Santander/Bancomext 2, for the purposes set forth in the applicable agreement and in order to set forth the terms and conditions under which Airbus agreed to sell and the Trustee of the Trust PDP Santander/Bancomext 2 agreed to acquire and receive the Financed Aircraft in accordance with the Second Novated Purchase Agreement, in order to become a part of the assets in trust of the Trust PDP Santander/Bancomext 2.
VI. On July 27, 2011, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting as trustee of the Trust PDP Santander/Bancomext 2, Santander, as the Administrative Agent, Airbus and Controladora, entered into a Step-In Agreement (the “ Step-In Agreement ”), in order to, in certain cases, grant and acknowledge certain rights in favor of the Banks pursuant to the Second Novated Purchase Agreement.
 
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VII. By virtue of the execution of Trust PDP Santander/Bancomext 2, in accordance with the instructions and powers granted in favor of its Trustee, as well as in accordance with the purpose set forth therein, the Fiduciary of the Trust PDP Santander/Bancomext 2 is empowered to enter into this Agreement in order for the Trust PDP Santander/Bancomext 2 obtains financing in the terms and subject to the conditions set forth in this Agreement.
REPRESENTATIONS
I. Santander represents, through its representatives, that:
a. It is a corporation duly organized in accordance with the laws of Mexico, authorized by the Ministry of Finance and Public Credit ( Secretaría de Hacienda y Crédito Público ) to act as a Multiple Lendering Institution.
b. Its legal representatives have sufficient power and authority necessary to execute this Agreement, which has not been revoked or limited in any manner whatsoever, evidencing such authority as well as the authority of its represented by means of the documents that are hereby transcribed on the Section of Personality of this Agreement.
II. Bancomext represents, through its representatives, that:
a. It is a national corporation duly organized in accordance with the Organic Law of the External Commerce National Bank ( Ley Orgánica del Banco Nacional de Comercio Exterior ), published in the official gazette on January 20, 1986 .
b. Its legal representatives have sufficient power and authority to execute this Agreement, which has not been revoked or limited in any manner whatsoever, evidencing such authority as well as the authority of the Lender by means of the documents that are hereby transcribed on the Section of Personality of this Agreement.
III. The Borrower represents, through its representatives, that:
a. It is a trust duly created and validly existing in accordance with the laws of Mexico.
b. Its trustee officer has sufficient power and authority to execute this Agreement, which have not been revoked, limited or modified whatsoever.
c. On July 27, 2011, in accordance with the instructions given and powers granted in favor of the trustee of the Trust PDP Santander/Bancomext 1, it executed with the Trustee of the Trust PDP Santander/Bancomext 2, as trustee, the Trust PDP Santander/Bancomext 2.
d. Pursuant to the above, this Agreement is entered into by the Trustee not in its individual capacity but solely as Trustee of the Trust PDP Santander/Bancomext 2, in
 
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accordance with its terms, in compliance with the purposes thereof and in exercise of the powers and authority that were granted as Trustee. The representations and commitments in accordance with this Agreement should not be construed as representations and commitments made individually by the Trustee, nor do they have the purpose or the intention to bind the Trustee personally, but they are made and intended to bind only the assets in trust of the Trust PDP Santander/Bancomext 2.
e. By affecting in trust to the Trust PDP Santander/Bancomext 2 mentioned in the paragraph above, the Trustee of the Trust PDP Santander/Bancomext 1 acting as Trustor will transfer to the assets in said Trust PDP Santander/Bancomext 2, among other things, the property following rights and assets: ( i ) all the rights and obligations under the Original Purchase Agreement on the Financed Aircraft, as may have been amended pursuant to the First Novation and Second Novation; (ii)  the property to the Financed Aircraft, once such aircraft have been delivered by Airbus pursuant to the provisions set forth in the Second Novated Purchase Agreement; (iii)  the exclusive property to the interest reserve account as provided herein; (iv)  the property upon any net resources received by the Trust PDP Santander/Bancomext 2 estate, whether they are distributions, capital contributions, proceeds obtained from financing or from investments of liquid assets forming part of the assets in trust in the Trust PDP Santander/Bancomext 2; (v)  the product or products substituting any of the assets in trust in the Trust PDP Santander/Bancomext 2; and (vi)  any other rights or assets forming part of the assets in trust in the Trust PDP Santander/Bancomext 2 (the “ Assets in Trust PDP Santander/Bancomext 2 ”), representing herein, that on the date of execution of this Agreement, said Assets in Trust PDP Santander/Bancomext 2 have not been modified in any way, as well as that the Agreements assigned as part of such assets in trust are in full force and effect.
f. The obligations in accordance with the Operative Documents are legal, valid, binding and enforceable.
g. The execution and fulfillment of the operations referenced in this Agreement or in the Operative Documents of which it is a part of, are not and will not be in any conflict with (i) any applicable law or regulation, (ii) the Trust PDP Santander/Bancomext 2 or (iii) any agreement or instrument to which the Borrower or its assets is subject to.
h. It doesn’t require any authorization or that may be advisable to obtain in order to fulfill its obligations under this Agreement and in accordance with any of the Operative Documents of which it is a part of.
i. It is not required to carry out any process to formalize the agreement of the parties in accordance with this agreement and in accordance with the Operative Documents to which it is or will be a part of n such date and none of the documents requires registry in any court or government office in Mexico nor is it required to pay any tax under any of the Operative Documents of which it is or will be a part of, in order to formalize them and perfect the rights and obligations of the parties under them, as well to be enforceable among the executing parties.
 
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k. It has carried out the on time payment of all taxes of the Borrower and/or its assets and there is no tax pending to be paid by it; it has carried out the presentation of its tax returns and there is no delay in them.
l. In addition to the operations and documents set forth in this Agreement, it has not entered into any operation or business or carried out any activity except for those expressly allowed by this Agreement, and has not entered into any agreement that is not a part of the Operative Documents.
m. The execution of and fulfillment of the obligations under the Operative Documents will not result or reasonably be expected to result in an Event of Default under this Agreement.
n. Its obligations in accordance with the Operative Documents of which it is or will be a part of, are and have the same preference in payment ( pari passu ) with respect to the rest of its non-guaranteed non-subordinated obligations acquired with third parties, except by those set forth in applicable law.
o. There is no and to its knowledge no litigation, arbitration or proceeding has initiated before any tribunal or court against the Borrower.
p. It has no right to claim in its favor or in favor of its assets, any immunity of jurisdiction right, execution, embargo, enforceability or other legal process with respect to nay procedure carried out in accordance with this Agreement or the Operative Documents.
IV. Each of the Joint Obligors represents, through its representative, that:
a. It is a corporation ( sociedad anónima promotora de inversion de capital variable ) duly organized and validly existing in accordance with the laws of Mexico.
b. Its representative has the power and authority to execute this Agreement in accordance with the special powers granted to them for such effects, which have not been revoked, modified or limited in any manner whatsoever.
c. The execution and fulfillment of this Agreement is authorized under its charter and the execution and compliance with the obligations set forth herein have been duly authorized by all relevant corporate bodies, and do not violate: (i) its current corporate bylaws or (ii) any law, regulation or executive order binding for Controladora or Concesionaria or (iii) any agreement, amendment or instrument binding Controladora or Concesionaria or its assets.
 
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d. It doesn’t require authorization or registration from or before any governmental authority or governing body to execute, deliver, and fulfill, by Controladora and Concesionaria, with this Agreement.
e. This Agreement and the Trust PDP Santander/Bancomext 1 constitute valid, enforceable, and binding obligations of Controladora and Concesionaria, respectively, enforceable against them in accordance with its terms.
f. There is no pending, or to the best of Controladora and Concesionaria’s knowledge, there is no proceeding before any court, whether judicial, administrative or arbitral, including, without limitation, in environmental, fiscal or labor law that may result in a Material Adverse Change pr affect the fulfillment of its obligations under this Agreement.
g. On October 28, 2005, Controladora entered into the Original Purchase Agreement.
h. On July 27, 2011, Controladora, acting as the trustor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting as trustee, entered into the Trust PDP Santander/Bancomext 1.
i. They have requested Santander and Bancomext to establish and grant in favor of the Borrower a revolving line of credit of up to a principal amount that will not exceed the amount set forth in the First clause, which shall be made available to the Borrower in different disbursements during the Availability Period, regarding each Aircraft, as set forth in Annex I of this Agreement.
j. No Event of Default has occurred, nor has any condition on on or before the date of this Agreement, or on the date of execution of the Trust PDP Santander/Bancomext 1 that has or could have a Material Adverse Change on its business, assets, liabilities, or financial situation or of any other nature of Controladora and/or Concesionaria, that could affect the results of its operations, business or projects of Controladora and/or Concesionaria or that may restrict or impede Controladora and Concesionaria to fulfill its obligations under this Agreement and the Trust PDP Santander/Bancomext 1, as applicable.
k. There has not occurred an Event of Default or any condition of any party under the Original Purchase Agreement, the First Novation or the Step-In Agreement that may affect the Financed Aircraft, nor has there been any amendment to the First Novation that may result in a Material Adverse Change under this Agreement.
l. It acknowledges and accepts the following: (i) the accuracy and authenticity of the representations under the Trust PDP Santander/Bancomext 1; (ii) the validity and enforceability of this Agreement, the Original Purchase Agreement and the Trust PDP Santander/Bancomext 1 as well as the obligations of Controladora and Concesionaria, as applicable, thereunder (iii) the validity, legal effect and enforceability of the Step-In
 
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Agreement and the First Novation, as well as the novation under such agreement of the rights and obligations of the Original Purchase Agreement, and recognizes it didn’t reserve any enforceable rights that may modify the terms under such agreements, (iv) that the Step-in Agreement and the Original Purchase Agreement contain substantially the same terms, conditions and obligations with respect to the Financed Aircraft (including without limitation, with respect to: the terms and conditions related to the delivery of the Financed Aircraft, delivery dates, price of the Financed Aircraft, escalation formulas and additional costs, technical specifications, covenants, penalties, etc.) and (v) there are no obligations of the Borrower pursuant to the First Novation or the Second Novation that have a consequence that the Borrower must fulfill with obligations covenants substantially more burdensome than those set forth in the Original Purchase Agreement.
m. This Agreement and Operative Documents entered into in connection thereof, once executed, shall constitute legal and valid obligations of the Joint Obligor, enforceable against the Borrower and each Joint Obligor in accordance with its terms subject to the laws of Mexico regarding concursos mercantiles , bankruptcy or that may limit the rights creditors in general.
n. All of its tax returns (regarding any period) of each Joint Obligor and those of its subsidiaries (as such term is defined herein) that in accordance with the applicable legislation ought to and have been filed, and all taxes, rights, and other contributions in connection with their incomes, sales or assets of which the Joint Obligors and any of their subsidiaries should be aware of or should be withheld have been withheld, except for those that have been contested in good faith and are pending resolution by a competent authority.
o. It is in compliance with all laws, regulations, statutes, orders, decrees and other precepts applicable, as well as all restrictions applicable, imposed by any governmental authority, except for those which fulfillment is not, or may not reasonably be expected to, individually or jointly, have a Material Adverse Change (as defined herein) in its business, rights, assets or financial situation, or that in any other form may affect the validity and enforceability of this Agreement.
p. Its consolidated financial statements, where applicable, and audited to December 31, 2010 and its consolidated financial statements, where applicable, interim to March 31, 2011, copy of which have been delivered to the Banks, reflect correctly, sufficiently and reasonably its consolidated financial situation to such dates, and they have been prepared in accordance with the accounting principles applicable to them, applied constantly, and to the date of this Agreement, there has not occurred a Material Adverse Effect in the financial situation, operations, projects of each Joint Obligor regarding the financial situation reflected in such financial statements.
q. It is Solvent.
r. Its payment obligations under this Agreement constitute direct and unconditional obligations and except for the specified guarantees granted herein, they have and will
 
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have at least the same legal treatment and rights ( pari passu) with respect to all other unsecured, unsubordinated debt present or future (except for preferred payment obligations in accordance with applicable law).
s. On the date hereof, neither the Joint Obligors or its subsidiaries, if any, is in default with respect to any debt, or any agreement whatsoever to which they are a party to or that obligates them, and that such default results or may be reasonably expected to result in a Material Adverse Change upon each Joint Obligor or its subsidiaries, if any.
t. The Joint Obligors and each of its subsidiaries (i) has good title to all property material to its business, (ii) has all necessary federal or local licenses, certificates, and authorizations in order to run business and to undertake any action in connection with its property as they are now being operated, and (iii) has insurance from reputable insurance companies, up to the amounts and with risk coverage for each Joint Obligor and in accordance with the industry business for similar companies with similar assets in same or similar business areas in which each of the Joint Obligors or its subsidiaries operate.
u. Both the Joint Obligors and any subsidiaries that have employees, have entered into collective bargaining agreements, which are in full force and have been fully complied with, and to this date and to the best of its knowledge there are no collective labor claims, to date, that threaten either of Joint Obligors or any of its subsidiaries.
v. Both the Joint Obligors and its subsidiaries, are in compliance with social security, worker housing, and retirement regulations, and similar provisions, and none of them have debts with any governmental authority whatsoever or with their workers in such matters, except for those that have been contested in good faith and that are pending resolution from the competent authorities.
w. All outstanding capital stock shares have been validly issued and fully paid, and there are no rights over such shares in favor of any person other than the shareholders.
x. Except for the loan agreements entered into International Finance Corporation , Banco Inbursa, S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa and Pasprot, S.A. de C.V., there is no agreement in which the Joint Obligors or any of its subsidiaries are a party to, that directly or indirectly limits or restricts, or that imposes any condition regarding, the returns, dividend payments, or other contributions in connection with any class of shares of any subsidiary of either of the Joint Obligors, or the granting if loans, disposing of or transferring any property of any subsidiary.
y. Both the Joint Obligors and any of its subsidiaries are in full possession of all necessary licenses, franchises, patents, copyrights, and brands, or any other necessary rights, in order to operate their business as to date and s it intends to operate it and does not violate any rights of others in connection with any of such matters.
z. It intends to execute this Agreement in order to be bound with Santander and Bancomext in the fulfillment of all the payment obligations of the Borrower pursuant to
 
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it. Therefore, it is their intention to act as joint obligors with respect of such payment obligations, as well as to execute as a joint guarantor of applicable promissory notes under this Agreement.
aa. The process agents to receive notices that they are obligated to appoint confirm the Operation Documents have been appointed and have accepted their appointment to this date.
DEFINITIONS
The terms used in this Agreement that have initial capital letter, whether they are or not in quotation marks, including those contained in the representations or any other part of this Agreement, as well as those detailed herein, shall have the following meanings, which may be equally applicable in plural or singular.
“Borrower” means Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively as Trustee in the Trust Number F/1498.
“Notice of Change of Specifications” has the meaning set forth in the Step-In Agreement.
“Banks”, mean Banco Santander (México), Sociedad Anónima, Institución de Banca Múltiple, Grupo Financiero Santander and Banco Nacional de Comercio Exterior, Sociedad Nacional de Crédito, as well as their respective successors and assigns, as parties to this Agreement and “Bank” shall mean each of Santander and Bancomext, as well as their respective succesors and assigns, as applicable.
“Material Advserse Change” means a change of any nature that significantly and adversely affects the financial or operational condition, the results, prospects, businesses and assets, as well as the fact that the Agreement, the Trust Agreement, and/or any document related directly or indirectly with the Agreement turns out to be illegal, null or not enforceable, and as a result the Borrower and/or Joint Obligors are not able to fulfill its obligations under this Agreement or any other document related directly or indirectly to this Agreement.
“Netting Letter”, means the document named Netting Letter that Airbus, the Borrower and Controladora will execute.
“BFE Agreements” means, with respect to each and all of the Financed Aircrafts, the agreements related to equipment installed in the Financed Aircrafts and delivered to the Buyer by Airbus (named “ Buyer Furnished Equipments ” o “BFE”), including the guarantees obtained by the Borrower and the Joint Obligors relating to them.
“SSBFE Agreement” means the agreements named Seller-Supplied Buyer Furnished Equipment with respect to the Financed Aircrafts.
 
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“Structuring Commission” has the meaning set forth in the third paragraph of the First clause of this Agreement.
“IAE Engine Support Letter Agreement” means the document named Engine Support Letter Agreement entered into by IAE International Aero Engines AG, Controladora, Concesionaria and the Administrative Agent regarding the engines installed in each of the Financed Aircrafts.
“Loan Agreement” or “Agreement” means this revolving credit line agreement.
“Checking Account” means the deposit and account administration agreement ser forth in Annex 4 herein and that the Borrower has with the Bank in which the amount of the disbursements of the Loan will be deposited.
“Business Day” means any day in which the Mexican banking institutions are not authorized to close.
“Disbursement” means each disbursement of the Loan, made by the Borrower during the Availability Period in accordance with this Agreement.
“Operative Documents” means this Agreement, its Annexes, the Trust PDP Santander/Bancomext 1, the Trust PDP Santander/Bancomext 2, the Step-In Agreement, the First Novation, the Second Novation, the Promissory Notes, the IAE Engine Support Letter Agreement and the Netting Letter that parties enter into related to them.
“Dollars” means dollars, currency valid in the United States of America.
“Evento de Incumplimiento” o “Incumplimiento” significa cualquier evento o circunstancia de las descritas en la Cláusula Décima Novena.
“Airbus Event of Termination” has the meaning set forth in the Step-In Agreement.
“Date of Disbursement” means, with respect to a Disbursement, the date in which such Disbursement is or must be made.
“KYC” means with respect to the Borrower and each of the Joint Obligors, the documents and information requested by the Banks in order to comply with the legal and internal dispositions regarding the “ know your customer ” policies and all other related to avoid money laundering.
“Mexico” means the United Mexican States.
“Interests Period” means the period to determine interests on each disbursement of the Loan, based on which the accrued interests of the unpaid balance of the Loan are calculated, in the understanding that the initial “Interests Period” shall begin on the date in which the Loan disbursement is made and will en don the day that numerically
 
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corresponds to such date on the third following month and each following “Interests Period” shall begin on the next day of the last day of the “Interests Period” that has lapsed and will end on the one numerically corresponding to such day of the following third month.
“Maximum Term of Disbursement” means December 31, 2013.
“Disbursement Request” means the document with which the Borrower requests the Banks to make a Loan Disbursement in terms substantially equal to the document hereby attached as Annex “2” and that is delivered to the Administrative Agent in the domicile set forth in this Agreement.
“Solvent” means with respect to each Joint Obligor, at any time, that each Joint Obligors not within the causes to be declared in concurso menrcantil in accordance with the terms of articles 9, 10 and 11 if the Ley de Concursos Mercantiles (or any legal disposition that substitutes it).
“Ordinary Interest Rate” means oa rate equivalent to the LIBOR Rate plus the sum of 265 (two hundred and sixty five) base points to be calculated at the beginning of each Interests Period.
“LIBOR Rate” means, with respect to each Interests Period, the rateo r arithmetic average of the interests rates for United States Dollars (rounded up to the next eighteenth of percent point) listed in the Libor Page (as such term is defined herein) in the date of the beginning of Interests Period as corresponding to the maturity of 3 (three) months at 11:00 A.M., hour of London, England, the Libor Day prior to the commencement of the applicable (as “Libor Day” is defined herein). For the effects of this definition, (i) “Libor Page” means the 3750 screen of the Dow Jones Telerate Service named “British Banker Association Interest Settlement Rates”, or the screen that substitutes it on such Service, and (ii) “Libor Day” means a day in which at least one interest rate for United States Dollars is listed in the Libor Page. The parties agree that the Interest Rate may be modified each Interests Period in accordance with the variations of the LIBOR Rate. The Borrower accepts all adjustments based on the terms set forth herein that may result without the need to amend this Agreement.
“Alternate Dollars Rate” means the Prime rate published in The Wall Street Journal precisely on the date in which the determination of such rate is made. If for any reason, the interest Prime rate is not published for such newspaper on the date set forth herein or in case such newspaper is not published in such date, then “Prime Rate” will be the average of the Prime rates offered by Bank of America, N.A . or Citibank, N.A., precisely on the date in which such interest rate must be determined in accordance with this Agreement. Any modification to the Prime rates in accordance with the above, will be fully enforceable against the parties on the Business Day in which the modification is published.
 
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Based on the foregoing Representations and Definitions, the parties herein agree as follows:
CLAUSES
FIRST.- PURPOSE AND CREDIT AMOUNT.- Pursuant to the provisions herein, Santander and Bancomext shall make available to the Borrower a revolving line of credit (the “ Credit Line ”) that will not exceed a total amount of US$62,714,000 (sixty two million seven hundred fourteen thousand Dollars 00/100), as follows: i) Santander will grant in favor of the Borrower a revolving line of credit up to an amount of US$37,714,000 (thirty seven million seven hundred fourteen thousand Dollars 00/100) (the “ Santander Portion ”), and ii) Bancomext will grant in favor of the Borrower a revolving line of credit up to an amount of US$25,000,000 (twenty five million Dollars 00/100) (the “ Bancomext Portion ”). Within the Credit Line amount shall not be comprised of commissions, interests, and expenses payable to the Borrower under this Agreement.
Any principal amount of the Revolving Credit Line that is repaid may be Disbursed again until the date of conclusion of the Maximum Term of Disbursement: (i) no Default has occurred, (ii) the disbursements are made in accordance with the format found in Annex 1 of this Agreement, and (iii) the conditions set forth in the Fourth clause of this Agreement have been fulfilled.
The Borrower will pay the Banks, upon the initial disbursement made in accordance with the conditions set forth in Annex 1, a Structuring Fee equivalent to the amount that results from calculating a 1.50% (one point fifty percent) of the Credit Line amount (the “ Structuring Fee ”). The Structuring Fee shall be paid with the resources of the first Disbursement in the following manner: (i) Bancomext shall receive a commission equal to the amount that results of calculating a 1.00% (one percent) of the Bancomext Portion, and (ii) Santander shall receive the remainder of the Structuring Fee. The Value Added Tax (V.A.T.) resulting from these payments shall be made by the Borrower and shall be paid to each Bank, as applicable, together with the payment of the corresponding amount of the Structuring Fee.
SECOND.- USE.- The Borrower, is obligated to use the total amount of this Credit to the payment and fulfillment of the obligations assumed by the Borrower in the Second Novation Agreement of the Original Purchase Agreement of the Financed Aircraft, including the repayment set forth in the Netting Letter, being the Borrower obligated to fulfill completely the purposes set forth in such Trust PDP Santander/Bancomext 2 and to the terms of the Step-In Agreement.
THIRD.- CREDIT TERM.- Subject to the terms set forth in the Seventh clause of this Agreement, the Credit Line term shall be 41 (forty one) months, meaning until December 31, 2014, from the execution date of this Agreement and up until the Maximum Term of Disbursement. Notwithstanding the foregoing, and subject to the terms set forth in the Seventh clause of this Agreement, the Banks may exercise the rights set forth in the Eighteenth clause for any disbursement made hereunder.
 
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FOURTH.- CONDITIONS FOR THE CREDIT DISBURSEMENT.- (1)  Initial Disbursement . The Borrower may use the Initial Disbursement, once the following documents have been delivered to the Administrative Agent:
a. Delivery of information . The Borrower and the Joint Obligors shall have delivered, to the satisfaction of the Administrative Agent: (i) copies of documents demonstrating the valid existence and powers granted in favor of their legal representatives; (ii) copies of the financial statements or trust’ estate balance sheet, as applicable, required by the Banks, and (iii) any other information reasonably required by the Banks for their analysis and compliance with internal regulation such as KYC forms.
b. Approval of the Operation . The Joint Obligors shall have delivered, to the satisfaction of the Administrative Agent, copies of the resolutions of their internal government bodies to carry out: (i) the execution of this Agreement, (ii) if applicable the granting of any guarantees as may be required under this Agreement.
c. Legal opinions . The Joint Obligors shall have delivered, to the satisfaction of the Administrative Agent, a legal opinion of its General Counsel directed to the Banks in which the following, among other, is confirmed, in accordance with Mexican Law: (i) the legal existence of the Borrower and the Joint Obligors, (ii) the validity of the powers granted to their legal representatives to enter into this Agreement, and (iii) the valid execution of the Operative Documents in which the Joint Obligors are a party and f the Obligations set forth for each of them in accordance with them.
d. Payment of fees and expenses . The Borrower has paid any and all fees, costs, and expenses that have arisen in accordance with this Agreement and the opening of the Interest Reserve Account or, if applicable, authorize to be settled against it such amounts from the Credit Line amounts to be disbursed by the Borrower.
e. Operative Documents . The Borrower and the Joint Obligors have delivered, in form and content reasonably satisfactory for the banls, each Operative Document, with the exception of the First Novation and the Second Novation, duly entered into by each party in accordance with its terms.
f. Veracity of the Representations; asbsence of Default . That the Borrower and each of each of the Joint Obligors have confirmed, in terms of the format annexed herein as Annex 5, that on the corresponding Date of Disbursement: (i) all representations made by them are true and correct, (ii) there is no Default nor any Default may arise from the corresponding Disbursement, (iii) no Event of Termination pursuant to the Purchase Agreement exists and (iv) the Purchase Agreement, the First Novation and the Second Novation are valid.
 
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g. Promissory Notes . The Borrower and the Joint Obligors have delivered to the Administrative Agent the Promissory notes issued in favor of each of the Banks, in a format substantially similar to the attached hereto as Annex 3, executed by the Borrower, as debtor, and by the Joint Obligors, as guarantors, for the amount of each Disbursement, to be made by each Bank (jointly, the “ Promissory Notes ” and, each a “ Promissory Note ”). The applicable Promissory Note will contain the date of execution, the corresponding Disbursement date and its final expiration shall be the Expiration Date. The parties agree that in case of any discrepancy between the terms of this Agreement and the Promissory Notes, the terms set in this Agreement shall supersede.
Once the foregoing conditions shall be fulfilled, at the Administrative Agents consideration, it is obligated to communicate through electronic means to Bancomext that the conditions have been satisfactorily fulfilled in order to carry out the first Disbursement. Additionally, the Administrative Agent is obligated to send Bancomext the information that proves the fulfillment of the conditions, in a term of no less than 3 (three) Business Days prior to the date of the applicable disbursement.
2. Subsequent Disbursements . In order to carry out the subsequent Disbursements besides the payment of the fees and expenses payable to such date to the Banks pursuant to this Agreement, the Borrower or the Joint Obligors must deliver to the Administrative Agent the following documents and information, and the following assumptions must have been fulfilled:
a) A statement from Airbus that proves the amount and date of payment and pre-delivery set forth in the applicable Disbursement Request and that to such date there has not occurred an Airbus Event of Termination;
b) A certificate in terms of subparagraph f) 1 above.
c) That there is no amendment to the applicable law after the date of execution of this Agreement and no change in the circumstances in which it was entered into and nor is there a situation or condition that, in the reasonable opinion of each of the Banks, has as a consequence that the delivery of the applicable portion of the Credit Line for each Bank may be considered ilegal under applicable law; and
d) That the Borrower and the Joint Obligors have delivered to the Administrative Agent the applicable Promissory Notes corresponding to each Bank regarding each Disbursement.
Once the foregoing conditions shall be fulfilled, at the Administrative Agents consideration, it is obligated to communicate through electronic means to Bancomext that the conditions have been satisfactorily fulfilled in order to carry out the first Disbursement. Additionally, the Administrative Agent is obligated to send Bancomext the information that proves the fulfillment of the conditions, in a term of no less than 3 (three) Business Days prior to the date of the applicable disbursement.
 
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Asimismo, una vez cumplidas las condiciones anteriormente señaladas respecto de la Disposición inicial o las Disposiciones subsecuentes, la Acreditada podrá llevar a cabo una Disposición conforme a lo siguiente:
Additionally, once all of the foregoing conditions have been satisfied with respect to the initial Disbursement or the subsequent Disbursements, the Borrower may make a Disbursement as follows:
(i) The Credit shall be disbursed by the Borrower in accordance with the calendar applicable to each Financed Aircraft set for in Annex 1, in the understanding that: (i) the Banks will not be obligated to make available to the Borrower any amount once the Maximum Term of Disbursement has occurred and in excess of the Maximum Term of Disbursement and it is understood that the Borrower will not be authorized to make any disbursements in a larger number of Disbursements tan those set forth in Annex 1, (ii) the sum of the disbursements delivered to the Borrower will not exceed the amount available in the Credit Line in accordance with this Agreement, and un any case, each of the Disbursements, must be made within 5 (five) days, except for the first Disbursement which may be made within 2 (two) days, as of the fulfillment of each of the conditions and prior delivery to each of the Banks in the domiciles set forth in this Agreement, of a Request of Disbursement.
(ii) The Disbursement of the Credit will be made by the deposit that each of the Banks make of the amount that appears in each Request of Disbursement, in the Account set forth in Annex 4 that the Administrative Agent has for the Borrower. In the statement it will not be necessary to describe the motive or purpose if such deposits.
(iii) The Disbursement made by the Borrower pursuant to this Agreement shall be registered by the accounting records made by the Banks, therefore the parties herein agree that the accounting of the Banks and/or the Checking Account statements referred to in this clause constitute evidence of the Disbursement made by the Borrower, therefore once the Banks have deposited the requested amounts, it shall be understood that the Borrower has made a Disbursement up to the amount deposited or delivered in terms of this Agreements or those settled by the Banks in accordance with the instructions of the Borrower.
(iv) In order to effectuate each Disbursement, the Banks should consider the amount already disbursed to the Borrower as well as the total available amount of Credit at the time, in order to: (i) the revolving line of credit is given only in respect to the amounts that have been paid by the Borrower, and (ii) the Borrower does not disburse of any initial quantities nor has at its disposal a revolving amount that exceeds the total Credit Line or of the limit of Disbursements permitted under this Contract. “Disbursements limit” will mean the total of all amounts that are available under this Contract pursuant to the disbursements described in Annex 1 herein.
 
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FIFTH.- ORDINARY INTERESTS.- The Borrower shall pay the Bank, without prior request, ordinary interests on all outstanding amounts payable, which shall be calculated and payable per “Interests Period” at the Ordinary Interest Rate. The calculation of interest will be performed using the number of calendar days that have elapsed with a base year of three hundred and sixty (360) days. The interests will be calculated and payable quarterly on the last day of each Interest Period; in the understanding that , if such day is not a Business Day, the payment will be made on the Business Day immediately thereafter.
Notwithstanding the foregoing, the Borrower, the Joint Obligors and the Bank agree if the LIBOR Rate cannot be determined for a specific Interests Period, then: (a) the applicable interest rate will be the Alternate Rate in Dollars, or (b) in the event that the Alternate Rate in Dollars cannot be determined, the Banks, Borrower and the Joint Obligors shall negotiate in good faith and agree on the interest rate that will be used for the corresponding Interest Period, and (c) in the case that the parties do not agree on the applicable interest rate for the applicable Interests Period within 10 (ten) Business Days from the Determination Date for the interests, the Bank shall determine (and shall deliver to the Borrower and the Joint Obligors a certificate containing the basis for such determination) the applicable interest rate over such period reflecting the financial costs of the Banks, and such rate shall be applied for the applicable Interest Period.
SIXTH.- DEFAULT INTERESTS.- In the event of default on the payment of any amounts corresponding to the principal amount of the Credit Line, the Borrower shall pay to the Lender default interests over the outstanding capital at an interest rate equal to the result of multiplying the Ordinary Interest Rate, by 1.25 (one point twenty five) times, in the understanding that the default interests will be calculated on a daily basis over the entire default period.
SEVENTH.- AMORTIZATIONS.- The Borrower agrees to repay each of the Banks the amount of credit disbursed in consecutive payments on the dates and amounts set forth for each Financed Aircraft in Annex 1 herein and in each applicable Promissory Note. If on the date of delivery of a Financed Aircraft with which a Disbursement is related is modified, the Borrower will repay the Banks each Disbursement on the date that first occurs any of the following: (i) the effective date of delivery of the Financed Aircraft or (ii) December 31, 2014.
EIGHT.- PREPAYMENTS.- The Borrower is authorized to perform any prepayments on amounts owed or prepay the total amount of the Credit, without penalty or premium, and without requiring authorization from the Banks, as long as the Borrower notifies such prepayment with at least 10 (ten) prior Business Days, in the understanding that any prepayment shall be made for the amount corresponding for each Disbursement or in multiples of such payments as set forth in the Seventh clause of this Agreement. Prepayments may only be made on a date of payment of principal amount in accordance
 
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with the Promissory Note which amount is being paid, and must be for the total outstanding principal amount and interests corresponding to such Promissory Note. The prepayments shall be applied in accordance with the Ninth clause herein.
NINTH.- PAYMENTS IN GENERAL.- The amounts that the Borrower and the Joint Obligors pay to the Banks shall be applied to satisfy payment obligations in the following order:
 
 	(i)	expenses,	
 
 	(ii)	fees,	
 
 	(iii)	commissions,	
 
 	(iv)	default interests,	
 
 	(v)	ordinary interests, and	
 
 	(vi)	capital residuals.	
In the event that the date in which the Borrower must make any payment under this Agreement is not a Business Day, the Borrower shall pay such payment on the next “ Business Day ”, in the understanding that: (a) the relevant extension shall be taken into consideration in order to calculate the correspondent interests; and (b) the days corresponding to such extension shall not be added to the next “Interests Period”.
Interests shall be paid without any deduction and free of any tax, contributions, liability, deductions or withholdings of any nature imposed or charged by any authority.
TENTH.- PLACE OF PAYMENT.- All payments that the Borrower must make to the Banks pursuant to this Agreement, shall be made without requiring a request of payment or collection of any nature, in immediately available funds in the account corresponding to each Bank, as set forth in Annex 4 herein.
In order for the transfer of funds to be made pursuant to this section, the relevant payment shall be considered as completed only if the Borrower delivers to the Banks, no later than 12:00 pm of the maturity payment day, a copy of the deposit slip or a document evidencing the transfer of funds.
ELEVENTH.- AUTHORIZATION FOR SETTLEMENT AGAINST THE CHECKING ACCOUNT OF THE BORROWER.- Notwithstanding the terms of the Ninth clause, the Borrower hereby authorizes Santander to settle against the checking account held by the Borrower with Santander, and without prior requirement or collection, the amounts owed under this Agreement. The Borrower shall maintain a valid account during the term of this Agreement and shall have sufficient funds in such account on the date each payment shall be made. In the event that the account held by the Borrower is cancelled due to the Borrower’s Default of the obligation to maintain sufficient funds in the account or for any other reason, the Borrower agrees to make payments pursuant to the Tenth clause. The parties agree that any and all amounts disbursed by Santander in the mentioned account, will be exclusively to pay the amounts due and payable by the Borrower to Santander under this Agreement.
 
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The provisions aforementioned shall be in full force and effect and shall apply to any other account assigned by the Santander to the Borrower in substitution of the account specified herein. Notwithstanding the foregoing, it is expressly agreed that even if Santander by any circumstance does not make any disbursements of the required amount the Credit Line, the Borrower’s obligation to pay to Santander pursuant to the Tenth clause of this Agreement shall remain in full effect.
The parties agree that the authorization granted to Santander pursuant to this Clause to settle against the checking account held by the Borrower with Santander and without previous payment requirement or collection, the amounts due and payable to Santander pursuant to this Agreement it is understood that Santander is authorized to settle from the available funds in such account, the principal amount that corresponds to Santander in accordance with the Santander Portion, meaning, the 60.136493% of such available amount on the date of the operation. Pursuant to the above, Santander will not be entitled to settle any amount that corresponds to the Bancomext portion of the Credit.
TWELFTH.- INTERESTS RESERVE ACCOUNT.- The Borrower is hereby obligated to open and maintain as part of the assets on Trust PDP Santander/Bancomext 2, during the term of this Agreement, a special interests reserve account. To such effect, the Borrower is hereby obligated to maintain in such account funds equivalent to approximately 3 (three) months of the amount payable for Ordinary interests in accordance with the terms of this Agreement (hereinafter referred to as the “ Interests Reserve Account ”). The Joint Obligors are hereby obligated to guarantee that such Interests Reserve Account has at least the funds set forth above during the term of this Agreement. If the Borrower disburses the funds of the Interests reserve account, the Borrower and the Joint Obligors shall restitute the amounts used to pay the Banks within 5 (five) Business Days following the date in which the Borrower used such funds, in the understanding that the Default of the obligation to restitute such amounts shall be considered an Event of Default of this Agreement.
The parties agree that he Interests Reserve Account set forth in this Clause shall be calculated using as reference the maximum amount of credit for the following 6 months in accordance with the payment and disbursements dates set forth in Annex 1; considering such amounts the Ordinary Interests for the following 3 (three) months will be determined. Additionally, the parties agree that such calculation may be reviewed every 6 (six) months and that h LIBOR of reference to be used will be the result applicable precisely for the respective Interests Period at the moment of review.
THIRTEENTH.- JOINT OBLIGATION.- (a) Each of the Joint Obligors, by means hereof agree, absolutely, unconditionally, completely, and irrevocably to comply in a joint and unlimited manner with the Borrower, in terms of the articles 1987, 1988, and other applicable articles of the Federal Civil Code, and the corresponding articles of the Civil Codes of the other federative entities of the Mexican United States and the Federal District the obligation to make all and any payments of principal, interests, commissions, and other payable amounts pursuant to this Agreement and any other documents related hereto, therefore the Banks may require payment of such amount indistinctly to the Borrower and/or to any of the Joint Obligors.
 
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(b) Each of the Joint Obligors agree that each and any payments that for principal amounts, interests, commissions, and other amounts due and payable in accordance with this Agreement will be paid and made available for the Banks at all times in accordance with the Tenth Clause.
(c) Along with the joint obligation assumed in this clause, the Joint Obligors agree to subscribe all other documents needed to be executed into in accordance with this Agreement, including without limitation, the execution of any Promissory Notes documenting the Credit Line granted pursuant to this Agreement acting as guarantor, in terms of the form attached hereto as Annex 3.
(d) The Joint Obligors will relieve their payment obligation directly through the payment to the Banks or through deposit in the account of the Borrower in order for it in turn to use such amounts to pay the corresponding amounts to the Banks.
(e) Also, in the event in which the Joint Obligors perform a payment on behalf of the Borrower, the Joint Obligors agree that their rights to receive any payment for such matter will be subordinated to the right of the Banks to receive the total amount due and payable in accordance with this Agreement, therefore the Joint Obligors agree that they may only receive such payments until the Credit and all other owed amounts in accordance with this Agreement have been fully paid, therefore the Joint Obligors will exercise its rights against the Borrower resulting from a subrogation as long as the Borrower has acted in accordance with its purpose, until the Banks have received all amounts due pursuant to this Agreement.
(f) Each of the Joint Obligors, by means hereof, accept that it is not necessary for the Banks to (i) deliver any notification, compliance requirement, or any right they have against the Borrower at any given time, (ii) deliver acceptance notices of this Joint Obligation and notices indicating that the Borrower is on default with any obligation, (iii) deliver notice of any actions or claims notices initiated by the Banks against the Borrower based on any agreement, instrument or exercise of any right in accordance with the obligations hereunder, (iv) deliver any other kind of notice, requirement, or notification, as well as any other formality in connection with the enforceability of the obligations in accordance with this Agreement against the Joint Obligors, or against the enforceability of the Borrower obligations under this Agreement, which omission or delay, except for what is set forth herein, can provide basis in order to release the Joint Obligors from their obligations hereunder, (v) exercise any right to require the assets of the Borrower to be used as payment of the Borrower obligations, prior to the requirement of the legal payment of the Joint Obligors, (vi) exercise any right to require the Borrower to be claimed or required to pay prior to the Joint Obligors
(g) The Banks shall have the right, at any time and from time to time, without requiring any notice or consent given from the Joint Obligors, and without implying the
 
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impairment, termination or amendment to the unconditional and absolute Joint Obligors obligations hereunder, to: (i) exercise or not to exercise any rights against the Borrower or other propter rem guarantee or others, and (ii) exchange or free any lien or guarantee or to waive, modify, free or consent the retirement of any other guarantee related with any obligation. In addition, the Joint Obligors obligations under this Agreement shall be absolute and unconditional, regardless of (a) any lack of validity or enforceability of any obligation hereunder or under any agreement or document in accordance with any obligation, (b) any current or subsequent law, regulation or executive order in any jurisdiction affecting any of the terms of the obligations or the Banks rights arising hereunder, or (c) any other circumstances, not referred to above, that could constitute an available defense for, or a way to release the Borrower or the Joint Obligors. The Joint Obligors, by means hereof, waive to any defense or proceed required to be exhausted in previous terms against the Borrower, until the Banks have received all of which is owed to them under this Agreement.
(h) This document shall be in full force and effects until the obligations and any other obligations arising hereunder have been fully satisfied.
FOURTEENTH.- COVENANTS. As long as any payable amount remain outstanding, the Borrower and, as applicable, each of the Joint Obligors hereby agrees that:
I. The Borrower agrees to:
(a) Net Worth Statements and Other Reports . The Borrower shall deliver to the Bank:
(i) as soon as available, but in any event within 120 (one hundred and twenty) calendar days after the end of each fiscal year of the Borrower, the net worth statement for such fiscal year; and
(ii) together with the financial information delivered pursuant to the previous paragraph, the Borrower shall deliver to each Bank a certificate regarding the compliance with the terms herein and stating the non existence of any condition or event that constitutes a default or an event of default or, if any such condition or event existed or exists, specifying the nature and what action the Borrower has taken or proposes to take with respect thereto.
(b) Notices . The Borrower shall give notice to the Administrative Agent promptly, but in any case within the 5 (five) calendar days after the occurrence any of the following: (i) Default or an Event of Default, or event of termination of the Original Purchase Agreement or an Airbus Termination Event, by means of a Borrower representation stating such Events details and the actions the Borrower has taken or proposes to take with respect thereto; (ii) any change in any laws in Mexico that may affect the amount or timing of receipt of any payment due under this Agreement or in any way affecting or that could be reasonably expected to have a Material Adverse Change, (iii) any default or event of default of any agreed obligation of the Borrower affecting or that could reasonably be expected to have a Material Adverse Change, (iv) any litigation,
 
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claim or proceeding before any court, governmental authority or arbitration panel that could be expected to have a Material Adverse Change, and (v) any development or event of any nature, which has had or could have a Material Adverse Change.
(c) Compliance with the Law and Contractual Obligations
The Borrower shall comply with the applicable law, regulations, executive orders, judgments or requirements of any Governmental Authority (including, licenses, certificates, permits, notices, registries, and other governmental authorizations of any nature), needed in order to maintain the property or possession of his assets, including without limitation, the compliance with all the obligations set forth in the Operative Documents, as well as all its relevant or necessary obligations arising from any agreement, contract or amendment to which it is a party or has entered into (in any way) relevant in order to fulfill its purposes.
(d) Payment obligations . The Borrower shall pay: (i) all payments due under this Agreement, taking in consideration preference order and terms indicated herein, (ii) all taxes, contributions, rights, and governmental expenses, of any nature, determined, placed or required, and (iii) all the claims made in accordance with the law, which failure to pay affects or could result in a lien upon its assets; in the understanding, however that, the Borrower shall not be obligated to pay or cause to pay any taxes, liability or claims appealed in good faith and by means of appropriate proceedings, and in respect of which appropriate reserves shall be undertaken in accordance with applicable accountant provisions or other applicable generally accepted accounting principles, if applicable.
(e) Amendments to the Original Purchase Agreement . The Borrower agrees to comply with all terms and conditions provided in the Novated Purchase Agreement. The Borrower agrees to not carry out, without the prior approval of the Banks any of the following:
 
 	(i)	terminate, cancel or allow the termination of the Novated Purchase Agreement or execute any agreement with Airbus that may result in the termination or cancellation of the Novated Purchase Agreement, in each case as related to the Financed Aircraft (or any portion thereof), except in such cases where such termination or cancellation is made in such circumstances that Airbus has the obligation to return the pre-delivery payments related to the Financed Aircraft and that Airbus has agreed with the Administrative Agent to carry out such returns directly to the Administrative Agent;	
 
 	(ii)	grant its consent so that Airbus may have the possibility to assign or tranfer its rights under the Purchase Agreement (as far as it is related with the Financed Aircraft) or the Step-In Agreement; or	
 
 	(iii)	request, allow, accept or grant consent so that any pre-delivery payment may be transferred or applied with respect to any aircraft that is not a Financed Aircraft.	
 
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Additionally, the Borrower is obligated to not execute, without the prior approval of the Banks, any agreement with Airbus that may modify or amend any term of the Purchase Agreement (as far as it is related to any Financed Aircraft, or any portion thereof) that may result in:
 
 	1.	the cancellation of the purchase of any Financed Aircraft, except for the currently set forth in the Purchase Agreement, with respect to the loss of any Aircraft or for any circumstance under which paid by the Banks have been reimbursed or paid to them;	
 
 	2.	the change in the pre-delivery payment date or amount, except when notified to the Banks at least 10 (ten) Business Days prior to such change and in the understanding that it must not exceed in any case the term set forth in Annex 1;	
 
 	3.	that the price of purchase of any Financed Aircraft increases in an amount that exceeds 2% (two per cent) of such purchase price;	
 
 	4.	that the date programmed for delivery of any Financed Aircraft be postponed or delayed for more than 180 (one hundred and eighty) days;	
 
 	5.	that the technical specifications of any Financed Aircraft be modified in such manner that may materially reduce the value, life or possibility of commercialization of such Financed Aircraft, except as required by applicable law; and	
 
 	6.	that any BFE is added to a Financed Aircraft that exceeds the amount of US$200,000.00 (two hundred thousand Dollars 00/100) with the exception of (i) it is required to replace a BFE due to the fact that its production has been discontinued, definitely ceased or delayed or that the approved manufacturer has ceased to be an approved manufacturer by Airbus or IAE,(ii) it is required by applicable law; or (iii) that the cost of such additional BFE is pre-paid to the applicable manufacturer or deposited to Airbus for its application on the day of the Aircraft.	
The parties agree that any other amendment that may be considered to modify the rights and interests of the Banks with respect to the Financed Aircrafts, in the reasonable opinion of the Banks must be approved by the Banks, whose approval will not be denied by the applicable Bank when there is a reasonable motive for such change.
(f) Books and Records . The Borrower shall keep proper books of records and accounts in which full, true and correct entries in respect of all the financial operations and assets of the Borrower in accordance with the generally accepted accounting principles or other applicable generally accepted accounting principles.
 
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(g) Use of the Credit Line . The Borrower shall use the total amounts of the proceeds gained in accordance with this Agreement for the purposes set forth in the Second clause and in accordance with the provisions set forth in Trust PDP Santander/Bancomext 2. The Banks shall not be responsible for the use given by the Borrower to the Credit Line resources.
(h) Priority of Payment . The Borrower shall ensure that its obligations hereunder constitute obligations of the Borrower in accordance with this Agreement ranking at least pari passu in the right of payment with all other present or future direct unsecured and unsubordinated obligations of the Borrower (except with those obligations having priority by operation of law).
(i) Reports and Information . The Borrower shall provide (i) reports and information required by the Banks in connection with the Financed Aircraft and (ii) such information that is necessary to comply with any requisites of KYC. Such information shall be delivered by the Borrower upon the request of the corresponding Bank, within 5 (five) business days following such Bank request.
(j) Status . The Borrower shall maintain its status as duly incorporated and validly existing trust under the laws of Mexico.
(k) Authorizations . The Borrower shall timely obtain, fulfill and will take all necessary actions to maintain in effect; and will provide the Banks with a copy of any such authorization required under any applicable law in order to be allowed to perform its obligations in accordance with the Operative Documents of which it is a part, and secure the legality, validity, enforceability or admissibility as evidence of any Operative Document of which it is a part of.
(l) Liens . The Borrower is obligated to not create, incur in, assume or allow the existence, directly or indirectly, of any guaranteed right or interest over (a) any of the Financed Aircraft (b) any of its assets, or (c) the Original Purchase Agreement or any Operative Document.
(m) Acts in prejudice of interests . The Borrower will not perform any act or will cease to make any decision or act that has or that may reasonably be expected to have as effect to prejudice the interests of any of the Banks regarding any Financed Aircraft or any Operative Document.
(n) Taxes . The Borrower will pay and comply with all taxes over it or its assets in the terms set forth in the applicable law, without allowing any fines or contingencies, with the exception of: (i) the payment if a specific tax has been contested by the Borrower in good faith; (ii) has reserved the required amounts for such taxes; and (iii) the payment may be legally retained.
 
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(o) Additional Obligations . The Borrower will perform all acts, carry out all required actions and execute all documents that may reasonably be required in order to protect and/or perfect the interests of each party under the Operative Documents and so as to allow the involved parties to obtain all necessary rights and benefits expected for them under the Operative Documents.
(p) Businesses . The Borrower will not perform any business or activity that may be different tan: (i) those allowed in the Trust PDP Santander/Bancomext 2.
(q) Rights under the Step-In Agreement . The parties recognize and agree that pursuant to Clause 7.7 of the Step-In Agreement, any amounts to be received by the Borrower in the terms set forth therein will be destined to pay any amounts due under this Agreement in favor of the Banks, and in such cases the Borrower and the Joint Obligors will be subject to the terms set forth in paragraph g) of Clause Thirteenth of this Agreement and will not exercise any defense or resource that may be required to be carried out first against the Borrower, until the Banks have received all that is owed pursuant to this Agreement. Pursuant to the above, the Borrower and Joint Obligors hereby recognize the rights granted in favor o the Banks pursuant to the Step-In Agreement.
II. The Joint Obligors agree that:
(a) Financial Statements and Other Reports . Each Joint Obligor shall deliver to the Bank:
(i) as soon as possible, but in any event within 120 (one hundred and twenty) calendar days after the end of each fiscal year of each Joint Obligor and any of its subsidiaries the audited individual and consolidated financial statements for the Joint Obligor and each of its subsidiaries for such fiscal year, including, as applicable, the balance sheet, individual and consolidated profit and loss statement, cash flow statement, and capital variations statement of the Joint Obligor and its subsidiaries for such fiscal year, accompanied by an opinion thereon of the External Auditor, as applicable. Such information must be accompanied by a letter of a legal representative of each Joint Obligor, certifying the fulfillment of the Debt covenants contained in subparagraph a) of clause Fifteenth; and
(ii) as soon as available, but in any event not later than 60 (sixty) calendar days after the end of each of the first three quarterly periods of each fiscal year of the Joint Obligor and its subsidiaries, as the case may be, the consolidated balance sheet corresponding to the period starting at the end of the previous quarter and ending at the end of such quarter, signed by a Joint Obligor officer stating that were prepared in accordance with the applicable accounting principles. Said balance sheet must be accompanied by a letter of a legal representative of each Joint Obligor, certifying the fulfillment of the Debt covenants contained in subparagraph a) of clause Fifteenth;
 
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(b) Notices . Each Joint Obligor shall promptly notify the Banks, in any case within the 5 (five) calendar days after the occurrence of any of the following: (i) Default or an Event of Default through the declaration of the Joint Obligor stating the details of such Default or Event of Default and the actions that the Joint Obligor has taken or proposes to take with respect thereto; (ii) any change in any laws of Mexico that may affect the amount or timing of receipt of any payment due under this Agreement or in any way affecting or that could be reasonably expected to have a Material Adverse Change, (iii) any Default or Event of Default of any agreed obligation of the Joint Obligor affecting or that could reasonably be expected to constitute a Material Adverse Change, (iv) any litigation, claim or proceeding before any court, governmental authority or arbitration panel affecting or that could reasonably be expected to have a Material Adverse Change, and (v) any notice of strike or labor stoppage of the Joint Obligor affecting or that could reasonably be expected to constitute a Material Adverse Change, and (vi) any significant change in its accounting principles, policy and guidelines, if any.
(c) Compliance with Law and Contractual Obligations
The Joint Obligors shall comply and shall make all of their subsidiaries comply with applicable law, regulations, executive orders, judgments or requirements of any applicable Governmental Authority (including, in licenses, certificates, permits, notices, registries, and other governmental authorizations of any nature, needed in order to maintain the property or possession of his assets or the performance of his activities, competition law, environmental law (including technical norm and disposal of toxic and hazardous materials, environmental regulations related with the preservation, restore and improvement of the environment, protection of natural areas, wild and aquatic flora and fauna, sustainable use of natural elements, precision and control of air, water and soil contamination, as well as all other set forth in the Mexican Environmental equilibrium and protection law, as applicable, as well as make sure that the design, operation and maintenance of the equipments and any of their parts comply with the requisite set forth in the applicable environmental regulations, federal, state or local), tax laws and laws regarding the social security administration and pension funds) as well as all its relevant or necessary obligations arising from any agreement, contract, issued security relevant or necessary to maintain the ordinary course of business, and which lack of compliance, shall not result or reasonably be expected to result in a Material Adverse Change.
(d) Payment Obligations . The Joint Obligors shall pay, and shall cause each of their subsidiaries to pay, prior to any default, (i) all taxes, contributions, rights, and governmental expenses, of any nature, determined, placed or required (including, without limitation, in social security, worker housing, and retirement regulations, real estate tax, water supply rights payment, and any other similar tax that could in the future substitute o replace such, and including all payments that they must make related with its concession title and Air Operator Certificate and all payments that they must make regarding air navigation services in the Mexican air space, as well as all others related to Airport Use Tariff (TUA for its initials in Spanish) and regarding fuel bough from Aeropuertos y Servicios Auxiliares ) and (ii) all claims made in accordance with the law, which failure to pay affects or could result in a lien upon its assets; on the understanding, however that,
 
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the Joint Obligor and its subsidiaries shall not be obligated to pay or cause to pay any taxes, liability or claims appealed in good faith and by means of appropriate proceedings, and in respect of which appropriate exceptions shall be undertaken in accordance with applicable accountant provisions or other applicable generally accepted accounting principles, as applicable.
(e) Insurance maintenance . The Joint Obligors shall maintain, and each of the Joint Obligors shall cause that each of its subsidiaries, maintain insurance with insurance companies with an established reputation, reasonable for the Banks, consistent and in accordance with the practices of similar businesses, owning similar assets, and located in the same general areas or similar areas of business that the Joint Obligors or their subsidiaries operate.
(f) Business conduct and Existence . Each Joint Obligor shall, and shall cause their subsidiaries to, continue to engage and conduct the same general type of business and activities and preserve, renew and keep in full force its legal existence, permits, licenses, registrations and in general necessary authorizations to conduct his business.
(g) Books and Records . Each Joint Obligor shall, and shall cause their subsidiaries to keep proper books of records and accounts in which full, true and correct entries in respect of all the financial operations and assets of the Joint Obligors and its subsidiaries in accordance with the applicable accounting principles or other applicable generally accepted accounting principles, in a consistent manner with the accountant policies and guidelines used on the previous fiscal years.
(h) Inspection Rights . The Joint Obligor shall allow, and each Joint Obligor shall cause their subsidiaries to allow that the written designated representatives of the applicable Bank inspect the accounting registries, collection activities and/or assets of the Joint Obligors and their subsidiaries, if any. Such inspections shall be made prior request, previously noticed in writing to the Joint Obligor (as the case may be) with at least 5 (five) Business Days in advance (except in the event in which a default or early termination exists and continues, in which case such notice shall not be required), being such expenses charged to the Banks (except in the event in which a default or early termination exists and continues, in which case such expenses shall be charged to the Joint Obligors). Such inspections shall be undertaken in Business Days and in labor hours, so as not to interfere or interrupt the Joint Obligors operations. The Banks, in compliance with the Financial Institutions Law and other applicable provisions, shall maintain the Lender client privilege and in consequence shall maintain (and shall cause its representatives to maintain) in a confidential manner, all the information of the Borrower, of the Joint Obligor and of their subsidiaries obtained as a result of the reviews or inspections provided hereto, as such information does not acquire the character of public by different means of the Banks or its representatives; in the understanding that, the Banks may disclose such information, when is binding to do so pursuant the applicable law or by virtue of a requirement of a competent authority, prior written notice to the applicable Joint Obligor.
 
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(i) Asset preservation . The Joint Obligors shall maintain and conserve, and shall cause each of their subsidiaries to maintain and preserver, all their assets that are used or that are useful for the development of their activities in good and normal conditions, except for the use and ordinary waste; in the understanding that, such obligation shall not prevent that each Joint Obligor or any of their subsidiaries discontinue the operation and maintenance of any of their assets, such discontinue is desirable in the conduction of its business and such discontinue, individually or jointly, shall not result in a Material Adverse Change.
(j) Transactions . The Joint Obligors shall carry out, and shall cause each of their subsidiaries to carry out, all its transactions, including those carried out with any of its affiliated, under market conditions.
(k) Governmental Authorizations . The Joint Obligors shall maintain, and shall cause each of their respective subsidiaries to maintain, in full force and effect, all licenses granted by, authorizations of, and registries before any governmental authority that are necessary pursuant to the applicable law or pursuant to reasonable practice of business for the performance of their activities and/or the rendering of air transportation services for passengers and cargo, including without limitation, in compliance with the antitrust legislation, legislation related to environmental protection or legislation related to health, and for the fulfillment of their obligations pursuant to this Agreement and for validity or enforceability of this Agreement and whose loss or cancelation results in a Material Adverse Change, including specifically all authorizations, concessions and certificates granted by the Transportation and Communications Ministry ( Secretaría de Comunicaciones y Transportes ), to Concesionaria to act as service provider of air transportation services pursuant to Mexican law.
(l) External Auditor . The Joint Obligors agree that their respective subsidiaries will maintain the same external auditor.
(m) Compliance with the Novated Purchase Agreement
(n) Amendments to the Original Purchase Agreement . The Joint Obligors agree to comply and cause the Borrower to comply with all terms and conditions provided in the Purchase Agreement. The Joint Obligors agree to not carry out, and cause the Borrower to not carry out, without the prior approval of the Banks any of the following:
 
 	(i)	terminate, cancel or allow the termination of the Novated Purchase Agreement or execute any agreement with Airbus that may result in the termination or cancellation of the Novated Purchase Agreement, in each case as related to the Financed Aircraft (or any portion thereof), except in such cases where such termination or cancellation is made in such circumstances that Airbus has the obligation to return the pre-delivery payments related to the Financed Aircraft and that Airbus has agreed with the Administrative Agent to carry out such returns directly to the Administrative Agent;	
 
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 	(ii)	grant its consent so that Airbus may have the possibility to assign or transfer its rights under the Purchase Agreement (as far as it is related with the Financed Aircraft) or the Step-In Agreement; or	
 
 	(iii)	request, allow, accept or grant consent so that any pre-delivery payment may be transferred or applied with respect to any aircraft that is not a Financed Aircraft.	
Additionally, the Joint Obligors are obligated to not execute, without the prior approval of the Banks, nor allow the Borrower to execute, any agreement with Airbus that may modify or amend any term of the Purchase Agreement (as far as it is related to any Financed Aircraft, or any portion thereof) that may result in:
 
 	1.	the cancellation of the purchase of any Financed Aircraft, except for the currently set forth in the Purchase Agreement, with respect to the loss of any Aircraft or for any circumstance under which paid by the Banks have been reimbursed or paid to them;	
 
 	2.	the change in the pre-delivery payment date or amount, except when notified to the Banks at least 10 (ten) Business Days prior to such change and in the understanding that it must not exceed in any case the term set forth in Annex 1;	
 
 	3.	that the price of purchase of any Financed Aircraft increases in an amount that exceeds 2% (two per cent) of such purchase price;	
 
 	4.	that the date programmed for delivery of any Financed Aircraft be postponed or delayed for more than 180 (one hundred and eighty) days;	
 
 	5.	that the technical specifications of any Financed Aircraft be modified in such manner that may materially reduce the value, life or possibility of commercialization of such Financed Aircraft, except as required by applicable law; and	
 
 	6.	that any BFE is added to a Financed Aircraft that exceeds the amount of US$400,000.00 (four hundred thousand Dollars 00/100) with the exception of (i) it is required to replace a BFE due to the fact that its production has been discontinued, definitely ceased or delayed or that the approved manufacturer has ceased to be an approved manufacturer by Airbus or IAE,(ii) it is required by applicable law; or (iii) that the cost of such additional BFE is pre-paid to the applicable manufacturer or deposited to Airbus for its application on the day of the Aircraft.	
 
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For purposes of this clause the term “Purchase Agreement” shall mean the Original Purchase Agreement, as it is executed to this date, in accordance with the First and Second Novations. The parties agree that any other amendment that may be considered to modify the rights and interests of the Banks with respect to the Financed Aircrafts, in the reasonable opinion of the Banks must be approved by the Banks.
(n) Reimbursements and BFE and SSBFE Agreements . The Joint Obligors are hereby obligated to transfer definitely and irrevocably in favor of the assets on trust of the Borrower, any rights related to any reimbursement of the Financed Aircraft, except for the reimbursement payments referred in the Netting Letter, as well as any other right related to the BFE and SSBFE Agreements, and to maintain valid such BFE Agreements during the term of this Agreement. Such transfer shall be made no later than 6 (six) months before the delivery date of the Financed Aircraft.
(o) Exercise of Rights . The Joint Obligors will only exercise their rights or carry out any acts (including, without limitation instructions to the Borrower) that they may carry out by virtue of the powers granted in favor or derived from the Trust PDP Santander/Bancomext 1, the Trust PDP Santander/Bancomext 2 and the Step-In Agreement, prior written consent of the Banks.
FIFTEENTH.- Negative Covenants. So long as any amount payable according to this Agreement remains unpaid and is outstanding, the Borrower and each of the Joint Obligors:
(a) Debt . The Joint Obligors and their subsidiaries agree not to obtain any additional Debt without previous agreement in writing by the Banks to the extent that: (i) the execution of any agreements with respect to such Debt result in the Default of any of the payment obligations contained herein, and/or (ii) an Event of Default cause has occurred and is continuing (unless the resources of such additional Debt are put forth for the payment of the Credit Line, to the extent that is necessary for the total payment of the amounts owed under the Credit Line).
For the purposes of this section, “Debt” means with respect to the Joint Obligors and the Borrower, at any date, (a) financing agreements executed to this date, (b) financing agreements related to the purchase and sale of aircraft, and their engines; (c) financing of an amount up to USD$100,000,000 (one hundred million Dollars 00/100) for working capital; (d) financing among subsidiaries and/or affiliates of the Joint Obligors; (e) financings that substitute the aforementioned; (f) financings regarding derivatives transactions in order to cover fuel risks, exchange rate risks and interests rate risks in accordance with the risk management policies authorized by the Board of Directors of the Joint Obligors; and (g) financings in general, as long as they comply with the following financial ratio: that the adjusted long term debt be less or equal to 5.5 (five point five) times EBITDAR, that on any determination date, which will be obtain with the result of dividing:
 
 	1.	The sum of (a) the long term financial debt in such date, plus (b) the result of multiplying by 7 (seven) times the amount if the rent of aircraft, engines and parts of leased aircraft of the next 4 (four) quarters under the agreements documenting the lease of flight equipment, minus (c) the the unrestricted cash; the result of the foregoing divided by ,	
 
 	2.	the EBITDAR of the last 4 (four) quarters concluded to such date.	
 
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Additionally, for the effects of this clause, “EBITDAR” shall mean, at any date, the sum of (i) operating income (loss); (ii) depreciation and amortization; and (iii) rents of aircraft, engines and spares, under pure lease agreements
(b) Encumbrances . Agree, and agree that none of their subsidiaries, shall create, assume or permit any encumbrances to exist in relation to: (i) the assets that belong to Trust PDP Santander/Santander 2, unless they constitute an encumbrance in relation with this Agreement and (ii) assets, whether tangible or intangible (including stocks representing an interest in the capital stock of any subsidiary and any intellectual or industrial property), whether they are at the moment its property or were acquired after this date, unless, regarding the assets referred under this section (ii), which are the following Encumbrances (the “ Allowed Encumbrances ”):
 
 	(i)	encumbrances that are result of any tax, labor or social security obligation or those created by ministry of law, provided that any of the encumbrances has been opposed in good faith through the corresponding procedures and of which reserves or any other necessary provision according to the applicable accounting principles in Mexico or other accounting principles that are generally accepted, if it be the case;	
 
 	(ii)	encumbrances that exist as a result of any judgment or court order of any court of law, provided that such judgment has been denied or its effects have been suspended through a court order within 60 (sixty) calendar days following the date it was ruled; and	
 
 	(iii)	encumbrances in order to guarantee the permitted debt according to paragraph (a) above.	
 
 	(iv)	all other encumbrances necessary for the operations and activities related with its social purpose.	
(c) Mergers and Consolidations . The Joint Obligors may not, without previous written authorization from the Banks, in one or more related operations, (i) consolidate, divest or merge (as acquiring corporation or acquired corporation) with any other entity or (ii) directly or indirectly, transfer, sell, or in any other way transfer all or most of its assets in favor of any entity, notwithstanding, in respect to any of the operations described in paragraphs (i) and (ii) above, the entity with which such operation was carried out is a subsidiary of the Joint Obligors, and immediately after such operation becomes effective:
 
 	(1)	the entity that results or is established by virtue of such merger or consolidation is established as a Joint Obligor in accordance with this Agreement,	
 
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 	(2)	the Joint Obligor, or its successor, expressly agrees to indemnify the Lender regarding any tax, levy or government burden, of any nature, that may be imposed on the Lender as a consequence of the operation of which the case may be, in relation to payments under this Agreement;	
 
 	(3)	its consequence is an event of default or an early termination cause; and	
 
 	(4)	the Joint Obligor has delivered the Banks a certificate and a legal opinion by an independent firm, reasonably acceptable to the Administrative Agent, each of which points out, given the case, that such consolidation, divestiture, merger, transfer, and the agreements relating to such operation, comply with the applicable provisions of this clause. This being understood that the legal opinion to which this subsection refers is not required in the case that a Joint Obligor carries out the registration of representative stock of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).	
(d) Transfer of Assets . The Joint Obligors wont allow and each subsidiaries will not allow, without previous authorization from the Lender sell, or in any other way transfer its assets (including interest representing the capital stock pertaining to any subsidiary), except for:
 
 	(i)	the selling or transfer of the inventory of the Borrower, Joint Obligors and their subsidiaries in the natural course of their business; and	
 
 	(ii)	the selling or transfer of assets in favor of any of the Borrower, Joint Obligors or its subsidiaries; and	
 
 	(iii)	the authorized transfer of assets by means of a Sale and Lease Back of aircraft, engines or their parts, as long as they are carried out in the ordinary course of business.	
The above being understood that the Joint Obligors may carry out the activities referred to in subsections (i) and (ii) above, provided that the total aggregate annual amount of such operations, and excluding those operations performed in the ordinary course of business, shall not exceed US$5,000,000.00 (five million Dollars 00/100) or its equivalent in another currency.
(e) Additional Financings . The Joint Obligors will not allow its subsidiaries, and the subsidiaries may not, grant any kind of Credit Line, credit or advance, with or without security, except those credits that are granted within the natural course of business between the Joint Obligors, as long as it has not incurred or continues in an event of default or an early termination cause.
 
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(f) Change in the Nature of Business . The Joint Obligors will not allow its subsidiaries, and the subsidiaries may not, substantially change the commercial name or nature, in the Borrower’s case, of its purposes, and in the case of the Joint Obligors, of its principal activities as they have been carried out to the date of this Agreement.
(g) Amendments to the Trust PDP Santander/Bancomext 2 . The Borrower and the Joint Obligors will not modify, complement or change in any way, and will not allow any other party to modify, complement or change any term of the Trust PDP Santander/Bancomext 2 nor the Step-In Agreement, without the prior written consent of the Bank.
(h) Payment of Dividends .
 
 	(i)	The Joint Obligors agree and shall cause their subsidiaries to refrain from celebrating o undertaking any obligation or agreement that, directly or indirectly, prohibits o restrains, or that has the effect of prohibiting or restraining, or imposing any condition to the declaration or payment of any kind of dividends or distributions to their shareholders or granting of credits or Credit Lines by any subsidiary to the Joint Obligors.	
 
 	(ii)	The Joint Obligors agree not to declare or pay dividends o make distributions to their shareholders as long as any amount payable according to this Agreement remains unpaid; except for distributions that do not exceed 15% of the pre-tax earnings determined according to the accounting principles applicable to the immediately preceding fiscal year and as long as the Borrower is not currently in an event of default or an early termination cause.	
The above in the understanding that the obligation to which subsection (g) refers will not applicable in the case that the Joint Obligor carries out the registration of its representative stock of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).
(i) Settlement and Dissolution of the Joint Obligors . The Joint Obligors may not initiate a lawsuit or approve a ruling to be settled or diluted (or in order to undergo a settlement or dissolution) or to settle or dilute any of its subsidiaries, except (i) that such subsidiaries should not be necessary and (ii) in the Banks reasonable judgment, such settlement or dissolution does not significantly affect the Borrower or the Joint Obligor subject according to this Agreement.
(j) Waivers. The Joint Obligors may not, and shall not allow their subsidiaries to, cancel or grant reductions concerning payable debt to any of them, except (i) concerning debt between the Borrower and the Joint Obligors, and (ii) cancellations or reductions made in the natural course of their business.
 
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(k) Capital Investment . The Joint Obligors may not, and shall not allow their subsidiaries to, incur in expenses or compromise expenses related to the acquisition of fixed assets or other assets, if an event of default or early termination cause has occurred and continues, or if, in the Banks’ reasonable judgment, as a result of such investment an event of default or an early termination cause may occur.
(l) Bylaws . The Joint Obligors may not, and shall not allow their subsidiaries to, modify the corporate purpose of its bylaws or any disposition of its bylaws that could reasonably be expected to have a Material Adverse Change, without previous consent of the Bank, except for those bylaw modifications that are required pursuant to a corporate restructuring in order to adapt them to the requirements of the Foreign Investment Law ( Ley de Inversión Extranjera ) and/or the Securities Market Law ( Ley del Mercado de Valores ) for stock corporations and for the purpose that the Joint Obligors register their representative stocks of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).
(m) Decreases in Capital Stock . The Joint Obligors agree to abstain from celebrating or permitting their subsidiaries to celebrate shareholders meetings in which it is resolved, in any way, to repay or reduce its capital stock, except for those reductions and reimbursements of capital that are found directly related to the registration process for representative stocks of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).
(n) Compensation. The Joint Obligors agree not to compensate or settle in any law suit, action, claim, dispute or pending process, for an amount that, individually, exceeds USD$10,000,000 (ten million Dollars 00/100) or its equivalent in any other currency or that they result in a Material Adverse Change.
(o) Concession . Concesionaria is hereby obligated to not modify in any way the Concession Title for the rendering of air transportation services of which Concesionaria is the holder, nor any other concession or government authorization related to the rendering of public air transportation services, except for those amendments to the Concession Title that: (i) correspond to an incorporation or change of aircraft registration marks (Annex 1); (ii) incorporation or domestic and/or international routes (Annex 2), (iii) amendment to the operation stations and/or maintenance and/or incorporation of sub-stations of operation or maintenance (Annex 3), (iv) update of the programmed development (Annex 4), and (v) any other amendment necessary to render the air transportation service, nor assign, transfer or encumbrance the rights derived from such title.
 
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SIXTEENTH.- LIMITED REPRESENTATIVE OF THE BANKS.
(a) Appointment of Administrative Agent . In order to comply with the terms of the Step-In Agreement, and the Trust PDP Santander/Bancomext 2, and in order to have one representation before the parties of such agreements and thus Agreement, each Bank hereby irrevocably appoints, designates and authorizes Santander as the administrative agent (hereinafter referred to as the “ Administrative Agent ”) to take the actions and exercise the rights and comply with their obligations under this Agreement, and all documents related, along with the powers incidental for such effect. Furthermore, each Bank hereby authorizes and appoints the Administrative Agent as an agent ( comisionista ) under the terms of Articles 273 other related of the Mexican Commerce Code ( Código de Comercio ) to execute, deliver and perform any document related to this Agreement, the Trust PDP Santander/Bancomext 2 and the Step-In Agreement. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other related document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth in this Agreement, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other related document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term “representative” or “administrative agent” herein and in the other related documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
Notwithstanding any disposition to the contrary contained in this Agreement or any of the related documents, the Administrative Agent shall have no more duties or responsibilities than those set forth expressly herein, nor will the Administrative Agent have, or be considered to have, a fiduciary relationship with any Bank, and it will not imply the existence of any agreement, performance, responsibility, duty or obligation of this Agreement or any other related document with the Agreement, nor will they exist against the Administrative Agent. Without limiting the generality of this sentence, the term “representative” or “administrative agent” in this Agreement and the related documents referring to the Administrative Agent, shall not be construed as to imply any fiduciary obligation or others, implied (or express), that may arise from the representation theory under any applicable law. Instead, such term is only used commercially and is intended to create or reflect an administrative relationship between independent contracting parties.
The parties recognize that the Joint Obligors and the Borrower may direct any notice for the Banks in accordance with this Agreement to the Administrative Agent, who must in turn send copy of them to the Banks within the 3 (three) days following reception, in the understanding that the Joint Obligors and the Borrower are not responsible for such copy. Consistent with the foregoing, except as expressly provided otherwise herein, any amendment made or received by the Administrative Agent will have the same effects as if made or received by all the Banks.
 
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Regarding notifications sent by the Administrative Agent to Bancomext with respect to which an answer is required from Bancomext, it is hereby understood that Bancomext has consented to the actions taken by the Administrative Agent if such Administrative Agent does not receive a response within 10 (ten) Business Days following receipt of such notice by Bancomext from the Administrative Agent.
The parties agree that the payments due to the Banks in terms of this Agreement shall be made directly to each Bank and that the Agent will not act as collector, receiver or hub of funds owed to the Banks and payer of the same. Additionally, each Bank must make the Disbursements that correspond to each of them directly to the Borrower, being that the Agent will also act as hub of such amounts for the Disbursements to the Borrower.
(b) Delegation of Duties . The Administrative Agent may execute any of its duties found in this Agreement or any other related document by or through any one or more sub-agents appointed by it, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.
(c) Liability of Administrative Agent . Neither the Administrative Agent nor any of its Affiliates, officers, directors, employees, agents or attorneys in fact shall
(i) be liable for any action taken or omitted to be taken by it or any such Person under or in connection with this Agreement or any other related document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or
(ii) be responsible in any manner to any Bank for any recital, statement, representation or warranty made by the Borrower, the Joint Obligors or any of their officers, contained in this Agreement or in any other related document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other related document, or for any failure of the Borrower or the the Joint Obligors to perform its obligations hereunder or thereunder.
(iii) responsible to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, or facts stated in, this Agreement or any other related document, or to inspect the properties, books or records of the Borrower, Joint Obligors or any of its Subsidiaries.
(iv) responsible of proving the veracity or fulfillment of the commitments assumed by the Borrower or the Joint Obligors and/or investigate the existence of possible Defaultes or diminishing of solvency of them.
(v) responsible for the suitability, precision or integrity of the information made available by the Borrower, the Joint Obligors or any person related to the documents of this financing operation.
 
35

The Banks hereby exempt the Administrative Agent of any responsibility by error or omission in the performance of the activities that are attributed to them in this Agreement, except those that arise from negligence or willful misconduct.
(d) Reliance .
 
 	i.	The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex, teletype or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrower), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other related document unless it shall first receive such advice or concurrence of the Banks as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of failing to take, taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request or consent of the Banks, and such request or any action taken or refrain from acting, in accordance with this Agreement, shall be enforceable against all Banks.	
 
 	ii.	For purposes of determining compliance with the conditions specified in this Section, each Bank that has executed this Agreement shall be deemed to have consented to, approved, accepted or to be satisfied with, each document or other matter either provided by Administrative Agent to such Bank for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to such Bank unless the Administrative Agent shall have received notice from such Bank prior to the proposed Closing Date specifying its objection thereto.	
(e) Notice of Default . The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, unless the Administrative Agent shall have received written notice from a Bank or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “Notice of Default”. The Administrative Agent will notify the Bank of its receipt of any such notice. The Administrative Agent shall take such action with
 
36

respect to such Default or Event of Default before Airbus or the other parties of the Step-In Agreement, in the understanding however , that unless and until the Administrative Agent has received any such written direction, the Administrative Agent may (but is not be obligated to) take such action, or refrain from taking such action.
(f) Credit Decision . Each Bank acknowledges that neither the Administrative Agent nor any of its Affiliates, officers, directors, employees, agents or attorneys-in-fact have made any representation or warranty to it, and that no act by the Administrative Agent hereinafter taken, including any consent to and acceptance of any assignment or any review of the affairs of the Borrower, the Joint Obligors and its Subsidiaries, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Bank as to any matter, including whether the Administrative Agent has disclosed material information in its possession.
Each Bank represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower, the Joint Obligors and its Subsidiaries and all applicable Bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder.
Each Bank also represents that it will, independently and without reliance upon the Administrative Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action in accordance with this Agreement and the other related documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower, the Joint Obligors and its Subsidiaries. Except for notices, reports and other documents expressly herein required to be furnished to the Banks by the Administrative Agent, the Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower or Joint Obligors which may come into the possession of any of the Administrative Agent or any of their Affiliates, officers, directors, employees, agents or attorneys-in-fact.
(g) Indemnification . Whether or not the transactions contemplated hereby are consummated, the Banks shall indemnify upon demand the Administrative Agent and its Affiliates, directors, officers, agents and employees (to the extent not reimbursed by or on behalf of the Company and without limiting the obligation of the Company to do so), pro rata , and hold the Administrative Agent harmless from and against any and all consequences incurred in by error or omission; provided , however , that no Bank shall be liable for the payment to the Administrative Agent of any portion of such Indemnified Liabilities to the extent determined in a final judgment by a court of competent jurisdiction to have resulted from the Administrative Agent’s gross negligence or willful
 
37

misconduct. Without limitation of the foregoing, each Bank shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other related document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower. The undertakings in this Section shall survive the payment of all other Obligations and the resignation or removal of the Administrative Agent.
(h) Administrative Agent acting . Santander and Bancomext agree and acknowledge that a consent obtained from both of the Banks shall be required in order for the Administrative Agent to perform any of the following actions or restrain which may result in affecting any rights of the Banks under this Agreement, in the understanding that the Administrative Agent is not allowed to agree on any amendment to the term, amount, rate or any other condition of the Credit Line without the prior consent of Bancomext. Pursuant to the above, the Banks accept that any action to be taken by the Banks against the Borrower and the Joint Obligors pursuant to the default of their obligations under this Agreement, shall always be initiated collectively by all of the Banks, in the understanding that the Administrative Agent does not assumes any liability of any nature in connection with such actions.
Santander and Bancomext agree that if the Administrative Agent receives any amounts derived of an action performed by it, with the unanimous consent of the Banks and the exercise of a right in favor of them, such amounts will be distributed by Santander and Bancomext in proportion of the Bancomext Portion and the Santander Portion in this Agreement.
(i) Administrative Agent in its Individual Capacity . Notwithstanding the provisions contained under Section (h) above, Santander and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of lending, trust, financial advisory, underwriting or other business with the Borrower, the Joint Obligors or the Borrower’s subsidiaries as though Santander was not the Administrative Agent hereunder and without notice to or consent of the Banks, and without the need to obtain their consent, as long as such activities don’t have as a result to affect the rights of the Banks under this Agreement. The Bank acknowledge that, pursuant to such activities, Santander or its Affiliates may receive information regarding the Borrower or any of its Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to its Loans, Santander shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not an Affiliate of the Administrative Agent, and the terms “Bank” and “Banks” include Santander in its individual capacity.
 
38

(j) Successor Administrative Agent . The Administrative Agent may resign upon thirty (30) days’ notice to the Banks. If the Administrative Agent resigns or is removed in accordance with this Agreement, the Banks shall appoint from among the Banks a successor agent for the Banks, which successor agent shall be subject to the prior approval of the Borrower at all times other than during the existence of an Event of Default (which consent of the Borrower shall not be unreasonably withheld or delayed). If no successor agent is appointed prior to the effective date of the resignation of the relevant existing Administrative Agent, then such existing Administrative Agent may appoint, after consulting with the Banks and the Borrower, a successor agent from among the Banks. Upon the acceptance of its appointment as the successor agent hereunder, such successor agent shall thereupon succeed to and become vested with all the rights, powers and duties of the retiring Administrative Agent, and the term “Administrative Agent” shall mean such successor agent. After the Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this section shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor agent has accepted appointment as Administrative Agent by the date which is thirty (30) days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation or removal shall nevertheless thereupon become effective and the Banks shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Banks appoint a successor agent as provided for above.
SIXTEENTH.- ASSIGNMENT.- In terms of Article 299 of the General Law of Negotiable Instruments and Credit Operations, the Banks are hereby authorized to assign, discount, endorse, or in any other way negotiate, partially or in whole and even before they become due, the right to collect the Credit herein granted with the previous written consent granted by the Borrower and by the Joint Obligors (in the understanding that such consent may not be unreasonably denied and if a period of 15 Business Days have passed after the request from the Bank without receiving an answer from the Borrower and by the Joint Obligors, it shall be construed as granted by them). Likewise, the Bank may assign, discount, endorse or in any way transfer, totally or partially, their rights pursuant to this Agreement through a notice previously carried out to the Borrower and the Joint Obligors in the following cases: (i) in the case that such assignment takes place in favor of any affiliate of the Bank, and (ii) in favor of any financial institution in case that an event of default occurs pursuant to this Agreement.
In case the assignment referred in the paragraph above is carried out to any person that because of its domicile or for any other reason, creates tax burdens for the Borrower and/or Joint Obligors, greater or additional to those they currently have with respect to the Credit Line with the Banks, said additional tax burdens shall be borne by the assignee, in the understanding that the Borrower and the Joint Obligors will not be obligated to pay any additional amount to that effect.
Notwithstanding the above, the Banks may not make any assignments ton ay person related to the competitors of the Joint Obligors.
 
39

The Borrower may not assign its rights or obligations under this Agreement, without the prior written consent of the Banks.
EIGHTEENTH.- UNILATERAL TERMINATION OR RESTRICTION OF THE AGREEMENT.- The parties agree that the Banks are authorized to restrict the amount of the Credit Line or the term of which to disburse such credit, or both, as well as to unilaterally terminate this agreement at any time, through a simple written notice directed to the Borrower, consequently, any right to use the unspent balance will be similarly limited or restricted, as the case may be. This clause is subject to Article 294 of the General Law of Negotiable Instruments and Credit Operations.
NINETEENTH.- EARLY TERMINATION.- The Lender may early terminate the term for the payment of the benefits on behalf the Borrower and immediately require the total amount of the Credit Line, its interests and other legal accessories, if the Borrower or any Joint Obligor does not comply with any of the obligations assumed by this Agreement and especially in the following events (each one a “ Default ” or an “ Event of Default ”:
(a) Failure to make payments . If the Borrower or any Joint Obligor shall fail to pay when due (whether at stated maturity, by acceleration or pre-payment) any principal of or interest or any other amount required by this Agreement.
(b) Misrepresentation . If any representation made by the Borrower or by any Joint Obligor herein or which is contained in any certificate, document or financial statement furnished by it in compliance with this Agreement or any information or documentation furnished by the Borrower or by any Joint Obligor herein: (i) shall prove to have been false in any material respect, or (ii) shall prove to be mistaken or erroneous in any material respect and such error, incorrectness, is not remedied or cured within a period of 30 (thirty) calendar days from the (a) the Borrower or any Joint Obligor first becomes aware of such error or mistake, or (ii) the Administrative Agent or any of the Banks gives written notice to the Borrower of such error or mistake.
(c) Specific non-performance . The Borrower or any Joint Obligor, as the case may be, shall default in the observance or performance of any covenant contained in Clause Thirteen and Fourteen or such default continues for more than any applicable period of grace.
(d) Other Defaults . The Borrower or either of the Joint Obligors, as the case may be, shall default in the observance or performance of any other obligations contained in this Agreement (other than as provided in paragraphs (a) through (c) above), as well as any other document related to this Agreement, and such default shall continue uncured for a period of 30 (thirty) calendar days from the first of (i) the day the Borrower or any Joint Obligor first becomes aware of such default, or (ii) the Administrative Agent or any of the Banks gives written notice to the Borrower of such default.
(e) Default of other Agreements . (i) If any Joint Obligor or any of its subsidiaries default with, or incurs in an event of default with respect to any issuance deed, agreement
 
40

or instrument related with any debt of such Joint Obligor or any of its subsidiaries (other that the debt incurred under this Agreement), and such default or event of default shall prove to have the early termination of such debt, or (ii) if any Joint Obligor or any of its subsidiaries shall fail to pay when due any principal, or interest or any other amount whatsoever payable by such Joint Obligors or any of its subsidiaries (other than the Allowed Debt incurred under this Agreement), involving an amount exceeding, jointly or separately, the amount of USD$5,000,000.00 (five million Dollars 00/100) or the equivalent thereof in any currency or (iii) that any Airbus Event of Default or allows any third party other than the Borrower and the Joint Obligors, to terminate or cancel the Original Purchase Agreement and the Step-In Agreement, or (v) that a Step-In Event exists (as defined in the Step-In Agreement).
(f) Default with Authorities . If the Borrower, any Joint Obligors or any of its subsidiaries shall default in the observance or performance of its obligations with any governmental authority, including without limitation, the Secretaría de Hacienda y Crédito Público , Instituto Mexicano del Seguro Social , Instituto del Fondo Nacional para la Vivienda de los Trabajadores or Sistema de Ahorro para el Retiro , and such default shall prove to have or may reasonable expect to have a Material Adverse Change.
(g) Insolvency . (i) if any Joint Obligor or any of their subsidiaries commences any proceeding or action (A) under any existing or future law of any jurisdiction (domestic or foreign) relating to concurso mercantil , insolvency, bankruptcy reorganization or relief of debtors, seeking to adjudicate it a concurso mercantil, Lenderrupt or insolvent, or seeking reorganization, arrangement, liquidation, dissolution, or other relief with respect to it or its debts, or (B) seeking appointment of a síndico , conciliador , receiver, auditor, custodian, manager, conservator, or other similar official for all or any substantial part of its assets, or if any Joint Obligor or any of its subsidiaries makes a general assignment for the benefit of its creditors; or (ii) any proceeding or other action of similar nature as such referred to in this clause (i) above has commenced against the Joint Obligor or any of its subsidiaries which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) any action related thereto remains undismissed for a period of 60 (sixty) calendar days; or (iii) there shall be commenced under any existing or future law of Mexico or by any competent jurisdiction against the Joint Obligor or any of its subsidiaries, any proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been discharged, or stayed or bonded pending appeal within 60 (sixty) calendar days from the entry thereof; or (iv) the Borrower or any of the Joint Obligors or its subsidiaries is unable to, or admits in writing its inability to, pay its debts as they become due.
(h) Judgments . Any judgments that may not be contested, involving in the aggregate an amount exceeding, jointly or separately, USD$5,000,000 (five million Dollars 00/100) or the equivalent thereof in any currency, against the Borrower, any Joint Obligor and/or any of its subsidiaries, and that it has as a consequence a Material Adverse Effect.
 
41

(i) Effectiveness of the Agreement . (i) The Borrower and any Joint Obligor or its subsidiaries appeal the effectiveness and enforcement of any document related herewith, (ii) a judicial, arbitral or administrative proceeding commences in order to appeal the effectiveness and enforcement of this Agreement, or (iii) any covenant of the Joint Obligors under this Agreement ceases to be valid and enforceable.
(j) Authorizations . (i) If any license, approval, registry, permit or government authorization or of any other nature necessary for the execution or compliance by the Borrower or by any of the Joint Obligors or its subsidiaries of this Agreement, or for the validity or enforceability of this Agreement, the Promissory Notes or any other related documents that is not obtained, maintained or has been revoked, modified or is no longer valid and if any license, concession, certificate, consent, registry, permit or government authorization or of any other nature of the Borrower and the Joint Obligors to carry out its activities in the ordinary course of business, including, without limitation, any other authorizations, concessions and certificates, granted by the Ministry of Transportation and Communications to the Joint Obligors to act as concessionaire of public air transportation services in accordance with Mexican law are not obtained, maintained or revoked or cease to be valid and such situation is not cured within 60 (sixty) days, as long as such term does not result in a Material Adverse Effect under the el Step-In Agreement.
(k) Expropriation . If any governmental authority nationalizes, seizes, intervenes or otherwise expropriates all or any substantial part of the assets of any of the Borrower or of any Joint Obligor or of its subsidiaries or the shares issued by, or property of (as the case may be) any of the Joint Obligor or its subsidiaries, or takes any action (including the aforesaid) that would prevent the Borrower or any Joint Obligor from performing any of their obligations under this Agreement.
(l) Material Adverse Effect . If any circumstance, event or condition on the business, operations, assets, conditions (financial or otherwise) or substantial part of the Borrower, any Joint Obligor or its subsidiaries, occurs that affects (a) the capacity of the Borrower or any of the Joint Obligors to punctually perform any of its covenants under this Agreement, (b) the legality, validity or enforceability of this Agreement, or (c) the rights and remedies of the Banks under this Agreement. In order to determine if an adverse effect is substantial the general financial and operational situation of the Borrower and the Joint Obligors shall be considered, jointly (a “ Material Adverse Effect ”).
(m) Share structure and Change of Control . If there occurs any Change of Control without prior written consent of the Banks, in the understanding that the Joint Obligors can make modifications to their share structure only in the case that such change is the effect of registering representative stock of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ) and any sale of shares thereafter.
 
42

(n) Material Adverse Change . Any event shall occur affecting adversely and substantially the economic situation or the business in which the Joint Obligors participate.
(o) Business Irruption . In any event that any of the Joint Obligors shall stop or in any way cease the activities considered substantial in its regular course of business.
(p) Default of other obligations . If any of the Borrower and/or the Joint Obligors cease to make the contributions or in any manner alter, modify, cancel or terminate their contribution and/or assignment in favor of the assets of the Borrower, of nay rights related to any reimbursement of the PDP’s with respect to the Financed Aircraft as well as any rights related to the BFE and SSBFE Agreements, as well as credits for engines.
(q) Reserve Account . If the Borrower or the Joint Obligors do not restitute the amounts disbursed by the Borrower to the Reserve Account in order to make payments to the Banks in accordance with this Agreement in a maximum term of 5 (five) days following the date in which the Borrower has disbursed such amounts.
TWENTIETH.- SURVEILLANCE.- The Banks shall have at all time the right to ensure that the amount of the Credit Line is destined to the purposes specified herein and may designate a person that ensures the accurate compliance of the Borrower’s covenants. With respect to accounting aspects, the Banks are entitled to order, at their cost, audits as often as deem appropriate performed by auditors designated by the Banks, as long as the operations of the Borrower are not affected. The Borrower agrees to deliver the Banks all the documents or data reasonably requested in connection with the faculty contained in this clause.
TWENTYFIRST.- CERTIFICATION.- The parties agree that the accounting balance statement of this instrument certified by the Lender’s Accountant shall be an executive instrument and shall be conclusive evidence with respect to the balance of indebtedness the Borrower, for all applicable legal effects, in accordance with Article 68 of the Financial Institution Law.
TWENTYSECOND.-NOTICES .- All notices and in general other communications to be given or made under this Agreement, including service of process, shall be delivered to the following domiciles, and in every case, the notice shall be effective when made at the following domiciles:

Banks:	  	Santander
Domicile:
 
Prolongación Paseo de la Reforma No. 500, Colonia Lomas de Santa Fe, Delegación Álvaro Obregón, México, Distrito Federal, C.P. 01219. Module 403	
 
43

			
	  	Attention: Osvaldo Rancé Cachafeiro / Francisco García
Tel.: + 52 (55) 5269-2836 / +52 (55) 5261-7392
Fax.: + 52 (55) 5269-2227 / + 52 (55) 5269-1833
Email: orance@santander.com.mx / fjgarcias@santander.com.mx	
		
	  	Bancomext
Domicile:
 
Periférico Sur 4333, Colonia Jardines en la Montaña, Delegación Tlalpan, México, Distrito Federal, C.P. 14210.
 
Attention:
 
Attention: Ricardo Luis Ramos San Martín y René Ross Valenzuela
Tel.: 5449-9235 / 5449-9126
Fax.: 5449-9485
Email: rramos@bancomext.gob.mx / rross@bancomext.gob.mx	
		
Borrower	  	Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as trastee under Trust No. F/[*]
 
Domicile:
 
Blvd. Manuel Avila Camacho No. 40, Piso 17
Colonia Lomas de Chapultepec
C.P. 11000
México, Distrito Federal
Attention: Carlos Jáuregui Baltazar and/or Luis Alberto Ramírez
Trust Division
Tel: 5201-8000
Fax: 5201-8144
Email: carlos.jauregui@db.com , luis-alberto.ramirez@db.com	
		
Joint Obligors:	  	CONTROLADORA
Domicile: Avenida Prolongación Paseo de la Reforma # 490, Primer Piso
Colonia Santa Fe Peña Blanca
Código Postal 01210
México Distrito Federal
 
Attention: General Counsel
Tel.: 52616400
 
CONCESIONARIA
Domicile: Avenida Prolongación Paseo de la Reforma # 490, Primer Piso	
	  	Colonia Santa Fe Peña Blanca
Código Postal 01210
México Distrito Federal
 
Attention: General Counsel
Tel.: 526166400	
 
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The parties may amend the domiciles hereof, provided that such amendment shall be notified by written notice to the other parties.
TWENTYTHIRD.- WAIVER.- If any of the Banks fail to exercise or delays in the exercise of any right or privilege pursuant to this Agreement, shall not be construed, for such fact, that that such Bank has waived said rights or privileges. Likewise, any total or partial exercise of any right or privilege under this Agreement shall not prevent any future exercise or the exercise of any other right or privilege. The remedies stated herein, shall not exclude the present or future provisions of the applicable law.
TWENTYFOURTH.- CREDIT LINE REPORTS.- The Borrower and the Joint Obligors hereby authorize each of the Banks to furnish and, if applicable, request information related to its economic situation, financial and credit operations, and to the credit information institutions referred to in the Ley para Regular las Sociedades de Información Crediticia, and other financial institutions which are members of Santander Financial Group, prior or after the execution of this Agreement.
TWENTYFIFTH.- GOVERNING LAW, SUBMITTION TO JURISDICTION AND COMPLIANCE.- All the matters not considered under this Agreement the parties shall be governed by and construed in accordance with the General Law of Negotiable Instruments and Credit Operations, the Law of Credit Institutions and any other applicable provisions. For the interpretation and compliance of this Agreement, the parties hereby irrevocably and unconditionally submit to the jurisdiction of the courts of Mexico, Federal District, in any legal action, suit or proceeding arising out of or relating to this Agreement, and the parties expressly waive any other forum or court that may correspond by reason of their present or future domiciles or otherwise.
TWENTYSEVENTH.- EXHIBITS.- The parties agree that the exhibits referred to in this agreement form part of this Contract.
[SIGNATURE PAGE FOLLOWS]
 
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IN WITNESS WHEREOF, the parties have caused this Agreement in 5 (five) copies each one considered as an original and together the same instrument, as of the date first above written.
THE BANKS
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER

By:	 	/s/ Mauricio Rebolledo Fernández	 		 	By:	 	/s/ Osvaldo Rancé Cachafeiro	
	 	Name:	 	Mauricio Rebolledo Fernández	 		 		 	Name:	 	Osvaldo Rancé Cachafeiro	
	 	Title:	 	Legal representative	 		 		 	Title:	 	Legal representative	
BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C.

By:	 	/s/ Eduardo Muñiz Juárez	 		 	By:	 	/s/ Ricardo Ramos San Martín	
	 	Name:	 	Eduardo Muñiz Juárez	 		 		 	Name:	 	Ricardo Ramos San Martín	
	 	Title:	 	Legal representative	 		 		 	Title:	 	Legal representative	
ADMINISTRATIVE AGENT
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER

By:	 	/s/ Mauricio Rebolledo Fernández	 		 	By:	 	/s/ Osvaldo Rancé Cachafeiro	
	 	Name:	 	Mauricio Rebolledo Fernández	 		 		 	Name:	 	Osvaldo Rancé Cachafeiro	
	 	Title:	 	Legal representative	 		 		 	Title:	 	Legal representative	
 
46

THE BORROWER
DEUTSCHE BANK MÉXICO, S. A.,
INSTITUCIÓN DE BANCA MÚLTIPLE,
DIVISIÓN FIDUCIARIA ACTING AS TRUSTEE OF THE
TRUST No. F/1498

By:	 	 	
	 	Name:	 	Carlos Jáuregui Baltazar	
	 	Title:	 	Fiducairy delegate	
THE JOINT OBLIGORS
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
	 	Name:	 	Fernando Suárez Gerard	
	 	Title:	 	Legal representative	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
	 	Name:	 	Fernando Suárez Gerard	
	 	Title:	 	Legal representative	
 
47

ANNEX 1
DISBURSEMENTS AND AMORTIZATIONS

 	  	 	  	 	  	AC # 24	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Aug-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Feb-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Aug-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	01-Aug-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 25	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Sep-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Mar-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	03-Sep-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	02-Sep-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 26	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Nov-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-May-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Nov-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	01-Nov-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 27	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Dec-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Jun-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	03-Dec-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	02-Dec-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
 
48

																	
 	  	 	  	 	  	AC # 28	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	764,672.28	  	 	 	459,847.09	  	 	 	304,825.19	  	
PDP	  	24M	  	01-Aug-11	  	 	1,529,344.57	  	 	 	919,694.18	  	 	 	609,650.39	  	
PDP	  	18M	  	01-Feb-12	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Aug-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Feb-13	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	03-Mar-14	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 29	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	782,735.41	  	 	 	470,709.62	  	 	 	312,025.79	  	
PDP	  	24M	  	01-Feb-12	  	 	1,565,470.82	  	 	 	941,419.24	  	 	 	624,051.58	  	
PDP	  	18M	  	01-Aug-12	  	 	3,130,941.63	  	 	 	1,882,838.48	  	 	 	1,248,103.15	  	
PDP	  	12M	  	01-Feb-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
PDP	  	6M	  	01-Aug-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
Reimbursement	  	Amortization	  	01-Sep-14	  	 	(10,175,560.30	) 	 	 	(6,119,225.07	) 	 	 	(4,056,335.23	) 	
				
 	  	 	  	 	  	AC # 30	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
PDP/Reimbursement	  	Concepto	  	Fecha de Pago	  	Monto Total	 	 	Porción
Santander	 	 	Porción
Bancomext	 	
Paid by Volaris	  		  	29-Jul-11	  	 	782,735.41	  	 	 	470,709.62	  	 	 	312,025.79	  	
PDP	  	24M	  	01-May-12	  	 	1,565,470.82	  	 	 	941,419.24	  	 	 	624,051.58	  	
PDP	  	18M	  	01-Nov-12	  	 	3,130,941.63	  	 	 	1,882,838.48	  	 	 	1,248,103.15	  	
PDP	  	12M	  	01-May-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
PDP	  	6M	  	01-Nov-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
Reimbursement	  	Amortization	  	01-Dec-14	  	 	(10,175,560.30	) 	 	 	(6,119,225.07	) 	 	 	(4,056,335.23	) 	
 
49

ANNEX 2
DISBURSEMENT REQUEST
[Letterhead of the Borrower]
Mexico, Federal District, [*], [*], 2011
Banco Nacional de Comercio Exterior, S.N.C.
Periférico Sur 4333
Colonia Jardines en la Montaña
Delegación Tlalpan, México
Distrito Federal, C.P. 14210
Attention: Ricardo Ramos San Martín
Banco Santander (México), S.A.
Institución de Banca Múltiple
Grupo Financiero Santander
Prol. Paseo de la Reforma 500 4o Piso
Modulo 403
México, D.F. 01219
Attention: Osvaldo Rancé Cachafeiro
Ref: Credit Agreement
Dear sirs:
We make reference to the Revolving Credit Line Agreement, dated as of July 27, 2011, (the “ Credit Line Agreement ”) among Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting solely as Trustee of the Trust number F/1498, as borrower (the “ Borrower ” or, as trustee pursuant to the Trust number F/1498, the “ Trustee ”), and Banco Santander (Mexico), S.A., Institución de Banca Mútliple, Grupo Financiero Santander and Banco Nacional de Comercio Exterior, S.N.C., acting as Lenders (the “ Bank ” or “ Banks ”); with the acknowledgement and consent of Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., as Joint Obligors of the Borrower. Capitalized terms used but not defined herein shall have the meaning specified in the Credit Line Agreement.
In connection with the aforementioned and pursuant to the terms of the Credit Line Agreement, we hereby and irrevocably notify that the Borrower wishes to disburse on [*] [*], 2011, an amount of US$[            ] ([million] Dollars 00/100), which must be deposited in the account set forth herein.
 
50

By virtue of the aforementioned, we irrevocably instruct the Lender to deposit the amounts corresponding to the applicable disbursementin the following account:
Bank: [*]
Beneficiary: Deutsche Bank México, S.A., Trust F/1498
Clave SWIFT: [*]
Account No.: [*]
CLABE: [*]

Very truly yours,	
	
Deutsche Bank México, S.A.,
Institución de Banca Múltiple, División Fiduciaria,
acting solely as Trustee of Trust number F/1498,	

Name:	 	Carlos Jáuregui Baltazar	
Title:	 	Fiducairy delegate	
 
51

ANNEX 3
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
Pursuant to value hereby received, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively as trustee of the Trust Number F/1498 (the “ Trustee ”) by this Promissory Note unconditionally promises to pay to the order of Banco Santander (México), S.A. Institución de Banca Múltiple, Grupo Financiero Santander and of Banco Nacional de Comercio Exterior, S.N.C. (the “ Lender ”) the principal sum of US$[            ] ([            ] Dollars 00/100) (the “Principal Sum”) payable in [            ] ([            ]) installments, in each of the following dates (each of which dates are a “ Payment Day ” and the last of which is the “ Expiration Date ”) for the amounts set forth as follows:
[INCLUDE THE CALENDAR CORRESPONDING TO EACH PROMISSORY NOTE]

 	  	 	  	 	  	AC # 24	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Aug-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Feb-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Aug-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	01-Aug-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 25	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Sep-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Mar-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	03-Sep-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	02-Sep-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 26	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Nov-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-May-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Nov-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	01-Nov-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
 
52

																	
 	  	 	  	 	  	AC # 27	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	24M	  		  	 	—   	  	 	 	—   	  	 	 	—   	  	
PDP	  	18M	  	01-Dec-11	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Jun-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	03-Dec-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	02-Dec-13	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 28	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	764,672.28	  	 	 	459,847.09	  	 	 	304,825.19	  	
PDP	  	24M	  	01-Aug-11	  	 	1,529,344.57	  	 	 	919,694.18	  	 	 	609,650.39	  	
PDP	  	18M	  	01-Feb-12	  	 	3,058,689.13	  	 	 	1,839,388.36	  	 	 	1,219,300.77	  	
PDP	  	12M	  	01-Aug-12	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
PDP	  	6M	  	01-Feb-13	  	 	2,294,016.85	  	 	 	1,379,541.27	  	 	 	914,475.58	  	
Reimbursement	  	Amortization	  	03-Mar-14	  	 	(9,940,739.68	) 	 	 	(5,978,012.19	) 	 	 	(3,962,727.49	) 	
				
 	  	 	  	 	  	AC # 29	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
Paid by Volaris	  		  	29-Jul-11	  	 	782,735.41	  	 	 	470,709.62	  	 	 	312,025.79	  	
PDP	  	24M	  	01-Feb-12	  	 	1,565,470.82	  	 	 	941,419.24	  	 	 	624,051.58	  	
PDP	  	18M	  	01-Aug-12	  	 	3,130,941.63	  	 	 	1,882,838.48	  	 	 	1,248,103.15	  	
PDP	  	12M	  	01-Feb-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
PDP	  	6M	  	01-Aug-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
Reimbursement	  	Amortization	  	01-Sep-14	  	 	(10,175,560.30	) 	 	 	(6,119,225.07	) 	 	 	(4,056,335.23	) 	
				
 	  	 	  	 	  	AC # 30	 	
PDP/Reimbursement	  	Concept	  	Payment date	  	Total Amount	 	 	Santander
Portion	 	 	Bancomext
Portion	 	
PDP/Reimbursement	  	Concepto	  	Fecha de Pago	  	Monto Total	 	 	Porción
Santander	 	 	Porción
Bancomext	 	
Paid by Volaris	  		  	29-Jul-11	  	 	782,735.41	  	 	 	470,709.62	  	 	 	312,025.79	  	
PDP	  	24M	  	01-May-12	  	 	1,565,470.82	  	 	 	941,419.24	  	 	 	624,051.58	  	
PDP	  	18M	  	01-Nov-12	  	 	3,130,941.63	  	 	 	1,882,838.48	  	 	 	1,248,103.15	  	
PDP	  	12M	  	01-May-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
PDP	  	6M	  	01-Nov-13	  	 	2,348,206.22	  	 	 	1,412,128.86	  	 	 	936,077.36	  	
Reimbursement	  	Amortization	  	01-Dec-14	  	 	(10,175,560.30	) 	 	 	(6,119,225.07	) 	 	 	(4,056,335.23	) 	
Likewise, the Borrower also unconditionally promises to pay the Lender, without prior request, ordinary interests over the unpaid Principal Sum during each Interest Period due (as this term is defined herein) since the date of this Promissory Note and until the Expiration Date, on an annual rate equivalent to the Ordinary Interest Rate (as this term is defined herein).
 
53

Interests will be due quarterly on the last day of each Period of Interests; in the understanding that, in case such day is not a Business Day, such payment shall be made on the next Business Day (each one an “ Interest Payment Date ”); in the understanding that the last Interest Payment Day shall occur precisely on the Expiration Date.
In case of an event of default concerning the payment of any amount due under this Note (except for ordinary interest) default interest will generate over the due and unpaid amount, beginning on the date in which such amount should have been paid until it is paid in full, at an annual interest rate of 1.25 (one point twenty five) times the Ordinary Interest Rate applicable during the period in which the default occurs and continues (the “ Default Interest Rate ”).
If any Payment Date or any Interest Payment Date occurs on a day which is not a Business day, such payment shall be made on the next Business Day.
Ordinary Interest hereunder shall be calculated on the basis of the actual number of days elapsed divided by 360 (three hundred sixty), including the first day but excluding the last day of the corresponding calculation period.
Default Interest due under this Note shall be calculated by dividing the Default Interest Rate applicable by three hundred sixty (360) and the result will be applied to the amounts due and unpaid, the result will be the default interest of each day that the Borrower agrees to pay on demand according to this Promissory Note.
For purposes of this Promissory Note, the following terms shall have the following meanings:
“ Business Day ” means any day in which the banking institutions in Mexico are not authorized to be closed.
“ Dollars ” or “ $ ” means the legal currency of the United States of America.
“ Interest Period ” means, for the first interest period, the period that begins on the date of this Promissory Note and ends on the Payment Date, and for each subsequent period, the period that begins the last day of the Interest Period next succeeding and that concludes on the next Payment Date.
“ Ordinary Interest Rate ” means, a rate equivalent to the LIBOR rate plus a margin of 265 (two hundred and sixty five) base points.
The Borrower will makes all payments of principal, interest, commissions and any other amount due under this Promissory Note free of interest, contributions, withholdings, deductions, fees or any other fiscal responsibility due under the laws, regulations and
 
54

other applicable legal dispositions in the United Mexican States, without any compensation, in immediately available funds, before 12:00PM (Mexico City, Federal District, United Mexican States) of the day in which the amount concerning becomes due. All payments made by the Borrower according to this Promissory Note shall be made in Dollars, through the account held between the Borrower and Banco Santander (México), S.A. Institución de Banca Múltiple, Grupo Financiero Santander.
The Borrower agrees to repay upon demand, in the same way and using the same funds, any costs and reasonable and duly justified amounts incurred in relation to the compliance or execution of this Promissory Note (including, without limitation, all documented legal costs).
The Borrower hereby waives any judicial proceedings, file, presentation, notice or lawsuit of any nature en relation to this Promissory Note.
Pursuant to Article 128 of the General Law of Credit Instruments of the United Mexican States, the period of presentment of this Promissory Note is hereby irrevocably extended until the date that is 6 (six) months after its Expiry Date; provided, however, that such extension does not imply that this Promissory Note cannot be presented for payment at an earlier date.
This Promissory Note shall be governed and interpreted according to the laws of the United Mexican States.
Concerning everything related to this Promissory Note, the Trustee hereby irrevocably submits to the jurisdiction of the courts of Mexico City, federal District, United States of Mexico, renouncing any other jurisdiction that by reason of his address, present or future, or any other reason, might correspond.
In case of a discrepancy between this Promissory Note and the Credit Line Agreement dated July 27, 2011 entered into by and between Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting solely as trustee of Trust f/1498; Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander as lender and administrative agent and Banco Nacional de Comercio Exterior, S.N.C.; and Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., (the “ Credit Line Agreement ”), the Credit Line Agreement will prevail.
This Promissory Note is executed in      pages which constitute one document.
 
55

Mexico City, Mexico, on              201
The Borrower
Deutsche Bank México, S.A., Institución de Banca Múltiple,
División Fiduciaria, acting solely as Trustee in Trust F / 1498

By:	 	 	
	 	Name:	 	Carlos Jáuregui Baltazar	
	 	Title:	 	Fiduciary Delegate	
Domicile:
Blvd. Manuel Ávila Camacho No 40, Piso 17
Colonia Lomas de Chapultepec, C.P. 11000
Mexico City, Mexico
As Joint Obligor
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
	 	Name:	 	Fernando Suárez Gerard	
	 	Title:	 	Legal representative	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
	 	Name:	 	Fernando Suárez Gerard	
	 	Title:	 	Legal representative	
 
56

ANNEX 4
BANK ACCOUNTS

THE BORROWER	  		
		
BANCOMEXT	  		
		
Account in the U.S	  		
Currency : US Dollars	  		
		
Standard Chartered Bank	  		
Nueva York, N. Y.	  		
		
Account number	  	3544 034 030 001 MATRIZ	
FEDWIRE	  	026002561	
CHIPS	  	0256	
SWIFT	  	SCBLUS33	
	
ADDRESS:
One Madison Avenue Third Floor, Nueva York, N. Y., C.P. 10010	

SANTANDER	  		
		
Account Name:	  	Banco Santander (Mexico), S.A.	
Bank:	  	JP Morgan Chase Bank, N.A.	
Account Number:	  	400047144	
Address:	  	4 New York Plaza, 15 th floor, 10004 New York, NY, USA	
FEDWIRE	  		
CHIPS	  		
SWIFT	  		
 
57

ANNEX 5
RESPONSIBLE OFFICER CERTIFICATE
[NAME OF THE BORROWER/JOINT OBLIGORS]
[Name of the Responsible Officer], as [title] of [Name of Borrower]/[Joint Obligors], a company [ — ] duly organized and existing under the laws of Mexico (the “Company”), pursuant to certain revolving credit line agreement dated July 27, 2011 (the “Credit Line Agreement”), entered into by and between Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively as trustee in Trust f/1498, as borrower; Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander as lender and administrative agent, and Banco Nacional de Comercio Exterior, S.N.C. as lender and on the other hand Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., each, individually, as a joint obligor and jointly as the joint obligors, I hereby certify that to this date:
1. The representations made by [Name of the Borrower] / [Nam of the Joint Obligors] pursuant to the credit Line Agreement and/or the agreements, certificates, instruments and documents related with it, are true and correct in all respects and are valid and fully enforceable to this date.
2. There has been no default in the obligations of [Name of the Borrower] / [Nam of the Joint Obligors], pursuant to the Credit Line Agreement and/or the agreements, certificates, instruments and documents executed by the [Borrower] / [Joint Obligors], and there cannot be a default of such documents as a consequence of the disposition that pursuant to the Credit Line Agreement that is requested on this date;
3. There is no Event of Default pursuant to the Purchase Agreement.
4. The Purchase Agreement, the First Novation and the Second Novation are valid and fully enforceable to this date.
The capitalized terms used in this Certificate and not defined otherwise, shall have the same meaning as set forth in the Credit Line Agreement.
IN WITNESS WHEREOF, this Certificate has been executed on July     , 2011.

By:	 	 	
	 	Name:	 	[ — ]	
	 	Title:	 	[ — ]	
 
58

FIRST AMENDMENT TO THE REVOLVING CREDIT LINE AGREEMENT DATED JULY 27, 2011 ENTERED INTO BY AND BETWEEN DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, DIVISIÓN FIDUCIARIA ACTING SOLELY AS TRUSTEE IN THE TRUST NUMBER F/1498 (HEREINAFTER REFERRED TO AS THE “BORROWER”); BANCO SANTANDER (MÉXICO), S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER (HEREINAFTER REFERRED TO AS “SANTANDER”); BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C. (HEREINAFTER REFERRED TO AS “BANCOMEXT”; SANTANDER AND BANCOMEXT MAY BE REFERRED TO JOINTLY AS THE “BANKS” AND, EACH ONE, AS APPLICABLE, AS “BANK”); CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (HEREINAFTER REFERRED TO AS “CONTROLADORA”) AND CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (HEREINAFTER REFERRED TO AS “CONCESIONARIA” AND HEREINAFTER, CONCESIONARIA AND CONTROLADORA MAY BE REFERRED TO AS, INDIVIDUALLY, A “JOINT OBLIGOR” AND JOINTLY, AS “JOINT OBLIGORS”), PURSUANT TO THE FOLLOWING RECITAL, REPRESENTATIONS AND CLAUSES:
RECITAL
I. That the Parties have entered into on July 27, 2011, a revolving Credit Line Agreement, pursuant to which Santander and Bancomext have made available to the Borrower, a revolving credit line agreement, with the appearance and agreement of the Joint Obligors of the Borrower (hereinafter referred to as the “Agreement”).
REPRESENTATIONS
 
 	I.	Santander represents, through its legal representatives that:	
a. It is a corporation duly organized in accordance with the laws of Mexico, authorized by the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) to act as a Multiple Lendering Institution.
b. Its legal representatives have sufficient power and authority necessary to execute this Agreement, which has not been revoked or limited in any manner whatsoever.
 
 	II.	Bancomext represents, through its legal representatives that:	
a. It is a national corporation duly organized in accordance with the Organic Law of the External Commerce National Bank (Ley Orgánica del Banco Nacional de Comercio Exterior), published in the official gazette on January 20, 1986.
b. Its legal representatives have sufficient power and authority to execute this Agreement, which has not been revoked or limited in any manner whatsoever.
 
59

 	III.	The Borrower represents, through its legal representatives that:	
a. It is a trust duly created and validly existing in accordance with the laws of Mexico.
b. Its trustee officer has sufficient power and authority to execute this Agreement, which have not been revoked, limited or modified whatsoever.
 
 	IV.	Each of the Joint Obligors, through its legal representatives that:	
a. It is a corporation (sociedad anónima promotora de inversion de capital variable) duly organized and validly existing in accordance with the laws of Mexico.
b. Its representative has the power and authority to execute this Agreement in accordance with the special powers granted to them for such effects, which have not been revoked, modified or limited in any manner whatsoever.
 
 	V.	The Parties represent, through its legal representatives that:	
a. It is their intention to modify certain Clauses of the Agreement in order to modify the dates of payment of interests of outstanding amounts, pursuant to the terms of this Amendment.
b. The parties recognize the authority of each of them.
The terms not defined herein or that are modified by this agreement, shal have the same meaning as set forth in the Agreement.
Pursuant to the above, the Parties hereby agree as follows:
CLAUSES
F IRST . The Parties agree that to the date of this Amendment, the “BORROWER” has made certain disbursements pursuant to the Agreement, which are set forth herein (the “Performed Disbursements”):
Disbursement 1: made on 29 July 2011.
Disbursement 2: made on 01 August 2011.
Disbursement 3: made on 01 September 2011.
Disbursement 4: made on 01 November 2011.
Disbursement 5: made on 28 December 2011.
Disbursement 6: made on de 01 February 2012.
Therefore, the Parties agree that the date of payment of interests of the Performed Disbursements, be made in accordance with the following calendar:
Disbursement 1: On April 30, 2012 and the next date of payment of interests shall be on May 1, 2012.
 
60

Disbursement 3: On March 01 2012, and the next date of payment of interests shall be on May 01 2012.
Disbursement 5: On March 28 2012, and the next date of payment of interests shall be on May 01 2012.
Disbursement 2, 4 and 6: On May 01 2012.
In the understanding that subsequent payments of interests shall be made in accordance with clause Third of this amendment.
S ECOND . The Parties agree that as of May 1, 2012, the payment of interests of outstanding amounts as a result of the Performed Disbursements and regarding all those to be made in the future by the Borrower porsuant to the Agreement, are modified in terms of clause third herein.
T HIRD
3.1 The Parties agree to modify the definition of “Interests Period” of the “DEFINITIONS” of the Agreement, to be set forth as follows:
““Interests Period” shall mean the period to calculate the interests base don which interests shall be calculated on the outstanding amount of the Credit, and will start on the next day on the Interest Payment Date immediately preceding and will end on the Interest Payment Date immediately following. For such effect the interests shall be calculated and payable on February 1, May 1, August 1 and November 1 of each year in the understanding that, in case such day is not a Business Day immediately following (each an “Interests Payment Date”)””.
3.2 The Parties agree to modify the clause fifth of the Agreemene regarding the “Ordinary Interests” to be set forth as follows:
““FIFTH.- ORDINARY INTERESTS.- The Borrower shall pay the Bank, without prior request, ordinary interests on all outstanding amounts payable, which shall be calculated and payable per expired Interests Period at the Ordinary Interest Rate. The interests shall be calculated and payable on the corresponding Interests Payment Date. The calculation of interest will be performed using the number of calendar days that have elapsed between each Interests Payment Date and the following, with a base year of three hundred and sixty (360) days.
Notwithstanding the foregoing, the Borrower, the Joint Obligors and the Banks agree that if the LIBOR Rate cannot be determined for a specific Interests Period, then: (a) the applicable interest rate will be the Alternate Rate in Dollars, or (b) in the event that the Alternate Rate in Dollars cannot be determined, the Banks, Borrower and the Joint Obligors shall negotiate in good faith and agree on the interest rate that will be used for the corresponding Interest Period, and (c) in the case that the parties do not agree on the applicable interest rate for the applicable Interests Period within 10 (ten) Business Days from the Determination Date for the interests, the Banks shall determine (and shall deliver to the Borrower and the Joint Obligors a certificate containing the basis for such determination) the applicable interest rate over such period reflecting the financial costs of the Banks, and such rate shall be applied for the applicable Interest Period.””
 
61

F OURTH . The Parties agree to modify Annex 3 of the Agreement “Promissory Note Format”, therefore as of the date of this amendment, the terms and conditions set forth in the document attached hereto as Annex A shall be in effect.
Additionally, the Parties agree to substitute the Promissory Notes pursuant to the performed Disbursements for others that contain the terms set forth in Annex A.
F IFTH . The Parties agree and accept that the execution of this amendment, is not an will not, under any circumstance, be construed as a novation, therefore the parties agree that, except as set forth above, the rest of the terms and conditions of the Agreement and its annexes will remain fully valid and without amendment.
S IXTH . All the matters not considered under this Agreement the parties shall be governed by and construed in accordance with the General Law of Negotiable Instruments and Credit Operations, the Law of Credit Institutions and any other applicable provisions. For the interpretation and compliance of this Agreement, the parties hereby irrevocably and unconditionally submit to the jurisdiction of the courts of Mexico, Federal District, in any legal action, suit or proceeding arising out of or relating to this Agreement, and the parties expressly waive any other forum or court that may correspond by reason of their present or future domiciles or otherwise.
S ÉPTIMA . The Parties set forth as their domiciles for all notices related to this amendment the ones set out in the Agreement.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
 
62

IN WITNESS WHEREOF, the parties have caused this Agreement in 5 (five) copies each one considered as an original and together the same instrument, in Mexico City, on February 28, 2012.
THE BANKS
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER

By:	 	 	 		 	By:	 	 	
Name:	 		 		 	Name:	 		
			
Title: Legal representative	 		 	Title: Representante legal	
BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C.

By:	 	 	 		 	By:	 	 	
Name:	 	Eduardo Muñiz Juárez	 		 	Name:	 	Ricardo Ramos San Martín	
			
Title: Legal representative	 		 	Title: Legal representative	
This page corresponds to the Amendment to the Agreement dated February 28, 2012.
 
63

THE ADMINISTRATIVE AGENT
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER

By:	 	 	 		 	By:	 	 	
Name:	 		 		 	Name:	 		
			
Title: Legal representative	 		 	Title: Legal representative	
This page corresponds to the Amendment to the Agreement dated February 28, 2012.
 
64

THE BORROWER
DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE
DIVISIÓN FIDUCIARIA, EN SU CARÁCTER DE FIDUCIARIO
DEL FIDEICOMISO NÚMERO F/1498

By:	 	 	
Name: Carlos Jáuregui Baltazar	
	
Title: Fiduciary Delegate	
This page corresponds to the Amendment to the Agreement dated February 28, 2012.
 
65

THE JOINT OBLIGORS
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name: Fernando Suárez Gerard	
	
Title: Legal representative	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name: Fernando Suárez Gerard	
	
Title: Legal representative	
This page corresponds to the Amendment to the Agreement dated February 28, 2012.
 
66

ANNEX A
PROMISSORY NOTE FORMAT
PROMISSORY NOTE
Pursuant to value hereby received, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively as trustee of the Trust Number F/1498 (the “Trustee”) by this Promissory Note unconditionally promises to pay to the order of Banco Santander (México), S.A. Institución de Banca Múltiple, Grupo Financiero Santander and of Banco Nacional de Comercio Exterior, S.N.C. (the “Lender”) the principal sum of US$[        ] ([        ] Dollars 00/100) (the “Principal Sum”) payable in [    ] ([    ]) installments, in each of the following dates (each of which dates are a “Payment Day” and the last of which is the “Expiration Date”) for the amounts set forth as follows:
[INCLUDE THE CALENDAR CORRESPONDING TO EACH PROMISSORY NOTE]
Likewise, the Borrower also unconditionally promises to pay the Lender, without prior request, ordinary interests over the unpaid Principal Sum during each Interest Period due (as this term is defined herein) since the date of this Promissory Note and until the Expiration Date, on an annual rate equivalent to the Ordinary Interest Rate (as this term is defined herein).
Interests will be due on February 1, May 1, August 1 and November 1. In case such day is not a Business Day, such payment shall be made on the next Business Day (each one an “Interest Payment Date”); in the understanding that the last Interest Payment Day shall occur precisely on the Expiration Date.
In case of an event of default concerning the payment of any amount due under this Note (except for ordinary interest) default interest will generate over the due and unpaid amount, beginning on the date in which such amount should have been paid until it is paid in full, at an annual interest rate of 1.25 (one point twenty five) times the Ordinary Interest Rate applicable during the period in which the default occurs and continues (the “Default Interest Rate”).
If any Payment Date or any Interest Payment Date occurs on a day which is not a Business day, such payment shall be made on the next Business Day.
Ordinary Interest hereunder shall be calculated on the basis of the actual number of days elapsed between each Interests Payment Dates and the following one, on a basis of a year of 360 (three hundred sixty) days, including the first day but excluding the last day of the corresponding calculation period.
Default Interest due under this Note shall be calculated by dividing the Default Interest Rate applicable by three hundred sixty (360) and the result will be applied to the amounts due and unpaid, the result will be the default interest of each day that the Borrower agrees to pay on demand according to this Promissory Note.
 
67

For purposes of this Promissory Note, the following terms shall have the following meanings:
“ Business Day ” means any day in which the banking institutions in Mexico are not authorized to be closed.
“ Dollars ” or “ $ ” means the legal currency of the United States of America.
“ Período de Intereses ” significa el período para el cómputo de intereses con base en el cual se calcularán los intereses que devengue el saldo insoluto del Crédito, e iniciará al día siguiente de la Fecha de Pago de Intereses inmediata anterior y terminará en la Fecha de Pago de Intereses inmediata siguiente. Para tales efectos los intereses serán calculados y pagaderos los días 1 de febrero, 1 de mayo, 1 de agosto y 1 de noviembre de cada año en el entendido que, en caso de que dicho día no sea un Día Hábil, dicho pago se realizará el Día Hábil inmediato siguiente (cada una, una “Fecha de Pago de Intereses”).
“ Interest Period ” means, the period for the calculations of interests based on which generated interests shall be calculated on outstanding amounts of the Credit Line, and will begin on the next day of the Interests Payment Date immediately preceding and will end on the Interests Payment Date immediately following. For such effect, interests shall be calculated and paid on February 1, May 1 and November 1 of each year, in the understanding that, if such date is not a Business Day, payment will be made on the next Business Day (each, an “Interests Payment Date”).
“ Ordinary Interest Rate ” means, a rate equivalent to the LIBOR rate plus a margin of 265 (two hundred and sixty five) base points.
The Borrower will make all payments of principal, interest, commissions and any other amount due under this Promissory Note free of interest, contributions, withholdings, deductions, fees or any other fiscal responsibility due under the laws, regulations and other applicable legal dispositions in the United Mexican States, without any compensation, in immediately available funds, before 12:00PM (Mexico City, Federal District, United Mexican States) of the day in which the amount concerning becomes due. All payments made by the Borrower according to this Promissory Note shall be made in Dollars, through the account held between the Borrower and Banco Santander (México), S.A. Institución de Banca Múltiple, Grupo Financiero Santander.
The Borrower agrees to repay upon demand, in the same way and using the same funds, any costs and reasonable and duly justified amounts incurred in relation to the compliance or execution of this Promissory Note (including, without limitation, all documented legal costs).
The Burrower hereby waives any judicial proceedings, file, presentation, notice or lawsuit of any nature en relation to this Promissory Note.
Pursuant to Article 128 of the General Law of Credit Instruments of the United Mexican States, the period of presentment of this Promissory Note is hereby irrevocably extended until the date that is 6 (six) months after its Expiry Date; provided, however, that such extension does not imply that this Promissory Note cannot be presented for payment at an earlier date.
 
68

This Promissory Note shall be governed and interpreted according to the laws of the United Mexican States.
In case of a discrepancy between this Promissory Note and the Credit Line Agreement dated July 27, 2011 entered into by and between Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting solely as trustee of Trust f/1498; Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander as lender and administrative agent and Banco Nacional de Comercio Exterior, S.N.C.; and Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., (the “Credit Line Agreement”), the Credit Line Agreement will prevail.
Concerning everything related to this Promissory Note, the Trustee hereby irrevocably submits to the jurisdiction of the courts of Mexico City, federal District, United States of Mexico, renouncing any other jurisdiction that by reason of his address, present or future, or any other reason, might correspond.
This Promissory Note is executed in      pages which constitute one document.
Mexico City, Mexico, on      201
The Borrower
Deutsche Bank México, S.A., Institución de Banca Múltiple,
División Fiduciaria, acting solely as Trustee in Trust F / 1498

By:	 	 	
Name: Carlos Jáuregui Baltazar	
Title: Fiduciary Delegate	
Domicile:	
Blvd. Manuel Ávila Camacho No 40, Piso 17
Colonia Lomas de Chapultepec, C.P. 11000
Mexico City, Mexico
As Joint Obligor
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name: Fernando Suárez Gerard	
Title: Legal representative	
 
69

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name: Fernando Suárez Gerard	
Title: Legal representative	
 
70

Execution Version
[TO BE RATIFIED BEFORE A MEXICAN NOTARY PUBLIC]
AMENDMENT AND ACKNOWLEDGEMENT OF INDEBTEDNESS AGREEMENT DATED AUGUST 1, 2013 (HEREAFTER THE “ AGREEMENT ”) TO THE CREDIT AGREEMENT (AS DEFINED BELOW), ENTERED INTO BY AND BETWEEN: (I)  DEUTSCHE BANK MEXICO, SA, INSTITUCIÓN DE BANCA MÚLTIPLE, DIVISIÓN FIDUCIARIA, ACTING SOLELY AS TRUSTEE OF TRUST F/1498, REPRESENTED HEREIN BY MARIA DEL CARMEN MOZAS GOMEZ (HEREAFTER THE “ A BORROWER ”), AND (II) DEUTSCHE BANK MEXICO, SA, INSTITUCIÓN DE BANCA MÚLTIPLE, DIVISIÓN FIDUCIARIA, ACTING SOLELY AS THE TRUSTEE OF TRUST F /1711, REPRESENTED HEREIN BY MARIA DEL CARMEN MOZAS GOMEZ (HEREAFTER THE “ B BORROWER ” AND TOGETHER WITH THE A BORROWER THE “ BORROWERS ”), (III) BANCO SANTANDER (MEXICO), S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GROUPO FINANCIERO SANTANDER (MEXICO) (“ SANTANDER ” OR THE “ AGENT ” AS APPLICABLE), REPRESENTED HEREIN BY GONZALO FONCERRADA MONTAÑO AND JOSE MARTIN GALLEGOS OLIVARES, IN HIS CAPACITY AS LENDER AND AGENT, AND (IV) BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C. (“ BANCOMEXT ”), REPRESENTED HEREIN BY EDUARDO MUÑIZ JUAREZ AND RICARDO RAMOS SAN MARTIN, AS LENDER (HEREAFTER, SANTANDER AND BANCOMEXT REFERRED TO COLLECTIVELY AS THE “ LENDERS ”, AND EACH, ACCORDINGLY AS THE “ BANK ”), AND (V)  CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. REPRESENTED HEREIN BY MARIO ENRIQUE GEYNE PLIEGO (HEREAFTER, “ CONTROLADORA ”) AND CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., REPRESENTED HEREIN BY MARIO ENRIQUE GEYNE PLIEGO (HEREAFTER, “ CONCESIONARIA ”, HEREAFTER, CONTROLADORA AND CONCESIONARIA REFFERED TO INDIVIDUALLY AS THE “ JOINT OBLIGOR ” AND COLLECTIVELY, THE “ JOINT OBLIGORS ” AND TOGETHER WITH THE BORROWERS AND LENDERS, THE “ PARTIES ”), PURSUANT TO THE FOLLOWING RECITALS, REPRESENTATIONS, DEFINED TERMS AND CLAUSES:
RECITALS
I. On October 28, 2005, Controladora, as the original purchaser (the “ Original Purchaser ” as defined in the Original Purchase Agreement), and Airbus S.A.S., as seller, (“ Airbus ”, or the “ Seller ” as defined in the Original Purchase Agreement) entered into an aircraft purchase agreement (the “ Original Purchase Agreement ”), pursuant to which Airbus agreed to sell to Controladora and Controladora agreed to purchase and to receive, among other things, 7(seven) Airbus A320 aircrafts identified with purchase numbers from 24 (twenty four) to 30 (thirty), as well as their engines and related operations and technical information manuals (the “ Financed Aircrafts 2005 ”, as defined in the Step-In

Agreement A referred in the recital VI of this agreement), as they are more detailed in the Original Purchase Agreement, which jointly with the other aircraft, were the purpose for its execution.
II. On July 27, 2011, Controladora, as the settlor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as the trustee (the “ Santander/Bancomext PDP Trust 1 Trustee ”), entered into an irrevocable trust agreement identified with number F/1497, (the “ Santander/Bancomext PDP Trust 1 ”).
III. On July 27, 2011, once the Santander/Bancomext PDP Trust 1 was executed, Controladora, Santander/Bancomext PDP Trust 1 Trustee, as the purchaser, and Airbus, as the seller, entered into an Aircraft Purchase Agreement Novation regarding the Financed Aircraft 2005 (as defined in the Step In Agreement A as the “ First PA Novation ”) in order to partially amend the terms of such Original Purchase Agreement (hereinafter, as may be amended, supplemented or novated from time to time, the “ First Novated Purchase Agreement ”). Pursuant to the terms and subject to the conditions set forth in the First Novated Purchase Agreement, Airbus agreed to sell and the Santander/Bancomext PDP Trust 1 Trustee agreed to purchase and to receive the Financed Aircrafts 2005, in accordance with the First Novated Purchase Agreement which would become part of Santander/Bancomext’s PDP Trust 1 estate.
IV. On July 27, 2011 the Santander/Bancomext PDP Trust 1 Trustee, in accordance with the authority granted to it within the Santander/Bancomext PDP Trust 1 as trustee, acting as the Settlor, and solely as Trustee of the Santander/Bancomext PDP Trust 1, entered into an irrevocable trust agreement number F/1498 with Deutsche Bank México, S.A. Institución de Banca Múltiple, División Fiduciaria, as trustee (the “ Santander/Bancomext PDP Trust 2 ), for the purposes set forth therein.
V. On July 27, 2011 the Trustee, in accordance with the authority granted to it within the Santander/Bancomext PDP Trust 1 and the trustee of Santander/Bancomext PDP Trust 2, and Airbus entered into an Aircraft Purchase Agreement Novation with respect to the Financed Aircrafts 2005 (the “ Second PA Novation ”, as defined in the Step-In Agreement A), to partially novate and amend the terms of such First Novated Purchase Agreement (hereinafter, as may be amended, supplemented or novated from time to time, the “ Second Novated Purchase Agreement ”, as defined in the Step-In Agreement A), as well as to transfer and assign all rights and obligations of Santander/Bancomext’s PDP Trust 1 estate in favor Santander/Bancomext’s PDP Trust 2 estate in order to establish the terms and conditions pursuant to which Airbus agreed to sell and the Trustee of the Santander/Bancomext PDP Trust 2 agreed to purchase and receive the Financed Aircrafts 2005 as set forth in the Second Novated Purchase Agreement in order that such aircrafts would become part of Santander/Bancomext’s PDP Trust 2 estate.
VI. On July 27, 2011, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciara, acting as trustee of the Santander/Bancomext PDP Trust 2, Santander, acting as the agent, Airbus and Controladora, entered into Step-In Agreement A (the “ Step-In Agreement A ”) to grant and acknowledge, in some cases, certain rights of the Lenders in connection with the Second Novated Purchase Agreement.

VII. On July 27, 2011, A Borrower, the Lenders and the Joint Obligors entered into a revolving credit line agreement (the “ Credit Agreement ”) in virtue by which the lenders agreed to disburse the principal amount of no more that US$62,714,000.00 (Sixty two million seven hundred fourteen thousand Dollars 00/100) in favor of A Borrower.
VIII. On February 28, 2012, the A Borrower, the Lenders and the Joint Obligors entered into an amendment agreement to the Loan Agreement in which, among other things, the definition of “Interest Period” and Clause Fifth to the Loan Agreement was modified.
IX. On December 28, 2011, Controladora, as the Original Purchaser, and Airbus as the Seller, entered into an amendment agreement to the Original Purchase Agreement number 8 (defined as Amendment No. 8 to the Purchase Agreement, the “Original Purchase Agreement 2011”), pursuant to which Airbus agreed to sell to Controladora and Controladora agreed to purchase and to receive, among other things, 8 (eight) Airbus A320 aircrafts identified with purchase numbers from 31 (thirty one) to 38 (thirty eight) and together with the technical information manuals, engines and other documents related to them (the “Financed Aircrafts 2011”) (together the Financed Aircrafts 2011 and the Financed Aircrafts 2005 the “Financed Aircrafts”).
X. On this date, Controladora, acting as settlor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as the trustee (the “ Santander/Bancomext PDP Trust 3 Trustee ”), entered into an irrevocable trust agreement identified with number F/1710, (the “ Santander/Bancomext PDP Trust 3 ” and together with Santander/Bancomext PDP Trust 1, the “ Originating Trusts ”).
XI. On such date upon execution of the Santander/Bancomext PDP Trust 3, Controladora, Santander/Bancomext PDP Trust 1 Trustee, as the purchaser, and Airbus, as the seller, entered into an aircraft purchase agreement novation respect to the Financed Aircrafts 2011 (the “ First PA Novation 2011 ”, as defined in the Step-In Agreement B) in order to partially novate and amend the terms of such Original Purchase Agreement 2011 (hereinafter, as may be amended, supplemented or novated from time to time, the “ First Novated Purchase Agreement 2011 ”, as defined in the Step-In Agreement B). Pursuant to the terms and subject to the conditions set forth in the First Novated Purchase Agreement 2011, Airbus agreed to sell and the Santander/Bancomext’s PDP Trust 3 Trustee agreed to purchase and to receive the Financed Aircrafts 2011, which would become part of Santander/Bancomext’s PDP Trust 3 estate.
XII. On such date the Santander/Bancomext’s PDP Trust 3 Trustee, in accordance with the authority granted to it within the Santander/Bancomext PDP Trust 3 as trustee, acting as the Settlor, and solely as Santander/Bancomext’s PDP Trust 3 Trustee, entered into an irrevocable trust agreement number F/1711 with Deutsche Bank México, S.A. Institución de Banca Múltiple, División Fiduciaria, as trustee (the “ Santander/Bancomext’s PDP Trust 4 Trustee ”), (the “ Santander/Bancomext PDP Trust 4 ), for the purposes set forth therein.

XIII. On such date the Santander/Bancomext’s PDP Trust 3 Trustee, in accordance with the authority granted to it within the Santander/Bancomext PDP Trust 3 and Santander/Bancomext’s PDP Trust 4 Trustee, and Airbus entered into an Aircraft Purchase Agreement Novation with respect to the Financed Aircrafts 2011 (the “ Second PA Novation 2011 ”, as defined in the Step-In Agreement B), to partially novate and amend the terms of such First Novated Purchase Agreement 2011 (hereinafter, as may be amended, supplemented or novated from time to time, the “ Second Novated Purchase Agreement 2011 ”, as defined in the Step-In Agreement B), as well as to transfer and assign all rights and obligations of Santander/Bancomext’s PDP Trust 3 estate in favor Santander/Bancomext’s PDP Trust 4 estate in order to establish the terms and conditions pursuant to which Airbus agreed to sell and the Trustee of the Santander/Bancomext PDP Trust 4 agreed to purchase and receive the Financed Aircrafts 2011 as set forth in the Second Novated Purchase Agreement 2011 in order that such aircrafts would become part of Santander/Bancomext’s PDP Trust 4 estate.
XIV. On such date Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciara, acting as trustee of the Santander/Bancomext PDP Trust 4, Santander, acting as the agent, Airbus and Controladora, entered into Step-In Agreement B (the “ Step-In Agreement B ”) to grant and acknowledge, in some cases, certain rights of the Lenders in connection with the Second Novated Purchase Agreement 2011.
XV. By virtue of the execution of Santander/Bancomext PDP Trust 2, and Santander/Bancomext PDP Trust 4, the Santander/Bancomext PDP Trust 2 Trustee and Santander/Bancomext PDP Trust 4 Trustee are entitled to enter into and be bound by this Agreement in order for the Santander/Bancomext PDP Trust 4, as B Borrower, obtain financing in accordance with the terms and conditions established herein.
XVI. The Parties agree to enter into this Agreement for the purpose of: (i) recognizing the obligations of the A Borrower under the Original Purchase Agreement, (ii) B Borrower accedes, in its capacity as borrower of the Original Credit Agreement , and (iii) amending and restating the Credit Agreement, so that with effect from the date of execution hereof, the Parties shall be governed under the terms and conditions of the documents attached hereto as Exhibit “A” (the “ Restated Credit Agreement ”).
REPRESENTATIONS
 
 	I.	The A Borrower represents, through its trust officer that:	
 
 	(i)	No circumstance, event or condition has occurred, causing a material adverse effect in (a) the business, operations, property or condition (financial or other) that affects its ability to comply and fulfill within due time any of its	

 	obligations under the Credit Agreement or the Restated Credit Agreement, (b) the legality, validity or enforceability of the Credit Agreement, (c) the rights and recourses of the A Borrower under the Credit Agreement or the Restated Credit Agreement, or (d) the rights established under the Credit Agreement.	
 
 	II.	The B Borrower represents, through its trust officer that:	
 
 	(i)	All statements made under the Restated Credit Agreement are true and correct in every way, as if such statements were made as of the date hereof and which are incorporated by reference as if set forth herein, and are confirmed and ratified by such B Borrower.	
 
 	III.	Each of the Parties represents, through its representative or trust officers, as applicable, that:	
 
 	(i)	To the date hereof, all statements made by each party in the Credit Agreement as such is amended in terms of the present Agreement, are true and correct in every way, as if such statements were made as of the date hereof and are incorporated by reference as if set forth herein, and are confirmed and ratified by each of them, as applicable; except , those which refer to a specific date or are qualified as a result of this Agreement.	
 
 	(ii)	Each of the Parties acknowledges the legal existence of their respective representations and the legitimate representation of their legal representatives or trust officers, as applicable.	
 
 	(iii)	In connection with the execution of this Agreement, and to its understanding, there has been no fraud, bad faith or willful misconduct.	
Based on the foregoing Recitals and Representations, the parties herein agree as follows:
CLAUSES
FIRST. Interpretation . The terms used herein commencing with an initial capital letter, not defined in this Agreement shall have the meaning ascribed to such terms in the Restated Credit Agreement. Additionally, in the present Agreement:
 
 	(i)	the terms used with an initial capital letter for plurals shall apply for singulars according to their meaning;	
 
 	(ii)	when the context so requires, any pronoun shall include the corresponding masculine or feminine or neutral form;	

 	(iii)	references to this Agreement or any other agreement, document, or any specific provision thereof, shall be interpreted as a reference to such instrument or provision as amended in accordance with their respective terms;	
 
 	(iv)	all references to Clauses, sections, subsections, paragraphs and Exhibits shall be interpreted in connection with the Clauses, sections, subsections, paragraphs and Exhibits under this Agreement, unless provided otherwise;	
 
 	(v)	any and all Exhibits and Appendices attached hereto, form an integral part of this agreement, and	
 
 	(vi)	the words “including”, “includes” and “include” shall be deemed as if being followed by “without any limitation”, unless expressly provided otherwise.	
SECOND. Accession of B Borrower to the Credit Agreement . With effect from the date of execution of this Agreement, the B Borrower expressly agrees to adhere to the Restated Credit Agreement, in its capacity as borrower (as B Borrower), in the same form and under the same terms as if had entered into such Restated Credit Agreement on the date of its execution, and so it is subject to the rights and obligations provided for the borrowers therein, including without limitation any obligation for the payment of any Disbursement, precisely on the terms and subject to the conditions set forth in the Restated Credit Agreement.
THIRD. Amendment and Restatement of the Credit Agreement . By virtue of the accession of the B Borrower to the Restated Credit Agreement, the Parties hereby agree to amend and restate the terms and conditions of the Credit Agreement in the terms of the document attached hereto as Exhibit “A” .
FOURTH. Acknowledgement of Indebtedness under the Restated Credit Agreement . As part of the amendment and restatement of the Credit Agreement subject to this Agreement to this date A Borrower hereby acknowledges that it owes the principal amount of US$25,595,447.75 (Twenty five million five hundred ninety five thousand four hundred forty seven Dollars 75/100) (US$15,392,204.48 to Santander and US$10,203,243.27 to Bancomext) on account of the A Tranche Amount, amounts payable by the A Borrower in accordance with the terms and conditions established under the Restated Credit Agreement.
FIFTH. Acknowledgement of receipt of payments under the Restated Credit Agreement. As part of the amendment and restatement of the Credit Agreement subject to this Agreement, the Lenders hereby acknowledge and agree that the A Borrower and/or the Joint Obligors, to this date, have made the corresponding payments for fees, expenses and commissions, including the structuring fee with respect to the A Tranche Amount established under Exhibit “B” hereof, in addition to the amounts due for principal and interests accrued as set forth in Exhibit “C” hereof, amounts that have been

paid by the A Borrower and/or the Joint Obligors pursuant to the terms and conditions set forth in such Restated Credit Agreement, the Lenders hereby grant the A Borrower and the Joint Obligors the broadest settlement permitted by law exclusively and limited only to such payments.
SIXTH. Independence of the obligations . The compliance or default of any obligation of the Borrower under any document relating to the Original Purchase Agreement or the Original Purchase Agreement 2011, as applicable, will in no way affect the validity, legality, enforceability, terms and conditions of the provisions contained in the Restated Credit Agreement.
Similarly, the compliance or default of any obligation under the Restated Credit Agreement does not in any way affect the validity, legality, enforceability, terms and conditions of the provisions, rights and obligations of the Trustee of Santander/Bancomext’s PDP Trust 1 or the Santander/Bancomext’s PDP Trust 3 in relation to the Original Purchase Agreement or the Original Purchase Agreement 2011, as applicable.
SEVENTH. No Novation . The execution of this Agreement by the A Borrower, the Lenders and the Joint Obligors does not constitute a novation of the obligations of such parties under the Credit Agreement (as amended and restated pursuant to this Agreement) or any other documents relating to or arising out of the Credit Agreement (as amended and restated pursuant to this Agreement).
EIGHTH. Ratification of the terms of the Credit Agreement . The Parties agree and confirm that the only modifications to the Credit Agreement are set forth in the Restated Credit Agreement attached hereto as Exhibit A. The Parties hereby confirm and ratify each and every one of the terms and conditions of the Credit Agreement and its exhibits restated by this Agreement represent the complete and final agreement of the Parties.
Also, the Parties agree that any reference to the “Credit Agreement” makes reference to the Restated Credit Agreement pursuant hereto.
NINETH. Conditions . This Agreement shall take effect from the date it is fulfilled, or from the date the Lenders confirm in writing the waiver corresponding to the following conditions precedent:
 
 	(a)	There is no Default or Material Adverse Change under the Restated Credit Agreement.	
 
 	(b)	The Borrower B has conducted full payment of the Structuring Fee with respect to the A Tranche Amount, in terms set forth under the Restated Credit Agreement.	
 
 	(c)	The Borrower delivers to the Agent the Netting Letter with respect to the B Tranche Amount, in terms set forth under the Restated Credit Agreement.	

TENTH. Conflicts . In case of any conflict in the interpretation of the provisions of this Agreement and the Restated Credit Agreement, the provisions of the Restated Credit Agreement shall prevail. 
ELEVENTH. Severability . In the event that any provision hereof is invalid, illegal or unenforceable, such provision shall be severed from the remainder of the Agreement and the validity, legality and enforceability of the remaining provisions shall not be affected in any way. 
TWELFTH. Entire Agreement . This Agreement supersedes all prior written and oral statement in connection hereof.
THIRTEENTH. Headers . The headings of this Agreement are included for convenience purposes only and shall not be intended to affect the interpretation of the provisions hereof. 
FOURTEENTH. Exhibits . The Parties agree that the Exhibits form an integral part of this Agreement as if they were included herein, and therefore shall be interpreted taking into account the content of such Exhibits.
FIFTEEN. Notices . All notices and other communications relating to this Agreement and the Restated Credit Agreement shall be made as provided in the Restated Credit Agreement. 
SIXTEENTH. Expenses and Costs . The Parties agree that the expenses and costs generated by the preparation and execution of this Agreement shall be on account of the Borrowers. 
SEVENTEENTH. Law and Jurisdiction . This Agreement shall be governed by and construed in accordance with the laws of Mexico. For all matters concerning the interpretation and application of this Agreement, the Parties submit themselves to the jurisdiction of the federal courts located in Mexico City, Mexico, waiving any other jurisdiction in reason of their previous or future address or otherwise. 
EIGHTEEN. Effectiveness/Ratification . This Agreement is executed by the Borrowers, the Lenders and the Joint Obligors, and the parties hereby agree to ratify this Agreement before a public notary within the next ten (10) Business Days of the date of execution.
[Signature pages continue]

This Agreement dated August 1, 2013 is entered into by the Parties in Mexico City, Federal District.
THE LENDERS
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER (MÉXICO)

By:	 	/s/    G ONZALO F ONCERRADA M ONTAÑO	 		 	By:	 	/s/    J OSÉ M ARTÍN G ALLEGOS O LIVARES	
	 	Name:	 	Gonzalo Foncerrada Montaño	 		 		 	Name:	 	José Martín Gallegos Olivares	
							
	 	Title:	 	Representante legal	 		 		 	Title:	 	Representante legal	
BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C.

By:	 	/s/    E DUARDO M UÑIZ J UÁREZ	 		 	By:	 	/s/    R ICARDO R AMOS S AN M ARTÍN	
	 	Name:	 	Eduardo Muñiz Juárez	 		 		 	Name:	 	Ricardo Ramos San Martín	
							
	 	Title:	 	Representante legal	 		 		 	Title:	 	Representante legal	

[SIGNATURE PAGES OF THE AMENDMENT AGREEMENT DATED AUGUST 1, 2013]

THE AGENT
BANCO SANTANDER (MÉXICO), S.A.
INSTITUCIÓN DE BANCA MÚLTIPLE
GRUPO FINANCIERO SANTANDER MÉXICO

By:	 	/ S /    G ONZALO F ONCERRADA M ONTAÑO	 		 	By:	 	/ S /    J OSÉ M ARTÍN G ALLEGOS O LIVARES	
	 	Name:	 	Gonzalo Foncerrada Montaño	 		 		 	Name:	 	José Martín Gallegos Olivares	
							
	 	Title:	 	Representante legal	 		 		 	Title:	 	Representante legal	
LAS ACREDITADAS
DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE
DIVISIÓN FIDUCIARIA, AS TRUSTEE OF TRUST F/1498

By:	 	/ S /    M ARIA DEL C ARMEN M OZAS G ÓMEZ	
	 	Name:	 	Maria del Carmen Mozas Gómez	
			
	 	Title:	 	Delegado Fiduciario	

[SIGNATURE PAGES OF THE AMENDMENT AGREEMENT DATED AUGUST 1, 2013]

DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE
DIVISIÓN FIDUCIARIA, AS TRUSTEE OF TRUST F/[ — ]

By:	 	/ S /    M ARIA DEL C ARMEN M OZAS G ÓMEZ	
	 	Name:	 	Maria del Carmen Mozas Gómez	
			
	 	Title:	 	Delegado Fiduciario	
JOINT OBLIGORS
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.

By:	 	/ S /    M ARIO E NRIQUE G EYNE P LIEGO	
	 	Name:	 	Mario Enrique Geyne Pliego	
			
	 	Title:	 	Attorney-in-fact	
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	/ S /    M ARIO E NRIQUE G EYNE P LIEGO	
	 	Name:	 	Mario Enrique Geyne Pliego	
			
	 	Title:	 	Attorney-in-fact	
[SIGNATURE PAGES OF THE AMENDMENT AGREEMENT DATED AUGUST 1, 2013]

Exhibit “A”
Restated Credit Agreement

EXHIBIT A
REVOLVING CREDIT LINE AGREEMENT
REVOLVING CREDIT LINE AGREEMENT (THE “ AGREEMENT ”) DATED AUGUST 1, 2013, ENTERED INTO BY AND BETWEEN DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, DIVISIÓN FIDUCIARIA, ACTING SOLELY AS TRUSTEE OF TRUST NUMBER F/1498, REPRESENTED HEREIN BY [*] (HEREINFATER THE “A BORROWER ”);(II) DEUTSCHE BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, DIVISIÓN FIDUCIARIA, ACTING SOLELY AS TRUSTEE OF TRUST NUMBER F/1711, REPRESENTED HEREIN BY [*] (HEREINAFTER THE “ B BORROWER ” AND TOGETHER WITH THE A BORROWER THE “BORROWERS”), (III) BANCO SANTANDER (MEXICO), S.A., INSTITUCIÓN DE BANCA MÚTLIPLE, GRUPO FINANCIERO SANTANDER (MÉXICO), REPRESENTED HEREIN BY MR. [*]AND [*] (“ SANTANDER ”, OR THE “ AGENT ” AS APPLICABLE) AS LENDER AND ADMINISTRATIVE AGENT AND (IV) BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C. (“ BANCOMEXT ”), REPRESENTED HEREIN BY [*]AND [*], AS LENDER (HEREINAFTER REFFERRED TO COLLECTIVELY AS THE “ LENDERS ”, OR INDIVIDUALLY AS THE “ LENDER ”); (V) CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V. REPRESENTED HEREIN BY [*] AND CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. REPRESENTED HEREIN BY [*] (HEREINAFTER “ CONTROLADORA ” AND “ CONCESIONARIA ”, RESPECTIVELY, THE “ JOINT OBLIGORS ” COLLECTIVELY, AND THE “ JOINT OBLIGOR ”, INDIVIDUALLY), PURSUANT TO THE FOLLOWING RECITALS, REPRESENTATIONS, DEFINED TERMS AND CLAUSES:
RECITALS
I. On October 28, 2005, Controladora, as the original transferee (the “ Original Purchaser ”, in the Original Purchase Agreement 2005), and Airbus S.A.S. (“ Airbus ”, or the “ Seller ”, in the Original Purchase Agreement) entered into an aircraft purchase agreement (the “ Original Purchase Agreement 2005 ”), pursuant to which Airbus agreed to sell to Controladora and Controladora agreed to purchase and to receive, among other things, 7(seven) Airbus A320 aircrafts identified with purchase numbers from 24 (twenty four) to 30 (thirty) and together with the technical information, manuals, engines and other documents related to them (the “ Financed Aircrafts 2005 ”, as defined in the Step-In Agreement A referred in the recital VI of this agreement), as they are more detailed in the Original Purchase Agreement, which jointly with the other aircraft, were the purpose for its execution.
II. On July 27, 2011, Controladora, as the settlor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as the trustee (the “ Santander/Bancomext PDP Trust 1 Trustee ”), entered into an irrevocable trust agreement identified with number F/1497, (the “ Santander/Bancomext PDP Trust 1 ”).
III. On July 27, 2011, Controladora, Santander/Bancomext PDP Trust 1 Trustee, as the purchaser, and Airbus, as the seller, entered into an aircraft purchase agreement novation in respect of the Financed Aircrafts 2005 (the “ First PA Novation 2005 ”) in order to partially novate

and amend the terms of such Original Purchase Agreement 2005 (hereinafter, as may be amended, supplemented or novated from time to time, the “ First Novated Purchase Agreement 2005 ”). Pursuant to the terms and subject to the conditions set forth in the First Novated Purchase Agreement 2005, Airbus agreed to sell and the trustee of Santander/Bancomext PDP Trust 1 agreed to purchase and to receive the Financed Aircrafts 2005, in accordance with the First Novated Purchase Agreement 2005, which would become part of Santander/Bancomext’s PDP Trust 1 estate.
IV. On July 27, 2011 the trustee of Santander/Bancomext PDP Trust 1, in accordance with the authority granted to it within the Santander/Bancomext PDP Trust 1 as trustee, acting as the Settlor, and solely as the trustee of Santander/Bancomext PDP Trust 1, entered into an irrevocable trust agreement number F/1498 with Deutsche Bank México, S.A. Institución de Banca Múltiple, División Fiduciaria, as trustee, (the “ Santander/Bancomext PDP Trust 2 ”), for the purposes set forth therein.
V. On July 27, 2011 the trustee of Santander/Bancomext PDP Trust 1, in accordance with the authority granted to it within the Santander/Bancomext PDP Trust 1 and the trustee Santander/Bancomext PDP Trust 2, and Airbus entered into an aircraft purchase agreement novation with respect to the Financed Aircrafts 2005 (the “ Second PA Novation 2005 ”), to partially amend the terms of such First Novated Purchase Agreement (hereinafter, as may be amended, supplemented or novated from time to time, the “ Second Novated Purchase Agreement 2005 ”), as well as to transfer and assign all rights and obligations of Santander/Bancomext’s PDP Trust 1 estate in favor Santander/Bancomext’s PDP Trust 2 estate in order to establish the terms and conditions pursuant to which Airbus agreed to sell and the Trustee of the Santander/Bancomext PDP Trust 2 agreed to purchase and receive the Financed Aircrafts 2005 as set forth in the Second Novated Purchase Agreement 2005 in order that such aircrafts would become part of Santander/Bancomext’s PDP Trust 2 estate.
VI. On July 27, 2011, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciara, acting as trustee of the Santander/Bancomext PDP Trust 2, Santander, acting as the agent, Airbus and Controladora, entered into a step in agreement in respect of the Financed Aircrafts 2005 (the “ Step-In Agreement A ”) to grant and acknowledge, in some cases, certain rights of the Lenders in connection with the Second Novated Purchase Agreement 2005.
VII. By virtue of the execution of Santander/Bancomext PDP Trust 2, the trustee of Santander/Bancomext PDP Trust 2 is entitled to enter into and be bound by this Agreement in order for the Santander/Bancomext PDP Trust 2 estate to obtain financing in accordance with the terms and conditions established herein.
VIII. On December 28, 2011, Controladora, as the Original Purchaser, and Airbus as the Seller, entered into an amendment agreement to the Original Purchase Agreement number 8 (defined as Amendment No. 8 to the Purchase Agreement, the “ Original Purchase Agreement 2011 ”), pursuant to which Airbus agreed to sell to Controladora and Controladora agreed to purchase and to receive, among other things, 8 (eight) Airbus A320 aircrafts identified with purchase numbers from 31 (thirty one) to 38 (thirty eight) and together with the technical information manuals, engines and other documents related to them (the “ Financed Aircrafts 2011 ”) (together the Financed Aircrafts 2011 and the Financed Aircrafts 2005 the “ Financed Aircrafts ”).
 
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IX. On February 28, 2012, the A Borrower, the Lenders and the Joint Obligors entered into an amendment agreement to the Agreement in which, among other things, the definition of “Interest Period” and the Fifth Clause to the Agreement was modified.
X. On August 1, 2013, Controladora, acting as settlor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as the trustee, entered into an irrevocable trust agreement identified with number F/1710, (the “ Santander/Bancomext PDP Trust 3 ” and together with Santander/Bancomext PDP Trust 1, the “ Originating Trusts ”).
XI. On August 1, 2013, upon execution of the Santander/Bancomext PDP Trust 3, Controladora, the trustee of Santander/Bancomext PDP Trust 1, as the purchaser, and Airbus, as the seller, entered into an aircraft purchase agreement novation respect to the Financed Aircrafts 2011 (the “ First PA Novation 2011 ”) in order to partially amend the terms of such Original Purchase Agreement 2011 (hereinafter, as may be amended, supplemented or novated from time to time, the “ First Novated Purchase Agreement 2011 ”). Pursuant to the terms and subject to the conditions set forth in the First Novated Purchase Agreement 2011, Airbus agreed to sell and the trustee under the Santander/Bancomext’s PDP Trust 3 agreed to purchase and to receive the Financed Aircrafts 2011, which would become part of Santander/Bancomext’s PDP Trust 3 estate.
XII. On August 1, 2013 the trustee under Santander/Bancomext PDP Trust 3, in accordance with the authority granted to it within the Santander/Bancomext PDP Trust 3 as trustee, acting as the Settlor, and solely as trustee of the Santander/Bancomext PDP Trust 3, entered into an irrevocable trust agreement number F/1711 with Deutsche Bank México, S.A. Institución de Banca Múltiple, División Fiduciaria, as trustee, (the “ Santander/Bancomext PDP Trust 4 ), for the purposes set forth therein.
XIII. On August 1, 2013 the trustee of Santander/Bancomext PDP Trust 3, in accordance with the authority granted to it within the Santander/Bancomext PDP Trust 3 and the trustee of Santander/Bancomext PDP Trust 4, and Airbus entered into an Aircraft Purchase Agreement Novation with respect to the Financed Aircrafts 2011 (the “ Second PA Novation 2011 ”), to partially novate and amend the terms of such First Novated Purchase Agreement 2011 (hereinafter, as may be amended, supplemented or novated from time to time, the “ Second Novated Purchase Agreement 2011 ”), as well as to transfer and assign all rights and obligations of Santander/Bancomext’s PDP Trust 3 estate in favor Santander/Bancomext’s PDP Trust 4 estate in order to establish the terms and conditions pursuant to which Airbus agreed to sell and the Trustee of the Santander/Bancomext PDP Trust 4 agreed to purchase and receive the Financed Aircrafts 2011 as set forth in the Second Novated Purchase Agreement 2011 in order that such aircrafts would become part of Santander/Bancomext’s PDP Trust 4 estate.
XIV. On August 1, 2013, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciara, acting as trustee of the Santander/Bancomext PDP Trust 4, Santander, acting as the agent, Airbus and Controladora, entered into a step-in agreement in respect with the Financed Aircrafts 2011 (hereinafter the “ Step-In Agreement B ”) to grant and acknowledge, in some cases, certain rights of the Lenders in connection with the Second Novated Purchase Agreement 2011.
XV. By virtue of the execution of Santander/Bancomext PDP Trust 4, the trustee of Santander/Bancomext PDP Trust 4 is entitled to enter into and be bound by this Agreement in order for the Santander/Bancomext´s PDP Trust 4 estate to obtain financing in accordance with the terms and conditions established herein.
 
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REPRESENTATIONS
I. Santander represents, through its representatives, that:
a. It is a corporation duly organized in accordance with the laws of Mexico, authorized by the Ministry of Finance and Public Credit ( Secretaría de Hacienda y Crédito Público ) to act as a Multiple Banking Institution .
b. Its legal representatives have sufficient power and authority to execute this Agreement, which has not been revoked or limited in any manner whatsoever, evidencing such authority as well as the authority of the Lender by means of the documents which are referred to herein.
II. Bancomext represents, through its representatives, that:
a. It is a corporation duly organized in accordance with the laws of Mexico, pursuant to the Ley Orgánica del Banco Nacional de Comercio Exterior, as published in the Official Federal Gazette ( Diario Oficial de la Federación ) dated January 20, 1986. 
b. Its legal representatives have sufficient power and authority to execute this Agreement, which has not been revoked or limited in any manner whatsoever, evidencing such authority as well as the authority of the Lender by means of the documents which are referred to herein
III. The A Borrower represents, through its representatives, that:
a. The Santander/Bancomext PDP Trust 2 is duly established and validly existing in accordance with the laws of Mexico.
b. Its trustee officer has sufficient power and necessary authority to execute this Agreement, and that such authority, as of the date hereof, has not been revoked, limited or modified whatsoever.
c. On July 27, 2011, in accordance with the instructions given and authority granted in favor of the trustee under Santander/Bancomext PDP Trust 1, and in favor of the trustee under Santander/Bancomext PDP Trust 2, both trustees entered into Santander/Bancomext PDP Trust 2 agreement.
d. This Agreement is entered into by the trustee, not acting on its own behalf or individually, but solely as trustee under Santander/Bancomext PDP Trust 2, in accordance with the terms and conditions set forth therein, in compliance with purposes thereof and entitled with the powers and authority granted as trustee. The representations and commitments by which the trustee is bound should not be construed as representations and commitments made by the individual, nor do they have the purpose or the intention to bind the trustee personally, but they are made and intended to bind only the Santander/Bancomext’s PDP Trust 2 estate.
e. Pursuant to the transfer of assets performed under Santander/Bancomext PDP Trust 2, the trustee, acting as settlor in accordance with the Santander/Bancomext PDP Trust 1, shall transfer to the Santander/Bancomext PDP Trust 2 estate, among other things, the following rights and assets: ( i ) the rights and obligations under the Original Purchase Agreement of the Financed Aircrafts 2005, as may have been amended pursuant to the First PA Novation and Second PA
 
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Novation; (ii)  the property to the Financed Aircrafts 2005, once such aircrafts have been delivered by Airbus pursuant to the provisions set forth in the Second Novated Purchase Agreement; (iii)  the property to the Interest Reserve Account A as provided herein; (iv)  the property upon any available profits received in Santander/Bancomext’s PDP Trust 2 estate, such as distributions, capital contributions, proceeds obtained from financing or from investments of liquid assets forming part of Santander/Bancomext’s PDP Trust 2 estate; (v)  the product or products substituting any of the assets of Santander/Bancomext PDP Trust 2; and (vi)  any other rights or assets forming part of Santander/Bancomext’s PDP Trust 2 estate (the “ Santander/Bancomext’s PDP Trust 2 estate ”), representing hereby that on the date of execution of this Agreement, Santander/Bancomext’s PDP Trust 2 estate has not been modified, as well as that the agreements assigned as part of such estate are, on the date hereof, in full force and effect.
f. The obligations expressed to be assumed by it in each of the Operative Documents to which it is, or will be, a party, are legal, valid, binding and enforceable.
g. The entry into and performance of this Agreement, and the transactions contemplated herein or by those Operative Documents to which it is, or will be, a party do not and will not conflict with (i) any law or regulation applicable to it (ii) the Santander/Bancomext PDP Trust 2 (iii) any agreement or instrument binding upon it or any of its assets.
h. No authorizations are required or desirable to enable it lawfully to enter into, exercise its rights and comply with its obligations in any of the Operative Documents to which it is, or will be, a party.
i. It is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of the Operative Documents to which it is or will become a party on such date that any of them or any other instrument be filed, recorded, registered or enrolled in any court, public office or elsewhere in Mexico or that any stamp, registration or similar tax be paid in Mexico on or in relation to any of the Operative Documents to which it is or will become a party on such date, and no further action in Mexico, including any filing or recording of any document, is necessary or permissible to establish and perfect the Lenders´ security interest created under the security documents as against it and any third parties.
j. It has duly and punctually paid and discharged all taxes imposed on it or upon its asset (if any) from time to time and it is not overdue in filing any tax returns (to the extent required under applicable laws and regulations).
k. Other than entering into the transactions and documentation contemplated by this Agreement, it has not entered into any business or conducted any activity other than any business or activity permitted by the terms of this Agreement and has not entered into any agreement other than any agreement which is an Operative Document to which it is, or will be, a party.
l. No Default has occurred and is continuing or might reasonably be expected to result from the entry into or the performance of any transaction contemplated by any Operative Document to which it is, or will be, a party.
m. Its obligations under the Operative Documents to which it is, or will be, a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except for obligations mandatorily preferred by law.
 
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n. No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency have been started or (to the best of its knowledge and belief) threatened against it.
o. In any proceedings taken in relation to this Agreement or any of the Operative Documents to which it is, or will be, a party, it will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment, enforcement or other legal process.
IV. The B Borrower represents, through its representatives, that:
a. The Santander/Bancomext PDP Trust 4 is duly established and validly existing in accordance with the laws of Mexico.
b. Its trustee officer has sufficient power and necessary authority to execute this Agreement, and that such authority, as of the date hereof, has not been revoked, limited or modified whatsoever.
c. On August 1, 2013, in accordance with the instructions given and authority granted in favor of the trustee under Santander/Bancomext PDP Trust 3, and the trustee under Santander/Bancomext PDP Trust 4 entered into Santander/Bancomext PDP Trust 4.
d. This Agreement is entered into by the trustee, not acting on its own behalf or individually, but solely as trustee under Santander/Bancomext PDP Trust 4, in accordance with the terms and conditions set forth therein, in compliance with purposes thereof and entitled with the powers and authority granted as trustee. The representations and commitments by which the Trustee is bound should not be construed as representations and commitments made by the individual, nor do they have the purpose or the intention to bind the trustee personally, but they are made and intended to bind only the Santander/Bancomext’s PDP Trust 4 estate.
e. Pursuant to the transfer of assets performed under Santander/Bancomext PDP Trust 4, the trustee, acting as Settlor in accordance with the Santander/Bancomext PDP Trust 3, shall transfer to the Santander/Bancomext PDP Trust 4 estate, among other things, the following rights and assets: ( i ) the rights and obligations under the Original Purchase Agreement 2011 of the Financed Aircrafts 2011, as may have been amended pursuant to the First PA Novation 2011 and Second PA Novation 2011; (ii)  the property to the Financed Aircrafts 2011, once such aircrafts have been delivered by Airbus pursuant to the provisions set forth in the Second Novated Purchase Agreement 2011; (iii)  the property to the Interest Reserve Account B as provided herein; (iv)  the property upon any available profits received in Santander/Bancomext’s PDP Trust 4 estate, such as distributions, capital contributions, proceeds obtained from financing or from investments of liquid assets forming part of Santander/Bancomext’s PDP Trust 4 estate; (v)  the product or products substituting any of the assets of Santander/Bancomext PDP Trust 4; and (vi)  any other rights or assets forming part of Santander/Bancomext’s PDP Trust 4 estate (the “ Santander/Bancomext’s PDP Trust 4 estate ”), representing hereby that on the date of execution of this Agreement, Santander/Bancomext’s PDP Trust 4 estate has not been modified, as well as that the agreements assigned as part of such estate are, on the date hereof, in full force and effect.
f. The obligations expressed to be assumed by it in each of the Operative Documents to which it is, or will be, a party, are legal, valid, binding and enforceable.
g. The entry into and performance of this Agreement, and the transactions contemplated herein or by those Operative Documents to which it is, or will be, a party do not and will not conflict with (i) any law or regulation applicable to it (ii) the Santander/Bancomext PDP Trust 4 (iii) any agreement or instrument binding upon it or any of its assets.
 
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h. No authorizations are required or desirable to enable it lawfully to enter into, exercise its rights and comply with its obligations in any of the Operative Documents to which it is, or will be, a party.
i. It is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of the Operative Documents to which it is or will become a party on such date that any of them or any other instrument be filed, recorded, registered or enrolled in any court, public office or elsewhere in Mexico or that any stamp, registration or similar tax be paid in Mexico on or in relation to any of the Operative Documents to which it is or will become a party on such date, and no further action in Mexico, including any filing or recording of any document, is necessary or permissible to establish and perfect the Lenders’ security interest created under the security documents as against it and any third parties.
j. It has duly and punctually paid and discharged all taxes imposed on it or upon its asset (if any) from time to time and it is not overdue in filing any tax returns (to the extent required under applicable laws and regulations).
k. Other than entering into the transactions and documentation contemplated by this Agreement, it has not entered into any business or conducted any activity other than any business or activity permitted by the terms of this Agreement and has not entered into any agreement other than any agreement which is an Operative Document to which it is, or will be, a party.
l. No Default has occurred and is continuing or might reasonably be expected to result from the entry into or the performance of any transaction contemplated by any Operative Document.
m. Its obligations under the Operative Documents to which it is, or will be, a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except for obligations mandatorily preferred by law.
n. No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency have been started or (to the best of its knowledge and belief) threatened against it.
o. In any proceedings taken in relation to this Agreement or any of the Operative Documents to which it is, or will be, a party, it will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment, enforcement or other legal process.
V. Each of the Joint Obligors represents, through its representative, that:
a. Concesionaria is a corporation ( sociedad anónima promotora de inversion de capital variable ) and Controladora is a public company ( sociedad anónima bursátil) , both duly organized and validly existing in accordance with the laws of Mexico.
b. Its legal representative has sufficient powers and necessary authority to execute this Agreement, and that power and authority have not been revoked, modified or limited in any manner whatsoever.
 
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c. The execution of this Agreement is authorized under its charter and the execution and compliance with the obligations set forth herein have been duly authorized by all relevant corporate bodies, and do not violate: (i) its current corporate bylaws or (ii) any law, regulation or executive order binding itself, or (iii) any agreement, amendment or instrument binding itself or its assets.
d. No authorization, filing or registration from or before any governmental authority or governing body is required to execute, deliver, and comply with the terms and its obligations of this Agreement.
e. This Agreement and the Originating Trusts constitute valid, enforceable, and binding obligations.
f. To the best of its knowledge, no action, suit, or other legal or arbitral proceeding, or investigation is pending by or before any court or Governmental Authority or in any arbitral panel, including without limiting to environmental, taxing or labor matters, which could result in a Material Adverse Effect to its transactions or the performance of its obligations hereunder.
g. On October 28, 2005, Controladora entered into the Original Purchase Agreement 2005.
h. On December 28, 2011, Controladora entered into the Original Purchase Agreement 2011.
i. On July 27, 2011, Controladora, acting as the settlor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting as trustee, entered into Santander/Bancomext PDP Trust 1.
j. On August 1, 2013, Controladora, acting as the settlor, and Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting as trustee, entered into Santander/Bancomext PDP Trust 3.
k. It has requested Santander and Bancomext to establish and grant in favor of the Borrowers a revolving credit facility up to a principal amount that will not exceed the amount set forth in the First Clause hereof, which shall be made available to each, the A Borrower and B Borrower in different Disbursements during the corresponding Tranche A Availability Period or Tranche B Availability Period, with respect to each Financed Aircraft, as set forth in Exhibit 1, and 1A hereof.
l. No Event of Default or condition has occurred on or before the date of this Agreement or the Originating Trusts that could have a Material Adverse Change on its business, assets, liabilities, or financial situation that could affect the results of its operations, business or projects of or that could limit its ability to comply with its obligations under this Agreement or the Originating Trusts, as applicable.
m. In accordance with the Original Purchase Agreement 2005, the Novated Purchase Agreement 2005, the Original Purchase Agreement 2011, the Novated Purchase Agreement 2011, the Step-In Agreement A, and the Step-In Agreement B, no Event of Default has occurred that may affect the Financed Aircrafts, nor has any other of the parties made any amendment (except for those expressly set forth herein) that could have a Material Adverse Effect in accordance to this Agreement.
 
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n. It acknowledges and accepts the following: (i) the accuracy and authenticity of the representations under the Originating Trusts; (ii) the validity and enforceability of this Agreement, the Original Purchase Agreement 2005, the Original Purchase Agreement 2011 and the Originating Trusts as well as its obligations of Controladora and Concesionaria thereunder, as applicable, (iii) the validity, legal effect and enforceability of the Step-In Agreement A, the Step-In Agreement B and the novations under such agreements of the rights and obligations of the Original Purchase Agreement 2005 and the Original Purchase Agreement 2011, and the absence of any enforceable right that could modify the terms under such agreements, (iv) that the Step-in Agreement A, the Step-In Agreement B, the Original Purchase Agreement 2011 and the Original Purchase Agreement 2005 contain substantially the same terms, conditions and obligations with respect to the Financed Aircrafts (including without limitation, with respect to: the terms and conditions related to the delivery of the Financed Aircrafts, time of delivery, price of the Financed Aircrafts, formulas for price increases and additional costs, technical specifications, obligations and negative covenants, penalties, etc.), and (v) that no additional obligations or covenants have been created for the Borrowers that may result in obligations substantially less beneficial than those set forth in the corresponding Original Purchase Agreements.
o. This Agreement and the Operative Documents to which it is, or will be, a party, entered into in connection thereof, once executed, shall constitute legal and valid obligations, and subject to concursos mercantiles , Lender Bankruptcy or any restrictive rights binding creditors under the laws of Mexico, they are enforceable against each of the Borrowers and each Joint Obligor.
p. All of its tax returns (regarding any period) and those of its subsidiaries (as such term is defined herein) that should be filed have been filed, and all taxes, rights, and other contributions in connection with their incomes, sales or assets of which the Joint Obligors and any of their subsidiaries should be aware of or should be withheld are, in fact, withheld, except for those that have been contested in good faith and are pending resolution by the competent authorities.
q. It is in compliance with all laws, regulations and orders applicable, as well as with all applicable restrictions, given by any governmental authority, except where failures to do so, in the aggregate, could not reasonably be expected to result in a Material Adverse Change on its business, operations, goods, assets or financial situation, or that in any other manner could affect the validity and enforceability of this Agreement.
r. Its applicable consolidated financial statements, audited financial statements as of December 31, 2010, December 31, 2011 and December 31, 2012 and applicable internal consolidated financial statements, as of March 31, 2013, copy of which have been delivered to the Lender, sufficiently and reasonably reflect its consolidated financial position of each Joint Obligor in such dates in accordance with the generally accepted accounting principles in effect from time to time in Mexico, and up to the date hereof no Material Adverse Change has occurred in respect to its financial situation, operations or projects.
s. It is solvent.
t. Its payment obligations under this Agreement constitute direct and unconditional obligations and they have and will have at least the same payment processing ( pari passu) with respect to all other unsecured, unsubordinated debt (except for preferred payment obligations in accordance with applicable law).
 
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u. On the date hereof, neither of the Joint Obligors or their subsidiaries, if any, is in default with respect to any debt, or any agreement whatsoever, that may result in or could be reasonably expected to result in a Material Adverse Change upon itself or its subsidiaries, if any.
v. It or any of its subsidiaries (i) has good title to all property material to its business, (ii) has all necessary federal or local licenses, certificates, and authorizations in order to run business and to undertake any action in connection with its property as they are now being operated, and (iii) has insurance from reputable insurance companies, up to the amounts and with risk coverage for each Joint Obligor and each of its subsidiaries in accordance with the industry business for similar companies with similar assets in same or similar business areas in which each of the Joint Obligors or its subsidiaries operate.
w. Both itself and any subsidiaries have employees employed under collective labor agreements, which are in full force and have been fully complied with, and to the best of its knowledge there are no collective labor claims, to date, that threaten either of Joint Obligors or any of its subsidiaries.
x. Both itself and any of its subsidiaries, are in compliance with social security, worker housing, and retirement regulations, and similar provisions, and that both have no debts with any governmental authority whatsoever or with their workers in such matters, except for those that have been challenged in good faith and are pending to be resolved by competent authorities.
y. All outstanding capital stock shares have been validly issued and fully paid, and there are no rights over such shares in favor of any person other than the shareholders.
z. Except for the loan agreements entered into between each and the International Finance Corporation, Banco Inbursa S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa y Pasport, S.A. de C.V., there is no contract or agreement directly or indirectly restricting the returns, dividend payments, or other contributions in connection with any kind of shares of any subsidiary of either of the Joint Obligors, or the Credit Line granting of, disposing of or transferring any property of any subsidiary of each Joint Obligor.
aa. Both itself and/or any of its subsidiaries are in full possession of all necessary licenses, franchises, patents, copyrights, and brands, or any other necessary rights, in order to operate their business as to date and does not violate any rights of others in connection with any of such matters.
bb. Each Joint Obligor intends to execute this Agreement in order to be bound by the covenants set forth herein, as well as with all such payment obligations to be made on behalf of the Borrowers in favor of the Lenders under this Agreement. Therefore, it is their intention to act as joint obligors with respect of all payment obligations of the A Borrower, and with respect of all payment obligations of the B Borrower, as well as to execute as a joint guarantor the promissory notes subscribed by the A Borrower and the B Borrower, if any, under this Agreement.
cc. The process agents authorized by each Joint Obligor to hear and to receive notifications in compliance with the Operative Documents to which each Joint Obligor is, or will be, a party have been appointed and they accepted its appointment to the date hereof.
 
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DEFINITIONS
The terms used herein commencing with an initial capital letter, either quoted or not, including those contained in the representations or in any other part of this Agreement, as well as the terms described hereto, shall have the following meaning, and shall be equally applicable in singular and plural:
“A Borrower” means Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively in its capacity of trustee of the Trust number F/1498.
“A Interest Period” means the period for the calculation of interests over each Disbursement of the A Tranche Amount made to the A Borrower that shall be used to calculate interest of the outstanding amount of the A Tranche Amount, that shall commence on the next succeeding day of the last A Interest Payment Date and shall end on the immediately next A Interest Payment Date. For such purposes the interests shall be calculated and payable on February 1 st , May 1 st , August 1 st , November 1 st of each year, in the understanding that, in the event that such payment day is not a Business Day, such payment shall be made on the immediate preceding Day, (each, a “A Interest Payment Date”).
“A Tranche Amount” has the meaning set forth in the First Clause of this Agreement.
“Airbus Termination Event” has the meaning given to it in the Step-In Agreement A and/or the Step-In Agreement B as the case may be.
“Alternative Interest Rate in Dollars” means the Prime Rate that is published in The Wall Street Journal newspaper on the exact date on which such rate is determined. In the case that, for whatever reason, the Prime interest rate is not published by the newspaper of reference on the date indicated above or in the case that such newspaper is not published on that date, then the
“ Prime Rate ” will be the mathematical average of the Prime rates that are offered by Bank of America or Citibank , on the exact date on which such rate should be determined according to this Agreement. Any modification to the Prime rates in accordance with the above, will be effective between the parties on the Business Day on which such a modification is announced. 
“B Borrower” means Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, acting exclusively in its capacity of trustee of the Trust number F/1711.
“Borrowers mean, jointly, A Borrower and B Borrower. They would be referred as one “Borrower”.
“B Interest Period” means the period for the calculation of interests over each Disbursement of the B Tranche Amount made to the B Borrower that shall be used to calculate interest of the outstanding amount of the B Tranche Amount, that shall commence on the next succeeding day of the last B Interest Payment Date and shall end on the immediately next B Interest Payment Date. For such purposes the interests shall be calculated and payable on February 1 st , May 1 st , August 1 st , November 1 st of each year, in the understanding that, in the event that such payment day is not a Business Day, such payment shall be made on the immediate preceding Day, (each, a “B Interest Payment Date”).
“B Tranche Amount” has the meaning set forth in the First Clause of this Agreement.
 
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“BFE Agreements” means, with respect to each and all Financed Aircrafts, the Buyer Furnished Equipments’ certificates, agreements and warranties obtained by the Borrowers and the Joint Obligors.
“Business Day” means any day on which Mexican financial institutions are not authorized to close.
“CFM International Benefit Engine Agreement” means, with respect to the Financed Aircrafts, each document denominated as an Engine Support Letter Agreement entered into CFM International Inc., Controladora, Concesionaria and the Agent in connection with the engines installed in each one of the Financed Aircrafts.
“Checking Account” and /or “Checking Accounts” means, individually or collectively, each and all of the, deposit and management agreements as set forth in Exhibit 4 that each of the Borrowers maintain with the Lender in which the Disbursements shall be deposited.
“Control” means, the ability of a person or group of persons, to carry out any of the following acts: (i) impose, directly or indirectly, decisions in the general shareholders meetings, partners or equivalent bodies, or the ability to appoint or remove a majority of directors, administrators or equivalent of a corporation, (ii) maintain the rights that allow, directly or indirectly, the vote with respect to more than fifty percent of the capital stock of a corporation, or (iii) to direct, directly or indirectly, the administration, strategy and major policies of an entity or corporation, by means of security ownership, by agreement or otherwise.
“Credit Line Agreement” or “Agreement” means this revolving credit line agreement.
“Credit” has the meaning assigned to such term in the First Clause of this Credit Agreement.
“Disbursement Date” means, in relation each Disbursement, the date on which such Disbursement is made or is to be made, with respect to the A Tranche Amount or the B Tranche Amount.
“Disbursement Period of Tranche A” means the period of time elapsed between the date hereof up until December 31, 2013, during which the A Borrower may disburse the A Tranche Amount of the Total Amount.
“Disbursement Period of Tranche B” means the period of time elapsed between the date hereof up until November 30, 2015 during which the B Borrower may disburse the B Tranche Amount of the Total Amount.
“Disbursement Period” means, as applicable, the Disbursement Period of Tranche A, and the Disbursement Period of Tranche B.
“Disbursement Request” means the document by means of which the Borrowers request the Lenders a Disbursement in terms substantially similar to the document attached hereto as “Exhibit 2” that shall be delivered to the Agent´s address as set forth herein.
“Disbursement” means each disbursement of the Credit Line requested by the A Borrower and the B Borrower and made by the Lenders during the corresponding Disbursement Period pursuant to this Agreement.
 
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“Dollars” means dollars in lawful currency of the United States of America.
“EBITDAR” has the meaning set forth in the Fifteenth Clause of this Agreement.
“Event of Default” or “Default” means any event or circumstances specified in Clause 19.
“IAE Engine Benefit Agreement” means, with respect to the Financed Aircrafts, each document denominated as an Engine Support Letter Agreement, entered or to be entered into in the agreed form between the IAE International Aero Engines AG, the Joint Obligors, the Borrowers and the Agent in connection with the transactions contemplated by this Agreement.
“Interest Period” means, as applicable, the A Interest Period and the B Interest Period in respect with the A Borrower and the B Borrower. Individually, each one of them, one “Interest Period”.
“Interest Reserve Account A” means, as such term is defined in Clause Twelfth herein, the interest reserve account maintained by the A Borrower.
“Interest Reserve Account B” means, as such term is defined in Clause Twelfth herein, the interest reserve account maintained by the B Borrower.
“Interest Reserve Accounts” means, collectively, the Interest Reserve Account A and the Interest Reserve Account B.
“KYC” means, for each Joint Obligor and Borrowers, the documents and information requested by the Lenders for the purpose of complying with the legal and internal provisions related to the “ know your customer” and those related to avoiding money-laundering.
“Lender” or “Lenders” means Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander (México), and Banco Nacional de Comercio Exterior, Sociedad Nacional de Crédito, as well as their respective successors and assignees, in its capacity of parties under this Agreement and “Lender” means each one of Santander and Bancomext, as well as their respective successors and assignees, as applicable.
“LIBOR Rate” means with respect to each Interest Period the rate or arithmetic mean of the Interest Rate for Dollars of the United States of America (rounded to the nearest sixteenth decimal place) listed on the LIBOR webpage (as such term is defined herein) as corresponding to the maturity date to three (3) months at 11:00 A.M., London England time, the Libor Day prior to the commencement of the respective Interest Period (as such term “Libor Day” is herein defined). For purposes of this definition (i) “Libor Webpage” means the Dow Jones Telerate Services 3750 screen entitled “British Banks Association Interest Settlement Rates”, or the screen that substitutes such screen at such service, and (ii) “Libor Day” means a date on which an interest rate in US Dollars is listed in the Libor Web Page. The Borrowers accept herein the adjustments made based on the aforementioned without the need of entering into an amendment agreement.
“Material Adverse Change” means any amendment of any nature that affects substantially and adversely the financial and operational condition, results, prospects, businesses and properties, as well as the fact that the Agreement, the Trust Agreements (as such term is defined herein), and/or any document related directly or indirectly with the Agreement or the Trust Agreements proves to be illegal, null or not enforceable, and as a result of the aforementioned the Borrowers and/or the Joint Obligors shall be unable to fulfill the covenants pursuant to this Agreement, the Trust Agreements or any other document related directly or indirectly therewith.
 
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“Maximum Disbursement Period A” means, the period up until December 31, 2013.
“Maximum Disbursement Period B” means, the period up until November 30, 2015.
“Mexico” means the United Mexican States.
“Netting Letter A”, means each of the documents entered into by Airbus, the A Borrower and Controladora, which provide for specific obligations to compensate amounts owed under the Operative Documents to which the A Borrower is, or will be, a party.
“Netting Letter B”, means each of the documents entered into by Airbus, the B Borrower and Controladora, which provide for specific obligations to compensate amounts owed under the Operative Documents to which the B Borrower is, or will be, a party.
“Netting Letters” means, together, the Netting Letter A and the Netting Letter B.
“Operative Documents” mean this Agreement, its Exhibits, the Santander/Bancomext PDP Trust 1, the Santander/Bancomext PDP Trust 2, Santander/Bancomext PDP Trust 3, Santander/Bancomext PDP Trust 4, the Step-In Agreement A, the Step-In Agreement B, the Novated Original Purchase Agreement 2005, the Novated Original Purchase Agreement 2011, the Promissory Notes, the IAE Engine Benefit Agreement or the CFM International Benefit Engine Agreement (as applicable), the BFE Agreements and each of the Netting Letters, executed by the parties in the context of and related with this Agreement.
“Ordinary Interest Rate” means a rate equivalent to the LIBOR Rate plus a margin of 2.65% (two point sixty five percent) to be calculated at the beginning of each Interest Period.
“Original Purchase Agreements” mean, together, the Original Purchase Agreement 2005 and the Original Purchase Agreement 2011.
“Solvent Party” means with respect to each Joint Obligor, in any moment, that such Joint Obligor is not in a position to be declared bankrupt according to Articles 9, 10 and 11 of the Corporate Bankruptcy Law ( Ley de Concursos Mercantiles ) or according to any other legal provision that replaces those Articles.
“Specification Change Notice” has the meaning given to it in each Step-In Agreement A and/or in the Step-In Agreement B, as applicable.
“SSBFE Agreements” means, with respect to each and all Financed Aircrafts, the Seller Supplied Buyer Furnished Equipments’ certificates, agreements and warranties obtained by the Borrowers and the Joint Obligors.
 
“Structuring Fees” has the meaning assigned to such term in the third paragraph of the First Clause of this Agreement.
“Total Amount” means, collectively the A Tranche Amount and the B Tranche Amount, in the understanding however that it shall never exceed in the aggregate US$71,498,943.00 (seventy one million four hundred and ninety eight thousand nine hundred and forty three Dollars 00/100).
 
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“Trust Agreements” means, collectively, the Santander/Bancomext PDP Trust 1 agreement, the Santander/Bancomext PDP Trust 2 agreement, the Santander/Bancomext PDP Trust 3 agreement, and the Santander/Bancomext PDP Trust 4 agreement.
CLAUSES
FIRST.- PURPOSE AND CREDIT AMOUNT.- Pursuant to the provisions herein, the Lenders shall make available to the Borrowers a revolving line of credit (the “Credit Line”) as follows:
 
 	(1)	In favor of the A Borrower, a revolving line of credit that will not exceed a total amount of US$62,714,000.00 (sixty-two million seven hundred and fourteen thousand Dollars 00/100) (the “ A Tranche Amount ”) in respect to which: i) Santander will grant a revolving line of credit up to an amount of US$37,714,000.00 (thirty seven million seven hundred and fourteen Dollars 00/100) (“ A Tranche Santander’s Portion ”), and ii) Bancomext will grant a revolving line of credit up to an amount of US$25,000,000.00 (twenty five million Dollars 00/100) (“ A Tranche Bancomext’s Portion ”); and	
 
 	(2)	In favor of the B Borrower, an extension of the revolving line of credit referred to in section (1) above, that will not exceed a total amount of US$71,498,943.00 (seventy one million four hundred and ninety eight thousand nine hundred and forty three Dollars 00/100) minus the amount resulting from adding the disbursements made by the A Borrower under the A Tranche Amount (the “ B Tranche Amount ”) in respect to which, considering the provision set forth in section (1) hereof: i) Santander shall grant the revolving facility up to the equivalent of the 52.7476329% of the B Tranche Amount (“ B Tranche Santander’s Portion ”), and ii) Bancomext shall grant the revolving facility up to the equivalent of 47.2523671% of the B Tranche Amount (“ B Tranche Bancomext’s Portion ”);	
Provided, however, that the aforementioned, under no circumstance: (i) the outstanding principal amount of Bancomext and derived from the credit disbursements, under the terms referred to in the sections above, shall be greater than US$33,784,943.00 (thirty three million seven hundred and eighty four thousand nine hundred and forty three Dollars 00/100), and (ii) the outstanding principal amount of Santander and derived from the credit disbursements, under the terms referred to in the sections above, shall be greater than US$37,714,000.00 (thirty seven million seven hundred and fourteen thousand Dollars 00/100).
Additionally, the parties hereby agree acknowledge and agree that each Borrower shall be obliged to comply and pay for the A Tranche Amount and the B Tranche Amount as applicable, therefore the A Borrower shall not be considered as a joint obligor, or a subsidiary obligor in respect with the obligations of the B Borrower under this Agreement and the Operative Documents to which it is, or will be a party, and the B Borrower shall not be considered as a joint obligor, or a subsidiary obligor in respect with the obligations of the A Borrower under this Agreement and the Operative Documents to which it is, or will be a party.
Notwithstanding the aforementioned sections 1 and 2, the parties acknowledge and accept that within the amount of the Loan it shall not comprise fees, interests and expenses that the Borrowers shall pay with respect to this Agreement. Any principal amount that is repaid shall reinstate the Credit Line by such an amount until the end of the Maximum Disbursement Period A and Maximum Disbursement Period B, as applicable, provided that: (i) no default has occurred, (ii) the Disbursements are made in accordance with the terms set forth in the format attached to Exhibit 1and 1A of this Agreement, and (iii) the conditions established in Clause Four hereof have been fulfilled.
 
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Upon each of the initial Disbursement made to each of the Borrowers with respect to the A Tranche Amount and the initial Disbursement of the B Tranche Amount, as applicable, in accordance with Exhibit 1 and 1A, the Borrowers shall pay to the Lenders a structuring fee equivalent to ***** of: (i) the A Tranche Amount with respect to the A Borrower and (ii) the B Tranche Amount with respect to the B Borrower (as applicable, each one of such a “Structuring Fee” and collectively the “Structuring Fees”). The Structuring Fees shall be paid with the resources of the first Disbursement of each A Tranche Amount and B Tranche Amount, in the following manner: (i) Bancomext shall receive a commission ***** of the A Tranche Bancomext’s Portion of the credit and ***** of the B Tranche Bancomext’s Portion of the credit , and (ii) Santander shall receive the remainder of the applicable Structuring Fee. The Value Added Tax (V.A.T.) resulting from these payments shall be made by the A Borrower and the B Borrower as applicable and shall be paid to each of the Lenders, as applicable, together with the corresponding portion of the Structuring Fees.
SECOND.- USE.- The Borrowers agree to use the total amount of the Credit Line upon payment and fulfillment of their obligations under the Novated Original Purchase Agreement 2005 and the Novated Original Purchase Agreement 2011 of the Financed Aircrafts, including the reimbursement under each Netting Letter, by virtue of which the Borrowers are obligated to abide by the purpose of the Santander/Bancomext PDP Trust 2, Santander/Bancomext PDP Trust 4 and the terms set forth in the Step-In Agreement A and the Step-In Agreement B.
THIRD.- CREDIT TERM.- Subject to the provisions set forth in Clause 7 (Repayment) hereof, the Credit Line availability term shall be as follows: (a) with respect to the A Borrower December 31, 2014, and (b) with respect to the B Borrower, November 30, 2016. Notwithstanding the foregoing and subject to the provisions in Clause Seventh hereof, the Lenders may exercise such rights set forth in Clause Eighteenth with respect to any Disbursement of the Total Amount made hereunder.
FOURTH.- CONDITIONS FOR THE CREDIT DISBURSEMENTS.- (1)  Initial Disbursement . Each one of the Borrowers will be authorized to request the initial Disbursement of the A Tranche Amount and/or the B Tranche Amount, as applicable, after providing the Agent with the following documents:
a) Delivery of information . The Borrowers and the Joint Obligors shall have delivered, in form and substance satisfactory to the Agent: (i) copies of documents demonstrating the valid existence and authority granted in favor of their legal representatives; (ii) copies of the financial statements or trust’ estate balance sheet, as required by the Lenders, and (iii) any other information reasonably required by the Lenders for its analysis and compliance with internal regulation such as KYC forms.
b) Authorization . The Joint Obligors shall have delivered, in form and substance satisfactory to the Agent: copies of any committee, shareholder or board of directors resolutions authorizing the following: (i) the execution of this Agreement, (ii) the granting of any guarantees as may be required under this Agreement if applicable, and (iii) the execution of any other document which may be required under this Agreement.
 
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c) Legal opinions . The Joint Obligors shall have delivered, to the satisfaction of the Lenders, independent third parties’ legal opinions covering, among other things: (i) the legal existence of each of the Borrowers and the Joint Obligors, (ii) the validity of their legal representatives to enter into this Agreement, and (iii) the validity and enforceability of each Operative Document to which it is a party and of the obligations set forth in such documents.
d) Payment of fees and expenses . The Borrowers shall pay any and all fees, costs, and expenses that have arisen in connection with this Agreement and the opening and maintenance of the applicable Interest Reserve Account, or in each case, authorized the discount of the amounts due against the amounts received from the first disbursement pursuant to this Agreement and its terms.
e) Operative Documents . The Borrowers and the Joint Obligors have delivered, in form and substance satisfactory to the Lenders, except for the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011 each Operative Document duly executed by each party to it.
f) Truthfulness of Representations; absence of Default . Receipt of a certificate from each of the Borrowers and the Joint Obligors confirming, in terms of the format attached as Exhibit 5, that as of such Disbursement Date: (i) all representations and warranties made by it are true and correct as of such Disbursement Date and that, (ii) no Default has occurred or would result from the proposed Disbursement, (iii) no Termination Event has occurred under the Original Purchase Agreement 2005, the Novated Original Purchase Agreement 2005, the Original Purchase Agreement 2011 and the Novated Original Purchase Agreement 2011, and (iv) the Original Purchase Agreement 2005, the Novated Original Purchase Agreement 2005, the Original Purchase Agreement 2011 and the Novated Original Purchase Agreement 2011 remain in full force and effect.
g) Promissory Notes . The each of the Borrowers and the Joint Obligors have delivered to the Agent the promissory notes issued in favor of each of the Lenders, substantially on the terms of the format attached as Exhibit 3 hereof, signed by the each of the Borrowers, as applicable, as debtor, and by the Joint Obligors, acting as guarantors, for the corresponding amount of such Disbursement to be made by each Lender (together, the “ Promissory Notes ” and, individually, the “ Promissory Note ”). The Promissory Note shall contain the subscription date, the Disbursement date, with respect to the A Tranche Amount and/or the B Tranche Amount (as applicable) and the Maturity Date. The parties agree that in case of discrepancy between this Agreement and any Promissory Note, the provisions held herein shall prevail.
h) Interest Reserve Accounts . That the Borrowers have opened and established the corresponding Interest Reserve Account.
Once the above conditions have been satisfied, the Agent must communicate by electronic means to each Lender that such conditions have been met in a satisfactory manner for purposes of carrying out the first Disbursement. Additionally, the Agent shall provide the Lenders the information attesting the due compliance with such conditions, within no more than 3 (three) Business Days prior to carrying out the corresponding disbursement.
(2) Subsequent Disbursements. Aside from having paid all the costs and expenses due and payable to the Lenders, in order to carry out the subsequent Disbursements, the Borrowers or the Joint Obligors shall have provided the Agent the following documents and information, according to the following stipulations:
 
a)	A financial statement from Airbus evidencing the amount and the date of the pre-delivery payment which is the subject of such Disbursement and that no Airbus Termination Event has occurred and is continuing.	
 
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b)	Written confirmation from the Borrowers and the Joint Obligors that (i) no Purchase Agreement Termination Event has occurred and is continuing and that the Original Purchase Agreements, the First Novation and Second Novation 2005, the First Novation and Second Novation 2013 are in full force and effect and (ii) no Default shall have occurred and be continuing.	
 
c)	A certificate in terms of subsection f) numeral 1 above in terms of Exhibit 5 hereof.	
 
d)	No change shall have occurred after the date of this Agreement in applicable law and no change in circumstances shall have otherwise occurred and no fact or condition shall exist which, in the reasonable opinion of any Lender, would make it illegal under applicable law for such Lender to make available its portion of the Loan; and	
 
e)	The Borrowers and the Joint Obligors have provided the Agent the Promissory Notes corresponding to each of the Lenders in relation to the Disbursements of the A Tranche Amount or the B Tranche Amount, as applicable.	
Once the above conditions have been satisfied, the Agent must communicate by electronic means to the Lenders that such conditions have been met in a satisfactory manner for purposes of carrying out the first Disbursement. Additionally, the Agent shall provide the Lenders the information attesting the due compliance with such conditions, within no more than 3 (three) Business Days prior to carrying out the corresponding disbursement.
Likewise, once all of the conditions have been satisfied in relation to the initial Disbursement or the subsequent Disbursements, the Borrowers may carry out a Disbursement according to the following stipulations:
 
 	(i)	The Credit Line shall be disbursed pursuant to the disbursements calendar attributable to each Financed Aircraft, as set forth under in Exhibit 1 and 1A hereto, as applicable, in the understanding that: (a) the Lenders will not be obligated to provide the Borrowers credit outside of the Maximum Disbursement Period A and the Maximum Disbursement Period B, as applicable, and it shall be understood that the Borrowers will not be authorized to receive more than the number of disbursements specifically set forth under such Exhibit 1 and 1A, as applicable, hereto, (b) the sum of the Disbursements made by the Borrowers in no case shall exceed the available amount of the Credit Line under this Agreement and in any case, each one of the Disbursements should be made within 5 (five) working days, except for the first Disbursement, which shall be made within 2 (two) working days after the condition precedents in this Clause have been satisfied and after a Disbursement Request has been delivered to each of the Lenders, at their given addresses.	
The Lenders shall not be obliged to provide the Borrowers any amount that exceeds the Total Amount, and in such event, the Joint Obligors shall be obliged to provide to the Borrowers the additional amounts required in order to avoid any default under the
 
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Operative Documents and to hold the rights of the Lenders under the Step-In Agreement A and Step-In Agreement. In the event that the Joint Obligors fail to comply with the obligation set forth above, the Lenders may: (i) provide the Borrowers and/or the Joint Obligors of any additional amounts required, or (ii) deliver any additional amounts payable, required by the Joint Obligors, with the purpose of avoiding any default and to preserve the Lenders’ rights under the Step-In Agreement A and Step-Inn Agreement B; provided, however, that in the event that the Lenders choose any of the alternatives provided in section (i) or (ii) of this paragraph, additionally the Lenders shall be entitled to exercise any legal action to obtain from the Borrowers and/or the Joint Obligors such amounts, and the Borrowers and the Joint Obligors shall be obliged to pay such corresponding amounts, within the five (5) following Business Days after the transference made by the Lenders, otherwise the default interests shall be accrued pursuant to Clause Sixth hereof.
 
 	(ii)	The Disbursements will be verified by the Lenders by depositing the amount that appears on each Disbursement Request into the Account Number indicated in Exhibit 4, which the Agent transfers to each of the Borrowers. It is not necessary to designate the purpose or destination of such funds. Notwithstanding the foregoing, the Borrowers, as applicable, may instruct the Agent that the Lenders deduct from the corresponding Disbursement any fees or other amounts due by the Borrowers hereunder.	
 
 	(iii)	The Disbursement Request made by the Borrowers pursuant to this Agreement shall be registered by each Lender in its accounting records. The parties herein agree that the accounting of each Lender and/or the Checking Account statements referred to in this clause constitute evidence of the Disbursement Request made by the Borrowers. Once the Lenders have delivered the agreed upon amounts, it shall be understood that the Borrowers have made a Disbursement Request up to the amount deposited or such amounts have been compensated by the Lenders in accordance with the instructions given by each of the Borrowers.	
 
 	(iv)	In order to effectuate each Disbursement, the Lenders should consider the amount already disbursed by each Borrower as well as the Total Amount of the Credit at the time, with the effect that: (i) the revolving line of credit is given only in respect to the amounts that have been paid by each of the Borrowers, and (ii) the Borrowers do not retain any initial quantities nor has at its disposal a revolving amount of credit that exceeds the total Credit Line of Disbursements permitted under this Agreement. “Disbursements Limit” will mean the total of all amounts that are available under this Agreement pursuant to the disbursements described in Exhibit 1 and 1A herein.	
FIFTH.- ORDINARY INTERESTS.- The Borrowers shall pay the Lenders ordinary interests on all outstanding amounts payable, which shall be calculated per “Interests Periods” in conformity with the Ordinary Interest Rate. The interests shall be calculated and payable in the A Interest Payment Date or the B Interest Payment Date as applicable. The calculation of interest will be performed using the number of calendar days that have elapsed between each Interest Payment Date with a base year of three hundred and sixty (360) days.
Notwithstanding the foregoing, the Borrowers, the Joint Obligors and the Lenders agree that if the LIBOR Rate cannot be determined for such Interest Period, then: (a) the applicable interest rate will be the Alternative Rate in Dollars, or (b) in the event that the Alternative Rate in Dollars
 
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cannot be determined, the Lenders, Borrowers and the Joint Obligors shall negotiate in good faith and agree on the interest rate that will be used for the corresponding Interest Period, (c) in the case that the parties do not agree on the applicable interest rate within 10(ten) Business Days from the determination date for the interests, the Lenders shall determine (and shall deliver to the Borrowers and the Joint Obligors a certificate containing the basis for such determination) the applicable interest rate over such period reflecting the financial costs of the Lenders, and such rate shall be applied for the Interest Period.
SIXTH.- DEFAULT INTERESTS.- In the event of default on the payment of any amounts corresponding to the principal amount of the Credit Line, or in case an Event of Default has occurred and is continuing, the Borrowers shall pay to the Lenders default interests in an amount equal to the result of the Ordinary Interest Rate multiplied by 1.25 (one point twenty five), in the understanding that the default interests will be calculated on a daily basis over the entire default period.
SEVENTH.- AMORTIZATIONS.- The Borrowers agree to repay each of the Lenders the amount of the Credit disbursed in payments on the dates and in the amounts set forth in Exhibit 1 and 1A, referencing the specific Financed Aircraft for which the payments were made. If the Delivery Date of an Aircraft to which the loan related to a specific Disbursement, either of the A Tranche Amount or the B Tranche Amount is re-scheduled in accordance with the terms of the Operative Documents, the Borrowers shall repay the Lenders on the earliest of (i) the actual Delivery Date of the Aircraft, or (ii) the maturity date of the Promissory Note in respect with such Aircraft, provided, however, that such date shall in no case be after November 30, 2016, for such purpose the Borrowers shall have made every and all principal payments before such date.
EIGHT.- PREPAYMENTS.- The Borrowers are authorized to perform any prepayments on amounts owed to the Lenders, either of the A Tranche Amount or the B Tranche Amount without any penalty or reward and without requiring authorization from the Lenders, as long as the Borrowers make notification of such prepayment at least 10 (ten) Business Days in advance, in the understanding that any prepayment shall be made on a payment date and up to the amounts indicated in clause Seventh for each payment, or in multiples of such payments. Prepayments shall only be made on an interest payment date, such amount shall be amortized. Prepayments shall be applied in accordance with Clause Ninth below.
NINTH.- PAYMENTS IN GENERAL.- The amounts delivered to the Lenders by the Borrowers or the Joint Obligors, either for the A Tranche Amount, or the B Tranche Amount, as applicable and shall be applied to satisfy obligations under this Agreement in the following order:
 
 	(i)	expenses,	
 
 	(ii)	fees,	
 
 	(iii)	commissions,	
 
 	(iv)	default interests,	
 
 	(v)	ordinary interests, and	
 
 	(vi)	capital residuals.	
In the event that a payment day applicable to any of the Borrowers is not a Business Day, such Borrower shall pay such payment on the next “ Business Day ” on the understanding that: (a) the relevant extension shall be taken into consideration in order to calculate the correspondent interests; and (b) the days corresponding to such extension shall not be added to the “Interests Period”.
 
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Interests shall be paid without any deduction and free of any tax, contributions, liability, deductions or withholdings of any nature imposed or charged by any authority.
TENTH.- PLACE OF PAYMENT.- Payments of any amounts due of the A Tranche Amount or the B Tranche Amount shall be made by each of the Borrowers to the Lenders without requiring a request of payment or collection of any nature by the Lender, and shall be made by direct deposit in available funds in each of the Lender’s corresponding accounts set out in Exhibit 4 of this Agreement.
In order for the transfer of funds to be made pursuant to this section, the relevant payment shall be considered as completed only if the applicable Borrower delivers to the Lenders, no later than 12:00 pm of the maturity payment day, a copy of the deposit slip or a document evidencing the transfer of funds for the corresponding period.
ELEVENTH.- AUTHORIZATION FOR DISBURSEMENT OF AMOUNTS.- Notwithstanding the provisions set forth in clause Tenth, the Borrowers hereby authorize Santander to disburse without previous notice or requirement, any outstanding amounts owed to the Santander from any of the Borrowers’ Checking Accounts. Each of the Borrowers shall maintain a valid account during the term of this Agreement and shall have sufficient funds in such account on the date each payment shall be made. In the event that the Checking Accounts held by the Borrowers are cancelled due to the applicable Borrower’s breach of the obligation to maintain sufficient funds in the accounts or for any other reason, the Borrowers agree to pay the Lender pursuant to the Tenth Clause. The parties agree that any and all quantities disbursed by Santander from the referenced accounts, shall be exclusively made to pay the amounts due by the applicable Borrower to Sandander in accordance with this Agreement.
The provisions aforementioned shall be in full force and effect and shall apply to any other accounts assigned by Santander to the Borrowers in substitution of the Checking Accouts specified herein. Notwithstanding the foregoing, it is expressly agreed that even if Santander by any circumstance does not make any disbursements of the required amount the Credit Line, the Borrowers’ obligation to pay to Santander, as applicable, in accordance with the previsions set out in clause Tenth shall remain in full effect.
The parties agree that the authorization granted to Santander as provided in this Clause to disburse from the Borrowers’ Checking Account, without previous notice or requirement, any outstanding amounts owed to Santander under this Agreement, shall be deemed to authorize Santander to disburse the amounts available in such Checking Account, the amount proportional corresponding to Santander pursuant to the A Tranche Santander’s Portion and the B Tranche Santander’s Portion of the Credit, that is, 52.748% of the available amount at the date of such operation. Pursuant to the foregoing, Santander is not authorized to disburse any amount corresponding to the A Tranche Bancomext’s Portion or the B Tranche Bancomext’s Portion of the Credit.
TWELFTH.- INTERESTS RESERVE ACCOUNTS.- The Borrowers agree to maintain as part of the trust estate transferred to the Santander/Bancomext PDP Trust 2 for the A Tranche Amount, and as part of the estate transferred to the Santander/Bancomext PDP Trust 4 for the B Tranche Amount, during the effectiveness of this Agreement, a special interests reserve account for each Borrower, respectively. Also, in accordance with this Agreement, The Borrowers agree to maintain in each account funds equivalent to 3 months of the payable Ordinary interests amounts for the A Tranche Amount and the B Tranche Amount, as applicable under this Agreement (hereinafter, the “Interests Reserve Account A” for the reserve with respect to the A
 
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Tranche Amount and “Interests Reserve Account B” for the reserve with respect to the B Tranche Amount, hereinafter, collectively the “Interests Reserve Accounts”). The Joint Obligors agree to guarantee that such Interests Reserve Accounts will maintain such amounts during the effectiveness of this Agreement. If any of the Borrowers makes use of the resources from the Interests Reserve Accounts, each Borrower, with respect to the A Tranche Amount and the B Tranche Amount as applicable, and the Joint Obligors agree to repay the amounts used to pay the Lenders within 5 (five) Business Days of having used such funds, in the understanding that the failure to comply with such repayment obligation will be considered as a Default hereunder.
The parties agree that the Interests Reserve Accounts under this Clause shall be calculated using as a reference the Total Amount for the next 6 (six) months in accordance with the amortization table and the provisions set out in Exhibit 1and 1A; considering such amounts will determine the Ordinary Interests corresponding to 3 (three) months. The parties also agree that the calculation will be revised every 6 (six) months and that the LIBOR reference rate to be used shall be the one that applies to the respective Interest Period, A or B, at the time of revision.
THIRTEENTH.- JOINT OBLIGATION.- (a) Each of the Joint Obligors, by means hereof agree, absolutely, unconditionally, completely, and irrevocably to comply in a joint and unlimited manner with the A Borrower with respect to the A Tranche Amount, in terms of the articles 1987, 1988, and other applicable articles of the Federal Civil Code, and the Civil Codes of the other federative entities of the Mexican United States and the Federal District the obligation to make all and any payments of principal, interests, commissions, and other payable amounts pursuant to this Agreement, by means of which the Lenders have the right to require such amount payments indistinctly to the A Borrower and/or to any of the Joint Obligors.
(b) Each of the Joint Obligors, by means hereof agree, absolutely, unconditionally, completely, and irrevocably to comply in a joint and unlimited manner with the B Borrower with respect to the B Tranche Amount, in terms of the articles 1987, 1988, and other applicable articles of the Federal Civil Code, and the Civil Codes of the other federative entities of the Mexican United States and the Federal District the obligation to make all and any payments of principal, interests, commissions, and other payable amounts pursuant to this Agreement, by means of which the Lenders have the right to require such amount payments indistinctly to the B Borrower and/or to any of the Joint Obligors.
(c) Each of the Joint Obligors agree that each and all of the payments of principal, interests, commissions, other payable amounts pursuant to this Agreement will be paid by any of the Borrowers and made available for the Lenders at all times pursuant to the provisions set forth in clause Tenth.
(d) Along with the joint obligation assumed in this clause, the Joint Obligors agree to subscribe the documents needed to be entered into in accordance with this Agreement, including without limitation, the execution of any promissory notes documenting the Credit granted pursuant to this Agreement acting as guarantor, in terms of the form attached hereto as Exhibit 3.
(e) The Joint Obligors shall be discharged of their obligations to pay directly to the Lenders or by depositing in the account of the Borrowers, as applicable, so that in turn, the Borrowers may use such amounts to pay the corresponding amounts to each Lender.
(f) Also, in the event in which the Joint Obligors perform a payment on behalf of any of the Borrowers, the Joint Obligors are subordinated to the Lenders in the right to payment and the Joint Obligors agree to only receive payment until the Credit and other amounts due have been
 
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satisfied fully. Furthermore, the Joint Obligors agree to exercise any right against any of the Borrowers resulting from the subrogation as long as the applicable Borrower has acted accordingly, until the Lenders receive the total owed amount in accordance with this Agreement.
(g) Each of the Joint Obligors, by means hereof accepts that it shall not be necessary for the Lenders to (i) give any notification, compliance requirement, or any right against that could be exercised against the Borrowers on a determined moment, (ii) give any acceptance notices of this joint obligation and notices indicating that the Borrowers are on default with any obligation, (iii) give any actions or claims notices initiated by the Lenders or the Borrowers based on any agreement, instrument or exercise of any right in accordance with the obligations hereunder, (iv) give any other kind of notice, requirement, or notification, as well as any other formality in connection with the enforceability of the obligations in accordance with this Agreement against the Joint Obligors, or against the enforceability of the Borrowers obligations under this Agreement, which omission or delay, except for what is set forth herein, can provide basis in order to release the Joint Obligors from their obligations hereunder, (v) execute any right to require the assets of the Borrowers to be used as payment of the Borrowers obligations to the Lenders, prior to the requirement of the legal payment of such obligations to the Joint Obligors, and (vi) execute any right to require the Borrowers to be claimed or required to pay prior to the Joint Obligors.
(h) The Lenders shall have the right, at any time and from time to time, without requiring any notice or consent given from the Joint Obligors, and without implying the impairment, termination or amendment to the unconditional and absolute Joint Obligors obligations hereunder, to: (i) exercise or not to exercise any rights against the Borrowers or any guarantee or other, and (ii) exchange or free any lien or guarantee or to waive, modify, free or consent the retirement of any other guarantee related with any obligation. In addition, the Joint Obligors obligation under this Agreement shall be absolute and unconditional, regardless (a) any lack of validity or enforceability of any obligation hereunder or under any agreement or document in accordance with any obligation, (b) any current or subsequent law, regulation or executive order in any jurisdiction affecting any of the terms of the obligations or the Lenders rights arising hereunder, or (c) any other circumstances, not referred to above, that could constitute an available defense for, or a way to release the Borrowers or the Joint Obligors. The Joint Obligors, by means hereof, agree not to exercise any defense or proceed required to be exhausted in previous terms against the Borrowers until the Lenders have received all their due debt.
(g) This document shall be in full force and effects until the obligations and any other obligations arising hereunder have been fully satisfied.
FOURTEENTH.- COVENANTS. As long as any payable amounts hereunder remain outstanding, each of the Borrowers and each of the Joint Obligors, as applicable, hereby agrees that:
I. Each one of the Borrowers agrees that:
(a) Net Worth Statements and Other Reports . Each Borrower shall deliver to the Lender:
(i) as soon as available, but in any event within 120 (one hundred and twenty) calendar days after the end of each fiscal year of each Borrower, the net worth statement for such fiscal year; and
(ii) together with the financial information delivered pursuant to the previous paragraph, each Borrower shall deliver to each Lender a statement signed by a representative of
 
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the Borrower in which it confirms compliance with the terms herein and stating the non existence of any Default or an Event of Default or, if any such Default or Event of Default existed or exists, specifying the nature and what action each Borrower has taken or proposes to take with respect thereto.
(b) Notices . Each Borrower shall promptly, but in any case within the 5 (five) calendar days after the occurrence give notice to the Agent of the occurrence of any of the following: (i) the occurrence of any Default or any Event of Default, or Purchase Agreement termination event or an Airbus Termination Event by means of a Borrower representation stating the details and the actions each Borrower has taken or proposes to take with respect thereto; (ii) any change in any laws of Mexico that may affect the amount or timing of receipt of any payment due under this Agreement or in any way affecting or having a Material Adverse Change, (iii) any default or event of default of any agreed obligation of each Borrower affecting or that could reasonably be expected to have a Material Adverse Change, (iv) any litigation, claim or proceeding before any court, governmental authority or arbitration panel that as a consequence may have a Material Adverse Change, and (v) any development or event of any nature, which has had or may have a Material Adverse Change.
(c) Compliance with the Law and Contractual Obligations Each Borrower shall comply with the applicable law, regulations, executive orders, judgments or requirements of any Governmental Authority (including, licenses, certificates, permits, notices, registries, and other governmental authorizations of any nature, needed in order to maintain the property or possession of its assets, including without limitation, the compliance with all the obligations set forth in the Operative Documents to which it is, or will be, a party, as well as all its relevant or necessary obligations arising from any agreement, contract or amendment to which it is a party or has entered into (in any way) in order to fulfill its purposes.
(d) Payment obligations . Each Borrower shall pay: (i) all payments due under this Agreement, taking in consideration preference order and terms indicated herein, (ii) all taxes, contributions, rights, and governmental expenses, of any nature, determined, placed or required, and (iii) all the claims made in accordance with the law, which failure to pay affects or could result in a lien upon its assets; on the understanding, however that, each Borrower shall not be obligated to pay or cause to pay any taxes, liability or claims appealed in good faith and by means of appropriate proceedings, and in respect of which appropriate exceptions shall be undertaken in accordance with applicable accountant provisions or other applicable generally accepted accounting principles, if applicable.
(e) Amendments to the Original Purchase Agreement 2005 . The Borrowers agree to comply with all terms and conditions provided in the Novated Original Purchase Agreement 2005, the Novated Original Purchase Agreement 2011 as applicable. Each Borrower shall not carry out any of the following acts, without prior approval of the Lenders:
 
 	(i)	rescind, cancel, terminate or permit the termination of the Novated Original Purchase Agreement 2005, or the Novated Original Purchase Agreement 2011 as applicable or enter into any agreement with Airbus which would rescind, cancel or terminate the Novated Original Purchase Agreement 2005, or the Novated Original Purchase Agreement 2011 as applicable, in each case insofar as it relates to the Financed Aircrafts (or any part thereof) save and to the extent that such rescission, cancellation or termination is in circumstances where Airbus has an obligation to refund the pre-delivery payments relating to the Financed Aircrafts to which such rescission, cancellations or termination applies and Airbus has agreed with the Agent to make any such refund directly to the Agent;	
 
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 	(ii)	consent to any assignment by Airbus of its rights under the the Novated Original Purchase Agreement 2005 or the Novated Original Purchase Agreement 2011 as applicable (insofar as it relates to the Financed Aircraft) the Step-In Agreement A or the Step-In Agreement B; or	
 
 	(iii)	request, permit, consent to or allow any pre-delivery payment to be transferred or applied towards any aircraft other than the Financed Aircraft.	
The Borrowers shall not, without prior approval of the Lenders, enter into any agreement with Airbus which would amend or otherwise modify any provision of the Novated Original Purchase Agreement 2005 or the Novated Original Purchase Agreement 2011 as applicable (insofar as it relates to any Financed Aircraft or any part thereof) which would result in:
 
 	1.	the cancellation of the purchase of any Financed Aircraft, except for those currently covered by the Original Purchase Agreement 2005 and the Original Purchase Agreement 2011, regarding the loss of any Financed Aircraft or any circumstance under which, paid for by the Lenders, have been reimbursed or paid for;	
 
 	2.	a change in the date or amount of payment of a pre-delivery payment, unless the Lenders are notified at least ten (10) Business Days in advance, and with the understanding that in no case will it exceed the period specified in Exhibit 1 and 1A;	
 
 	3.	the Purchase Price of any Financed Aircraft being increased by an amount in excess of 2% (two per cent.) of such Purchase Price;	
 
 	4.	the schedule Delivery Date of any Financed Aircraft being postponed by more than 180 (one hundred and eighty) days;	
 
 	5.	the specification of any Financed Aircraft being changed in terms which could materially reduce the value, useful life or marketability of such Financed Aircraft, with the exception of those required by the applicable legislation;	
 
 	6.	the addition of any BFE in respect of any Financed Aircraft having a cost in excess of US$300,000.00 (three hundred thousand dollars 00/100) with the exception of: (i) it is required to replace the BFE because the production thereof has been discontinued, ceased in short, or delayed, or the manufacturer thereof has ceased to be an approved manufacturer for Airbus, IAE or CFM International; (ii) it is required by the applicable legislation; or (iii) that the cost of such additional buyer furnished equipment be pre-paid to the respective manufacturer or deposited to Airbus to be applied in the day of the delivery of the Financed Aircraft.	
The parties herein agree that any other amendment considered modifying, in the reasonable opinion of the Lenders, the rights or interests of the Lenders in respect of the Santander Financed Aircrafts shall be previously approved by the Lenders, whose approval shall not be negated by the Lender as the case may be when there is a reasonable motive that may provoke the change.
 
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(f) Books and Records . Each Borrower shall keep proper books of records and accounts in which full, true and correct entries in respect of all the financial operations and assets of the Borrowers in accordance with the generally accepted accounting principles or other applicable generally accepted accounting principles.
(g) Use of the Credit Line . Each Borrower shall use the total amounts of the proceeds gained in accordance with this Agreement for the purposes indicated in the Second Clause and in accordance with the provisions set forth in the purposes of the Santander/Bancomext PDP Trust 2 and the Santander/Bancomext PDP Trust 4, the Lenders shall not be responsible for the use given any of the Borrowers to the Credit Line resources.
(h) Priority of Payment . Each Borrower shall ensure that its obligations hereunder constitute obligations of such Borrower in accordance with this Agreement ranking at least pari passu in the right of payment with all other present or future direct, senior, unsecured and unsubordinated obligations of such Borrower (except with those obligations having priority by operation of law).
(i) Reports and Information . Each Borrower shall provide the Lenders with (i) reports and information required by the Lenders in connection with the Financed Aircrafts and other information that it has available with respect to the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011 and (ii) such information as is necessary for compliance of any “know your customer” requirements. Such information shall be delivered by each Borrower upon the request of the corresponding Lender within 5 (five) Business Days following such Lender request.
(j) Status . Each Borrower shall maintain its status as trust duly established and validly existing under the laws of Mexico.
(k) Authorizations . Each Borrower shall promptly obtain, comply with and do all that is necessary to maintain in full force and effect; and supply certified copies to the Lenders of any authorization required under any applicable law to enable it to perform its obligations under the Operative Documents to which, it is a party and to ensure the legality, validity, enforceability or admissibility in evidence in of any Operative Document to which it is a party.
(l) Negative Pledge . Each Borrower shall not directly or indirectly create, incur, assume, suffer to exist or permit to subsist any security interest over (a) any of the Financed Aircrafts, (b) any of its assets, or (c) the Original Purchase Agreements or any other Operative Documents to which it is, or will be, a party.
(m) No prejudice of interests . Each Borrower shall not do anything or take any action or knowingly omit to take any action which has or may be reasonably expected to have the effect of prejudicing the interests of any Lender in relation to any Financed Aircraft, or any Operative Document to which it is, or will be, a party.
 
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(n) Taxation . The Borrower shall pay and discharge all taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent (i) payment is being contested in good faith; (ii) adequate reserves are being maintained for those Taxes; and (iii) payment can be lawfully withheld.
(o) Further assurance . The Borrower shall carry out all acts, do all things and execute all documents reasonably required by any Lender to protect and/or perfect the interests of any Lender under the Operative Documents to which it is, or will be, a party and to ensure the Finance Parties obtain all rights and benefits intended to be conferred on them under the referred Operative Documents.
(p) Business . Each Borrower shall not enter into any business or other activity other than (i)those permitted by the Santander/Bancomext PDP Trust 2 in respect with the A Borrower and the Santander/Bancomext PDP Trust 4 in respect with the B Borrower .
(q) Rights under the Step-In Agreement. The parties acknowledge and agree that as provided under Clause 7.7 of the Step-In Agreement A and as provided under Clause 7.7 of the Step-In Agreement B, whatever amounts to be received by the A Borrower or the B Borrower in the events herein provided, any amounts due in accordance with the present agreement will be paid to the Lenders, and in such event the applicable Borrower and the Joint Obligors will be as defined in subparagraph g) of Clause Thirteen of the present agreement and will not present a defense or spend any resource that requires exhausting those firstly of such Borrower, until the Lenders have received all that is owed to them in accordance with the present Agreement. By virtue of the proceeding, the Borrowers and the Joint Obligors acknowledge in this action that, in the event that Airbus does not exercise its rights under the Step-In Agreement A and/or the Step-In Agreement B, the Lenders shall have the rights granted on their behalf as provided in such Step-In Agreement A and the Step-In Agreement B, same that shall be exercised through a third party appointed by the Agent agreed by the Lenders.
II. The Joint Obligors agree that:
(a) Financial Statements and Other Reports . Each Joint Obligor shall deliver to the Lender:
(i) as soon as possible, but in any case within 120 (one hundred and twenty) calendar days after the end of each fiscal year of each Joint Obligor the individual consolidated financial statements for such fiscal year, including, as applicable, the balance sheet, individual and consolidated profit and loss statement, cash flow statement, and capital variations statement of the Joint Obligor for such fiscal year, accompanied by an opinion thereon of the external auditor, as applicable. Such information shall be accompanied by a letter from a legal representative of each one of the Joint Obligors, certifying the compliance with the financial ratios established in subparagraph (a) of the Fifteenth clause; and
(ii) as soon as available, but in any case not later than 60 (sixty) calendar days after the end of each of the first three quarterly periods of each fiscal year of each Joint Obligor, as the case may be, the individual and consolidated, non audited, financial statements of each Joint Obligor, corresponding to each quarter that include, as applicable, a balance sheet, the income statement, individual and consolidated, of the Joint Obligor corresponding to the period starting at the end of the previous quarter and ending at the end of such quarter (not accumulated), signed by the corresponding Joint Obligor officer stating that were prepared in accordance with the generally accepted accounting principles. Such balance sheet and income statement shall be accompanied by a letter from a legal representative of each one of the Joint Obligors, certifying compliance with the financial ratios established in subparagraph (a) of the Fifteenth clause.
 
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(b) Notices . Each Joint Obligor shall promptly but in any case notify the Lenders, within the 5 (five) calendar days after the occurrence, of the occurrence of any of the following: (i) Default or an Event of Default through the declaration of the Joint Obligor stating the details of such Default or Event of Default and the actions that the Joint Obligor has taken or proposes to take with respect thereto; (ii) any change in any laws of Mexico that may affect the amount or timing of receipt of any payment due under this Agreement or in any way affecting or that could be reasonably expected to have a Material Adverse Change, (iii) any Default or event of default of any agreed obligation of the Joint Obligor affecting or that could be expected to constitute a Material Adverse Change, (iv) any litigation, claim or proceeding before any court, governmental authority or arbitration panel affecting or that could reasonably be expected to have a Material Adverse Change, and (v) any notice of strike or labor stoppage of the Joint Obligor that constitutes a Material Adverse Change, and (vi) any significant change in its accounting principles, policy and guidelines, if any.
(c) Compliance With Law and Contractual Obligations . The Joint Obligors shall comply with applicable law, regulations, executive orders, judgments or requirements of any Governmental Authority (including, in licenses, certificates, permits, registries, and other governmental authorizations of any nature, needed in order to maintain the property or possession of his assets or the performance of his activities, competition law, environmental laws and orders (including technical norm and disposal of toxic and hazardous materials, ecological orders related to the preservation, restoration, and improvement of the environment, the protection of natural areas and terrestrial and aquatic flora and fauna, the reasonable exploitation of natural resources, the precision and control of air, water, and soil pollution, as well as the other provisions provided in the Law of Ecological Balance and Environmental Protection that may be applicable, as well as ensuring that the design, operation, and maintenance of the equipment and any of its installations comply with the requirements applicable to the environment, whether federal, state, or local tax laws and laws regarding the social security administration and pension funds) as well as all its relevant or necessary obligations arising from any agreement, contract or amendment that they have issued in order to fulfill its purposes, maintain the ordinary course of business, and which compliance, shall not result or reasonably be expected to result in a Material Adverse Change.
(d) Payment Obligations . The Joint Obligors shall pay, and shall cause each of their subsidiaries to pay, prior to any default, (i) all taxes, contributions, rights, and governmental expenses, of any nature, determined, placed or required (including, without limitation, in social security, worker housing, and retirement regulations, real estate tax, water supply rights payment, and any other similar tax that could in the future substitute o replace such, and including further every related payment that shall be made in relation to its concession title and aerial operator certificate, and every payment that it must make to Navigation Services for Mexican Airspace, as well those payments due in respect of Airport Usage Fees (TUA) and fuel that may accrue from Airports and Auxiliary Services), and (ii) all claims made in accordance with the law, which failure to pay affects or could result in a lien upon its assets; on the understanding, however that, each Joint Obligor and its subsidiaries shall not be obligated to pay or cause to pay any taxes, liability or claims appealed in good faith and by means of appropriate proceedings, and in respect of which appropriate exceptions shall be undertaken in accordance with applicable accountant provisions or other applicable generally accepted accounting principles, as applicable.
 
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(e) Insurance maintenance . The Joint Obligors shall maintain, and each of the Joint Obligors shall cause that each of its subsidiaries, maintain insurance with insurance companies with an established reputation, reasonably acceptable by the Lenders, consistent and in accordance with the practices of similar businesses, owning similar assets, and located in the same general areas or similar areas of business that the Joint Obligors and their subsidiaries operate.
(f) Business conduct and Existence . Each Joint Obligor shall, and shall cause their subsidiaries to, continue to engage and conduct the same general type of business and activities and preserve, renew and keep in full force its legal existence and take all reasonable actions to maintain all material rights, privileges, approvals, licenses and necessary authorizations to conduct his business.
(g) Books and Records . Each Joint Obligor shall, and shall cause their subsidiaries to keep proper books of records and accounts in which full, true and correct entries in respect of all the financial operations and assets of the Joint Obligors and its subsidiaries in accordance with the generally accepted accounting principles or other applicable generally accepted accounting principles, in a consistent manner with the accountant policies and guidelines used on the previous fiscal years.
(h) Inspection Rights . The Joint Obligor shall allow, and each Joint Obligor shall cause their subsidiaries to allow that the written designated representatives of the respective Lender inspect the accounting registries, collection activities and/or assets of the Joint Obligors and their subsidiaries, if any. Such inspections shall be made prior request, previously noticed in writing to the Joint Obligor (as the case may be) with at least 5 (five) Business Days in advance (except in the event in which a Default or early termination exists and continues, in which case such notice shall not be required), being such expenses charged to the Lenders (except in the event in which a default or early termination exists and continues, in which case such expenses shall be charged to the Joint Obligors). Such inspections shall be undertaken in Business Days and in labor hours, so as not to interfere or interrupt the Joint Obligors operations. The Lenders, in compliance with the Financial Institutions Law and other applicable provisions, shall maintain the Lender-client privilege and in consequence shall maintain (and shall cause its representatives to maintain) in a confidential manner, all the information of the Borrowers, of the Joint Obligor and of their subsidiaries obtained as a result of the reviews or inspections provided hereto, as such information does not acquires the character of public by different means of the Lenders or its representatives; in the understanding that, the Lenders may disclose such information, when it is binding to do so pursuant to the applicable law or by virtue of a requirement of a competent authority, having to give prior written notice to the respective Joint Obligor.
(i) Asset preservation . The Joint Obligors shall maintain and conserve, and shall cause each of their subsidiaries to maintain and preserver, all their assets that are used or that are useful for the development of their activities in good and normal conditions, except for the use and ordinary waste; in the understanding that, such obligation shall not prevent that each Joint Obligor or any of their subsidiaries discontinue the operation and maintenance of any of their assets, such discontinuation is desirable in the conduction of its business and such discontinuation, individually or jointly, shall not result in a Material Adverse Change.
(j) Transactions . The Joint Obligors shall carry out, and shall cause each of their subsidiaries to carry out, all its transactions, including those carried out with any of its affiliated, under market conditions.
 
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(k) Governmental Authorizations . The Joint Obligors shall maintain, and shall cause each of their respective subsidiaries to maintain, in full force and effect, all licenses granted by, authorizations of, and registries before any governmental authority that are necessary pursuant to the applicable law or pursuant to reasonable practice of business for the performance of their activities and/orthe benefit of regular air transport service of people and cargo, including without limitation, in compliance with civil aviation legislation, antitrust legislation, legislation related to environmental protection or legislation related to health, and for the fulfillment of their obligations pursuant to this Agreement and for validity or enforceability of this Agreement and whose loss or cancelation results in a Material Adverse Change, and specifically including every authorization, concession, and certificate, granted by the Secretary of Communication and Transportation to the Concessionaire to act as provider of air transportation services in accordance with Mexican law.
(l) External Auditor . The Joint Obligors agree that their respective subsidiaries will maintain the same external auditor.
(m) Compliance with the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011 . The Joint Obligors are obligated to comply with all the terms and conditions established under the Original Purchase Agreements, the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011, as applicable.
(n) Amendments to the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011. The Joint Obligors are obligated to comply with, and cause the A Borrower and the B Borrower to comply with, all the terms and conditions established under the Original Purchase Agreements, the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011, as applicable. The Joint Obligors are obligated to not carry out, and to cause that the Borrowers do not carry out, any of the following actions, without prior approval of the Lenders:
 
 	(i)	rescind, cancel, terminate or permit the termination of the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011 or enter into any contract or agreement with Airbus which would rescind, cancel, or terminate the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011, as applicable, in each case insofar as it relates to the Financed Aircrafts (or any part thereof), save and to the extent that such rescission, cancellation, or termination is in circumstances where Airbus has an obligation to refund the pre-delivery payments relating to the Aircraft to which such rescission, cancellation, or termination applies, and Airbus has agreed with the Agent to make any such refund directly to the Agent;	
 
 	(ii)	consent to any assignment by Airbus of its rights under the Original Purchase Agreements, the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011, as applicable (insofar as it relates to the Financed Aircrafts) the Step-In Agreement A or the Step-In Agreement B; or	
 
 	(iii)	request, permit, consent to or allow any pre-delivery payment to be transferred or applied towards any aircraft other than the Financed Aircrafts.	
 
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Also, the Joint Obligors are obligated to not execute, without prior approval of the Lenders, nor permit any of the Borrowers to execute, any contract or agreement with Airbus that may amend or change any of the terms of the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2011, as applicable (insofar as they are related to any Financed Aircraft, or to any portion thereof) that may result in:
 
 	(i)	the cancellation of the purchase of any Financed Aircraft, except for those currently covered by the Novated Purchase Agreement 2005 and the Novated Purchase Agreement 2013, as applicable, as applicable, regarding the loss of any Financed Aircraft or any circumstance under which, paid for by the Lenders, have been reimbursed or paid for;	
 
 	(ii)	a change in the date or amount of payment of a pre-delivery payment, unless the Lenders are notified at least ten (10) Business Days in advance, and with the understanding that in no case will it exceed the period specified in Exhibit 1 and 1A;	
 
 	(iii)	the Purchase Price of any Financed Aircraft being increased by an amount in excess of 2% (two per cent.) of such Purchase Price;	
 
 	(iv)	the schedule Delivery Date of any Aircraft being postponed by more than 180 (one hundred and eighty) days;	
 
 	(v)	the specification of any Aircraft being changed in terms which could materially reduce the value, useful life or marketability of such Aircraft, with the exception of those required by the applicable legislation;	
 
 	(vi)	the addition of any buyer furnished equipment in respect of an Aircraft having a cost in excess of US$300,000 (three hundred thousand dollars 00/100) with the exception of: (i) it is required to replace the buyer furnished equipment because the production thereof has been discontinued, ceased in short, or delayed, or the manufacturer thereof has ceased to be an approved manufacturer for Airbus, IAE or CFM International; (ii) it is required by the applicable legislation; or (iii) that the cost of such additional buyer furnished equipment be pre-paid to the respective manufacturer or deposited to Airbus to be applied in the day of the Aircraft.	
The parties agree that any other modification that could be deemed to modify the rights or interests of the Lenders with respect to the Aircraft, in the reasonable opinion of the Lenders, shall be approved by the Lenders.
(o) Reimbursements and BFE and SSBFE Agreements . The Joint Obligors are obligated to transfer in favor of the Borrowers’ estate any rights related to any reimbursements of the Financed Aircrafts, save for the reimbursement payments to which any of the Netting Letters apply, as well as any rights related to the BFE and SSBFE Agreements, and to maintain all such BFE and SSBFE Agreements during the term of this Agreement. Such transfer shall be effected no later than 6 (six) months before the delivery date of each one of the Financed Aircrafts.
(p) Exercise of rights . Only the Joint Obligors may exercise any rights or carry out any actions (including without limitation instructions to the Borrowers) that may perform by
 
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virtue of the powers granted to them or derived from the Santander/Bancomext PDP Trust 1, the Santander/Bancomext PDP Trust 2, Santander/Bancomext PDP Trust 3, the Santander/Bancomext PDP Trust 4, the Step-In Agreement A and the Step-In Agreement B, with prior written consent granted by the Lenders.
FIFTEENTH. Negative Covenants. So long as any amount payable according to this Agreement remains unpaid and is outstanding, each one of the Borrowers and each of the Joint Obligors agree the following:
(a) Debt . The Joint Obligors and their subsidiaries agree not to obtain additional Debt in excess of the Permitted Debt allowed under this Agreement without previous agreement in writing by the Lenders to the extent that: (i) the execution of any agreements with respect to such additional debt result in the breach of any of the payment obligations contained herein, and/or (ii) a Default or an Event of Default has occurred and is continuing (unless the resources of such additional debt are put forth for the payment of the Credit Line, to the extent that is necessary for the total payment of the amounts owed under the Credit Line).
For purposes of this clause, “Permitted Debt” means, with respect to each of the Borrowers and of the Joint Obligors, the following: (a) financings incurred and validly in place at the time of execution of this Agreement; (b) financings related to the acquisition and/or the leasing of the Financed Aircrafts and the motors of such aircrafts; (c) financings up to an amount of U.S.$100,000,000.00 (one hundred million Dollars and 00/100) for working capital purposes; (d) financings between Subsidiaries and/or Affiliates of the Joint Obligors; (e) financings substituting an of the financings mentioned in (a) to (d) above; (f) financial operations in accordance with the risk management policies that are, from time to time, authorized by the board of directors of the Joint Obligors and that are undertaken for the purpose of minimizing the risks associated with fuel, exchange rate and interest rate; (g) Other Financings provided they satisfy a Net Debt - EBITDAR Ratio of less than or equal to 5.5 (five point five) times the EBITDAR, which will be calculated by dividing:
 
 	(1)	The sum of: (i) long-term liabilities on the date of calculation, plus (ii) the result of multiplying by 7 (seven) the amount of rent to be paid for aircrafts, engines and leased aircraft parts under such agreements covering leasures of flight equipment over the next 4 (four) trimesters, plus (iii) the negative balance of unrestricted cash flow; such result will be divided by,	
 
 	(2)	The EBITDAR of the last 4 (four) trimesters ending on the date of calculation.	
For purposes of this clause, “EBITDAR” means, on any date, the result of the sum of: (i) the accounting net results; (ii) items that do not require cash flow; (iii) comprehensive financing income; (iv) taxes; and (v) all amounts in connection with aircrafts, motors and parts leased under lease agreements.
Notwithstanding the aforementioned, each Borrower and each Joint Obligor acknowledge and agree that, in the event that the Borrowers and the Joint Obligors are in Default with the financial ratio set forth in the subsection (g) above of the Permitted Indebtedness, and therefore are in an Event of Default pursuant to the Clause Nineteenth hereof, to the discretional choice of the Lenders, the Lenders may choose between: (i) an early termination of this Agreement, once any period of wait has expired in accordance to this Agreement, or (ii) grant a temporary waiver to the Borrowers and the Joint Obligors to cure such Default, in which case, (y) if the following net debt - EBITDAR ratio of the Joint Obligors, considered collectively, is between 5.5 (five point five)
 
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and 7 (seven) times EBITDAR, the Borrowers and the Joint Obligors shall be obliged to pay a fee equal to 1.20% (one point twenty percent) annually over the Total Amount, fee that shall be paid to the Lenders in a quarterly basis and for each concluded period (or partial period) in which the Borrowers and the Joint Obligor are in default, or (z) if the net debt - EBITDAR ratio referred to in section (y) above, applicable to the Joint Obligors, together, is greater than 7 (seven) times EBITDAR, the Lenders shall determine, to its entire discretion, if such temporary waiver shall be granted to the Borrowers and Joint Obligors in terms unilaterally decided by the Lenders, including without limitation the amount to be delivered to the Lenders for such waiver, or if they shall proceed pursuant to section (i) above.
(b) Permitted Liens . The Jount Obligors agree not to constitute, assume, or allow to exist, and each Joint Obligor agrees not to permit that any of its Subsidiaries constitutes, assumes, or allows to exist, any liens over: (i) the rights and assets part of the Santander/Bancomext PDP Trust 2 and Santander/Bancomext PDP Trust 4 estate, unless it refers to liens created by means hereof, and (ii) any other asset, tangible or intangible (including those interests representing the social stock of any Subsidiary and any industrial or intellectual property) of their property to date hereof or that may be acquired after this time, for the purposes of this section (ii) except for those liens created as follows:
 
 	(i)	liens arising out of any financial, labor or social security obligation, or arising by ministry of law, provided that any of such liens have been contested in good faith through the corresponding proceedings and with respect to which the Joint Obligors set aside reserves or make any other provision necessary to satisfy the applicable accounting principles in Mexico or other generally accepted principles of accounting that may be applicable, whichever may be applicable;	
 
 	(ii)	liens that exist as a result of any court ruling or judicial order of any court provided that such court ruling be declared inadmissible or its effects have been suspended by another court within 60 (sixty) calendar days following the date of such ruling;	
 
 	(iii)	liens to secure debt permitted in accordance with subsection (i) above; and	
 
 	(iv)	all those liens necessary for the operation and related to the ordinary course of business of the Joint Obligors.	
(c) Mergers and Consolidations . The Joint Obligors may not, without previous written authorization from the Lender, in one or more related operations, (i) consolidate, divest or merge (as acquiring corporation or acquired corporation) with any other entity or (ii) directly or indirectly, transfer, sell, or in any other way transfer all or most of its assets in favor of any entity, notwithstanding, in respect to any of the operations described in paragraphs (i) and (ii) above, the entity with which such operation was carried out is a subsidiary of the Joint Obligors, and immediately after such operation becomes effective:
 
 	(1)	the entity that results or is established by virtue of such merger or consolidation is established as a Joint Obligor in accordance with this Agreement,	
 
 	(2)	the Joint Obligor, or its successor, expressly agrees to indemnify the Lenders regarding any tax, levy or government burden, of any nature, that may be imposed on the Lenders as a consequence of the operation of which the case may be, in relation to payments under this Agreement;	
 
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 	(3)	its consequence is a Default an Event of Default or an early termination cause; and	
 
 	(4)	the Joint Obligor has delivered the Lenders a certificate and a legal opinion by an independent firm, that is reasonably acceptable to the Agent, each of which points out, given the case, that such consolidation, divestiture, merger, transfer, and the agreements relating to such operation, comply with the applicable provisions of this clause. This being understood that the legal opinion to which this subsection refers is not required in the case that a Joint Obligor carries out the registration of representative stock of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).	
(d) Transfer of Assets . The Joint Obligors won’t allow and each subsidiaries will not allow, without previous authorization from the Lenders to sell, or in any other way transfer its assets, tangible or intangible (including interest representing the capital stock pertaining to any subsidiary and any industrial or intellectual property), except for:
 
 	(i)	the selling or transfer of the inventory of the Borrowers, Joint Obligors and their subsidiaries in the natural course of their business; and	
 
 	(ii)	the selling or transfer of assets in favor of any of the Borrowers, Joint Obligors or its subsidiaries; and	
 
 	(iii)	the authorized transfer of assets (aircrafts, engines and aircraft parts, as long as they are made in the ordinary course of business) by means of a Sale and Lease Back .	
The above being understood that the Joint Obligors may carry out the activities referred to in subsections (i) and (ii) above, provided that the total aggregate annual amount of such operations, and excluding those operations performed in the ordinary course of business, shall not exceed US$5,000,000.00 (five million Dollars 00/100) or its equivalent in another currency.
(e) Additional Financings . The Joint Obligors will not allow its subsidiaries, and the subsidiaries may not, grant any kind of Credit Line, credit or advance, with or without security, except those credits that are granted within the ordinary course of business between the Joint Obligors, as long as it has not incurred or continues in an event of Default or an early termination cause.
(f) Change in the Nature of Business . The Joint Obligors will not allow its subsidiaries, and the subsidiaries may not, substantially change the commercial name or nature, in the Borrower’s case, of its purposes, and in the case of the Joint Obligors, of its principal activities as they have been carried out to the date of this Agreement.
(g) Modifications to the Santander/Bancomext PDP Trust 2 and to the Santander /Bancomext PDP Trust 4. The Borrowers and the Joint Obligors shall no modify, supplement, or change in any manner, nor permit any other party to modify, supplement, or change any provision of the Santander/Bancomext PDP Trust 2 , of the Santander/Bancomext PDP Trust 4, the Step-In Agreement A nor of the Step-In Agreement B, as applicable, without the prior written consent of the Lender.
 
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(h) Payment of Dividends .
 
 	(i)	The Joint Obligors agree and shall cause their subsidiaries to refrain from celebrating or undertaking any obligation or agreement that, directly or indirectly, prohibits or restrains, or has the effect of prohibiting or restraining, or imposing any condition (y) to the declaration or payment of any kind of dividends or distributions to their partners or shareholders or (z) granting of any kind of loans, credits, credit lines or any other type of financing by any subsidiary to any of the Joint Obligors.	
 
 	(ii)	The Joint Obligors agree not to declare or pay dividends o make distributions to their shareholders as long as any amount payable according to this Agreement remains unpaid; except for distributions that do not exceed 15% (fifteen percent) of the pre-tax earnings determined according to the accounting principles applicable to the immediately preceding fiscal year and as long as the Borrower is not currently in an event of Default or an early termination cause.	
The above in the understanding that the obligation to which subsection (g) refers will not applicable in the case that the Joint Obligor carries out the registration of its representative stock of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional de Valores ).
(i) Settlement and Dissolution of the Joint Obligors . The Joint Obligors may not initiate a lawsuit or approve a ruling to be settled or diluted (or in order to undergo a settlement or dissolution) or to settle or dilute any of its subsidiaries, except (i) that such subsidiaries should not be necessary and (ii) in the Lenders’ reasonable judgment, such settlement or dissolution does not significantly affect the corresponding Borrowers or the Joint Obligors subject according to this Agreement.
(j) Waivers. The Joint Obligors may not, and shall not allow their subsidiaries to, cancel or grant reductions concerning payable debt to any of them, except (i) concerning debt between the Borrowers and the Joint Obligors, and (ii) cancellations or reductions made in the natural course of their business.
(k) Capital Investment . The Joint Obligors may not, and shall not allow their subsidiaries to, incur in expenses or compromise expenses related to the acquisition of fixed assets or other assets, if an event of Default or early termination cause has occurred and continues, or if, in the Lenders’ reasonable judgment, as a result of such investment an event of Default or an early termination cause may occur.
(l) Bylaws . The Joint Obligors may not, and shall not allow their subsidiaries to, modify the corporate purpose of its bylaws or any disposition of its bylaws that could reasonably be expected to have a Material Adverse Change, without previous consent of the Lenders, except for those bylaw modifications that are required within the context of a corporate restructure for the purpose of complying with the requirements of the Foreign Investment Law ( Ley de Inversión Extranjera ) and/or Securities Market Law ( Ley del Mercado de Valores ) for stock corporations and for the purpose that the Joint Obligors register their representative stocks of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional Bancaria de Valores ).
 
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(m) Decreases in Capital Stock . The Joint Obligors agree to abstain from celebrating or permitting their subsidiaries to celebrate shareholders meetings in which it is resolved, in any way, to repay or reduce its capital stock, except for those reductions and reimbursements of capital that are found directly related to the registration process for representative stocks of its share capital in the National Securities Registry ( Registro Nacional de Valores ) that is kept by the National Securities Commission ( Comisión Nacional Bancaria de Valores ).
(n) Compensation. The Joint Obligors agree not to compensate or settle in any law suit, action, claim, dispute or pending process, for an amount that, collectively, exceeds $10,000,000.00 (ten million Dollars 00/100) or the equivalent thereof in any other currency and that these have a Material Adverse Change.
(o) Concession. Concesionaria agrees not to modify in any way the concession title of public air transport service, nor any other concession or government authorization related to the provisions of public air transport service, except for those modifications in the Concession Title that: (i) apply due to additions or change of aircraft registration (Exhibit 1); (ii) addition of national and/or international routes (Exhibit 2), (iii) modification of bases of operation and/or maintenance and/or addition of sub-bases of operation or maintenance (Exhibit 3), (iv) update the development program (Exhibit 4), and (v) any other modification necessary to provide air transport service, or assign, transfer or encumber the rights derived from such title.
SIXTEENTH.- AGENT.
(a) Appointment and Authorization . To comply with the provisions set forth in the Step-In Agreement A, the Step-In Agreement B, the Santander/Bancomext PDP Trust 2 and the Santander/Bancomext PDP Trust 4, and to the effect of having a single representation before the parties thereto and herein, each Lender hereby irrevocably appoints, designates and authorizes Santander as the agent to take measures and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Credit Line document, together with such powers as are reasonably incidental thereto. Furthermore, each Lender hereby authorizes and appoints the Agent as an agent ( comisionista ) under the terms of Articles 273 and other provisions of the Mexican Commerce Code ( Código de Comercio ) to execute, deliver and perform any Credit Line related with this Agreement, the Santander/Bancomext PDP Trust 2, the Santander/Bancomext PDP Trust 4, the Step-In Agreement A and the Step-In Agreement B.
Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Credit Line document, the Agent shall include reference to its Affiliates and to its own, and its Affiliates’ officers, directors, employees and agents) shall not have any duties or responsibilities, except those expressly set forth in the Credit Line documents, nor shall the Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Credit Line document or otherwise exist against the Agent. Without limiting the generality of the foregoing sentence, the use of the term “representative” or “agent” herein and in the other Credit Line documents with reference to the Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
The parties acknowledge that the Joint Obligors and the Borrowers may send any notice addressed to the Lenders through the Agent, who should forward a copy of such notice to the
 
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Lenders within 3 (three) days following its reception, without responsibility from the Joint Obligors and the Borrowers. Consistent with the above, unless provided otherwise herein, any notice made or received by the Agent shall have the same effects as if it were made or received by the Lenders.
In case of notices sent by the Agent to Bancomext for which Bancomext is required to reply, if the Agent weren’t to receive such reply within 45 (forty five) Business Days following its delivery, it shall be understood that Bancomext gives its consent to the Agent to act according to the provisions of such notice.
The parties hereby agree that the payments owed to the Lender shall be made directly to each Lender without the Agent acting as collector, receptor or concentrator of the funds owed to the Lenders. Also, each Lender must make their corresponding Disbursements directly to the Borrower, being as the Agent must not act as concentrator of such amounts for the Disbursement to the A Borrower and/or the B Borrower, except for the events established in accordance with the provisions of the Santander/Bancomext PDP Trust 4.
(b) Delegation of Duties . The Agent may execute any of its duties found in this Agreement or any other Credit Line document by or through any one or more sub-agents appointed by it, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.
(c) Liability of Administrative Agent . Neither the Agent nor any of its Affiliates, officers, directors, employees, agents or attorneys in fact shall:
(i) be liable for any action taken or omitted to be taken by it or any such Person under or in connection with this Agreement or any other Credit Line document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or
(ii) be responsible in any manner to any Lender for any recital, statement, representation or warranty made by the Borrowers, or any officer thereof, contained in this Agreement or in any other Credit Line document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Credit Line document, or the validity, effectiveness, genuineness, enforceability or sufficiency or feasibility of this Agreement or any other Credit Line document, or for any failure of the Borrowers to perform its obligations hereunder or thereunder.
(iii) be responsible to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, or facts stated in, this Agreement or any other Credit Line document, or to inspect the properties, books or records of the Borrowers, the Joint Obligors or any of its Subsidiaries.
(iv) be responsible of proving the veracity or fulfillment of the commitments made by the Borrowers or the Joint Obligor and/or investigating the existence of possible events of default or insolvency of such.
(v) be responsible for the adequacy, accuracy or integrity of the information provided by the Borrowers, the Joint Obligors or any other person related to the Credit Line documents.
 
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The Lenders exempt the Agent from any liability due to error or omission in the performance of its roles under this Agreement, except for those due to gross negligence or willful misconduct.
(d) Reliance by Administrative Agent .
 
 	i.	The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex, teletype or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrowers), independent accountants and other experts selected by the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Line document unless it shall first receive such advice or concurrence of the Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of failing to take, taking or continuing to take any such action. As to any matters not expressly provided for in the Credit Line documents, the Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request or consent of the Lenders.	
 
 	ii.	For purposes of determining compliance with the conditions specified in this Section, each Lender that has executed this shall be deemed to have consented to, approved, accepted or to be satisfied with, each document or other matter either provided by the Borrowers to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to such Lender unless the Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.	
(e) Notice of Default . In no case shall the Agent be deemed of having knowledge or notice of the occurrence of any Default or Event of Default, except if the Agent responsible for the administration of this Agreement were to have received written notice from a Lender or the Borrowers referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “Notice of Default”. The Agent will notify the rest of the Lenders of its receipt of any such notice. The Agent shall take such action with respect to such Default or Event of Default before Airbus or any party of the Step-In Agreement, directed by the Lenders in writing in accordance with this agreement; in the understanding however , that unless and until the Agent has received any such written direction, the Agent may (but is not be obligated to) take such action, or refrain from taking such action.
(f) Credit Decision . Each Lender acknowledges that neither the Agent nor any of its Affiliates, officers, directors, employees, agents or attorneys-in-fact have made any representation or warranty to it, and that no act by the Agent hereinafter taken, including any consent to and acceptance of any assignment or any review of the affairs of the Borrowers and its Subsidiaries, shall be deemed to constitute any representation or warranty by the Agent to any Lender as to any matter, including whether the Agent has disclosed material information in its possession. Each Lender represents to the Agent that it has, independently and without reliance upon the Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of an investigation into the business, prospects, operations, property, financial and other condition
 
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and creditworthiness of the Borrowers and its Subsidiaries and all applicable Lender regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrowers hereunder.
Each Lender also represents that it will, independently and without reliance upon the Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action in accordance with this Agreement and the other Credit Line documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrowers and its Subsidiaries.
Except for notices, reports and Operative Documents expressly herein required to be furnished to the Lenders by the Agent, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrowers or the Joint Obligors which may come into the possession of any of the Agent or any of their Affiliates, officers, directors, employees, agents or attorneys-in-fact.
(g) Indemnification . Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the Agent and its Affiliates, directors, officers, agents and employees (to the extent not reimbursed by or on behalf of the Borrowers and without limiting the obligation of the Borrowers to do so) and as long as a final and binding resolution has been issued by a competent authority, pro rata , and hold the Agent harmless from and against any and all liabilities derived from his role as Agent, included consequences due to error or omission; provided , however , that no Lender shall be liable for the payment to the Agent of any portion of such Indemnified Liabilities to the extent determined in a final judgment by a court of competent jurisdiction to have resulted from the Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender shall reimburse the Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in connection with the preparation, execution, delivery, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Credit Line document, or any document contemplated by or referred to herein, to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Borrowers. The Lenders also agree to reimburse the Agent, in advance, for any documented taxes required to be paid by the Agent pursuant to this Agreement. The undertakings in this Section shall survive the payment of all other Obligations and the resignation or removal of the Agent.
(h) Agent acting on behalf of the Lenders . Santander and Bancomext agree and acknowledge that a consent obtained from both of the Lenders shall be required in order for the Agent to perform any other act or omission which may result in affecting any of the Lenders’ rights under this Agreement, in the understanding that the Agent shall not agree in any modification to the term, amount, rate or any other related to the Credit, without Bancomext’s consent . Consequently, the Lenders hereto acknowledge and agree that any action taken by the Lenders against the Borrower and the Joint Obligors pursuant to this Agreement, shall always be initiated collectively by all of the Lenders, in the understanding that the Agent does not assumes any liability of any nature in connection with such actions.
Santander and Bancomext agree that in the event that the Agent receives any amount derived from an action taken by him, with the unanimous consent of the Lenders, such amounts shall be distributed evenly by Santander and Bancomext in respect to Bancomext’s Portion and Santander’s Portion hereunder.
 
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(i) Agent in its Individual Capacity . Notwithstanding the provisions contained under Section (h) above, Santander and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of lending, trust, financial advisory, underwriting or other business with the Borrowers and any of the Borrowers’s Affiliates as though Santander was not the Agent hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, Santander or its Affiliates may receive information regarding the Borrowers or any of its Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrowers or such Affiliate) and acknowledge that the Agent shall be under no obligation to provide such information to them. With respect to the A Tranche Santander’s Portion and the B Tranche Santander’s Portion, Santander shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not an Affiliate of the Agent, and the terms “Lender” and “Lenders” include Santander in its individual capacity.
(j) Successor Agent . The Agent may resign upon thirty (30) days’ notice to the Lenders, and the Agent may be removed at any time, upon written notice to the Administrative Agent, with or without cause by the Lenders. If the Agent resigns or is removed in accordance with this Agreement, the Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be subject to the prior approval of the Borrowers at all times other than during the existence of an Event of Default (which consent of the Borrowers shall not be unreasonably withheld or delayed). If no successor agent is appointed prior to the effective date of the resignation of the relevant existing Agent or the Lenders’ election to remove such existing Agent, then such existing Agent may appoint, after consulting with the Lenders and the Borrowers, a successor agent from among the Lenders. Upon the acceptance of its appointment as the successor agent hereunder, such successor agent shall thereupon succeed to and become vested with all the rights, powers and duties of the retiring Agent, such retiring Administrative Agent’s appointment, powers and duties as Agent shall be terminated, and the term “Agent” shall mean such successor agent. After the Agent’s resignation or removal hereunder as Agent, the provisions of this section shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor agent has accepted appointment as Agent by the date which is thirty (30) days following a retiring Agent’s notice of resignation or removal, the retiring Agent’s resignation or removal shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Lenders appoint a successor agent as provided for above.
SEVENTEENTH.- ASSIGNMENT.- In terms of Article 299 of the General Law of Negotiable Instruments and Credit Operations, each of the Lenders are hereby authorized to assign, discount, endorse, or in any other way negotiate, partially or in whole and even before they become due, the right to collect the Credit herein granted with the previous written consent granted by each Borrower and by the Joint Obligors (in the understanding that such consent may not be unreasonably denied and if a period of 15 (fifteen) Business Days have passed after the request from such Lender without receiving an answer from the Borrower and by the Joint Obligors, it shall be construed as granted by them). Likewise, such Lender may assign, discount, endorse or in any way transfer, totally or partially, their rights pursuant to this Agreement through a notice previously carried out to each Borrower and the Joint Obligors in the following cases: (i) in the case that such assignment takes place in favor of any affiliate of the Lender, and (ii) in favor of any financial institution in case that an Event of Default occurs pursuant to this Agreement.
 
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In the event that the assignment refered to above were made to any person who, by reason of their domicile or any other cause, generated higher or additional tax burdens to each Borrower and/or the Joint Obligors, such additional tax burdens shall be absorbed by the assignee, in the understanding that the Borrowers and Joint Obligors are not required to pay any additional amount.
Notwithstanding the foregoing, the Lenders shall not make assignments to any person related with the Joint Obligors counterparts.
Neither the Borrowers nor any Joint Obligor shall assign its rights or obligations pursuant to this Agreement, or any other document related therewith, without prior written consent from the Lenders.
EIGHTEENTH.- UNILATERAL TERMINATION OR RESTRICTION OF THE AGREEMENT.- The parties agree that the Lenders are authorized to restrict the amount of the Credit Line or the term of which to disperse such credit, or both, as well as to unilaterally terminate this Agreement at any time, through a simple written notice directed to each Borrower. Consequently, any right to use the unspent balance will be similarly limited or restricted, as the case may be. This clause is subject to Article 294 of the General Law of Negotiable Instruments and Credit Operations.
NINETEENTH.- EARLY TERMINATION.- The Lenders may at any terminate the term for the payment of the benefits granted on behalf of the Borrowers and the Total Amount, (including, but not limited to, any amounts due and payable by A Borrower with respect to the A Tranche Amount and by B Borrower in respect with the B Tranche Amount) in addition to any and all interests and other legal amounts accrued thereon, in the understanding, however, that (i) if any Default or Event of Default is caused by the A Borrower, the Lenders may immediately request payment of any and all amounts of principal, interests and other amounts accrued thereon or related payments relating to the A Tranche Amount, considering any and all referred amounts as due and payable; (ii) if any Default or Event of Default is caused by such B Borrower, the Lenders may immediately request payment of any and all amounts or principal, interests and other amounts accrued thereon or related payments relating to the B Tranche Amount, considering any and all referred amounts thereafter as due and payable; and (iii) if any Default or Event of Default is caused by any of the Borrowers and/or Joint Obligors, the Lenders may immediately request payment of any and all amounts or principal, interests and other amounts accrued thereon or related payments under the Total Amount from the Joint Obligors, considering such amounts thereafter as due and payable. For purposes of this Clause, each of the following events shall be considered a “ Default or an “ Event of Default ”:
(a) Failure to make payments . If any of the Borrowers fail to pay when due (whether at stated maturity, by acceleration or otherwise) any principal of or interest or any other amount required by this Agreement.
(b) Misrepresentation . Any representation or warranty made by any of the Borrowers or by any Joint Obligor herein or which is contained in any certificate, document or financial statement furnished by it in compliance with this Agreement or any information or documentation furnished by any of the Borrowers or by any Joint Obligor: (i) shall prove to have been false in any material respect, or (ii) shall prove to be mistaken or erroneous in any material respect and such error, incorrectness, is not remedied or cured within a period of 30 (thirty) calendar days from the (a) any of the Borrowers or any Joint Obligor first becomes aware of such error or mistake, or (ii) the Agent or any Lender delivers a written notice to the Borrowers of such error or mistake.
 
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(c)  Specific non-performance . If any of the Borrowers or any Joint Obligor, as the case may be, does not comply with any covenant contained in Clause Fourteenth and Fifteenth or if any such event of default continues for more than any applicable grace period.
(d)  Other Defaults . If any of the Borrowers or either of the Joint Obligors, as the case may be, does not comply with any of its obligations contained in this Agreement (other than as provided in paragraphs (a) through (c) of this Section 6.01), as well as in any other document related to this Agreement, and such default shall continue uncured for a period of 30 (thirty) calendar days from the earlier of the time (i) the Borrowers or any Joint Obligor first becomes aware of such default, or (ii) the Agent or any Lender gives written notice to the Borrowers of such default.
(e)  Breach of other Agreements . (i) If the Joint Obligors or any of its subsidiaries default with, or incurs in an event of default with respect to any debt offering document or deed, agreement or instrument involving or related with any debt of such Joint Obligor or any of its subsidiaries (other that the debt incurred under this Agreement), and such default or event of default shall prove to have the early termination of such debt, or (ii) any Joint Obligors or any of its subsidiaries shall fail to pay when due any principal, or interest or any other amount whatsoever payable by such Joint Obligors or any of its subsidiaries (other than Permitted Debt incurred under this Agreement), involving an amount exceeding, jointly or separately, USD$5,000,000.00 (five million Dollars 00/100) or the equivalent thereof in any currency, or (iii) there exists an Airbus Termination Event or any event that would permit a third party that is neither the Borrowers nor the Joint Obligors to terminate the Original Purchase Agreement and the Step-In Agreement, or (iv) there exists a Step-in Event (as defined in the Step-In Agreements).
(f) Default with Authorities . If any of the Borrowers, any Joint Obligors or any of its subsidiaries shall default with any of its obligations with any governmental authority, including without limitation, the Department of Treasury ( Secretaría de Hacienda y Crédito Público ), Instituto Mexicano del Seguro Social , Instituto del Fondo Nacional para la Vivienda de los Trabajadores , Sistema de Ahorro para el Retiro , and such default shall prove to have or may reasonable expect to have a Material Adverse Change.
(g)  Insolvency . (i) if any Joint Obligor or any of their subsidiaries commences any proceeding or action (A) under any existing or future law of any jurisdiction (domestic or foreign) relating to concurso mercantil , bankruptcy, insolvency, reorganization or relief of debtors, seeking to adjudicate it a concurso mercantil, Lenderrupt or insolvent, or seeking reorganization, arrangement, liquidation, dissolution, or other relief with respect to it or its debts, or (B) seeking appointment of a síndico , conciliador , receiver, auditor, custodian, manager, conservator, or other similar official for all or any substantial part of its assets, or if any Joint Obligor or any of its subsidiaries makes a general assignment for the benefit of its creditors; or (ii) any proceeding or other action of similar nature as such referred to in this clause (i) above has commenced against the Joint Obligor or any of its subsidiaries which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) any action related thereto remains undismissed for a period of 60
 
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(sixty) calendar days; or (iii) there shall be commenced under any existing or future law of Mexico or by any competent jurisdiction against the Joint Obligor or any of its subsidiaries, any proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been discharged, or stayed or bonded pending appeal within 60 (sixty) calendar days from the entry thereof; or (iv) the Borrowers or any of the Joint Obligors or its subsidiaries is unable to, or admits in writing its inability to, pay its debts as they become due.
(h) Judgments . Any judgments issued against the Borrowers, any Joint Obligor and/or one or more of its subsidiaries, involving in the aggregate an amount exceeding, jointly or separately, USD$5,000,000.00 (five million Dollars 00/100) or the equivalent thereof in any currency, and such judgments shall not have been discharged whatsoever, and as a consequence have a Material Adverse Change.
(i) Effectiveness of the Agreement . (i) If any of the Borrowers and any Joint Obligor or its subsidiaries appeal the effectiveness and enforcement of any document related herewith, (ii) a judicial, arbitral or administrative proceeding commences in order to appeal the effectiveness and enforcement of this Agreement, or (iii) any covenant of the Joint Obligors under this Agreement ceases to be valid and enforceable.
(j) Authorizations . (i) If any license, approval, registry, permit or government authorization or of any other nature necessary for the execution or compliance by the Borrowers or by any of the Joint Obligors or its subsidiaries of this Agreement, or for the validity or enforceability of this Agreement, the Promissory Notes or any other Credit Line Documents that is not obtained, maintained or has been revoked, modified or is no longer valid, and (ii) any license, concession, certificate, approval, registry, permit or government authorization or any other authorization of any kind of the Borrowers and the Joint Obligors need to carry out their ordinary course of business, including, without limiting, any and all authorizations concessions and certificates granted by the Secretaría de Comunicaciones y Transportes to the Joint Obligors to act as public air transport concessionaries under Mexican regulation that is not obtained, or revoked, modified or is no longer valid and such situation is not remedied within 60 (sixty) days, provided that such term does not generate an Event of Default under the Step-In Agreements.
(k) Expropriation . Any governmental authority nationalizes, seizes, intervenes or otherwise expropriates all or any substantial part of the assets of any of the Borrowers or of any Joint Obligor or of its subsidiaries or the shares issued by, or property of (as the case may be) any of the Joint Obligor or its subsidiaries, or takes any action (including the aforesaid) that would prevent the Borrowers or any Joint Obligor from performing any of their obligations under this Agreement.
(l) Material Adverse Effect . Any circumstance, event or condition on the business, operations, assets, conditions (financial or otherwise) or substantial part of the Borrowers, any Joint Obligor or its subsidiaries, that affects (a) the capacity of the Borrowers or any of the Joint Obligors to punctually perform any of its covenants under this Agreement, (b) the legality, validity or enforceability of this Agreement, or (c) the rights and remedies of the Lenders under this Agreement. In order to determine if an adverse effect is substantial the general financial and operational situation of the Borrowers and the Joint Obligors shall be considered, jointly (a “ Material Adverse Effect ”).
 
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(m)  Change of Control . Any change of Control in any of the Joint Obligors, without prior written consent of the Lenders, in the understanding that the Joint Obligors complete amendments to their capital structure to the extent that such amendment or restructure results from the registration of the capital stock of any such Joint Obligor before the Mexican National Securities Registry ( Registro Nacional de Valores ) that is maintained by the Mexican National Securities and Exchange Commission ( Comisión Nacional Bancaria y de Valores ) and a subsequent public offering and sale of such shares.
(n)  Material Adverse Change . Any event shall occur affecting adversely and substantially the financial situation in the business on which the Borrowers or the Joint Obligors form part of.
(o)  Business Irruption . In any event that any of the Joint Obligors shall stop or in any way cease the activities considered substantial in its regular course of business.
(p)  Breach of other obligations . In any event that any of the Borrowers and/or the Joint Obligors cease to deliver or in any manner, amend, modify, cancel or terminate its transfer and/or assignment in favor of the Borrowers’ Estate, of any rights related to any reimbursements of the PDP’s in relation with the Financed Aircrafts as well as any rights related to the BFE and SSBFE Agreements and Engine credits.
(q)  Reserve Account. In the event that any of the Borrowers or the Joint Obligors fail to reimburse the amounts drawn by the Borrowers from the Interest Reserve Accounts for purposes of paying the Lenders within 5 (five) days from the date on which any of the Borrowers has disposed of such amounts of the applicable Interest Reserve Account.
TWENTIETH.- SURVEILLANCE.- The Lenders shall have at all time the right to ensure that the amount of the Credit Line is destined to the purposes specified herein and shall designate a person that ensures the accurate compliance of the Borrower’s covenants. With respect to accounting aspects, the Lenders are entitled to order audits as often as deem appropriate, performed by auditors designated by the Lenders and as long as it does not affect the the Borrowers´ operations. The Borrowers agree to deliver the Lenders all the documents or data requested, within reason, in connection with the faculty contained in this clause.
TWENTYFIRST.- CERTIFICATION.- The parties agree that the accounting balance statement of this instrument certified by each of the Lender’s corresponding Accountant shall be an executive instrument and shall be conclusive evidence with respect to the balance of indebtedness of each of the Borrowers, for all applicable legal effects, in accordance with Article 68 of the Financial Institution Law.
 
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TWENTYSECOND.-NOTICES .- All notices and in general other communications to be given or made under this Agreement, including service of process, shall be delivered to the following domiciles, and in every case, the notice shall be effective when made at the following domiciles:

Lenders:	  	Santander
Domicile:	
		
	  	Prolongación Paseo de la Reforma No. 500, Colonia Lomas de Santa Fe, Delegación Álvaro Obregón, México, Distrito Federal, C.P. 01219. Module 403
 
Attention: José Martín Gallegos Olivares / Isabel Arana de Uriarte
Tel: +52(55) 5257-8238
Fax: +52(55) 5257-8000 ext. 18939
Email: jmgallegos@santander.com.mx /
iarana@santander.com.mx	
		
	  	Bancomext
Domicile:
 
Periferico Sur 4333, Colonia Jardines de la Montaña, Delegación Tlalplan, México, Distrito Federal, C.P. 14210.
 
Attention: Ricardo Luis Ramos San Martín and René Ross Valenzuela
Tel: 5449-9235 / 5449-9126
Fax: 5449 - 9485
Email: rramos@bancomext.gob.mx / rross@bancomext.gob.mx	
		
Borrowers	  	Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as trastee under Trust No. F/1498 and under Trust No. F/1711
 
Domicile:
 
Blvd. Manuel Avila Camacho No. 40, Piso 17
Colonia Lomas de Chapultepec
C.P. 11000
México, Distrito Federal
Attention: Carlos Jáuregui Baltazar and/or Gabriel Arroyo
Trust Division
Tel: 5201-8000
Fax: 5201-8144
Email: carlos.jauregui@db.com , gabriel.arroyo@db.com	
		
Joint Obligors:	  	CONTROLADORA
 
Domicile:
 
Avenida Antonio Dovalí Jaime No. 70
Torre B 13th Floor, Colonia Zedec Santa Fe.
C.P. 01210
México, Distrito Federal
 
Attention: General Counsel
Tel:52616400	
		
	  	CONCESIONARIA
Domicile:
 
Avenida Antonio Dovalí Jaime No. 70
Torre B 13th Floor, Colonia Zedec Santa Fe.
C.P. 01210
México, Distrito Federal
 
Attention: General Counsel
 
Tel:52616400	
 
45

The parties may amend the domiciles hereof, provided that such amendment shall be notified by written notice to the other parties.
TWENTYTHIRD.- WAIVER.- The no exercise or delays in the exercise of any right or privilege by any of the Lenders pursuant to this Agreement, shall be construed to be a waiver thereof. Likewise, any total or partial exercise of any right or privilege under this Agreement shall not prevent any future exercise or the exercise of any other right or privilege. The remedies stated herein, shall not exclude the present or future provisions of the applicable law.
TWENTYFOURTH.- CREDIT LINE REPORTS.- The Borrowers and the Joint Obligors RS hereby authorize each of the Lenders to furnish and, if applicable, request information related to its economic situation, financial and credit operations, and to the credit information institutions referred to in the Ley para Regular las Sociedades de Información Crediticia, and other financial institutions which are members of Santander Financial Group, prior or after the execution of this Agreement.
TWENTYFIFTH.- GOVERNING LAW, SUBMITTION TO JURISDICTION AND COMPLIANCE.- All the matters not considered under this Agreement the parties shall be governed by and construed in accordance with the General Law of Negotiable Instruments and Credit Operations, the Law of Credit Institutions and any other applicable provisions. For the interpretation and compliance of this Agreement, the parties hereby irrevocably and unconditionally submit to the jurisdiction of the courts of Mexico, Federal District, in any legal action, suit or proceeding arising out of or relating to this Agreement, and expressly waive any other forum or court that may correspond by reason of their present or future domiciles or otherwise.
TWENTYSIXTH.- EXHIBITS.- The parties agree that the exhibits referred to in this agreement form part of this Agreement.
[SIGNATURE PAGE FOLLOWS]
 
46

IN WITNESS WHEREOF, the parties have caused this Agreement in 7 (seven) copies each one considered as an original and together the same instrument, as of the date first above written.
THE LENDERS
BANCO SANTANDER(MÉXICO), S.A.
INSTITUCIÓN DE BANCA MULTIPLE
GRUPO FINANCIERO SANTANDER MÉXICO

By:	 	 	 		 	By:	 	 	
Name:	 	[ — ]	 		 	Name:	 	[ — ]	
Title:	 	Attorney in fact	 		 	Title:	 	Attorney in fact	
BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C.

By:	 	 	 		 	By:	 	 	
Name:	 	[ — ]	 		 	Name:	 	[ — ]	
Title:	 	Attorney in fact	 		 	Title:	 	Attorney in fact	
THE AGENT
BANCO SANTANDER(MÉXICO), S.A.
INSTITUCIÓN DE BANCA MULTIPLE
GRUPO FINANCIERO SANTANDER MÉXICO

By:	 	 	 		 	By:	 	 	
Name:	 	[ — ]	 		 	Name:	 	[ — ]	
Title:	 	Attorney in fact	 		 	Title:	 	Attorney in fact	
 
47

THE BORROWERS
DEUTSCHE BANK MÉXICO, S. A.,
INSTITUCIÓN DE BANCA MÚLTIPLE,
DIVISIÓN FIDUCIARIA ACTING AS TRUSTEE OF THE
TRUST No. F/1498

By:	 	 	
Name:	 	[ — ]	
Title:	 	Attorney in fact	
DEUTSCHE BANK MÉXICO, S. A.,
INSTITUCIÓN DE BANCA MÚLTIPLE,
DIVISIÓN FIDUCIARIA ACTING AS TRUSTEE OF THE
TRUST No. F/1711

By:	 	 	
Name:	 	[ — ]	
Title:	 	Attorney in fact	
THE JOINT OBLIGORS
CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A.B. DE C.V.

By:	 	 	
Name:	 	[ — ]	
Title:	 	Attorney in fact	
CONCESIONARIA VUELA COMPAÑIA DE AVIACIÓN, S.A.P.I. DE C.V.

By:	 	 	
Name:	 	[ — ]	
Title:	 	Attorney in fact	
 
48

Exhibit 10.53
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
MASTER AGREEMENT
This Master Agreement (the “ Agreement ”) is made and entered into effective as of July 20, 2009 (“ Effective Date ”) by and between Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (d/b/a. Volaris), a company duly organized and existing under the laws of the United Mexican States (“Mexico”), whose address is Avenida Prolongación Paseo de la Reforma 490, Piso 1 Col. Santa Fe Peña Blanca 01210, Mexico , (“ Customer ”) and Sabre Inc., a Delaware corporation located at 3150 Sabre Drive, Southlake, TX 76092 (“ Sabre ”).
The terms of this Agreement shall apply to each Work Order and to all System(s) and Services provided to Customer by Sabre hereunder. The terms and conditions set forth in this Agreement and in any Work Order shall control if there are different or additional terms in any Customer purchase order form or Sabre’s acceptance form or invoice. In the event of a conflict between the terms and conditions of the Agreement and any Work Order, the Work Order shall supersede the Agreement only for the engagement covered under the specific Work Order.
 
1. Definitions . For purposes of this Agreement, certain defined terms will have the meanings set forth in Exhibit A to this Agreement.
2. Term and Termination .
a) Term. This Agreement will commence as of the Effective Date and continue until the later of (i) five (5) years following the Effective Date, or (ii) the expiration of all Work Orders to this Agreement.
b) Termination. Either party may terminate any Work Order under this Agreement if the other party commits a Material Breach of the Work Order and fails to cure such Material Breach within thirty (30) days following receipt of written notice from the non-breaching party describing the breach in detail (except for a breach regarding failure to pay amounts due, in which case the period to cure shall be thirty (30) days). Sabre may terminate this Agreement and/or any Work Order if Sabre has given Customer written notice of a default in payment of any undisputed amounts due and payable more than three (3) times in any twelve (12) month period during the term. Notwithstanding the above, if the Material Breach cannot reasonably be cured within a thirty (30) day cure period, the non-breaching party’s right to terminate will not be permitted so long as the breaching party (i) provides a written remediation plan to the non-breaching party prior to the expiration of the thirty (30) day cure period; and (ii) starts the remediation process as set forth in the plan during the thirty (30) day cure period; and (iii) completes the remediation within sixty (60) days from the date of the original default notice. In addition to all other remedies, upon written notice to Customer as set forth in Section 9(g) below, Sabre shall also have the right to suspend Customer’s access to any System or any Service without terminating this Agreement or any related Work Order if Customer fails to pay an undisputed sum for a period in excess of thirty (30) days after it becomes payable.
c) Early Termination. Sabre and Customer agree that each Work Order will contain and define provisions regarding early termination. The terms and conditions for early termination will be set forth in each Work Order to this Agreement.
d) Effects of Termination. Upon the expiration or termination of this Agreement or any Work Order, unless provided otherwise in a Work Order, all license or access rights granted therein will immediately cease to exist, Customer shall promptly discontinue all use of the System(s), erase all copies of the System(s) from Customer’s computers, and return to Sabre all copies of the System(s), Documentation, and any other Sabre Confidential Information in Customer’s possession or control, and have an officer of Customer certify to Sabre in writing that it has fully complied with these requirements, except that Customer may retain a copy of such information if it is required by law and consistent with its record retention policies so long as Customer holds such Confidential Information in confidence in accordance with Section 7 below. Sabre shall return all Customer’s Confidential Information to Customer to Sabre, and have an officer of Sabre certify to Customer in writing that it has fully complied with these requirements, except that Sabre may retain a copy of such information if it is required by law and consistent with its record retention policies so long as Sabre holds such Confidential Information in confidence in accordance with Section 7 below.
3. Fees and Payment .
a) Fees. Customer shall pay Sabre the fees and charges set forth in the Work Orders to this Agreement.
b) Travel and Out-of-Pocket Expenses. Customer shall reimburse Sabre for all reasonable and pre-approved in writing Project related travel and incidental (T&I) out-of-pocket expenses incurred by

			
Sabre Inc. — Confidential	 	1	

Sabre in connection with this Work Order. Customer will provide Sabre with confirmed coach class travel within its network for Sabre employees conducting the work under this Agreement. If travel is not possible or available on Customers network, then Sabre employees will purchase and be reimbursed for coach class travel on another airline. Out of pocket expenses associated with the project include, but are not limited to, ground transportation expenses while on-site and during transit; lodging, food and incidental expenses incurred in the performance of this Agreement in accordance with the related Work Order. 
c) Payment Procedures Payment will be made by wire transfer to an account designated to Customer by Sabre. All fees and charges shall be due and payable forty-five (45) days after receipt of invoice from Sabre. Each monthly invoice will itemize the fees and charges, and will be accompanied by reasonable detail. If an Affiliate of Sabre performs any of Services, Sabre may opt for such Affiliate to invoice Customer for the Services it provides, in which case Customer will pay that Affiliate directly. Interest on any late payments shall accrue at the rate of one and one half percent (1.5%) per month or the highest rate permitted by applicable law, whichever is less, from the date such amount is due until finally paid. 
d) Payments without Set-Off. All payments by the parties hereunder shall be paid to the other party without set-off or reduction for any amounts owed, or claimed, from the parties. Parties hereby waive and disclaim any rights of offset or set-off.
e) Taxes. The fees and charges listed in this Agreement and Work Orders do not include taxes, duties or other assessments. Customer will be responsible for and will reimburse Sabre for all taxes or similar charges that are related to this Agreement or to payments made under this Agreement, other than taxes imposed on the net income of Sabre (collectively, “Taxes”). If Customer is required by law to make any deduction or withholding of Taxes from any payment due to Sabre under this Agreement, Customer will (i) timely and properly prepare and submit any necessary filings and remit such Taxes to the appropriate taxing authority, (ii) provide Sabre with governmental receipts evidencing Customer’s withholding and payment to the appropriate tax authorities in a timely manner and (iii) increase each payment related to this Agreement to the extent necessary to ensure that Sabre actually receives the amount that Sabre would have received if such payment had not been subject to Taxes. 
Sabre hereby agrees to provide Customer any documentation reasonably requested by Customer to allow Customer to comply with its obligations under
the applicable tax law with respect to the transactions covered by this Agreement, including without limitation, (i) a tax residency certificate, currently Form 6166, issued by the U.S. Department of the Treasury (Internal Revenue Service) or any substitute thereto, and (ii) upon request from Customer seek a provide Customer a new Form 6166 (or any substitute thereto), from the U.S. Department of Treasury.
4. Intellectual Property
a) Sabre Retention of Rights. Sabre retains exclusive ownership of all worldwide Intellectual Property Rights in the System(s) and Documentation, including any derivative work, modification, Update or Version thereof. Sabre and its suppliers reserve all rights in and to the System and Documentation not expressly granted to Customer in this Agreement.
b) Express Restrictions. The System(s), and its structure, organization, and source code constitute valuable trade secrets of Sabre. Unless otherwise permitted under the applicable Work Order, Customer agrees not to (i) modify, adapt, alter, translate, or create derivative works from a System; (ii) merge a System with other software; (iii) sublicense, lease, rent, or loan a System to any third party; (iv) reverse engineer, decompile, disassemble, or otherwise attempt to derive the source code for a System; or (v) otherwise use or copy the System except as expressly allowed in this Agreement. Decompiling a System is permitted to the extent the laws of Customer’s jurisdiction give Customer the right to do so to obtain information necessary to render a System interoperable with other software; provided, however, that Customer must first request such information from Sabre and Sabre may, in its discretion, either provide such information to Customer or impose reasonable restrictions, including a reasonable fee, on such use of a System to ensure that Sabre’s and its suppliers’ proprietary rights in the System are protected.
c) Backup Copies. For Systems and Documentation delivered to Customer by Sabre, Customer may make a reasonable number of copies solely for the permitted use and for backup purposes. Customer shall reproduce on each copy and on each partial copy of a System or Documentation any copyright notice and proprietary rights legend contained therein, as such notice and legend appear in the original.
5. Indemnification .
a) Sabre will defend, indemnify and hold harmless, at its expense, any action brought against Customer, Customer Affiliates, and their respective directors, officers and employees, to the extent that such action is based on a claim of Infringement. Sabre will pay any and all damages and costs (including reasonable attorney fees) incurred by

			
Sabre Inc. — Confidential	 	2	

Customer that are attributable to the Infringement, provided that Sabre is promptly informed in writing and furnished a copy of each communication, notice or other action identifying any third party patent or copyright or relating to the alleged Infringement and is given information and assistance necessary to defend or settle such claim. Customer’s failure to promptly notify Sabre of an Infringement claim shall not relieve Sabre of any liability under this Section except to the extent that the defense of such action is prejudiced thereby.
b) Should any portion of a System as delivered by Sabre hereunder become, or in Sabre’s opinion is likely to become the subject of a claim of Infringement, then Sabre may, at its option and expense: (i) procure for Customer the right to use the System free of any liability for Infringement; or (ii) replace or modify the applicable portion of the System with a non-Infringing substitute otherwise complying substantially with the description of the System in the Work Order. If (i) or (ii) are not commercially and/or economically feasible, Sabre may accept return of the System and reimburse Customer for the implementation and license fees (but not Access Fees) actually paid to Sabre by Customer depreciated on a three year straight line depreciation schedule.
c) If any action is brought against Sabre based on a claim that (i) software code or documentation written by Customer or any data or information added to a System by Customer or by any other person or entity at Customer’s request; (ii) use of a System in combination with, or in addition to, equipment or computer programs not licensed or developed by Sabre; (iii) any modification or alteration of a System by Customer or its third party agents or contractors; or (iv) any breach of this Agreement by Customer, constitutes an Infringement, then the indemnity obligation stated in this Section “Indemnification” with respect to Sabre shall reciprocally apply to Customer. If the parties cannot clearly determine whether the Infringement action is based on the actions of Sabre or of Customer, Sabre may exercise sole control over the defense and Customer will cooperate with Sabre in such defense. No compromise or settlement of any claim or proceeding may be affected or committed to by Sabre without Customer’s prior written consent, which consent shall not be unreasonably withheld or delayed.
d) The foregoing shall constitute Sabre’s sole and exclusive obligation, and Customer’s sole and exclusive remedy, for any Infringement by a System of any Intellectual Property Rights.
e) Except as expressly provided for in this Section, Customer shall defend, indemnify and hold harmless Sabre from any and all claims or causes of action arising out of Customer’s use of a System, including but not limited to Customer’s use of the System in combination with, or in addition to, any
equipment or computer programs not licensed or recommended by Sabre. Customer shall pay any and all damages and expenses (including reasonable attorney fees incurred by Sabre) in connection with such claims, regardless of the circumstances of the claim or damage.
6. Disclaimer of Warranty .
SABRE DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE SYSTEM(S) AND SERVICES, INCLUDING ANY WARRANTIES OF, MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE, TITLE, AND NONINFRINGEMENT. NO REPRESENTATION OR OTHER AFFIRMATION OF FACT SHALL BE DEEMED A WARRANTY FOR ANY PURPOSE OR GIVE RISE TO ANY LIABILITY OF SABRE WHATSOEVER. CUSTOMER ACKNOWLEDGES THAT IT HAS RELIED ON NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES IN THIS AGREEMENT.
7. Non-Disclosure .
a) Confidential Information. As between the parties, the Confidential Information of each party will remain its sole property. All Confidential Information shall be held and protected by the recipient in strict confidence, and shall be used by the recipient only as required to render performance or to exercise rights and remedies under this Agreement. Each party will protect the other party’s Confidential Information from unauthorized use, access or disclosure with the same measures that the recipient takes to protect its own proprietary information of like importance, but in no event less than reasonable care. No Confidential Information will be disclosed to any third party by the recipient party without the prior written consent of the disclosing party, except that each party may disclose this Agreement and the other party’s Confidential Information to its Affiliates and their respective directors, employees, attorneys, agents, auditors, insurers and subcontractors who require access to such information in connection with their employment or engagement and who are obligated to keep such information confidential in a manner no less restrictive than set forth in this Section. The party employing or engaging such persons is responsible and liable for their compliance with such confidentiality obligations.
b) Required Disclosures . Each party may disclose the Confidential Information of the other party in response to a request for disclosure by a court or another governmental authority, including a subpoena, court order, or audit-related request by a taxing authority, if that party; (i) promptly notifies the other party of the terms and the circumstances of that request, (ii) consults with the other party, and cooperates with the other party’s reasonable requests to resist or narrow that request, (iii) furnishes only information that, according to written advice of its

			
Sabre Inc. — Confidential	 	3	

legal counsel, that party is legally compelled to disclose, and (iv) uses reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded the information disclosed.
8. LIMITATION OF LIABILITY . WITH THE EXCEPTION OF LIABILITY FOR DEATH OR PERSONAL INJURY CAUSED BY THE NEGLIGENCE OF EITHER PARTY (FOR WHICH NO LIMIT SHALL APPLY), EACH PARTY WAIVES ALL LIABILITY OF THE OTHER PARTY, ITS LICENSORS AND SUPPLIERS FROM NEGLIGENCE, WHETHER CONTRIBUTORY, SOLE OR JOINT. EXCEPT FOR EITHER PARTY’S BREACH OF THE NON-DISCLOSURE OBLIGATIONS OR CUSTOMER’S BREACH OF THE USE RESTRICTIONS PLACED ON THE SYSTEM(S) UNDER THIS AGREEMENT AND THE APPLICABLE WORK ORDERS, NEITHER CUSTOMER, SABRE OR SABRE’S LICENSORS OR SUPPLIERS SHALL BE LIABLE FOR ANY LOST PROFITS, REVENUE OR SAVINGS OR FOR ANY INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL OR CONSEQUENTIAL DAMAGES, UNDER ANY CIRCUMSTANCES, EVEN IF SUCH PARTY HAD BEEN ADVISED OF, KNEW, OR SHOULD HAVE KNOWN, OF THE POSSIBILITY THEREOF. UNDER NO CIRCUMSTANCES SHALL SABRE’S AGGREGATE CUMULATIVE LIABILITY HEREUNDER, WHETHER IN CONTRACT, TORT, OR OTHERWISE, *****. EXCEPT FOR THE PAYMENT OF AMOUNTS DUE AND PAYABLE HEREUNDER, UNDER NO CIRCUMSTANCES SHALL CUSTOMER AGGREGATE CUMULATIVE LIABILITY HEREUNDER, WHETHER IN CONTRACT, TORT, OR OTHERWISE, ***** CUSTOMER ACKNOWLEDGES THAT THE FEES PAID BY IT REFLECT THE ALLOCATION OF RISK SET FORTH IN THIS AGREEMENT AND THAT SABRE WOULD NOT ENTER INTO THIS AGREEMENT WITHOUT THESE LIMITATIONS ON ITS LIABILITY.
9. General Terms and Conditions.
a) As soon as reasonably possible following the Customer placing a System into Productive Use under any Work Order, Customer, individually or jointly with Sabre, will issue, with the prior written consent of the Costumer a press release that makes reference in the lead that the applicable technology was enabled by Sabre Airline Solutions and specifically identify the applicable System(s) and/or Services within the body of the release. This press release will be approved by both parties prior to issuance. Sabre may also identify Customer as one of its clients in general promotional literature and disclose to current and prospective clients that Sabre has provided Customer with the System(s) and/or Services covered under Work Orders hereunder. In addition, from time to time the parties may also issue a mutually agreed upon press releases in connection with this Agreement.
b) Choice of Law. This Agreement and any dispute arising hereunder shall be construed in accordance with the laws of the State of New York without regard to principles of conflict of laws. This Agreement will not be governed by the U.N. Convention on Contracts for the International Sale of Goods, the application of which is expressly excluded. The parties hereby irrevocably submit to the jurisdiction of the United States District Court
located in the borough of Manhattan, New York and each party waives any objection which it may have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in such Court.
Notwithstanding anything herein to the contrary, in the event of an actual or threatened breach of the use restrictions placed on the System(s) and Documentation or the Confidentiality provisions contained herein, the non-breaching party will be entitled, without waiving any other rights and remedies and without obligation to post a bond, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction.
c) Force Majeure . Either party shall be excused from performing hereunder (except for the payment of money) to the extent that it is prevented from performing as a result of any act or event which occurs and is beyond its reasonable control, including, without limitation, acts of God, war, action of a governmental entity, strikes, lockouts, insurrection, protest, security breaches or other hostilities, embargos, blockades, fuel or energy shortages, transportation delays or the inability to obtain necessary labor, materials or utilities from usual sources; provided that the party experiencing the force majeure provides the other with prompt written notice thereof and uses all reasonable efforts to remove or avoid such causes. If the inability to perform or deliver continues for longer than fifteen (15) days, either party may terminate this Agreement by providing written notice to the other party.
d) Savings Clause . If any provision of this Agreement is prohibited by law or held to be unenforceable, the remaining provisions hereof shall not be affected, and this Agreement shall continue in full force and effect as if such unenforceable provision had never constituted a part hereof, and the unenforceable provision shall be automatically amended to so as to best accomplish the objectives of such unenforceable provision within the limits of applicable law.
e) Relationship. Sabre is an independent contractor hereunder and no employee of either party shall be deemed to be an employee of the other for any purpose whatsoever. Nothing shall be construed to create a partnership, joint venture or agency relationship between the parties. Each party shall comply, at its own expense, with the provisions of all applicable state and municipal requirements and with all state and federal laws applicable to it as an employer and otherwise.
f) Assignment. Neither party may transfer or assign this Agreement to any other person or entity, whether by operation of law or otherwise, without the prior written consent of the other party except that (i) the parties may assign this Agreement to an Affiliate

			
Sabre Inc. — Confidential	 	4	

provided that the assigning party remain primarily liable for the assignee’s on-going performance hereunder, and (ii) either party may assign this Agreement to an third party who acquires all or substantially all of the assignors assets (whether by merger, change of control or otherwise) as long as the assignee expressly agrees to assume all rights and obligations hereunder of the assignor..
g) Notices. All notices required to be sent and service of process hereunder shall be in writing and deemed to have been given upon delivery (i) by commercial courier with delivery tracking capabilities, or (ii) if by certified mail return receipt requested, or (iii) by hand delivery to the addresses set forth below the signature line below, or to such other address or individual as the parties may specify from time to time by written notice to the other party. Each party agrees that any notice or service of process by any of the methods set forth above is adequate for all purposes and each party expressly waives any requirement of any other form of notice or service of process.
h) Export. If required, Sabre will use commercially reasonable efforts to obtain all approvals necessary to export the System to Customer’s location. In the event that such approvals are refused, either party may terminate this Agreement or a relevant Work Order, and neither party shall be liable to the other for any resulting loss or expense. Customer will comply fully with all applicable United States and foreign government export and import control laws and regulations in its use of a System and, in particular, Customer will not export or re-export any System without all required United States and foreign government licenses. Customer will defend, indemnify and hold harmless Sabre from and against any violation of such laws or regulations by Customer or any of its agents, officers, directors or employees. Without limiting the generally of the foregoing, Customer shall not, and shall cause its representatives not to, export, directly or indirectly, re-export, divert, or transfer the System(s),
Documentation or any direct product thereof to any destination, company or person restricted or prohibited by the United States Export Control.
j) Waiver. The waiver by either party of any default or breach of this Agreement shall not constitute a waiver of any other or subsequent default or breach. Except for actions for nonpayment or breach of Sabre’s Intellectual Property Rights in the System(s) or Documentation, no action, regardless of form, arising out of this Agreement may be brought by either party more than one year after the cause of action has accrued.
k) Miscellaneous. All obligations hereunder are subject to the receipt of all necessary government approvals. This Agreement, together with each Work Order referencing this Agreement, constitutes the entire agreement between the parties related to the subject matter thereof, supersedes any prior or contemporaneous agreement between the parties relating to the performance of work under a Work Order, and shall not be changed except by written agreement signed by an officer of each party. If any terms in the Work Order conflict with the terms of this Agreement, the terms of the Work Order shall supersede the terms of this Agreement for that engagement. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute the same instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by fax shall be sufficient to bind the parties to the terms and conditions of this Agreement.
l) Survival . All terms of this Agreement, which by their nature are intended to survive termination of this Agreement, including without limitation, sections entitled “Effects of Termination”, “Fees and Payment”, “Intellectual Property”, “Indemnification”, “Disclaimer of Warranty:, “Non-Disclosure”, “Limitation of Liability”, “Choice of Law”, “Claims Period”, “Savings Clause”, “Notices”, “Export:, “Miscellaneous”, and “Survival”, shall survive termination.

[SIGNATURE PAGE FOLLOWS]

Sabre Inc. — Confidential	 	5	

IN WITNESS WHEREOF, Customer and Sabre have executed this Agreement as of the Effective Date set forth above.

Concesionaria Vuela Compañía de Aviación, S.A. de C.V.	 		 	Sabre Inc.	
	 	 	 		 		 	 	
By:	 	/s/ Enrique Javier Beltranena Mejicano	 		 	By:	 	/s/ Stephen M. Clampett	
Name:	 	Enrique Javier Beltranena Mejicano	 		 	Name:	 	Stephen M. Clampett	
Title:	 	Chief Executive Officer	 		 	Title:	 	President, Airline Products & Solutions	

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

Notice Address:	    	Notice Address:	
	  	Avenida Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca 01210, Mexico, D.F. Mexico
Attn: IT Director	    	3150 Sabre Blvd.
Southlake, TX 76092-2129
Attn: President, Airline Solutions	
			
	  	with a copy to:	    	with a copy to:	
	  	Avenida Prolongación Paseo de la Reforma 490, Piso 1
Col. Santa Fe Peña Blanca 01210, Mexico, D.F. Mexico_
Attn: General Counsel / Director Jurídico	    	3150 Sabre Blvd. MD 8314
Southlake, TX 76092-2129
Attn: General Counsel 	

			
Sabre Inc. — Confidential	 	6	

E XHIBIT A
Definitions
a) “Access Fees” means a monthly fee paid by Customer to Sabre for access and use a System, the amount and timing of which shall be set forth in the respective Work Orders.
b) “Affiliate” means an entity controlled by, controlling, or under common control with another party. “Control” shall mean the ownership of more than fifty percent (50%) of the voting equity of an entity. An entity will be an “Affiliate” only for so long as such control exists.
c) “Confidential Information” means (i) the terms and conditions of this Agreement and Work Orders and the parties performance hereunder, (ii) information relating to a party’s business, customers, financial condition, or operations, (iii) Sabre’s information technology systems, Documentation and the Intellectual Property Rights in its System and Documentation and any derivative works thereof; and (iv) any other information, whether in a tangible medium or oral and marked or clearly identified by a party as confidential or proprietary at the time of disclosure; except such information that (a) is known to the recipient prior to its first receipt of such information from the disclosing party, provided that such information is not subject to another confidentiality agreement of which Customer and Sabre are a party, (b) is or becomes generally known to the public other than as a result of an unauthorized disclosure by any of the recipient’s directors, officers, employees, agents or advisors, or (c) is independently developed by the recipient without access to or use of the Confidential Information. The Confidential Information of a party also includes Confidential Information provided to that party by a third party licensor, supplier, vendor or the like.
d) “Documentation” means Sabre’s then current published guides, manuals and on-line help for System. Documentation may be provided in paper, computer disk, over the web or via online help in a System.
e) “Error” means a reproducible failure of a System (as delivered by Sabre to Customer) to perform substantially in accordance with the description of the System given in a Work Order.
e) “Infringement” means a claim of direct infringement of any duly issued United States patent or copyright resulting from the supply to Customer by Sabre, or the use by Customer, of any System as delivered hereunder by Sabre under this Agreement.
f) “Intellectual Property Rights” means all copyrights, trademarks, service marks, trade secrets, patents, patent applications, moral rights, contract rights, and other proprietary rights.
g) “ Material Adverse Effect ” means a material adverse effect on the assets, properties, business prospects, operations or financial condition of any party.
h) “ Material Breach ” means the occurrence or existence of any event(s), circumstance(s) or condition(s) that constitutes a failure of a party to perform its obligations under the Agreement or a Work Order that has a material adverse effect on the other party, unless the breaching party cures such failure within the timeline set out in the Agreement or the applicable Work Order.
i) “Patch” means urgent issue resolution(s) issued to the Customer as part of the Support Services.
j) “Professional Services” means consulting and technical services provided by Sabre in connection with a System, such as calibration, connectivity, customization, training and implementation support of a System, but does not include Support Services.
k) “Productive Use” means the ability to routinely use the functionality of a System in Customer’s business operations for productive purposes.
l) “Project Schedule” means the estimated delivery schedule for a System or Services.
m) “Support Services” means the services made available by Sabre for a System as described in Appendix H of a Work Order.
n) “Support Services Fee” means the fee to be paid to Sabre by Customer for the performance of the Support Services as specified in the Work Order.
o) “System” means the software system, including any Updates or new Versions provided by Sabre to Customer under this Agreement.
p) “Travel Expenses” means all actual documented out-of-pocket expenses incurred by Sabre in the performance of this Agreement, including but not limited to, air and ground transportation, lodging, meals and incidental expenses.
q) “Update” means a group of patches and/or minor functionality, covered by the Support Services.
r) “Version” means a major enhancement of a System that contains significant new or improved functionality and/or architecture changes that Sabre makes generally available to licensees of the System for an additional charge. The equipment to use a new Version may cascade into the need to revise interfaces, infrastructure and hardware/server platforms. Additional implementation and upgrade license fees may be required to upgrade to a new Version.

Sabre Inc. — Confidential	 	7	

s) “Work Order” means a supplement to this Agreement signed by the parties to describe Services, the addition of a System or to implement a change order. A Work Order shall not be effective unless signed by both Customer and Sabre and will then be incorporated by reference into this Agreement and made a part hereof.

Sabre Inc. — Confidential	 	8	

WORK ORDER NUMBER 1
TO
MASTER AGREEMENT
SABRESONIC RES, SABRESONIC CHECK-IN and SABRESONIC WEB
This Work Order is to the Master Agreement dated as of July 20, 2009, (the “ Agreement ”) by and between Concesionaria Vuela Compañía de Aviación, S.A. de C.V. (“ Customer ”) and Sabre Inc. (“ Sabre ”). This Work Order, together with the terms of the Agreement, shall constitute a single contract and shall be effective as of August 21, 2009 (the “ Work Order Effective Date ”).
 
1.	DEFINITIONS	
In addition to the terms defined in parenthesis herein, all capitalized terms will have the meanings indicated in the Agreement, or, if not defined in the Agreement or parenthetically, in Appendix J attached hereto.
 
2.	DESCRIPTION OF SYSTEM, SERVICES AND OTHER DELIVERABLES	
 
2.1	Systems	
Sabre will provide Customer with a license to access and use the SabreSonic Res, SabreSonic Check-In and SabreSonic Web solutions, including all modules thereto, (each a “System” and collectively the “Systems”) as described in the attached Appendix A.
 
2.2	Professional Services	
Sabre will provide Customer with the Professional Services described in the attached Appendix B, as such description may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E.
 
2.3	Customer Responsibilities	
In connection with the Systems and Professional Services to be provided by Sabre hereunder, Customer shall be responsible for the activities described in Appendix C, as such description may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E. Customer will perform the Customer Responsibilities in accordance with the timeline set out the Project Schedule.
 
2.4	Documentation	
Sabre will provide Customer with System(s) Documentation, in English only, as described in Appendix D.
 
2.5	Project Schedule	
Sabre will:
 
 	(a)	perform all Professional Services,	
 
 	(b)	provide all Deliverables to Customer; and	
 
 	(c)	make the Systems available for use by Customer and its Affiliates as set forth in this Work Order,	
all in accordance with the Project Schedule set forth in the attached Appendix E, as the Project Schedule may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E.
 
2.6	System Requirements	
The hardware and infrastructure described in the attached Appendix F (the “System Requirements”) is necessary for the proper functioning of the Systems. Customer will be responsible for the System Requirements as described in Appendix F as the System Requirements may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E. Sabre hereby covenants and agrees with Customer that on the Work Order Commencement Date, the Systems will be compatible with the System Requirements.

2.7	Maintenance Services	
For the Systems delivered under this Work Order and during both the Work Order Term, Sabre shall provide Customer with the Maintenance Services described in Appendix G. The Maintenance Services will commence on the Work Order Commencement Date.
 
2.8	System Performance	
In connection with the hosting of the Systems and during both the Work Order Term, Sabre will comply with the Service Level Agreement set forth in the attached Appendix H.
 
2.9	Hosting of Systems and Customer Data	
Sabre shall establish the Systems, as modified by Sabre through the Professional Services, and make them available for use by Customer and its Affiliates via the Internet and/or a direct telecommunications connection. In consideration of the fees payable by Customer to Sabre under this Work Order, Sabre will establish and maintain all necessary physical lines from the Systems to the Internet via an Internet services provider and/or through a dedicated direct telecommunication connection provided by Customer. The Systems shall reside on a server or cluster of servers which are physically located at Sabre’s or its designee’s place of business and may be used for the applications of other Sabre customers or third parties. At its expense, Customer shall be responsible for obtaining and installing the equipment, the network from the Customer’s private network to the Sabre Data Center, an Internet and/or direct telecommunications connection, and the software applications identified in Appendix C or Appendix F (as such Appendix may be revised in the PDD and PPP documents delivered by Sabre to Customer) that are required for Customer to access and utilize the Systems. The minimum requirements will be finally determined and agreed upon in the PDD and PPP. Sabre will otherwise be responsible for obtaining, installing and maintaining all of the equipment, hardware, software and other materials that are required to make the Systems available for use by Customer and its Affiliates from the Sabre Data Center. Sabre is not responsible for the operation of any Internet or other communication services. In addition to the foregoing, Sabre will, as part of the hosting services collect, store and process the Customer Data (as defined below in Section 4). For clarity, the point of demarcation for each party’s responsibilities shall be as follows: Sabre shall be responsible for the operation of all equipment and network within the Sabre Data Center and Customer shall be responsible for the operation of any equipment, network and communication services outside the Sabre Data Center.
 
2.10	Customer Specific Deliverables	
Sabre will provide Customer with the Customer Specific Deliverables described in the attached Appendix I (the “Deliverables”), as such description may be revised in the PDD and the PPP documents delivered by Sabre to Customer as described in Appendix E.
 
3.	LICENSE/USAGE RIGHTS GRANTED	
 
3.1	Use Rights	
The following usage rights shall be provided to Customer for the Systems covered under this Work Order.
 
 	(a)	With respect to the Systems other than SabreSonic Web, effective upon Commencement Date, Sabre hereby grants to Customer and its Affiliates a personal, non-exclusive, non-transferable (except as permitted under the Agreement), worldwide right and license during the Work Order Term to (i) access and use the Systems via the Internet and/or direct telecommunication line solely for the Customer’s and its Affiliate’s internal airline operations and Ancillary Services, and (ii) to use the associated Documentation in support of the Customer and its Affiliate’s authorized use of the Systems. With respect to the Kiosk Check-In System and any other portion of the Systems that provide Customer’s passengers with self service options, the license granted hereunder shall include the ability of the Customer and its Affiliate’s permitting their passengers to access and use the relevant portions of the Systems for the purpose of exercising the passenger self service options that are available, including, without limitation, for the purpose of checking in on the Customer and its Affiliate’s flights and Ancillary Services.	

Confidential	  	Page 2	  		

 	(b)	With respect to SabreSonic Web, effective upon Commencement Date for the System, Sabre hereby grants to the Customer and its Affiliates a personal, non-exclusive, non-transferable (except as permitted under the Agreement), worldwide right and license during the Work Order Term to (i) use the Site over the World Wide Web to make Customer’s Content available for access and use by third parties, and (ii) to use the associated Documentation in support of the Customer’s and its Affiliate’s authorized use of the Site and the System.	
 
 	(c)	The Documentation for the Systems covered under this Work Order may be provided on paper, computer disk, over the web or via on-line help.	
 
 	(d)	Customer shall be primarily liable for the of its Affiliates compliance with the terms and conditions of this Work Order.	
 
3.2	Express Restrictions on Use	
In addition to the restrictions contained in Section 4(b) of the Agreement, and except as expressly permitted in the Agreement or this Work Order, Customer agrees not to (a) copy, re-sell, reproduce, distribute, republish, download, post, frame or transmit in any form or by any means or allow another to use or access the Systems; (b) knowingly transmit any data to the Systems that contains software viruses or other harmful or deleterious computer code, files or programs; or (c) knowingly interfere with or disrupt services or networks connected to the Systems, or knowingly violate the regulations, policies or procedures of such networks.
 
3.3	Customer Content	
With respect to the Content provided by Customer in connection the Site supported by Sabre under the SabreSonic Web System, Customer grants to Sabre a personal, non-exclusive, non-transferable (except as permitted under the Agreement), worldwide right and license during the Work Order Term to use, reproduce, electronically distribute, and publicly display the Content as required by this Work Order. Customer represents and warrants that it has all rights, title and interest in and to the Content as necessary for its use as contemplated by this Work Order.
 
4.	CUSTOMER DATA / CUSTOMER DATABASE	
Customer will be solely responsible for the accuracy of the “Customer Data” and the timely inputting of such Customer Data into the Systems and any changes thereto. The “Customer Database” shall be and remain the property of Customer. Only equipment specified by Customer may be used to access the Customer Database. Subject always to Section 2.9 above, Sabre and its subcontractors’ data processing personnel shall have access to the Customer Database as needed to ensure the integrity and performance of the System. The location of the Customer Database may or may not be physically separate from the databases of other Customers of Sabre, but will nonetheless remain secure against improper access. Sabre shall maintain, or cause to be maintained, the Customer Database and shall make backup archival copies of the Customer Database at least once every twelve (12) hours so that if the Customer Database is for any reason erased or destroyed, Sabre shall begin to restore from the latest archival copy. If the Customer Database is erased or destroyed for causes within Sabre’s control, Sabre will restore the archival copy at no additional charge. Otherwise, Customer will pay Sabre for all labor incurred in restoring the archival copy at Sabre’s then current standard labor rate.
Upon expiration or termination of this Work Order, and upon Customer’s request Sabre will return to Customer, in Sabre’s then existing machine-readable format and media, all Customer Data in Sabre’s possession. Customer will pay Sabre on a time and materials basis for the extraction and return of the Customer Data at Sabre’s then-current standard labor rates. In addition, upon Customer’s request during the Work Order Term, Sabre will provide Customer a copy, in Sabre’s then existing machine-readable format and media, all Customer Data in Sabre’s possession. Customer will pay Sabre on a time and materials basis for the copy of the Customer Data at Sabre’s then-current standard labor rates.
Sabre will not use the Customer Data for any purpose other than providing the Services. Subject to applicable laws, Sabre may use the Customer Data for the purpose of determining, using and distributing aggregate statistical and marketing information from which the identity of Customer or its customers cannot be determined through the use of reasonable effort.
Sabre personnel having access to the Customer Data will be informed of their duties to maintain its confidentiality and to use it only for purposes permitted hereunder. Customer may establish backup security for the Customer Data and retain backup data files if it so chooses. With the written permission of Customer, Sabre may have access to such backup data files as is reasonably required by Sabre.

Confidential	  	Page 3	  		

Sabre will restrict access to data contained within the System by functional identification (“Duty Codes”) to facilitate data security. Customer agrees that the Duty Codes used by Customer, unless otherwise agreed to by Sabre, shall be identical to those used by Sabre.
The Systems shall be resident on equipment at the Sabre Data Center and Customer will not receive a copy thereof (Customer’s rights being limited to the access and use of the System resident at the Sabre Data Center). Customer shall receive only one copy of any non-hosted software and one copy of the Documentation therefore. Customer may make a reasonable number of copies of the non-hosted software and Documentation solely for the permitted use and for back-up purposes. Customer shall reproduce and include on each copy and on each partial copy any copyright notice and proprietary rights legend contained in the non-hosted software and Documentation, as such notice and legend appear in or on the original.
 
5.	TERM AND TERMINATION	
The term of this Work Order shall commence as of the Work Order Effective Date and continue for a period of five (5) years from the Commencement Date. For purposes of this Work Order, the “Commencement Date” shall be the date that the Systems are placed into productive use by Customer. If Customer elects not to implement functionality as permitted under Section 6.9 below, such functionality shall not be deemed a part of the System for purposes of establishing the Commencement Date.
Notwithstanding anything herein to the contrary, upon at least ***** prior written notice to Sabre the ***** In connection with such termination, Customer will pay Sabre a termination fee equal as follows:
 
 	(a)	if the termination is effective on or before ***** but before *****, the termination fee will equal ***** of the remaining Total Committed RPBs times the RPB Fee: and	
 
 	(b)	if the termination is effective after *****, the termination fee will equal ***** of the remaining Total Committed RPBs times the RPB Fee.	
Customer may pay the termination fee *****
 
6.	FEES AND CHARGES	
Customer shall pay Sabre the following fees and charges for Sabre’s provision of access and use to the Systems and performance of the Services described herein. For the Systems defined in Appendix A of this Work Order No. 1 and in Appendix A of Work Order No. 2, the RPB Fee will ***** as mutually agreed upon by the parties in writing.
 
6.1	Professional Service Fees	
Customer will pay Sabre a fee of ***** for the Professional Services outlined in Appendix B of Work No. 1 and Work Order No. 2 to be executed contemporaneously with Work Order No. 1.
Sabre and Customer agree ***** payable as follows:
 
 	(a)	Phase 1: *****	
 
 	(i)	*****	
 
 	(ii)	*****	
 
 	(iii)	*****	
 
 	(iv)	*****; and	
 
 	(v)	***** after ***** and upon the Systems all *****	
 
 	(b)	Phase 2: *****	
 
 	(i)	Beginning upon *****, Sabre will invoice Customer *****	
 
 	(ii)	Notwithstanding ***** Customer is obligated to pay the phase 2 Professional Service Fees under the payment schedule defined above.	

Confidential	  	Page 4	  		

6.2	RPB and System Usage Fees	
For access and use of the Systems described in Appendix A of this Work Order, Customer will pay Sabre a monthly fee equal to the amount set forth in the chart below per RPB for the applicable Contract Year (the “RPB Fee”) times the actual number of Customer’s RPB (as defined below) for such month (collectively, the “System Usage Fee”). The System Usage Fee paid by Customer shall be subject to the Minimum Commitment as set forth in Section 6.4 below. Additional fees for some functionality are listed separately below.

Contract Year(s)	  	RPB Fee	 	
*****	  	 	*****	  	
*****	  	 	*****	  	
 
6.3	Acquisition Clause	
Should Customer acquire another airline or assets from another airline where Customer is the surviving entity, and as a result of such acquisition or merger Customer’s future RPBs are reasonably expected to increase by more than ***** per annum, the parties agree to meet within ***** following the completion *****
 
6.4	Minimum Commitment	
The System Usage Fee set forth in Section 6.2 above are subject to the Customer having a minimum number of committed RPBs per Contract Year (the “Minimum Commitment”). In any Contract Year, Sabre will invoice Customer monthly for the greater of either 1) Customer’s actual RPBs for the prior month multiplied by the PB Fee; or, 2) one-twelfth of the Minimum Commitment for the applicable Contract Year, as outlined in the table below:

Contract Year	  	Minimum Commitment
of Revenue Passengers
Boarded (RPB)	 	
1	  	 	*****	  	
2	  	 	*****	  	
3	  	 	*****	  	
4	  	 	*****	  	
5	  	 	*****	  	
If at the end of any Contract Year, Customer has failed to meet the Minimum Commitment for such year, the amount payable to Sabre by the Customer will be reconciled at the conclusion of the relevant Contract Year with the Customer making an additional payment equal to the Minimum Commitment level minus the actual RPBs times the RPB Fee for the applicable “Contract Year”.
 
6.5	Renegotiation Clause	
During the period commencing ***** both parties anticipate that Customer will achieve a total of 25.7 million RBPs under this Work Order (the “Total Committed RPBs”), and ending no later than ***** the following may apply:
 
 	(a)	Customer has an option to request *****	
 
 	(b)	If the parties are unable to reach agreement on a revised RPB Fee within the Renegotiation Period, *****	
 
 	(c)	*****	
 
6.6	Revenue Passenger Boarded Reporting, Invoicing and Adjustment	
By the 15th day of each month from and after the Commencement Date, Customer will provide Sabre with the actual number of RPBs carried during the preceding month (on all Customer and its Affiliates and on all Customer Codeshare Carriers). If Customer fails to timely report its actual RPBs, the most recent number provided by Customer will be used for the monthly invoices.

Confidential	  	Page 5	  		

6.7	Increases in Messages	
The System Usage Fees set forth in Section 6.2 are based on ***** Following a period of the ***** Sabre and Customer will measure Customer’s Messages per RPB during the Stabilization Period and on ***** Customer and Sabre will agree to an expected number of Messages per RPB. The expected Messages per RPB agreed to at this time will be adjusted ***** and will then establish the Messages per RPB (the “Expected Monthly Messages per RPB”) for *****
In the event Customer and Sabre cannot agree to Expected Monthly Messages per RPB at the end of the *****
In the event that Customer’s actual number of Messages per RPB in any month exceeds the Expected Monthly Messages per RPB, System Usage Fee for that month will be adjusted as follows:

Average number of Messages per RPB per Month	  	Additional
Fee Per
Month
per PB	 	
*****	  	 	*****	  	
*****	  	 	*****	  	
During the term of the Work Order, Messages generated by any new Sabre owned system deployed by Customer will be *****
 
6.8	Travel and Out-of-Pocket Expenses	
Customer shall reimburse Sabre for all reasonable, pre-approved Travel Expenses in accordance with Section 3 (b) of the Agreement and Appendix K to this Work Order.
 
6.9	Timing of Implementation	
Customer may request in writing that Sabre not implement all the functionality identified in Appendix A for the Systems during the assessment and project planning phase described in Appendix B. Should Customer later choose to implement any portion of the delayed functionality at a later date, Customer will notify Sabre and the parties will agree in writing upon the timing of such implementation. Customer will pay Sabre for any incremental costs incurred by Sabre for the implementation, including but not limited to associated incremental travel, labor, training, etc.
 
6.10	Out of Cycle Processing and Additional Implementations	
Customer will pay Sabre then current rates for any requested out of cycle off-line processing or for any requested new programs and additional data that require off-line processing. Customer shall also pay Sabre for installation and implementation services in connection with the hosted Systems at new Customer Sites installed after the Commencement Date at the labor rate set forth in Section 6.11 below.
 
6.11	Change Request Labor Rate	
The labor rate for any Change Request under this Work Order will be ***** per hour for system changes. The labor rate for any Change Request under this Work Order for business process or management consulting professional services will be ***** per hour.
 
7.	ACCEPTANCE TESTING	
Acceptance Testing for the Systems, as modified by Sabre through the Professional Services, will be conducted toward the end of the implementation process as agreed in the project schedule prior to final cutover for each System The purpose of such testing shall be to confirm the Systems materially conform to the description of the System set out in the attached Appendix A. The detailed acceptance testing procedure (i.e., test scripts, identification of testers and test sites, etc.) will be established jointly by the parties and set out in writing prior to the commencement of the acceptance testing. The specific test scripts and processes that will be used by the parties during the Acceptance Testing for the Systems will be mutually agreed upon by the parties and documented in the Program Process and Procedures Document. Sabre will provide Customer with its standard test scripts and Customer will revise and update as it deems reasonably necessary. So long as the test scripts are designed to confirm that Sabre’s delivery of the functionality meets the descriptions set forth in this Work Order, then Sabre will accept the test scripts proposed by Customer. Acceptance testing for the Project Definition Document, the Program Process and Procedures Document, the deliverables provided in connection with the Business Transformation Services, will be conducted by Customer within five (5) to ten (10) business days from

Confidential	  	Page 6	  		

Sabre’s delivery of such deliverables to Customer (“Deliverable Testing Period”). The Customer will identify to Sabre any material inadequacies or deficiencies in these deliverables on or before the expiration of the Deliverable Testing Period. Sabre will thereafter promptly remediate such inadequacies and re-submit the relevant deliverable to Customer for review and approval. If Customer fails to identify any material inadequacies with the relevant deliverables within five (5) to ten (10) business days from receipt of any resubmission, the deliverables shall be deemed to have been accepted by Customer.
 
8.	SPECIAL TERMS AND CONDITIONS	
 
8.1	PCI Compliance	
Sabre acknowledges its role as a PCI Service Provider and will, at its own expense, pursue and use commercially reasonable efforts to obtain an annual PCI DSS compliance renewal consistent with the standards defined by the Payment Card Industry Security Standards Council and the data protection programs of the respective payment card companies. Updates on the status of annual renewal will be available to Customer on request.
 
8.2	SAS 70 Audits	
Promptly following the execution of this Work Order, Sabre will provide Customer with its latest SAS 70 Type II audit report for the processing center at which the System is hosted. Thereafter upon Customer’s request, which shall not be requested more frequently than once per year, Sabre will provide Customer with its SAS 70 Type II or other industry recognized assessments for the data processing center at which the System is hosted.
 
8.3	Development Hours	
Sabre will provide Customer with up to ***** development labor hours *****. These development hours are *****.
 
8.4	SabreSonic Web	
*****
 
8.5	Sabre Roadmap Enhancements	
*****
 
9.	CONFLICTS	
If any term in this Work Order conflicts with a term of the Agreement, the terms of the Work Order shall supersede the terms of the Agreement for this Work Order only.
 
10.	FULL FORCE AND EFFECT	
Except as otherwise expressly modified herein, all other terms and conditions of the Agreement shall remain in full force and effect.

Confidential	  	Page 7	  		

IN WITNESS WHEREOF, Customer and Sabre have executed this Work Order as of the Work Order Effective date.

CONCESIONARIA VUELA COMPAÑIA	 		 		
DE AVIACION, S.A DE C.V	 		 	SABRE INC.	
					
By:	 	/s/ Alfonso Ascencio Triujeque	 		 	By:	 	/s/ Stephen M. Clampett	
Name:	 	Alfonso Ascencio Triujeque	 		 	Name:	 	Stephen M. Clampett	
Title:	 	General Counsel	 		 	Title:	 	President, Airline Products & Solutions	
					
By:	 	/s/ Fernando Suárez	 		 		 		
Name:	 	Fernando Suárez	 		 		 		
Title:	 	Chief Financial Officer	 		 		 		

Confidential	  	Page 8	  		

APPENDIX A
DESCRIPTION OF SYSTEMS
Summary Functionality for Customer
 
1.	SabreSonic® Res	
 
1.1	Reservations, Pricing and Reporting	
 
1.2	Pricing, Fare and Rules Display	
 
1.3	Codeshare	
 
 	(a)	Unlimited codeshare flights are included in this Work Order for up to three (3) codeshare partner airlines to be implemented either at cutover or during the term of the Work Order.	
 
 	(b)	Additional codeshare partners beyond the three (3) listed above are not included in the fees in this Work Order.	
 
1.4	Command Center™ Interface	
 
1.5	Credit Suite	
 
1.6	Customer Relation Management Suite	
 
 	(a)	CDD (both PNR and VCR)	
 
 	(b)	Customer Insight	
 
 	(c)	Customer Value Calculator	
 
1.7	Interact™ Interface	
 
1.8	Net Access™	
 
1.9	Qik® Schedule Interface	
 
1.10	SabreSonic® MyFares	
 
1.11	Business Intelligence Analytic Module	
 
1.12	SabreSonic® Inventory (base inventory option)	
 
2.	SabreSonic® Ticket	
 
2.1	Basic Ticketing	
 
2.2	Electronic Ticketing	
 
2.3	Interline Electronic Ticketing Hub with three (3) carriers	
 
2.4	Automated Exchange and Refunds	
 
3.	SabreSonic® Check-In	
 
3.1	Sabre® Check-In™ passenger check-in system	

Confidential	  	Page 9	  		

3.2	EDIFACT Thru Check-In	
 
 	(a)	Three (3) EDIFACT Thru Check-In links are included in the Work Order.	
 
 	(b)	Additional EDIFACT links beyond the three (3) listed above are not included in the fees in this Work Order.	
 
 	(c)	Customer and Sabre will agree to the specific links during the project planning phase of the implementation.	
 
4.	SabreSonic® Web	
 
 	(a)	Three (3) additional storefronts	
 
5.	Kiosk Check-in	
 
6.	Mobile Check-in	
 
7.	Roving Agent Check-in	
 
8.	Web Check-in	
 
9.	Sabre® Agency Activity	
 
10.	Sabre® Corporate Loyalty	
 
11.	Sabre® Virtually There®	
 
12.	Sabre® Enterprise Mobile Services (EMS)	
 
 	(a)	Text and email messaging.	
 
13.	Revenue Integrity Manager	
 
 	(a)	Existing processes	
 
 	(b)	Customer specific processes	
 
 	(c)	Real-time Revenue Integrity	
 
14.	Travel Bank	
 
15.	SabreSonic® Merchandising Services	
 
15.1	Branded Fares	
 
15.2	Ancillary Sales	
 
15.3	Pay for Preferred Seats	
 
16.	Sabre® Web Services	
 
17.	SabreSonic® Sell	
 
18.	Host Frequent Traveler	

Confidential	  	Page 10	  		

1.	SABRESONIC® RES:	
 
1.1	Reservations, Pricing and Reporting	
 
 	(a)	The ARINC Lost and Stolen Ticket function allows utilization of the SabreSonic Passenger Solution mirrored ARINC industry automated accountable passenger traffic documents database in order to protect the user against lost and stolen documents. The carrier must have a signed contract with ARINC for this service.	
 
 	(b)	The Automated Reference System (Focus) is an on-line help facility. It contains 3 levels of information referred to as the Main Function List, Specific Functions and Detailed Information. The Specific Functions level contains detailed formats and the Detailed Information level contains more specific format information. Access to this information is obtained through the use of qualifiers, which are words used to describe the information being requested. The user may have one unique on-line reference manual for information specific to their operation.	
 
 	(c)	The FMH/REM (Focus Multihost / Restricted Entry Manual) online reference manuals contain over 100 topics ranging from SabreSonic formats to Help Desk numbers.	
 
 	(d)	The Calculator function performs arithmetic calculations (addition, subtraction, multiplication and division); displays monthly calendars and calculates past and future dates (useful in calculating advance purchase dates); converts Celsius and Fahrenheit, metric and decimal; time zone differences can also be calculated.	
 
 	(e)	The Car Availability function represents 50 car rental companies in over 100 countries. Sabre CARS PLUS is an automated, dynamic car availability and rate system that displays both corporate and local vendor information. This system also provides policy and rule information. The booking is created from the shoppers and rate quote entries. The Rental Car Availability System (RCAS) is a manual sell system providing the basic functions of general availability by city and arrival date and the car sell entry directly from car availability.	
 
 	(f)	The Catering Message Table (PMMT) contains booked passenger counts by flight. Utilizing the Time Initiated Function Table (TIFT), these counts may be automatically transmitted to a catering facility.	
 
 	(g)	The Clock function provides the capability for the user to select time displays in either a 12-hour or 24-hour clock. An entry to display local time for the desired city is also provided.	
 
 	(h)	The Check Authorization (Dishonored Check Information and Exchange Service <DCIES>) function provides the verification of bank checking account numbers and driver’s license numbers used to complete a check form of payment ticketing transaction. This information is input by the user and is sent across a DCIES link for verification. This function is valid for checks drawn on U.S. or Canadian banks. ARINC monthly charges billed.	
 
 	(i)	The E-mail Address in the Passenger Name Record (PNR) function allows for the storing of e-mail addresses in the PNR and the ability to send passenger notification updates using Sabre ® Virtually There™ or Sabre ® InformSM. The e-mail address can be inserted with or without using the name select entry. Users can display the e-mail address by name selection and attach multiple names to a single e-mail address. This function is applicable to all PNR types, except Block Space Group (BSG) bookings.	
 
 	(j)	The Encode/Decode function provides the ability to decipher system codes for airports, cities, airlines, travel agencies, equipment, cars, hotels and tour associates. The Encode/Decode entries provide additional information such as ticketing and baggage agreements and Prepaid Ticket Advice (PTA) acceptance when decoding airlines, as well as, buffer zone information used in tax calculations when decoding cities/airports. Encode/Decode also provides the ability to encode the aircraft equipment type by the manufacturer name or decode the aircraft type to obtain a description and number of seats.	
 
 	(k)	The Flight Information (FLIFO) function tracks the movement of host aircraft and provides the ability to record flight information about specific flight/date within the current inventory period of 331 days. FLIFO keeps track of the movement of host aircraft. For carriers utilizing the Dispatcher Environmental Control System (DECS), the OUT, OFF, IN, estimated time of arrival (ETA), estimated time of departure (ETD), etc. times are relayed to FLIFO.	

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 	(l)	The Frequent Traveler in the Passenger Name Record (PNR) function allows a SabreSonic hosted client or partner airline’s frequent traveler number to be entered in the PNR. No validation is performed on the frequent traveler number entered.	
 
 	(m)	The General Sales Agent (GSA) function provides travel agency access within a partition. Travel agents can access only those Passenger Name Records (PNRs) in the designated city code of the partition or PNRs released to that location by the SabreSonic hosted client. This functionality is available solely for GSAs as defined by IATA. GSAs implemented at cutover included.	
 
 	(n)	The Hotel Availability function is an automated system which offers property and rate information from more than 60,000 hotel properties. This product provides the ability to search, view and reserve participating hotels.	
 
 	(o)	The Itinerary Print function provides the customer with a printed detail of all Passenger Name Record (PNR) itinerary data in an easy to read format. The printed itinerary contains the user’s home station, date the itinerary was printed, PNR locator, passenger name(s), segment information, pre-reserved seats, multiple meal types, special meals and itinerary remarks. Additional options are available with the Itinerary Print function, including foreign language (French or Spanish) and requesting specific name numbers. Itinerary Print will also include Mexican regulations’ requirement for Customer’ VAT registry number and information.	
 
 	(p)	The List Displays function provides various passenger information in a list format, which includes number in party, last name/first name, class of service and record locator.	
 
 	(q)	The Name List (LD, etc) function provides passenger lists based on the command for complete flight list, pre-reserved seats, top tier frequent traveler members, infants, waitlisted passengers, positive space passengers, last booked passengers, etc.	
 
 	(r)	The Passenger Boarding Information (PBI) function displays the number of passengers booked on each flight, as well as, each fare class, by boarding city and destination. The PBI list also provides a breakdown of inbound connecting passengers and the number of passengers booked on connecting flights for downline stations. The PBI list indicates employee positive space bookings and non-revenue space available (NRSA) information.	
 
 	(s)	The Large Party Process HOST (Group Host) function provides the ability to set parameters for a host booked Passenger Name Record (PNR) to a maximum number in party of 99. The large party parameter is determined by the carrier. PNRs within the set parameters are automatically queue placed to the booking city for manual handling. Large Party PNRs received within 2 days of departure are queue placed to the board point city for manual handling.	
 
 	(t)	Group Need Processing provides carriers a means to control large party bookings containing host inventory. This allows host agents to sell segments with a NN status code, but automatically change the segments to Group Need status if it is a group booking as identified in the large party definition within the carrier partition. The Group Need status will not decrement from inventory. PNRs with Group Need segment status will be automatically queue placed for an agent to confirm or deny the request.	
 
 	(u)	The Minimum Connect Time function provides the display of minimum connection times for each airport and airline. Official minimum connect times are supplied by OAG Inc., and customer supplied sub-minimum connecting times are used to automatically build connections	
 
 	(v)	The Passenger Name Record (PNR) is a stored record that contains all the details concerning the creation and modification of the reservations agreement between the SabreSonic hosted client and the passenger. A PNR is created, stored and maintained for every passenger for whom airspace and an auxiliary service has been requested, reserved or waitlisted. A PNR can be created by the booking agent or via a teletype message. The PNR contains both mandatory and optional fields. The mandatory fields include the passenger name, itinerary, ticketing or time limit, phone number and received from. The optional fields include Special Service Request (SSR), Other Service Information (OSI), e-mail	

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 	address, frequent traveler numbers, Pre-reserved seats (PRS), remarks and address. All PNRs include a signature line containing the time/date/year, agent sign, creation location, record locator and indicators to notify an agent if history or pre-reserved seats exist. On the day of departure, a PNR itinerary is updated with flight information (FLIFO) to show if a flight is on time, delayed or cancelled. A PNR can be displayed by flight number, date and name or by the unique 6 alpha record locator assigned at end transaction. There are also various display capabilities for other airline segments booked in the host partition, by waitlisted flights or by using a prepaid ticket advice (PTA) number if a prepaid ticket exists in the PNR.	
 
 	(w)	The Block Space Group Bookings (BSG) function provides the ability for wholesalers or retail subscribers to block air space without submitting specific passenger names. The BSG Passenger Name Record (PNR) serves as an inventory record. Requests for specific passenger air space are satisfied by the BSG without decrementing general inventory levels. The BSG is the controlling record and the specific passenger PNRs associated to it are called Associated PNRs.	
 
 	(x)	The Change/Delete/Insert Passenger Data Fields function provides the ability to change or remove passenger data fields from the Passenger Name Record (PNR).	
 
 	(y)	The Corporate Passenger Name Record (PNR) function allows a PNR to contain an itinerary with or without passenger names and seats by utilizing a group name. The individual names may be added one at a time at a later date, but must be present for ticketing. Corporate PNRs can also be displayed by specific flight, date and board city using the Corporate Passenger Name List.	
 
 	(z)	The Clone function provides the automated cloning of an entire Passenger Name Record (PNR) or only certain parts of a PNR, such as itinerary, through a single transaction and each of the PNRs can be cross referenced to each other if desired.	
 
 	(aa)	The Duplicate Segment Check function validates the airline itinerary in a Passenger Name Record (PNR) at end transaction to search for segments where the airline code, date of departure, board point and off point are equal. If duplicate segments are found, a warning response is displayed. The warning response can be overridden with a second end transaction entry.	
 
 	(bb)	The Infant Passenger Name Record (PNR) function provides an additional name field used to identify an infant traveling in the PNR. An infant is defined as being at least 7 days old, but less than 2 years old.	
 
 	(cc)	The Passenger Name Record (PNR) History function contains all actions taken on the PNR, as well as, the signature line identifying the location, date and agent sign for each action. At end transaction, SabreSonic automatically updates PNR history with each change made.	
 
 	(dd)	The Divide Passenger Name Record (PNR) function provides the ability to divide multiple name PNRs in a single entry. A line of remarks containing the record locator is automatically added to both PNRs for cross-referencing purposes.	
 
 	(ee)	The Reduce Passenger Name Record (PNR) function provides the ability to reduce the number in party before or after ending the transaction. This function also requires that the name field be reduced to match the number in party prior to ending transaction.	
 
 	(ff)	The Increase Passenger Name Record (PNR) function provides the ability to increase the number in party prior to end transaction on a newly created PNR. This entry cannot be applied to a retrieved PNR.	
 
 	(gg)	The Past Date Information (PDI) CD-ROM Basic product contains Passenger Name Record (PNR) data that has been purged from the system and itinerary segments that have been flown. The Purged PNR CD-ROM file captures the entire PNR 48 hours after the final itinerary segment has been flown and the PNR is purged from SabreSonic. The Flown PNR CD-ROM file captures certain fields of the PNR each time an itinerary segment is flown. Search capabilities can be performed by carrier code, date, flight number, last name/first name or record locator.	
 
 	(hh)	A Prepaid Ticket Advice (PTA) generally involves the payment for a ticket by someone other than the passenger at a location other than the passenger’s point of origin. The authority to issue a ticket for the specified passenger is forwarded to the appropriate ticketing location at the passenger’s point of origin.	

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The prepaid function provides for PTA information to be entered, directly into a Passenger Name Record (PNR). Because a prepaid ticket may be purchased before the passenger has confirmed specific flights, the PTA function allows for the creation of a PNR with an “OPEN” segment itinerary. A PTA PNR can be retrieved by the PTA number if desired.
 
 	(ii)	The Automated Teletype Prepaid Ticket (PTA) function allows a prepaid ticket message, using AIRIMP standards, to be sent to the ticketing carrier in order to arrange a prepaid ticket as a service to the passenger. SabreSonic automatically sends an acknowledgment (ACK) message to the sender of the prepaid ticket. The PTA information is automatically updated in the Passenger Name Record (PNR).	
 
 	(jj)	The Printer function provides automated printing for ticketing, boarding passes, hard copy, print screen and miscellaneous non-transport documents.	
 
 	(kk)	The Queues function is designed to provide the user with automated and manual capabilities to place a Passenger Name (PNR), message or teletype message to a predetermined location (queue) in the system to be retrieved later for further action. Queue locations are identified by city codes and a numeric or alpha character. Each city code can contain up to 511 numeric queues and 24 alpha queues.	
 
 	(ll)	The Atlas function can be used to offer customers a choice of airports to reach their intended destination, which could result in lower fares or better flight schedules. The Atlas function can determine the 10 closest airports to a specified city, airport or military base and will provide a proximity display of these airports. This function also provides the mileage between cities.	
 
 	(mm)	The Special Meals (ML*) Table validates special meal requests and automatically creates a name associated Special Service Request (SSR) item in the Passenger Name Record (PNR). The SSR item provides the airport, catering and flight personnel with a passenger’s special meal information.	
 
 	(nn)	The Special Travelers Account Record System (STARS) is a reference source for storing frequently used information, procedures, training data, station or city information on-line. Each STAR allows up to 200 lines of information. STARS allow the automatic transfer of lines directly into the Passenger Name Record (PNR). Each STAR also has a signature line that contains the create city/date/agent sign, purge date, date viewed and a count for the number of times the STAR has been retrieved.	
 
 	(oo)	The Special Service Request (SSR) function is used by the Teletype function to automatically process inbound and outbound messages containing a SSR code. SSR processing allows each carrier to select the type of action to be taken by SabreSonic based on the specific SSR code. The SSR table is created and maintained by SabreSonic, utilizing IATA SSR codes.	
 
 	(pp)	The Terminal Monitor function provides the user with the capability of monitoring the input and output of a terminal or multiple terminals by another terminal, multiple terminals, or by a hard-copy printer within their partition. This monitoring functionality allows a user’s entries and responses to be viewed and helps to determine performance problems or detect misuse. The Employee Profile Record (EPR) keyword MNTSET is required to perform this function.	
 
 	(qq)	The Minimum Connection Alert function sends an error message to the user at End Transaction when any segment in the PNR does not meet the published minimum connection times. The error response contains the affected segment number and city, as well as, the minimum connection time for that city. This alert message can be modified by performing the End Transaction entry again.	
 
 	(rr)	The Agent Productivity Reporting Information System (APRIS) is an on-line report that integrates airline reservation booking activity with call data and city pair revenue information to produce an analysis of reservations agent productivity. The user inputs the call data and revenue information using the APRIS mask online in the SabreSonic system. Reservation booking data is captured daily from off-line SabreSonic sources.	
 
 	(ss)	The Ticket Control Number (TCN) File contains information from the auditor’s coupon of all tickets, including exchanges and voids. The TCN file contains all of the information required by ATPCo. All ticketing information is collected during nightly file maintenance. A TCN record consists of one Sabre Generated Ticket Number (SGTN) transaction.	

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 	(tt)	The Non-Transport Data File (NTP) contains all miscellaneous sales (non-transport) transactions. This includes all transactions entered into the Miscellaneous (MISC) Mask, (i.e., kennels, excess baggage, unaccompanied minor, unpaid taxes, etc.), the Refund (RFND) Mask, the Prepaid Ticket Advice (PTA) Mask, all voided transportation transactions, and all taxes that were collected as a combined sum (XT). A NTP record equals each line of data in the file. There are nine data types: Miscellaneous Sales, Prepaid Ticket Advice, Refunds, Interline Passes, Vouchers, Non Transport MSR Tax Records, Voided Transactions, Passenger Facilities Charge and Combined Taxes.	
 
 	(uu)	The TMR 1 - Advance Booking Report contains the booking counts of host airline flights, categorized by commuter airline, date and city pair. The report is sorted by date range, city pair, board point, class code and commuter airline. It can also be used as a summary of total passengers boarded by date and by station to assist airport manning projections.	
 
 	(vv)	The TMR 2 - Post Departure Report provides detailed post departure data for host and commuter flights for a maximum of 3 days prior to the request date. Also provides previous days boardings by city.	
 
 	(ww)	The TMR 3 - Interline Booking Report contains booking cancellation counts on host and other airline flights. Collects daily booking counts made by other airlines on the host, host airline on itself, and host airline on all other airlines. This information is obtained from the signature line of the Passenger Name Record (PNR).	
 
 	(xx)	The TMR 4 - Group Booking Report indicates the total number of large party and corporate Passenger Name Records (PNRs) for all host flights. The report is sorted by date range, board point and flight numbers.	
 
 	(yy)	The TMR 5 - Dupe Check Facility Report contains the passenger names and Passenger Name Record (PNR) locators of suspected duplicate bookings. Search logic checks the first 36 consonants of the last name and matches the first initial, as well as, title (i.e.: Mr., Mrs., Ms., etc.). This report may be requested for a specific flight in a market, specific date or date range or teletype booked PNRs. The search can also be limited to only corporate or Blocked Space Group (BSG) PNRs. The printed report also includes the flight number, class, date, status code, board and off points, first available telephone contact number from the PNR and the booking source.	
 
 	(zz)	The TMR 6 - Sabre Performance Summary Report displays the number of Passenger Name Records (PNRs) and high-speed message counts generated for the current month. Previous month and year-to-date information is also available.	
 
 	(aaa)	The TMR 7 - Daily Bookings Report contains booking counts on host airline flights, classified by date. All of the bookings for each day of a period of up to 7 months are calculated and displayed.	
 
 	(bbb)	The Teletype Reject Message function allows for the processing of inbound messages from other CRS’ rejected due to a mis-match of passenger name or itinerary information. Teletype rejects are sorted by departure date and placed on high, medium or low priority queues. The user determines the date range of each queue. The manual handling of teletype rejects is duty code restricted. Large party bookings are sent to a specific queue for group desk handling.	
 
 	(ccc)	Group Fare Processing (GRPF ) allows the host carrier to determine the large party number for requests sent from other airlines. Passenger Name Records (PNRs) containing the GFAX SSR “GRPF” entry are queue placed to the group processing queue for manual handling. Group bookings received without the GRPF option, are automatically sent back to the booking source with a segment status code “NO”, indicating no action taken.	
 
 	(ddd)	The Teletype Name Change Reject/Name Reject function rejects name change messages sent via teletype. These messages can then be manually reviewed.	
 
 	(eee)	The Large Party Process OA (Group OA) allows a user defined large party number to be designated for bookings received via teletype. These Passenger Name Records (PNRs) are automatically queue placed for manual processing rather than denying the booking.	

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 	(fff)	The Passenger Name List/Add and Delete List (PNL/ADL) is an IATA formatted message used to transmit Passenger Name Lists (PNL) to up to 6 teletype addresses. This is useful for carriers when ground handling another carrier’s flights. The PNL is generated to that pre-determined address of the ground handler, which then takes the data and automatically creates Passenger Name Records (PNRs) or Check-in data in the ground handler’s CRS. The Add and Delete List (ADL) refreshes and updates the original PNL with new, cancelled or modified passenger information.	
 
 	(ggg)	The Special Service Request (SSR) function enables SabreSonic to automatically process various inbound SSR requests and send the appropriate outbound teletype message reply. Each carrier can select the type of action to be taken by the system for each type of request, and the desired response to be automatically generated by the system back to the originator. This function can also be set-up to queue place Passenger Name Records (PNRs) containing pre-defined SSRs for manual handling.	
 
 	(hhh)	The Special Meal (SPML) Code function allows a reply to be sent back to the originator based on parameters contained in the Special Meal Table. The parameters determine the lead time for ordering meal, the class of service, the meal service availability on flight and the flight’s board point.	
 
 	(iii)	The IATA Mandated NAR (New Arrival) Segment and NCO (New Continuing Onward) Segment Teletype Message Changes function is a teletype message tag identifier that generates and sends the entire itinerary to other airlines occupying the same itinerary when changes are made to the arrival or continuing segments.	
 
 	(jjj)	The Electronic Travel Authority System (ETAS) is a forward host Multi-Access connectivity function, which allows a SabreSonic user to access the ETAS system to apply for and receive travel visas to Australia. The visa is electronically transmitted via SabreSonic connectivity to the ETAS system.	
 
 	(kkk)	The Weather System is a forward host Multi-Access connectivity function, which allows a SabreSonic user to access the National Weather Service system for current and forecasted weather conditions and temperatures around the world.	
 
 	(lll)	The World Tracer Baggage System link is a forward host Multi-Access connectivity function that enables SabreSonic to use World Tracer for bag searches among many world carriers. A SITA contract is required.	
 
 	(mmm)	The Baggage Management Analysis System (BMAS) tracks and locates mishandled baggage. This system has the ability to take passenger information from the Passenger Name Record (PNR) and enter it into the worldwide baggage tracking database.	
 
 	(nnn)	The Agent Sign Security (AgSS) function provides a defense against unauthorized users gaining access to SabreSonic, and deters certain system functions and entries through an Employee Profile Record (EPR). AgSS authenticates the identity of an agent at sign in to the system and establishes security through the use of keywords, duty codes and passwords. Specific SabreSonic functions may be performed, only with appropriate duty codes and/or keywords in the EPR, preventing inappropriate users from engaging in unauthorized functional activities.	
 
 	(ooo)	The Flight in Trouble (FIT) function is a table updated by the user that restricts flight data from viewership in the event of an incident. Once a flight is loaded into the FIT table, entries involving the affected flight number are restricted. For example, entries to display a Passenger Name Record (PNR), List Displays (LD), inventory displays, Airport check-in entries, flight information (FLIFO) and electronic ticketing entries and displays are all restricted. Updates to the FIT table are duty code restricted. Users possessing the appropriate keyword in their Employee Profile Record (EPR) can view restricted information.	
 
 	(ppp)	The OUS/OUB Message function allows messages to be generated, from unsolicited messages, to a specific CRT address (OUS) or all CRTs (OUB) on a specific line allowing rapid communication between users. The message is capacity controlled by an Employee Profile Record (EPR) keyword.	
 
 	(qqq)	The Pre-reserved Seat Selection (PRS) function provides the ability to issue advanced seat assignments, at the time of the reservation. A seat map is available for each flight and can be displayed by flight number or segment number. Seat assignments can be designated by area preference (either	

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 	smoking or non-smoking, window or aisle) or by specific seat number. A seat can be reserved up to 330 days in advance and boarding passes can be issued up to 30 days prior to departure. Seats can be cancelled by segment, specific seat number or by all segments without canceling the itinerary. Changes to pre-reserved seats are contained in seat history. All pre-reserved seats are name associated in the Passenger Name Record (PNR).	
 
 	(rrr)	The Sign in Message function allows authorized personnel to add a message to SabreSonic to be displayed on user sign in. Messages can vary by sign in location. These messages are Employee Profile Record (EPR) keyword controlled. Sign in messages provide timely communication of important information/training to specific locations or to all locations.	
 
 	(sss)	The Message Switching (MSW) function provides a method for processing teletype messages that are generated within and between airline/CRS and related companies around the world through the use of direct circuits and ARINC or SITA. MSW is also used to transmit Passenger Name Record (PNR) bookings and Passenger Name Lists/Add Delete Lists (PNL/ADL) to other CRS systems. MSW processes all of the administrative messages direct to SabreSonic printers. Messages can be addressed to a single location or simultaneously to multiple locations.	
 
 	(ttt)	The Scan File provides the ability to track high speed messages in the customer’s system and generate the following reports:	
 
 	(i)	Top Twenty Action Codes	
 
 	(ii)	Top Twenty Agent Signs	
 
 	(uuu)	The Condensed Report by Action code provides the number of times a specific entry is entered into SabreSonic. The Top Twenty Agent Signs provides the number of times a specific agent enters any command.	
 
 	(vvv)	Timatic is a forward host Multi-Access connectivity function, which allows a SabreSonic user to access travel documentation requirements and regulations for nearly 200 countries.	
 
 	(www)	The Time Initiated Function Table (TIFT) function allows for the automatic generation of specific SabreSonic entries at specified times which are defined by the user. These specified entries and responses can be sent to either a printer, SabreSonic set address, or teletype address.	
 
1.2	Pricing, Fare and Rules Display	
 
 	(a)	Itinerary Pricing is a database with more than 45 million fares from over 650 airlines worldwide submitted by the Airline Tariff Publishing Company (ATPCO) and SITA. This database maintains fare filings, comprehensive rules, currencies and Banker Selling Rates (BSR)	
 
 	(b)	Price Quote (PQ) functionality allows tickets to be issued directly from the pricing information stored in the Price Quote Record in the PNR. PQ ensures tickets are issued at fare quoted until expiration of the Price Quote Record, which is controlled by the airline.	
 
 	(c)	The No Passenger Name Record (PNR) pricing function allows easy-to-use formats to price multi-leg itineraries without creating a PNR. A fill-in mask is available which provides flexibility to add or change information as needed. No PNR Pricing can accommodate a simple one-way or a complicated 16 segment itinerary for up to four different passenger types.	
 
 	(d)	The Tax Database function in SabreSonic includes both a Tax Database Summary Display and a Tax Database Detail Display. The Tax Summary displays a list of all taxes applicable to a specified country. The Tax Detail Display allows the user to request information regarding a particular tax.	
 
 	(e)	A Ticket Designator is used in pricing and ticketing entries to apply discounts to filed fares or to designate specific promotional rates. Ticket designators can be limited to a single validating carrier, by the inventory booking code, by travel validity dates or by geographical area. Ticket designators can be applied by segment, by trip or by itinerary.	

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 	(f)	Sabre Air Pricing Operations is responsible for all air itinerary pricing operations. This includes fare and rule data processing, development and maintenance of all pricing applications.	
 
 	(g)	The ATPCO: Automatic Fare Updates function electronically transmits the carrier’s filed fares from ATPCO to Sabre. This automatic process updates the carrier’s fares 5 times daily.	
 
 	(h)	The Fare Construction function provides principals that are used to calculate fares for international itineraries. Sabre pricing adheres to IATA standards of fare construction including global direction, directionality of fares, governing carrier, mileage parameters, limitations on indirect travel, higher intermediate fares (HIF or HIP), precedence of through fares, routings, differentials, around the world fares, minimum fare checks, cabotoge rules including French, British and Dutch and Neutral Units of Construction (NUCs). All local currency amounts are converted using the Rate of Exchange (ROE) to a NUC amount. The cost for the itinerary is then calculated in NUCs. The total NUC is then converted using the ROE to the currency of the country of origin.	
 
 	(i)	The Negotiated Fares function provides airlines with the ability to manage the distribution of non-published fares and defined viewership. Automated Negotiated Fares eliminate the need for paper tariffs or a privately managed database of negotiated air rates. The integration of negotiated fares with published fares can be displayed with a single fare quote entry. The automation of negotiated fares is accomplished through the Airline Tariff Publishing Company (ATPCO) privates fares tariff filing.	
 
 	(j)	Guaranteed Fare Pricing computes and saves the lowest applicable fare for a booked itinerary; validates an itinerary against all airline fare rules and displays detailed fare, tax, and surcharge information to the user; allows users to price an entire itinerary or specific segments of an itinerary. Also offers users the ability to price specific passenger types (e.g., adult, child, senior citizen, military, negotiated, etc.), using over 150 industry-standard codes	
 
 	(k)	Price by cabin returns the lowest available fare within a desired cabin for a desired itinerary taking into consideration current fare class availability. Price by cabin also allows users to append qualifiers that find the lowest fare regardless of availability, exclude penalty fares, with or without restrictions, and/or based on a specified purchase date. The user can also append a qualifier that automatically rebooks the itinerary in the lower class-of-service. Evaluates up to eight segments in one itinerary. (WPNCB)	
 
 	(l)	The U.S. government/state fare pricing (GST Pricing) function provides ability to price the lowest published fare, negotiated fares and U.S. state government fare in one entry.	
 
 	(m)	Fare & Rules Displays provide users with up-to-date information on airline fares, rules, government taxes, passenger fees, currency rate & exchange, and baggage allowance.	
 
 	(n)	The Fare / Shoppers Quote Display function displays all published fares for a carrier in the requested market for the specified date or dates of travel. Fares for future travel or up to 60 days past date EEDcan be displayed. Variations to the entry sort fares by fare type, currency, specified booking class, etc. Once the fare has been displayed, shortcut entries can be used to quickly change a part of the fare quote, such as the arrival city or the carrier. All fare and rule information is sent to Sabre from the Air Tariff Publishing Company (ATPCO) and SITA. The Fare Shoppers entry allows the user to view fares from all airlines that publish fares in the requested market. Fares are shown in ascending order, with comparison information regarding frequency and type of service (non-stop, direct, on-line connection) for each airline at the top of the display.	
 
 	(o)	The Electronic Rules Display (RD) function provides an automated display of fare rules submitted by each airline via their fares vendor to Sabre. This display contains 28 fare rule categories including seasons and blackouts, transfers, combinability, fare by rule information, minimum/maximum stay and groups. Specific rule categories may be accessed individually or in groups.	
 
 	(p)	The Rules Display – RD function returns fare rules for a carrier, including 28 categories.	
 
 	(q)	The Booking Code Validation (RB) Table displays booking code requirements to qualify for a specified fare basis as outlined by the publishing carrier.	
 
 	(r)	The ROE Display – FC function displays IATA quarterly NUC conversion rates of exchange.	

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 	(s)	The Currency Management (Conversion Functions) function displays the Bankers Selling Rate (BSR) for the country requested. This function converts currency at the market rate. Currency Management also contains an alpha listing of all country currencies, as well as, a conversion for the BSR.	
 
 	(t)	The Tax Display – TX function displays country or city specific taxes.	
 
 	(u)	The MPM Mileage Display – WN function displays applicable maximum permitted mileage for MPM fare levels.	
 
 	(v)	The Ticketed Point Mileage Display – WN function calculates miles traveled between ticketed points for fare and routing applicability.	
 
 	(w)	The PFC Display – PXC function calculates applicable passenger facility charge for domestic and international itineraries.	
 
1.3	Codeshare	
Unlimited codeshare flights are included in this Work Order for up to three (3) codeshare partner airlines to be implemented at cutover. Additional Codeshare partners implemented after cutover are not included. Codeshare flights refer to flight numbers, either marketing or operating. An agreement with the other carrier is required.
 
 	(a)	The Codeshare function provides the ability for an airline to partner with another airline to offer services to cities where the host airline does not fly. Additional market availability is provided without the added cost of aircraft, flight crew and airport facilities. The SabreSonic system currently supports IATA Options 1, 2, 3, and 4. The SabreSonic codeshare product is very flexible; allowing the carrier many choices in how various bookings and responses will be sent and processed. When a passenger checks in on the SabreSonic—hosted carrier’s flight that connects with a marketing flight, SabreSonic recognizes the codeshare flight; if the operating carrier has an EDIFACT agreement with the operating carrier, then EDIFACT Through Check-In is performed. This product requires a Codeshare agreement.	
 
 	(b)	The Codeshare Marketing TCS Date Relate functionality allows carriers participating in codeshare arrangements to link classes of service to dates in the TCS (Teletype Codeshare Table) enabling them to add effective and discontinue dates ensuring the marketing carriers classes of service are mapped and translated to the operating carrier’s classes of service for the exchange of booking data.	
 
 	(c)	The Operating TCS Table gives the operating carrier more control over what classes of service are being booked by the marketing carrier. This table is used to validate the fare class mapping translations for inbound IATA Option 1 and 4 booking messages sent by the marketing carrier. It is also used to translate the marketing carrier class to the operating carrier class of service for IATA Option 2 bookings and AVS messages.	
 
 	(d)	The PNL Check-In Enhancement function searches for existing PNR’s within SabreSonic when an inbound PNL/ADL message is received and merges the data found in the PNL with the existing Sabre PNR. This eliminates dupe bookings. It also enables the system to perform “ through check-in” on their passengers from their origin city to their final destination.	
 
 	(e)	The AVS Leg and Segment Support function applies the Availability Status (AVS) messages to both the operating and marketing carriers when an AVS message is sent.	
 
 	(f)	The Request Availability Status Message (RAS) function allows additional control of a carrier’s marketing flights. This product enables the marketing carrier to send an Availability Status (AVS) recap request to the operating carrier at any given time. Upon receipt of the message, the operating carrier will automatically return an AVS message (recap) to the marketing carrier. SabreSonic has the capability to send and receive RAS messages.	
 
 	(g)	The Passenger Name Record (PNR) Identification by Record Locator (RLOC) function attempts to retrieve a PNR in two ways in order to process inbound Teletype messages. The first check searches the OA RLOC (Other Airline Record Locator) Index for the originating airline’s RLOC; if the PNR is not found, the system will attempt to retrieve the PNR via flight, name, date.	

Confidential	  	Page 19	  		

 	(h)	The Open Seat Indicator on Boarding Passes function enables EDIFACT to print ‘OPN’ in the seat assignment field on ATB2 boarding passes issued via EDIFACT for OA open seating flights. This functionality is available for all EDIFACT partners who send an open seating indicator in the check-in response (DCRCKA).	
 
 	(i)	The LDX function will produce the Codeshare PNR Reconciliation Report from the Marketing Carrier’s Partition. The report will include an item for each PNR that was booked by the Marketing Carrier and is missing from either the Marketing or Operating Flight.	
 
 	(j)	The Flight Segment Included in Teletype Reply to SSR Request function provides for the flight segment associated to an SSR to be included in the SSR reply message.	
 
 	(k)	The Inbound Passenger Reconciliation List (PRL) Enhancement provides information collected during the check-in process that can be used to update a ground handled/marketed airlines’ reservation system, as necessary. The PRL message reflects a list of accommodated onboard passengers and associated information.	
 
 	(l)	The “SOLD AS” Identifier on Boarding Passes function modifies the current boarding pass stub to include a “SOLD AS” field to reflect the Marketing carrier’s code and flight number when operated by a codeshare partner. This provides the passenger with information associating the codeshare partner’s base operating flight number to the flight originally booked.	
 
 	(m)	The IATA Passenger Final Sales - Outbound Message is a teletype message generated during the post departure reconciliation process to provide post departure control statistical and/or amended passenger information to codeshare/contracted 3rd parties. The Post Final Sales message lists all “exception” passengers, or passengers who did not check in “normally”. The passengers are listed first by category, then class of service, and lastly alphabetically. A passenger will appear in only one category.	
 
 	(n)	The Codeshare Prepaid Ticket Advice provides the ability for the passenger to pickup a prepaid ticket from either the marketing or operating carrier’s ticket office. Upon issuance of the ticket a teletype message is automatically sent advising that the PTA has been ticketed.	
 
 	(o)	The SabreSonic system has the ability to send, receive, and process Codeshare IATA Option 1 messages. With IATA Option 1, the marketing carrier performs the translation to the operating carrier information. The marketing flight information is included at the end of the air segment. Therefore, the marketing carrier sends both marketing and operating carrier details within the booking message.	
 
 	(p)	The SabreSonic system has the ability to send, receive, and process Codeshare IATA Option 2 messages. With IATA Option 2, the operating carrier performs the translation to the operating carrier information. The marketing carrier sends marketing flight information only.	
 
 	(q)	The SabreSonic system has the ability to send, receive, and process Codeshare IATA Option 3 messages. With IATA Option 3, the marketing carrier performs the translation to the operating carrier information. The marketing carrier sends operating flight information only.	
 
 	(r)	The SabreSonic system has the ability to send, receive, and process Codeshare IATA Option 4 messages. Codeshare IATA Option 4 is similar to Option 1, however the booking format is slightly different. The marketing carrier performs the translation to the operating carrier information and both flights are included in the air segment.	
 
 	(s)	The Codeshare Automated Passenger Protection (APP) function allows the operating and marketing carrier to determine who will be responsible for reaccommodating the marketing codeshare passengers during schedule change. If it is determined that the operating carrier will be responsible for reaccommodating the marketing passengers, teletype messages are created to update the marketing PNRs and processed according to the rules of each partner. Additionally, the SabreSonic operating carrier may protect marketing carrier’s passengers separately from their own non-codeshare passengers. Each codeshare may be protected differently as well.	

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 	(t)	The Codeshare Availability Status Messages (AVS) Reapply function re-applies AVS inhibits, previously applied by the operating carrier from an AVS open or close message, after the marketing carrier’s schedule change.	
 
 	(u)	True Availability allows a marketing flight’s Inventory Detail record (IND) to be programmatically linked to the IND of the operating carrier, when both airlines reside in the SabreSonic system. Therefore, the availability of the marketing flight will mirror the availability of the operating flight, reflecting its “true availability”. A ‘TAI’ indicator in the city pair availability demonstrates to the marketing carrier that the city pair is displayed as ‘true availability’. Additionally, True Availability supports all Sabre inventory structures (Net, Threshold, Virtual and Continuous Nesting).	
 
 	(v)	The FLIFO Cancellation function appends a FLIFO cancellation message on the marketing flight when the operating flight is cancelled with a CN or CS action code.	
 
 	(w)	The Codeshare Seat Return-Outbound function provides the ability to return seats to the operating carrier by cabin, date range, time and origin or destination for codeshare block space agreements. Codeshare Seat Return also creates the ability to retain a minimum number of block seats, to set new seat authorizations with adjustable overbooking levels, to provide return seat percentages and to establish additional addresses for seat release messages.	
 
 	(x)	The Dual Flight Number Validation function provides the ability to validate the dual flight number information is correct when it is received from the marketing carrier. This function is applicable to IATA Option 4 codeshare partnerships only.	
 
 	(y)	Codeshare Ticket Number Advice (TKNA) notifies the marketing carrier when the operating carrier tickets the PNR using paper ticketing. Upon completion of ticketing the operating codeshare PNR, teletype will send an SSR TKNA to the marketing carrier, which will input a T- 20JUN (date ticket was issued by operating carrier), followed by the ticketing information in the marketing carrier’s ticketing field. This will eliminate the possibility of the PNR being cancelled due to a ticketing time limit imposed by the marketing carrier at the time of booking.	
 
 	(z)	Codeshare Flight Default permits the check-in agent to use the marketing carrier code and flight number when defaulting to a flight for check-in.	
 
 	(aa)	The Codeshare Agreement Table is a centralized location of all codeshare tables. This table will give the customer and the Sabre Codeshare representative the ability to view all features that have been activated for any particular codeshare partnership without having to search different codeshare tables.	
 
 	(bb)	Codeshare Numeric Availability Status Messages (AVA) provides the ability for a SabreSonic user to send and receive AVA messages for Availability Status Messaging. AVA is an additional free flow availability message that provides more accurate inventory synchronization between codeshare partners. The availability message is in numeric format that includes all mapped classes of service (RBDs), both public and non-public, for each compartment (F/C/Y). This differs from the standard AVS message, which includes only the classes affected by the change. By including the current availability for all RBDs, there is an inherent control feature that allows the marketing carrier to maintain an accurate availability at all times. This functionality also includes the sending and receiving of AVA Recap Request messages (RVR) and AVA Recap Responses (AVR).	
 
 	(cc)	Guaranteed Sell for Codeshare Flights enables the system to verify availability on the operating carrier’s codeshare flight prior to confirming an inbound booking message from the marketing carrier. This will eliminate the number of codeshare overbookings on the operating carrier’s flight.	
 
 	(dd)	The Automate Codeshare Schedule Change feature will automatically update the SabreSonic hosted marketing carrier’s flights and passengers when an operating carrier’s schedule changes. For Sabre to OA codeshares, this feature will automatically generate a Standard Schedules Message (SSM) to the OA marketing carrier in order to update the marketing flight when the operating flight is created or changed, reducing the number of flights with possible schedules out-of-synch.	
 
 	(ee)	Ticket and Time Limit Notification notifies the booking source when the operating carrier tickets or adds a ticket time-limit to the Passenger Name Record (PNR). This applies to interline and codeshare PNRs. Notification is generated in the form of an SSR TKNE, TKNA, or TKTL.	

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1.4	Command CenterTM Interface	
Command CenterTM Interface is a web based graphical user interface (GUI) giving SabreSonic customers a tool to easily perform the system configuration, table maintenance, and information reporting tasks for functions including: Market Tariff Table; Codeshare configuration and management; Pre-Reserved Seat Map configuration; Agreements management (Ticketing & Baggage Agreements, Credit Card Acceptance agreements, and Frequent Flyer Agreements
 
1.5	Credit Suite	
 
 	(a)	Basic Authorization	
The Credit Authorization (CAS) function provides the carrier the ability to obtain real-time, instantaneous credit authorization for major credit cards accepted as form of payment. Credit card numbers are first validated for accuracy upon input into the system. After that, direct links between SabreSonic and the major credit card associations provide the carrier the means of obtaining a real-time approval code prior to issuance of a ticket. Alternatively, the automated approval code may be substituted by the use of an on-line entry to approve credit prior to document issuance.
 
 	(b)	Credit Suite	
The Data Delivery function (also known as Accelerated Credit Card Billing or ACCB ) allows carriers to accelerate settlement of American Express, Discover, MasterCard, Visa, JCB and Diners Club/Carte Blanche credit card transactions. Credit card settlement data is captured and formatted according to preferences of airline’s credit card merchant bank(s)/processor(s). This information is transmitted “on behalf” of the carrier directly to the bank(s)/processor(s). The data is sent daily, seven days a week, being electronically downloaded into the banks’ accounting systems, and therefore accelerating the process of recovery of credit card revenue by 5-8 days on average, considerably improving airline’s cash flows. Credit card purchases for transportation tickets, as well as refund, exchange and miscellaneous transactions completed through the use of masks can be accelerated. Requires Sabre generated Ticket Number. Sabre supports encrypted FTP/IP connectivity via Internet for the transmission of Credit Suite files. However, in specific cases, a dedicated communications link to the credit processor/bank may need to be installed.
Interchange Optimization (also known as Payment Services 2000 or PS2000 ) represents Sabre’s flexibility to meet local requirements from the card associations, in order to qualify the carrier for the lowest possible discount fees on transactions processed via the Data Delivery product. As an example, in the US, Visa and MasterCard’s “Passenger Transport” qualification requirements are met by the inclusion of additional data fields in the settlement files sent to banks. Specific requirements need to be analyzed on a country by country basis. Magnetic card swipe reader devices may be required. Interchange Optimization programs may require a contractual agreement between the carrier and the card associations.
 
 	(c)	Credit Suite - Fraud Prevention	
Address Verification Service (AVS) is an enhanced fraud tool that verifies that the address in the credit card data field matches the address on file with the card issuer, allowing for more secure transactions. Currently available in the U.S., Puerto Rico and the U.S. Virgin Islands.
 
1.6	Customer Relationship Management Suite	
 
 	(a)	CDD	
Customer Data Delivery – PNR and VCR Data (“ CDD – PNR and CDD – VCR Data Feed ”) enables Sabre hosted airlines to receive structured data files containing normalized host airline Passenger Name Record (PNR) and Virtual Coupon Record (VCR) data. Information on all active PNRs and electronic tickets (VCRs) from airline direct, agency, and other interline booking channels that are active in the host airline database in the Sabre ® Passenger Reservation System after date/time of implementation is included. The data is extracted from the hosted airline database and is transmitted via scheduled batch feeds.
Data will be delivered to Customer via FTP on a daily basis, in flat files, delimited data string format.

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 	(b)	Customer Insight	
Customer Insight is a profile system that can be used as a central repository for customer profiles. The database is located on an open platform and supports flexible data access and update methods: Batch file updates via FTP, manual updates via the Sabre system or the SabreSonic Agent Interface, and a web service interface based on OTA (Open Travel Alliance) standards. The data model utilized provides the ability for hosted airlines to store a wide variety of information regarding their customers, for example: personal information, such as name, contact information and travel document information; air travel information such as customer value score, service needs such as airline seating, meals and class of service, also travel preferences, frequent traveler information and employment information. Frequent Traveler profiles can be used during the booking process to quickly build a Passenger Name Record (PNR) by automatically moving profile information into the PNR with reduced keystrokes and increased accuracy. The reservations and check-in functions integrate with Customer Insight in order to recognize an airline’s most loyal frequent flyer members.
 
 	(c)	Customer Value Calculator	
The Customer Value Calculator is a model which calculates a customer value score for each customer with a profile given a set of airline specified parameters. The application currently consists of three main areas:
 
 	•	 	Parameter Inputs	
 
 	•	 	Graphical Distribution	
 
 	•	 	Parameter Set Management	
The information below contains a description of these specific areas.
Parameter Inputs: The model allows the user to configure three different parameters: Recency, Frequency, and Monetary Value. Recency represents the number of segments flown by a customer in a user specified period of time. This time period is generally short in duration and is used to capture recent travel activity. Similarly, Frequency also represents the number of segments flown by a customer in a user specified period of time. However, the time period for this is generally longer than the Recency time period. For example, whereas the time period of consideration for Recency might be 12 months, the Frequency time period may be 36 months. The final parameter in the model is monetary value. This parameter captures the amount of spend by a customer in a user specified period of time.
The user has the ability to control each of these parameters in three ways: time periods, ranges, and weights. Time periods, as discussed previously, define the time period for which the parameter will be calculated. Ranges give the airline the ability to tier the values for a particular parameter. For example an airline may choose to assign values for recency like:
 
 	•	 	Less than or equal to 2 would indicate a recency score of 0	
 
 	•	 	Between 3 and 6 (inclusive) segments would indicate a recency score of 30	
 
 	•	 	Between 7 and 10 (inclusive) segments would indicate a recency score of 70	
 
 	•	 	11 or more segments flown in the time period would indicate a recency score of 100	
Finally, the airline can set the relative weights of the parameters. For example, recency may compose of 20% of the customer value score, frequency may compose of 30% of the customer value score, and monetary value may compose of 50% of the value score.
Once all of these parameters are set then a customer value score can be calculated for each customer with a customer profile. The user can then save this parameter set under a unique name for further reference.
Parameter Set Management: The third and final area of the Customer Value Calculator is the area of parameter set management. Airlines can have multiple parameter sets with different goals and experiments using the what-if functionality of the model.
The Parameter Set Management area allows users of the system to perform general management functions. This includes viewing, sorting, deleting, and renaming parameter sets. From the parameter set management area, a user can also tell which parameter set is currently loaded in production as well as the next one queued for production if a change has been designated.

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1.7	Interact™ Interface	
Interact is a graphical user interface for airline agents to manage reservations and check-in functions from a single, easy-to-use tool. The Interface supports all native host functionality required for call center or airport agents. In addition, the product provides graphical seat maps, consistent and easy-to-use tab-based navigation, easy-to-read graphical output and the ability to work equally well with or without a mouse.
 
1.8	Net Access™	
Net Access is an internet based emulator solution for airline customers. Airline staff and Global Sales Agents (GSA’s) would use this emulator to access the native Sabre System. It may be used at Reservations offices, City Ticket offices, Airports, or any other location where Sabre access is needed and hardwire is not available. Net Access is intended to address the need for infrequent service (i.e., seasonal or charter), or in non-traditional situations (an airline has a representative stationed on-site at a convention to assist customers). Net Access is offered as an alternate product rather than a replacement for existing Airline Solutions products.
Below are some of the benefits of using Net Access:
 
 	(a)	Increased productivity – easy, convenient, one-stop shopping tool that reduces time consuming research for products and services that are difficult to find today	
 
 	(b)	Low cost – browser based, available 24/7 over any Internet connection	
 
 	(c)	Global – localized at the country and regional level	
 
 	(d)	Customizable – can be configured	
Sabre airlines are utilizing Net Access in the following ways:
 
 	(a)	Global Sales Agents (GSA’s)	
 
 	(b)	Small office environments, such as:	
 
 	(i)	Reservations offices	
 
 	(ii)	City Ticket offices	
 
 	(iii)	Work from Home capabilities	
 
 	(c)	Unique airport needs, such as:	
 
 	(i)	Early start-up service before wiring is installed	
 
 	(ii)	Charter service	
 
 	(iii)	Or other situations where hardwire is too costly or not available	
 
 	(d)	Net Access is distributed via a web link	
 
 	(e)	Because some airlines may have difficulty downloading the emulator due to an internal firewall, a CD will be provided upon request	
 
 	(f)	Net Access provides a low cost alternative to hardware	
 
 	(g)	Connectivity is achieved through the internet and may be connected via any Internet Service Provider (ISP)	
 
 	(i)	No dedicated circuits required	
 
 	(ii)	Eliminates legacy communication connections (x.25)	
 
 	(iii)	Eliminates need for dedicated routers	

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 	(h)	No software to distribute or install	
 
 	(i)	Installation completed by the customer	
 
 	(ii)	Easy to use installation script	
 
 	(iii)	Java is downloaded during the installation process	
 
 	(i)	Supports Sabre host functionality	
 
 	(i)	Includes all standard configuration functions	
 
 	(ii)	Including font size, colors, window display	
 
 	(iii)	Includes support for PF Keys, Quick Keys etc.	
 
 	(iv)	Enables the Interact Airport and Reservations interface to connect to Sabre from a computer with internet access with no dedicated circuits required	
 
 	(j)	Supports point-and-click functionality not available in a regular native Sabre emulator	
 
 	(k)	Supports Sabre ticket, boarding pass, and bag tag printing	
 
 	(l)	System architecture designed for automated updates	
 
 	(i)	No repeat installation required	
 
1.9	Qik® Schedule Interface	
The Sabre® Qik-Schedule™ product is a graphical user interface for airline employees to modify schedules from an easy-to-use tool.
 
1.10	MyFares	
Sabre MyFares offers near-real time fare transmission processing and sales channel targeting to provide increased control over when and where fares are distributed. Fare content can be distributed to specific airline geographic groups, including area, zone, nation, state/province, city/airport and department code. In addition, users have the option to distribute to the extensive worldwide Sabre ConnectedSM agency network. MyFares serves as a supplemental direct fare filing option to ATPCO and SITA fare filings.
 
1.11	Business Intelligence Essential Analytics module	
The SabreSonic Essential Analytics reports module (the “System”) is a separate module of the SabreSonic Business Intelligence product family. It consists of a base set of reports with Customer configurable parameters for narrowing the scope and focus of the reports. Examples of the types of reports included in this reports module are described below (subject to change as the product evolves based on customer input and usage factors):
 
 	(a)	Bookings and Cancellations Reports	
 
 	(i)	Accessible via SabreSonic Airline Community Portal	
 
 	(ii)	Bookings and Last-minute Cancellation Counts / Sources	
 
 	(b)	Market Analysis Reports	
 
 	(i)	Top Markets	
 
 	(ii)	Specific City Pairs, Departure Cities or Arrival Cities	
 
 	(c)	Flight Level Reports	

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 	(d)	Daily / Date Range Perspective	
 
 	(e)	YOY / YTD, QOQ / QTD, MOM / MTD option for Booking Count Report	
 
 	(f)	Segment and Airline O&D Perspective for Booking Reports	
 
 	(g)	Graphic Summary Representations (Pie Chart, Bar Chart)	
 
1.12	SabreSonic® Inventory base inventory option	
SabreSonic Inventory provides airlines flexibility in designing nesting structures by supporting the following:
 
 	(a)	Serial - fare classes nested one into another	
 
 	(b)	SabreSonic Inventory supports advanced point of sale control, including:	
 
 	(i)	Capability to control POS by the IATA EDIFACT standard levels—country, city/airport, agency (IATA ARC number)	
 
 	(ii)	Point of sale search may be serial or hierarchical (based on level of match)	
 
 	(iii)	Additional POS differentiators are duty code and agent sign-in ID	
 
 	(iv)	Point of sale relationships may be defined in a table	
 
 	(v)	Ability to control availability by discrete channels such as off-tariff fares negotiated with travel agencies and online channels.	
 
 	(vi)	Agency blacklists are also supported by SabreSonic Inventory and managed through the point of sale rules.	
 
 	(c)	SabreSonic Inventory supports extensive control of availability through the use of flexible rule-based actions to be taken during the availability process. Controls are provided at the host, market, point of sale and flight number level of detail.	
 
 	(d)	SabreSonic Inventory currently supports the following actions:	
 
 	(i)	Inhibit a fare class – no availability, long sell permitted	
 
 	(ii)	Inhibit a fare class from availability – no availability, no short sell, long sell permitted	
 
 	(iii)	Inhibit a fare class from sell – shows in availability, no sell permitted	
 
 	(iv)	Suppress availability to zero – shows in availability with zero seats, no short sell, long sell permitted	
 
 	(v)	Suppress segment limit – overrides segment limits for all fare classes	
 
 	(vi)	Block availability – applies to all fare classes	
 
 	(vii)	Block sell – applies to all fare classes	
 
 	(viii)	Uninhibited fare class – reverses inhibit for availability and sell	
 
 	(ix)	Uninhibited fare class for availability – reverses an availability inhibit	
 
 	(x)	Uninhibited fare class for sell– reverses a sell inhibit	
 
 	(xi)	Adjust fare class availability with multiplicative and additive factors	
 
 	(xii)	Adjust fare class authorization with multiplicative and additive factors	
 
 	(e)	The following is a list of conditions users can apply to qualify the above actions:	
 
 	(i)	Rule effective and discontinue date	
 
 	(ii)	Frequency (days of the week)	

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 	(iii)	Sales date ranges	
 
 	(iv)	Seasonality (Travel date ranges)	
 
 	(v)	Sale days open restriction (inclusive)	
 
 	(vi)	Sale days closed restriction (inclusive)	
 
 	(vii)	Sale hours open restriction (inclusive)	
 
 	(viii)	Sale hours closed restriction (inclusive)	
 
 	(ix)	Sale date/time open restriction (inclusive)	
 
 	(x)	Sale date/time closed restriction (inclusive)	
 
 	(xi)	Travel departure time bands (times local to point of origin) (inclusive or exclusive)	
 
 	(xii)	Travel arrival time bands (times local to point of destination) (inclusive or exclusive)	
 
 	(xiii)	Routing (or, and, consecutive)	
 
 	(xiv)	Trip type (non-stop, multi-stop direct, online connection, interline connection, 1, 2 or 3 connect points)	
 
 	(xv)	Departure region	
 
 	(xvi)	Arrival region	
 
 	(xvii)	Point of sale (country, city, agency IATA fare qualification rules number)	
 
 	(xviii)	Interline partner carrier code list	
 
 	(xix)	Operational type – normal, funnel, overlap, code share (applies to a segment	
 
 	(f)	SabreSonic Inventory manages waitlist placement using client defined percentage limits, which initiates the waitlist clearance review. SabreSonic Inventory also supports clearance with availability and sell processing.	
 
 	(g)	Note – O&D Controls are not included.	
 
 	(h)	SabreSonic Inventory also supports the following types of AVS generation:	
 
 	(i)	Segment AVS provides the capability to send other airlines and/or CRSs open and close messages for a specific origin and destination without affecting other cities in the line of flight.	
 
 	(ii)	Leg AVS provides the capability to send other airlines/CRSs open and close messages for a specific origin and destination which will open or close other cities in the line of flight.	
 
 	(iii)	Numeric AVS provides the capability to send specific availability levels to other airlines and/or CRSs.	
 
 	(i)	The Schedule Change function furnishes the means to create and alter flight schedules and related elements of data.	
 
 	(j)	The Dynamic Schedule Change function allows the user to add, modify, cancel and reinstate current flight schedules into SabreSonic. These changes are stored in a database and are updated in SabreSonic twice weekly.	
 
 	(k)	The On Demand Schedule Change function allows the user to add, modify or cancel flight schedules and have the updates shown in SabreSonic immediately.	
 
 	(l)	The Schedule Change Passenger Protection Reports are online displays that contain detailed information on the flights and passenger PNRs affected by schedule change reaccommodation. Reports include: Summary of flight numbers and passengers affected; Flight Detail with detailed reaccommodation information for each PNR; Basic Airline Segment (BAS) Display, containing basic airline segment details for each PNR; and Candidate Display, which included a list of protection candidates used by the system to protect a PNR by flight and Record Locator	

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 	(m)	The Extra Sections function allows for the addition of extra flights to the system outside of the schedule change process. Extra sections are used when the market requires an additional flight for a limited operation - i.e.: 1 day or 1 day a week for the next month.	
 
 	(n)	The Charters function enables two ways for charters to be input into the system. Charters input through a schedule change entry appear as any other flight. Charters input with an inventory type entry using a specific flight number range are not shown in city pair availability. Seat maps and seat assignments, boarding passes, positive name match, on-board counts, no-shows and IATA Passenger Name Lists (PNLs) and Add and Delete Lists (ADLs) are provided for charter flights.	
 
 	(o)	The Schedule Change Reaccommodation function is an automated passenger reaccommodation process for passengers affected by schedule change. SabreSonic automatically builds a candidate list for protection where the highest-ranking candidate (flight) is determined and used for the reaccommodation process. The ranking is determined by parameters defined by the carrier. Each carrier can also assign criteria values to passenger PNR’s to determine the reaccommodation order by PNR attributes, such as frequent flyer, class of service, etc. The carriers also have the ability to define limits for flight overbookings during reaccommodation. There are two reaccommodation options an airline can chose to implement:	
 
 	(i)	O&D – Identifies protection for the whole journey, from origin to destination.	
 
 	(ii)	Leg Based – Identifies protection for the affected legs.	
 
 	(p)	The Commuter function provides the ability to designate up to 15 additional airlines as commuters, under the host airline code, by assigning a specific flight number range and using an asterisk in the city pair availability display. Additionally, a message can be appended to flights in order to identify the name of the commuter airline in the city pair availability display. The Encode/Decode table contains the commuter carrier name.	
 
 	(q)	The Automated Overlap Flights function provides an automatic method for inventory control of the shared legs. Specifically, the Automated Funnel Flights function provides an automatic method of updating seats sold for a change of aircraft which results in a connecting flight appearing as a direct flight in city pair availability. The Automated Overlap Flights function allows for the utilization of one aircraft to operate as two flight numbers over a common city pair and automatically decrements inventory when a seat is sold. Overlap flights may or may not be a change of aircraft, which may result in passenger deplaning and enplaning. Only one of the flight numbers will appear in the city pair availability for the common leg.	
 
 	(r)	The Inventory Authorization - Flight Load Predictor (FLP) function is a nightly process used to adjust authorizations of flights. The authorizations specify the number of seats available for sale in each class for a specific period before flight departure date. Manual entries exist to change or override these authorizations. FLP allows the ability to retain authorization levels through a schedule change.	
 
 	(s)	SSM provides the automated message transmission of SabreSonic schedule changes to be generated to another CRS. ASM provides the automated message transmission of adhoc changes to be generated to another CRS, such as flight cancellation, entries changing arrival or departure times, and equipment changes. Available only with Amadeus, Galileo and Worldspan	
 
2.	SABRESONIC® TICKET	
 
2.1	Basic Ticketing	
 
 	(a)	The Inclusive Tour / Bulk Ticketing (ITBT) function allows the pricing and ticketing of inclusive tour (IT) and contract bulk (BT) tours. The ticketing entry prints either IT or BT, as applicable, in the base fare box on the ticket instead of the base fare. Taxes are calculated unless a tax override is used, however no total is printed. For ATB ticket stock, the actual fare amount is printed on the auditor coupon.	

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 	(b)	Ticketing Masks provide an automated method for exchanging tickets and collecting funds for the sale of prepaid tickets, miscellaneous service items and non-transport fees. Requires Sabre generated Ticket Numbers.	
 
 	(c)	The Exchange Ticketing function is an automated process utilizing a mask to complete the exchange transaction. Use of this mask provides exchange information to revenue accounting systems in the Ticket Control Numbers (TCN) off-line file. Data Delivery for exchanges is possible with the mask.	
 
 	(d)	The Paper Ticket Surcharge functionality automatically displays paper ticket surcharges as a “Q” surcharge on the ticket in the fare calculation line, eliminating the need to enter a miscellaneous charge order (MCO) and maximizing the use of electronic ticketing.	
 
 	(e)	The Automated Teletype Prepaid Ticket Advice (PTA) mask is an automated method used to issue a system-generated PTA document and automatically record all PTA data in the Passenger Name Record (PNR). The mask automatically fills with itinerary and pricing information captured from the PNR, the user enters purchaser and other relevant information. SabreSonic edits for required information, calculates totals, prints the PTA document and when applicable, updates the Agent Sales Report.	
 
 	(f)	The Refund mask provides an automated method for users to issue refunds for unused tickets, downgrades, denied boarding compensation, or overcharges. Each refund transaction is performed through a series of user fill-in masks. Upon completion of the transaction, a refund document is issued and the Agent Sales Report is updated. The printed document contains the passenger name, monetary value and a Sabre generated non-transport ticket number.	
 
 	(g)	The Transportation Voucher mask enables users to generate a document that can be used at a later date for airline travel. Vouchers could be used in the case of over sales, as a promotional tool or as a goodwill gesture. The printed document contains the passenger name, monetary value and a Sabre generated non-transport ticket number.	
 
 	(h)	The Miscellaneous Sales mask provides an automated method to collect funds for the sale of miscellaneous service items (i.e.: oxygen, pet kennels, bicycles, change fees, excess baggage charges, etc.) or taxes. The printed document contains the passenger name, monetary value and a Sabre generated non-transport ticket number.	
 
 	(i)	The Ticket Print Routine function provides automated ticket issuance for both automatically priced itineraries and manually updated ticket images. In addition to Automated Ticket and Boarding Pass (ATB1 and ATB2), SabreSonic has several transitional ticket print routines (TAT). Automated ticketing provides qualifiers for group, passenger type, name and segment select and tax-exempt. Automated ticketing is also available for industry/reduced rate ticketing. The ability to exchange tickets is also provided.	
 
 	(j)	The Customer Service Authorization (CSA) function provides airport agents ability to issue automated Customer Service Authorizations (CSA) on ATB ticket stock. The CSA application allows EPR AAA city database updates and systemwide CSA database viewership. Airport agents can issue CSA amenities vouchers for local accommodation or accommodation in other cities. The passengers PNR’s will be updated with historical remarks.	
 
 	(k)	The Sabre Generated Ticket Number (SGTN) function provides ticket numbers generated by SabreSonic from a ticket number range provided by the carrier. SGTN uses a ‘MOD 7’ check digit algorithm for ticket number security. SGTNs are automatically generated to the Agent Sales Report and the Ticket Control Number (TCN) off-line file.	
 
 	(l)	The Universal Charge Coupon function provides an additional coupon which can be signed by the passenger and used as the credit card document to be sent to the customer’s credit card company. The Universal Charge Coupon is offered in ATB1 and ATB2 print routines.	
 
 	(m)	The Agent Coupon - Automated Ticket/Boarding Pass (ATB) function provides an additional copy of the auditor’s coupon.	
 
 	(n)	The Reservations Ticketing function identifies reservation ticketing centers and regional offices in order to separate and distribute reservations ticketed Passenger Name Records (PNRs) by the form of	

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 	payment (credit card or invoice) which is derived from the ticketing field, or by PNR type which is determined by the date of travel. The distribution is accomplished by queuing the PNRs to the reservations ticketing center or regional offices for handling. The reservations ticketing function provides the ability to issue an electronic ticket for travel.	
 
 	(o)	The Reservations Ticketing Print Routine product provides the ability to print invoice name, address and form of payment information, from the remarks section of a retrieved reservations ticketing Passenger Name Record (PNR), in the appropriate places on the reservations ticket and invoice. The Reservations Ticketing Print Routine has ATB2 capabilities.	
 
 	(p)	Agent Sales Report (ASR) provides a method to accurately record all ticketing transactions. ASR records daily ticket sales (manual and Sabre generated), coupon exchanges, checks, cash transaction, all credit card transactions by credit card company and Sabre issued miscellaneous sales, prepaid tickets, vouchers and refunds. All agent sales reports will be sent offline when the station close entry is completed and be available for revenue accounting purposes in an off-line file.	
 
2.2	Electronic Ticketing	
 
 	(a)	The Airline Direct Electronic Ticketing product provides computerized storage of the passenger’s entitlement to travel. The host airline maintains the accountable travel and payment information in a real-time environment. Itineraries with up to 4 segments can be issued electronically. Electronic tickets are retained in the system until seven days after the last flight segment becomes inactive. An inactive status could be flown, refunded or exchanged. If there is at least one active flight segment, the electronic ticket is retained for up to 396 days from the date of the first flight coupon. After all flight coupons have been used, the electronic ticket is retained in the system for 7 days.	
 
 	(b)	The Electronic Ticket Flown Virtual Coupon Record (VCR) contains data from the flown flights of tickets issued by the electronic ticketing product. The VCR is marked as lifted/used when it has undergone post departure processing. A VCR record consists of an individual flown or lifted flight coupon.	
 
 	(c)	The Virtual Coupon Record (VCR) Purged File contains a daily capture of ticket and coupon information for all VCRs being purged from the system.	
 
2.3	Interline Electronic Ticketing	
 
 	(a)	The Interline Electronic Ticketing Sabre function allows a SabreSonic hosted electronic ticketing carrier to use electronic tickets for interline passengers with a non-Sabre hosted carrier. Airline Direct E-Ticketing is required.	
 
2.4	Automated Exchanges and Refunds	
 
 	(a)	The Change Fee Collection feature of the Automated Exchange product gives an airline the ability to ensure change fees are collected, or to waive and document the reason for the waiver. For itineraries changed with the SabreSonic Res System prior to a passenger’s airport check-in, boarding pass issuance is inhibited at time of check-in until the agent either collects the fee or documents the reason for waiver. The requirement of an explanation as well as the legend of waiver codes/ reasons is controlled by the airline via a user updateable table. In order for an airline to inhibit boarding pass issuance when an outstanding fee exists, an airline must use SabreSonic Check-In in conjunction with the Change Fee Collection feature. The use of the Change Fee Collection feature includes the following reports:	
 
 	(b)	Change Fees Collected file – Agent location, date, sine, and amount collected	
 
 	(c)	Change Fee Override report – Agent location, date, sine, reason code and (optional) text explanation of override	
 
 	(d)	The Paper Ticket Capture feature of the Automated Exchange product provides a means to populate the paper ticket database with TCN (Ticket Control Number) data received from ATPCO and Sabre. This allows Customer to view paper ticket images. (Carrier must have signed agreement with ATPO to receive this feed)	

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 	(e)	The Ticket From Price Quote Record feature of the Automated Exchange product extends the airline’s fare validity period to ensure a passenger receives the ticket price they were quoted per each carrier’s criteria in the Price Quote Record Expiration Table.	
 
 	(f)	The Automated Exchanges feature of the Automated Exchange product automates an airline’s process for completing ticket reissues and exchanges, including the ability to address downgrades, denied boarding compensation and overcharges. Mask processing within this product automates the calculation of taxes, fares and ticketing for complex itinerary combinations and enables agents to use published and private fares and override fare rules. When used in conjunction with SabreSonic Check-In, this feature can also automatically notify an agent when an add-collect amount is due and suspends the boarding pass issuance until the money has been collected.	
 
 	(g)	The Automated Refunds feature enables airlines to automate their current manual refund process, including support for the recall of taxes from governments (when appropriate) to expedite the entire refund process.	
 
3.	SABRESONIC® CHECK-IN	
 
3.1	Sabre® ACSTM	
 
 	(a)	The Sabre® ACS™ passenger check-in system facilitates check-in by performing a multitude of functions including most aspects of baggage handling and routing, baggage security, passenger information, passenger check-in, boarding, onboard reconciliation, flight control and post-departure control. ACS helps agent’s process passengers quickly and efficiently by presenting passenger information in a consistent, uncomplicated format with logical entry sequences and graphical representations that expedite the check-in process.	
 
 	(b)	The Automated Bag Tags function allows for the automatic issuance of bag tags as passengers are checked-in. Automatic updates to the Passenger Name Record (PNR) and Passenger Item, with the bag tag number and the final destination of the checked bag(s), are performed. Other features include the ability to modify or cancel the number of bags for previously checked-in passengers. Bag tag numbers are not duplicated for the current flight.	
 
 	(c)	The Automated Boarding Pass feature provides printed boarding passes which contain the passenger name, gate information, departure information, destination, frequent traveler number, sequence number and seat assignment. Boarding pass information will also indicate whether the flight is a codeshare, wet-lease or change-of-gauge segment.	
 
 	(d)	The Baggage Sortation Message function provides reconciliation, license plate (bag tag bar codes), piece count and weight information for the processing of baggage by automated baggage sortation systems. Transfer messaging expedites the transfer of interline baggage, by providing the bag tag information and carrier to the downline station.	
 
 	(e)	The Post Departure Control function transfers flight control, enabling passenger check-in, to downline stations. This function enables updates of Passenger Name Records (PNRs) with no record (NOREC), alternate space, frequent traveler participation, and electronic ticket data. Updates to individual PNRs with boarded and not boarded passenger information is also provided.	
 
 	(f)	The Standby Listings function records the passenger name, time of check-in, destination and desired cabin of service for all airport standby passengers. This function is used to track and accommodate both revenue standby and non-revenue standby passengers.	
 
 	(g)	The Standby by Seniority function allows the option to prioritize employee non-revenue pleasure standby passengers by specific code and company seniority.	
 
 	(h)	The Third Party Handling function allows stations to ground handle other airline’s flights within their own partition/CRT via IATA messaging. PNL/ADL, PRL, and PFS are supported on behalf of third party handling.	
 
 	(i)	The Passport Name List function records and processes passenger passport information for most international flights at the time of check-in. This information is then sent via teletype to the downline	

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 	U.S. Customs station. Passenger emergency contact (PCTC) information is collected at check-in and noted in the Passenger Name Record (PNR) for carrier and U.S. Government uses in case of an incident.	
 
 	(j)	The Automated Passenger Profile System (APPS) profiles those passengers who could be a possible security risk on domestic flights. This system was created in conjunction with a FAA mandate to U.S. carriers. Passengers are ‘scored’ prior to check-in, then again when checking baggage to determine the security risk. Agents are then alerted to perform positive bag match procedures for such passengers prior to the flight’s departure.	
 
 	(k)	Positive Bag Match provides airlines with the ability to display those passengers with checked bags who have not yet boarded the aircraft.	
 
 	(l)	The Pre-cleared Baggage Edit provides the ability to establish when baggage has been cleared through an extraneous device.	
 
 	(m)	The Connecting Passenger Information (CPI) Display Enhancement improves existing connecting information by gathering and including the outbound connecting gate, terminal assignments, and departure times for other Sabre airlines in addition to the host carrier.	
 
 	(n)	The Passenger Information List provides a final list of information used by the flight crew, which contains a list of names and seat numbers of all accommodated first class passengers, a comments field that identifies passengers with special service requests, and members of elite mileage status. Provides ground personnel information and contact numbers, identifies smoking rows and number of meals originally catered for the flight. It also contains a list of all passengers on standby status regardless of whether or not they were accommodated.	
 
 	(o)	Automated Excess Baggage automates calculation and collection of excess baggage fees. Boarding pass issuance is inhibited until the fees are collected or overridden by the agent. Excess Baggage Report is also included.	
 
3.2	EDIFACT Thru Check-In	
 
 	(a)	The EDIFACT Thru Check-in (ETCI) function provides the ability to check-in passengers on other airlines with whom the host carrier has an agreement. Agents can issue and/or reissue boarding passes for an other airline (OA) connection. Additionally, agents can display the OA seat map, change OA seat assignments, transmit manual bag tag edits to the OA for bag security purposes, send Special Service Request (SSR) information directly to the OA as a Passenger Manifest Item (PMF) item and can also display passenger lists.	
 
4.	SABRESONIC® WEB	
Three (3) additional storefronts
Sabre will host a Site for Customer. For purposes of this Work Order, a “Site” means the set of World Wide Web pages hosted by Sabre through which a customer of Customer utilizing the Site may access the Customer’s Reservation data via SabreSonic Web software with incorporated product features set forth in this Work Order. The term “Site” shall include all sites and sub sites.
 
4.1	SabreSonic® Web Functionality	
 
 	(a)	Air Flexibility. User can select a number of options when making travel plans:	
 
 	(i)	Flexible (dates and times are flexible)	
 
 	(ii)	Semi-Flexible (dates are firm but times are flexible)	
 
 	(iii)	Non-Flexible (dates and times are firm)	
 
 	(iv)	Multiple destination	

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 	(b)	Fare Led Pricing. Users who choose the flexible path can select an air itinerary based upon availability for their selected dates or, if they are unavailable, select from available alternate dates for their itinerary.	
 
 	(c)	Corporate Bookings. The SabreSonic Web tool can also be used as a corporate travel booking site for users. With this feature, a user with a Corporate Discount code in their user profile identifies whether they want to make a personal or corporate booking upon commencing the booking process. If the user identifies that they want to make a corporate travel booking, then the system will apply the corporate discount as defined by the CAT25 filing that the Customer has made for the relevant corporation.	
 
 	(d)	Negotiated Pricing. Published fares, negotiated and contract bulk fares filed via ATPCO as well as manually discounted fares can be utilized.	
 
 	(e)	Passenger Types. Adult, Children, Infants with no seat, Infants with seats, Youth, Student, Senior Citizen, and Military fares are available for use.	
 
 	(f)	Class of Service. First, Business, and Economy class of service can be offered.	
 
 	(g)	Guest Login. A user may log into the SabreSonic Web application using their user ID or they may log in as a Guest.	
 
 	(h)	Language. Customer can select their Web site’s language to be in up to twelve existing languages:	
 
 	(i)	American English	
 
 	(ii)	Arabic	
 
 	(iii)	French	
 
 	(iv)	German	
 
 	(v)	Italian	
 
 	(vi)	Japanese	
 
 	(vii)	Portuguese	
 
 	(viii)	Simplified Chinese	
 
 	(ix)	Spanish	
 
 	(x)	Swedish	
 
 	(xi)	Traditional Chinese	
 
 	(xii)	UK English	
 
 	(i)	Users can change their language preference dynamically within the customers booking engine at any time.	
 
 	(j)	Currency. Users can select a currency conversion feature to convert a selected fare/rate to the currency of their choosing.	
 
 	(k)	E-mail confirmation. Users receive an e-mail message after they create a profile, complete a new reservation, or change a reservation in the preferred language established in their profile. If provided, the e-mail address is automatically inserted into the Remarks section of the PNR.	
 
 	(l)	Multiple Payment Options. User payment options are credit card, debit card (PIN-less transactions), invoice or pay-at-retail location(s) cash in airports	
 
 	(m)	Multiple Delivery Options. Customer can offer validated electronic ticketing, pick up at customer locations. Separate addresses can be entered for billing	
 
 	(n)	Delivery Fee Options. Customer can customize the booking engine to charge delivery fees for paper tickets sent to their users. Via email	

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 	(o)	Processing Fee Options. Customer can customize their Web site to charge processing fees for new reservations made by their users.	
 
 	(p)	Member Profile. Users can input their personal travel preferences. The profile stores basic user information and preferences that are used for processing air, car or hotel reservations. Users can edit their profile at any time. Customer can configure whether credit card details are optional or mandatory.	
 
 	(q)	Password Reminder. Registered Web site users/members who forgot their password can follow a link from the customer’s Member Login page to:	
 
 	(i)	Receive their password by e-mail or	
 
 	(ii)	Answer a password reminder question and the user/member is logged into the site.	
 
 	(r)	Credit Card Validation. Users can input their credit card information into their member profile or upon booking a reservation. The booking engine performs a “checksum” validation of the credit card number upon confirmation of the booking. SabreSonic Web can also provide additional security via the Credit Card Security code feature, provided the Credit Suite has been activated by the Customer.	
 
 	(s)	Flight Information. Enables users to check gate and flight arrival and departure information.	
 
 	(t)	Flight Schedules. Flight arrival and departure schedule information is presented to users in a timetable format.	
 
 	(u)	Cancel/View Reservations. Users are provided with a “My Reservations” feature that can be used to view or change their future itineraries. Historical reservations details are also available for viewing.	
 
 	(v)	An upcoming release of SabreSonic Web will also support exchanges of booked itineraries for personal travel. This feature will be available provided that the Customer has implemented Sabre’s Automated Exchange Suite.	
 
 	(w)	Seat Maps. The Customer can enable graphical, interactive seat maps from which the user can select a specific seat assignment after PNR is created. Based on the airplane configuration	
 
 	(x)	Shopping Cart. Users can shop for air travel and place their selection in a “shopping cart” prior to purchase. This stage in the booking process is optional and can be disabled. Other things can be put in the shopping cart related or not related to air travel	
 
 	(y)	Instant Ticketing. SabreSonic Web provides the ability to automate the fulfillment process for E-ticketing eligible PNRs. This feature requires the Sabre Credit Card Authorization module to be activated. Eligible PNRs are also the ones that are paid in retail stores 48hrs later of the reservation.	
 
 	(z)	Miscellaneous Credit Cards. Customer has the option to add up to 5 miscellaneous credit cards. Visa, MasterCard, Amex, Corporate, UATP, for pesos and USD and also the ability to have it in installments (3, 6 months)	
 
 	(aa)	Main Menu Bypass. This allows users to have access via buttons on the customer home page to the “request” air providing them with extremely quick access to shop and book travel.	
 
4.2	Site Manager Website Configuration Options	
 
 	(a)	Logo Branding. Customer can display their logo on their Web site.	
 
 	(b)	Color. The customer can select one of 15 pre-defined color themes, or they can individually define the color parameters for certain GUI elements. Additionally, Customer can upload cascading style sheets for booking engine look and feel.	
 
 	(c)	Business Information. Customers can display their business’ name, address, telephone numbers, e-mail, and hours of operation as page footer on all pages.	

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 	(d)	Banner Advertisement. Two banner spaces are available per section (four sections total) that can be configured by the customer. The customer can provide gif and hyperlink per each banner space.	
 
 	(e)	Hold And Purchase Itinerary. Enables users to hold a booking online and then subsequently purchase travel from the customer’s office or Web site within a specified time period configurable by the customer. Or payment in retail stores	
 
 	(f)	Additional URL’s. Customer may enable five additional URL’s that can be accessed from the SabreSonic Web menu list. Many domains will forward to our Customer home page.	
 
 	(g)	Booking change Fee. This provides the ability to charge change charges for a multiple type reservation and determine the associated fee with each type.	
 
 	(h)	Website Traffic Reporting Tool. Access to Website traffic reports is available via 3rd party vendors such as WebSideStory’s Hit Box, Net Iqs WebTrends and Nedstat’s Nedstat Pro and Sitestat We need OK to put tags on pages for another vendor if necessary. Are this reports included in the quote?. Can we get a demo URL to see what kind of reports they generate? Can we link to emarketing strategies?	
 
 	(i)	http://www.hitboxenterprise.com/	
 
 	(ii)	http://www.Webtrendslive.com/enterprise_default.htm	
 
 	(iii)	http://www.nedstat.com/	
 
 	(iv)	KIOSK CHECK-IN	
 
4.3	Initiate Check In with the following:	
 
 	(a)	Magnetic card swipe. Application will support ATB2 ticket, Credit Card or Frequent Flyer Card in standard Visa/MasterCard CC format.	
 
 	(b)	Record Locator. Match on Last Name	
 
 	(c)	Flight #. Match on First and Last Name	
 
 	(d)	Destination City. Match on First and Last Name	
 
 	(e)	Check-in for single, multiple name records. Up to 7 in reservation	
 
 	(f)	Process up to three segments.	
 
 	(g)	Process for duplicate PNRs. Info card will be generated (same as similar names)	
 
 	(h)	Exit option on every screen. Buttons will be consistent	
 
 	(i)	Display seat map, allow for seat selection and seat changes. Will auto assign if not selected by passenger	
 
 	(j)	Identify undesirable seats on the seat map. Seats by exits, etc.	
 
 	(k)	Seat selection origin and connecting flight	
 
 	(l)	Exit row seating – provide disclaimer. Need Customer text for disclaimer	
 
 	(m)	Allow frequent flyer data entry	
 
4.4	Boarding Pass /Bag Tag Print functionality	
 
 	(a)	Bar Code on boarding pass. IATA BCBP compliant	

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 	(b)	Print boarding pass for origin and connecting flight, passenger name, FFP number, seat, departure and destination city	
 
 	(c)	Print dept city and time plus arrival city, time	
 
 	(d)	Print additional information card. For example, Lounge Invitation (if applicable)	
 
 	(e)	Restrict to maximum number of bags at check in. If more than 3, see agent prompt	
 
 	(f)	Ability to turn off bag function. Configurable by unit	
 
 	(g)	CUSS Compliant. Requirement for standard installation	
 
 	(h)	Same Day Return Check-in	
 
 	(i)	EDIFACT Through Check-In. If enabled in Host	
 
5.	MOBILE CHECK IN	
The SabreSonic Check-in Mobile Check-in application will enable passengers to perform check-in functions on their mobile phone and wireless devices.
The goal of this project is to provide a smooth, seamless, simple and easily understood process flow for passengers utilizing Mobile devices to check-in for a flight departing today or tomorrow. Through a series of screens, the passenger will be prompted through the ability to:
 
 	(a)	Indicate they desire to check-in	
 
 	(b)	Input required data	
 
 	(i)	Flight number	
 
 	(ii)	Departure city or airport code	
 
 	(iii)	Last name, first name	
 
 	(iv)	Record Locator (Sabre or Other GDS)	
 
 	(c)	Respond with name(s) list, or single name match for party of 1	
 
 	(i)	User will select name(s) from list	
 
 	(ii)	User will select Gender Type (only ACSI)	
 
 	(iii)	Display Itinerary in subsequent page.	
 
 	(iv)	Option to Add FF Number to the PNR.	
 
 	(v)	Option to Add APIS data for International Flights	
 
 	(vi)	Display seat map for subsequent seat selection	
 
 	(d)	Respond with ‘check-in successful’	
 
 	(e)	Display Boarding Pass Page with 2D barcode	
 
 	(f)	Option to Save the Boarding Pass on the Mobile as device Image.	
 
 	(g)	Option to Email the Boarding Pass	
 
6.	ROVING AGENT CHECK IN	
The SabreSonic Check-in Roving Agent Check-in module is a web-based airport check-in application that employs a mobile, hand-held PDA device and printer, HTML browser-based software and connectivity to an

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airline host partition. This module provides airport staff with mobility and flexibility to move from behind gate and ticket counters to assist customers with check-in and other flight-related processes. Key functionality includes:
 
 	(a)	Secure log-in with agent id and password	
 
 	(b)	Access to Customer flight information, including: Flight status retrieval (gate, ETA, ETD)	
 
 	(c)	Domestic Flight check-in, including:	
 
 	(i)	Single, Multiple passenger check-in by PNR lookup (up to 9 passengers in the same PNR and 3 segments)	
 
 	(ii)	Similar names list display and check-in (based on first letter of passenger last name and flight number)	
 
 	(iii)	Seat map display and Seat selection for the first segment	
 
 	(iv)	Boarding pass issuance (thermal printer paper, bar-coded boarding pass). Print branded fare and fare class. Also should be able to print text configurable to Customer	
 
 	(d)	Other functions include	
 
 	(i)	Add FF number functionality	
 
 	(ii)	Statistics	
 
 	(iii)	Bagtag Printing to host addressable printer	
 
 	(iv)	Re-print of thermal paper boarding pass by selection of passenger at passenger details display	
 
 	(v)	Ability to offload a passenger	
 
7.	WEB CHECK IN	
 
7.1	Web Check-In Application	
 
 	(a)	Airline branding. Per Customer requirements (header, footer, Customer verbiage, colors, home web page link, font size, modify buttons per Customer requirements)	
 
 	(b)	Integration with SabreSonic Web. Where applicable	
 
 	(c)	Data Capture for transaction logging. Departure Time, Record locator line to identify booking source	
 
 	(d)	Initiate check-in with the following:	
 
 	(i)	Passenger Name, Flight #, Departure City, First and Last Name, or	
 
 	(ii)	Passenger Name, Record Locator, Match on RLOC, or	
 
 	(iii)	Frequent Flyer Number, Match on FFP#, VCR	
 
 	(e)	Should be able to sell rows when defined that (for example) the exit row is $X more if you choose that seat. Cabins must be defined and could have different prices for a window seat that a middle one.	
 
 	(f)	Should be able to sell some ancillaries (before printing pass) online using credit cards	
 
 	(g)	The boarding pass (html) should be able to be configurable by Customer to make changes	
 
 	(h)	Webcki could be enable for some routes but not necessary all. This should be configurable by Customer (defined by airports, by international/national flights, etc)	

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7.2	Check-in Parameters	
 
 	(a)	Flight window configuration. Normally set for 24 hrs – 90 minutes	
 
 	(b)	Display seat map. Disallow seat selection for 1st row of seat map	
 
 	(c)	Identify children & infants. Inhibit passenger check-in with PLUS INF	
 
 	(d)	Check-in for single and multiple name records. Up to 7 in reservation (based on screen size and presentation format)	
 
 	(e)	Process up to three segments	
 
 	(f)	Process for duplicate PNRs. Info card will be generated (same as similar names)	
 
 	(g)	Identify open seats, allow seat changes	
 
 	(h)	Seat selection origin and connecting flight	
 
 	(i)	Single/multiple name records	
 
 	(j)	Exit row seating – provide disclaimer. Need Customer text for disclaimer	
 
 	(k)	Same day return check-in. According to system, Customer parameters	
 
7.3	Boarding Pass Print Parameters	
 
 	(a)	Print e-ticket # on boarding pass. Per Customer requirements	
 
 	(b)	Print carrier code on boarding pass	
 
 	(c)	IATA BCBP Bar Code on boarding pass	
 
 	(d)	Print boarding pass for origin, connecting flights	
 
 	(e)	Print customer name, seat number	
 
 	(f)	Print branded fare and fare class	
 
 	(g)	Print text configurable by Customer	
 
8.	SABRE® AGENCY ACTIVITY	
The Agency Activity system is composed of two main modules. The Customer Access module provides access to account information by corporations. The Airline Administration module provides access to customer data and program rules by customer service agents and marketing analysts.
 
8.1	Customer Access Module	
The Customer Access module is offered as a multi-language web site that is branded with the look and feel of your airline’s web site. With secure account access and a user-friendly interface, the Customer Access module provides the following features:
 
 	(a)	Enrollment. Corporate enrolment can be direct or by invitation. A corporation is defined as either a business or travel agency. The enrolment pages can be offered to the end user in their preferred language and communicates the terms and conditions of the program.	

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 	(b)	Profiles. The profile contains the corporation’s, associated travel agencies and account administrator’s details. Data collected about the company can be mandatory or optional. Information can be changed by the user at any time once they have logged in.	
 
 	(c)	Account Statements. These monthly statements provide details of transactions, both accrual and redemption, in an easy-to-read layout. Clickable links provide detailed transactional information.	
 
 	(d)	Program Feedback. ¬Users can provide feedback and ask questions about the program via two links. Contact Us and the Feedback Form let users interact with the airline, if desired, in an easy-to-use online format, helping to reduce calls to the airline customer care center.	
 
 	(e)	Customer Touch Points. A number of options are available that let you communicate with your customers either through rules that trigger an e-mail or via the e-mail tool that enables you to send emails to a group of users or all users keeping them informed of new program features or other marketing information.	
 
8.2	Airline Administration Module	
The Airline Administration module consists of six sub-modules.
 
 	(a)	Translation. The translation tool enables airlines to dynamically change the text on the Web site to the chosen language. You can input text in the languages presented to your users differing per market or use the entered default text in all markets. The translation tool supports double-byte characters and non-Western languages.	
 
 	(b)	Multi Level Security Access. This sub-module enables airlines to control access to the administration module on a per tool basis. The tool let you provide overall access or access to just one tool within the administration GUI. This allows the airline to grant access to various site functionality based on the needs of different groups within the airline, such as reporting or the ability to update text on the Web site without allowing access to all of the tools.	
 
 	(c)	Promotions. This set of tools provides the ability to set up promotions such as a bonus for users when they join the program based on travel information such as class of travel, date of travel or origin and destination. Promotion rules can be set within each tool, and each promotion can be offered in all or specific markets.	
 
 	(d)	Revenue Growth. This sub-module provides the airline with the ability to set revenue growth targets either by market or corporation. Additional accrual can apply if target levels are reached.	
 
 	(e)	Account Administration. This sub-module provides airlines with the ability to log into an account in read-only mode to assist the end user, add/deduct credits to an account and view profile information and a list of sold tickets associated with the selected account. Agency account configurations such as commission and tax on commission levels, whether credit is extended or not and the credit limit, credit card payment only details and the GSA (general sales agent) associated to an agency.	
 
 	(f)	Credit Limits – the airline allocates a credit limit to the agency and once the credit limit is reached no further sales can be made where the agency is using a distribution channel that has real time integration. The airline is alerted when an agency reaches their credit limit. The agency is alerted when they are within a % of using their available credit. An airline would typically set the credit limit in line with a financial guarantee that they have in place with the agency. On an agreed timetable the statement will generate to the account in the form of an invoice for payment to the airline.	
 
 	(g)	Pre paid accounts – if the currency is monetary, funds can be deposited in a travel agency account when the agency makes a payment to the airline. Sales are then decremented against that prepayment. Both the agency and the airline are advised when the agency is with a % of using all available funds. This allows an airline the ability to receive an upfront payment and deposit those funds for future purchases.	
 
 	(h)	Credit card – transactions completed by credit card (airline must be the merchant on the card) must be settled through the airlines credit card vendor. However the system allows tracking of the sale and calculates the commission owed to the agency by the airline.	

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 	(i)	Direct Communications. This email module allows the airline to send bulk or individual marketing or program e-mails to agencies or corporations based on selected criteria. To begin with this tool is only for sending the confirmation of the reservation, recommendation for travel, conditions, etc. Email marketing is currently handled in another tool.	
 
 	(j)	Reports. The report sub-module offers the ability to run reports based on all of the information gathered within the program.	
 
 	(i)	Liability Report – This report provides the airline with current account balances for agencies based on a given date.	
 
 	(ii)	Manual Transaction Report – This report provides the airline with a detailed list of all of the airline agent instigated manual transactions, both debit and credit, by airline agent or account for a specified date range.	
 
 	(iii)	Refund Report – Specific information on refunds is available via this report.	
 
 	(iv)	Daily Transactions Report – provides a report of all the account transactions processed for a 24 hour period	
 
 	(v)	End of Reporting Period Report – provides a report by account for the billing period that shows the revenue generated commissions and tax on commissions and net amount due to the airline or agency.	
 
8.3	System Interfaces	
 
 	(a)	Web Services – These services interact with the Agency Activity system and provide the airline with the ability to connect other applications to the data.	
 
 	(i)	Create Account	
 
 	(ii)	Update Account profile	
 
 	(iii)	Balance Request	
 
 	(iv)	Hold Funds	
 
 	(v)	Purchase Transaction	
 
 	(vi)	Refund Transaction	
 
 	(vii)	Void Transaction	
 
 	(b)	The web services is not only for agencies. We use it also for integrators (for vacation packages)	
 
 	(c)	In web services we need the selling process in fare families and multicurrency with different payment types (credit card, credit of the organization, and payment in retail stores)	
 
 	(d)	To access the web services the partner of Customer will need a VPN to our network and from there access the web services	
 
 	(e)	We need the change process in this distribution method.	
 
 	(f)	We need to identify sales in web services in a report	
 
 	(g)	Data Import and Export – The Agency Activity system collects the airlines output file, GDS files or BSP file via FTP on an agreed timetable from daily to monthly, depending on requirements, and processes the batch file to the agency accounts.	
 
 	(i)	Sales Revenue data import processes the transactions received based on a sale. Rebates or commission are calculated on the ticket sale or refund.	
 
 	(ii)	Payment data import processes the payment transactions for an account.	
 
 	(iii)	Balanced HOT file is produced and sent to the airlines FTP server for upload to the airlines Revenue Accounting system.	
 
 	(iv)	Profile extract, in IATA layout, is sent to the airlines FTP server for upload to the Revenue Accounting system. The Daily file contains incremental updates and the fortnightly file contains all profile data.	

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9.	SABRE® CORPORATE LOYALTY	
The Corporate Loyalty system is composed of two main modules. The Customer Access module provides access to account information by corporations. The Airline Administration module provides access to customer data and program rules by customer service agents and marketing analysts.
 
9.1	Customer Access Module	
The Customer Access module is offered as a multi-language web site that is branded with the look and feel of your airline’s web site. With secure account access and a user-friendly interface, the Customer Access module provides the following features:
 
 	(a)	Enrollment. Corporate enrolment can be direct or by invitation. A corporation is defined as either a business or travel agency. The enrolment pages can be offered to the end user in their preferred language and communicates the terms and conditions of the program.	
 
 	(b)	Profiles. The profile contains the corporation’s, associated travel agencies and account administrator’s details. Data collected about the company can be mandatory or optional. Information can be changed by the user at any time once they have logged in.	
 
 	(c)	Account Statements. These monthly statements provide details of transactions, both accrual and redemption, in an easy-to-read layout. Clickable links provide detailed transactional information.	
 
 	(d)	Award Redemption . Approved users are able to make redemptions based on the awards that an airline offers. Flights, upgrades, vouchers and partner offerings are all possibilities. A variety of fulfillment options to match the award offerings include online flight redemption via SabreSonic™ Web, eCertificates, third-party vendors or call center integration. Users can choose the award that provides the best value and suits their needs.	
 
 	(e)	Program Feedback. ¬Users can provide feedback and ask questions about the program via two links. Contact Us and the Feedback Form let users interact with the airline, if desired, in an easy-to-use online format, helping to reduce calls to the airline customer care center.	
 
 	(f)	Customer Touch Points. A number of options are available that let you communicate with your customers either through rules that trigger an e-mail or via the e-mail tool that enables you to send emails to a group of users or all users keeping them informed of new program features or other marketing information.	
 
9.2	Airline Administration Module	
The Airline Administration module consists of six sub-modules.
 
 	(a)	Translation. The translation tool enables airlines to dynamically change the text on the Web site to the chosen language. You can input text in the languages presented to your users differing per market or use the entered default text in all markets. The translation tool supports double-byte characters and non-Western languages.	
 
 	(b)	Multi Level Security Access. This sub-module enables airlines to control access to the administration module on a per tool basis. The tool let you provide overall access or access to just one tool within the administration GUI. This allows the airline to grant access to various site functionality based on the needs of different groups within the airline, such as reporting or the ability to update text on the Web site without allowing access to all of the tools.	
 
 	(c)	Promotions. This set of tools provides the ability to set up promotions such as a bonus for users when they join the program based on travel information such as class of travel, date of travel or origin and destination. Promotion rules can be set within each tool, and each promotion can be offered in all or specific markets.	

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 	(d)	Revenue Growth. This sub-module provides the airline with the ability to set revenue growth targets either by market or corporation. Additional accrual can apply if target levels are reached.	
 
 	(e)	Redemptions. This module allows for the setup of the awards being offered. Select the category, add a picture if needed and nominate the value required to redeem the award. Awards can be offered in all markets, or you can select the markets in which a particular award is offered, including setting different redemption levels per market.	
 
 	(f)	Account Administration. This module provides airlines with the ability to log into an account in read-only mode to assist the end user, add/deduct credits to an account and view profile information and a list of flown tickets associated with the selected account. The Outbound Email Tool lets the airline send bulk e-mails to program members based on selected criteria.	
 
 	(g)	Direct Communications. This eMail module allows the airline to send bulk or individual marketing or program e-mails to agencies or corporations based on selected criteria. The initial use will be for sending the confirmation email. Email marketing is used with a specialialized tool	
 
 	(h)	Pre-Paid Accounts. If the currency in an account is monetary, funds can be put in a travel agency or corporate account using this module. This allows an airline the ability to receive an upfront payment and deposit those funds for future purchases.	
 
 	(i)	Reports. The report module offers the ability to run reports based on all of the information gathered within the program.	
 
 	(i)	Survey Results – This report provides an overview of the answers to the survey questions per market asked by the airline during the enrollment process.	
 
 	(ii)	Liability Report – This report provides the airline with current account balances for corporations based on a given date.	
 
 	(iii)	Manual Transaction Report – This report provides the airline with a detailed list of all of the airline agent instigated manual transactions, both debit and credit, by airline agent for a specified date range.	
 
 	(iv)	Credits Report – With this tool, you can run a report that considers the overall accrual of program currency either across the entire program, by market or by corporation. The report can be queried on different groupings to provide snapshots based on profile information.	
 
 	(v)	Ticket Report – Specific accrual of flown tickets are viewable through this report. Reports can be run based on classes of travel, city pairs or bonus accruals based on the information captured for the net flown revenue of the company.	
 
 	(vi)	Debits Report – This report allows for view of redemptions made by corporations and manual debits made by airline agents.	
 
 	(vii)	Refund Report – Specific information on refunds – available only when integration with SabreSonic Web – is available on this report.	
 
9.3	System Interfaces	
 
 	(a)	Corporate Loyalty Web Services. These services interact with the Corporate Loyalty system and provide the airline with flexibility to integrate with their internal systems	
 
 	(b)	Call Center Module. This module enables award-redemption interaction with your call center. Redemptions are placed on queue within a Corporate Loyalty GUI, and the call center staff can action their designated queue. Built-in supervisor monitoring and Service Level Agreement performance provide additional monitoring of service levels.	

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 	(c)	SabreSonic Web and Interact. This product provides integration for online award redemption. Flights can be booked and paid for with corporate credits	
 
 	(d)	Revenue Data Import. The Corporate Loyalty system automatically picks up the airlines output file of flown revenue on an agreed timetable from daily to monthly, depending on requirements, and processes the flown revenue to the corporation or agency accounts	
 
9.4	Host Frequent Traveler	
 
 	(a)	The Passenger List (manifest) displays a frequent flyer name list, the record locator and any top tier members for all SabreSonic hosted frequent flyers on a specified flight and date.	
 
 	(b)	The Banners and Tags in Passenger Name Record (PNR) function displays headers at the top of the PNR which identify frequent traveler top tier members. In addition, a 3 character “tag” is displayed in the frequent flyer (FF) field of the PNR designating the specific tier and is used for internal processing to recognize tier status for functions such as pre-reserved seat blocking, waitlist processing or automated upgrade and redemption priority, print frequent traveler number and top tier tag on the boarding pass.	
 
 	(c)	Block Adjacent Pre-reserved Seats (PRS) Provides the ability to block the adjacent seat or row next to a frequent traveler member when assigning advance pre-reserved seats.	
 
 	(d)	The FQTV Number Validation Algorithm function is performed when the frequent flyer number is entered into the Passenger Name Record (PNR) or while creating a Frequent Traveler Profile. This algorithm is either a ‘MOD 7’ or ‘MOD 10’ check digit routine that ensures the frequent flyer number entered is valid. An error message is displayed when an incorrect number is entered.	
 
 	(e)	The Name/Number Match function matches the name on the frequent flyer account against the name in the passenger name record (PNR) when the number is added to the PNR. An error message is displayed if the last name and first initial of the name in the PNR does not match the name on the frequent flyer account.	
 
 	(f)	The Frequent Traveler Post Departure Off-line File contains frequent flyer and flight segment data extracted from Passenger Name Records (PNRs). The file contains data for each flown segment and all actions taken during post departure processing. A Frequent Flyer Off-line File Record equals one line of data in the file. Each record is one passenger on one flight plus a record total line at the end of each file.	
 
 	(g)	The Name Search function allows agents to search the database for the customer’s frequent flyer number by name. A file transfer process is required to populate the Frequent Traveler (FQTV) database for this functionality.	
 
 	(h)	The Restricted Line Display function displays additional account information such as the frequent flyer’s enrollment date, number of miles in account, the last award issued and any lounge memberships.	
 
 	(i)	Instant Enrollment functionality provides convenience to a new member who enrolls in the airline’s frequent flyer program over the phone or during check-in, so the new member can begin accruing mileage immediately, without filling out an enrollment form	
 
 	(j)	The Automated Upgrade functionality allows airlines to define their unique business rules to be used to automatically process upgrade requests for frequent traveler members.	
 
 	(k)	Re-accommodation functionality allows the airline to manage the re-accommodation process based on tier level information of the traveler.	
 
 	(l)	Waitlist Clearance gives the airline the ability to manage the order of processing the waitlist based on tier level information of the traveler.	

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10.	SABRE® VIRTUALLY THERE®	
Sabre® Virtually There™ provides a personal travel web site with real-time itinerary, travel information and destination content for the carrier’s travelers.
Features include: Personal travel plans available 24 hours a day, 7 days a week; Online travel documents include current itinerary and eTicket Receipts; Airline branding displayed on site and provides the ability to link to the airline Web site; Automated delivery of the itinerary and other travel information through a hyperlink in an e-mail message. Should also include weather service to the place the client travels, other content that could be added and maintained by Customer. Airport information and destination information. Also we could add banners depending of client itinerary (if going to Cancun a banner of Cancun restaurant or hotels).
Itinerary should be dynamic, this means that we could send an itinerary with different banners depending on the customer, origin and/or destination. Also based on language.
 
11.	SABRE® ENTERPRISE MOBILE SERVICES	
Sabre® Enterprise Mobile Services leverages the direct access to real-time, Customer traveler itinerary information which is hosted by Sabre in addition to the Sabre Enterprise Mobile Services (EMS) messaging platform.
Travelers will have messaging coverage globally as the EMS platform includes over 600 wireless carrier providers worldwide to ensure that real-time, SMS messaging to traveler’s mobile devices is accurate and timely.
Sabre® Enterprise Mobile Services includes:
 
 	(a)	Real-time monitoring of traveler itineraries.	
 
 	(b)	Trip reminder messaging in advance of flight departure.	
 
 	(c)	Flexibility for travelers to choose which flight interruptions they wish to be alerted for. Options include flight delays, flight cancellations and terminal/gate changes.	
Traveler has ability to choose whether they wish to receive a SMS text message or email or both for their flight notification alerts.
This needs to have the ability to charge for a service (ex: SMS) and only those who have paid they get the service.
 
12.	REVENUE INTEGRITY MANAGER	
System(s) provided under the Work Order include the following:
The Revenue Integrity product is a hosted solution provided by Sabre to help airlines with flight firming and ensure that seat availability is not wasted. Airlines routinely lose valuable dollars through unnecessary spoilage of seats, caused by expired ticket time limits, duplicate segments in a PNR, etc. as it is a very cumbersome and time consuming task to search for such PNRs.
The Revenue Integrity product provides an automated way to search for undesirable PNRs using data available in our off-host PNR storage warehouse. The advantage of searching on Sabre’s off-host PNR storage warehouse is that host partition access is minimized, thus saving on expensive message count hits.
A user may configure which PNRs are processed and actioned using configurable business rules. The system also provides the capability for the user to status their own particular processes at any time. Status will show the time that the process initiated and completed, as well as the number of PNR’s processed up to that point. The system also provides the capability for users to view their own results data in a report form online via HTML web pages and/or be exporting to MS EXCEL.
Note: Revenue Integrity provides nine (9) of the pre-defined processes (as documented below), which the airline can choose to configure and run via the Command GUI.

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The following is a description of all nine of the current Revenue Integrity pre-defined processes to choose from:
 
 	(a)	Ticket Time Limit Processing. The “Ticketing Time Limit” process aims to minimize the effects of agents who book seats without ticketing the bookings. Agents do this to ‘keep hold’ of a seat. There are a variety of reasons why they might do this. They might do this in good faith because a passenger needs a little bit more time to confirm and pay for the booking. Alternatively, they might do this in bad faith to block off seats on a flight with the expectation that they will be able to sell these seats closer to the date of departure.	
 
 	(b)	Duplicate Segment Processing (in the same PNR). The “Duplicate Segment” process aims to minimize the effects of agents who book multiple segments with the same origin and destination and the same departure date (or a date within 1 day of each other) in the same PNR. Agents might do this to allow a customer to hedge their bets.	
 
 	(c)	Duplicate PNR Processing (across multiple PNRs). The “Duplicate PNR” process aims to minimize the effects of agents who book multiple segments with the same origin and destination and the same departure date (or a date within 1 day of each other) for the same passenger in different PNRs.	
 
 	(d)	Passive Segment Processing. The “Passive Segment” process aims to reduce GDS costs associated with abusive use of passive segments. It should be noted that a segment that is booked as a passive segment results in GDS costs for the airline unless cancelled promptly. Note Pre-requisite: Airlines must have the Passive Segment Notification feature activated in the SabreSonic host system in order to use this Revenue Integrity process.	
 
 	(e)	Fictitious Booking Processing. The “Fictitious Booking Process” aims to minimize the effects of agents who make bookings with closely similar names, fictitious names (Mouse/Mickey, Test, etc). There are normally two sources of fictitious bookings, abusive agents or developers working in the airline industry who are testing their software. Abusive agents create fictitious bookings in order to block off seats on a flight with the expectation that they will be able to sell these seats closer to the date of departure, or to earn GDS credits. Developers often forget to remove fictitious bookings after their testing is complete and are also a source of unnecessarily blocked seated availability. Note: This process requires the Airline to provide a list of any known fictitious names (i.e. names possibly used for testing purposes and / or those names known as frequently used by travel agencies to hold space) and upload that list into the Revenue Integrity system. Once the airline’s list is uploaded, the Revenue Integrity application will run its search and matching criteria against that data to determine possible fictitious / duplicate names used within PNRs.	
 
 	(f)	Fictitious Ticket Number Processing . The “Fictitious Ticket Number Process” aims to minimize the effects of agents who create bookings and then pretend to ticket them in order to avoid cancellation of the booking after the ticketing time limit. Agents do this to ‘keep hold’ of a seat so that they will be able to sell these seats closer to the date of departure. The “Fictitious Ticket Number” check does a search on a ticket number match against a list that the airline has created (.csv or .txt) and uploaded into the revenue integrity tool. Note: This process requires the Airline to provide a list of their known fictitious ticket numbers and upload that list into the Revenue Integrity system. Once the airline’s list is uploaded, the Revenue Integrity application will run its search and matching criteria against that data to determine possible fictitious ticket numbers found in all PNRs.	
 
 	(g)	Special Passenger Processing. The “Special Passenger Process” is used to check for PNRs that contain passengers that the airline wishes to flag at the time of booking. This can include VIP or restricted passengers. The “Special Passenger” check does a search on a name match against the special passenger list(s) that the airline has created (.csv or .txt) and uploaded into the revenue integrity tool. Note: This process requires the Airline to provide a list of their known “special passenger names” and upload that list into the Revenue Integrity system. Once the airline’s list is uploaded, the Revenue Integrity application will run its search and matching criteria against that data to identify a list of PNRs that match known “special passengers” so the airline can then action as needed.	
 
 	(h)	Restricted Credit Card Processing. The “Restricted Credit Card Process” is used to check for PNRs that contain bookings made with a credit card that the airline has restricted. The “Restricted Credit Card” check does a search on credit card numbers against a restricted credit card list that the airline has created (.csv or .txt) and uploaded into the revenue integrity tool. Note: This process requires the Airline to provide a list of their known restricted credit card numbers and upload that list into the	

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 	Revenue Integrity system. Once the airline’s list is uploaded, the Revenue Integrity application will run its search and matching criteria against that data to determine possible matches of PNRs that contain identified restricted credit card numbers	
 
 	(i)	Auto Teletype Reject Message Queue Processing. The “Auto Teletype Reject Queue Process” offers a configurable robotic application to automatically work a vast majority of an airline’s teletype reject messages on a queue. This process allows a set of User-configured rules to be applied to each teletype reject message type. Each TTY message is read as it falls on the carrier-specified queue and is then actioned according to the rules defined by the User. Although 100% of all teletype reject message scenarios cannot be automatically processed, airlines can now automate the processing of a significantly higher percentage of the most common reject scenarios and reduce the amount of resources previously allocated to manually work TTY reject queues.	
 
12.2	Newly Developed Revenue Integrity	
The Revenue Integrity System will include the newly developed Revenue Integrity processes and enhanced process capability upon Customer’s cutover including:
 
 	(a)	Enhancement to the Fictitious Ticketing process. Sabre agrees to enhance the existing Fictitious Ticket Process to contain an “embedded list of known lost and stolen ticket numbers (from ARINC subscription list) and also do automatic comparison with all ticket numbers previously shown as issued in Customer Sabre partition PNRs. Note: Customer must subscribe to ARINC Lost and Stolen Ticket Number data solution.	
 
 	(b)	New Watchlist Fraud Detection Process. The new Revenue Integrity Watchlist Fraud Protection process will be created to augment the Sabre host Watchlist process that matches on name only. The new Revenue Integrity Watchlist Fraud Protection process will work 24 X 7 in addition to the host Watchlist process and will enable the airline to enter additional elements into a Table that will be used to better identify potential scenarios of traveler fraud. A User will enter elements specific to a known traveler name into a Revenue Integrity Table that automatically sends that Table content to Sabre Traveler Data Warehouse to use in search and comparison to return PNRs that match on specific elements. Customer can have the process automatically queue place PNRs to one or multiple queues so that different actions can be taken based on which element(s) is /was matched. Elements used for matching that Customer can input into the Table will include:	
 
 	(i)	Passport number	
 
 	(ii)	Address	
 
 	(iii)	Date of birth	
 
 	(iv)	Email address	
 
 	(v)	Phone number	
 
 	(vi)	Origin and Destination	
 
 	(vii)	Credit card number	
 
 	(viii)	Name	
 
 	(ix)	IP address if known from past or present booking	
 
 	(c)	New Credit Card Fraud Check Process. This new process will work behind the scenes (To be determined if this can be done before ticketing on every ticket or right after issuance on some tickets) – this process will need to read the BIN number on the credit card (first 6 digits of the credit card tells type of credit card and the specific bank that issued the card) and the process will call a table or use a web service to send a message to the specific bank to validate if the card owner did in fact purchase a ticket with this credit card number. Credit Card company will contact card holder and if the bank verifies that the card holder did not purchase the ticket, the process will receive a response (possibly via web service – To be determined) and the process will email a specific airport contact based on the email address Customer provides for all Airport locations to prevent passenger boarding.	

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 	(i)	An additional part of this process needs to support other responses from the Credit Card Company such as notification that the card number in question is approved, declined, reported as stolen / hot, or to pick up the credit card and prevent use.	
 
 	(ii)	Also as part of the new credit card fraud protection capability, this process will include the ability for Customer to set a “credit card charge limit or threshold”. This will enable the system to alert Customer staff when multiple charges on the same day or over a set period of time occur on the same credit card number and exceed a pre-specified dollar amount. Example is to find same credit card charged multiple times and prevent any additional charges once the dollar amount totals XX amount. (I.e. Limit charges to same credit card in a day to no more than USD$4000. (Customer to instruct threshold amount.)	
 
 	(d)	Enhancement to the Duplicate PNR and Duplicate Segment Processes. An enhancement will be completed to enable the process to look for additional elements to determine true duplicate including the addition of using name, credit card number and ticket number and coupon number, and even fake email addresses such as viajes@yahoo.com , viajes@hotmail.com (as an examples) Other example is that this process must have the ability to find and extract all PNRs with the same credit card numbers and different names. Goal is to allow Customer to find PNRs with patterns of duplication when PNRs are booked and / or on day of departure – as close to flight time as possible.	
 
 	(i)	An additional Customer requirement that will be met upon cutover through this process is to allow this process to search and identify “duplicates” on the same day that occur more than FOUR times – such as … find all purchases or “buys” that are made on the same day either by same passenger name, or where same credit card has been used for payment, searching all points of sale.	
 
 	(e)	Auto Teletype Reject Message Queue Processing. The Auto Teletype Reject Queue Process offers a configurable robotic application to automatically work a vast majority of an airline’s teletype reject messages on a queue.	
 
 	(i)	This process allows a set of User-configured rules to be applied to each teletype reject message type. Each TTY message is read as it falls on the carrier-specified queue and is then actioned according to the rules defined by the User. Although 100% of all teletype reject message scenarios cannot be automatically processed, airlines can now automate the processing of a significantly higher percentage of the most common reject scenarios and reduce the amount of resources previously allocated to manually work TTY reject queues.	
In addition, Customer is entitled to the following new processes planned for delivery in 2010 for the entire Revenue Integrity Community including:
 
 	(a)	Group Booking Management Process. The Group Booking Management Process will assist Customer in managing group travel PNRs and enforce group fare and ticketing policies. The new process will allow an Airline to apply group time limits for multiple things such as:	
 
 	(i)	Deposit receipt date (% milestones and full receipt)	
 
 	(ii)	Receipt of Passenger Names	
 
 	(iii)	Messaging to booking source	
 
 	(iv)	Enforcement of group numbers for contracted price	
 
 	(v)	Enforcement of ticketing dates	
Additionally the process will perform checks to review that all passengers within a group are ticketed at the right fare, the number of passengers at that fare meets contract requirements, and audit the actual fare ticketed with that booked.
 
 	(b)	Enhanced Restricted Credit Card process matching. This process is to be enhanced to include the automatic comparison of credit card numbers shown and used in Customer PNRs to those known credit card numbers found on the Industry credit card Blacklist. If credit card number is found to match any black listed numbers (or numbers uploaded into Revenue Integrity by Customer from their own managed lists) then the process will make an entry to inhibit check in and alert specific Customer staff via email and / or queuing of PNR. The process will also need to send a SSR message to the booking source (agency) to “contact airline”. Customer will require the matched traveler to pay cash at the	

Confidential	  	Page 47	  		

 	airport in order to travel. This process must have the ability to find and extract all PNRs with the same credit card numbers and different names. Customer will have access to this enhanced Restricted Credit Card process upon its release to the Revenue Integrity User Community in 2010.	
 
 	(c)	Waitlist Segment Cancellation Process. The Customer will have access to the new Waitlist Segment Cancellation Process, without additional charge, upon the delivery of this process to the Revenue Integrity User Community in 2010. The process is described as follows:	
 
 	(i)	The new Waitlist Segment Cancellation Process will automate the ability for airlines to identify PNRs earlier on that have waitlisted segments and either work to clear those segments or cancel the waitlisted segments out of the PNR to avoid excessive segment fees. Airlines will have the ability to build rules to find all PNRs with waitlisted segments at specified intervals of time prior to flight time and:	
 
 	(ii)	Cancel waitlist segments at least 72 hours (or at any time interval) before departure	
 
 	(iii)	Track and notify travel agents of unacceptable waitlist practices and alert commercial department of violations for possible fee assessment	
 
 	(iv)	Identify waitlisted segments where clearance is unlikely and cancel to avoid GDS fee	
 
 	(v)	Reduce total waitlist expenses by automatically cancelling all waitlisted segments in all PNRs X days before departure	
 
 	(vi)	Track and report details on all waitlisted segments cancelled	
 
 	(d)	Sabre Real Time Revenue Integrity . As part of our SabreSonic roadmap for Revenue Integrity, Customer will have access to the Real Time Revenue Integrity solution upon its release to the Revenue Integrity User Community. The newly enhanced Real Time Revenue Integrity solution will apply your airline’s process rules, enforce policies, send alerts and take directed actions within minutes after a PNR has been created or modified to protect and maximize revenue right up to flight departure time.	
 
13.	TRAVEL BANK	
The SabreSonic Ticket Travel Bank product includes the following functionality:
 
 	(a)	Create an Individual Travel Bank Account through Interact at RES/ATO/CTO or through SabreSonic Web Booking Engine	
 
 	(i)	upon full or partial exchange with residual amount upon full or partial refund	
 
 	(b)	Create a Corporate Travel Bank Account through SabreSonic Web Booking Engine	
 
 	(i)	upon creation of corporate profile in the system	
 
 	(c)	Credit a Travel Bank Account through Interact at RES/ATO/CTO or through SabreSonic Web Booking Engine interface	
 
 	(i)	upon full or partial exchange with residual amount	
 
 	(ii)	upon full or partial refund	
 
 	(iii)	upon voiding a ticket	
 
 	(iv)	as a result of internal system failure	
 
 	(v)	as a result of a manual adjustment to the account by an airline representative with appropriate security level (i.e. customer service)	
 
 	(d)	Debit a Travel Bank Account through Agent Interface at RES/ATO/CTO or through Sabre Sonic Web	
 
 	(i)	upon ticket issuance	
 
 	(ii)	upon exchange transaction with additional collection	
 
 	(iii)	as a result of internal system failure	
 
 	(iv)	as a result of a manual adjustment to the account by an airline representative with appropriate security level (i.e. customer service)	

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 	(e)	View a Travel Bank Account statement through Sabre Sonic Web – direct link	
 
 	(i)	Available to Individual account owner or corporate administrator	
 
 	(ii)	Available to airline staff with the appropriate security level	
 
 	(f)	Query Travel Bank account balance and business usage rules	
 
 	(i)	upon retrieval of the traveler profile by an airline staff thru Interact	
 
 	(ii)	upon display thru Interact of the FOP page	
 
 	(iii)	upon sign in SabreSonic Web Booking engine by an airline traveler (configurable by carrier)	
 
 	(iv)	upon display thru SabreSonic Web Booking engine of the FOP page	
 
 	(g)	Manage a Travel Bank Account	
 
 	(i)	by the Individual account owner thru SabreSonic Web Booking engine to add/delete additional users to the account	
 
 	(ii)	by the corporate administrator thru SabreSonic Web Booking engine to add/delete/enable/disable association of business traveler to the corporate account	
 
 	(iii)	by the airline staff with appropriate security level thru Travel Bank administration site.	
 
 	(iv)	manual adjustment to an account balance(credit/debit)	
 
 	(v)	change status of an account – active/suspended/closed	
 
 	(vi)	set business usage rules at account level – which of the fare components the account balance can apply	
 
 	(h)	Reporting	
 
 	(i)	upon request by an airline staff with appropriate security level thru Travel Bank administration site	
 
 	(i)	Report Offerings – Instant reporting of liability against customer Travel Bank accounts which include:	
 
 	(i)	Liability Report – provides the balance of available total credits within a market or the balance of each account for a selected date range. Provides the airline with a snapshot of its financial liability	
 
 	(ii)	Credit Expiry Report – provides a report of all the expired credits within a market or by account for selected time frame	
 
 	(iii)	Redemption Report – provides a report of all the debits applied to end-user accounts	
 
 	(iv)	Refund Report – ability to look at the refunds at a market, account or agent level	
 
 	(v)	Admin Manual Transaction Report – provides an overview of the manual transactions at a market, account or airline agent level	

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14.	MERCHANDISING SERVICES	
 
14.1	Branded Fares:	
The SabreSonic® Branded Fares solution provides the capability to create and sell “brands” (a.k.a. fare families) by categorizing different fare classes (a.k.a. Reservation Booking Designator) into a brand with associated attributes. The following modules/features are provided with this option:
 
 	(a)	Sabre Merchandising Manager TM – an online GUI based application that allows the Customer to define which fare classes are mapped to a particular brand and to define which fare basis codes are excluded from a brand. Sabre Merchandising Manager also allows the Customer to define what attributes are associated with the branded fare and then distribute this information as a textual message via a web service.	
 
 	(b)	Enhanced SabreSonic Sell features – include the capability to shop by branded fares. Branded fare shopping is included with Interact and with SabreSonic Web (if included in the Agreement). The SabreSonic Branded Fare shopping service can also be delivered as a web service or integrated with SabreSonic direct sales channels.	
 
 	(c)	Branded Fare Fulfillment features – include the capability to print branded fares on the boarding coupon, within the check-in GUI, and on the passenger manifest	
 
14.2	Ancillary or “ala carte” Sales:	
 
 	(a)	The Ancillary Sales solution provides the Customer the capability to define up to 99 ancillaries. Ancillaries are tracked with airline specified Special Service Requests (SSR’s), which are defined in the SSR Inventory solution, which the Customer can access via an online GUI. The first ancillary covered under this framework is “pay for excess bags” (scheduled for 2Q 2010). Configuration work may be required in SabreSonic direct channels (i.e. SabreSonic Web and Interact) to support the display of new ancillaries, and SabreSonic Check-in work may be required to support fulfillment of new ancillaries. Additional ancillaries will be rolled out as per the SabreSonic CSS roadmap.	
 
14.3	Pay for Preferred Seat:	
The “Pay for Preferred Seat” solution provides the capability to charge for pre-reserving a specific seat. The solution can be configured to charge for pre-reserving at seat at time of booking creation or extending the requirement to charge for reserving a seat through the check-in period.
This option provides additional capabilities in the following modules:
 
 	(a)	SabreSonic Seat Map – an additional seat block (P Block) is used to designate seats that require a fee to pre-reserve. Seat blocks are set by the Customer using the SabreSonic Command GUI. The seat fee can vary by seat type and market.	
 
 	(b)	SabreSonic Inventory – provides a capability to control whether the P Blocked seats can be pre-reserved based on the fare class of the purchased ticket. For example, based on the fare class of the purchased ticket, P Blocked seats can be restricted from selection, pre-reserved for a fee, or pre-reserved at no charge.	
 
 	(c)	SabreSonic Web (if included in the Agreement) – provides the capability to show a seat map and which seats require a fee payment in order to pre-reserve them, as well as showing what the fee amount is. SabreSonic Web also supports the collection and fulfillment of the ancillary fee for pre-reserving the “preferred seat”.	
 
 	(d)	Interact Reservation and Check-in GUI – provides the capability to charge a fee to pre-reserve “preferred seats”, either at time of booking, or at the check-in (if Customer elects to charge for selecting a “preferred seat” during the check-in period). For the seat fees collected at time of booking, an automated robot is provided to handle the fulfillment of the purchase and speed up the booking process. Graphical indicators are used on the Interact availability screen to indicate to the reservation agent which flights have “preferred seats”. Capabilities also exist to override the fees for “preferred seats” and specify a reason for the override.	

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 	(e)	Sabre Virtually There TM – provides additional documentation on the seat information line indicating when a “preferred seat” has been selected, as well as the amount paid for the “preferred seat” on the electronic receipt.	
 
 	(f)	SabreSonic Web Check-in (if included in the Agreement) – provides additional capabilities to prompt the passenger about the existence of “preferred seats” and to collect a fee for “preferred seats” at time of web check-in using a major credit card.	
 
 	(g)	SabreSonic Kiosk Check-in (if included in the Agreement) – provides additional capabilities to prompt the passenger about the existence of “preferred seats” and to collect a fee for “preferred seats” at time of kiosk check-in using a major credit card.	

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15.	SABRE® WEB SERVICES	
The Web Services feature is used to gain access to discrete pieces of travel products or functions so that airlines can build these pieces into their own travel points of sale or applications. Web Services provides a simplified, standard and consistent method of access to the Sabre system infrastructure and travel services giving the airline control to build their own travel application.
The Web Services listed below will be available to Customer immediately. Additional Web Services may be added at a later date.

Sabre Web Services
Service Category / Name	 	Sabre Host Command	 	Services Pricing
Category *	
USG Session Services	 		 		
SessionCloseRQ	 	Not Applicable	 	Not Applicable	
SessionCreateRQ	 	Not Applicable	 	Not Applicable	
SessionValidateRQ	 	Not Applicable	 	Not Applicable	
Air Services	 		 		
AirConnectionPointLLSRQ	 	T*CP-	 	Basic	
AirConnectionTimeLLSRQ	 	T*CT-	 	Basic	
AirSeatCancelLLSRQ	 	4GX	 	Basic	
AirSeatLLSRQ	 	4G	 	Basic	
AirTicketLLSRQ	 	W‡	 	Basic	
BargainFinderPlusLLSRQ	 	WPNI	 	Search	
DisplayAirPriceLLSRQ	 	*PQ	 	Basic	
DisplayPriceQuoteLLSRQ	 	*PQ	 	Basic	
FareLLSRQ	 	FQ	 	Fare	
IMAP_AirSeatMapLLSRQ	 	4G*	 	Basic	
OTA_AirAvailLLSRQ	 	1	 	Basic	
OTA_AirBookLLSRQ	 	JA	 	Basic	
OTA_AirFlifoLLSRQ	 	2	 	Basic	
OTA_AirLowFareSearchLLSRQ	 	JR	 	Search	
OTA_AirPriceLLSRQ	 	WP	 	Fare	
OTA_AirRulesLLSRQ	 	RD	 	Fare	
OTA_AirScheduleLLSRQ	 	S	 	Basic	
OTA_AirSeatMapLLSRQ	 	4G*	 	Basic	

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ShortSellLLSRQ	 	0	 	Basic	
VerifyFlightDetailsLLSRQ	 	V*	 	Basic	
Hotel Services	 		 		
Air Services	 		 		
HotelPropertyDescriptionLLSRQ	 	HOD	 	Basic	
HotelRateDescriptionLLSRQ	 	HRD*	 	Basic	
HotelResModifyLLSRQ	 	HOM	 	Basic	
OTA_HotelAvailLLSRQ	 	HOT	 	Basic	
OTA_HotelResLLSRQ	 	0H	 	Basic	
Vehicle Services	 		 		
OTA_VehAvailRateLLSRQ	 	CF, CQ	 	Basic	
OTA_VehLocDetailLLSRQ	 	CP*	 	Basic	
OTA_VehResLLSRQ	 	0CAR	 	Basic	
VehLocationFinderLLSRQ	 	CLF	 	Basic	
VehLocationListLLSRQ	 	CLL	 	Basic	
VehQuoteLocationListLLSRQ	 	CQL	 	Basic	
VehRateRulesLLSRQ	 	CF*R	 	Basic	
VehResModifyLLSRQ	 	CM	 	Basic	
PNR Services	 		 		
TravelItineraryAddInfoLLSRQ	 	“-”, 9, DK, FF, PE, 6	 	Basic	
AddAccountingLineLLSRQ	 	AAC	 	Basic	
AddRemarkLLSRQ	 	5	 	Basic	
ModifyRemarkLLSRQ	 	5[line number]¤	 	Basic	
SpecialServiceLLSRQ	 	3 or 4 OSI or SSR	 	Basic	
DeleteSpecialServiceLLSRQ	 	3 or 4[line number]¤	 	Basic	
EndTransactionLLSRQ	 	6, E	 	Basic	
IgnoreTransactionLLSRQ	 	I	 	Basic	
OTA_CancelLLSRQ	 	XI	 	Basic	
OTA_TravelItineraryReadLLSRQ	 	JX	 	Basic	

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TravelItineraryModifyInfoLLSRQ	 	‘¤”	 	Basic	
ResReconfirmLLSRQ	 	0RCF	 	Basic	
MiscSegmentSellLLSRQ	 	0OTH	 	Basic	
Queues Services	 		 		
PersonalQDisplayLLSRQ	 	QS*	 	Basic	
QAccessLLSRQ	 	Q/	 	Basic	
QAnalysisLLSRQ	 	QA/	 	Basic	
QCountLLSRQ	 	QC/	 	Basic	
QMoveLLSRQ	 	QMOV/	 	Basic	
QPlaceLLSRQ	 	QP/	 	Basic	
RestrictedQDisplayLLSRQ	 	QMR/*	 	Basic	
Miscellaneous Services	 		 		
AddressVerificationLLSRQ	 	CK*AV	 	Basic	
ChangeAAALLSRQ	 	AAA	 	Basic	
CreditVerificationLLSRQ	 	CK*IK	 	Basic	
DesignatePrinterLLSRQ	 	W*, GY, PTR/,DS	 	Basic	
DisplayCurrencyLLSRQ	 	DC*CC/CUR	 	Basic	
InvoiceItineraryLLSRQ	 	DIT	 	Basic	
MileageLLSRQ	 	WN	 	Fare	
ProfileAddInfoLLSRQ	 	NB	 	Basic	
ProfileDisplayLLSRQ	 	N*	 	Basic	
ProfileModifyInfoLLSRQ	 	NB¤	 	Basic	
SabreCommandLLSRQ	 	Various host command strings	 	Basic, Fare, or Search	
VendorCodesLLSRQ	 	DU	 	Basic	

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APPENDIX B
PROFESSIONAL SERVICES
 
1.	BUSINESS TRANSFORMATION SERVICES	
In connection with the implementation and cutover of the Systems for Customer, Sabre will provide Customer with consulting services to assist in the orderly transition to the Systems
 
1.1	Description of Transformation Services	
Sabre shall assist Customer in the development of its mutually agreed and formally defined functions related to the deployment of the Systems. Such assistance shall include:
 
 	(a)	Solution Assessment Phase – Sabre shall review Customer’s current procedures and practices in all of the following areas:	
 
 	(i)	Reservations Center – Sales, payments, special services, premium services, flight information and flight change notification	
 
 	(ii)	Reservations Control – Queue processing, waitlist management, re-accommodation and flight firming, inventory control	
 
 	(iii)	Airports Departure Control – Check-in, passenger movement, gate processing and boarding	
 
 	(iv)	Web-site and e-Commerce – Client’s B2C, Client’s B2B, 3rd Party B2C, 3rd Party B2B, tour operators, wholesalers and consolidators	
 
 	(v)	Direct Sales Outlets – Airline sales offices, vacation sales and General Sales Agents	
 
 	(vi)	Global Distribution – Connectivity, presence, performance, and invoice management	
 
 	(vii)	Indirect Sales Outlets – Travel Agencies, tour operators and consolidators	
 
 	(viii)	Interline Management – Special Prorate Agreements, Code-share management, ticketing agreements and Clearinghouse management	
 
 	(ix)	Revenue Quality and Integrity – Booking abuse control, ticketing abuse control and revenue quality management	
 
 	(x)	E-ticketing/Ticketless – Host-based, GDS-based and interline	
 
 	(xi)	Fares Management – Fare class alignment, fares structures, reactive pricing practices and proactive pricing practices	
 
 	(b)	Interactive Pilot Phase. Sabre shall assist Customer with the implementation of the specific improvements to the business procedures and practices, organization structures and measurement practices associated each of the functional areas reviewed in the Solution Assessment.	
 
 	(c)	Solution Adoption Phase . Sabre shall assist Customer with the introduction of the Systems and help implement the Improvements that Customer elects to incorporate.	
 
 	(d)	Transition Phase . Sabre shall transfer all management and control functions associated with the Improvements over to Customer in a controlled manner in order to help the Improvements to deliver the expected benefits.	
 
1.2	Deliverables	
Each of the deliverables set forth below will be represented by either a document prepared by Sabre and provided to Customer or by the performance of specific activities. Each of the scope areas outlined in the section above has its own specific deliverables:
 
 	(a)	Solution Assessment Deliverables :	
 
 	(i)	Solution Assessment – a document in presentation format detailing the Customer’s current organization structures, procedures and practices associated with each of the areas detailed in Solution Assessment above.	

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 	(ii)	Recommended Improvements – a document in presentation format detailing recommended changes to the functional area’s organization structures, procedures and practices of Customer for the areas detailed in the Solution Assessment above (the “Recommended Improvements”).	
 
 	(iii)	Benefits Analysis – a document in presentation format detailing the anticipated benefits associated with implementing of the Recommended Improvements.	
 
 	(iv)	Master Project Plan – a plan of all tasks, milestones and assignments associated with the implementation of the Recommended Improvements in order to achieve the expected benefits illustrated by the deliverable described in Benefits analysis above.	
 
 	(b)	Interactive Pilot Phase Deliverables:	
 
 	(i)	Functional Improvements – preparation of Recommended Improvements as defined above for each of the scope areas associated with the Solution Assessment.	
 
 	(ii)	Organization Structures – assistance with the establishment of recommended organization structures associated with each scope area identified in the Solution Assessment. Such organization structures shall include: a) recommended organization chart, and b) recommended roles and responsibilities for key positions on the organization chart.	
 
 	(iii)	Procedures and Practices – recommended procedures and practices for each of the areas of scope detailed in the Solution Assessment above.	
 
 	(iv)	Key Performance Indicators – recommended KPIs for each areas of scope detailed in the Solution Assessment above.	
 
 	(v)	Standard Performance Reports – creation of recommended standard reports for the KPIs including: a) formats of the reports, b) instructions for preparation of the reports, c) recommended frequency of report creation, d) recommended approach to distribution of the reports.	
 
 	(c)	Solution Adoption Phase Deliverables:	
 
 	(i)	Improvements Implementation – implementation of the agreed Recommended Improvements for the scope areas associated with the Solution Assessment	
 
 	(ii)	Business Training – training of designated Customer personnel on each of the following: a) implementation of the organization structures developed above, b) implementation of the procedures and practices above, c) implementation of the KPIs developed above, and d) implementation of standard reports developed above.	
 
 	(d)	Transition Phase Deliverables:	
 
 	(i)	Implementation Assistance – assistance with the cutover to production of the Systems as well as concurrent implementation of the organization structures, procedures and practices and KPIs	
 
 	(ii)	Performance Monitoring – review of the on-going operation of Customer’s performance under the new structures, procedures and practices.	

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2.	DESCRIPTION OF CODESHARE SERVICES	
Sabre consultants shall assist Customer to prepare for implementation of Codeshares, herein after termed “Consulting Services”:
 
2.1	Fundamentals	
 
 	(a)	Sabre shall perform an executive level seminar titled Codeshare Fundamentals. Key activities include:	
 
 	(i)	Sabre will lead a discussion on the types of alliances and the opportunities and challenges of each alliance type.	
 
 	(ii)	Sabre will provide an overview of each of the seminar sessions to be provided in section 2.2 and lead a discussion on the impacts to each of the commercial and operational areas. Participants will be requested to develop a list of “hot” items that will be provided to the participants of the seminar sessions to be provided in section 2.2.	
 
2.2	Codeshare Applications	
Sabre will provide seminars titled Codeshare Applications. The following business and/or operational units will be provided Codeshare Applications Seminars:
 
 	(a)	Network Planning and Scheduling: The codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Scheduling systems (database, forecasting and optimization systems)	
 
 	(ii)	Schedule development	
 
 	(iii)	Schedule coordination	
 
 	(iv)	Schedule publication	
 
 	(v)	Schedule synchronization	
 
 	(b)	Revenue Management and Pricing: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Fare class mapping between codeshare partners	
 
 	(ii)	Revenue sharing	
 
 	(iii)	Fare filing practices	
 
 	(iv)	Technology requirements	
 
 	(c)	Reservations and Reservations Control: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Availability	
 
 	(ii)	PNR synchronization	
 
 	(iii)	Security	
 
 	(iv)	Country, Passport and Visa information (TIMATIC)	
 
 	(v)	Payment Solutions and Fraud	
 
 	(vi)	Seat assignments and seat maps	
 
 	(vii)	Re-accommodation and protection	
 
 	(viii)	Groups processing	
 
 	(ix)	Flight movement messaging	
 
 	(x)	Technology requirements	
 
 	(d)	Airport Ground Operations: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Customer recognition	
 
 	(ii)	Security	
 
 	(iii)	Country, Passport and Visa information	

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 	(iv)	Payment Solutions and Fraud	
 
 	(v)	Ticketing processes including exchanges and refunds	
 
 	(vi)	Re-accommodation and protection	
 
 	(vii)	Frequent Flyer program topics	
 
 	(viii)	Baggage transfer	
 
 	(ix)	Signage	
 
 	(x)	Back Office considerations	
 
 	(xi)	Technology requirements	
 
 	(e)	Loyalty and Customer Relations: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Status mapping	
 
 	(ii)	Accruals between disparate programs	
 
 	(iii)	Redemptions	
 
 	(iv)	Points (or other mechanism) transfer	
 
 	(v)	Customer complaint/resolution management between partners	
 
 	(vi)	Back Office considerations	
 
 	(vii)	Technology requirements	
 
 	(f)	Sales and Marketing Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Corporate Agreements	
 
 	(ii)	Branding	
 
 	(iii)	Web site requirements	
 
 	(g)	Revenue Accounting and Finance Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	International payment type and credit card usage	
 
 	(ii)	Fraud management	
 
 	(iii)	Impacts of currency exchange rates	
 
 	(iv)	Currency repatriation	
 
 	(v)	General Ledger impacts	
 
 	(vi)	Proration	
 
 	(h)	Legal: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Setting up business in another country	
 
 	(ii)	Responsibilities of marketing vs. operating carrier	
 
 	(iii)	Immigration and customs rules	
 
 	(iv)	Labor laws	
 
 	(v)	Duty free	
 
 	(vi)	Bonding for Cargo	
 
 	(vii)	Taxation	
 
 	(viii)	Jurisdiction	

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 	(ix)	Competition regulations	
 
 	(x)	Data privacy	
 
 	(xi)	Advertising Fairness/Disclosures	
 
 	(i)	Technology: Codeshare topics to be discussed during this seminar include but are not limited to:	
 
 	(i)	Technology requirements for each functional area	
 
 	(ii)	Technology requirements for financial systems	
 
2.3	Debrief Sessions	
 
 	(a)	Following each Codeshare Applications seminar, Sabre will lead a de-brief session with core team members selected by Customer. Key activities include:	
 
 	(i)	Consolidating learnings from the Codeshare Applications seminars	
 
 	(ii)	Identifying critical processes than span functional units	
 
 	(iii)	Determining criticality of gaps between current codeshare business processes and technology and industry standard codeshare business processes and technology	
 
 	(iv)	Outlining implications of learnings to Customer	
 
 	(v)	Outlining Considerations for future planning	
 
 	(vi)	Reconciliation of implications and considerations to current processes and initiatives	
 
 	(vii)	Creation of a data flow model for codeshare processes and technology	
 
2.4	Scenario and Assumption Review Session	
Sabre shall lead and collaborate with Customer to validate initial international codeshare assumptions and scope.
 
2.5	Codeshare Departmental Workplan Development	
 
 	(a)	Sabre shall lead and collaborate with Customer in the preparation of workplans for Codeshare from the output of the Codeshare Workshops as outlined above. Workplans will be developed for the following business areas:	
 
 	(i)	Network Planning and Scheduling	
 
 	(ii)	Revenue Management and Pricing	
 
 	(iii)	Reservations and Reservations Control	
 
 	(iv)	Airport Ground Operations	
 
 	(v)	Loyalty and Customer Relations	
 
 	(vi)	Sales and Marketing	
 
 	(vii)	Revenue Accounting and Finance	
 
 	(viii)	Legal	
 
 	(ix)	Cargo	
 
 	(x)	Security and Facilities	
 
 	(xi)	Emergency Response	
 
 	(xii)	Technology	
 
 	(b)	Key activities include:	
 
 	(i)	Define Business Process Impacts.	

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 	(ii)	Conduct reviews of the output from the international codeshare seminars with Customer teams.	
 
 	(iii)	Identify business process codeshare impacts. Combine the business process impact output from the codeshare seminars with any additional impacts identified above.	
 
 	(iv)	Identify technology impacts. Combine technology impact output from the codeshare seminars and any additional impacts identified above.	
 
 	(v)	Identify criticality of impacts.	
 
 	(vi)	Assist Customer to Develop Workplan.	
 
 	(vii)	Identify resource constraints among Team members from each department.	
 
 	(viii)	Develop preliminary plan.	
 
 	(ix)	Quantify Impact.	
 
 	(x)	Identify resource and timeline impacts to other non-codeshare related initiatives.	
 
 	(xi)	Identify interdependencies with technology and other business processes.	
 
 	(xii)	Refine workplan to minimize impacts.	
 
2.6	Identify critical path	
 
 	(a)	Determine which business process or technology impact items will have the most significant impact on the implementation of international codeshare and highlight these items in the workplan.	
 
 	(b)	During the development of the workplan, the Sabre consultants and Customer will conduct review sessions or “checkpoints” to ensure that the project is on target.	
 
2.7	Integrated Codeshare Workplan Development	
 
 	(a)	Lead and collaborate with Customer Teams to develop an integrated international codeshare workplan. Key activities include:	
 
 	(i)	Identify interdependencies between departmental workplans.	
 
 	(ii)	Map departmental plans to an integrated timeline.	
 
 	(iii)	Identify integrated critical path. Determine which business process or technology impact items will have the most significant impact on the integrated workplan for implementation of international codeshare and highlight these items in the workplan.	
 
2.8	DELIVERABLES	
 
 	(a)	Codeshare Fundamentals Deliverables:	
 
 	(i)	A document in presentation style that details the opportunities and challenges associated with codeshare.	
 
 	(ii)	Seminar covering the key business and technology issues associated with codeshare in each of the subject areas to be presented in section 2.2 above.	
 
 	(iii)	List of key items generated by participants to be provided to participants of Codeshare Applications to be presented in section 2.2 above.	
 
 	(b)	Codeshare Applications Deliverables:	
 
 	(i)	Function-specific detailed seminars focused on the impact to individual areas of responsibility as outlined in section 2.3 above.	
 
 	(ii)	Documents for each functional area that detail the key areas of impact to that specific function based on Customer’s current business practices	

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 	(iii)	De-brief sessions with Customer’s core codeshare team members focused on the creation of considerations and deliverables for a work plan to be used in future planning activities as outlined in section 2.4 above.	
 
 	(iv)	Document of consolidated learnings from each codeshare applications seminar.	
 
 	(v)	Document of consolidated implications from each codeshare seminar.	
 
 	(vi)	Document of consolidated considerations for future planning from each codeshare seminar.	
 
 	(vii)	Document identifying critical codeshare business process and technology gaps and level of criticality of each gap.	
 
 	(viii)	Codeshare data flow model.	
 
 	(c)	Scenario and Assumption Review Session Deliverables:	
 
 	(i)	Documented assumptions based on selected scenarios identified in 2.2 above that will be used to develop workplans.	
 
 	(d)	Codeshare Departmental Workplan Deliverables:	
 
 	(i)	Documented workplans for each business area as identified in 2.3 above.	
 
 	(ii)	Network Planning and Scheduling Workplan	
 
 	(iii)	Revenue Management and Pricing Workplan	
 
 	(iv)	Reservations and Reservations Control Workplan	
 
 	(v)	Airport Ground Operations Workplan	
 
 	(vi)	Loyalty and Customer Relations Workplan	
 
 	(vii)	Sales and Marketing Workplan	
 
 	(viii)	Revenue Accounting and Finance Workplan	
 
 	(ix)	Legal Workplan	
 
 	(x)	Cargo Workplan	
 
 	(xi)	Security and Facilities Workplan	
 
 	(xii)	Emergency Response Workplan	
 
 	(xiii)	Technology Workplan	
 
 	(e)	Workplan Content. Each workplan will include:	
 
 	(i)	Resource requirements. Numbers of individuals required from specific work areas as identified in 2.3.2 above.	
 
 	(ii)	Time estimates. Amount of elapsed time required to minimize business process or technology impacts as identified in 2.3.2 above.	
 
 	(iii)	Critical path as identified in 2.3.4	
 
 	(f)	Integrated Master Workplan for codeshare. A workplan derived from the activities as identified in 2.3 above.	
 
 	(i)	Interdependencies between workplans.	
 
 	(ii)	Integrated timeline. A timeline indicating elapsed time and which integrates each of the departmental workplans and associated critical path items.	

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3.	PROJECT DEFINITION DOCUMENT AND PROGRAM PROCESS AND PROCEDURES DOCUMENT	
Customer and Sabre will mutually agree and formally define the agreed to professional services related to the implementation and delivery of the System and services to be provided to Customer by Sabre during the project initiation phase of the project. Such agreement will be documented in the Project Definition Document (“ PDD ”) and the Program Process and Procedures document (“ PPP ”).
The PDD will include, but not limited to the following items:
 
 	(a)	Project Summary Statement	
 
 	(b)	Key Business Objectives and Benefits	
 
 	(c)	Solution Overview	
 
 	(d)	Project Definition, including:	
 
 	(i)	Project Is / Is Not List	
 
 	(ii)	Major Project Deliverables	
 
 	(iii)	Project Completion Criteria	
 
 	(iv)	Project Dependencies	
 
 	(v)	Assumptions	
 
 	(vi)	Constraints & Project Flexibility Matrix	
 
 	(e)	Roles & Responsibilities	
The PPP will include, but not limited to the following mutually agreed terms:
 
 	(a)	Issue Management	
 
 	(i)	Process Overview	
 
 	(ii)	Issue Management Definitions, including:	
 
 	(iii)	Issue	
 
 	(iv)	Issue Priority	
 
 	(v)	Submitter	
 
 	(vi)	Owner	
 
 	(vii)	Status Code	
 
 	(viii)	Escalation	
 
 	(ix)	Issue Management Process Flow	
 
 	(x)	Issue Management Process Flow Steps	
 
 	(b)	Change Request Management	
 
 	(i)	Process Overview	
 
 	(ii)	CR Service Level Targets	
 
 	(iii)	Change Management Definitions, including:	
 
 	(iv)	Change	
 
 	(v)	Change Types	
 
 	(vi)	Change Request Priority	
 
 	(vii)	Owner	

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 	(viii)	Change Management Review Team	
 
 	(ix)	Steering Committee	
 
 	(x)	Status Codes	
 
 	(xi)	Submitter	
 
 	(xii)	Approval Authority	
 
 	(xiii)	Change Management Process Diagram	
 
 	(xiv)	Change Management Process Steps	
 
 	(c)	Communications Plan	
 
 	(d)	Risk Management	
 
 	(i)	Overview	
 
 	(ii)	Tracking Project and Program Risks	
 
 	(iii)	Risk Management Process, including:	
 
 	(iv)	Initiation Phase	
 
 	(v)	Planning Phase, including:	
 
 	(vi)	Risk Identification	
 
 	(vii)	Qualitative Analysis	
 
 	(viii)	Quantitative Analysis	
 
 	(ix)	Risk Response Planning	
 
 	(x)	Schedule Updates	
 
 	(xi)	Monitoring and Controlling Phase	
 
 	(e)	Quality Management	
 
 	(i)	Overview	
 
 	(ii)	End to End Testing	
 
 	(iii)	Customer Testing	
 
 	(iv)	Business Simulation	
 
 	(f)	Cost Management	
 
 	(i)	Travel & Incidentals	
 
4.	PROJECT PLANNING	
Sabre and Customer will perform data collection and create a detailed project plan for implementation of the Systems covered under this Work Order, outlining the major milestones. The project plan will be mutually agreed between Sabre and Customer.
Sabre Project Planning Responsibilities:
 
 	•	 	Assign at least one Project Manager for the duration of the implementation process.	
 
 	•	 	Develop and deliver a project plan	
 
 	•	 	Manage the Change Request process as required by Customer	
 
 	•	 	Make available System for use by Customer.	

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5.	MIGRATION	
PNR conversion will be either manual or automatic. For automatic conversion, Customer is required to provide record layouts, PNR and Credit Shell (if applicable) captures from their current CRS vendor as mutually agreed in order to validate that automatic conversion is possible. A delay in providing this information to Sabre may delay the project schedule. If automatic conversion is not possible, conversion will be manual.
Sabre is not responsible for any Customer’ third-party system integration, unless otherwise specified in this Work Order or as defined in the PDD, PPP or Project Plan.
Sabre shall provide a mutually agreed number of data migration rehearsals during the implementation of this Work Order prior to Commencement Date or until a mutually agreed success rate has been accomplished.
 
6.	TRAINING	
All training services provided by Sabre will be defined in the training plan and/or PDD / PPP / Project Plan.
 
6.1	Train the Trainers	
 
 	(a)	Sabre will provide training to Customer in the form of “train the trainers” or “specialists” as part of implementation Service to Customer.	
 
 	(b)	Sabre will provide a certification process of completion to all Customer “train the trainers” trainers.	
 
6.2	Training Materials and Location	
 
 	(a)	The class duration is an estimate and will be finalized after the business requirements are completed for each training topic. The maximum class size is 12 people and cannot be increased.	
 
 	(b)	One “train the trainer” or train the “specialist” class will be provided for the products included in the contract.	
 
 	(c)	Sabre shall provide Customer training documentation via Sabre’s website. Customer is responsible for downloading and printing the necessary training materials.	
 
 	(d)	Training will be in English unless otherwise specified in this Work Order.	
 
 	(e)	Customer is responsible for providing training equipment and facilities OR Training will be provided at Sabre office facilities in Southlake, Texas.	
 
6.3	On-going Training	
After implementation, Customer will have the opportunity to attend periodic ongoing training sessions that may be offered by Sabre as part of the Sabre Continuous Learning Series. Up to four seats per session will be provided to Customer. No fees will be payable to Sabre for attendance; however, Customer will be responsible for its own expenses related to attendance, such as travel and incidental costs incurred.

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7.	NETWORK SERVICES	
Sabre will provide network services in corporation and upon mutually agreement with Customer as described below:
 
 	(a)	Obtain communications network cost estimates for Customer’s locations requiring System access, provided that Customer provides the necessary requirement information.	
 
 	(b)	Perform one network survey	
 
 	(c)	Design Sabre network connectivity and provide Sabre circuits	
 
 	(d)	Install and configure Sabre router on Customer network and test connectivity	
 
 	(e)	Assist Customer to establish frame relay connectivity from Customer’s Wide Area Network to Sabre host	
 
 	(f)	Assist Customer in establishing connectivity from Customer’s locations not connected on Customer’s Wide Area Network to Sabre host via the SITA network	
 
 	(g)	Assist Customer with selection and installation of hardware and software requirements	
 
 	(h)	Provide technical training to Customer’s personnel in installation, maintenance and support procedures for Sabre’s client software (including gateway software)	
 
 	(i)	Support PNR conversion and cutover	
 
 	(j)	Provide technical support personnel at Customer’s designated primary location for up to thirty (30) days following cutover of the SabreSonic Res System	
 
 	(k)	Sabre reserves the rights to all its hosts IP addresses and maintains unconditional access for their sole use with our core routers. Any Customer installing routers in a common or shared airport network environment must NAT all Sabre IP addresses.	
Additional Network Services beyond the scope of this Work Order may require additional fees. Services, if applicable, will be outlined in cost quotes and sent to Customer for approval. Additional services may include the following:
 
 	(a)	Integration testing of Customer equipment	
 
 	(b)	Installation and monthly fees for circuits obtained by Sabre on Customer’s behalf	
 
 	(c)	Hardware and software for Sabre operation. I.E.: PC’s, printers, cables, etc.	
 
 	(d)	Installation of infrastructure at Airports, CTO, ATO, Reservation centers	
 
 	(e)	Installation of customer LAN/WAN where applicable	
 
 	(f)	Site surveys other than at the HDQ	
 
 	(g)	Installation of temporary training facility	
 
 	(h)	Installation in shared airport systems (SITA, ARINC)	
 
 	(i)	LNIATA setup charges after conversion	
 
 	(j)	Third party connections to the host (incur a monthly fee and installation charge)	

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APPENDIX C
CUSTOMER RESPONSIBILITIES
 
1.	CUSTOMER RESPONSIBILITIES	
The following is a list of expected customer responsibilities necessary for the project. The Customer responsibilities will be updated and documented in the PDD and PPP. In connection with the Systems and Services to be provided by Sabre, Customer shall be responsible for the following at Customer’s expense:
 
1.1	General Responsibilities	
 
 	(a)	Designate a Project Coordinator who will be the primary Sabre contact during the implementation and training phases. This individual shall help assure a smooth installation, including installation of the Systems infrastructure, making the appropriate Customer marketing, customer service and system staff available during the training period, etc.	
 
 	(b)	Provide the assistance reasonably requested by Sabre in the implementation of the Systems, including but not limited to obtaining the necessary participation and cooperation from Customer’s third party vendors (affiliated or non-affiliated)	
 
 	(c)	Provide executive oversight and fully participate in the project governance process including regular joint executive steering committee meetings	
 
 	(d)	Facilitate process and procedure improvements/transformation as specified by the PDD	
 
 	(e)	Provide the necessary resources and focus to facilitate and implement the Codeshare program	
 
 	(f)	Provide the necessary internal process change management and employee communications throughout the project	
 
 	(g)	Designate support personnel at every cutover location	
 
 	(h)	File Customer’s fare levels with a Sabre approved fares vendor (e.g. ATPCO)	
 
 	(i)	Utilize the Sabre Air Pricing package for fares and pricing requirements	
 
 	(j)	File schedules with a Sabre approved schedules vendor (e.g. OAG)	
 
 	(k)	Procure, install and maintain Sabre certified equipment for use to access System. Customer will be responsible for any costs associated with certifying equipment, including printers, which are not already Sabre certified. Customer will also be responsible for procuring support services from the equipment vendor, if such is equipment is not procured through Sabre.	
 
 	(l)	Procure, install and maintain communications circuits to Customer’s sites requiring access to System	
 
 	(m)	Order and install any necessary hardware and network configurations necessary to support the Systems	
 
 	(n)	Customer shall pay install and monthly connections fees for all infrastructure terminating at the Sabre Data Center. This includes SITA ASCUs	
 
 	(o)	Provide Sabre, in a timely manner, any reasonably requested information concerning Customer’s network and hardware configurations and requirements	
 
 	(p)	Perform training as outlined in this Work Order.	
 
 	(q)	Have the necessary agreements in place with the appropriate GDSs	

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 	(r)	Meet any other, mutually agreed, defined requirements as specified in the Project Plan provided by Sabre	
 
 	(s)	Obtaining, installing and maintaining all equipment and telecommunication facilities and necessary interfaces, at its own expense, in order to communicate with the Systems	
 
 	(t)	Creation, management, security, and change controls for any and all passwords and user IDs. Any Sabre-assigned passwords shall likewise be maintained by Customer as secret and confidential. Customer agrees that it is and shall remain solely and completely liable for any communications or other uses that are made using its or its users’ passwords and user IDs, as well as for any obligation that may result from such use. Customer is responsible for changing any password it believes has been stolen or might otherwise be misused. Customer shall notify Sabre immediately of any unauthorized use of any password or user ID or any other breach of security suspected by Customer.	
 
 	(u)	Customer will make available, as promptly as possible (as defined in the Project Schedule), all information, data, facilities and personnel support reasonably requested by Sabre, including the support specified in this Work Order.	
 
 	(v)	Executing the test plan that tests the material conformity of the System to the description provided in Appendix A of this Work Order. The test plan and testing should include:	
 
 	(i)	Testing of any existing applications necessary to validate the operation of the interfaces beyond the boundaries of the System (i.e., testing each of the applications integrated with the System to validate that each is functioning properly).	
 
 	(ii)	Maintenance of the test data in the test environment during the course of Customer Testing.	
 
 	(iii)	Tests and validation of Customers business requirement and processes.	
 
 	(w)	During Customer Testing Period Customer shall notify Sabre immediately of any material non-conformity between the System and the Description of System as contained in Appendix A of this Work Order.	
 
 	(x)	Customer shall ensure that the appropriate personnel have been trained	
 
1.2	Credit Suite	
 
 	(a)	Customer acknowledges that it is solely responsible for the security of Customers’ Payment Card Data while such data is in Customer’s possession or under its control. Customer shall be solely liable for loss or compromise of Payment Card Data while in its possession and for any damage or liability resulting therefrom. Payment Card Data means account number, in conjunction with either the name, address, date of expiration or any applicable security code of the cardholder.	
 
 	(b)	Customer shall ensure that all Cardholder Information, if / when stored, remains encrypted, is appropriately masked for viewing, and that viewership is allowed only on a ‘need to know’ basis at all times for the duration of this Agreement. Customer acknowledges that it is solely responsible for the security of Cardholder data while such data is in Customer’s possession or under its control. Customer shall be solely liable for loss or compromise of Cardholder data in its possession and for any damage or liability resulting therefrom. Cardholder data means (but not limited to) first name or initial and last name in combination with: social security number or Social Insurance Number, driver’s license number, or State Identification Card number, financial account number, credit or debit card number with personal identification number such as an access code, security codes or password that would permit access to an individual’s financial account information.	
 
1.3	SabreSonic Check In – Self-Service Kiosks Check In	
 
 	(a)	Customer will provide Branding Graphics and Marketing Media (logos, artwork, color specifications) provided as camera-ready artwork or as digital images (.jpg, .gif, etc.).	
 
 	(b)	Customer will be responsible for the selection of the self-service kiosk hardware and vendor; self-service kiosk hardware and software must be CUSS-compliant, otherwise incremental effort and project cost will be incurred; Sabre will provide contact information for recommended hardware vendors and can provide consultation for the planned deployment as part of this project	

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1.4	SabreSonic Check In – Web Check In	
Customer will provide Branding Graphics and Marketing Media (logos, artwork, color specifications) provided as camera-ready artwork or as digital images (.jpg, .gif, etc.).
 
1.5	SabreSonic Web	
 
 	(a)	Customer is responsible for handling all communications with end-user travelers utilizing the SabreSonic Web Site.	
 
 	(b)	Customer will provide the Content and periodic updates to the Content.	
 
 	(c)	Customer is responsible for all unlawful purchases on the Site (which may include, without limitation, identity theft and other credit card fraud). Any credit card charge-back that Sabre receives as a result of an unlawful act on the Site will be billed back to the Customer in the month following receipt and research of such charge-back. Customer agrees to notify Sabre immediately through a mutually agreed upon email address and/or phone number, of any known schemes poised by persons or groups or any technical issues that could generate a charge-back. Customer agrees to co-join Sabre in all fraud prevention efforts to include manual, automated and future technology.	

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APPENDIX D
USER DOCUMENTATION
Sabre shall provide Customer training documentation for the Systems via Sabre’s customer support web site. Customer is responsible for downloading and printing the necessary training materials.
The Systems Documentation will be updated periodically by Sabre as New Functions and Enhancements are released. Customer may make a reasonable number of copies of the System(s) Documentation solely for the permitted use and for back-up purposes. Customer will reproduce and include on each copy and on each partial copy any copyright notice and proprietary rights legend contained in the System(s) Documentation, as such notice and legend appear in or on the original.

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APPENDIX E
PROJECT SCHEDULE
Sabre and Customer agree that the following high level dates provided below are illustrative of the overall Project Schedule.
Start Date: August 17 th , 2009 but not later than the August 31 st , 2009
Commencement Date: Mid-May 2010 but not later than Mid-June 2010
The detailed project schedule will be developed jointly between Customer and Sabre and defined in the PDD, PPP and Project Plan as agreed.

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APPENDIX F
SYSTEM REQUIREMENTS
The following minimum requirements are required for use and access to the SabreSonic solution. Customer and Sabre are currently conducting a study, the results of which will be included in the PDD and may result in changes to the System Requirements identified below.
 
1.	MINIMUM REQUIREMENTS – SABRESONIC PASSENGER SOLUTION	
 
1.1	IP Frame / OFEP Requirements	
Sabre OFEP/NOFEP provides connectivity to hosts in Tulsa via TCP/IP. Sabre OFEP supports workstations utilizing the Interface to SabreSonic and Sabre client, as well as, applications written to the Sabre Windows API. TCP/IP is used for the communications between Sabre Clients and Sabre Hosts.
 
1.2	Hardware Requirements	
 
 	(a)	Cisco router will be provided by Sabre within the Sabre Data Center	
 
 	(b)	Workstations with 10/100 Mbps Ethernet Cards	
 
 	(c)	10/100 Switches	
 
1.3	Workstation Minimum Hardware Requirements for Sabre Client	
 
 	(a)	CPU: Pentium III	
 
 	(b)	Microprocessor speed: 500 MHz or faster	
 
 	(c)	Hard Drive: 1 GB	
 
 	(d)	RAM: 1 GB	
 
 	(e)	Monitor: 17 inch	
 
 	(f)	Drive: CD ROM	
 
 	(g)	Operating system: XP, 2000, Vista or NT	
 
 	(h)	Operating platform: 32 bit	
 
 	(i)	Network adapters: Ethernet	
 
 	(j)	Network protocols: TCP/IP	
 
 	(k)	Keyboard: 101-key	
 
 	(l)	Mouse: IBM compatible	
 
 	(m)	Ports: Serial	
 
1.4	Workstation Minimum Hardware Requirements for SabreSonic Interact	
 
 	(a)	CPU: Pentium III	
 
 	(b)	Microprocessor speed: 500 MHz or faster	
 
 	(c)	Hard Drive: 1 GB	

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 	(d)	RAM: 1 GB	
 
 	(e)	Monitor: 17 inch	
 
 	(f)	Drive: CD ROM	
 
 	(g)	Operating system: XP, 2000, Vista or NT	
 
 	(h)	Operating platform: 32 bit	
 
 	(i)	Network adapters: Ethernet	
 
 	(j)	Network protocols: TCP/IP	
 
 	(k)	Keyboard: 101-key	
 
 	(l)	Mouse: IBM compatible	
 
 	(m)	Ports: Serial	
 
*	Note: No remote management software has been certified for use with Sabre emulators. Sabre emulators must run locally on all workstations.	
 
1.5	Technical Infrastructure Requirements	
 
 	(a)	10/100 Mbps Ethernet cards	
 
 	(b)	Category 5 cabling	
Sabre Recommendation: Install a second router running HSRP (Hot Standby Routing Protocol) for redundancy at the primary site.
 
1.6	Additional Minimum Requirements	
 
 	(a)	Customer needs to provide three public IP addresses	
 
 	(b)	Routers must be installed by Sabre	
 
 	(c)	Routers are procured, owned, and managed by Sabre	
 
 	(d)	Customer must provide all existing subnetworks	
 
2.	MINIMUM REQUIREMENTS – SABRESONIC CHECK IN – GATE READERS	
Common-use environment – any CUTE/MUSE certified gate reader device
In an airport where Customer has purchased the hardware, following is the current list of certified scanners that will work with Sabre Gate Reader application. Sabre will provide the Customer with updates to the below list when additional devices gets certified by Sabre.
 
 	•	 	IER801BC	
 
 	•	 	Access IS BGR120M	
 
 	•	 	Access IS BGR120S	
 
 	•	 	Symbol LS2208 (1D barcode scanner, serial)	
 
 	•	 	Symbol 4407 (1D, 2D barcode scanner, wedge)	

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In addition to the above devices, Sabre can certify any 2D scanner. Should Customer find a 2D scanner that they would like to purchase/deploy that is not on the above list, Customer may request Sabre to test and certify the device at no additional charge. Customer will be required to provide Sabre with a sample device to be used in Sabre lab for testing and certification purpose.
 
3.	MINIMUM REQUIREMENTS – SABRESONIC CHECK IN – SALES SERVICE KIOSK CHECK IN	
Customer will be responsible for the selection of a self-service kiosk vendor, hardware and software platform. The self-service kiosk hardware and software must be CUSS-compliant, otherwise incremental effort and project cost will be incurred. An example SSK unit configuration follows:
Hardware: IATA CUSS-compliant Self-Service Kiosk unit configured with Touch-screen, Pentium 4 CPU, 256M RAM, 2GB Disk, Thermal printer (for boarding pass issuance), ATB Reader and/or Magnetic Card Reader, Network Interface Card
Optional: Bag Tag printer, Passport Reader, Infrared scanner
Software: Vendor kiosk management software, IATA CUSS compliant software platform
Communications: Airport LAN, IP connectivity (to Sabre eMergo data center); Minimum 64KB circuit, although 128KB circuit is recommended to ensure optimal performance and response time

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APPENDIX G
MAINTENANCE SERVICES
 
1.	MAINTENANCE SERVICES	
This Appendix G defines the Maintenance Services to be provided for the Systems covered by this Work Order No 5.
 
2.	CUSTOMER’S IT ENVIRONMENT	
Unless otherwise provided herein, Customer shall be responsible for obtaining, installing and maintaining the equipment, telecommunication facilities and interfaces that Customer has expressly agreed to provide in accordance with Section 2(i) of the main body of this Work Order, at its own expense, in order to communicate with the Systems. Customer may change its IT environment used in connection with the Systems or Services (including Customer’s desktop environment, and including changes to personal computers, hardware, software, network configuration or telecommunications network); provided, that such change conforms to Sabre’s standards and complies with minimum specifications set forth in Appendix F.
 
3.	MANAGEMENT OF SYSTEM	
Subject always to Section 2(j) of the Work Order, Hosting Systems and Data. Sabre shall have the right to subcontract any of its obligations under this Work Order to any third party without having to obtain Customer’s prior written consent. In the event that Sabre provides any communications circuits utilized with the Systems, Customer acknowledges that Sabre is not a licensed provider of communications circuits and therefore shall arrange for the provision of the communication circuits through a third-party provider selected by Sabre. Sabre will monitor such provider’s performance of its obligation to provide and maintain the communications circuits, work with such provider and Customer to resolve any problems with the communications circuits, and take all reasonable actions to cause such provider to perform such obligations. Sabre will not, however, be responsible for any damages caused by the communications circuits and/or acts or omissions by the communications circuit provider.
 
4.	SABRE CHANGES TO SYSTEM	
Sabre may modify, amend, enhance, update or provide an appropriate replacement for any of the Systems, or any element thereof, at any time. Further, Sabre shall have the right to manage all resources used in providing the Systems as Sabre deems appropriate. From time to time, the functionality of the Systems may be modified by Sabre creating Enhancements and adding New Functions. If Sabre offers these Enhancements or New Functions without charge to Customer, then Customer agrees to accept them for use with the Systems. Customer is under no obligation to purchase any Enhancement or New Function that Sabre makes available for an additional charge and Sabre hereby agrees that it will continue to support the underlying version of the System without such new Enhancement or New Function. If, following the Work Order Effective Date, Sabre removes functionality from all or any portion of the Systems without providing similar substitute functionality, and such removal has a material adverse effect on Customer, then at the Customer’s request Sabre will continue to make the prior Version or Release (i.e. last Version or Release containing the removed functionality) available to Customer for its access and use, and Sabre will provide Maintenance Services for that prior Version or Release until the eliminated functionality is restored into the relevant portion of the System.
 
5.	ENHANCEMENT AND NEW FUNCTION IMPLEMENTATION	
Sabre will use reasonable efforts to provide Customer with prior notice of the scheduled implementation of Enhancements and New Functions. Such notice shall be provided to Customer in the same manner and at the same time as such notice is provided to other Sabre customers utilizing the Systems. Sabre shall provide training materials to Customer with respect to such Enhancement and New Functions. The training materials shall be substantially similar to those that Sabre provides to other Sabre customers who utilize the Systems, and at minimum provide sufficient detail to and content to enable a reasonably skilled end user to use the Enhancements and New Functions without interruption of the existing features and functions. Except where precluded by operational emergencies to correct a Level 1 or 2 Error, Sabre shall test all System capabilities, including without limitation, Enhancements and New Functions, under an internal test environment. Despite such testing, conditions may develop that lead to error conditions, malfunctions, or a breakdown in the operation of the System. Should any of the foregoing occur, Sabre shall use reasonable efforts to correct any such condition with the same degree of effort afforded a similar problem affecting Other Customers. Nothing in this Section may be construed to excuse Sabre from performing to the Service Level Commitments contained in Appendix H.

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6.	SCOPE OF MAINTENANCE SERVICES	
During the Maintenance Term, Sabre will provide the services necessary to remedy any Level 1 or Level 2 Errors in the Systems and to acknowledge evaluate and record any Level 3 or Level 4 Errors in the Systems. Fixes for Level 3 and Level 4 Errors will be prioritized after all Level 1 and Level 2 Errors are remedied. Maintenance Services will commence promptly after Customer has identified an Error with the Systems, or any portion thereof, and has notified Sabre’s Support Desk of the Error.
 
7.	FIRST LINE SUPPORT/SECOND LINE OF SUPPORT	
Customer shall establish and maintain the organization and processes to provide “First Line Support” to its users of a System through one or more designated technical coordinators trained in software/database administration, operations and preventative maintenance procedures (the “Technical Coordinator”). First Line Support shall include, but not be limited to, (a) a direct response to users with respect to inquiring concerning the performance, functionality or operation of the System, (b) a direct response to users with respect to problems or performance deficiencies of the System, (c) an initial diagnosis of problems or performance deficiencies of the System, and (d) an initial attempt to resolve any such problems or performance deficiencies of the System. If after reasonable commercial efforts, the Customer Technical Coordinator is unable to diagnose or resolve the problems or performance deficiencies of the System, the Technical Coordinator shall contact the Sabre Support Desk for “Second Line Support”, and Sabre will provide such support as set forth herein. Second Line Support shall include a diagnosis of problems or performance deficiencies of the System and a resolution of Level 1 or Level 2 Errors with the System. Second Line Support shall also include a diagnosis of problems or performance deficiencies of the System and a record and possible resolution of Level 3 or Level 4 Errors with the System. Customer shall provide Sabre with the necessary remote access (e.g. modem) to Customer’s operating system so that Sabre may provide remote diagnostic capability. Sabre does not assure performance of the Maintenance Services if such remote access is not provided by Customer when requested by Sabre.
 
8.	SUPPORT DESK	
During the Work Order Term and any Transition Period, Customer will have access to a Sabre Support Desk twenty-four (24) hours a day, seven (7) days a week, accessible via the internet, email, teletype and/or telephone support. The Support Desk will be responsible for facilitating the Second Line of Support. A Support Desk coordinator will be responsible for logging and tracking Errors after they have been reported by Customer, contacting the Customer’s Technical Coordinator, if deemed necessary, to confirm receipt of an Error report and determining the priority level of the Error. In the event the parties disagree on the severity level placed by Sabre on any Error, the Customer may escalate to the Sabre Account Director, and may further escalate to Sabre Regional Vice President, for discussion and agreement. Error levels will be determined as follows:
Level 1 – A complete loss of service of the System or “Critical Business Function”. The System is inoperable and work cannot continue.
Level 2 – A severe loss of service of the System. Problem affects a Critical Business Function, however, use of the System can continue in a restricted fashion.
Level 3 – A moderate loss of service of the System. A workaround is available permitting use of the System’s functionality.
Level 4 – No loss of service of the System. Problem is minor and no workaround is required.
Customer may report a System Error by contacting the Sabre Help Desk using any of the following methods:
 
 	•	 	Internet Access: Go to “http://customersupport.sabre.com/”	
 
 	•	 	Email: Send to res.helpdesk@sabre.com	
 
 	•	 	Teletype: Send to SAAHD1S	
 
 	•	 	Phone in Mexico: 01-800-123-8537 or 001-682-605-5500. Note: all Level 1 Errors are to be reported by telephone, if possible, for the quickest response.	

Confidential	  	Page 75	  		

9.	USER GROUP	
Customer will be entitled to attend Sabre’s User Group Meetings for the SabreSonic Passenger Solution. All expenses associated with Customer’s attendance of such meetings shall be the responsibility of Customer.

Confidential	  	Page 76	  		

APPENDIX H
SERVICE LEVEL AGREEMENT
 
1.	INTRODUCTION	
 
 	(a)	This Service Level Agreement describes the service levels applicable to the System provided under this Work Order. This Service Level Agreement shall supersede and replace any existing service level agreements or performance standards under the Agreement.	
 
 	(b)	The Service Level Commitments and Service Level Targets with respect to the Systems are set forth in this Appendix H. Sabre’s failure to achieve a Service Level Commitment and Service Level Targets shall be considered a Service Level Default, resulting in a Service Credit as set forth in this Appendix H.	
 
 	(c)	In the event of System changes or other changes which adversely affect the System performance, both parties will agree in advance the impact on Service Level Commitments and Service Level Targets (such agreement to be negotiated in good faith).	
 
2.	EXCEPTIONS TO SERVICE LEVEL COMMITMENTS AND TARGETS	
Sabre shall not be responsible for its failure to meet any Service Level Commitment if such failure is attributable to any of the following:
 
 	(a)	Customer’s failure to perform its obligations under the Agreement or Work Order that impact the performance of the System defined in Appendix C;	
 
 	(b)	Force Majeure Events except for (i) strikes, lockouts, insurrection, protest, security breaches or other hostilities, (ii) fuel and energy shortages or (iii) transportation delays or the inability to obtain necessary labor, materials or utilities from usual sources;	
 
 	(c)	The performance of a third party not under Sabre’s control (for clarity, a Sabre subcontractor shall be considered to be under Sabre’s control and Sabre will not be excused for failure to meet a Service Level Commitments as a results of acts or omissions of a Sabre subcontractor);	
 
 	(d)	Service or resource reductions mutually agreed with Customer provided that Sabre has previously notified Customer in writing that the implementation of such request may result in a failure to meet a Service Level Commitment;	
 
 	(e)	Unforeseen capacity increases based on changes in Customer’s business operations, processes or methodology that adversely impact the System(s), provided, however, increases of capacity demands resulting from Customer fare sales shall not be considered unforeseen;	
 
 	(f)	Failure of the System Requirements provided by Customer; or	
 
 	(g)	Failure of the Internet or other telecommunication connections.	
 
3.	ROUTINE DOWNTIME	
Up to ten (10) times in any calendar year, Sabre may schedule downtime for maintenance and or modifications to the Systems for period not to exceed four (4) hours each time (“Routine Downtime”). Except for operational necessity, Routine Downtime shall occur between 2100 and 0700 United States Central Time, using reasonable efforts to exclude Tuesdays. Sabre will provide Customer with at least ten (10) days prior notice of any scheduled Routine Downtime and the anticipated duration of such Routine Downtime; provided, however, Sabre may defer the scheduled Routine Downtime upon not less than twenty-four (24) hour prior advance notice for operational necessity.

Confidential	  	Page 77	  		

4.	MONITORING AND REPORTING	
 
 	(a)	Unless otherwise specified, Sabre will provide the monitoring systems and/or tools (“Monitoring System”) for monitoring all Service Levels Commitments and Service Level Targets.	
 
 	(b)	By the fifteenth (15th) day of each month, Sabre will provide Customer with a monthly performance report to verify Sabre’s performance and compliance with the Service Level Commitments and Service Level Targets. The data and detailed supporting information shall be Sabre Confidential Information.	
 
 	(c)	Sabre will provide Customer access to Sabre’s Monitoring System, and metrics as soon such a reporting system is available for direct access.	
 
 	(d)	Upon mutual agreement and if technically feasible Customer will use its own Monitoring System to monitor the System.	
 
5.	RIGHT TO AUDIT	
 
 	(a)	Upon Customer’s reasonable written notice to Sabre, and for the purpose of verifying compliance with this Work Order, Customer shall have access on an annual basis, during regular business hours at mutually acceptable times and places, to all records which reasonably relate to this Work Order, for audit and copy.	
 
 	(b)	Both parties reserve the right to have an outside independent audit performed to substantiate overall conformance to this Work Order	
 
 	(c)	The auditing party shall be responsible for all reasonable costs incurred by the non auditing party in connection with each such examination; provided, however, that the auditing party shall not be responsible for such costs if the audit reveals that the non auditing party is not performing in accordance with this Work Order.	
 
 	(d)	In the event that the audit reveals that the non auditing party has not complied with the Service Level Commitment and Service Targets, the non auditing party shall immediately provide Service Credits as described in Section 5 of Appendix H.	
 
 	(e)	During each audit, neither party shall materially interfere with the ability of the non auditing party to perform its duties.	
 
6.	SERVICE CREDITS	
In the event Sabre fails to meet a Service Level Commitment and Service Level Targets identified in this Appendix H, and such failure is not excused or otherwise permitted under the terms of this Appendix H, then, as Sabre’s sole and exclusive liability and Customer’s sole and exclusive remedy, Sabre shall provide Customer with the Service Credit(s) as described in this Appendix H.
 
6.1	Settlement of Service Credits	
 
 	(a)	Within the standard monthly reporting Sabre shall provide information about Service Credits due for the preceding month.	
 
 	(b)	Any Service Credit(s) due to Customer will be applied on the next month invoice. Service Credits are not redeemable for cash.	
 
6.2	Service Credit Calculation	
 
 	(a)	Service Level Commitments	
In the event Sabre fails to meet a Service Level Commitment, it will provide Customer with a Service Level Credit which shall be calculated as a percentage of the System Usage Fee for the month corresponding to the Measurement Window for an affected period.

Confidential	  	Page 78	  		

			
Availability	  	Service Credit for failure to achieve
Service Level	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
The maximum Service Credit available to Customer for any given month shall in no event exceed ***** of the System Usage Fees for the applicable month.
 
6.3	Service Level Targets	
 
 	(a)	Service Credits will be paid for each Level 1 and Level 2 error not resolve in ***** business days (or as mutually agreed if longer than ***** business days)	
 
 	(b)	For each Level 1 not met Sabre pays Customer a Service Credit equal to ***** of the monthly committed RPB fee on the next months invoice	
 
 	(c)	For each Level 2 not met Sabre pays Customer a Service Credit equal to ***** of the monthly committed RPB fee based on the next month invoice	
 
 	(d)	Service Credits capped at a maximum of ***** of the RPB expense on any one month invoice	
 
 	(e)	In any one calendar month if the Service Credit due Customer meets or exceeds ***** of the RPB expense on the applicable month’s invoice Sabre will be deemed as Service Level Default for that month	

Service Target Level	  	Service Credit for Default	
Level 1	  	*****	
Level 2	  	*****	
 
7.	SERVICE LEVEL COMMITMENTS	
Sabre will meet the following Service Level Commitments in connection with its performance under this Work Order:
 
 	(a)	Availability – the System will collectively be Available ***** of the time.	
For purposes of calculating the Availability of a System, the following metric shall apply:
 
 	(a)	Availability: This Performance Metric is a measure of the time of the System is available to Customer for Productive Use at Sabre’s Data Center (“Availability” or “Available”). It is expressed as a percentage of the Agreed Service Time, during the “Measurement Window” (i.e., a calendar month), for a specific System. The Availability shall be measured in percentage points to ***** decimal places as follows:	
***** = *****/***** x 100%

Confidential	  	Page 79	  		

 	(b)	Agreed Service Time is equal to the total time available in the Measurement Window excluding Routine Downtime.	
 
 	(c)	For any period that a System is not Available other than for Routine Downtime (“Unscheduled Outage”), the period of such Unscheduled Outage shall be measured from the point in time when Sabre determines that the Unscheduled Outage began, which shall be the earliest of:	
 
 	(i)	the point in time that such Unscheduled Outage is detected by Sabre through its Monitoring System; or	
 
 	(ii)	Customer reports such Unscheduled Outage to the Sabre Help Desk; or	
 
 	(iii)	any other manner in which Sabre has actual knowledge that the System(s) is not available to Customer	
 
 	(d)	The Unscheduled Outage shall end at the point in time which is earlier of:	
 
 	(i)	the time Sabre registers in its Monitoring System that the affected System(s) is Available; or	
 
 	(ii)	the time Sabre registers traffic from Customer which generates responses from the affected System(s).	
 
8.	SERVICE LEVEL TARGETS	
In addition to the Service Level Commitments provided above, Sabre will endeavor to meet the following Service Level Targets:
 
 	(a)	The “Response Time” is the period measured from the time a request is received by the System at Sabre’s data processing center and the time a response is provided by the System at Sabre’s data processing center. If Sabre’s average Response Time during a monthly period persistently falls below ***** after excluding complex fare shopping transactions (e.g., searches involving multiple routing and/or days for travel), then notwithstanding anything herein to the contrary, Customer shall have the right to terminate this Work Order for cause pursuant to Section 2(b) of the Agreement. For purposes of this section, a “persistent failure” of Sabre to meet the ***** Response Time as described above shall mean (i) Sabre’s failure to meet such Response Time for ***** consecutive months, or (ii) Sabre’s failure to meet such Response Time for ***** months in any ***** month period.	
 
 	(b)	In the case that Customer reports a Level 1 Error, Sabre and Customer must mutually agree to modify the Level reported by Customer. Once both parties mutually consent the change of Level, Sabre must notify Customer in writing the reason of such change.	

Confidential	  	Page 80	  		

 	(c)	The target response and remediation times for Level 1 and 2 Errors (as described in Section 8 of Appendix G) after an Error has been logged is as follows:	

Severity
Level	  	Source	  	Acknowledgement	  	Engagement
(2 nd  and 3 rd  level)
after
acknowledgement	  	Customer
Update
Frequency	  	Restore*	  	Remediation**	  	Escalation	
1	  	Telephone	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
2	  	Telephone	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	Web/e-mail	  	*****	  		  		  		  		  		
3	  	Telephone	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	Web/e-mail	  	*****	  		  		  	*****	  		  		
4	  	Telephone	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	Web/e-mail	  	*****	  		  		  	*****	  		  		
 
*/**	see definitions in Appendix J	
 
9.	TERMINATION FOR PERSISTENT SERVICE LEVEL DEFAULT	
 
9.1	Service Level Commitments	
Notwithstanding the above, Customer shall have the right to terminate this Agreement for cause upon written notice to Sabre (and without the provision of a cure period) in the event that the Availability of the System falls below (i) *****, (ii) ***** for any ***** consecutive months, or (iii) ***** for any ***** months in any *****. Customer may only exercise its right to terminate as permitted under this provision within ***** from the end of the month in which such termination right was triggered.
 
 	(a)	Customer then has ***** days from the point in time that Sabre is deemed in Default of the Service Level to notify Sabre that it will terminate the agreement.	
 
 	(b)	Customer then will migrate-off of the System at least ***** days after this notification date.	
 
 	(c)	Customer will provide Sabre at least ***** days advance notification of the date it will migrate off the System	
 
9.2	Service Level Targets	
Notwithstanding the above, Customer shall have the right to terminate this Agreement for cause upon written notice to Sabre (and without the provision of a cure period) in the event that the Service Credits for Service Level Targets paid to Customer exceeds ***** percent (i) for any ***** consecutive months, or (ii) for any ***** months in any ***** month period.
 
 	(a)	Customer then has ***** days from the point in time that Sabre is deemed in Default of the Service Level to notify Sabre that it will terminate the agreement.	
 
 	(b)	Customer then will migrate-off of the System at least ***** days after this notification date	
 
 	(c)	Customer will provide Sabre at least ***** days advance notification of the date it will migrate off the System	

Confidential	  	Page 81	  		

APPENDIX I
CUSTOMER SPECIFIC DELIVERABLES
Customer Specific Deliverables will be mutually agreed upon by the parties in and defined in the Project Definition Document. Any subsequent Customer Specific Deliverables will be mutually agreed upon by the parties through the Change Request process. Sabre will deliver to Customer the following Customer Specific Deliverables:
 
 	(a)	Interface Deliverables as will be defined in the PDD	
 
 	(b)	Sabre Roadshow	
 
 	(c)	eCommerce Workshop	
 
 	(d)	Work with Customer to define Critical Business Process for clarity related to the Service Level Agreement	
Sabre will be responsible for ensuring compliance with Mexican government regulations
 
 	(a)	Registro Federal de Causantes (RFC)	
 
 	(b)	Tax requirements	
 
 	(c)	Financial Sector mandates (Mexican credit cards may not be charged in USD; Authorization of credit cards (PROSA)	
 
 	(d)	Mexican aviation industry requirements	
 
 	(e)	Local and Federal government mandate	

Confidential	  	Page 82	  		

APPENDIX J
DEFINITIONS
The following terms when capitalized in this Work Order shall have the meanings set forth below:
“ Ancillary Services ” means the third party products and services that Customer distributes to its airline passengers in connection with its airline services, including but not limited to airport shuttle services, travel insurance, in-flight meal purchases, car rental, hotel services, and in-flight entertainment operations.
“ Codeshare Carriers ” means a carrier with whom Customer has an arrangement whereby such other airline and Customer market and operate any of their respective airline flight segments under the airline designator code (issued by the International Air Transport Association, or its successor) of the other party;
“ Content ” means the Customer-specific content provided by Customer and made available by Sabre through the Site. The Content will be provided by Customer in the format mutually agreed upon by the parties.
“ Contract Year ” shall mean a consecutive twelve month period, with the Contract Year 1 beginning on the Commencement Date and ending twelve months thereafter.
“ Critical Business Function ” means any functionality mutually agreed and documented by both parties during the implementation of the System in an Amendment to Appendix G.
“ Customer Data ” means all data and information that is input by or on behalf of Customer into any application database forming part of or used by Customer in connection with the Systems, including data and information that is processed by the Systems by or on behalf of Customer, or that is automatically generated or created through Customer’s use of the Systems.
“ Customer Database ” shall mean the database that includes the Customer Data, including information that relates to Customer’s air schedules, fares, and passengers (including inventory records of Customer’s flights, and passenger name records that include airlines segments), and that is stored in and processed by the Sabre Data Center. “ Deliverables ” means
“ Enhancement ” means any change to the method of operation or display of the functions that exist in the software.
“ Expected Monthly Messages per RPB ” shall mean the measured and agreed messages per RPB with a 20% buffer added onto the agreed messages per RPB
“ Hosting Services ” means the Sabre services described in Section 2.9 of the Work Order;
“ Message ” shall mean each time data is sent by or on behalf of Customer to a System at the Sabre Data Center and data is then sent from a System at the Sabre Data Center in response to an inquiry by or on behalf of Customer. For clarity, a Message is a round trip response
“ Milestone ” means a significant event occurring as part of the Professional Services as identified on the Project Schedule set forth on Appendix E, as the Project Schedule may be revised in the Project Definition Document and the Program Process and Procedures Document delivered by Sabre to Customer at Milestone 1, and as more particularly described in Section 2(2) of this Work Order;
“ Monitoring System ” means a system used to monitor System performance in data center.
“ Non-critical Users ” means employees or customers other than Critical Users.
“ New Function ” shall mean any modification that adds a function not provided by with the software on the date the parties entered into this Work Order.
“ Restore ” means that a work around is identified and implemented in order to restore the operations of the System.
“ Remediate ” means the root cause analysis has been completed and a final resolution has been identified and implemented to correct the cause of the Error.

Confidential	  	Page 83	  		

“ RPB Fee ” means the fee per Revenue Passenger Boarded as set forth in Section 6 of this Work Order that Customer pays for access and use of the Systems.
“ Revenue Passenger Boarded ” or “ RPB ” shall mean a passenger with a paid ticket excluding non-revenue passengers, who is boarded on a Customer flight or on a flight marketed or operated under a Customer Entity’s airline designator code. A Revenue Passenger Boarded on a direct flight that makes one or more intermediate stops, whether or not including a change of equipment, shall be counted as one Revenue Passenger Boarded. A passenger traveling on a Funnel Flight shall be regarded as more than one Revenue Passenger Boarded. A passenger making a connection at an intermediate point by deplaning from one flight and boarding another flight shall be considered as more than one Revenue Passenger Boarded. “Funnel Flight” shall mean a Flight (i)(a) for which a single flight number (“through flight number”) has been assigned to two or more connecting Flight segments, and (b) for which the through flight number is different than the flight numbers of the component Flight segments, or (ii) for which the assigned Flight number has a single point of origin and multiple destination or multiple points of origin and a single destination. “Flight” shall mean a schedule or chartered airline flight segment operated by Customer or by another person using a Customer Entity’s airlines designator code. A series of flight segments operated under a single flight number without a scheduled change of aircraft shall be single Flight, except that each separately numbered flight segment of a Funnel Flight shall be a separate flight.
“ Project Definition Document ” or “ PDD ” means the project definition document described at Section 3 of Appendix B of this Work Order; and
“ Program Process and Procedures Document ” or “ PPP ” means the program process and procedures document described at Section 3 of Appendix B of this Work Order.
“ Sabre Date Center ” means any computer data processing facility operated by or on behalf of Sabre.
“ Site ” means the set of World Wide Web pages hosted by Sabre through which a customer may access the Customer’s reservation data via SabreSonic Web software with incorporated product features set forth in the description of SabreSonic Web set forth in this Work Order. The term “Site” shall include all sites and sub sites.
“ System Usage Fee ” means the total of the PB Fees, subject to the Minimum Commitment set forth in Section 6.2 of the Work Order, paid each month for Customer to access and use the Systems.

Confidential	  	Page 84	  		

APPENDIX K
TRAVEL & INCIDENTALS
 
1.	Travel & Expense Categories	
Sabre and Customer agree that Travel & Expenses will be managed by the following categories:
 
1.1	Air Travel	
 
 	(a)	Includes all air fare expenses including taxes that allow Sabre to travel to and from their home base to Mexico.	
 
 	(b)	Air travel will be space positive economy seating to/from Continental United States to/from Mexico;	
 
 	(c)	Sabre will use reasonable efforts to notify Customer fifteen (15) days in advance about travel arrangements;	
 
 	(d)	Customer will approve, coordinate and purchase travel itineraries for Sabre;	
 
 	(e)	All expenses such as change fees and additional airfare will be responsibility of the party that requests the change.	
 
1.2	Lodging Expense	
 
 	(a)	Includes expenses related to lodging in Mexico including breakfast expense and daily internet service;	
 
 	(b)	All lodging expenses listed above will be direct billed to Customer	
 
1.3	Meals & Incidentals	
 
 	(a)	A daily Per Diem allowance that provides for:	
 
 	(i)	Lunch and Dinner	
 
 	(ii)	Fees and tips	
 
 	(iii)	Transportation between places of lodging or Customer offices and places where meals are taken	
 
 	(iv)	Laundry and Dry Cleaning	
 
 	(b)	Sabre will invoice Customer for Per Diem expenses	
 
1.4	Mexico Airport Transportation	
 
 	(a)	Includes ground transportation expenses to and from a Mexican airport to the hotel where Sabre personal will be lodging;	
 
 	(b)	Sabre will invoice Customer actual expenses for Mexico Airport Transportation expenses and provide the respective documents that support such expense.	
 
1.5	Local Transportation	
 
 	(a)	Includes ground transportation expenses to and from Customer’ offices and the hotel where Sabre personal will be lodging	
 
 	(b)	Sabre will invoice Customer actual expenses for Mexico Airport Transportation expenses and provide the respective documents that support such expense.	

Confidential	  	Page 85	  		

1.6	Point of Origin Ground Transportation	
 
 	(a)	A Per Diem allowance for ground transportation and/or airport parking for travel from point of origin airport to Customer site;	
 
 	(b)	This Per Diem allowance paid only once per trip	
 
 	(c)	Sabre will invoice Customer for Per Diem expenses	
 
2.	Per Diem Rates	
Sabre and Customer agree on the following Per Diem rates described in the table below:

Travel & Expense Category	  	Per Diem Rate	
Meals & Incidentals	  	US $50 per day including travel day	
Point of Origin Ground Transportation	  	US $70 per trip	
The management process for travel & incidentals will be mutually described in detail in the PPP.

Confidential	  	Page 86	  		

Exhibit 10.54
Hosted Services Agreement
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
CONFIDENTIAL
VOLARIS – JANUARY 29, 2013
NAVITAIRE HOSTED SERVICES AGREEMENT
Table of Contents

1	    	Definitions	  	 	3	  	
2	    	Scope of Services	  	 	5	  	
3	    	NAVITAIRE Obligations	  	 	5	  	
4	    	Customer Obligations	  	 	6	  	
5	    	Term and Termination	  	 	8	  	
6	    	Price and Payment	  	 	9	  	
7	    	License, Title, Modifications, and Covenants	  	 	11	  	
8	    	Indemnification	  	 	14	  	
9	    	Confidential Information	  	 	15	  	
10	    	Disclaimers and Limitations	  	 	16	  	
11	    	Publicity	  	 	16	  	
12	    	Relationship of the Parties	  	 	17	  	
13	    	No Assignment	  	 	17	  	
14	    	Force Majeure	  	 	17	  	
15	    	Industry Event	  	 	17	  	
16	    	Notices	  	 	18	  	
17	    	Waiver	  	 	18	  	
18	    	General	  	 	18	  	
EXHIBIT A	  	 	21	  	
HOSTED RESERVATION SERVICES - NEW SKIES®	  	 	21	  	
1	    	Definitions	  	 	21	  	
2	    	Scope of Services	  	 	24	  	
3	    	Implementation Services	  	 	24	  	
4	    	Data Circuits	  	 	30	  	
5	    	Support Center Support	  	 	30	  	
6	    	New Skies by NAVITAIRE Functionality Included in Hosted Reservation Services	  	 	31	  	
7	    	Customer Hardware, Software, Connectivity and Network Requirements	  	 	55	  	
8	    	Service Levels and Service Level Targets	  	 	58	  	
EXHIBIT B	  	 	66	  	
(INTENTIONALLY OMITTED)	  	 	66	  	
EXHIBIT C	  	 	67	  	
NAVITAIRE CONTACTS	  	 	67	  	
1	    	NAVITAIRE Support Center	  	 	67	  	
2	    	NAVITAIRE Commercial Account Manager	  	 	67	  	
3	    	NAVITAIRE Account Executive Sponsor	  	 	67	  	
4	    	NAVITAIRE Financial Contacts	  	 	67	  	
 
1

							
EXHIBIT D	  	 	68	  	
CUSTOMER CONTACTS	  	 	68	  	
1	    	Customer Emergency Contact	  	 	68	  	
2	    	Customer Account Liaison	  	 	68	  	
3	    	Customer Executive Sponsor	  	 	68	  	
4	    	Customer Authorized Support Contact	  	 	68	  	
5	    	Customer Financial/Accounts Payable Contact	  	 	69	  	
EXHIBIT E	  	 	70	  	
POWERED BY NAVITAIRE® MARK	  	 	70	  	
1	    	Mandatory Use of the Mark	  	 	70	  	
2	    	Guidelines for Using the NAVITAIRE Wired Mark	  	 	70	  	
3	    	License Grants and Restrictions	  	 	71	  	
4	    	No Further Conveyances	  	 	71	  	
5	    	No Endorsement	  	 	71	  	
6	    	Termination	  	 	71	  	
7	    	The Mark	  	 	71	  	
EXHIBIT F	  	 	72	  	
(INTENTIONALLY OMITTED)	  	 	72	  	
EXHIBIT G	  	 	73	  	
HOSTED REVENUE ACCOUNTING SERVICES - SKYLEDGER®	  	 	73	  	
1	    	Definitions	  	 	73	  	
2	    	Scope of Services	  	 	73	  	
3	    	Implementation Services	  	 	73	  	
4	    	Data Circuits	  	 	77	  	
5	    	Included Support	  	 	78	  	
6	    	Scheduled Maintenance	  	 	79	  	
7	    	Hosted Revenue Accounting Services Functionality	  	 	79	  	
8	    	Customer Hardware, Software, Connectivity and Network Requirements	  	 	83	  	
9	    	System Errors and System Changes	  	 	84	  	
EXHIBIT H	  	 	88	  	
(INTENTIONALLY OMITTED)	  	 	88	  	
EXHIBIT I	  	 	89	  	
EXHIBIT J	  	 	90	  	
EXHIBIT K	  	 	91	  	
PRICE AND PAYMENT	  	 	91	  	
1	    	Fee Schedule	  	 	91	  	
WORK ORDER TERMS AND FORM	  	 	97	  	
1	    	Additional Terms	  	 	97	  	
2	    	Form of Work Order	  	 	99	  	
Appendix A	  	 	102	  	
Change Request Form	  	 	102	  	
 
2

Hosted Services Agreement
 
NAVITAIRE HOSTED SERVICES AGREEMENT
This Hosted Services Agreement (the “Agreement”) is made between Navitaire LLC, a Delaware corporation (“NAVITAIRE”) and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (d.b.a. Volaris) a Mexican sociedad anónima promotora de inversion de capital variable , (“Customer”), and shall be effective as of January 29, 2013 (“Effective Date”).
Recitals
 
A.	Accenture LLP is a global management consulting, technology services and outsourcing company.	
 
B.	NAVITAIRE, wholly owned by Accenture LLP, is an airline technology services company, which provides various services such as hosted reservation and revenue management services to airline companies worldwide.	
 
C.	The parties desire that NAVITAIRE provide to Customer Hosted Services (as defined in Section 1), and Customer desires to purchase such Hosted Services on the terms contained in this Agreement.	
NOW, THEREFORE, the parties agree as follows:
 
1	Definitions	
As used herein, the following terms shall have the meanings accorded them in this Section 1. In the event of any conflict between a definition set forth in this Section 1 and in any one contained in an Exhibit to this Agreement, the definition contained within such Exhibit shall control.
 
 	1.1	Affiliate of a party means any entity, whether incorporated or not, that is controlled by, controls, or is under common control with such party. “Control” means the ability, whether directly or indirectly, to direct the affairs of another by means of ownership, contract or otherwise.	
 
 	1.2	API(s) means Application Program Interface(s).	
 
 	1.3	Confidential Information has the meaning set forth in Section 9.1 hereof.	
 
 	1.4	Configurable Template means any of the templates comprising from time to time a part of the Hosted Services System and designed to permit Customer to configure the presentation and interfaces of the Hosted Services through the use of API(s) made available by NAVITAIRE as a part of Hosted Services for such purpose.	
 
 	1.5	Contract Year means each twelve (12) month period commencing at the Target Date listed for Hosted Reservation Services in Exhibit A. If Hosted Reservation Services are not in scope of the Agreement, the Target Date in the applicable exhibit is used to determine the Contract Year.	
 
 	1.6	Customer Authorized Support Contact(s) has the meaning set forth in Exhibit D.	
 
 	1.7	Custom Enhancement Request means a request by Customer to modify the Hosted Services System used by NAVITAIRE to provide the Hosted Services.	
 
 	1.8	Customer Account Liaison has the meaning set forth in Exhibit D.	
 
 	1.9	Customer Personal Data means data which is owned or controlled by Customer, which NAVITAIRE has access to and/or otherwise processes for the purpose and during the provision of the Services, and which names or identifies a natural person including, without limitation: (a) data that is explicitly defined as a regulated category of data under data protection laws applicable to Customer; (b) non-public personal data, such as national identification number, passport number, social security number, driver’s license number; (c) health or medical information, such as insurance information, medical prognosis, diagnosis information or genetic information; (d) financial information, such as a policy number, credit card number and/or bank account number; and/or (e) sensitive personal data, such as race, religion, marital status, disability, or sexuality.	
 
3

Hosted Services Agreement
 
 	1.10	Deliverables mean Materials that are originated and prepared for Customer by the Service Provider (either independently or in concert with Customer or third parties) and delivered to Customer during the course of the NPS Services under this Agreement, within the scope of a Work Order, as described in the Work Order form included in Exhibit L of this Agreement.	
 
 	1.11	Emergency has the meaning set forth in Section 5 of Exhibits A and G.	
 
 	1.12	Enhancement has the meaning set forth in Section 8 of Exhibit A and Section 9 of Exhibit G.	
 
 	1.13	Hosted Reservation Services means the services described in Exhibit A; provided that if Hosted Reservation Services are not designated as being contracted for in Section 2, Exhibit A shall be blank or not appended and this Agreement shall not cover such type of services.	
 
 	1.14	Hosted Revenue Accounting Services means the services described in Exhibit G; provided that if Hosted Revenue Accounting Services are not designated as being contracted for in Section 2, Exhibit G shall be blank or not appended and this Agreement shall not cover such type of services.	
 
 	1.15	Hosted Services or Services means Hosted Reservation Services and/or Hosted Revenue Accounting Services, as designated in Section 2 of this Agreement. Hosted Services are provided by NAVITAIRE and its Affiliates.	
 
 	1.16	Hosted Services System means with respect to Hosted Reservation Services and Hosted Revenue Accounting Services, the hardware and software used by NAVITAIRE to provide such Services as well as in each case any user or other documentation associated therewith (including Configurable Templates and any associated API(s)).	
 
 	1.17	Implementation Services has the meaning set forth in Section 3 of Exhibits A and G.	
 
 	1.18	Included Support has the meaning set forth in Section 5 of Exhibits A and G.	
 
 	1.19	Initial Term has the meaning set forth in Section 5.1 hereof.	
 
 	1.20	Interrupted Service means a complete system availability outage of ***** due to the following:	
 
 	•	 	NAVITAIRE controlled primary circuit network line being down;	
 
 	•	 	NAVITAIRE controlled server or router being down; or	
 
 	•	 	System Error which causes the system to be completely unavailable.	
 
 	1.21	Invoicing Currency means the currency that NAVITAIRE uses in preparation of monthly Customer invoices. The Invoicing Currency for this Agreement is *****	
 
 	1.22	Major Release has the meaning set forth in Exhibit A, Section 8.	
 
 	1.23	Mark has the meaning set forth in Section 4.11 hereof and in Exhibit E.	
 
 	1.24	Materials mean work product and other materials, including without limitation, reports, documents, templates, studies, software programs in both source code and object code, specifications, business methods, tools, methodologies, processes, techniques, solution construction aids, analytical frameworks, algorithms, know-how, processes, products, documentation, abstracts and summaries thereof.	
 
 	1.25	NAVITAIRE Account Manager means the NAVITAIRE Commercial Account Manager and/or other NAVITAIRE representatives as designated in Customer’s copy of the NAVITAIRE Procedures Manual, provided by the NAVITAIRE Support Center.	
 
 	1.26	NAVITAIRE Property has the meaning set forth in Section 7.2 hereof.	
 
4

Hosted Services Agreement
 
 	1.27	NPS means Navitaire Professional Services. , a division of Navitaire LLC that specializes in providing custom solutions to NAVITAIRE customers.	
 
 	1.28	Passive/Informational Segment means a Segment on the host PNR for informational notice of flights on other airlines, which does not directly affect the host’s flight inventory.	
 
 	1.29	PNR means a Passenger Name Record, being an individual electronic record with a unique record locator number, which may contain one or more passenger names, but does not necessarily contain active or inactive booked Segments.	
 
 	1.30	Professional Services means the services performed for Customer by NAVITAIRE, as the Service Provider, pursuant to Exhibit L of this Agreement and a mutually agreed, written Work Order, as contemplated by the Work Order form included in Exhibit L of this Agreement.	
 
 	1.31	Segment or Host Segment means a nonstop individual booked flight segment or passive/informational segment.	
 
 	1.32	Service Fees means the fees payable by Customer as specified in Exhibit K.	
 
 	1.33	Service Levels means targets included in Exhibit A, Section 8.	
 
 	1.34	Service Provider means the entity described in the Professional Services definition.	
 
 	1.35	Support Center or NAVITAIRE Support Center means the NAVITAIRE facility that accepts phone and Internet based customer support tool service requests related to Hosted Services.	
 
 	1.36	Support Center Support has the meaning set forth in Section 5 of Exhibit A and G.	
 
 	1.37	Support Fees means fees payable by Customer for applicable NAVITAIRE Support Center Support as specified in Exhibit K.	
 
 	1.38	Target Date means the completion date for Implementation Services for each of the defined Hosted Services as outlined in Section 3 of Exhibits A and G unless the Target Date has been changed as outlined in Exhibit K. In the event that Customer utilizes the Hosted Services for live production use before the Target Date, the Target Date will be deemed to be the first date of production use of such Hosted Services. The specific Target Date for each of the Services is located in Section 3.9.1 of Exhibits A and G.	
 
2	Scope of Services	
For purposes of this Agreement, Hosted Services include (as designated by ‘X’) the following:

‘X’
or ‘N/A’	  	Hosted Services	
X	  	Hosted Reservation Services (or certain types thereof), as designated in and the provision of which is governed by Exhibit A hereto.	
X	  	Hosted Revenue Accounting Services, as designated in and the provision of which is governed by Exhibit G hereto.	
In addition, the parties may further agree that NAVITAIRE will provide Professional Services pursuant to Exhibit L, if the parties agree and execute a written Work Order in a form similar to the example contained within Exhibit L.
Unless expressly identified as being hosted by NAVITAIRE in the table above, Customer shall be responsible for managing any hosted environments required to support any NAVITAIRE or third party products.
 
3	NAVITAIRE Obligations	
NAVITAIRE shall perform the Hosted Services in accordance with this Agreement ***** NAVITAIRE may utilize subcontractors to perform its obligations under this Agreement. *****
 
5

Hosted Services Agreement
 
4	Customer Obligations	
 
 	4.1	General Obligations. Customer shall comply with the obligations set forth herein including, but not limited to, those set forth in Exhibits A and G.	
 
 	4.2	Access and Cooperation. Customer will provide NAVITAIRE with access to and use of its data, internal resources, and facilities, and shall otherwise cooperate with NAVITAIRE as reasonably required by NAVITAIRE, ***** in connection with the implementation and provision of Hosted Services. Customer gives permission to NAVITAIRE to transmit data to third parties *****.	
 
 	4.3	Notice of Increased Usage and Hosted Reservation and/or Web Services Processing Capacity. Customer agrees to provide NAVITAIRE, on a confidential basis and according to a NAVITAIRE pre-defined process, at least ***** advance written notice of any marketing initiatives, acquisitions, alliances, schedule changes, or promotions that may materially increase Customer’s usage of the Hosted Reservation and/or Web Services or otherwise adversely impact the Hosted Reservation and/or Web Services System performance. Examples of this include, without limitation, free ticket/$0 fare promotions, new hub announcements, significant additional aircraft purchases, etc. For the purposes of this Section, a material increase is an increase that generates a response greater than the peak Hosted Reservation and/or Web Services Processing Capacity, comprised of Segments booked per hour and Availability Requests made per hour, as described in this Section. If Customer requires additional capacity above the peak Segments booked per hour and/or peak Availability Requests made per hour, NAVITAIRE will endeavor to provide a quote to Customer based on the requirements and scope desired, and the timeline on which such additional capacity can be made available to Customer.	
NAVITAIRE’s Hosted Reservation and/or Web Services Processing Capacity for ***** is based on multiplying the Monthly Minimum Segment Guarantee by ***** and dividing the result by *****). For the purposes of illustration, if the Monthly Minimum Segment guarantee is ***** that number is multiplied by ***** and then divided by ***** The resulting ***** constitute the peak Hosted Services Processing Capacity for *****.
The Hosted Reservation and/or Web Services Processing Capacity for Availability Requests (as defined in Exhibit A, Section 1) is based on multiplying the number of looks defined in the Look to Booked Segment ratio (as provided in Exhibit K) by the monthly minimum Segment guarantee *****. For the purposes of illustration, if the Monthly Minimum Segment Guarantee is ***** the monthly minimum Segment guarantee ***** is ***** divided by *****). The resulting ***** is the monthly minimum Segment guarantee *****. If the Look to Booked Segment ratio is defined as *****, the Hosted Reservation and/or Web Services Processing Capacity for Availability Requests is calculated by taking the ***** and multiplying it by ***** The resulting ***** is the Hosted Services Processing Capacity for Availability Requests.
NAVITAIRE will not be obligated to fulfill Service Level parameters, as outlined in Exhibit A, Section 8 when Customer’s volume exceeds the peak Hosted Reservation and/or Web Services Processing Capacity for ***** and/or Availability Requests made per hour, as defined in this paragraph *****.
 
 	4.4	Notice of Additional Data Storage Requirements. During the Term of this Agreement NAVITAIRE agrees to provide Customer with completed travel historical data storage capacity equal to ***** of historical PNR level booking activity detail available in the On-Line Transaction Processing (“OLTP”) database and accessible from the Hosted System interfaces, along with an additional ***** of read-only historical PNR data available in the archive database and accessible from SkySpeed. If Customer desires additional data storage in excess of ***** available, Extended PNR Archiving may be contracted for as outlined in Exhibit K.	
 
6

Hosted Services Agreement
 
 	4.5	Annual Segment Forecast Update. Customer agrees to provide NAVITAIRE each ***** with projected annual Segment volume forecast for the following year. NAVITAIRE will use Customer’s Segment forecast for business planning purposes for providing Hosted Services.	
 
 	4.6	Customer Contacts. Customer initially designates the person set forth in Exhibit D, Section 2 as the Customer Account Liaison, being the primary authorized contact for account management, project funding, performance, payment, and other commercial issues with respect to the Hosted Services. Customer further initially designates the person(s) set forth in Exhibit D, Section 6 as the Customer Authorized Support Contact(s), being the authorized contact(s) to utilize the telephone support and Internet technical support system. Customer will ensure that all Customer Authorized Support Contact(s) will have received adequate training on the Hosted Services. Customer may change their designated Customer Account Liaison or Customer Authorized Support Contact(s) by written notice to NAVITAIRE.	
 
 	4.7	Customer Costs. Customer will be responsible for all its own costs and expenses except for those specifically assumed by NAVITAIRE under this Agreement.	
 
 	4.8	Use by Customer. Hosted Services and Confidential Information of NAVITAIRE are for the sole and exclusive use of Customer and excludes any Affiliates of Customer ***** Customer may, however, permit agents hired by Customer or Customer’s subcontractors to access the Hosted Services solely for the purpose of procuring Hosted Services for and on behalf of Customer; provided that ***** (a) Customer promptly provides NAVITAIRE with the names of each such agent; and (b) each such agent agrees to be bound by: ***** confidentiality provisions ***** Section 9, ***** hereof. Customer may not transfer any Confidential Information of NAVITAIRE, in any form whatsoever, to any other third party or allow any third party to access or use the Hosted Services or Confidential Information of NAVITAIRE without the prior written consent of NAVITAIRE. Any transfer of or access to the Hosted Services or Confidential Information of NAVITAIRE in violation of this Section shall constitute a material breach of this Agreement. For purposes of reference, Section 7 contains further terms and conditions regarding Customer’s use of the Hosted Services System.	
 
 	4.9	Training. Except for any initial training provided by NAVITAIRE as described in Exhibits A and G, Customer will be responsible for training its employees and authorized agents and subcontractors in the use of Hosted Services including, but not limited to, use of any new functions or Enhancements. *****.	
 
 	4.10	Telecommunications and Equipment. Unless otherwise specified in Exhibits A and G, Customer shall be responsible for all telecommunication circuits used by Customer in connection with the transmission of data between the Hosted Services System and Customer’s site(s). Customer shall provide, install, and operate compatible hardware and communications equipment, which meets NAVITAIRE required specifications as listed in Exhibit A, Section 7 and Section 8 of Exhibit G, necessary for connecting to the Hosted Services System. Customer is required to have Internet access and Internet electronic mail capability in order to communicate with NAVITAIRE support. Customer agrees to order all required circuits it is responsible for within ***** of execution of this Agreement. In the event that the Target Date is greater than ***** following the Effective Date of this Agreement, Customer may order all required circuits at a later date but no less than ***** prior to the Target Date. The data circuits must be of capacity sufficient to accommodate all Hosted Services and meet any defined Service Levels. All Customer connections to the NAVITAIRE network must be a Layer 3 connection via a router or firewall. Included in the standard pricing are ***** network rack space in the NAVITAIRE data center for Customer network hardware. All Customer network devices must include rack mounting hardware and any device used for serial connections must include built-in CSU/DSUs. All Customer devices housed in the NAVITAIRE data center require console connections for remote access and maintenance (i.e., Out-of-band or Lights-out management). NAVITAIRE will provide ***** console connections to Customer in the standard pricing for this remote access and maintenance. Additional rates***** will apply if Customer requires more console connections or rack space.	
 
7

Hosted Services Agreement
 
 	4.11	Acknowledgment. Customer agrees to include the Powered by NAVITAIRE® Mark (the “Mark***** under the terms and conditions set forth in Exhibit E of this Agreement. *****.	
 
 	4.12	Post Implementation Upgrade Release Management. Customer agrees to use Hosted Services that are provided through the latest release of the NAVITAIRE software***** included in the Hosted Services System and available for general distribution. ***** It is the intention of NAVITAIRE to make available and provide Support Center Support in respect to the most current version, or the latest version “minus one”, of NAVITAIRE software included in the Hosted Services System, however *****, NAVITAIRE reserves the right to require Customer to utilize the then most current version. Customer will be responsible, on a time and materials basis, for all costs associated with implementing an upgrade release including, but not limited to: project management; training; technical support; system integration services; business process analysis; and any required data transformation*****. Upgrade release requests will be initiated using the standard NAVITAIRE Work Order process *****.	
 
5	Term and Termination	
 
 	5.1	Term. Unless otherwise terminated earlier under this Section 5, this Agreement shall commence on the Effective Date and continue for an Initial Term period of ten (10) years following the first day of the month immediately following the Target Date for the respective Hosted Services. This Agreement will renew automatically for ***** additional ***** renewal terms unless one party provides written notice of termination to the other party at least ***** prior to the end of the initial or any renewal term. NAVITAIRE may increase the Service Fees payable by Customer with respect to any renewal term; provided that NAVITAIRE gives Customer written notice of such increase in Service Fees at least ***** prior to the end of the then current term, but otherwise the terms hereof and the Monthly Minimum Segment Guarantees applicable for the last year of the Initial Term shall likewise apply to each renewal term.	
 
 	5.2	Termination for Cause	
 
 	5.2.1	This Agreement may be terminated as follows:	
(a) by a party upon written notice to the other party in the event of material breach of the terms hereof by the other party which is not cured within ***** of written notice thereof;
(b) by NAVITAIRE upon written notice to Customer, if Customer fails to pay any amount due hereunder within ***** of the due date, NAVITAIRE provides written notice of such failure to Customer (which notice also constitutes the notice described in Section 6.5 hereof), and within ***** of delivery of such written notice such amount remains unpaid;
(c) by a party if the other party becomes, or is party as debtor to a proceeding in which it is alleged to be, bankrupt, insolvent or unable to pay its debts when due; or if it ceases to operate in the normal course of business, has a receiver appointed, or makes an assignment for the benefit of its creditors;
(d) by Customer upon written notice to NAVITAIRE *****(e) *****
(f) by Customer in the event*****
 
 	5.2.2	NAVITAIRE shall not be in breach ***** if its failure to perform hereunder is due to problems caused by Customer software and associated data, or by Customer hardware other than that recommended by NAVITAIRE in Exhibit A, Section 7 and Section 8 of Exhibit G herein or other equipment failures for hardware or other equipment not maintained by NAVITAIRE.	
 
8

Hosted Services Agreement
 
 	5.2.3	If Customer terminates due to material breach by NAVITAIRE, NAVITAIRE will ***** upon Customer’s request, provide Customer with Customer’s data for contracted Hosted Services, which will be provided in a NAVITAIRE defined data extract format and delivered via electronic media*****.	
 
 	5.2.4	If NAVITAIRE terminates due to Customer’s material breach, Customer will pay NAVITAIRE a sum comprised of: (i) *****; (ii) any reasonable attorneys’ costs that NAVITAIRE incurs as a result of Customer’s material breach and subsequent termination. NAVITAIRE will, upon Customer’s request ***** provide Customer with duplicates of Customer’s data for contracted Hosted Services, which will be provided in a NAVITAIRE defined data extract format and delivered via electronic media.	
 
 	5.3	Termination for Convenience.	
 
 	5.3.1	Upon the ***** anniversary of the live production use of the Hosted Reservation Services and for a period of ***** thereafter, *****:	
 
 	a)	In the ***** prior to the *****.; and	
 
 	b)	*****:	
 
 	(i)	*****, or	
 
 	(ii)	*****.	
 
 	c)	For example under ***** above*****and *****.	
 
 	5.4	Survival. No termination hereof shall release Customer from its obligation to pay NAVITAIRE in full for all Hosted Services performed by NAVITAIRE up to the date of termination, nor shall it affect any other obligations hereunder which expressly or by reasonable implication is intended to survive termination, including those set forth in Sections 6, 7, 8, 9, 10, and 19 hereof.	
 
6	Price and Payment	
 
 	6.1	Service Fees. In consideration for the provision of Hosted Services by NAVITAIRE as set forth in this Agreement, Customer will pay NAVITAIRE the Service Fees as set forth in Exhibit K and, as applicable, elsewhere in this Agreement.	
 
 	6.2	Expenses. Customer shall bear all ***** expenses incurred by NAVITAIRE personnel in connection with travel to Customer’s site(s) to prepare for and to implement the Hosted Services or to provide training, consulting, support, or other services at Customer’s site(s)*****. Such expenses shall include, without limitation, reasonable and timely air travel (it is NAVITAIRE’s policy to have all personnel travel business class for all flights ***** ground transportation, quality lodging including high-speed internet access, and NAVITAIRE’s standard per-diems for meals and ***** incidentals. NAVITAIRE shall, whenever reasonably possible, obtain advance written approval from Customer of applicable travel expenses and Customer may select one of the following options:	
 
 	a)	Customer Arranged Travel. Customer may arrange any such flight with a view to obtaining good value or for industry confirmed discounted space travel, ground transportation, and quality lodging, including high speed internet access.	
 
 	b)	NAVITAIRE Arranged Travel. NAVITAIRE can obtain travel arrangements through the NAVITAIRE corporate travel agency. In this case and in recognition of volume corporate discounts provided, NAVITAIRE will bill Customer, and Customer agrees to pay, the actual cost of such expenses.	
 
 	6.3	Payment Terms. All payments made under this Agreement shall be made in the Invoicing Currency either: (a) by electronic funds transfer, prepaid, to the bank account designated on the invoice; or (b) by check drawn on a United States bank and delivered to the address indicated on the invoice. Except where otherwise specifically set forth in	
 
9

Hosted Services Agreement
 
 	this Agreement, all payments under this Agreement are due within ***** Service Fees as stated in Exhibit K will be invoiced in advance at the beginning of each month for the Service Fees for the monthly minimum Segment guarantees listed in the monthly recurring Service Fees for the Hosted Services to be rendered for that month. Following the actual service month, NAVITAIRE will reconcile actual Customer transactions, and invoice Customer for any remaining balance. (By way of example, NAVITAIRE will invoice Customer on ***** for the Service Fees for the monthly minimum Segment guarantees for services to be performed from ***** through ***** *****, NAVITAIRE will reconcile using Customer’s actual transaction activity for February and invoice Customer for any transaction fees exceeding the previously invoiced minimum Service Fees.) Any amounts not paid when due will bear interest at the lesser of: (a) *****; or (b) the maximum rate allowable by law. In addition to any interest charge, any payments due that are more than ***** late will be subject to an automatic ***** late fee.	
 
 	6.4	Fee Adjustment	
 
 	6.4.1	Service Fees. The Service Fees identified in Exhibit K are all subject to the adjustments as set out in this Section 6.4.1 (the “Adjustable Amounts”). The Adjustable Amounts shall be adjusted annually on ***** of each year ***** and each following one year anniversary thereafter (the “Adjustment Date”) to account for inflation. On the Adjustment Date, if the U.S. Bureau of Labor Statistics Employment Cost Index for Compensation/Civilian Workers/White Collar/Professional and related Occupations (Not Seasonally Adjusted) as published by the Bureau of Labor Statistics of the Department of Labor (the “ECI”), (the “Current Index”), increases from the ECI applicable twelve (12) months prior thereto (the “Base Index”), then effective as of such Adjustment Date, the Adjustable Amounts, as previously adjusted, will be increased by the percentage that the Current Index increased from the Base Index. In such event, NAVITAIRE will provide to Customer a recalculation of the Adjustable Amounts. If the U.S. Bureau of Labor Statistics stops publishing the ECI or substantially changes the content of the ECI, the parties will substitute another comparable measure published by a mutually agreeable source. The parties agree that ***** During the Initial Term as stated in Section 5.1 hereof, NAVITAIRE will not otherwise increase the Service Fees for the Hosted Services functionality specified in Exhibit A, Section 6 and Section 7 of Exhibit G or for any subsequent functionality changes that are not defined as a Major Release.	
NAVITAIRE reserves the right to offer a Major Release which may include additional significant Enhancements such as API(s), Codeshare, Customer Value Rules, Recognition and Intelligent Seating Enhancement Set, GoNow, and GDS Type A/EDIFACT connectivity, at an additional charge above the fees described in Exhibit K of this Agreement. Customer has the option***** of paying such additional charges to enable such functionality or remain with current functionality and Hosted Services and fees as stated in Exhibit K. In the event that Customer accepts a significant Enhancement which will incur additional Service Fees, such fees will be communicated to Customer in advance, in writing, and upon Customer’s written acceptance, will be added to the applicable Service Fees.
 
 	6.4.2	Support Fees. The Support Fees identified in Exhibit K are all subject to the adjustments as set out in this Section 6.4.2 (the “Adjustable Amounts”). The Adjustable Amounts shall be adjusted annually on ***** of each year following the Effective Date (the “Adjustment Date”) to account for inflation. During the term, if the U.S. Bureau of Labor Statistics Employment Cost Index for Compensation/Civilian Workers/White Collar/Professional and related Occupations (Not Seasonally Adjusted) as published by the Bureau of Labor Statistics of the Department of Labor (the “ECI”), (the “Current Index”), increases from the ECI applicable ***** prior thereto (the “Base Index”), then effective as of such Adjustment Date, the Adjustable Amounts, as previously adjusted, will be	
 
10

Hosted Services Agreement
 
 	increased by the percentage that the Current Index increased from the Base Index. In such event, NAVITAIRE will provide to Customer a recalculation of the Adjustable Amounts. If the U.S. Bureau of Labor Statistics stops publishing the ECI or substantially changes the content of the ECI, the Parties will substitute another comparable measure published by a mutually agreeable source. The parties agree that*****	
 
 	6.4.3	Notice. NAVITAIRE shall give Customer not less than ***** prior written notice of any increase in the Service Fees or Support Fees.	
 
 	6.5	Failure to Pay. If Customer fails to pay any ***** within ***** of the date due, NAVITAIRE may provide written reminder notice of such failure to Customer (this notice also constitutes the notice described in Section 5.2.1 (b) of this Agreement). If, within ***** of delivery of such written notice such sum remains unpaid, NAVITAIRE may, without breach of this Agreement, discontinue performing under this Agreement until all due but unpaid payments are received*****.	
 
 	6.6	Taxes. Customer shall pay or, if NAVITAIRE so requires, reimburse NAVITAIRE for all taxes in connection with this Agreement***** ***** including, sales, use, excise, value-added, goods and services, consumption, and other similar taxes or duties ***** any payment for service, product or technology provided by NAVITAIRE be subject to withholding tax *****, Customer shall reimburse NAVITAIRE for such withholding tax. Each Party shall provide and make available to the other Party any resale, exemption, multiple points of use certificates, treaty certification and other exemption information reasonably requested by the other Party. If Customer shall pay any tax incurred in connection with this Agreement, Customer agrees to remit to NAVITAIRE within ***** of issue, tax documents which support the payment of such taxes. Customer agrees to reimburse and hold NAVITAIRE harmless from any deficiency (including penalties and interest) relating to taxes that are the responsibility of Customer under this paragraph. ***** Each party shall be responsible for taxes based on its own net income, employment taxes of its own employees, and for taxes on any property it owns or leases. For purposes of this Agreement, taxes shall include taxes incurred on transactions between and among NAVITAIRE and its Affiliates.	
*****
 
7	License, Title, Modifications, and Covenants	
 
 	7.1	License. NAVITAIRE will grant such access to Customer to the Hosted Services System as is necessary to use such System to obtain the Hosted Services in accordance with NAVITAIRE policies and procedures, and subject to Section 7.2 of this Agreement, NAVITAIRE hereby grants Customer a non-exclusive, non-transferable, worldwide license to use the Hosted Services System to the extent of the access provided during the term of this Agreement solely for the purposes of obtaining Hosted Services in accordance herewith *****.	
All licenses will be transferred by remote telecommunications from NAVITAIRE’s place of business, to or through Customer’s computer, and Customer will not obtain possession of any tangible personal property, such as electronic storage media.
 
 	7.2	Title. Subject to Sections 7.1 and 7.3 of this Agreement, NAVITAIRE hereby retains all of its right, title, and interest in and to the Hosted Services System, and copyrights, patents, trademarks, service marks, design rights (whether registered or unregistered), trade secrets, know-how, expertise, and all other similar proprietary rights associated therewith (“Intellectual Property Rights”) and/or which are developed in connection with this Agreement, irrespective of whether developed by NAVITAIRE individually or by NAVITAIRE and Customer jointly (the “NAVITAIRE Property”), which shall include without limitation: (a) the source code of software included in the NAVITAIRE Property, where applicable; and (b) all modifications, extensions, upgrades, and derivative works of the NAVITAIRE Property. In confirmation of NAVITAIRE’s right, title and interest in the	
 
11

Hosted Services Agreement
 
 	NAVITAIRE Property as set forth in the preceding sentence of this Section 7.2, Customer hereby assigns to NAVITAIRE all of its right, title and interest in and to the NAVITAIRE Property. *****	
 
 	7.3	Modifications	
 
 	7.3.1	By NAVITAIRE. Without prejudice to Section 6.4 of this Agreement or any other provision of this Agreement, NAVITAIRE may upgrade, modify and replace the Hosted Services System or any part thereof at any time during the term of this Agreement, provided that:	
 
 	a)	NAVITAIRE notifies Customer at least ***** prior to implementation of any upgrades or replacements of the Hosted Services System which are likely to materially alter the delivery of Hosted Services;	
 
 	b)	all upgrades and replacements which might reasonably be expected to materially alter the delivery of Hosted Services are scheduled for implementation as reasonably required by NAVITAIRE*****; and	
 
 	c)	with introduction of any upgrades***** or replacements, NAVITAIRE maintains the comparable level of services.	
Nothing in this Section 7.3.1: (i) releases NAVITAIRE from providing Hosted Services under the terms and conditions of this Agreement; or (ii) obligates NAVITAIRE to upgrade or replace the Hosted Services System at any time. It is the intention of NAVITAIRE to make available and provide Support Center Support in respect to the most current version, or the most recent prior release of the current version, of NAVITAIRE software included in the Hosted Services System; however, ***** NAVITAIRE reserves the right to require Customer to utilize the then most current version.
 
 	7.3.2	By Customer . Customer shall not reverse engineer, disassemble, decompile, unlock, copy, alter, modify, change, create derivatives of or in any other way reproduce or use any of the software code, programs, or components of the Hosted Services System, provided that:	
 
 	a)	Customer may use the API(s) provided by NAVITAIRE from time to time for such purpose as a part of Hosted Services solely to configure the Configurable Templates for use as a part of such Services; and	
 
 	b)	Without prejudice to the rights of Customer in its trademarks and services, Customer shall have no right following termination of this Agreement to use the Configurable Templates or any configurations thereof, or any API(s) or source code provided by NAVITAIRE, or any modifications, changes or derivatives thereof created, in any such case whether created by or for Customer or otherwise, all of which are hereby assigned by Customer to NAVITAIRE as contemplated by Section 7.2 hereof.	
 
 	7.4	Customer Covenants. Customer hereby covenants and agrees that:	
 
 	a)	the NAVITAIRE Property may be used by NAVITAIRE and its Affiliated companies to facilitate delivery of similar services to other customers; and	
 
 	b)	Customer shall not access or use any API(s) embedded in the Hosted Services System except as authorized by NAVITAIRE and in connection with the Hosted Services; and	
 
 	c)	without limiting the provisions set forth in Section 4.8 of this Agreement, no person other than Customer ***** (including no Affiliate of Customer, merger, acquisition, or otherwise), shall obtain access to Hosted Services or use the Hosted Services System absent a written agreement signed by NAVITAIRE; and	
 
12

Hosted Services Agreement
 
 	d)	NAVITAIRE has enabled features in its Hosted Services to allow Customers and third parties to access the Hosted Services and to modify certain NAVITAIRE products and applications, using software products and applications not developed by NAVITAIRE. Should there be a failure of a software product or application not developed by NAVITAIRE, or should such software product or application cause NAVITAIRE provided Hosted Services to fail or to be adversely impacted, NAVITAIRE shall, at its sole ***** discretion, disable the offending software product or application, deny access to NAVITAIRE Hosted Services, and hold Customer liable for all damages incurred by NAVITAIRE in such circumstance. Software products and applications or modification to software products or applications not developed by NAVITAIRE that fail or cause NAVITAIRE Hosted Services to fail shall also suspend any Service Levels in this Agreement or other commitments previously agreed between the parties.	
 
 	7.5	Mutual Covenants. Each party represents and warrants to the other party that as of the Effective Date of this Agreement:	
 
 	a)	it has the requisite power and authority to enter into this Agreement and to carry out the transactions contemplated by this Agreement; and	
 
 	b)	the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement shall not constitute a material default under any material contract by which it or any of its material assets are bound, or an event that would, with notice of lapse of time or both, constitute such a default.	
 
 	7.6	Compliance With Laws	
 
 	7.6.1	Notwithstanding any other provision of this Agreement to the contrary other than Section 7.6.2 below, each party will retain responsibility for its compliance with all applicable laws and regulations relating to its respective business and facilities and the provision of services to third parties. In performing their respective obligations under this Agreement, neither party will be required to undertake any activity that would violate any applicable laws or regulations.	
 
 	7.6.2	Notwithstanding any other provision of this Agreement to the contrary:	
 
 	a)	Each party shall retain responsibility for its compliance with all applicable export control laws and economic sanctions programs relating to its respective business, facilities, and the provision of services to third parties; and	
 
 	b)	Neither Party shall be required by the terms of this Agreement to be directly or indirectly involved in the provision of goods, software, Deliverables, work, services and/or technical data that may be prohibited by applicable export control or economic sanctions programs.	
Applicable export control or economic sanctions programs may include U.S. export control laws such as the Export Administration Regulations and the International Traffic in Arms Regulations, and U.S. economic sanctions programs that are or may be maintained by the U.S. Government, including sanctions currently imposed against Belarus, Burma (Myanmar), Cuba, Iran, Iraq, Ivory Coast, Liberia, North Korea, Sudan, Syria and Zimbabwe, as well as Specially Designated Nationals and Blocked Persons programs. NAVITAIRE and Customer will comply with U.S. export control and U.S. economic sanctions laws with respect to the export or re-export of U.S. origin goods, software, services and/or technical data, or the direct product thereof.
The parties understand and agree that this Agreement shall not require NAVITAIRE to provide or support services involving Cuba, Iran, Myanmar (Burma), Sudan, Syria, North Korea, Specially Designated Nationals, and/or Blocked Persons, either directly or indirectly, including through the use of subcontractors.
 
13

Hosted Services Agreement
 
Prior to providing NAVITAIRE with any goods, software, Deliverables, work, services and/or technical data subject to export controls controlled at a level other than EAR99/AT, Customer shall provide written notice to NAVITAIRE specifying the nature of the controls and any relevant export control classification numbers. NAVITAIRE may decline to receive goods, software, services and/or technical data subject to export controls at a level other than EAR99/AT. Customer shall take steps to ensure that where NAVITAIRE is required to provide any entity/third party with any goods, software, Deliverables, work, services and/or technical data arising from or under the performance of this Agreement, Customer shall take steps to ensure that any such provision of goods, software, Deliverables, work, services and/or technical data to such entity is not subject to restrictions or prohibitions under applicable export control or economic sanctions programs.
NAVITAIRE shall have the right, at its sole discretion, to refrain from being directly or indirectly involved in the provision of goods, software, Deliverables, work, services and/or technical data that may be prohibited by applicable export control laws or economic sanctions programs, without liability to Customer.
 
8	Indemnification	
 
 	8.1	Rights to Indemnification. Each party shall defend the other party from any claims that any product, service, information, materials or other item provided by such party under this Agreement infringes *****; and indemnify such party for ***** in relation to such claim; provided that, however, a party shall have no defense or indemnity obligation under this Section 8.1 to the extent any such infringement results from: (a) the use of any software provided by the indemnifying party in combination, operation or use with software or hardware not provided by such indemnifying party; provided that, however, such exclusion shall not apply to the use by Customer of the Hosted Services System in connection with the hardware and software identified on the applicable Exhibit hereto; (b) the use of any Hosted Services System in a modified state which was not authorized by the indemnifying party; or (c) use of a version of the software included in the Hosted Services System without having implemented all of the updates within a reasonable period after such updates were provided by the indemnifying party and the indemnified party was advised that such update was intended to address an alleged infringement. Without limiting the foregoing indemnification obligations, if any product, service, information, material or other item of the indemnifying party is, or in the indemnifying party’s opinion is likely to be held to be, an infringing material, then the indemnifying party may, at its option: (i) procure the right to continue using it; (ii) replace it with a non-infringing equivalent; (iii) modify it to make it non-infringing*****; or (iv) if none of the foregoing can be accomplished in a commercially reasonable manner, cease using, and require the indemnified party to cease using such item, and if such cessation renders it impractical to continue the contractual relationship contemplated hereby, either party may also terminate this Agreement. The foregoing remedies constitute the indemnified party’s sole and exclusive remedies and the indemnifying party’s entire liability with respect to infringement.	
 
 	8.2	Notice and Control of Action. The party seeking indemnification in respect of any actual or potential claim or demand shall notify the other party within ***** after it receives written documents relating to such claim. The indemnifying party shall have no obligation to indemnify the other party to the extent such other party fails to give the notice within the specified period set forth in the preceding sentence and such failure materially prejudices the indemnifying party. The indemnifying party shall have the right, at its sole cost, expense, and liability, to appoint counsel of its choice and to litigate, defend, settle or otherwise attempt to resolve any such claim, provided that the indemnified party shall have the right to consent to any settlement, which consent will not be unreasonably withheld.	
 
14

Hosted Services Agreement
 
9	Confidential Information	
 
 	9.1	Notification. During the term of this Agreement, either party may receive or have access to ***** technical information, as well as information about product plans and strategies, promotions, customers, ***** and related non-technical business information that the disclosing party considers to be ***** confidential and which each party agrees shall be marked as confidential at the time of disclosure, or if disclosed orally but stated to be confidential, shall be designated as confidential in a document prepared by the disclosing party that summarizes the Confidential Information disclosed and sent to the receiving party within ***** after such verbal disclosure *****; provided that the Hosted Services System shall in any event be dealt with as confidential information of NAVITAIRE (with respect to a party its “Confidential Information”). The fees payable under, and the material terms of, this Agreement are agreed to be Confidential Information of each party.	
 
 	9.2	Use and Protection of Information. Confidential Information may be used by the receiving party only in furtherance of the transactions contemplated by this Agreement, and only by those employees of the receiving party and its agents or subcontractors who have a need to know such information for purposes related to this Agreement, provided that such agents or subcontractors have signed separate agreements containing substantially similar confidentiality provisions. Except as permitted in this Agreement, ***** The receiving party and its agents and subcontractors shall protect the Confidential Information of the disclosing party by using the same degree of care (but not less than a reasonable degree of care) to prevent the unauthorized use, dissemination, or publication of such Confidential Information as the receiving party uses to protect its own confidential information of a like nature and value. The receiving party’s, as well as its agents’ and subcontractors’, obligation under this Section shall be for a period of ***** after the date of disclosure or ***** from the end of the Agreement term, whichever is greater; provided that the obligation of Customer to refrain from using, and to protect the confidentiality of the Hosted Services System and Professional Services and Deliverables shall continue indefinitely.	
 
 	9.3	Exclusions. Nothing in this Agreement shall prohibit or limit either party’s use of information which it can demonstrate by written evidence was: (a) previously known to it without obligation of confidence; (b) independently developed by it; (c) acquired by it from a third party which is not, to its knowledge, under an obligation of confidence with respect to such information; or (d) which is or becomes publicly available through no breach of this Agreement.	
 
 	9.4	Subpoena. In the event a receiving party or its agents and subcontractors receives a subpoena or other validly issued administrative or judicial process requesting Confidential Information of the other party, the receiving party shall provide prompt notice to the other of such subpoena or other process. The receiving party, its agents and subcontractors, as the case may be, shall thereafter be entitled to comply with such process to the extent required by law. If a party or its agents and subcontractors is served with a subpoena or other validly issued administrative or judicial process in relationship to the matters contemplated hereby and arising from a proceeding in which the other party is a defendant and the served party, its agents and subcontractors, is not, such other party shall pay all the reasonable out-of-pocket expenses of the served party, its agents and subcontractors, associated with such subpoena or other administrative or judicial process.	
 
 	9.5	Privacy of Information. NAVITAIRE shall protect Customer Personal Data during performance of the Services in accordance with laws to which NAVITAIRE is subject as a service provider or data processor and any specific written instructions or protocols that are agreed in writing by the parties as may be reasonably needed in order to support Customer’s compliance with laws to which it is subject.	
 
15

Hosted Services Agreement
 
In the event that NAVITAIRE will process Customer Personal Data of EU origin (as those terms are defined by EU Data Protection Directive 95/46/EC), then NAVITAIRE and Customer shall execute the standard contractual clauses for transfers to Processors located in third countries authorized by EU Commission Decision 85/2010 (“EU Model Clauses”).
 
 	9.6	Upon termination of this Agreement, *****.	
 
10	Disclaimers and Limitations	
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT:
 
 	10.1	THE AGGREGATE LIABILITY OF NAVITAIRE UNDER OR IN CONNECTION WITH THIS AGREEMENT AND THE PROVISION OF HOSTED SERVICES TO CUSTOMER, REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT, OR OTHERWISE), SHALL NOT EXCEED THE LARGER OF ***** OR THE AGGREGATE AMOUNT PAID BY CUSTOMER FOR SERVICE FEES DURING THE ***** PRECEDING THE DATE SUCH LIABILITY IS PAID;	
 
 	10.2	NAVITAIRE HEREBY DISCLAIMS AND EXCLUDES ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS BASED ON THE USE OR POSSESSION OF ANY PRODUCT, SERVICE OR RELATED MATERIALS PROVIDED UNDER THIS AGREEMENT BY NAVITAIRE;	
 
 	10.3	NAVITAIRE INTERRUPTED SERVICE WILL NOT INCLUDE DOWNTIME DUE TO DENIAL OF SERVICE (“DOS”) ATTACKS ON CUSTOMER WEB SITES;	
 
 	10.4	NEITHER PARTY SHALL BE LIABLE FOR ANY EXEMPLARY, SPECIAL, PUNITIVE, INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES OF ANY KIND, OR LOSS OR EXPENSES (INCLUDING, BUT NOT LIMITED TO, BUSINESS INTERRUPTION, LOST BUSINESS, LOST PROFITS, OR LOST SAVINGS) EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;	
 
 	10.5	WITH THE EXCEPTION OF THE PROVISION SET FORTH IN SECTION 8.1, NAVITAIRE SHALL NOT BE LIABLE FOR ANY CLAIMS OF THIRD PARTIES RELATING TO THIS AGREEMENT AND TO THE PROVISION OF HOSTED SERVICES, AND CUSTOMER SHALL DEFEND NAVITAIRE FROM, AND INDEMNIFY AND HOLD NAVITAIRE HARMLESS AGAINST, ALL SUCH CLAIMS;	
 
 	10.6	EACH PARTY HAS A DUTY ***** TO MITIGATE THE DAMAGES THAT WOULD OTHERWISE BE RECOVERABLE FROM THE OTHER PARTY PURSUANT TO THIS AGREEMENT, BY TAKING APPROPRIATE AND COMMERCIALLY REASONABLE ACTIONS TO REDUCE OR LIMIT THE AMOUNT OF SUCH DAMAGES OR AMOUNTS; AND	
 
 	10.7	***** *****.	
THE FOREGOING STATES THE ENTIRE LIABILITY OF NAVITAIRE WITH REGARD TO THIS AGREEMENT AND THE PROVISION OF HOSTED SERVICES HEREUNDER. THE LIMITATIONS OF LIABILITY CONTAINED IN THIS SECTION 10 ARE A FUNDAMENTAL PART OF THE BASIS OF NAVITAIRE’S BARGAIN HEREUNDER, AND NAVITAIRE WOULD NOT ENTER INTO THIS AGREEMENT ABSENT SUCH LIMITATIONS.
 
11	Publicity	
All advertising, press releases, public announcements and public disclosures by either party relating to this Agreement which includes: (i) the other party’s name, trade names, trademarks, logos, service marks or trade dress (collectively, “Name”); or (ii) language from which the connection of such Name may be inferred or implied, will be coordinated with and subject to approval by both parties prior to release; provided, however, that (iii) either party may indicate to
 
16

Hosted Services Agreement
 
third parties that NAVITAIRE is providing services to Customer, including NAVITAIRE’s right to use Customer’s Name within an airline “tailfin” shape for that purpose; and (iv) NAVITAIRE may use Customer as a reference.
 
12	Relationship of the Parties	
The relationship of the parties under this Agreement is and at all times shall remain that of independent contractors. Nothing in this Agreement or the attached Exhibits shall be construed to create a joint venture, partnership, franchise, employment or agency relationship between the parties to this Agreement, and accordingly, neither party shall represent itself as having, nor does either party have, the right, power, or authority to bind or otherwise create any obligation or duty, express or implied, on behalf of the other party in any manner whatsoever. *****
 
13	No Assignment	
Neither party to this Agreement shall have the right to assign this Agreement or any right or obligation hereunder, whether by operation of law or otherwise, without the prior written consent of the other party*****, provided that NAVITAIRE may assign or delegate obligations ***** to: (i) any of its Affiliates; and/or (ii) to any entity that acquires all or substantially all of the assets of NAVITAIRE or to successor in a merger or acquisition of NAVITAIRE *****.
 
14	Force Majeure	
 
 	14.1	Each Party will be excused from performance under this Agreement (other than obligations to make payments that have become due and payable pursuant to this Agreement *****) for any period and to the extent that it is prevented from performing any obligations pursuant to this Agreement, in whole or in part, as a result of a Force Majeure Event. If either Party is prevented from, or delayed in performing any of its obligations under this Agreement by a Force Majeure Event, it will promptly notify the other Party by telephone (to be confirmed in writing within five days of the inception of the delay) of the occurrence of a Force Majeure Event and describe, in reasonable detail, the circumstances constituting the Force Majeure Event and of the obligations, the performance of which are thereby delayed or prevented. Such Party will continue to use commercially reasonable efforts to recommence performance whenever and whatever extent possible without delay.	
 
 	14.2	A “Force Majeure Event” will mean the occurrence of an event or circumstance beyond the reasonable control of a Party, and will include, without limitation; (i) explosions, fires, flood, earthquakes, catastrophic weather conditions, diseases, or elements of nature or acts of God; (ii) acts of war (declared or undeclared), acts of terrorism, insurrection, riots, civil disorders, rebellion or sabotage; (iii) acts of national, prefectural, local or foreign governmental authorities or courts, national or state of emergencies, or changes in laws; (iv) labor disputes, lockouts, strikes or other industrial action, whether direct or indirect and whether lawful or unlawful; (v) failures or fluctuations in electrical power or telecommunications service or equipment, expropriation, condemnation of facilities or destruction, in whole or part, of the equipment or property necessary to perform the Services; and (vi) delays or failures caused by the other Party or the other Party’s performance or third party nonperformance (except that a Party will not be excused for delays or failures caused by such Party’s ***** subcontractors or agents unless the event or circumstance is a Force Majeure Event as to such ***** subcontractor or agent).	
 
 	14.3	In case such Force Majeure Event *****.	
 
 	14.4	If the Force Majeure Event continues for a period of *****, *****.	
 
15	Industry Event	
In the event of *****Factors to be considered include but are not limited to the following*****
 
17

Hosted Services Agreement
 
16	Notices	
All notices and communications that are permitted or required under this Agreement shall be in writing and shall be sent to the address of the parties as set forth immediately below, or such other address as the representative of each party may designate by notice given in accordance with this Section. Any such notice may be delivered by hand, by overnight courier or by facsimile transmission, and shall be deemed to have been delivered upon receipt.
As of the date of this Agreement, the addresses of the parties are as follows:

   	  	VOLARIS	  	NAVITAIRE	
			
Attention:	  	*****	  	*****	
			
Address:	  	*****	  	*****	
			
Telephone:	  	*****	  	*****	
			
Fax:	  	*****	  	*****	
 
17	Waiver	
Neither party’s failure to exercise any of its rights under this Agreement shall constitute or be deemed to constitute a waiver or forfeiture of such rights.
 
18	General	
 
 	18.1	Entire Agreement, Amendments, and Work Orders. This Agreement and its Exhibits constitute the entire agreement between NAVITAIRE and Customer, and supersede any prior or contemporaneous communications, representations, or agreements between the parties, whether oral or written, regarding the subject matter of this Agreement. The terms and conditions of this Agreement may not be changed except by an amendment signed by an authorized representative of each party. Professional Services and Deliverables will be requested in a Work Order, in a form similar to the example attached as Exhibit L, and shall be executed by an authorized representative of Customer and Service Provider.	
 
 	18.2	Headings and Counterparts. The headings in this Agreement are for the convenience of the parties only and are in no way intended to define or limit the scope or interpretation of the Agreement or any provision hereof. This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original, but all of which together will constitute one agreement binding on the parties, notwithstanding that both parties are not signatories to the original or the same counterpart.	
 
 	18.3	Applicable Law and Jurisdiction. This Agreement is made under and shall be construed in accordance with the laws of the State of New York without giving effect to that jurisdiction’s choice of law rules. For the sole and exclusive purpose of seeking injunctive relief in accordance with Section 18.5 below, both parties hereby consent and submit to the sole and exclusive jurisdiction of the federal courts of the Southern District of New York, in all questions and controversies arising out of this Agreement, and agree that such court is the most appropriate and convenient court to settle any dispute, and accordingly waive the right to argue to the contrary.	
 
 	18.4	Severability. If any term or provision of this Agreement is held to be illegal or unenforceable, the validity or enforceability of the remainder of this Agreement shall not be affected.	
 
 	18.5	Dispute Resolution. Any dispute between the parties with respect to interpretation of any provision of this Agreement or with respect to performance by NAVITAIRE or Customer shall be resolved as specified in this Section 18.5.	
 
 	18.5.1	Upon the request of either party, each party will appoint a designated representative whose task it will be to meet for the purpose of endeavoring to	
 
18

Hosted Services Agreement
 
 	resolve such dispute. The designated representatives shall discuss the problem and negotiate in good faith in an effort to resolve the dispute without the necessity of any formal proceeding. *****.	
 
 	18.5.2	If the designated representatives do not resolve the dispute within ***** after the request to appoint a designated representative is delivered to a party, then the dispute shall escalate to the Vice President, Customer Operations of NAVITAIRE and the Chief Commercial Officer of Customer, for their review and resolution within the next *****. During such time, the amount subject to dispute shall be placed in a mutually agreed escrow account and held there pending resolution of the dispute. All other applicable fees not affected by the dispute are due as specified within this Agreement.	
 
 	18.5.3	If the dispute is not resolved by the parties under Section 18.5.1 or 18.5.2 hereof, the parties may initiate formal proceedings. With the sole exception of an action seeking only injunctive relief for a breach hereof *****, any controversy or claim arising out of or relating to this Agreement, or the making, performance or interpretation thereof, including without limitation alleged fraudulent inducement thereof, ***** be settled ***** *****, New York by one arbitrator in accordance with the Rules of Commercial Arbitration of the American Arbitration Association. Judgment upon any arbitration award may be entered in any court having jurisdiction thereof. *****.	
 
 	18.5.4	The parties hereby agree that if any dispute or controversy proceeds to arbitration, the arbitrator appointed pursuant to Section 18.5 shall award the prevailing party its costs, including reasonable attorneys’ fees and costs, to the degree of such prevailing party’s success.	
 
 	18.5.5	The parties agree to continue performing their respective obligations under this Agreement while the dispute is being resolved; provided, however, if the dispute is regarding nonpayment by Customer, NAVITAIRE shall not be required to continue performance of its obligations: (a) unless Customer continues to pay all disputed amounts to NAVITAIRE or to an escrow account structured by agreement of the parties; or (b) if the continuing provision of services to Customer in the absence of receipt by NAVITAIRE of the disputed payment poses a material financial burden on NAVITAIRE.	
 
 	18.6	Third Party Procurement. NAVITAIRE has a number of relationships with third party vendors for products and services made available to users of the NAVITAIRE suite. NAVITAIRE utilizes these third party vendors in order to provide a comprehensive offering for the benefit of the customer base. In some cases, NAVITAIRE may receive compensation from these third party vendors.	
 
 	18.7	Exhibits. The Exhibits attached and listed below are part of this Agreement:	
 
 	•	 	Exhibit A: Hosted Reservation Services - New Skies®	
 
 	•	 	Exhibit B: (INTENTIONALLY OMITTED)	
 
 	•	 	Exhibit C: NAVITAIRE Contacts	
 
 	•	 	Exhibit D: Customer Contacts	
 
 	•	 	Exhibit E: Powered by NAVITAIRE® Mark	
 
 	•	 	Exhibit F: (INTENTIONALLY OMITTED)	
 
 	•	 	Exhibit G: Hosted Revenue Accounting Services - SkyLedger®	
 
 	•	 	Exhibit H: (INTENTIONALLY OMITTED)	
 
 	•	 	Exhibit I: (INTENTIONALLY OMITTED)	
 
19

Hosted Services Agreement
 
 	•	 	Exhibit J: (INTENTIONALLY OMITTED)	
 
 	•	 	Exhibit K: Price and Payment	
 
 	•	 	Exhibit L: Work Order Terms and Form	
IN WITNESS WHEREOF, NAVITAIRE and Customer, each acting with proper authority, have caused this Agreement to be executed as of the date set forth below.

Signed for and on behalf of:	 		 	Signed for and on behalf of:	
			
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d.b.a. VOLARIS)	 		 	Navitaire, LLC	
					
Signature:	 	/s/ Holger Blankenstein	 		 	Signature:	 	/s/ John Dabkowski	
					
Printed Name:	 	Holger Blankenstein	 		 	Printed Name:	 	John Dabkowski	
					
Title:	 	Director Comercial CCO	 		 	Title:	 	Chief Executive Officer	
					
Date:	 		 		 	Date:	 		
					
Signature:	 	/s/ Fernando Suarez	 		 		 		
					
Printed Name:	 	Fernando Suarez	 		 		 		
					
Title:	 	Chief Financial Officer	 		 		 		
					
Date:	 		 		 		 		
 
20

Hosted Services Agreement
 
EXHIBIT A
HOSTED RESERVATION SERVICES – NEW SKIES®
Conflict and Exhaustion of Provisions
In the event that there exists any conflict between any term, condition or provision contained within this Exhibit and in any term, condition, or provision contained within the Agreement, the term, condition, or provision contained within this Exhibit shall control. Further, the rights, obligations, and privileges of the parties shall be determined first by reference to this Exhibit, as opposed to the Agreement. For purposes of clarification, the rights, obligations, and privileges contained within this Exhibit shall control and govern any dispute between the parties until all such rights, obligations, and privileges have been exhausted in their entirety; and only after such time shall the rights, obligations, and privileges of the parties be determined by reference to the Agreement.
 
1	Definitions	
As used in and for purposes of this Exhibit, the following terms shall be defined as set forth in this Exhibit. In the event that there exists any conflict between a definition set forth in this Exhibit and in any definition contained within Section 1 of the Hosted Services Agreement (the “Agreement”), the definition set forth in this Exhibit shall control.
 
 	1.1	Ancillary Component means a product or service other than Customer-originating flights sold by Customer using the Hosted Reservation Services. Examples include: an insurance policy purchase, a car hire/rental, a hotel reservation/purchase, an add-on activity such as a 1-hour helicopter tour, souvenir t-shirt, etc. For clarification purposes, Ancillary Components (i) are usually non-flight products or services but can also include flights not provided by Customer, but sold through the Travel Commerce functionality; and (ii) exclude any Segment under this Agreement.	
 
 	1.2	Authorization Services has the meaning set forth in Section 7.4.1 hereof.	
 
 	1.3	Availability Request means a request for a fare and/or inventory and/or Ancillary Component across *****. Availability Requests are further defined as:	
 
 	a)	Standard Availability Calls are single or multi-day searches for fares, inventory or ancillary components (e.g. *****) and are calculated as ***** Journey or Ancillary Component *****, across *****. For purposes of illustration, a request for flights from ***** would be ***** whereas a request for flights from *****, 2012 would be *****.	
A round trip or multi-city search using a Standard Availability Call requesting flights are computed as ***** for each *****, for each *****. For purposes of illustration, ***** request for a ***** is calculated as *****. For additional purposes of illustration, *****is calculated as *****
Technical call types that are defined as Standard Availability Calls are GetAvailability, GetTripAvailability, GetUpgradeAvailability, or similarly functioned future calls.
 
 	b)	Low Fare Availability Calls are utilized in the Low Fare Finder tool and are further defined as either Unloaded or Loaded:	
Unloaded Low Fare Availability Calls are calculated as ***** for each set of *****. For purposes of illustration, where the Low Fare Finder is configured to return ***** on either side of the requested booking date, for each outbound ***** and/or return ***** the unloaded low fare search in all cases is ***** for each requested *****, regardless of the *****. For additional clarification, *****is calculated as *****.
 
Exhibit A - 21

Hosted Services Agreement
 
Unloaded Low Fare Availability Calls, when utilized in a *****, will be calculated as ***** for each requested ***** of low fare searches. For purposes of illustration, *****is calculated as *****
Loaded Low Fare Availability Calls are calculated as ***** for each ***** across *****. For purposes of illustration, where the Low Fare Finder is configured to return ***** on either side of the requested booking date, for each outbound ***** or return *****, the Loaded Low Fare Availability Calls are calculated as *****for the requested booking date and *****on either side of the requested booking date*****. For additional clarification, *****is calculated as *****
Loaded Low Fare Availability Calls, when utilized in a *****, will be calculated as ***** for each requested day of low fare searches
Technical call types that are defined as Low Fare Availability Calls are GetLowFareAvailability, GetLowFareTripAvailability, or similarly-functioned future calls.
 
 	1.4	Change Assistance List (CAL) is a list of passenger changes that occurred since the initial PAL or previous CAL was generated.	
 
 	1.5	Change Control has the meaning set forth in Section 8.7.1 hereof.	
 
 	1.6	Codeshare, Marketing or Codeshare Marketing Carrier means when Customer markets and sells a flight under its own host airline code and the flight is operated by another airline. A codeshare marketing partner is an airline participating in a codeshare as the Codeshare Marketing Carrier.	
 
 	1.7	Codeshare, Operating or Codeshare Operating Carrier means when another airline markets and sells a flight under its own host airline code and the flight is operated by Customer. A codeshare operating partner is an airline participating in a codeshare as the Codeshare Operating Carrier.	
 
 	1.8	Codeshare PNR means a Passenger Name Record, being an individual electronic record with a unique record locator number, containing one or more passenger names and booked Segments which contains at least one Segment booked via NAVITAIRE’s free-sale codeshare functionality.	
 
 	1.9	Common Use Airport means an airport whose technology infrastructure including network, hardware, and software is managed by a third party company or organization. Typically common use providers manage a large number of airport infrastructures with a common platform and protocol. SITA CUTE and ARINC MUSE are examples of the larger common use platforms.	
 
 	1.10	Confirmed Status means when a reservation has been: (a) systematically acknowledged and accepted in the Hosted Reservation System by issuing a record locator or PNR number; and (b) the PNR has achieved a confirmed state in the Hosted Reservation System via either: (i) application of full or partial payment to the PNR; or (ii) application of an alternative mechanism such that payment for the PNR has been otherwise fulfilled.	
 
 	1.11	Content Provider means a provider of Ancillary Components sold in a Super PNR or Non-Flight Related Fee Record.	
 
 	1.12	CRS/GDS/ARS PNR means a Passenger Name Record, being an individual electronic record with a unique record locator number, containing one or more passenger names and booked Segments which contains at least one Segment booked via a CRS/GDS/ARS using Type B/Teletype Connectivity, or via a CRS/GDS using Type A/EDIFACT Booking Connectivity, or via Web Services/API Connectivity. A CRS/GDS/ARS source is based on unique user code and user type.	
 
 	1.13	Electronic Ticket (E-Ticket) means the document stored in electronic form, used in lieu of a paper document to be exchanged for the use of transportation and/or related services involving a single carrier.	
 
Exhibit A - 22

Hosted Services Agreement
 
 	1.14	Electronic Ticketing (E-Ticketing) means the method used to document in electronic form, the sale of transportation and/or related services for a single carrier in lieu of the issuance of a paper document.	
 
 	1.15	Electronic Ticketing Interchange and Database Provider means the third party provider that Customer has contracted with to process, exchange and store Customer E-Ticket records.	
 
 	1.16	Electronic Ticketing Services Agreement (ETSA) means the agreement Customer enters into with the Electronic Ticketing Interchange and Database Provider for Electronic Ticketing services.	
 
 	1.17	Executive Review Meeting means a formal meeting attended by Customer, NAVITAIRE and any related third party required, in response to non-compliance to the specified service level measures.	
 
 	1.18	Executive Sponsors has the meanings set forth in Exhibits C and D.	
 
 	1.19	Incident (INC) means a Customer reported Hosted Services trouble report and description logged and submitted through the INC schema in NAVITAIRE’s Internet based customer support tool (Remedy).	
 
 	1.20	Interline Electronic Ticket (Interline E-Ticket) means the document stored in electronic form, used in lieu of a paper document, to be exchanged for the use of transportation and/or related services involving more than one carrier.	
 
 	1.21	Interrupted Service Minutes means, with respect to a given Reporting Period, the total number of minutes during which Hosted Reservation Services is unavailable due to Interrupted Service, excluding Planned Downtime Minutes. This time is tracked by the minute, rounded up to the nearest minute per incident.	
 
 	1.22	Interrupted Service Report has the meaning set forth in Section 8.6.2 hereof.	
 
 	1.23	Journey means the true origination and destination city pair in a one way request. For example, Flight 100 originates in LAX with a stop in SLC on the way to BOS, where it connects to Flight 200 departing from BOS and arriving in JFK. A request for LAX-JFK on *****, which happens to include both Flight 100 and Flight 200 as the connecting pair, would be one Journey.	
 
 	1.24	Look to Booked Segment Ratio means the numeric result of the number of Availability Requests divided by the number of booked Segments where the Segment resides in a PNR that has reached a Confirmed Status.	
 
 	1.25	Load Factor means the ratio between the number of Loaded to Unloaded Low Fare Availability Calls based on the Low Fare Finder configured parameters. For purposes of illustration, if the Low Fare Finder is configured to return ***** on either side of the requested booking date, in a round trip search the resulting calls would be *****and*****. The Load Factor is determined by dividing the Loaded Low Fare Availability Calls by the Unloaded Low Fare Availability Calls, with the result in this scenario *****).	
 
 	1.26	Look to Booked Segment Ratio for CRS/GDS/ARS Type A/EDIFACT Bookings means the numeric result of the number of PAOREQ Availability Requests divided by the number of CRS/GDS/ARS Type A/EDIFACT booked Segments where the Segment resides in a PNR that has reached a Confirmed Status.	
 
 	1.27	Maximum Availability Requests Allowed means the numeric result of multiplying the Monthly Minimum Segment Guarantee by the Look to Booked Segment Ratio.	
 
 	1.28	Minimum System Availability Target has the meaning set forth in Section 8.2.1 hereof.	
 
 	1.29	Monthly Performance Report has the meaning set forth in Section 8.6.2 hereof.	
 
Exhibit A - 23

Hosted Services Agreement
 
 	1.30	MQSeries is a popular system for messaging across multiple platforms including Microsoft Windows, Linux, IBM mainframe and midrange, UNIX, and others. It allows independent applications on distributed systems to communicate with each other.	
 
 	1.31	Negotiated Allotment or NegoAllotment means allocation of a Customer’s seats to tour operators, cruise lines, or other non-affiliate third party entity through negotiated contracts.	
 
 	1.32	Non-Flight Related Fee Record means any data record materially referring to an Ancillary Component that is stored along with its corresponding fee in a PNR rather than as an Ancillary Component.	
 
 	1.33	Passenger Assistance List (PAL) is a list of Passengers with Reduced Mobility (PRM) for a particular flight and board point.	
 
 	1.34	Passengers with Reduced Mobility (PRM) describes functionality arising out of industry standards issued by IATA in respect of rights of disabled persons and persons with reduced mobility traveling by air within the European Community.	
 
 	1.35	Planned Downtime has the meaning set forth in Section 8.2.1(b) hereof.	
 
 	1.36	Planned Downtime Minutes means, with respect to a given Reporting Period, the total number of minutes in a Reporting Period during which Hosted Reservation Services are unavailable due to: (a) an act or omission of Customer with respect to matters described in Section 7.1 of this Exhibit; (b) an event of Force Majeure; or (c) a planned, scheduled, and approved event including Hosted Services System maintenance during which a particular service, upgrade or Hosted Services System routine requires Planned Downtime as defined in Section 8.2.1(b) hereof. Customer may request the event be rescheduled, providing there is reasonable cause for such a delay. This notification must be made to NAVITAIRE at least ***** in advance of the scheduled event. Planned Downtime Minutes will be tracked by the minute, rounded up to the nearest minute per incident.	
 
 	1.37	Reporting Period will be a calendar month. The NAVITAIRE Account Manager will measure monthly calculations simultaneous to account reviews.	
 
 	1.38	Reporting Period Minutes means, with respect to a given Reporting Period, the total number of minutes during such Reporting Period.	
 
 	1.39	Stabilization Period has the meaning set forth in Section 8.7.5 hereof.	
 
 	1.40	Strategic Business Review has the meaning set forth in Section 3.5 hereof.	
 
 	1.41	Super PNR means a passenger name record that includes one or more Ancillary Components. For the avoidance of doubt, a Super PNR includes any Ancillary Component regardless of booking source.	
 
 	1.42	Utilized Availability Requests Allowed means the numeric total result of the count of executed Standard Availability Calls and Low Fare Availability Calls.	
 
2	Scope of Services	
NAVITAIRE will provide certain services and support functions during the term of this Agreement related to the Hosted Reservation Services and related applicable products. Of the available Hosted Reservation Services, Customer has selected the products and/or services outlined in Exhibit K.
 
3	Implementation Services	
 
 	3.1	Data Center Implementation Services. NAVITAIRE will configure, install, activate, and test the necessary data center hardware and software for providing the Hosted Reservation Services to Customer. Unless otherwise specified, this service does not include communication circuits, wireless data services, or any remote communication	
 
Exhibit A - 24

Hosted Services Agreement
 
 	devices, including routers or network hardware. Client personal computers, workstations, or other Customer devices connected to the Hosted Services System are the responsibility of Customer and must meet the minimum specifications as required by NAVITAIRE.	
 
 	3.2	Virtual Private Network (VPN) Connectivity. If Customer desires to use a virtual private network (VPN) for connectivity to Hosted Reservation Services, NAVITAIRE will evaluate such a request to determine the viability of the use of a VPN connection for either a primary or back-up data circuit. After review, NAVITAIRE will advise Customer if the request is approved and the additional costs that will apply *****	
 
 	3.3	Network Configuration and Design Services. NAVITAIRE will supply recommended technical diagrams and will advise Customer on required network hardware requirements, for client portion of application as necessary. Customer shall have internal or third party network expertise available for the installation and configuration of their required network.	
 
 	3.4	System Integration Services. During the implementation of Hosted Reservation Services and before production use of such services, NAVITAIRE will assist in the assessment of the compatibility of third party hardware and software with the Hosted Services System. Customer shall be responsible for the cost of modifying or replacing any third party systems including hardware and software. For future integration services, NAVITAIRE will, upon request, provide an estimate; however, any services will be provided on a time and materials basis *****	
 
 	3.5	Strategic Business Review. NAVITAIRE will conduct a Strategic Business Review to gather information on Customer’s desired use of the Hosted Reservation Services and outline functional capabilities of the Hosted Services System. During the Strategic Business Review, NAVITAIRE will work with Customer to create a project plan and project schedule, including NAVITAIRE and Customer responsibilities, used to determine the Target Date.	
 
 	3.6	Customer Site Installation Services. NAVITAIRE will assist Customer with the installation and testing of the required telecommunications connection between the NAVITAIRE data center and the designated Customer facility. Customer shall be responsible for the cost of troubleshooting or connecting Customer’s internal network. Additional technical support for on-site assistance after the initial conversion to production use of the Hosted Reservation Services shall be quoted on a project basis at the request of Customer using the rates as outlined in Exhibit K.	
 
 	3.7	Initial Training Services. NAVITAIRE will supply the following training and Customer agrees to participate in such training for the Hosted Reservation Services:	
 
 	3.7.1	Core Reservation System Training: Up to a maximum of ***** which may be attended by up to ***** Customer employees at the NAVITAIRE office located in Salt Lake City, Utah or up to ***** Customer employees at the NAVITAIRE office located in *****. An additional ***** training will be required if GDS, Codeshare, and/or Interline functionality is implemented. If the training is not held at a NAVITAIRE facility, NAVITAIRE requires that ***** trainers be on-site at the alternate location and additional fees will apply. Also, if training is not held at a NAVITAIRE facility, Customer will be responsible for trainer transportation, quality lodging including high-speed internet access, additional costs for trainer’s time away from their home office, NAVITAIRE standard per-diems for meals and incidentals, and for meeting the NAVITAIRE requirements for a stable training technical environment. . All training will be conducted in English. Topics will include use of SkySpeed, Airport Check-in, Irregular Operations, Flight Scheduling and Fare Maintenance, and Reservations and Supervisory Features. Customer must complete basic computer familiarization and Windows training for all trainees before the initial training.	
 
Exhibit A - 25

Hosted Services Agreement
 
 	3.7.2	SkySales Training: Up to ***** which may be attended by up to ***** of Customer’s technical employees at the NAVITAIRE offices in Salt Lake City, Utah. The course includes time for hands-on development.	
Please note that the SkySales Training has been designed with the assumption that the developer(s) performing the carrier customization has a base level understanding of the Microsoft ASP.NET technology and knowledge of C# (C-sharp), XML, XSLT, HTML, and CSS. If additional assistance is required for this base understanding or additional development support after the course, the NAVITAIRE Professional Services organization can be engaged via a work order.
 
 	3.7.3	Data Store Products Training (if applicable): Up to ***** of technical training which may be attended by up to ***** Customer technical employees at Customer’s location. The course covers the data model, performance tuning, use of the Data Warehouse, replication, and how to avoid impacting the replication process. Classroom requirements for the on-site Data Store training are located in the Data Store course syllabus.	
 
 	3.7.4	Intelligent Seating Training (if applicable): Up to a maximum of ***** which may be attended by up to ***** Customer employees at the NAVITAIRE offices located in Salt Lake City, Utah.	
 
 	3.7.5	GoNow Agent (if applicable): Up to a maximum of ***** which may be attended by up to ***** Customer employees at the NAVITAIRE offices located in Salt Lake City, Utah.	
 
 	3.7.6	Travel Commerce Training (if applicable): Up to a maximum of ***** which may be attended by up to ***** Customer employees at the NAVITAIRE offices located in Salt Lake City, Utah.	
 
 	3.7.7	Loyalty Training (if applicable): Up to a maximum of ***** days which may be attended by up to ***** Customer employees at the NAVITAIRE offices located in Salt Lake City, Utah or.	
 
 	3.7.8	Launch Support: *****, up to ***** with up to ***** NAVITAIRE employees on-site with Customer, during cutover to the production Hosted Reservation Services.	
 
 	3.7.9	Manuals: Customer will be provided an electronic copy of the user reference manuals in Adobe Acrobat (PDF) format for download via the NAVITAIRE Customer care web site or by CD. Technical specification and technical reference manuals are for internal NAVITAIRE use only, unless otherwise specified in this Agreement or by other arrangement. All materials provided by NAVITAIRE are in the English language unless otherwise specified within this Agreement.	
 
 	3.7.10	Customer’s Travel Costs: Customer’s travel and lodging costs for training at a NAVITAIRE facility will be paid by Customer.	
 
 	3.8	Project Reporting. During the course of Implementation Services, the NAVITAIRE Project Manager will provide Customer with: (a) Weekly Project Plan Update and Status Report; (b) Weekly Updated Issues/Resolution List; and (c) Executive Summary.	
 
 	a)	Weekly Project Plan Update and Status Report. Weekly status reports will be transmitted to Customer on a weekly basis during the provision of Implementation Services. This report will include updated status on the implementation process and an updated project plan. A list of the following week’s tasks and goals will be included in the report.	
 
 	b)	Weekly Updated Issues/Resolution List. Weekly updated issues/resolution lists will be forwarded to Customer on the same schedule as the Weekly Project Plan	
 
Exhibit A - 26

Hosted Services Agreement
 
 	Update and Status Report. The Issues/Resolution List will include specific additional items discovered in the project analysis, or critical issues that deserve heightened priority apart from the project plan. The Issues/Resolution List will include the task, the responsible party, date, open/close status, priority, and date of closed task. Every issue will be given a priority relative to a mutually agreed priority with Customer. Priorities will be ranked 1-5, 1 being most critical. Below is a description of each priority:	
 
 	•	 	Priority 1 - Urgent. All issues included in this priority are deemed critical and will be given priority attention. These issues may affect a milestone or dependency related to the completion of conversion services. Issues in this category are critical to resolve prior to other project dependencies and milestones being completed.	
 
 	•	 	Priority 2 - High. Issues included in this priority may affect the Target Date and require resolution prior to the completion of conversion services.	
 
 	•	 	Priority 3 - Medium. Issues included in this priority are not required prior to completion of conversion services, but must be finished prior to the end of Implementation Services.	
 
 	•	 	Priority 4 - Low. These items are not critical to either the completion of conversion services or Implementation Services but require monitoring for subsequent follow up or entry into NAVITAIRE’s Internet based customer support tool.	
 
 	•	 	Priority 5 - Excluded. These items are deemed excluded and are either unnecessary or may be addressed in a business process change or work-around.	
 
 	c)	Executive Summary. An Executive Summary will be provided to both the NAVITAIRE and Customer Executive Sponsors upon reaching critical milestones. These milestones will be established mutually with Customer as the final project plan has been established.	
 
 	3.9	Implementation Services Time Frame	
 
 	3.9.1	During the course of planning discussions related to this Agreement, NAVITAIRE acknowledges the Target Date as requested by Customer for completion of applicable portions of the Implementation Services. The Target Date for completion of the Implementation Services is no later than ***** NAVITAIRE and Customer will detail dates and dependencies of the project plan, as summarized in the table in Section 3.9.2 below, in order to confirm the Target Date achievability.	
 
 	3.9.2	Upon receipt of the Implementation Fees due at signing, NAVITAIRE agrees to work with Customer, to plan, coordinate, and to make progress toward completion of the required Implementation Services within the time frame preceding the Target Date. NAVITAIRE further agrees to initiate, mutually with Customer, project-scope-analysis and project-planning communication to establish the final schedule for Implementation Services.	
The following table outlines the key milestone activities that will be discussed during the Strategic Business Review:

 	  	Primary Responsibility	  	Duration to	  	 	
Key Milestones & Supporting Tasks	  	NAVITAIRE	  	Customer	  	Complete	  	Milestone Dependency	
0	  	Agreement Signature and Project Start Date	  	ü	  	ü	  	*****	  	Agreement Signed*	
1	  	Account Setup Complete	  		  		  	*****	  	Milestone 0	
	  	Current version of software loaded	  	ü	  		  		  		
	  	Equipment ordered, received and setup	  	ü	  		  		  		
	  	Final version of software loaded	  	ü	  		  		  		
 
Exhibit A - 27

Hosted Services Agreement

 	  	Primary Responsibility	  	Duration to	  	 	
Key Milestones & Supporting Tasks	  	NAVITAIRE	  	Customer	  	Complete	  	Milestone Dependency	
2	  	New Skies Training	  		  		  	*****	  	Milestone 1	
	  	New Skies core training complete	  		  	ü	  		  		
	  	SkySales training	  		  	ü	  		  		
	  	Other training, as mutually agreed	  		  	ü	  		  		
3	  	Third Party Development	  		  		  	*****	  	Milestone 2	
	  	Website development	  		  	ü	  		  		
	  	API development	  		  	ü	  		  		
4	  	User Acceptance Testing	  		  		  	*****	  	Milestones 2, 3 and 5	
	  	UAT plan and cases outlining business critical functionality completed & forwarded to NAVITAIRE	  		  	ü	  		  		
	  	Confirm business critical functionality available in New Skies release	  	ü	  		  		  		
	  	Data validation of converted data	  		  	ü	  		  		
	  	Approved functionality is working as documented	  		  	ü	  		  		
5	  	Third Party Certification	  		  		  	*****	  	Milestone 3	
	  	SkyPay certification complete	  	ü	  	ü	  		  		
	  	Website certification complete	  		  	ü	  		  		
	  	API certification complete	  		  	ü	  		  		
6	  	Operational Readiness	  		  		  	*****	  	Milestone 4	
	  	All code changes required for go-live in production account	  	ü	  		  		  		
	  	Final skins are published to website, if self-hosted	  		  	ü	  		  		
7	  	Dry Run	  		  		  	*****	  	Milestone 5	
	  	Pull data from production	  		  	ü	  		  		
	  	Convert data	  		  	ü	  		  		
	  	Perform data integrity check	  		  	ü	  		  		
	  	Move data to production environment	  	ü	  		  		  		
	  	Simulate go-live activities	  	ü	  	ü	  		  		
8	  	Go-Live Readiness Review	  		  		  	*****	  	Milestone 7	
	  	Confirm go-live date with all necessary teams	  	ü	  	ü	  		  		
9	  	Go-Live	  		  		  	*****	  	Milestone 8	
	  	Pull data from production	  		  	ü	  		  		
	  	Convert data	  		  	ü	  		  		
	  	Perform data integrity check	  		  	ü	  		  		
	  	Move data to production environment	  	ü	  		  		  		
	  	Perform go-live activities	  	ü	  		  		  		
	  	Approve go-live	  		  	ü	  		  		
 
*	Implementation services will not be scheduled until this Agreement is fully-executed and any implementation fees due and payable by Customer as outlined in Exhibit K have been received by NAVITAIRE.	
 
 	3.9.3	Customer understands that the Target Date is subject to change as such date is dependent on, among other matters, certain third party agreements/activities on behalf of both Customer and NAVITAIRE. These third party agreements/activities may include, but are not limited to, the following:	
 
 	•	 	Airport facility use agreements.	
 
 	•	 	All telecommunications and data circuits.	
 
 	•	 	Credit card settlement and authorization agreements.	
 
 	•	 	Centralized Reservation System/Global Distribution System/Airline Reservation System (CRS/GDS/ARS) agreements and host provider(s) certification process.	
 
 	•	 	Content Provider agreements and certification process.	
 
Exhibit A - 28

Hosted Services Agreement
 
 	•	 	Data conversion systems.	
 
 	•	 	Bilateral agreements for marketing codeshare terms with other airline partners.	
 
 	•	 	Codeshare marketing partner host provider certification process.	
 
 	•	 	IATA carrier code assignment.	
Customer will immediately establish a primary technical Project Manager contact that will be assigned to interact with the Project Manager appointed by NAVITAIRE. Failure to appoint this individual will jeopardize the delivery of Implementation Services by NAVITAIRE.
 
 	3.9.4	Upon ‘Go Live’, Customer is expected to fully open functionality to the public. If Customer requests a two phase launch (e.g., initial “soft launch” for limited release), Customer must recognize that the appropriate NAVITAIRE resources may not be available for appropriate on-site or data center support for a second launch outside of the ’Go Live’ date. Additional implementation fees will apply for any two phase launch scheme.	
 
 	3.9.5	Upon completion of the Implementation Services as described in this Exhibit A, Section 3, NAVITAIRE will provide written notification to the Customer Account Liaison named in Exhibit D, Section 2.	
 
 	3.10	Data Conversion and Import Services	
 
 	3.10.1	Conversion Services. If Customer has been using a third party reservation system, Customer will be responsible for converting existing reservations data into the required Hosted Reservation Services format. Hosted Reservation Services file format requirements and specifications are available to Customer upon request.	
 
 	3.10.2	Data Conversion Assistance. If Customer desires assistance with data conversion services from a third party reservation system, NAVITAIRE will review this request, and if accommodated, such assistance will be provided on a time and materials fee basis, *****	
 
 	3.10.3	Data Import Services. NAVITAIRE will automatically convert and process Customer’s PNR(s) into the Hosted Services System. The data conversion process will take place in three steps:	
 
 	•	 	Extract. An extract process will retrieve all reservations that have a flight record with a date after *****. Only complete, or valid, reservations will be extracted from the previous reservation system data file.	
 
 	•	 	Conversion. After a ‘block’ of reservation data is extracted, the corresponding output file will be transferred to the new environment. A data validations routine will perform audits of the data quality.	
 
 	•	 	Import. Upon completion of the first extract file of clean data, an import routine will transfer the clean data to the New Skies compliant databases in segmented extracts. While the first is transferring, a concurrent process will commence on the second extract, transfer and import to expedite data transfer.	
 
 	3.11	Reservations History Capture for Third Party Revenue Management Systems	
If Customer is not yet using a revenue management system, or is using a third party revenue management system, additional fees will apply to capture reservations booking history data from Hosted Reservation Services. Applicable charges are outlined in Exhibit K.
 
Exhibit A - 29

Hosted Services Agreement
 
4	Data Circuits	
 
 	4.1	Primary and Backup Data Circuits. Customer shall be responsible for all telecommunication circuits used by Customer in connection with the transmission of data between the Hosted Services System and Customer’s site(s), as stated in Section 4.10 of the Agreement.	
 
 	4.2	Facility Locations. The facility locations provided for in this Agreement are as follows:	
 
 	•	 	The NAVITAIRE Hosted Reservation data center will be located in *****	
 
 	•	 	Customer’s primary facility will be located in *****	
 
5	Support Center Support	
 
 	5.1	Included Support. NAVITAIRE will include English-speaking Support Center Support via email, an Internet based customer support tool (English version only), or telephone. A customized version of the NAVITAIRE Procedures Manual will be provided to Customer.	
The allotment of ***** for included support is for the specified period only and may not be carried forward. Allotted monthly ***** of Support Center Support are not deducted for System Error reporting and use of the online support system. All other related ***** are deducted in ***** increments with a minimum of ***** per occurrence. Included Support for Hosted Reservation Services is provided at the following levels:
 
 	5.1.1	Initial Support. Included in the first ***** following the implementation of Hosted Reservation Services, Customer is allotted, at no additional charge, a maximum number of included Support Center Support ***** as described in Exhibit K, Section 1.3. If Customer utilizes the Support Center more than the allotted number of *****, the Support Fees in Section 5.3 hereof will apply.	
 
 	5.1.2	Basic Support. After the expiration of initial support, Customer is allotted, at no additional charge, a maximum number of included Support Center Support hours as described in Exhibit K, Section 1.3. If Customer utilizes the Support Center more than the allotted number of ***** the Support Fees in Section 5.3 hereof will apply.	
 
 	5.2	Hours - Non-Emergency. NAVITAIRE Support Center Support is available *****, excluding NAVITAIRE holidays (Christmas Eve, Christmas Day and New Year’s Day).	
 
 	5.3	Support Rate. ***** more than the applicable initial or basic support for the Support Center will be invoiced at the rate specified in Exhibit K, Section 1.3.	
 
 	5.4	Available Assistance. The NAVITAIRE Support Center may be contacted for assistance in the following areas. All services are in English, unless otherwise specified in this Agreement.	
 
 	5.4.1	System Error Reporting. Customer may report an identified Hosted Reservation Services System Error at no additional cost through the Customer Support line or the Internet based customer support tool.	
 
 	5.4.2	Emergency. An Emergency is defined as an aircraft incident or emergency on behalf of Customer, or Interrupted Service. Hosted Services System outages due to Customer misuse of the Hosted Services System will incur Support Fees at the rate specified in Exhibit K, Section 1.3. Interrupted Service due to Customer misuse of the Hosted Services System will be excluded from Interrupted Service Minutes.	
The NAVITAIRE Support Center may be reached, without charge, in the event of an Emergency ***** by calling the number provided in Exhibit C, Section 1.
 
Exhibit A - 30

Hosted Services Agreement
 
Customer will be requested to call the Support Center and report the Emergency, in English, to the representative, or if all representatives are busy with other calls, a message may be left in English on the voicemail response system, which will page an appropriate contact. A representative of NAVITAIRE will return Customer’s call within ***** with an acknowledgement and initial response to Customer.
Provided the Emergency is due to a complete system availability outage of the Hosted Reservation Services, NAVITAIRE will advise Customer as described in this Exhibit A, Section 8, regarding the status of the error or problem and the anticipated period to resolution. During normal business hours, both the NAVITAIRE Account Manager and Customer Account Liaison will be notified and briefed on the situation, with a further escalation to the Executive Sponsors for any outage exceeding *****. The Executive Sponsors will determine whether further escalation to the CEO, President or Managing Director level of each company is necessary.
Customer is required to provide NAVITAIRE with an after-hours emergency contact number in Exhibit D, which will be answered by Customer when called by the NAVITAIRE support representative.
 
 	5.4.3	Request Reporting. Customer may utilize the NAVITAIRE Internet support tool to contact the NAVITAIRE Support Center electronically for the following service requests:	
 
 	•	 	Custom Enhancement requests;	
 
 	•	 	New product concepts or requests;	
 
 	•	 	Additional training requests; and	
 
 	•	 	Product expertise.	
These services are subject to the Support and/or Other Fees as described in Exhibit K, Section 1.3 and/or 1.4, and are accepted at the sole discretion of NAVITAIRE. If the request is accepted by NAVITAIRE, a price quote and time schedule will be generated. Customer will then decide whether to authorize the work to be performed by NAVITAIRE.
 
 	5.5	Third Party Interfaces.	
 
 	5.5.1	NAVITAIRE will supply and support defined interfaces to third party systems utilized by Customer only if listed in this Section.	
 
 	5.5.2	Unless third party software is incorporated into the Hosted Services System and indicated specifically in the specifications included in this Exhibit, neither NAVITAIRE nor such third party shall be liable for the performance or failure to perform of the other in respect to Service Level Targets.	
 
 	5.5.3	In the event that a Travel Commerce or Content Provider connection causes severe performance issues or downtime to the Hosted Reservation Services System, NAVITAIRE reserves the right to temporarily disable the offending connection. Customer will be notified if such actions become necessary. NAVITAIRE will reestablish the connection once the supplier has resolved the issue.	
 
6	New Skies by NAVITAIRE Functionality Included in Hosted Reservation Services	
The following pages itemize the basic and optional products and features as of the Effective Date of this Agreement. Depending on the terms of this Agreement, as defined in this Exhibit A, Section 2 Scope of Services, not all optional products and features are included in this Agreement. This functionality list may be modified or expanded in the future based upon new releases, provided that no material functionality will be eliminated unless mutually agreed with Customer and NAVITAIRE.
 
Exhibit A - 31

Hosted Services Agreement
 
Customer and NAVITAIRE.
Hosted Reservation Services – New Skies
Base Functionality
SkySpeed – Call Center Reservation System
General Features – SkySpeed
 
 	•	 	Graphical reservations screens.	
 
 	•	 	Fee entry and payment collection.	
 
 	•	 	On-demand itinerary print capability.	
 
 	•	 	Auto-queue capability.	
 
 	•	 	Role-based user security.	
General Features – Availability and Fare Look-up
 
 	•	 	Search for travel components (flight, train, bus, ferry, etc.) and fare availability according to multiple search criteria.	
 
 	•	 	Display travel components (flight, train, bus, ferry, etc.) and fare results, including real-time pricing and availability.	
 
 	•	 	Interactive calendar.	
 
 	•	 	Graphical display of price by passenger type, fees and taxes, multiple currencies, fare rules, manifest and SSR availability. Multiple-airport cities (MAC) functionality.	
General Features – SkySpeed Booking Module
 
 	•	 	Book, change, divide, and cancel reservations.	
 
 	•	 	Book unlimited number of passengers per PNR as defined by role.	
 
 	•	 	Reserve unlimited number of travel Segments per passenger, per PNR.	
 
 	•	 	Book multiple flight connections.	
 
 	•	 	Book non-revenue and revenue standby passengers.	
 
 	•	 	Override fares dependent on user security settings.	
 
 	•	 	Assign multiple Special Service Request (SSR) codes to individual passengers based on availability.	
 
 	•	 	Add individual passenger identification documents.	
 
 	•	 	Optional seat map display showing actual seat availability.	
 
 	•	 	Optional pre-assigned seating.	
 
 	•	 	Associate seat fees with pre-assigned seats.	
 
 	•	 	Dynamic seating legend to display seat properties.	
 
 	•	 	Store multiple addresses and phone numbers on a single booking.	
 
 	•	 	Auto-populate name and address from stored phone numbers.	
 
 	•	 	Issue itinerary at the airport or station, or by mail, fax, email or XML feed to the desired system.	
 
 	•	 	Multiple language support for itinerary printing.	
 
 	•	 	Carrier defined mandatory comments.	
 
 	•	 	Ability to create Agent and carrier defined Freeform, Manifest, and Itinerary comments.	
 
 	•	 	Display of real-time travel status information (e.g. FLIFO).	
 
 	•	 	Move passengers to new travel components.	
 
 	•	 	Apply promotion codes to bookings.	
 
 	•	 	Use vouchers as payment on bookings.	
 
 	•	 	Apply discount codes for selected passenger(s) on a booking.	
 
 	•	 	Apply penalty fees at the PNR and passenger level.	
 
 	•	 	Auto-assign seats at the passenger and booking level, with Intelligent Seating for optimal seat selection.	
 
 	•	 	Quick search options to retrieve PNRs.	
 
 	•	 	View available and expired fares within a date range.	
 
 	•	 	Direct refunds to spoilage fees so they are not refunded to passengers.	
 
 	•	 	Directional fares	
 
 	•	 	Place traffic restrictions on flight routes according to IATA standards.	
 
 	•	 	Support for Change of Gauge on equipment (aircraft, train, bus, and ferry).	
 
 	•	 	Support for payment by installments.	
General Features – Customer Management
 
 	•	 	Manage customer profiles, including personal information, travel preferences and booking information.	
 
 	•	 	Support for system-generated and third-party Customer IDs	
General Features – Travel Agent Support
 
 	•	 	Support for travel agency, corporate and third-party profiles.	
 
 	•	 	Automatic entry of travel agency, corporate or third-party organization ID upon agent login.	
 
 	•	 	Private fares and fare discounts based on organization.	
 
 	•	 	PNR retrieval using CRS, GDS and third-party record locators.	
 
 	•	 	Support for parent/child relationships within travel agencies.	
 
Exhibit A - 32

Hosted Services Agreement
 
General Features – Airline Specific PNR Preferences
 
 	•	 	Configure which fields are required, optional and disabled for passenger information, contact information, payment information and customer profile information.	
 
 	•	 	Automatically place bookings on hold for declined credit cards (configurable).	
 
 	•	 	Configure validation for phone number format.	
 
 	•	 	Auto-populate city and state based on postal code (US & Canadian postal codes).	
 
 	•	 	Configure default booking values for country, language, culture and nationality.	
General Features – Agent and Airline Support Tools
 
 	•	 	Create and manage system agents.	
 
 	•	 	Apply role-based permissions to agents and agent groups.	
 
 	•	 	Password-protected login for individual agents.	
 
 	•	 	Temporary supervisory login to perform secure functions.	
 
 	•	 	Configurable logoff time value for inactive sessions.	
 
 	•	 	Scratch pad for call-specific notes.	
 
 	•	 	Customizable reference system to maintain and manage carrier policy and procedure information.	
 
 	•	 	Online help documentation.	
 
 	•	 	Password-protected queue access.	
SkySales – Internet Reservation System
General Features – SkySales Booking Module
 
 	•	 	Book, change and cancel reservations.	
 
 	•	 	Trip types include one-way, round-trip and open jaw travel components.	
 
 	•	 	Travel components may be multi-leg, multi-segment (flights, trains, buses, ferries, etc.).	
 
 	•	 	Configurable day-of-travel booking.	
 
 	•	 	Interactive calendar.	
 
 	•	 	Assign multiple Special Service Request (SSR) codes to passengers, based on availability.	
 
 	•	 	Optional Special Service Request (SSR) fees.	
 
 	•	 	Support for passenger types, including discounts.	
 
 	•	 	Search Again feature to retain previous query settings.	
 
 	•	 	Display selected travel components and fares prior to purchase.	
 
 	•	 	Optional “I Agree To Terms” enforcement check box.	
 
 	•	 	Display of confirmed or held booking, including booking details.	
 
 	•	 	Flight following interface.	
 
 	•	 	Link to external pages, such as third-party payment providers and loyalty programs.	
 
 	•	 	Self-service passenger moves without fee or fare change within a carrier-defined timeframe.	
General Features – Pricing/Promotions
 
 	•	 	Online redemption of promotion code discounts.	
 
 	•	 	Online redemption of vouchers.	
 
 	•	 	Request a single fare class, single fare level or multiple fare levels.	
 
 	•	 	Display of single or multiple fares per travel component.	
 
 	•	 	Display of “Discounted Web” and “Regular Price” comparisons.	
 
 	•	 	Fare display by passenger type.	
 
 	•	 	Summary and detailed price quotes, including fee and tax breakdown.	
 
 	•	 	Configurable fare rules display.	
 
 	•	 	Configurable promotional fares, such as Buy One, Get One Free.	
 
 	•	 	Directional fares.	
General Features – Passenger/Contact
 
 	•	 	Associate passenger titles with passenger types.	
 
 	•	 	Configure the maximum number of passengers allowed per booking, by booking source.	
 
 	•	 	Configure drop-down lists, input boxes and required fields for passenger and contact information.	
 
 	•	 	Option to include infant name/age and adult passenger association in manifest comments.	
General Features – Availability
 
 	•	 	Multiple-airport cities (MAC) functionality.	
 
 	•	 	Show product class or class of service for fare display.	
 
 	•	 	Advanced move functionality.	
 
 	•	 	Route-aware origin and destination lists.	
 
 	•	 	Availability for single day and date ranges.	
 
 	•	 	Place traffic restrictions on flight routes according to IATA standards.	
 
 	•	 	Support for Change of Gauge on equipment (aircraft, trains, bus, ferry, etc.).	
 
 	•	 	Search by lowest fare in market for a number of days out (Premium Service).	
 
Exhibit A - 33

Hosted Services Agreement
 
General Features – Payments
 
 	•	 	Facilitates communication for credit card validation and authorization with Customer’s third party provider.	
 
 	•	 	Configurable controls for pending and declined cards.	
 
 	•	 	Configure and store data related to installment payments.	
General Features – Travel Agency Support
 
 	•	 	Discounts, promotions, commissions, tracking, reporting and billing for travel agencies and corporations.	
 
 	•	 	Online travel agency registration, including IATA/ARC/ATOL/BSP number and password.	
 
 	•	 	Online corporate business registration, including account number and password.	
 
 	•	 	Booking for unregistered/unrecognized agencies prior to carrier validation.	
 
 	•	 	Carrier validation/activation of pending online registrations.	
 
 	•	 	Online support for updates to travel agency/corporate account information.	
 
 	•	 	Individualized logins for agents within a travel agency/corporation.	
 
 	•	 	Travel agency/corporate ID and contact information included on bookings.	
 
 	•	 	Parent-child relationships for travel agencies and corporations.	
General Features – Seat Functionality
 
 	•	 	Customizable, graphical seat map display.	
 
 	•	 	Dynamic, unique seat map for each travel component.	
 
 	•	 	Seat selection from seat map or system-assigned based on customer preferences and Intelligent Seating algorithms.	
 
 	•	 	Individual seating and group seating, including seat assignment restrictions.	
 
 	•	 	Dynamic seat legend to display seat properties.	
 
 	•	 	Seat fees and SSR fees.	
General Features – Technical Details
 
 	•	 	Ability to customize graphics and HTML display elements (“look and feel”) through CSS and XSLT.	
 
 	•	 	Server-enforced, role-based configuration controls to define application business logic.	
 
 	•	 	Customizable market data (origin and destination airport codes, currency codes and time zone settings).	
 
 	•	 	Customizable lists and codes for aircraft types and credit cards.	
 
 	•	 	Customizable contact information lists (for example, states/provinces, and countries).	
 
 	•	 	Configurable itinerary distribution options (for example, email, fax, print).	
 
 	•	 	Support for localization (multiple languages) through customization libraries.	
 
 	•	 	Support for local time settings by city.	
 
 	•	 	Retrieve and view traveled bookings for registered members.	
 
 	•	 	Full validation of form elements using JavaScript.	
 
 	•	 	Future expandability through modular architecture.	
 
 	•	 	Supported browsers include Internet Explorer 6.0 or higher, Firefox 2.0 or higher, Opera or the latest version of Safari.	
 
 	•	 	Optional Secure SSL Encryption, No Encryption, or both (generally compliant with secure SSL encryption).	
Limitations and Exclusions
 
 	•	 	SkySales is not designed for use on a platform without web session locking.	
 
 	•	 	Implementing locking per NAVITAIRE and Microsoft® recommendations and practices is required.	
 
 	•	 	SkySales support obligations and Service Level targets and/or penalty/rebate calculations do not apply for any Service Level issues attributable to non-compliant session provisioning.	
 
 	•	 	SkySales hosting by NAVITAIRE is not included within the scope of Hosted Reservation Services.	
SkySchedule – Scheduling Application
General Features – SkySchedule
 
 	•	 	Create and maintain schedules.	
 
 	•	 	Re-accommodate passengers to other travel components – flight, train, bus, ferry, etc.	
 
 	•	 	View PNR(s) and passengers affected by a schedule change.	
 
 	•	 	Create non-stop travel components.	
 
 	•	 	Create direct and/or connecting, multiple-leg travel components.	
 
 	•	 	Maintain routing mileage table for reporting.	
 
 	•	 	Maintain and compare multiple schedules.	
 
 	•	 	Change travel time, flight/train number, status, equipment type, and cabin/car configuration.	
 
 	•	 	Automatically update cabin/car configuration based on Authorized Unit (AU) changes.	
 
 	•	 	Maintain automated or user-defined schedule change queuing.	
 
 	•	 	Create and modify preliminary schedules offline prior to activation.	
 
 	•	 	Display detailed inventory and change history.	
 
 	•	 	Configure availability display for real-time travel component modifications.	
 
 	•	 	Print schedules.	
 
 	•	 	Maintain carrier-specific cities or airport/station codes in the airport/station table.	
 
 	•	 	Generate schedules in industry-standard formats.	
 
 	•	 	Import and export SSIM files.	
 
 	•	 	Maintain standby priority of a re-accommodated passenger.	
 
Exhibit A - 34

Hosted Services Agreement
 
 	•	 	Create a preliminary schedule for comparison of active schedule.	
 
 	•	 	Flag certain travel components and indicate whether they are for general use or not.	
 
 	•	 	Dynamic seating legend to display system and custom seat properties.	
 
 	•	 	Create circle travel components.	
 
 	•	 	Support for travel segments crossing the International Date Line.	
General Features – Fare and Inventory Management – SkyFare/SkyManager
 
 	•	 	Support for multiple currencies.	
 
 	•	 	Set the booking default currency based on origin city.	
 
 	•	 	Create and maintain fare rules.	
 
 	•	 	Apply advance purchase requirement.	
 
 	•	 	One-way, return (round-trip), and open jaw fares.	
 
 	•	 	Apply seasonality criteria to fares.	
 
 	•	 	Specify minimum number of passengers required.	
 
 	•	 	Specify day-of-week stay over requirement.	
 
 	•	 	Specify minimum/maximum stay requirement.	
 
 	•	 	Specify combinability rules.	
 
 	•	 	Specify directional fares.	
 
 	•	 	Specify travel date and sales date restrictions.	
 
 	•	 	Specify valid passenger discount types.	
 
 	•	 	Organization-specific fares.	
 
 	•	 	Fare branding to bundle distinct services with a recognized product name.	
 
 	•	 	Combine base fare, sales taxes, and travel fees for end user display (excludes GDS).	
 
 	•	 	Maintain discrete fare classes (unaffected by standard nesting rules).	
 
 	•	 	Create and modify fares using file import/export.	
 
 	•	 	Apply global fare changes.	
 
 	•	 	Differentiate between CRS/GDS and internal AU application.	
 
 	•	 	Support for revenue management interface files.	
 
 	•	 	Define fare classes and fare access by user role.	
 
 	•	 	Role- and fare-based hold settings.	
 
 	•	 	Validate standby fare classes.	
 
 	•	 	Create and maintain SkySpeed and SkySales fare rule files for passenger advice.	
 
 	•	 	Create and maintain fee types, descriptions, amounts, and currencies.	
 
 	•	 	Negative fees.	
 
 	•	 	Refunds.	
 
 	•	 	Implement availability status (AVS) RECAP and/or RESYNC either automatically or manually.	
 
 	•	 	Manage AU(s) at a leg and route level.	
 
 	•	 	Run a pending batch of fares manually, on demand.	
 
 	•	 	Negotiated space functionality for third parties, such as tour operators.	
SkyPay – Payment Processing and Settlement
General Features – SkyPay – Payment Processing and Settlement
 
 	•	 	Create and maintain payment types.	
 
 	•	 	Enter multiple payments on an individual PNR.	
 
 	•	 	Allow PNR(s) to be ended with partial payment, based on role.	
 
 	•	 	Allow PNR(s) to be ended with a negative balance.	
 
 	•	 	Authorize credit cards manually; with processor approval.	
 
 	•	 	Restrict refunds by payment type and/or user group.	
 
 	•	 	Reverse a previously-entered payment.	
 
 	•	 	Support credit card processing as outlined in Section 7.4 of Exhibit A of this Agreement.	
 
 	•	 	Select bank direct payments via SkySpeed and SkySales. (Settlement is dependent on Bank file.)	
 
 	•	 	Require AVS and CVV for payment verification purposes via SkySales and/or SkySpeed. (AVS is not supported in all regions.)	
 
 	•	 	Support the configuration and storage of data related to installment payments.	
SkyPort – Airport Check-in System
General Features – SkyPort – Airport Check-in System
 
 	•	 	Check in one or more passengers on the same PNR at the same time.	
 
 	•	 	Board one or more passengers on the same PNR at the same time.	
 
 	•	 	Issue boarding passes and bag tags for standby passengers.	
 
 	•	 	Display travel segment data and remarks.	
 
 	•	 	Open, close, and lock travel segments (flight, train, bus, ferry, etc.).	
 
 	•	 	Create and modify PNR(s) in real-time.	
 
 	•	 	Associate or disassociate passengers with customer credit files.	
 
 	•	 	Display passenger lists, such as confirmed, standby, connecting, no-show, same PNR, etc.	
 
 	•	 	Display list of travel segments according to numerical order of flight/train/bus/ferry.	
 
Exhibit A - 35

Hosted Services Agreement
 
 	•	 	Make changes to passenger information directly on the PNR.	
 
 	•	 	Change the priority code of standby passengers.	
 
 	•	 	Print passenger manifests.	
 
 	•	 	Print passenger receipts/itineraries to peripheral boarding pass printers. (Supported printers may be found under Customer Requirements; Equipment Specifications).	
 
 	•	 	Display passenger ticket numbers on boarding passes.	
 
 	•	 	Scan boarding passes to print bag tags.	
 
 	•	 	Automatic generation and printing of bag tags.	
 
 	•	 	Pre-assigned seating.	
 
 	•	 	Assign seats or change seat assignments.	
 
 	•	 	Hold or block seats.	
 
 	•	 	Dynamic seating legend to display seat properties.	
 
 	•	 	Support for multiple equipment configurations.	
 
 	•	 	Assign or remove SSR codes.	
 
 	•	 	Display multiple SSR codes assigned to a passenger.	
 
 	•	 	Add SSR fees after check-in.	
 
 	•	 	Assign a voucher to a passenger.	
 
 	•	 	Input and retrieve Flight Following information.	
 
 	•	 	Re-accommodate passengers for irregular operations (IROP).	
 
 	•	 	Maintain checked and boarded status on international flights during an irregular operation (IROP).	
 
 	•	 	Create ad hoc connections between cities and markets where connections are not routinely created (IROP).	
 
 	•	 	Allow or restrict agents from checking in selected passengers.	
 
 	•	 	Allow or restrict the ability for agents to log in to a location other than the assigned default location.	
 
 	•	 	Display historical manifests, including checked and no-show passenger details.	
 
 	•	 	Report gender count and weight categories for passenger-driven weight-and-balance calculation.	
 
 	•	 	Support for station add/collects.	
 
 	•	 	Support for cash-out sales by agent.	
 
 	•	 	Support for agent login security.	
 
 	•	 	Display daily station-specific note pages for company updates.	
 
 	•	 	Customizable reference system for carrier policies and procedures.	
 
 	•	 	Online help system.	
 
 	•	 	Agent reports, Flight Following, Irregular Operations (IROP), and message generation (internal and Teletype).	
 
 	•	 	Display inventory.	
 
 	•	 	Cancel or suspend inventory.	
 
 	•	 	Support for ARINC/MUSE and SITA/CUTE (certification required).	
 
 	•	 	Allow or prevent agents from viewing or editing passengers who are on Lock or Warning queues.	
 
 	•	 	Specify the amount of time allowed to open or close travel segments after departure.	
 
 	•	 	Prompt for AU updates during equipment swap.	
 
 	•	 	Generate outbound BSM messages.	
 
 	•	 	Accept and process MVT messages for travel segment information updates.	
 
 	•	 	Support the configuration and storage of data related to installment payments.	
 
 	•	 	Transmit APIS data to government authorities via EDIFACT messaging. (NAVITAIRE APIS solution has been certified by customers with U.S. and Canadian customs authority. APIS requirements from other countries may require additional development and testing.)	
 
 	•	 	Address in country/CBP - APIS enhancements. (NAVITAIRE APIS solution has been certified by customers with U.S. and Canadian customs authority. APIS requirements from other countries may require additional development and testing.)	
 
 	•	 	Includes the NAVITAIRE Terminal Emulator, which is required to access SkyPort.	
New Skies Reports – Reporting System
General Features – New Skies Reports
 
 	•	 	Run reports “on-demand’ on the NAVITAIRE Reporting platform.	
 
 	•	 	Reports may be exported in various data formats, including CSV (Comma Delimited), XML, and PDF. (Microsoft Excel can open and import CSV and XML file formats.)	
 
 	•	 	Detail reports that generate output based on a user-specified time frame can produce at least one full day of detail data.	
 
 	•	 	Summary reports that generate output based on a user-specified time frame can produce up to one month of summary data.	
 
 	•	 	Option to request NAVITAIRE report development at an additional charge.	
 
 	•	 	Report files generated by the New Skies Reports subscription functionality will be retained for up to fourteen (14) days from the date they are generated.	
General Features – Standard Reports
The following is an alphabetical list by function, which contains a description of the standard reports available as a part of the Hosted Reservation Services. These reports may be added to, deleted, modified, changed, eliminated or substituted for at the discretion of NAVITAIRE at any time. The reports are viewed online via a browser interface.
 
Exhibit A - 36

Hosted Services Agreement
 
Accounting General
 
 	•	 	AG Payments -Displays information about activity within a travel agency during a specified period of time.	
 
 	•	 	Agency List -Displays information about the travel agency, corporate or Air Travel Organizer’s License (ATOL) accounts that have been entered for your carrier.	
 
 	•	 	Agency List Summary -Displays a summary view of the agencies associated with your carrier.	
 
 	•	 	Availability Information -Displays flight availability information, including lid, capacity, seats sold	
 
 	•	 	Bank Reconciliation - Reconciles bank transactions.	
 
 	•	 	Bookings By Agent Detail - Provides detailed information on bookings made by individual booking agents.	
 
 	•	 	Cancellation After Travel Date -Displays passenger and fare information about cancelled booking segments.	
 
 	•	 	Checked Baggage -Displays baggage information for flights.	
 
 	•	 	Checked In Passengers By Fare Class -Displays the total number of passengers by fare class who were checked-in.	
 
 	•	 	Commissions Incurred - Provides commissions information for each of the travel agency that generates bookings for your carrier.	
 
 	•	 	Credit File Commissions -Displays commission information on travel agency bookings.	
 
 	•	 	Credit Shell File -Displays credit shell/file activity and balances.	
 
 	•	 	Credit Shell File Expired - Lists expired credit files and credit shells.	
 
 	•	 	Customer ID By Flight -Displays the customer IDs associated with passengers booked on a selected flight.	
 
 	•	 	Daily Agency Charges -Displays the number of charges and activity performed by each agency during a specified day.	
 
 	•	 	Enplanement Deplanement -Displays either enplanements or deplanements by airport.	
 
 	•	 	Fare Overrides -Displays fare override information by agent.	
 
 	•	 	Fees And Discounts -Displays passenger-level service fees, SSR fees, seat fees, and penalty fees.	
 
 	•	 	Fees And Discounts By Date -Displays fees that were manually added to the booking.	
 
 	•	 	Fees And Discounts By Location And Agent -Displays fees that were manually added to the booking by location and by agent.	
 
 	•	 	Fees And Discounts By Location And Fee Type -Displays fees that were manually added to the booking by location and by fee type.	
 
 	•	 	Gender Count By Fare Class - Lists and breaks down passenger information by fare class.	
 
 	•	 	Generic Tax History -Displays information about the selected tax.	
 
 	•	 	Net Sales - Summarizes net sales figures.	
 
 	•	 	No Shows -Displays the names, PNRs, flight dates, and flight numbers for no-show passengers.	
 
 	•	 	Payment Detail -Displays information about payments made.	
 
 	•	 	Payment Detail Consolidation -Displays information about payments made and is further organized by booking source.	
 
 	•	 	Payment Receipts -Displays information about all payments made on the payment approval date.	
 
 	•	 	Payment Receipts Restricted -Displays information about all payments made on a specified date.	
 
 	•	 	Payments By Batch Code -Displays information on the batch codes used to make payments on bookings.	
 
 	•	 	PNR Out of Balance - Queries for reservations that have a credit and/or balance due.	
 
 	•	 	Refunds -Displays refunds made by specific departments.	
 
 	•	 	Sales Exceptions -Displays the information on PNRs when the balance of the PNR and the payments made differ.	
 
 	•	 	Seat Assignments By Agent - Provide the total number of seat assignments made by specific agents.	
 
 	•	 	Segment Activity By City Pair -Displays information on confirmed and/or unconfirmed booking amounts and passenger totals by city pairs.	
 
 	•	 	Segment Activity By Flight Date -Displays information on segment activity by flight date.	
 
 	•	 	Segment Activity Detail -Displays information on segment activity for a specific date or date range.	
 
 	•	 	Segments By Agent - Shows the number of segments that were created or cancelled during the period and the charges associated with those segments made by individual agents.	
 
 	•	 	Unapproved Payments -Displays all payments, by payment type that have not been approved.	
 
 	•	 	US Security Fees - Provides information required by the TSA.	
Accounting – Travel Agency Specific
 
 	•	 	Account Charges -Displays charges to agency accounts.	
 
 	•	 	AG Payments -Displays information about activity within a travel agency during a specified period of time.	
 
 	•	 	Agency List -Displays information about the travel agency, corporate or Air Travel Organizer’s License (ATOL) accounts that have been entered for your carrier.	
 
 	•	 	Agency List Summary -Displays a summary view of the agencies associated with your carrier.	
 
 	•	 	Commissions Incurred - Provides commissions information for each of the travel agency that generates bookings for your carrier.	
 
 	•	 	Daily Agency Charges -Displays the number of charges and activity performed by each agency during a specified day.	
 
 	•	 	Travel Agency Aging - Determines the outstanding and/or unused amounts for an agency as of the report date.	
 
 	•	 	Travel Agency Payments -Displays information on payments made by an agency.	
Add-on Services
 
 	•	 	Ancillary Services Detail - Generates detailed information on car rentals, insurance, and hotels.	
 
 	•	 	Ancillary Services Summary - Generates summary information on car rentals, insurance, and hotels.	
 
 	•	 	Car Rental -Displays information on car hire auxiliary services.	
 
 	•	 	Insurance - Tracks the amount of revenue generated by passengers purchasing insurance.	
Booking
 
 	•	 	Bookings By Agent -Displays total bookings created by an agent.	
 
 	•	 	Bookings By Agent Detail - Provides detailed information on bookings made by individual booking agents.	
 
Exhibit A - 37

Hosted Services Agreement
 
 	•	 	Bookings By Agent Detail Restricted - Provides detailed information on bookings made by individual booking agents restricted by the agent’s location and domain.	
 
 	•	 	Bookings By Agent Restricted - Provides detailed information on bookings made by individual booking agents restricted by the agent’s location.	
 
 	•	 	Bookings By Fare Class with Equipment -Displays passenger/segment booking and fare totals by fare class.	
 
 	•	 	Bookings By Market -Displays passenger totals, booking amounts, and average fares for individual markets.	
 
 	•	 	Bookings By Origin -Displays segment booking information (total segments and fare amounts by currency) for each originating city.	
 
 	•	 	Bookings By Schedule - Monitors bookings for a specified origin/destination (city pair) on a specific date.	
 
 	•	 	Bookings By Source - Provides a count of active (not cancelled) booking Segments and Journeys by booking source or channel.	
 
 	•	 	Booking Statistics - Determine flown and unflown revenue by booking source.	
 
 	•	 	Bookings By Time -Displays booking information in hourly increments.	
 
 	•	 	Days Out Bookings -Displays information about segment bookings made on a specific date, the number of segments sold in future dates following the selected booking date, and the actual travel date when these bookings were made.	
 
 	•	 	Duplicate Bookings - Lists different PNRs for the same flight and date that contain identical passenger names.	
 
 	•	 	E-Ticket On Demand -Displays information on the dates E-Tickets were issued for billing purposes.	
 
 	•	 	Group Bookings Out of Balance - displays information on group reservations that have a credit and/or balance due.	
 
 	•	 	Net Booking Transactions - determines revenue from confirmed bookings by booking source using the date created.	
 
 	•	 	Transaction By Channel - Provides booking, segment, and availability call transaction counts that are used to generate monthly invoices for billing.	
Codeshare
 
 	•	 	IATCI Reporting - Provides Inter Airline Through Check-in (IATCI) data to carriers expanding their existing code share partnerships with other airlines.	
Department of Transportation (DOT)
 
 	•	 	DOT Non Stop Market -Displays non-stop market information required by the U.S. Department of Transportation.	
 
 	•	 	DOT On-Flight Market -Displays passenger totals for flown flights required by the U.S. Department of Transportation.	
Inventory
 
 	•	 	Cancelled Inventory With Passengers - Provides the number of passengers who may need to be re-accommodated to another flight due to a cancellation	
 
 	•	 	Flight Capacity Lid -Displays information on seat capacity (or lid) and availability.	
 
 	•	 	Flight Schedule -Displays scheduled departure cities and times for flights	
 
 	•	 	Inventory Capacity - Lists capacity, lid, net seats sold, and seats sold today for flights.	
 
 	•	 	Load Factor Search -Displays load factor information.	
 
 	•	 	Seat Property Match -Displays counts of how many passengers requested seat assignments and how many got the seats they actually requested.	
 
 	•	 	Seating Exceptions - Designed to identify PNRs with particularly low match rates on desired properties.	
 
 	•	 	Seats Sold By Cabin -Displays the number of seats sold, and fare amounts, by cabin.	
 
 	•	 	Seats Sold By Fare Class -Displays the number of seats sold in each fare class.	
Management Performance
 
 	•	 	City Pair Load Factor - Provides information about the productivity of flights servicing different city pairs.	
 
 	•	 	Flight Specific Load Factor -Displays flight specific load factor information.	
 
 	•	 	Revenue By Flight -Displays revenue by average seat mile/kilometer for each date and for individual flights.	
Marketing
 
 	•	 	Promo Codes By Booking Date -Displays information on PNRs with promotion codes by booking date.	
 
 	•	 	Promo Codes By City Pair -Displays information on promotion codes by city pairs.	
Operations
 
 	•	 	Availability Information -Displays flight availability information, including lid, capacity, seats sold, and GDS triggers for selected flights on selected dates.	
 
 	•	 	Checked Baggage -Displays baggage information for flights.	
 
 	•	 	Checked In Passengers By Fare Class -Displays the total number of passengers by fare class who were checked-in.	
 
 	•	 	Flight Line -Displays passenger counts for a specific flight on a specified date.	
 
 	•	 	Flight Load -Displays passenger totals for flights.	
 
 	•	 	Flight Manifest -Displays passenger information for selected flights.	
 
 	•	 	Flight Schedule -Displays scheduled departure cities and times for flights.	
 
 	•	 	Flight Specific Load Factor -Displays load factor information.	
 
 	•	 	Gender Count By Fare Class -Breaks down passenger information by fare class.	
 
 	•	 	IROP And Moved Passengers - Lists all PNR’s that have been moved by IROP.	
 
 	•	 	Lock List - Allows you to print all data associated with a name on the watch list.	
 
 	•	 	Lock List History - Allows you to print all data associated with activity on the lock list including those who have been moved on as well as cleared from the list.	
 
 	•	 	Manifest With Connection Information - Lists connection information for booked passengers.	
 
 	•	 	Selectee Report - Lists the number of passengers that have been identified for additional security screening.	
 
 	•	 	SSR Flight Information - Provides a list of passengers with SSRs on a flight by flight basis and the SSR counts by flight.	
 
Exhibit A - 38

Hosted Services Agreement
 
 	•	 	SSRs By Agent - Lists and subtotals SSR code assignments by the Agent ID that assigned them.	
 
 	•	 	SSRs By Flight - Allows you to generate SSR statistics for inbound, outbound, thru, connection or all flight types.	
 
 	•	 	Watch List - Allows you to print all data for a single Watch ID, a range of Watch IDs, or all Watch IDs	
Payment
 
 	•	 	Payment Detail -Displays information about payments made.	
 
 	•	 	Payment Detail Consolidation - displays information about payments made. Information may be further organized by booking source, transaction type, department, and agent.	
 
 	•	 	Payment Receipts -Displays information about all payments made on the payment approval date.	
 
 	•	 	Payment Receipts Restricted -Displays information about all payments made by payment type, agent, location, and department.	
 
 	•	 	Payments By Batch Code -Displays information on the batch codes used to make payments.	
 
 	•	 	Payment Summary -Displays information on what location and department received the payment, the payment method, and how much of the payment was collected.	
 
 	•	 	Unapproved Payments -Displays all payments, by payment type that have not been approved.	
PNR Diagnostics
 
 	•	 	Bookings By Agent Detail - Provides detailed information on bookings made by individual booking agents.	
 
 	•	 	Duplicate Bookings - Lists different PNRs for the same flight and date that contain identical passenger names.	
 
 	•	 	PNR Activity -Displays transaction activity performed on individual PNRs.	
 
 	•	 	PNR Out of Balance - Allows you to query for reservations that have a credit and/or balance due.	
 
 	•	 	PNRs On Queue -Displays information about all PNRs that are currently awaiting processing in one or more queues including subqueues.	
Revenue
 
 	•	 	City Pair Load Factor - Provides an extensive array of information about the productivity of flights servicing different city pairs.	
 
 	•	 	Earned Unearned Revenue - Allows you to view information on earned (flown) revenue, unearned (no-show, unflown) revenue, or both earned and unearned revenue.	
 
 	•	 	Earned Unearned Revenue Detail - Provides details in addition to those generated in the Earned Unearned Revenue Report	
 
 	•	 	Enplanement Deplanement -Displays either enplanements or deplanements by airport.	
 
 	•	 	Revenue By Fare Class -Displays earned revenue by fare class.	
 
 	•	 	Revenue By Flight -Displays revenue by average seat mile/kilometer for each date and for individual flights.	
 
 	•	 	Revenue By Market -Displays base and gross revenue information by market.	
Flight Information Control and Display (FLIFO)
General Features – Flight Information Control and Display (FLIFO)
 
 	•	 	Input and update departure and arrival information for travel segments.	
 
 	•	 	Accept and transmit industry MVT messages via Type B/Teletype with applicable Operational Message Add-on Suite.	
Agency Billing and Commissions
General Features – Agency Billing and Commissions
 
 	•	 	Create, maintain and retrieve travel agency commissions, charges and payments data.	
 
 	•	 	Set up to individual commission rates based on distribution channel for each agency.	
 
 	•	 	Create an invoice line of credit for travel agencies and corporations.	
 
 	•	 	Access the ODS to extract agency billing and commission data.	
 
 	•	 	Calculate commissions at the booking date.	
 
 	•	 	Include the journey details in the Agency Billing and Commission Extract.	
 
 	•	 	Use the add-on commission field to specify and additional percent to represent GST.	
 
 	•	 	Recall commissions based upon agency.	
 
 	•	 	Invoice multiple agencies for one booking.	
 
 	•	 	Create multiple commission records, as long as an agency is tied to each activity.	
SkyManager – Configuration and Management Utility
General Features – SkyManager Management Console
 
 	•	 	Graphical interface for management of system settings, carrier, and user configurations.	
 
 	•	 	Configure security roles and login requirements for agents, including individual permissions for a variety of tasks, such as creating and modifying reservations, access to various system components, seat assignments, overbooking, discounts, promotion codes, fees, moves, passenger types, fare quotes, etc.	
 
 	•	 	Configure passenger discount codes.	
 
 	•	 	Configure vouchers.	
 
 	•	 	Maintain various codes, such as country codes, currency code, and delay codes.	
 
 	•	 	Support for currency conversion rate imports.	
 
 	•	 	Configure daily and real-time company notes.	
 
Exhibit A - 39

Hosted Services Agreement
 
 	•	 	Manage IATA and carrier-specific SSR codes.	
 
 	•	 	Configure taxes and various fees - such as travel fees, SSR fees, payment fees, seat fees, spoilage fees, etc.	
 
 	•	 	Set fee amounts based on channel.	
 
 	•	 	Apply or exempt penalty fees based on organization, role, and fare class.	
 
 	•	 	Exempt stations from certain taxes and fees (such as rural airports where PFC does not apply).	
 
 	•	 	Configure variable taxes for fees.	
 
 	•	 	Configure passenger discount types.	
 
 	•	 	Configure queues and queue events.	
 
 	•	 	Set restriction levels on individual queue categories.	
 
 	•	 	Password-protect queues.	
 
 	•	 	Manage inventory for fares and SSRs.	
 
 	•	 	Synchronize inventory between multiple systems.	
 
 	•	 	Configure variable credit expiration criteria for credit types.	
 
 	•	 	Configure payment validation and authorization restrictions.	
 
 	•	 	Manage Web Service permissions at the method (function) level. (System Master only.)	
 
 	•	 	Enable users to search by the lowest fare in a market for a number of days out. (Premium Service.)	
 
 	•	 	Define a declined payment “hold period” based on booking channel.	
General Features – Message Interface (Type B/Teletype)
 
 	•	 	Support for the following Type B/Teletype messages:	
 
 	•	 	Baggage Service Messages - BSM	
 
 	•	 	Operation System Messages - PXA, PXB, MVT	
 
 	•	 	AIRIMP Messages (accept and reply)	
General Features – Security
 
 	•	 	Configure whether the credit card number used as booking payment is concealed or displayed.	
 
 	•	 	Create & manage a table of restricted credit cards.	
 
 	•	 	Manage Security Watch List functionality. (Optional)	
 
 	•	 	Create & manage government or carrier watch list for reservation/passenger matching, queuing, and check-in lock.	
 
 	•	 	Require a unique customer ID for each passenger booked on a reservation. (Optional)	
 
 	•	 	Automate updates to the U.S. Securities Watch List through a scheduled job.	
PNR Archiving
General Features – PNR Archiving
 
 	•	 	Moves PNR data from production to the archive fifteen (15) months after the last flight segment in the PNR is marked as flown or no-show and the booking is in balance.	
 
 	•	 	Retains PNR data in the archive for eighty one (81) months, for a total of ninety six (96) months of data retention.	
 
 	•	 	Archived data is viewable only through SkySpeed.	
 
 	•	 	Comments can be added to an individual archived PNR through SkySpeed.	
Note: If Extended PNR Archiving is not selected by Customer, PNR data will be purged ninety six (96) months after the last travel segment in a PNR has been marked as traveled (e.g. flown) or no-show.
Limitations and Exclusions
 
 	•	 	PNR Archiving does not include schedules, SkyPort, or any other non-PNR data.	
 
 	•	 	Changes to archived data are prohibited except for the ability to add a comment through SkySpeed, as noted above.	
 
 	•	 	While bookings in the archive database appear exactly as they appeared in SkySpeed prior to being archived, including the full history, the archive database does not contain version history records which enable “as-of” reporting.	
 
 	•	 	Reporting on archived data includes the following reports:	
 
 	•	 	Archive Booking; and	
 
 	•	 	Archive Flight Manifest.	
 
 	•	 	Data Store access does not include access to the PNR Archive database.	
Hosted Reservation Services – New Skies
Add-On Functionality
CRS/GDS/ARS Type B/Teletype or Type A/EDIFACT Connectivity
General Features – CRS/GDS/ARS Type B/Teletype Connectivity
 
 	•	 	Support for IATA/AIRIMP standard free-sale distribution using Teletype (Type B) formatting with host carrier receiving inbound sales from CRS/GDS/ARS, or host carrier making outbound sales from Call Center or Website on targeted ARS interline partners.	
 
 	•	 	Support for IATA/AIRIMP Type B/Teletype message processing. The product has been certified with the following third party CRS/GDS/ARS providers: ***** all of which support the IATA AIRIMP Type B/Teletype message format.	
 
 	•	 	Host-to-host direct connectivity to exchange messages with *****	
 
 	•	 	Guarantee inbound reservation sales with automated credit card approval/settlement through SkyPay.	
 
Exhibit A - 40

Hosted Services Agreement
 
 	•	 	Confirm inbound CRS/GDS/ARS bookings with SSR ticket number form of payment notification, which includes the following IATA E-Ticket TKNE support:	
 
 	•	 	Generate post-departure E-Ticket ‘Lifted/Boarded’ status updates to an Electronic Ticketing Interchange and Database Provider using standard teletype ETL (E-Ticket List) messages.	
 
 	•	 	Transmit E-Ticket number data generated by the NAVITAIRE system via standard teletype automated SSR TKNE to host outbound interline carriers.	
 
 	•	 	Accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by and validated on another airline that is not hosted in the NAVITAIRE system.	
 
 	•	 	Accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by a GDS subscriber and validated on another carrier that is not hosted in the NAVITAIRE system.	
 
 	•	 	Accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by a GDS subscriber and validated on the host carrier’s accounting code.	
 
 	•	 	Store E-Ticket numbers in the NAVITAIRE system at the passenger and segment level.	
 
 	•	 	Note: Customer is responsible for negotiating and maintaining the appropriate agreements with an Electronic Ticketing Interchange and Database Provider as well as bi-lateral Interline E-Ticketing agreements with other carriers.	
 
 	•	 	Auto-cancel or hold bookings when payment is not received inbound in the established timeframe, and to send notification to the CRS/GDS/travel agency.	
 
 	•	 	Notify CRS/GDS/travel agency of Automatic Schedule Changes (ASC).	
 
 	•	 	Capture and validate IATA/ARC Terminal IDs, non-registered agency, or third-party account in Organizations.	
 
 	•	 	Support Automated Inventory (AVS) LC, LA, and LR messages to and from CRS/GDS/ARS customers.	
 
 	•	 	Process and reply to initial booking requests, change and cancel requests, and other update requests including DVD (divide number in party) and CHNT (change name) messages.	
 
 	•	 	Calculate price and reply to CRS/GDS/ARS travel agency/carrier with the “amount due” for the external booking request.	
 
 	•	 	View inbound Teletype communications with the CRS/GDS/ARS travel agencies within the PNR history.	
 
 	•	 	View and process rejected Teletype messages.	
 
 	•	 	Maintain travel agency and third-party Organization accounts.	
 
 	•	 	Set last seat availability or inventory open/close trigger levels for CRS/GDS/ARS bookings.	
 
 	•	 	Configure CRS/GDS/ARS booking configurations to allow or disallow: hold time, promotion codes, and agency payment automatic confirmation.	
 
 	•	 	Specify which classes of service may be sold by the CRS/GDS/ARS.	
 
 	•	 	Auto-debit agency credit account for PNR booked or use agency credit when an appropriate SSR or OSI message is received.	
 
 	•	 	Automatically create credits for cancellation requests via booking configuration.	
 
 	•	 	Support a set of IATA/ARIMP Special Service Requests (SSR/OSI) including seat requests.	
 
 	•	 	Settle via Agency, Billing and Commission module functionality (optional).	
 
 	•	 	Support for industry-standard group name formats and SSR GRPS for group requests originated by a CRS/GDS/ARS. Group names must include at least three (3) characters, including slashes and spaces. For example: 10IP/, 10IP/TOUR, 10IP TOUR, 10I/P, 10IPA.	
 
 	•	 	Selectively allow holds for CRS/GDS/ARS bookings based on any combination of User Group, Fare Class, Agency ID, flight (Segment) number, flight (Segment) range, origin, or destination.	
 
 	•	 	Apply payment to group bookings, including the ability to accept group deposits (i.e., partial payments) using AG credit accounts.	
 
 	•	 	Consolidators to apply payment to exiting, on hold PNRs transferred to the consolidator by a sub-agency without making the process visible to the sub-agency.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity (typically full availability participation) and for travel agency settlement.
General Features – CRS/GDS/ARS Type A/EDIFACT Booking Connectivity
 
 	•	 	Type A/EDIFACT Booking Connectivity includes all features listed in Type B/Teletype Connectivity for CRS/GDS as listed above, in addition to the following:	
 
 	•	 	Support interactive selling via EDIFACT ITAREQ/RES messages.	
 
 	•	 	Support PNR wrap-up via EDIFACT HWPREQ/RES messages.	
 
 	•	 	Support session clear or terminate via EDIFACT CLTREQ/RES messages.	
 
 	•	 	Accept and reply to sell requests for Segments (flights) marketed by Customer under their carrier code.	
 
 	•	 	Support for IATA/AIRIMP Type A/EDIFACT Booking messages. The product has been certified with the following third-party CRS/GDS/ARS providers: *****, all of which support the IATA AIRIMP Type A/EDIFACT message formats.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity (typically higher GDS participation levels) and for travel agency settlement and/or other carrier settlement.
General Features – CRS/GDS/ARS Type A/EDIFACT Availability Connectivity
 
 	•	 	Type A/EDIFACT Availability includes the ability to receive and reply to the following inbound Product Availability Offering messages:	
 
 	•	 	Support for interactive availability via EDIFACT PAOREQ/RES messages.	
 
 	•	 	Support for market-based availability EDIFACT Message Types 44 and 45.	
 
 	•	 	Support for flight (Segment)-specific availability EDIFACT Message Types 46 and 47.	
 
 	•	 	Return real-time availability for Segments (flights) marketed by Customer under their own carrier code.	
 
 	•	 	Return a numeric inventory value for each class of service configured for use with the external system.	
 
Exhibit A - 41

Hosted Services Agreement
 
 	•	 	Support for segment type indicators in a market request, including non-stop, direct/through, and connections.	
 
 	•	 	Support multiple-airport (station) code (MAC) requests.	
 
 	•	 	Accept and reply to market availability requests that contain a specific class of service.	
 
 	•	 	Support for IATA/AIRIMP Type A EDIFACT Availability messages. The product has not been certified for use with any CRS/GDS/ARS provider at this time.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity (typically higher GDS participation levels) and for travel agency settlement and/or other carrier settlement.
General Features – Instant Pay™ (requires Type B/Teletype or Type A/EDIFACT Booking Connectivity, as applicable, with partner(s))
 
 	•	 	Accept and process passenger or agency credit card for booking confirmation.	
 
 	•	 	Auto-debit travel agency credit account for booking confirmation or debit agency credit when applicable SSR message is received.	
 
 	•	 	Payment amount notification returned to travel agent via participating CRS/GDS.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Codeshare Distribution
General Features – Codeshare Distribution
 
 	•	 	Support for IATA/AIRIMP standard codeshare free-sale distribution using Option 2 or Option 4 Type B/Teletype formatting with host carrier as operating carrier and/or marketing carrier and;	
 
 	•	 	Support codeshare schedules.	
 
 	•	 	Support Option 2 or Option 4 booking requests.	
 
 	•	 	Support automated inventory (AVS) messages to codeshare partner.	
 
 	•	 	Support automated schedule change messages (ASC).	
 
 	•	 	Support receipt, storage of IATA SSR ticket number notifications (TKNA, E, M) per passenger.	
 
 	•	 	Control pricing and fares for codeshare segments.	
 
 	•	 	Support fare class mapping with partner.	
 
 	•	 	Support partner account payments, with ad-hoc or default IATA/agency accounts.	
 
 	•	 	Support dual record locator and TRL messages.	
 
 	•	 	Form of payment using payment methods used for other booking channels as enabled via New Skies reservation system configuration utility.	
 
 	•	 	Unique codeshare indicator on reservation PNR displays.	
 
 	•	 	Support interline through check-in of baggage.	
 
 	•	 	Support optional booking record content of OA (other airline) passive/information segments.	
 
 	•	 	Add OA passive/informational segments during the check in process to facilitate through baggage check-in.	
 
 	•	 	View inbound teletype communications from codeshare partners within the PNR history.	
 
 	•	 	Process and reply to initial booking requests, change and cancel requests, and other updates including DVD (divide number in party) and CHNT (change name) messages.	
 
 	•	 	View and process rejected teletype messages.	
 
 	•	 	Configure codeshare booking configurations to allow or disallow: hold time, promotion codes, and agency payment automatic confirmation.	
 
 	•	 	Specify which classes of service may be sold by the codeshare partner.	
 
 	•	 	Support a set of IATA/AIRIMP special service requests (SSR/OSI) including seat requests, ticket number advisories, passenger service information such as wheelchairs, pets, and more.	
 
 	•	 	Settlement via Agency, Billing, and Commissions module functionality.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity (typically full availability participation) and for codeshare settlement.
Block Space Codeshare (non-automated booking inventory)
General Features – Block Space Codeshare (non-automated booking inventory)
 
 	•	 	Product support for block space codeshare distribution, host carrier as operating or marketing carrier.	
 
 	•	 	Ability to sell codeshare inventory from availability displays.	
Note: Contact NAVITAIRE for additional functionality available for related support processes and configuration available for non-automated booking inventory process for block space arrangements.
E-Ticket Issuance and Connectivity (from SkySpeed)
General Features – E-Ticket Issuance and Connectivity (from SkySpeed)
 
 	•	 	Generate the following TKTREQ ticketing messages to an Electronic Ticketing Interchange and Database Provider using standard EDIFACT version 03:2 (#130 Issue, #131 Display, #79 System Cancel, and #134 Exchange/Reissue).	
 
 	•	 	Configure the data required to support Interline E-Ticketing in the NAVITAIRE system.	
 
Exhibit A - 42

Hosted Services Agreement
 
 	•	 	Place host marketing codeshare and outbound interline bookings on a PNR queue for ticketing.	
 
 	•	 	Issue host carrier validated adult and infant Interline E-Tickets using the NAVITAIRE system.	
 
 	•	 	Reissue host carrier validated adult and infant Interline E-Tickets using the NAVITAIRE system.	
 
 	•	 	Reissue adult and infant Interline E-Tickets issued by and validated on another carrier when E-Ticket number and applicable fare data is stored in the NAVITAIRE system.	
 
 	•	 	Reissue adult and infant Interline E-Tickets issued by a GDS subscriber and validated on another carrier when E-Ticket number and applicable fare data is stored in the NAVITAIRE system.	
 
 	•	 	Display host carrier validated E-Ticket data using the NAVITAIRE system.	
 
 	•	 	Generate post-departure E-Ticket ‘Lifted/boarded’ status updates to an Electronic Ticketing Interchange and Database Provider using standard teletype ETL (E-Ticket List) messages.	
 
 	•	 	Ability to transmit E-Ticket number data generated by the NAVITAIRE system via standard teletype automated SSR TKNE to host marketing codeshare and outbound interline carriers.	
 
 	•	 	Ability to accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by and validated on another carrier that is not hosted in the NAVITAIRE system.	
 
 	•	 	Accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by a GDS subscriber and validated on another carrier that is not hosted in the NAVITAIRE system.	
 
 	•	 	Ability to accept and store E-Ticket number data transmitted via standard teletype automated SSR TKNE, issued by a GDS subscriber and validated on the host carrier’s accounting code.	
 
 	•	 	Ability to store E-Ticket numbers in the NAVITAIRE system at the passenger and segment level.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements with an Electronic Ticketing Interchange and Database Provider as well as bi-lateral Interline E-Ticketing agreements with other carriers. Functionality is available on ***** and higher.
E-Ticket Display for externally hosted E-Ticket database (from SkySpeed)
General Features – E-Ticket Display for externally hosted E-Ticket database (from SkySpeed)
 
 	•	 	Generate the following TKTREQ ticketing message to an Electronic Ticketing Interchange and Database Provider using standard EDIFACT version 03:2 (#131 Display).	
 
 	•	 	Display host carrier validated E-Ticket data stored in the host carrier’s external E-Ticket database, using SkySpeed.	
 
 	•	 	Display interline partner validated E-Ticket data stored in the host carrier’s external E-Ticket database, using SkySpeed.	
 
 	•	 	Booking details displayed from partner from host carrier E-Ticket database.	
Note: Customer is responsible for establishing an E-Ticket database hosting agreement with a third party vendor and negotiating the appropriate bi-lateral Interline E-Ticketing agreements with other airlines and any costs associated with such. Functionality is available on ***** and higher.
Limitations and Exclusions
 
 	•	 	E-Tickets displayed must be included in host carrier E-Ticket database.	
 
 	•	 	E-Ticket will be displayed only when the host carrier is a participating carrier on the E-Ticket.	
 
 	•	 	Only E-Tickets are included in E-Ticket display. For example, paper tickets will not be displayed.	
 
 	•	 	Functionality that allows coupon status updates is not included.	
 
 	•	 	E-Ticket number format supported is 13 digits.	
 
 	•	 	Search to display E-Ticket is driven solely by E-Ticket number.	
GoNow – Agent
General Features – GoNow – Agent
 
 	•	 	Agent login security and permission settings.	
 
 	•	 	Integration with NAVITAIRE Terminal Emulator (NAVTE) to support SkyPort functions.	
 
 	•	 	Search for and select passengers.	
 
 	•	 	Display passenger, itinerary, and charge summary for selected passengers.	
 
 	•	 	Assign or modify seat assignments.	
 
 	•	 	Collect seat fees.	
 
 	•	 	Advanced baggage functionality.	
 
 	•	 	Support for special service requests (SSRs), with or without fees.	
 
 	•	 	Add service fees to bookings.	
 
 	•	 	Collect and authorize credit card and pre-paid payments.	
 
 	•	 	Check-in confirmed and standby passengers for hosted segments.	
 
 	•	 	Check-in using New Skies IATCI functionality.	
 
 	•	 	Modify booking information.	
 
 	•	 	Print and reprint boarding passes and passenger invoices.	
 
 	•	 	Travel component search and manifest display.	
 
 	•	 	Board passengers.	
 
 	•	 	Security document collection and enforcement.	
 
 	•	 	Receive interactive boarding directives (based on supported New Skies government security connections.)	
 
 	•	 	Support of New Skies Fly-Ahead functionality.	
 
 	•	 	Add and view booking comments.	
 
Exhibit A - 43

Hosted Services Agreement
 
 	•	 	Display Aircraft Zone Report.	
 
 	•	 	Support for SITA/CUTE interface. (Customer is responsible for certification.)	
 
 	•	 	Support for ARINC/MUSE interface. (Customer is responsible for certification.)	
Note : Functionality is compatible with ***** and higher. *****
Limitations and Exclusions
 
 	•	 	Off-line check-in functionality.	
 
 	•	 	Common use support for ARINC, ULTRA, and RESA: Further development is required to interface with hardware peripherals for document printing and receiving inputs from the reader and scanning devices via common use API. Development and certification for these common use providers is not included with the GoNow base offering.	
GoNow – Touch (Kiosk)
General Features – GoNow – Touch (Kiosk)
 
 	•	 	Self-serve check-in using a touch screen interface software application.	
 
 	•	 	Support for CUSS hardware device interface framework, integrating with the hardware via the CUSS API as referenced in the Common Use Self Service technical Specifications Version 1.0 published by IATA.	
 
 	•	 	Support for the following hardware devices (not currently certified with any CUSS provider):	
 
 	•	 	API-boarding pass printer;	
 
 	•	 	Magnetic card swipe;	
 
 	•	 	Passport scanner; and	
 
 	•	 	Bar code reader.	
 
 	•	 	Support for multi-language interfaces using translation files provided by Customer.	
 
 	•	 	Customization of GoNow–Touch pages with color themes and branding provided by Customer.	
 
 	•	 	Retrieve reservation and select up to six (6) passengers for check-in and service via the following:	
 
 	•	 	Credit card magnetic swipe, based on cardholder name stored in track data;	
 
 	•	 	Confirmation number, using touch screen keyboard input; and	
 
 	•	 	Passenger ID number (i.e., Passenger VIP number), using touch screen keyboard input.	
 
 	•	 	Management of duplicate values resulting from multiple matching passenger names.	
 
 	•	 	Display error message(s) for passengers who cannot be checked in, including add comment to booking.	
 
 	•	 	Display and review itinerary details and flight status.	
 
 	•	 	Select seat(s) from a graphical seat map, restricting configured blocked seats from being assigned.	
 
 	•	 	Select number of bags.	
 
 	•	 	Check in selected passenger(s).	
 
 	•	 	Add customer ID to passenger record.	
 
 	•	 	Print boarding pass(es).	
 
 	•	 	Display input track data from CUSS hardware while in test mode.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity. *****
Limitations and Exclusions
 
 	•	 	Customer is responsible for scheduling and costs associated with common use certification, including additional development required to achieve ARINC CUSS certification (i.e., CUSS or ARINC required exception and deployment requirements).	
 
 	•	 	Kiosk hardware support and monitoring is not included.	
 
 	•	 	NAVITAIRE will provide default GoNow Touch web skins. Customer is responsible for development and testing of any branding, localization, and customization.	
Customer Value and Recognition Rules Engine and Intelligent Seating
Includes:
 
 	•	 	Customer Value and Recognition Rules Engine.	
 
 	•	 	Intelligent Seating.	
 
 	•	 	Customer Value Based Irregular Operations and Schedule Changes.	
 
 	•	 	Customer Value Seat Assignment Scheduler (Interface to Seat or Re-seat all Passengers on a Travel Segment).	
 
 	•	 	Day of Departure FlyAhead Functions (Interface to Establish Alternative Same Day Travel and Associated Fees Offers).	
Note: Features of this suite are available in a series of New Skies releases beginning with New Skies 3.2, with more features added in 3.3 and 3.4. New Skies target release 3.4 is considered the baseline release with all functionality listed in this section.
General Features – Customer Value and Recognition Rules Engine
 
 	•	 	Configure rules for customer value score.	
 
 	•	 	Apply rules and score passengers in a PNR.	
 
 	•	 	Rules based on certain PNR criteria (e.g., program level, fare, ancillary products, class of service, origin/destination).	
 
 	•	 	Configure display value for passenger score range (e.g., High, Medium, Low).	
 
 	•	 	Display customer value default score in SkySpeed and SkyPort.	
 
 	•	 	Use customer value to set priority during operational disruptions (IROP) or schedule changes (reaccommodation).	
 
Exhibit A - 44

Hosted Services Agreement
 
 	•	 	Use customer value during seat assignment scheduler service.	
 
 	•	 	Use customer value to determine FlyAhead (same day confirmed) eligibility for operational involuntary or customer convenience offers.	
 
 	•	 	Expose scoring service via APIs.	
General Features – Intelligent Seating
 
 	•	 	Seat assignment by multiple factors, such as seat groups, togetherness, priority, seat sets, and uniform allocation.	
 
 	•	 	Search for, view, and reserve seats with specific properties.	
 
 	•	 	Mouse over seats to view seat properties.	
 
 	•	 	Search for forward-facing seats.	
 
 	•	 	Store seat preferences on the booking for reseating, including cancel-rebook.	
 
 	•	 	Manage access to seat properties by role.	
 
 	•	 	Create custom images for physical seat maps in all booking channels.	
 
 	•	 	Vector-based seat maps.	
 
 	•	 	Automatically re-assign seats during reaccommodation, IROP, and equipment swap.	
 
 	•	 	Manage seat fulfillment with automated queues.	
 
 	•	 	Track seat satisfaction and seating behavior with standard reports.	
Advanced Features – Intelligent Seating
 
 	•	 	Seat assignment by additional factors, such as customer recognition value, origin/destination, zone, weight-balance, and segment optimization.	
 
 	•	 	Create custom seat properties, including various options for search and seat assignment behavior.	
 
 	•	 	Restrict seats based on SSR.	
 
 	•	 	Use marketing configurations for flexible physical inventory and seat properties.	
 
 	•	 	Automated moveable class curtain.	
 
 	•	 	Modify physical inventory and seat properties daily according to travel segment or market.	
 
 	•	 	Run on-demand reseating in AU Grid, SkySchedule and at the airport/station via GoNow.	
 
 	•	 	Automatically seat passengers before departure, including batch processing.	
 
 	•	 	Test and preview ad hoc reseating results.	
 
 	•	 	View reseating progress in a Batch Job Viewer.	
 
 	•	 	Configure seat assignment satisfaction threshold for passengers.	
 
 	•	 	Track seat satisfaction at the travel segment level and booking/passenger level.	
 
 	•	 	Manage seat fulfillment via automated reseating queue events.	
Limitations and Exclusions
 
 	•	 	Interface is “as is” in SkySpeed.	
 
 	•	 	There is no interface in SkyPort.	
 
 	•	 	Functionality does not include SkySales customization.	
 
 	•	 	Functionality is not supported in GDS or similar external channels - this is not an industry-based product.	
Booking History Files
General Features – Booking History Files
 
 	•	 	Capture and store booking activity files from the Hosted Reservation Services to be used as input for a Revenue Management System.	
 
 	•	 	Customer is responsible for formatting booking history files to be compatible with a third party Revenue Management System.	
 
 	•	 	NAVITAIRE will provide the layout of the booking history file to Customer’s third party Revenue Management System services provider upon request.	
Note: If Customer is not currently using a Revenue Management System, NAVITAIRE will store the booking history files until such time Customer determines they wish to use a Revenue Management System.
API Suites
General Features – Booking and Voucher API Suite
 
 	•	 	Obtain inventory and fare availability for travel segments (flight, train, bus, ferry, etc.) in a market.	
 
 	•	 	Obtain inventory and fare availability for a whole itinerary.	
 
 	•	 	Price an itinerary including all fares and taxes.	
 
 	•	 	Display fare rule content.	
 
 	•	 	Create or cancel bookings for specified travel segments (flight, train, bus, ferry, etc.).	
 
 	•	 	Obtain SSR availability for specified travel segments (flight, train, bus, ferry, etc.).	
 
 	•	 	Book or cancel specified SSR(s).	
 
 	•	 	Retrieve a booking by record locator.	
 
 	•	 	Provide a list of names.	
 
 	•	 	Display seat maps for specified travel segments (flight, train, bus, ferry, etc.).	
 
 	•	 	Assign or unassign seats on specified travel segments (flight, train, bus, ferry, etc.) for one or more passengers.	
 
 	•	 	Accept schedule changes made to segments in a booking.	
 
Exhibit A - 45

Hosted Services Agreement
 
 	•	 	Retrieve bookings by specified search criteria including 3rd party record locators.	
 
 	•	 	Display booking history and payment information.	
 
 	•	 	Retrieve stored baggage information by record locator.	
 
 	•	 	Add, commit, and retrieve accounts and account transactions.	
 
 	•	 	Manage queues, including add, update, and delete from a booking queue.	
 
 	•	 	Search by lowest fare in a market for a number of days out. (Premium service in which additional Fees apply.)	
 
 	•	 	Booking APIs can be used to develop and provide booking applications available on mobile devices.	
 
 	•	 	Third-party vendor capabilities to create, void, and reinstate vouchers.	
General Features – Check-in API Suite
 
 	•	 	Interact with third-party vendors, including kiosk check-in service providers.	
 
 	•	 	Retrieve manifest or travel segment information.	
 
 	•	 	Display seat maps.	
 
 	•	 	Request or change seat assignments for specified passengers at time of check-in.	
 
 	•	 	Confirm check-in status for specified passengers and generate boarding passes.	
 
 	•	 	Generate baggage tags for specified passengers.	
 
 	•	 	Reprint boarding passes for checked-in passengers.	
 
 	•	 	Security control for check-in of selected passengers.	
 
 	•	 	Generate Advance Passenger Information System (APIS) messages. (Premium service in which additional Fees apply.)	
 
 	•	 	Check-In APIs can be used to develop and provide check-in services on mobile devices.	
General Features – Weight and Balance API Suite
The Weight and Balance API supports data transfer between the Hosted Reservation Services and a third-party weight-and-balance application, as follows:
 
 	•	 	Schedule and Operational event data are sent to a dedicated travel queue so flight data and status can be retrieved via the API and used by a third-party weight-and-balance application.	
 
 	•	 	The Webservice API method allows third parties to:	
 
 	•	 	Retrieve flight details and flight event details; and	
 
 	•	 	Retrieve summarized sales and check-in data.	
 
 	•	 	The summarized passenger, passenger seat zone, baggage counts, and check-in status, can be requested at any time during the selling period through the post departure period.	
Limitations and Exclusions
 
 	•	 	Summarized travel component information is provided at the leg level. Information is not provided at the thru or connecting Segment level.	
 
 	•	 	Technical support or development needed to integrate with a third-party application is the responsibility of Customer.	
 
 	•	 	Use of data to calculate and produce final weight-and-balance load instructions or compliance reports is Customer’s responsibility.	
Negotiated Allotment (NegoAllotment)
General Features – Negotiated Allotment (NegoAllotment)
 
 	•	 	Search and view existing negotiated allotment contract details.	
 
 	•	 	Create, update, and release allotment space.	
 
 	•	 	Configure price per seat and fare rule options.	
 
 	•	 	Restrict sales of allotment inventory to specified distributors.	
 
 	•	 	Support for all standard reservation functions on allotment bookings.	
 
 	•	 	Protect and re-accommodate allotment passengers and space.	
 
 	•	 	User interface to administer contracts.	
 
 	•	 	Support for integration with a contract management system and processing of name lists through the Allotment API, which includes the following:	
 
 	•	 	Search and view existing negotiated allotment contract details.	
 
 	•	 	Create, update, and release allotment space.	
 
 	•	 	Configure price per seat and fare rule options.	
 
 	•	 	Add, commit, and retrieve accounts and account transactions.	
 
 	•	 	Access to the Negotiated Allotment (NegoAllotment) functionality.	
 
 	•	 	Support for tour operator fares using negotiated fares.	
Limitations and Exclusions
 
 	•	 	Booking of blocked space via SkySales and GDS booking channels are not supported.	
 
 	•	 	Requires Allotment API Suite add-on functionality.	
 
 	•	 	Name lists are not supported; this is handled via the Booking API.	
Hosted Web Check-in
General Features – Hosted Web Check-in
 
 	•	 	Retrieve passenger and travel component information by information such as credit card, record locator, travel component/passenger name, and customer number.	
 
Exhibit A - 46

Hosted Services Agreement
 
 	•	 	Display seat maps.	
 
 	•	 	Request or change seat assignments for specified passengers.	
 
 	•	 	Confirm check-in status for specified passengers.	
 
 	•	 	Generate boarding passes.	
3-D Secure Programs
General Features – 3-D Secure Programs
 
 	•	 	Support for Verified by Visa and MasterCard Secure Code (3-D Secure Programs), which are optional programs, available at additional cost, for Customer to participate in with their acquiring banks and/or payment service provider. Functionality is fully dependent upon the acquiring bank and/or payment service provider.	
 
 	•	 	Ability to send passenger credit card detail to Cardinal Commerce.	
 
 	•	 	Ability to receive 3-D Secure response from Cardinal Commerce.	
 
 	•	 	Ability to continue processing for transaction within New Skies based upon response from Cardinal Commerce, either continue to authorization or decline transaction.	
 
 	•	 	Ability to pass response from Cardinal Commerce to authorization and/or settlement file.	
 
 	•	 	A timeout with Cardinal Commerce, length as configured in SkyPay, will bypass 3-D Secure and continue with authorization.	
Limitations and Exclusions
 
 	•	 	NAVITAIRE’s responsibility is limited to sending the data to Cardinal Commerce and continuing processing within New Skies based upon the response from Cardinal Commerce.	
 
 	•	 	NAVITAIRE has no responsibility as to the evaluation of the credit card 3-D Secure status.	
 
 	•	 	NAVITAIRE has no responsibility as to the security of the credit card data once that data is passed to Cardinal Commerce.	
 
 	•	 	Agreement on the 3-D Secure scope, processing, functionality and any applicable Cardinal Commerce costs are the responsibility of Customer and are subject to separate agreement between Cardinal Commerce and Customer, to the exclusion of NAVITAIRE.	
Dynamic Currency Conversion (DCC)
General Features – Dynamic Currency Conversion (DCC)
 
 	•	 	Allows the cardholder to connect to a third-party vendor, who facilitates payment for an international transaction in their local currency. The Foreign Currency Exchange Provider works with acquiring banks to offer multiple currencies, which are then made available to Customer and cardholder.	
 
 	•	 	Sends a call to the core New Skies system to check if DCC is available for the card being entered and returns the result to SkySales without leaving the payment page.	
 
 	•	 	Supports:	
 
 	•	 	Foreign Currency Exchange rate lookup and retrieval.	
 
 	•	 	Reporting to identify and track DCC acceptance.	
 
 	•	 	Payment reporting details transactions and currencies.	
Limitations and Exclusions
 
 	•	 	Foreign Currency Exchange rate lookup and retrieval requires separate commercial agreement directly with an approved vendor.	
 
 	•	 	Currency Conversion is only available on Visa and MasterCard credit card transactions.	
 
 	•	 	NAVITAIRE cannot guarantee the validity of the rates provided by any Foreign Currency Exchange Provider.	
Multi-Currency Conversion (MCC)
General Features – Multi-Currency Conversion (MCC)
 
 	•	 	To be provided	
Limitations and Exclusions
 
 	•	 	Foreign Currency Exchange rate lookup and retrieval requires separate commercial agreement directly with RBS for their “FX Micropay” product.	
 
 	•	 	Available for SkySales bookings only.	
 
 	•	 	Acquiring Bank must provide multi-currency merchant account.	
 
 	•	 	NAVITAIRE cannot guarantee the validity of the rates provided by any Foreign Currency Exchange Provider.	
Data Store Products
General Features – Data Store
 
 	•	 	The Data Store (DS) offers customers read only access to ***** of data in the Operational Data Store (ODS) and Data Warehouse (DW) for custom reporting needs.	
 
 	•	 	Customers cannot create custom objects in or modify the ODS or DW data.	
 
Exhibit A - 47

Hosted Services Agreement
 
 	•	 	Standard New Skies reports continue to run against the ODS.	
 
 	•	 	NAVITAIRE provides the following services for the Data Store:	
 
 	•	 	Delivery of data committed to the New Skies database via replication articles, typically *****	
 
 	•	 	Transactional Data Integrity where the data committed to the New Skies database are replicated to the DS.	
 
 	•	 	Supports ***** user logins.	
 
 	•	 	Documentation includes the data model, training curriculum, and explanations of the Data Store architecture, replication, and support processes.	
Note: Due to the detailed transactional nature of the data store database, this product supports custom reports but is not suited for large, time consuming queries (e.g., table scans to summarize large time frames of detailed data) or data Extraction, Transformation, and Loading (ETL) purposes. If replication to the ODS is delayed due to demanding user queries, NAVITAIRE reserves the right to abort such queries. Operational issues with the Data Store that result from NAVITAIRE’s hosting environment or staff will be addressed and corrected by NAVITAIRE. Identification and/or correction of issues resulting from Customer’s use of the Data Store are billable on a time and materials basis. Questions, consulting requests, or other training and informational needs related to the Data Store will be obtained by following the standard Work Order process and contracting with Navitaire Professional Services (NPS). These services are not provided as part of this Agreement.
Limitations and Exclusions – Data Store
The Data Store is not equipped to support the following: Reports, extract processes, or applications that have time-critical needs (e.g. government security, airport check-in, boarding, baggage, or other time-critical operational reports or data feeds) or interactive applications that enable inserting, adding, or updating reservation data. The New Skies Web Service APIs have been designed to support these functions.
Note: There are no response time commitments for the Data Store. Service level measurements and/or penalties do not apply for replication delays.
General Features – Data Store Workbench
 
 	•	 	The Data Store Workbench (DSW) offers customers read only access to the Operational Data Store (ODS) and Data Warehouse (DW) data, as well as read/write access to the Data Store Workbench (DSW) database, for custom reporting, extraction, transformation, and loading.	
 
 	•	 	Customers can create and store custom objects in the DSW database, located on the same physical server as the ODS and DW, but cannot create custom objects in or modify the ODS or DW data.	
 
 	•	 	The DSW database size is capped *****	
 
 	•	 	Database user privileges are limited to DDL_ADMIN.	
 
 	•	 	NAVITAIRE IT staff provides basic database administration services for the DSW database which include standard data backup and recovery support.	
 
 	•	 	Job scheduling is not permitted on the DSW database server. If implemented, customers will host scheduling services on their servers at their location (e.g., SQL Server Integration Services packages).	
 
 	•	 	Standard New Skies reports continue to run against the ODS.	
 
 	•	 	NAVITAIRE provides the following services for the Data Store Workbench:	
 
 	•	 	Delivery of data committed to the New Skies database via replication articles, typically *****	
 
 	•	 	Transactional Data Integrity where the data committed to the New Skies database are replicated to the DS.	
 
 	•	 	Supports ten (10) standard user logins and ***** user login.	
 
 	•	 	Documentation includes the data model, training curriculum, and explanations of the data store architecture, replication, and support processes.	
Note: This product is designed for light custom reporting and moving reservations data to another database, data warehouse, or other system outside of the New Skies environment for processing. Due to the detailed transactional nature of the data store database, this product does not support heavy data processing tasks. If replication to the ODS is delayed due to demanding user queries, NAVITAIRE reserves the right to abort such queries. Operational issues with the Data Store Workbench that result from NAVITAIRE’s hosting environment or staff will be addressed and corrected by NAVITAIRE. Identification and/or correction of issues resulting from Customer’s use of the Data Store Workbench are billable on a time and materials basis. Questions, consulting requests, or other training and informational needs related to the Data Store Workbench will be obtained by following the standard Work Order process and contracting with Navitaire Professional Services (NPS). These services are not provided as part of this Agreement.
Limitations and Exclusions – Data Store Workbench
The Data Store Workbench is not equipped to support the following: Reports, extract processes, or applications that have time-critical needs (e.g. government security, airport check-in, boarding, baggage, or other time-critical operational reports or data feeds) or interactive applications that enable inserting, adding, or updating reservation data. The New Skies Web Service APIs have been designed to support these functions.
Note: There are no response time commitments for the Data Store Workbench. Service level measurements and/or penalties do not apply for replication delays.
General Features – Enhanced Data Store
 
 	•	 	The Enhanced Data Store (EDS) offers customers the same features as the Data Store Workbench (DSW) and provides greater reporting flexibility to separate critical standard reporting from heavy, ad-hoc reporting. The Enhanced Data Store (EDS) provides an additional copy of the Operational Data Store (ODS) and is designed to support special reporting and ETL, read-only needs.	
 
Exhibit A - 48

Hosted Services Agreement
 
 	•	 	Customers can create and store custom objects in the DSW database, located on the same physical server as the ODS and DW, but cannot create customer objects in or modify the EDS data.	
 
 	•	 	The primary distinction between the EDS and DSW products is that the EDS is designed to provide significantly more processing power by offloading the ETL, custom reporting, and custom queries to dedicated hardware.	
 
 	•	 	Standard New Skies reports continue to run against the ODS.	
 
 	•	 	NAVITAIRE provides the following services for the Enhanced Data Store:	
 
 	•	 	Delivery of data committed to the New Skies database via replication articles, typically *****Transactional Data Integrity where the data committed to the New Skies database are replicated to both the DS and EDS.	
 
 	•	 	Supports ten (10) standard user logins and ***** user login.	
 
 	•	 	Documentation includes the data model, training curriculum, and explanations of the data store architecture, replication, and support processes.	
Note: If replication to the ODS is delayed due to demanding user queries, NAVITAIRE reserves the right to abort such queries. Operational issues with the Enhanced Data Store that result from NAVITAIRE’s hosting environment or staff will be addressed and corrected by NAVITAIRE. Identification and/or correction of issues resulting from Customer’s use of the Enhanced Data Store are billable on a time and materials basis. Questions, consulting requests, or other training and informational needs related to the Enhanced Data Store will be obtained by following the standard Work Order process and contracting with Navitaire Professional Services (NPS). These services are not provided as part of this Agreement.
Limitations and Exclusions – Enhanced Data Store
The Enhanced Data Store is not equipped to support the following: Reports, extract processes, or applications that have time-critical needs (e.g. government security, airport check-in, boarding, baggage, or other time-critical operational reports or data feeds) or interactive applications that enable inserting, adding, or updating reservation data. The New Skies Web Service APIs have been designed to support these functions.
Note: There are no response time commitments for the Enhanced Data Store. Service level measurements and/or penalties do not apply for replication delays.
Extended PNR Archiving
General Features – Extended PNR Archiving
 
 	•	 	General Features, Limitations, and Exclusions of PNR Archiving are applicable for the Extended PNR Archiving.	
 
 	•	 	Retains PNR data in the Extended PNR Archive as long as specified in Exhibit K of the Agreement.	
Note: If Extended PNR Archiving is not selected by Customer, PNR data will be removed from the production system ***** after the last flight segment in a PNR has been marked as flown or no-show.
Ticket Services and Sales Data Interchange (TCN File)
General Features – Ticket Services and Sales Data Interchange (TCN File)
 
 	•	 	User interface to update ticket ranges in use, including MCOs, MPDs and Refunds.	
 
 	•	 	Assigns a document number to each booking.	
 
 	•	 	Converts all ticketless booking data into ticketed type records.	
 
 	•	 	Daily file of sales, exchanges, refunds, lifts and no-shows.	
 
 	•	 	File format conforms to NAVITAIRE TCN specification.	
Note: Customer must obtain a range of ticket numbers which can be used in this New Skies module specifically for reporting New Skies data to a third-party passenger revenue accounting system.
Low Fare Finder
General Features – Low Fare Finder
 
 	•	 	Ability to search for the lowest fares within a specified time frame (up to a ***** period on either side of a target date and in a user-specific market).	
 
 	•	 	Search results display the lowest fares in a calendar format within the specific time frame.	
 
 	•	 	Ability to allow passenger to view promotional fares without forcing passenger to conduct a search.	
 
 	•	 	Ability to allow passenger to view all available flights over a range of dates, rather than limiting search to a single departure date and arrival date.	
Limitations and Exclusions
 
 	•	 	Service Level targets and/or penalty/rebate calculations do not apply for this product or for any Service Level issues caused by this product.	
 
 	•	 	Tests have been performed on the functionality to confirm basic operating requirements, but in the event that the Low Fare Finder functionality is determined to have impact on other functions, NAVITAIRE reserves the right to temporarily disable functionality.	

Exhibit A - 49

Hosted Services Agreement
 
All-Inclusive Pricing
General Features – All-Inclusive Pricing
 
 	•	 	Provides Customer with the ability to build base fares and then configure the system to display the all-inclusive price in SkySpeed, SkySales, and SkyPort.	
 
 	•	 	Provides Customer with the ability to implement a flexible solution, disclosing unavoidable costs associated with the booking at the time of sale, only when specifically configured to do so.	
 
 	•	 	Ability to configure by market and by specific user role (“All Markets” setting is available).	
 
 	•	 	Displays a combined base fare plus all applicable taxes and travel fees for the passenger.	
Limitations and Exclusions – All-Inclusive Pricing
 
 	•	 	The system will only apply taxes and additional travel fees as set up by Customer.	
 
 	•	 	Does not communicate an all-inclusive price to CRS/GDS/ARS booking channels.	
Disaster Recovery Services
General Features – Disaster Recovery Services
Disaster Recovery Services will provide a backup location for the Hosted Reservation Services Base Functionality. If Disaster Recovery Services are not selected in Section 2 of Exhibit A, no backup environment will exist for Customer at a site geographically independent from the primary data center. Customer understands that there is an inherent risk to declining Disaster Recovery Services. Customer has chosen to DECLINE Disaster Recovery Services.
FTP Connectivity for Operational Messages
General Features – FTP Connectivity for Operational Messages – Outbound Messaging
 
 	•	 	Deliver outbound messages to a single IP address, as an alternate to Type B/Teletype delivery.	
 
 	•	 	Outbound messages adhere to the same formats and data structures outlined in the New Skies GDS Reference Guide.	
 
 	•	 	Support for the following outbound message types:	
 
 	•	 	ADL - Additions and Deletions List	
 
 	•	 	BSM - Baggage Service Message	
 
 	•	 	MVT - Aircraft Movement message	
 
 	•	 	NAM - Lid/Sold custom message	
 
 	•	 	PIS - Advanced Passenger Information System	
 
 	•	 	PNL - Passenger Name List	
 
 	•	 	PXA - Actual Passenger ‘checked-in’ counts	
 
 	•	 	PXB - Actual Passenger ‘booked’ counts	
General Features – FTP Connectivity for Operational Messages – Inbound Messaging
 
 	•	 	Receive inbound messages to an established FTP account as an alternative to Type B/Teletype.	
 
 	•	 	Process inbound messages from the FTP account, consistent with processing messages received via Type B/Teletype connectivity.	
 
 	•	 	Inbound messages adhere to the same formats and data structures outlined in the New Skies GDS Reference Guide.	
 
 	•	 	Support for the following inbound message types:	
 
 	•	 	MVT - Aircraft Movement message	
 
 	•	 	OPS - Weather/Flight-Release file	
 
 	•	 	PFS - Passenger Final Status	
 
 	•	 	PXA - Actual Passenger “checked-in” counts	
 
 	•	 	PXB - Actual Passenger “booked” counts	
Limitations and Restrictions
 
 	•	 	The FTP message transport service is not guaranteed like Type B/Teletype delivery. If there is a failure during message transmission, data may be lost. However, the circuits and servers supporting this feature in the ESC environment are stable and do not normally experience issues.	
 
 	•	 	Messages delivered via FTP connectivity are transmitted over a private connection to Customer’s FTP server. They are not transmitted over the internet due to security concerns and/or industry compliance standards.	
 
 	•	 	Customer is responsible for forwarding Outbound FTP messages from their FTP server to the final destination, when required. NAVITAIRE does not transmit FTP messages directly to the final destination.	
FTP Connectivity for XML Itineraries
General Features – FTP Connectivity for XML Itineraries
 
 	•	 	Deliver outbound messages to a single IP address.	
 
 	•	 	Support for the following outbound message types:	
 
 	•	 	XML Itineraries	
Limitations and Restrictions
 
 	•	 	The FTP message transport service is not guaranteed like Type B/Teletype delivery. If there is a failure during message transmission, data may be lost; however, the notification infrastructure supporting this feature is stable and does not normally experience issues.	
 
Exhibit A - 50

Hosted Services Agreement
 
 	•	 	Messages delivered via FTP connectivity are transmitted over a private connection to Customer’s FTP server. They are not transmitted over the internet due to security concerns and/or industry compliance standards.	
 
 	•	 	Customer is responsible for forwarding Outbound FTP messages from their FTP server to the final destination, when required. NAVITAIRE does not transmit FTP messages directly to the final destination.	
 
 	•	 	For itinerary transmission via notification services, the transmission is done in the clear-text and no sensitive data should be included. Customer should “mask” the data.	
Type B/Teletype Connectivity for Operational Messages
General Features – Type B/Teletype Connectivity for Operational Messages
Outbound Messaging
 
 	•	 	Deliver outbound messages to Type B/Teletype addresses.	
 
 	•	 	Outbound messages adhere to the same formats and data structures outlined in the New Skies Type B/Teletype Messaging Reference Guide.	
 
 	•	 	Support for the following outbound message types:	
 
 	•	 	ADL - Additions and Deletions List	
 
 	•	 	BSM - Baggage Service Message	
 
 	•	 	MVT - Aircraft Movement message	
 
 	•	 	NAM - Lid/Sold custom message	
 
 	•	 	PNL - Passenger Name List	
 
 	•	 	PXA - Actual Passenger ‘checked-in’ counts	
 
 	•	 	PXB - Actual Passenger ‘booked’ counts	
 
 	•	 	PAL - Passenger Assistance List	
 
 	•	 	CAL - Change Assistance List	
 
 	•	 	Support for the following for PAL/CAL messages:	
 
 	•	 	Meets requirements identified in IATA Document 1708a, Any Passenger Assistance List (PAL) and Change Assistance List (CAL) messages will be forwarded via Type-B Messaging.	
 
 	•	 	A PAL list will be generated one time for each designated flight.	
 
 	•	 	A CAL list will be generated only if there are changes since the delivery of the flight’s initial PAL list. Multiple CAL lists may be generated, if necessary, due to subsequent changes to passenger information and their reduced mobility qualification status (add, change, delete).	
 
 	•	 	PAL and CAL lists are automatically generated and contain the following information:	
 
 	•	 	Flight Information	
 
 	•	 	Passenger name	
 
 	•	 	SSR code (BNLD, DEAF, DPNA, MAAS, WCHC, WCHR, WCHS)	
 
 	•	 	Flight Details	
 
 	•	 	One inbound connection	
 
 	•	 	One outbound connection	
 
 	•	 	If a designated flight has no PRMs on board, a PAL and/or CAL list is still generated. In such cases, a NIL value is provided.	
Inbound Messaging
 
 	•	 	Receive inbound messages to a Type B/Teletype address.	
 
 	•	 	Process inbound messages received via Type B/Teletype connectivity.	
 
 	•	 	Inbound messages adhere to the same formats and data structures outlined in the New Skies Type B/Teletype Messaging Reference Guide.	
 
 	•	 	Support for the following inbound message types:	
 
 	•	 	MVT - Aircraft Movement message	
 
 	•	 	OPS - Weather/Flight-Release file	
 
 	•	 	PFS - Passenger Final Status	
 
 	•	 	PXA - Actual Passenger “checked-in” counts	
 
 	•	 	PXB - Actual Passenger “booked” counts	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Type B/Teletype Connectivity for AVS Messages
General Features – Type B/Teletype Connectivity for AVS Messages
 
 	•	 	Deliver Type B/Teletype Availability Status (AVS) Messages either automatically or manually to selected partner.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
MQSeries Connectivity for Operational Messages
General Features – MQSeries Connectivity for Operational Messages
 
 	•	 	Receive inbound messages and deliver outbound to the final destination as an alternate to Type-B/Teletype delivery	
 
 	•	 	Provides for improved support from the NAVITAIRE operations and support teams.	
 
 	•	 	Provides a higher degree of reliability when compared to FTP type messaging and has built error handling, correction, and retry logic.	
 
 	•	 	Provide for Type B/Teletype guaranteed delivery.	
 
 	•	 	Support for receipt of any message or data with a Type B/Teletype header over the MQ links.	
 
 	•	 	Outbound messages adhere to the same formats and data structures as outlined in the New Skies Type B/Teletype Messaging Reference Guide.	
 
Exhibit A - 51

Hosted Services Agreement
 
Limitations and Restrictions
 
 	•	 	Available only for hosted Customers that have their own MQ Server.	
 
 	•	 	NAVITAIRE will transmit via MQ series directly to the final destination.	
 
 	•	 	Standard Schedule Messages (SSM) and/or Ad-hoc Schedule Messages (ASM)	
Standard Schedule Messages (SSM) and/or Ad-hoc Schedule Messages (ASM)
General Features – Standard Schedule Messages (SSM) and/or Ad-hoc Schedule Messages (ASM)
 
 	•	 	Receive and send the following SSM sub-messages: NEW, TIM, REV, EQT, FLT, ADM, RPL, SKD, CNL	
 
 	•	 	Receive and sent the following ASM sub-messages: NEW, TIM, RRT, EQT, CON, FLT, ADM, RPL, CNL	
 
 	•	 	Update individual flight lines via SSM as opposed to the now standard SSIM process.	
 
 	•	 	Update individual flight dates via ASM (operational changes).	
 
 	•	 	Target individual partners on a message / sub-message basis with outbound SSM’s and ASM’s.	
 
 	•	 	Setup an email distribution list that is contacted when an SSM results in the creation of a reaccommodation batch.	
 
 	•	 	Process TTY queue entries for rejected messages that failed to process within New Skies.	
 
 	•	 	Messages are delivered by either Type B/Teletype or FTP.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Limitations and Exclusions
 
 	•	 	SSM’s not currently supported: ACK, NAC, REV, RSO	
 
 	•	 	ASM’s not currently supported: RIN, ACK, NAC	
Note: Ad-hoc Schedule Messages (ASM) are only supported on New Skies release 3.4.5 or higher
Advanced Passenger Information System (APIS)
General Features – Advanced Passenger Information System (APIS)
 
 	•	 	Collect via travel document information from various sources during the booking process and at check-in. (Some restrictions apply based on government requirements.)	
 
 	•	 	APIS is supported in the following products:	
 
 	•	 	Call center applications (SkySpeed)	
 
 	•	 	Airport (SkyPort) via passport scanner or manual input	
 
 	•	 	API (booking and check-in)	
 
 	•	 	GDS	
 
 	•	 	Codeshare	
 
 	•	 	System supports document verification processes during check-in and passenger boarding (as required).	
 
 	•	 	APIS data is transmitted via SITA/ARINC in UN-EDIFACT/PAXLST format with the following information:	
 
 	•	 	Flight	
 
 	•	 	Passenger	
 
 	•	 	Travel Documents (mandatory and optional)	
 
 	•	 	Functionality is available in ***** and higher.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
APIS Quick Query (AQQ)
General Features – APIS Quick Query (AQQ)
 
 	•	 	Request real-time automated screening and processing of passenger data prior to printing a boarding pass.	
 
 	•	 	Process can be invoked via:	
 
 	•	 	Web Check-In	
 
 	•	 	Airport Counter Check-In	
 
 	•	 	Kiosk Check-in	
 
 	•	 	Boarding Process	
 
 	•	 	Includes integration with SkySpeed, SkySales, New Skies Reports, and core New Skies processing.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Electronic Borders (E-Borders)
General Features – Electronic Borders (E-Borders)
 
 	•	 	Generate a Passenger Check-in message in UN-EDIFACT/PAXLST format for all checked in passengers, or checked in and boarded passengers, with verified documents.	
 
 	•	 	Determine transmission time of the Passenger Check-in message based on airline preference.	
 
 	•	 	Generate a Passenger Departure message in UN-EDIFACT/PAXLST format for all checked in and boarded passengers at flight close.	
 
Exhibit A - 52

Hosted Services Agreement
 
Limitations and Exclusions
 
 	•	 	Airline should verify the document status during the check-in period and after boarding to confirm all passengers have verified documents.	
Customs and Border Protection (CBP) PNR Push
General Features – Customs and Border Protection (CBP) PNR Push
 
 	•	 	Push PNR data to US Customs and Border Protection for reservations where one or more Segments are for travel inbound to or outbound from the United States.	
 
 	•	 	PNR data push will be performed upon completion of initial booking, modification to booking, and flight close.	
 
 	•	 	Data will be provided in plain text form.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Inter Airline Through Check-in (IATCI)
General Features – Inter Airline Through Check-in (IATCI)
 
 	•	 	Generate through check-in messages to another airline’s departure control system.	
 
 	•	 	Generate through check-in update messages to another airline’s departure control system.	
 
 	•	 	Generate through check-in cancel messages to another airline’s departure control system.	
 
 	•	 	Print boarding passes with seat assignments for flights operated by another airline.	
 
 	•	 	Exchange baggage details and APIS information via through check-in messages.	
 
 	•	 	Check in host carrier passengers when through check-in queries are received.	
 
 	•	 	Update host carrier passenger data when through check-in update messages are received.	
 
 	•	 	“Uncheck” host carrier passengers when through check-in cancel messages are received.	
 
 	•	 	Respond to boarding pass reprint queries received from another airline.	
 
 	•	 	Support IATA EDIFACT version 03:1 for through check-in messages.	
Secure Flight
General Features – Secure Flight
 
 	•	 	Collect Secure Flight Passenger Data (SFPD) through all booking channels and during the check-in process.	
 
 	•	 	Create and transmit SFPD UN-E DIFACT messages to the United States Department of Homeland Security (US-DHS) message router for passengers.	
 
 	•	 	Collect Gate Pass Holder information with subsequent creation and transmission of SFPD Gate Pass UN-EDIFACT messages to US-DHS message router prior to issuance of gate passes via SkyPort. The gate pass is a document issued to non-travelers, allowing them entry though airport security to a sterile area normally reserved for passengers.	
 
 	•	 	Process US-DHS response messages by assigning boarding pass printing results and Electronic System for Travel Authorization (ESTA) status to the passenger.	
 
 	•	 	Process US-DHS unsolicited messages by creating and transmitting acknowledgement messages to the US-DHS router.	
 
 	•	 	Evaluate the Boarding Pass Printing Result and ESTA status during the check-in and boarding process.	
 
 	•	 	Display the Boarding Pass Printing Result and ESTA status in SkyPort.	
 
 	•	 	Perform batch and interactive transmission of SFPD messages during the Secure Flight transmission window (the 72 hours prior to departure).	
 
 	•	 	Collect, store, and include Passenger Redress Number in SFPD messages.	
 
 	•	 	Collect, store, and include Known Traveler Number in SFPD messages.	
Note: Customer is responsible for negotiating and maintaining the appropriate agreements and any costs associated with the other host provider(s) for this connectivity.
Limitations and Exclusions
 
 	•	 	Transmission of crew data is not supported.	
 
 	•	 	Domestic to domestic international flights for United States carriers (e.g. ORY to NCE).	
 
 	•	 	Receive Passenger Redress number and Known Traveler number is not currently available via IATCI messaging.	
 
 	•	 	Additional industry or IATA requirements not specifically included above.	
Travel Commerce Services
General Features – Travel Commerce Services
 
 	•	 	Search for and book ancillary components in SkySales or SkySpeed as part of the travel booking process and store the component within the Super PNR.	
 
 	•	 	Search for and book ancillary components in SkySales or SkySpeed without travel components and store the component(s) within the Super PNR.	
 
Exhibit A - 53

Hosted Services Agreement
 
 	•	 	View the Travel Commerce components in an existing PNR, including Supplier confirmation number and other relevant booking details.	
 
 	•	 	Add an ancillary component to an existing booking through SkySales or SkySpeed.	
 
 	•	 	Cancel an ancillary component booking from SkySpeed or SkySales.	
 
 	•	 	Locally host inventory for insurance.	
 
 	•	 	Configure product availability by supplier and location.	
 
 	•	 	Include ancillary components in the traveler’s itinerary email notification.	
 
 	•	 	Configure markups within a component’s pricing for locally hosted components.	
 
 	•	 	Store supplier confirmation numbers within the Super PNR.	
 
 	•	 	Add a markup by supplier.	
 
 	•	 	Specify cancellation fees by supplier.	
 
 	•	 	Aggregate available products from multiple Suppliers in a single search result.	
 
 	•	 	Manage product inventory as a retail item, free-sell, or inventory by day (i.e., block space).	
 
 	•	 	Query multiple sub-locations within a parent location during a single product search.	
Supplier Connectivity
 
 	•	 	Support for direct interfaces to Content Providers via XML API connections. List of available connections is subject to change and will evolve with each product release.	
 
 	•	 	Additional connections can be requested through the enhancement process or via a NAVITAIRE work order.	
Standard Reports (Travel Commerce specific)
Reports are viewed on-line via a browser interface.
 
 	•	 	The following standard reports related to Travel Commerce functionality are available:	
 
 	•	 	Ancillary Services Summary - Summary of revenue by provider.	
 
 	•	 	Ancillary Services Detail - Transaction level report.	
 
 	•	 	Insurance Report - Details by transaction on each policy sold/canceled.	
 
 	•	 	Car Rental Report - Details by transaction on each car rental booking or cancellation	
Note: Reports may be added to, deleted, modified, changed, eliminated, or substituted at the discretion of NAVITAIRE at any time.
Loyalty Services
General Features – Loyalty Services
 
 	•	 	Ability to set up the parameters of Customer’s Frequent Traveler Program.	
 
 	•	 	Ability to upgrade or downgrade a member account.	
 
 	•	 	Ability to track customer travel by points/miles/credits for flown segments.	
 
 	•	 	Ability to look up and adjust members’ accounts.	
 
 	•	 	Built-in rules engine for configuring awards and promotions. Each rule has an effective and discontinue date, and includes the ability to define award rules using numerous criteria:	
 
 	•	 	Ability to test rules in the Rules Engine.	
 
 	•	 	Supports two options for computing points:	
 
 	•	 	Fixed amount (e.g. 1 point for every segment flown); and	
 
 	•	 	Percentage amount (e.g. 10% of the fare as points, or 50% of the mileage).	
 
 	•	 	Supports accrual of qualifying (elite) points/ mileage/ credits while accruing redeemable points.	
 
 	•	 	Supports multi-level programs such as silver/gold/platinum.	
 
 	•	 	Supports automatic upgrades and downgrades to/from a higher status level.	
 
 	•	 	Supports expiration of points after a specified time period.	
 
 	•	 	Customizable on-line account statement.	
 
 	•	 	Service desk UI for adding missing flight credits, customer service adjustments, researching activity, etc.	
 
 	•	 	Support for call center redemptions.	
 
 	•	 	Support for points fares published in SkyFare.	
 
 	•	 	Support for third-party accruals via batch file of API, including accrual rules engine with different criteria for each partner type.	
 
 	•	 	Support for retro credit for past flight requests through the call center.	
 
 	•	 	Supports reverse redemption with the ability to maintain and observe original expiration dates.	
 
 	•	 	Supports an Error Log with a descriptive reason included in the detail. Ability to sort by field names.	
 
 	•	 	Reports:	
 
 	•	 	Flight Redemption Activity - detail report of host flight redemptions;	
 
 	•	 	Redemption Activity - report of redemptions by third-party partners;	
 
 	•	 	Host Accrual Activity Summary - summary of all accrual activity;	
 
 	•	 	Partner Accrual Activity Summary - summary of all accrual activity, which can be filtered by partner;	
 
 	•	 	Loyalty Program Member Accrual - report with accrual details by program member;	
 
 	•	 	Outstanding Award point balance for use in accounting to track outstanding liability;	
 
 	•	 	Adjustment report - report of manual adjustments made to customer accounts; and	
 
 	•	 	Recognition Level Log and Summary Reports- includes manual an automatic upgrade details.	
 
 	•	 	Ability for members to register on-line and manage on-line profile.	
Loyalty Services – New Skies interfaces
 
 	•	 	Real-time interface for boarded passengers for posting points at time of boarding of flight close.	
 
 	•	 	Integration for market distances and customer levels.	
 
 	•	 	Integration of member account statement into SkySpeed 360 degree passenger profile view.	
 
Exhibit A - 54

Hosted Services Agreement
 
7	Customer Hardware, Software, Connectivity and Network Requirements	
 
 	7.1	Upgrades. Customer is required to maintain the latest version ***** of supported NAVITAIRE and ***** related third party software as directed by the NAVITAIRE Support Center, *****. Upon receipt of upgraded software, newer versions of software, or notification of third party software updates, Customer must update their software versions within *****. Failure to complete the advised upgrades may result, at NAVITAIRE’s option, in the suspension of Included Support as described in this Exhibit A, Section 5.	
 
 	7.2	Equipment Specifications. These equipment specifications outline the required, supported hardware and software necessary for the proper function and efficient operation of the Hosted Reservation Services and applicable products. Unless otherwise specified in this Agreement, the equipment and software listed below are the responsibility of Customer. This list may not be all-inclusive, depending on the technical requirements of Customer.	
All specifications are subject to change. Customer will be provided with not less than thirty (30) days’ notice of incremental hardware upgrade requirements.
Call Center PC/Workstation (for SkySpeed)
 
 	•	 	Processor: Intel Pentium class processor (any speed greater than 1 GHz). This includes Pentium 4 and M class machines.	
 
 	•	 	Disk space: Minimum of 10 GB of hard disk space for operating system and NAVITAIRE software.	
 
 	•	 	Operating system: Microsoft Windows version currently supported via standard Microsoft support. Customer must upgrade workstations to the .NET 3.5 SP1 release if running clients such as SkySpeed on New Skies release 3.2 or higher. This is a free downloadable upgrade available from Microsoft.	
 
 	•	 	Monitor: 15” color SVGA monitor (minimum of 1024x768 resolution). Non-interlaced monitors recommended.	
 
 	•	 	Memory: Minimum of 256 Megabytes of RAM.	
 
 	•	 	Network interface card: 100MB Network Interface Card (TCP/IP protocol).	
 
 	•	 	Mouse: PS/2 Mouse or other Microsoft Compatible Pointing Device.	
Airport Check-in PC/Workstation (for Skyport)
 
 	•	 	Processor: Intel Pentium class processor (any speed greater than 500 MHz). This includes Pentium II, and Pentium III class.	
 
 	•	 	Disk space: Minimum of 4 GB of hard disk space for operating system and NAVITAIRE software.	
 
 	•	 	Operating system: Airport Check-in software runs with the terminal emulation software listed below and Microsoft Windows XP or Windows 7 if running NAVITAIRE’s NAVTE.	
 
 	•	 	Monitor: 15” color SVGA monitor (minimum of 1024x768 resolution). Non-interlaced monitors recommended.	
 
 	•	 	Memory: Minimum of 128 megabytes of RAM.	
 
 	•	 	Network interface card: 100MB Network Interface Card (TCP/IP protocol).	
 
 	•	 	Mouse: Mouse or other Microsoft Compatible Pointing Device.	
 
 	•	 	Terminal emulation software: NAVITAIRE Terminal Emulator per client workstation.	
 
 	•	 	Serial ports: Minimum of two required.	
Airport PC/Workstation (for GoNow – Agent UI)
 
 	•	 	Processor: Intel Pentium class processor (any speed greater than 1 GHz). This includes Pentium 4 and M class machines.	
 
 	•	 	Disk space: Minimum of 10 GB of hard disk space for operating system and NAVITAIRE software.	
 
 	•	 	Operating system: Microsoft Windows version currently supported via standard Microsoft support. Customer must upgrade workstations to the .NET 3.5 SP1 release if running clients such as GoNow on New Skies release 3.2 or higher. This is a free downloadable upgrade available from Microsoft.	
 
 	•	 	Monitor: 15” color SVGA monitor (minimum of 1024x768 resolution). Non-interlaced monitors recommended.	
 
 	•	 	Memory: Minimum of 256 Megabytes of RAM.	
 
 	•	 	Network interface card: 100MB Network Interface Card (TCP/IP protocol).	
 
 	•	 	Mouse: PS/2 Mouse or other Microsoft Compatible Pointing Device.	
 
Exhibit A - 55

Hosted Services Agreement
 
Airport Peripheral Equipment
Bag Tag Printers
 
 	•	 	IER or VidTroniX bag tag printers with TCP/IP, Serial, or Parallel connections.	
 
 	•	 	Specific models compatible with NAVITAIRE Hosted Services systems available upon request.	
 
 	•	 	The manufacturer of the printer may supply additional bag tag stock information and specification.	
 
 	•	 	Epson L90 bag tag printer with USB connection.	
 
 	•	 	Characteristics controlled by the software driver.	
 
 	•	 	Uses small rolls of paper.	
 
 	•	 	ARINC/SITA Common Use Environments.	
Boarding Pass Printers
 
 	•	 	Epson TMT-88 or TMT-90 thermal receipt printers. Specifications for thermal roll stock are available from the printer manufacturer.	
 
 	•	 	ARINC/SITA Common Use Environments.	
New Skies Reports
The supported browsers for New Skies Reports are Microsoft browser versions currently supported via standard Microsoft support and Internet Explorer 8 working in IE7 compatibility mode.
Print Server
 
 	•	 	Hardware Requirements	
Equipment must be found on the Microsoft HCL ( http://www.microsoft.com/whdc/hcl/default.mspx )
 
 	•	 	Single/Dual Processor Intel Pentium XEON Class server	
 
 	•	 	2 GB RAM	
 
 	•	 	72GB of available hard disk space	
 
 	•	 	100MB Ethernet Adapter	
 
 	•	 	Software Requirements	
 
 	•	 	Microsoft Windows Server 2008	
 
 	•	 	Microsoft Printing Services (installed from Windows Operating System CD)	
 
 	•	 	Supported Windows Server 2003 Print drivers for all print devices (See print device details below)	
 
 	•	 	Technical documentation for setting up Printing for Windows Server 2003	
http://www.microsoft.com/technet/prodtechnol/windowsserver2003/library/ServerHelp/f119ea8c-834e-4dd0-9744-6c7cc879ddba.mspx
 
 	•	 	Print Device Requirements	
 
 	•	 	Ethernet/IP (LPR/LPD) enabled printers	
 
 	•	 	PCL 5 compliant / HP LaserJet 2100 (driver supported/PCL5)	
 
 	•	 	Requires a manufacture or Microsoft supported driver for Windows Server 2003 (not Windows XP/2000)	
 
 	•	 	Generic Plain Text Driver supported	
 
 	•	 	Additional Recommendations	
 
 	•	 	Printers should be PCL5 compliant (able to utilize the HP LaserJet 2100 print driver). The 2100 print driver in the Microsoft Windows platform is the most generic PCL5 print driver.	
 
 	•	 	Printers should have the ability to print using the Generic plain text print driver that ships with Windows Server 2003.	
Email Server
 
 	•	 	Must be scalable and robust to handle anticipated email volume for receipt emailing to passenger.	
 
 	•	 	Refer to email software instructions and technical documentation for proper hardware configuration.	
 
 	•	 	Customer may consider third party email hosting or email broadcast services available.	
 
 	•	 	Software Requirements	
 
 	•	 	SMTP compatible mail server	
 
 	•	 	Host relaying must be supported (configured to allow SMTP relay from NAVITAIRE network)	
Microsoft Recommended Solution:
Exchange Server 2010: http://www.microsoft.com/exchange/default.mspx
Setup for Mail relay for Exchange Server 2010: http://support.microsoft.com/default.aspx?scid=kb;en-us;260973
Network Hardware, Software, and Data Circuits
 
 	•	 	Data Circuits: Customer must already have or must install the necessary equipment and circuits to support their primary call center sites and remote locations, including field stations. NAVITAIRE requires a LAN/WAN network supporting TCP/IP protocols.	
 
 	•	 	Routers, DSU/CSUs, and Modems: Customer should contact NAVITAIRE for recent information regarding recommended routers and other network communication equipment.	
 
 	•	 	IP Addressing: NAVITAIRE requires that Customers present NAVITAIRE with an Internet Registered IP address for all traffic from Customer workstations or devices that require connectivity to the Hosted Reservation Services by utilizing either: (a) the actual Internet Registered IP address assigned to a Customer workstation or device or (b) a NAT (Network Address Translation) configured on Customer’s network equipment which changes the source IP address of the Customer workstation or device to an Internet Registered IP address prior to communicating with NAVITAIRE.	
 
 	•	 	Customer Provided Data Circuits: NAVITAIRE requires a review of the proposed primary or backup data circuit(s) prior to a third party agreement and installation. Where possible, NAVITAIRE will use reasonable effort to provide all necessary specifications and extend management of the data circuit as permitted by Customer and the third party supplying the data circuit(s).	
 
Exhibit A - 56

Hosted Services Agreement
 
 	7.3	Third Party Software. Customer is required to purchase directly from providers other related third party software licenses necessary to use the Hosted Reservation Services, including the following: 	
 
 	•	 	Local network server operating system(s) license: Microsoft Windows NT 4.0, Novell, or similar Operating System supporting TCP/IP protocols.	
 
 	•	 	Reporting: Microsoft Reporting Services for New Skies report development and access.	
 
 	•	 	Airports: Re-certification of the ARINC/SITA emulators to support the New Skies airport interface.	
 
 	7.4	Credit Card Processing	
 
 	7.4.1	Authorization and Settlement Services. Customer will be allowed ***** payment authorization services connection with a third party, and ***** settlement services connection with a third party, any additional connections will be quoted upon request.	
 
 	7.4.2	Card and Payment Types.	
 
 	•	 	Supported Credit Cards: NAVITAIRE currently supports VISA, American Express, MasterCard, JCB, Diners Club, and Discover Card.	
 
 	•	 	Supported Debit Cards: NAVITAIRE currently supports regional debit cards such as Visa Electron (EL), Visa Delta, Visa Connect, Switch/Solo, Maestro, and Laser.	
 
 	•	 	Not Supported: Debit cards requiring a Personal Identification Number [PIN], ATM cards, or private label credit cards are not supported.	
 
 	•	 	ELV: Ability to use an Elektronisches Lastschriftverfahren (ELV) form of payment through a European payment gateway is supported.	
 
 	•	 	UATP: Ability to use the UATP form of payment through either the shard ARINC circuit or via Customer’s PSP, depending upon regional requirements.	
 
 	7.4.3	PCI Compliance. NAVITAIRE will remain in compliance with the Payment Card Industry’s Data Security Standards (“PCI Standards”) in force at the time of execution of this Agreement, and to the extent applicable to the Hosted Reservation Services provided by NAVITAIRE. ***** Any subsequent changes to the PCI Standards requiring a modification to the Hosted Services shall be borne by Customer.	
 
 	7.4.4	Data Circuits. Customer must arrange and pay for necessary circuits for authorization and settlement file transmissions.	
 
 	7.4.5	Data Transmission. By selecting external and/or third party payment related services such as credit card authorization, settlement, 3-D Secure, DCC, etc., Customer authorizes NAVITAIRE to electronically transmit certain Customer data to providers of such services in order to facilitate the provision of payment related services.	
 
 	7.4.6	Authorization and Settlement Providers. Customer shall be responsible for contracting with third party authorization and settlement providers, and shall be responsible for the use, disclosure and treatment of any Customer Personal Data by such third parties. A list of NAVITAIRE supported authorization and settlement providers will be provided to Customer upon request. Should Customer elect to use an authorization or settlement provider not currently	
 
Exhibit A - 57

Hosted Services Agreement
 
 	certified by NAVITAIRE, such authorization or settlement provider is subject to NAVITAIRE approval and the certification costs, including development, are payable by Customer.	
 
 	7.5	CRS/GDS/ARS Agreements and Connection Fees (to Support Optional CRS/GDS/ARS Type B/Teletype, Type A/EDIFACT, and/or Codeshare Connectivity). Customer must negotiate and have in place, no later than ***** prior to the Target Date, the necessary participating agreements with each of the NAVITAIRE supported Computerized Reservation System/Global Distribution System (CRS/GDS) providers or airline and associated Airline Reservation System (ARS) providers. Implementation, integration, connection and Service Fees as described in Exhibit K and line charges may apply. NAVITAIRE will order and facilitate the installation of all circuits required to process CRS/GDS/ARS bookings, upon written notice from Customer.	
 
8	Service Levels and Service Level Targets	
 
 	8.1	Service Level Scope. The Service Levels contained in this Section represent the target service performance for the provision of the Hosted Reservation Services. Metrics, measurement, and reporting will create performance assessment measures that apply to operations services in the following three service categories:	
 
 	•	 	System availability targets.	
 
 	•	 	Metrics, measurement, and reporting.	
 
 	•	 	Remedies and corrective action.	
 
 	8.2	Service Level Targets	
 
 	8.2.1	System Availability. NAVITAIRE will seek to provide Customer with an overall Minimum System Availability Target of ***** of all Reporting Period Minutes for the applicable Reporting Period. Interrupted Service minutes will be measured and used to determine the percentage of monthly Hosted Services System availability.	
 
 	a)	Network Responsibilities. The diagram below shows those hardware components, network components (excluding the internet), and the software that resides on those components that are owned from a service level perspective by NAVITAIRE and those items that are owned by Customer. Items that are contained within the dotted-line (on the right side of the diagram) are the responsibility of Customer. During the event of an Interrupted Service, NAVITAIRE is responsible for errors that occur involving the hardware components, network components, and the software that reside outside of the dotted-line area.	
 
Exhibit A - 58

Hosted Services Agreement

 
 	b)	Planned Downtime. Planned Downtime will be used to provide hardware and software maintenance services. Planned Downtime is scheduled at a time that is agreeable for NAVITAIRE and Customer, generally between ***** local time for Customer. NAVITAIRE will notify Customer no later than ***** the day prior to the scheduled event if the time is needed for Change Control purposes.	
 
 	8.2.2	Incident (INC) Service Response. NAVITAIRE will commit to the response targets below for each Emergency INC logged System Error.	

Customer Communication	  	Emergency INC Response	
Acknowledgement and Initial Response	  	*****	
Update	  	Every *****	
 
 	8.3	System Errors and Emergencies	
 
 	8.3.1	System Errors. A System Error occurs when functionality that is included in the NAVITAIRE product user documentation is currently not working on Customer’s site in all material respects consistent with the manner that it is described in the documentation.	
 
 	Note:	Customer must refer to the documentation that matches the version of software they are running. If Customer wants a feature that is not currently included in their software version, but the feature is included in a later software version, Customer must upgrade their software to that version to be able to take advantage of the new features and functionality.	
System Errors detected during testing in Customer’s test environment should also be logged through the Internet based customer support tool with a reference to the test database code. NAVITAIRE will respond to all Emergency INCs for the test environment within *****
No failure of any reconfiguration by Customer of a Configurable Template shall be deemed to be or can create a System Error.
 
Exhibit A - 59

Hosted Services Agreement
 
 	8.3.2	System Error Reporting. Customer may report an identified Hosted Reservation Services System Error at no additional cost using the Internet based customer support tool INC schema. A System Error is defined in this Exhibit A, Section 8.3.1.	
 
 	8.3.3	System Error Classification. When Customer reports an INC for a System Error, it will be assigned a priority based on the severity of the issue. These priorities will be assigned using the following table:	

Impact Analysis	  	Business Functionality	
	  	No loss of
business
function	  	Partial loss
of business
function.
Work-around
exists.	  	Partial loss of
business
function. No
work-around
exists.	  	Complete
loss of
business
function.
Work-
around
exists.	  	Complete
loss of
business
function.
No work-
around
exists.	
Immediate impact is significant. Affects many and/or critical users.	  	*****	  	*****	  	*****	  	*****	  	*****	
Immediate impact is moderate. Affects few and/or non-critical users.	  	*****	  	*****	  	*****	  	*****	  	*****	
Immediate impact is marginal. Affects few or no users.	  	*****	  	*****	  	*****	  	*****	  	*****	
An example of an ***** System Error might include:
*****
An example of a ***** System Error might include:
*****An example of a ***** System Error might include:
 
 	8.3.4	***** Emergency Response Procedure. In the event of a Customer Emergency, the NAVITAIRE Support Center may be contacted for assistance, according to the procedures outlined in this Exhibit A, Section 5.4.	
 
 	8.3.5	NAVITAIRE Support Communication Targets. For High, Medium, and Low INCs, response targets are provided in the table below. NAVITAIRE’s resolution targets are provided in the Support User Guide, available on NAVITAIRE’s Customer Care web site.	

Customer Communication	  	INC Severity Classification and Response Targets	
	  	High	  	Medium	  	Low	
Acknowledgement and Initial Routing	  	*****	  	*****	  	*****	
Updates	  	Customer will receive electronic notification whenever data is needed or incident is resolved, status changed or notes updated.	
 
 	8.4	Service Levels Reporting	
 
 	8.4.1	General. Regular, standardized Service Levels reporting provides a common denominator, which measures and evaluates service performance. This provides a basis on which conclusions can more easily be drawn as to the actual Service	
 
Exhibit A - 60

Hosted Services Agreement
 
 	Levels achieved. NAVITAIRE will monitor and measure performance of specified Service Levels items and send a Monthly Performance Report to Customer for review and approval. The report will be structured for Customer’s internal use and metrics will be generated and distributed on a monthly basis.	
 
 	8.4.2	Report Information	
 
 	•	 	Monthly Performance Report. NAVITAIRE will submit a Monthly Performance Report by the ***** of the subsequent month following the Reporting Period to the Customer Account Liaison. The report will contain the monthly indicator of Service Levels statistics and will be transmitted via email unless otherwise requested by Customer. The report will also summarize all Interrupted Service Reports for the Reporting Period.	
 
 	•	 	Interrupted Service Report. NAVITAIRE will provide an Interrupted Service Report, created by the NAVITAIRE Support Center, following an Interrupted Service event. This report will summarize circumstances, identified cause (if known) and will outline any identified corrective action. Interrupted Service Reports can be tracked by the associated INC number for reference on the Monthly Performance Report.	
 
 	8.4.3	Report Follow Up. If Customer has any questions or objections to the Interrupted Service Report, they will notify their NAVITAIRE Account Manager within ***** of receiving the report and NAVITAIRE shall respond within ***** of notification. If the parties cannot agree on the measurements reported, the matter will be escalated to the respective Executive Sponsors, and, if still unresolved, will be escalated as outlined in Section 17.5 of the Agreement (Dispute Resolution).	
 
 	8.5	Review and Correction	
 
 	8.5.1	NAVITAIRE Account Manager Review. In addition to Support Center Support and Emergency services, the NAVITAIRE Account Manager will coordinate a teleconference with the Customer Account Liaison within ***** of the Interrupted Service to discuss the details of the Interrupted Service and to update Customer on any identified cause or status. The NAVITAIRE Account Manager will close the Interrupted Service Report with the Customer Account Liaison upon final report of identified cause and any outline of corrective action.	
 
 	8.5.2	Executive Review. Upon the request of the NAVITAIRE or Customer Account Liaison, an Executive Sponsor teleconference and a further escalation to the CEO, President, or Managing Director level of each company may be made depending on the severity of the Interrupted Service.	
 
 	8.6	Corrective Action, *****. The corrective action ***** described below will be applied with respect to each Reporting Period, which commences after ***** following completion of Implementation Services. Conflict and Exhaustion of Provisions as stated at the beginning of this Exhibit A will apply to this Section.	
 
 	8.6.1	Corrective Action. The NAVITAIRE Account Manager shall monitor corrective action and report to the Executive Sponsors. In the event that Minimum System Availability Targets are not met during the Reporting Period, the NAVITAIRE Account Manager shall initiate corrective action during the subsequent Reporting Period. *****, NAVITAIRE shall, at its own expense, use commercially reasonable efforts to correct the deficiency in order to meet future Minimum System Availability Targets.	
 
 	8.6.2	Failure Notification. Upon a ***** failure of NAVITAIRE to meet Minimum System Availability Targets during successive Reporting Periods, the issue shall be escalated to the CEO, President, or Managing Director level of each company. Customer may notify NAVITAIRE, in writing, of the failure to meet	
 
Exhibit A - 61

Hosted Services Agreement
 
 	Minimum System Availability Targets. Upon receipt of such notice, NAVITAIRE will begin reporting System Availability in ***** Reporting Periods and will communicate to Customer within ***** and in writing the status of improvement in performance.	
 
 	8.6.3	***** If NAVITAIRE *****, NAVITAIRE shall provide Customer with ***** pursuant to the following tables:	
Table 1. Where the Service Interruption concerns **********

*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
Table 2. Where the Service Interruption concerns **********

*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
*****	  	*****	
 
 	a)	Customer shall have the right to terminate this Agreement in the following events *****If NAVITAIRE *****,	
 
 	b)	If NAVITAIRE *****.	
 
 	c)	If NAVITAIRE *****.	
***** require NAVITAIRE to use its commercially reasonable efforts to work with Customer and its selected vendor to move the data to another reservation system vendor, charging the Customer time and materials.
The foregoing remedies constitute Customer’s sole and exclusive remedies and NAVITAIRE’s entire liability with respect to a failure to meet the Minimum System Availability Targets *****
 
 	8.7	System Changes	
 
 	8.7.1	Change Control. Change control covers all events that impact application software, custom software, system software, or hardware. The Change Control process effectively plans and facilitates changes to the Hosted Services System, including ownership for mitigating problems that may occur with a change to minimize any associated downtime. This function is responsible for coordinating and controlling all change administration activities (i.e., document, impact, authorize, schedule, implementation control), and determining if and when a change will be implemented in the production environment.	
 
Exhibit A - 62

Hosted Services Agreement
 
Planned Downtime will be used to provide hardware and software maintenance services. Planned Downtime is scheduled at a time that is agreeable for NAVITAIRE and Customer, generally between ***** local time for Customer. NAVITAIRE will notify Customer no later than ***** the day prior to the scheduled event if the time is needed for Change Control purposes.
 
 	8.7.2	Enhancements. An “Enhancement” is a request for a new report or application or an improvement to an existing application related to usability, performance, additional functionality, or flexibility. Enhancements will be logged in the Internet based customer support tool. Such requests can be in response to:	
 
 	a)	Mandates controlled by external third parties including governments, governing industry bodies such as International Air Transport Association [IATA], Société Internationale de Télécommunications Aéronautiques [SITA], or airport authorities. Examples include:	
 
 	•	 	Taxes, fees, security issues, immigration.	
 
 	•	 	Airport technology issues that impact airlines such as bag tag, Common Use Terminal Emulator (CUTE), or CUBE.	
 
 	b)	Customer requests that are initiated through a direct request, user conference, or through Customer’s NAVITAIRE Account Manager. Examples include:	
 
 	•	 	Competitive advantage.	
 
 	•	 	Improved passenger services.	
 
 	•	 	Specific client requirements.	
 
 	•	 	Improved business management.	
 
 	c)	Internal requests that are initiated through the sales cycle, Technology, Development, or NAVITAIRE line of business. Examples include:	
 
 	•	 	Cost reduction initiatives.	
 
 	•	 	Product obsolescence.	
 
 	•	 	Corporate business plan objective.	
Efforts required to develop, implement, document, and/or train on Enhancements are payable by Customer.
 
 	8.7.3	Urgency Classifications for Enhancements. Enhancements will be assigned a priority according to the criteria in the table below. If there is a disagreement as to the priority of the requested Enhancements, these will be decided between the NAVITAIRE Account Manager and the Customer Account Liaison. If this cannot be resolved at this level, it will be escalated to the respective Executive Sponsors for determination.	

Urgency	    	Description	
		
*****	    	A requirement from a business critical third party or other outside influence such as an airline buyout, purchase of another airline, a new government regulation, or a requirement that cannot be completed in a manual nature without severe negative impact. Such requests are Urgent only if a third party controls the requirement, it is non-discretionary to the customer, and the third party places an immediate time constraint on the customer.
 
Note: Documentation from the governing entity, which clearly states the nature of the requirement, the time frame allowed for implementation, and the penalties for non-compliance may be required. Due to the nature of an Emergency request, NAVITAIRE expects to receive no more than ***** such requests per year. Every attempt will be made to meet the established regulatory deadline communicated in these instances; however should the deadline be compromised NAVITAIRE will communicate specific issues that may make this deadline unattainable with an estimate of when it can be completed.	
 
Exhibit A - 63

Hosted Services Agreement

	    	Examples:
 
•   Adding Security Watch - a government or industry requirement that would inflict severe financial penalties if not met and demanded a quick implementation.
 
•   Adding the EURO as a form of currency - a specific governmental requirement that was dictated to the customers and demanded a quick implementation.	
		
*****	    	A requirement from a business critical third party or outside influence such as an airline buyout, purchase of another airline, a new government regulation, or a requirement that cannot be completed in a manual nature without severe negative impact, but DOES NOT have an immediate time constraint placed on Customer by the third party.
 
Note : Such requests are classified as High to prevent them from becoming Very High/Emergencies. A new business requirement that cannot be completed in a manual nature without severe negative impact. Such requests are not Emergencies because the request is discretionary to the customer.
 
Examples:
 
•   Printing French Itineraries for domestic French flights - a governmental requirement that provided sufficient time to respond to the need. Changing to a new bank - a customer-driven requirement that is critical to customer daily operations.	
		
*****	    	Supports all required Hosted Services System operations; the request is required eventually but could wait until a later release if necessary. Would enhance the product, but the product is not unacceptable if absent. More of a want than a need, but would provide benefit to the customer.
 
Examples:
 
•   Adding support of seat assignment capability for Computerized Reservation System (CRS) bookings.
 
•   Adding new check-in commands or short-cuts that would save time and effort for the agents.
 
•   Adding new features or functions in the Irregular Operations (IROP) program to increase efficiency of passenger handling.	
		
*****	    	A functional or quality enhancement that corrects an aesthetic problem or improves usability from the customer’s perspective. It does not greatly affect or alter core functionality.
 
Examples:
 
•   Enabling a pop-up message of “Are you sure” for bags weighing > 100Kg.
 
•   Adding the ability to alter the ‘flow’ of the SkySpeed booking process as a user configurable option.
 
•   Adding support for additional languages for SkySpeed (localization).
 
•   Adding more feeds (imports or exports) to third party packages for data sharing.
 
•   Making minor adjustments to screen layouts or design to increase readability.
 
•   Adjusting reports to increase readability and decrease questions to support.	
 
Exhibit A - 64

Hosted Services Agreement
 
 	8.7.4	Releases. NAVITAIRE software changes are bundled into work units called releases. As previously stated in Section 4.12 of the Agreement, Customer is responsible for maintaining ***** current version ***** of the NAVITAIRE software and all costs associated with implementing a release. Upgrade requests will be initiated using the standard NAVITAIRE Work Order process. The type and content of each release will vary according to criteria listed in the chart below:	

Criteria	  	Releases	
	  	*****	  	*****	  	*****	
				
Driven By	  	Strategy and product direction	  	Bug fixes to previous releases of software	  	Very High / Emergency bug fixes or emergency enhancements	
				
Target Content	  	Enhancement *****
Bug Fix *****
Emergency *****	  	Enhancement *****
Bug Fix *****
Emergency *****	  	Enhancement *****
Bug Fix *****
Emergency *****	
				
Description	  	Changes in the architecture, to the database, or that affect many different products in the NAVITAIRE product suite	  	Bug fixes, new reports, new stand-alone programs or features. Data structure changes that do not impact the database or architecture	  	Critical changes to the software stemming from Very High / Emergency bug fixes or emergency enhancements	
				
Approximate
Schedule	  	Annual	  	Quarterly to monthly	  	As needed or in the next available release	
				
Implementation
Requirement	  	Overnight customer downtime	  	Implementation may require minimal customer downtime	  	Downtime as required by the software change	
				
Data Conversion
Requirement	  	Rolling transformation likely required	  	Data transformation likely required	  	Non or minimum (i.e., database deltas)	
				
QA Requirement	  	Full regression, performance, and other testing as required	  	Full regression testing	  	Component level testing only	
				
Notes	  	A Major Release requires post-release code Stabilization Period of *****	  	Minor releases have a rolling schedule, which allows for consistency in planning, development and release	  		
 
 	8.7.5	Release Stabilization Period. ***** Major Release as defined in this Exhibit A, Section 8.7.4, Hosted Services System performance for all or some of the Minimum System Availability Targets are subject to exemption during periods of time identified as Stabilization Periods. A Stabilization Period is defined as follows:	
 
 	•	 	As used herein, the term “Stabilization Period” means the first ***** following a Major Release. During the Stabilization Period incidents related to the functionality added for a particular third party service in the release that are directly related to that third party service are exempted from the Service Levels performance target. The Stabilization Period will not apply to Major Release ‘sub-releases’, fixes, *****	
During this time NAVITAIRE will work with Customer to periodically evaluate and refine the service level measures applicable to such third party service offerings.
 
 	8.8	Notification of Increased Usage. As previously stated in Section 4.3 of the Agreement, Customer agrees to use commercially reasonable efforts to provide NAVITAIRE with the designated advance notice of significant volume increases, according to a NAVITAIRE defined process.	
Due to the anticipated impact on performance of the Hosted Reservation Services, the first ***** following the increase in volume will be defined as a Stabilization Period. The purpose of this Stabilization Period is to allow the operation of the solution and the service level to stabilize from the influence of the increase in volume. During the Stabilization Period, NAVITAIRE will work with Customer to evaluate and refine the Service Levels targets. At the conclusion of the Stabilization Period, NAVITAIRE and Customer may mutually agree to revise Service Levels performance targets.
 
Exhibit A - 65

Hosted Services Agreement
 
EXHIBIT B
(INTENTIONALLY OMITTED)
 
Exhibit B - 66

Hosted Services Agreement
 
EXHIBIT C
NAVITAIRE CONTACTS
NAVITAIRE agrees to provide contacts for the following areas. Customer should use these contacts as necessary.
 
1	NAVITAIRE Support Center	
The following number is to be utilized as described in Exhibits A and G:

Telephone:	  	(800) 772-3355 toll-free United States	
 
2	NAVITAIRE Commercial Account Manager	
NAVITAIRE agrees that the following individual is authorized to communicate with Customer on behalf of NAVITAIRE with respect to account management, project funding, contractual performance, and other commercial issues with respect to the Hosted Services:

Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
 
3	NAVITAIRE Account Executive Sponsor	
NAVITAIRE agrees that the following individual is responsible for Executive Sponsorship and for business issue escalation:

Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
 
4	NAVITAIRE Financial Contacts	
Customer may contact the NAVITAIRE Finance Department at the following regarding payments, invoices or other financial issues:

Name:	  	*****	
Title:	  	*****	
Telephone:	  	*****	
Facsimile:	  	*****	
Email:	  	*****	
 
Exhibit C - 67

Hosted Services Agreement
 
EXHIBIT D
CUSTOMER CONTACTS
NAVITAIRE agrees to use the following for its initial and primary contacts with Customer:
 
1	Customer Emergency Contact	
Customer agrees that the following number is available and will be answered after-hours for NAVITAIRE’s use in case of an emergency related to the Hosted Services. Failure for NAVITAIRE to obtain an answer from this Emergency Contact will prevent NAVITAIRE from providing support during an emergency. This may cause the system to be unavailable until such time that a Customer Emergency Contact may be reached.

Name:	  		
Telephone:	  	(800) 772-3355 toll-free United States	
 
2	Customer Account Liaison	
Customer agrees that the following individual is authorized to communicate with NAVITAIRE and make decisions on behalf of Customer with respect to account management, project funding, performance, payment, and other commercial issues with respect to the Hosted Services:

Name:	  	*****	
Title:	  	*****	
Telephone:	  	*****	
Email:	  	*****	
 
3	Customer Executive Sponsor	
Customer agrees that the following individual is responsible for Executive Sponsorship and for Emergency escalation:

Name:	  	*****	
Title:	  	*****	
Telephone:	  	*****	
Email:	  	*****	
 
4	Customer Authorized Support Contact	
Customer may designate up to two (2) primary Customer Authorized Support Contacts. The Customer Authorized Support Contact shall be the only person authorized to access the NAVITAIRE telephone and Internet technical support systems, as described in Exhibits A and G, on behalf of Customer:

Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
 
Exhibit D - 68

Hosted Services Agreement
 
In addition, Customer may designate up to two (2) individuals that will act as alternates for the Customer Authorized Support Contacts. The designated alternate(s) for the Customer Authorized Support Contact(s) are:

Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
Name:	  		
Title:	  		
Telephone:	  		
Email:	  		
 
5	Customer Financial/Accounts Payable Contact	
Customer agrees that the following individual(s) is (are) the proper accounting contacts to whom all invoices and accounting documents will be delivered. These contacts will see to the timely payment of all invoices for services rendered under this Agreement.

Name:	  	Octavio Benitez	
Title:	  	Head of Accounts Payable	
Telephone:	  	(52 55) 11052300 ext 5523	
Email:	  	octavio.benitez@volaris.com	
Address:	  	Av. Antonio Dovalí Jaime No. 70, Torre B, Piso 13, Col. Zedec Santa Fe, C.P. 01210, México, D.F., Mexico	
 
Exhibit D - 69

Hosted Services Agreement
 
EXHIBIT E
POWERED BY NAVITAIRE® MARK
The following terms and conditions shall apply to Customer’s use of the Powered by NAVITAIRE Mark (the “Mark”), as described in Section 4.11 of the Agreement.
 
1	Mandatory Use of the Mark	
*****
 
2	Guidelines for Using the NAVITAIRE Wired Mark	
 
 	2.1	Sizing and Placement Requirements. Customer is required to use the Mark to credit NAVITAIRE as follows:	
 
 	2.1.1	*****.	
 
 	2.1.2	*****. ***** *****.	
 
 	2.1.3	*****.	
 
 	2.1.4	*****.	
 
 	2.1.5	Individual graphic elements of the Mark may not be used as design features on the travel product, travel product packaging, documentation, collateral materials, advertising, or for any purpose other than as permitted herein.	
 
 	2.1.6	The Mark is an official mark and shall at all times remain the property of NAVITAIRE. The Mark includes graphic elements and accompanying words. The Mark shall always be expressed as an integrated whole.	
 
 	2.1.7	NAVITAIRE may change the Mark or substitute a different mark at any time; provided however that NAVITAIRE provides ninety (90) days prior written notice and further provided that such change or substitute Mark do not have substantially different sizing and placement requirements.	
 
 	2.2	Color Treatment. Approved Mark colors (included in the Mark as supplied by NAVITAIRE) are:	
 
 	2.2.1	Two Color Applications. The Mark must be used in the colors supplied by NAVITAIRE, which are medium blue for “Powered by NAVITAIRE” and light blue for the ‘swoosh’ below the NAVITAIRE portion of the graphic.	
 
 	2.2.2	Black and White Applications. An all black Mark or an all white Mark may be used if this color scheme is more compatible with Customer’s website branding.	
 
 	2.3	Location. *****	
 
 	2.4	Quality Control	
 
 	2.4.1	*****.	
 
 	2.4.2	*****.	
 
 	2.4.3	(INTENTIONALLY LEFT BLANK).	
 
 	2.4.4	*****.	
 
 	2.4.5	*****.	
 
 	2.4.6	*****.	
 
Exhibit E - 70

Hosted Services Agreement
 
3	License Grants and Restrictions	
 
 	3.1	*****.	
 
 	3.2	All rights not expressly granted are reserved by NAVITAIRE. Customer acknowledges that nothing in this Exhibit shall give it any right, title or interest in the Mark or any part thereof, other than the license rights granted herein. Customer may not use or reproduce the Mark in any manner whatsoever other than as described in this Exhibit E, Section 2.	
 
 	3.3	Customer agrees that it will not at any time dispute or contest: (a) the validity of the Mark or any registrations of the Mark, whether now existing or hereafter obtained; (b) the exclusive ownership by NAVITAIRE, its successors or assigns, of the Mark or of any registrations of the Mark, whether now existing or hereafter obtained; (c) the exclusive ownership by NAVITAIRE of the present and future goodwill of the business pertaining to the Mark; or (d) NAVITAIRE’s right to grant to Customer the rights and privileges conferred by the foregoing license.	
 
4	No Further Conveyances	
Customer shall not assign, transfer or sublicense any right granted herein in any manner without the prior written consent of NAVITAIRE.
 
5	No Endorsement	
 
 	5.1	Customer may not use the Mark in any way as an endorsement or sponsorship of the travel product by NAVITAIRE.	
 
 	5.2	Customer shall not use the Mark in any manner that disparages NAVITAIRE or its products or services, infringes any NAVITAIRE intellectual property or other rights, or violates any state, federal or international law.	
 
6	Termination	
 
 	6.1	NAVITAIRE reserves the right at its sole discretion to terminate or modify Customer’s license to use the Mark at any time.	
 
 	6.2	Customer may terminate its use of the Mark by: (a) terminating the Agreement as permitted therein; and (b) terminating Customer and/or Users access to the Hosted Services System.	
 
 	6.3	Upon termination of the Agreement, any and all rights and or privileges to use the Mark shall expire and use of the Mark shall be discontinued.	
 
7	The Mark	

 
 	Note:	The Mark above is depicted for print clarity. The required minimum size of 115 pixels in width is smaller than the above depiction.	
 
Exhibit E - 71

Hosted Services Agreement
 
EXHIBIT F
(INTENTIONALLY OMITTED)
 
Exhibit F - 72

Hosted Services Agreement
 
EXHIBIT G
HOSTED REVENUE ACCOUNTING SERVICES - SKYLEDGER®
Conflict and Exhaustion of Provisions
In the event that there exists any conflict between any term, condition or provision contained within this Exhibit and in any term, condition, or provision contained within the Agreement, the term, condition, or provision contained within this Exhibit shall control. Further, the rights, obligations, and privileges of the parties shall be determined first by reference to this Exhibit, as opposed to the Agreement. For purposes of clarification, the rights, obligations, and privileges contained within this Exhibit shall control and govern any dispute between the parties until all such rights, obligations, and privileges have been exhausted in their entirety; and only after such time shall the rights, obligations, and privileges of the parties be determined by reference to the Agreement.
 
1	Definitions	
As used in and for purposes of this Exhibit, the following terms shall be defined as set forth in this Exhibit. In the event that there exists any conflict between a definition set forth in this Exhibit and in any definition contained within Section 1 of the Agreement, the definition set forth in this Exhibit shall control.
 
 	1.1	Customer Revenue Accounting Contact means either the Customer Account Liaison or Customer Authorized Support Contact set forth in Exhibit D, Sections 2 and 4.	
 
 	1.2	Executive Sponsors has the meanings set forth in Exhibits C and D.	
 
 	1.3	Strategic Business Review has the meaning set forth in Section 3.5 hereof.	
 
 	1.4	Support Center means the NAVITAIRE facility that accepts phone and Internet based customer support tool service requests related to Hosted Services.	
 
 	1.5	System Error has the meaning set forth in Section 9 hereof.	
 
2	Scope of Services	
NAVITAIRE will provide certain services and support functions during the term of this Agreement related to the Hosted Revenue Accounting Services and related applicable products. Of the available Hosted Revenue Accounting Services, Customer has selected the products and/or services outlined in Exhibit K. The Hosted Services System infrastructure capacity will be established and configured for Customer’s operations based on flight Segment volume estimates provided by Customer.
Customer will be responsible for transferring data from the Hosted Revenue Accounting Services to Customer’s general ledger. Such functionality is specifically excluded from NAVITAIRE’s Hosted Revenue Accounting Services.
 
3	Implementation Services	
 
 	3.1	Data Center Implementation Services. NAVITAIRE will configure, install, activate, and test the necessary data center hardware and software for providing the Hosted Revenue Accounting Services to Customer. Unless otherwise specified, these services do not include communication circuits, wireless data services, or any remote communication devices, including routers or network hardware. Client personal computers, workstations, or other Customer devices connected to the Hosted Services System are the responsibility of Customer and must meet the minimum specifications as required by NAVITAIRE.	
 
Exhibit G - 73

Hosted Services Agreement
 
 	3.2	Virtual Private Network (VPN) Connectivity. If Customer desires to use a virtual private network (VPN) for connectivity to Hosted Revenue Accounting Services, NAVITAIRE will evaluate such a request to determine the viability of the use of a VPN connection for either a primary or back-up data circuit. After review, NAVITAIRE will advise Customer if the request is approved and the additional costs that will apply *****	
 
 	3.3	Network Configuration and Design Services. NAVITAIRE will supply recommended technical diagrams and will advise Customer on required network hardware requirements for client portion of application, as necessary. Customer shall have internal or third party network expertise available for the installation and configuration of their required network.	
 
 	3.4	System Integration Services. As Customer uses the NAVITAIRE Hosted Reservation Services, NAVITAIRE will integrate daily reservations activity XML extract files from NAVITAIRE Hosted Reservation Services into the Hosted Revenue Accounting Services.	
During the implementation of the Hosted Revenue Accounting Services and before production use of such services, NAVITAIRE will assist in the assessment of the transfer of the general ledger output file from the Hosted Revenue Accounting Services application. Customer shall be responsible for the cost of modifying or replacing any third party systems including hardware and software. For future integration services, NAVITAIRE will, upon request, provide an estimate; however, any services will be provided on a time and materials basis *****
 
 	3.5	Strategic Business Review	
 
 	3.5.1	NAVITAIRE will conduct a Strategic Business Review to gather information on Customer’s desired use of the Hosted Revenue Accounting Services and outline functional capabilities of the Hosted Services System. During the Strategic Business Review, NAVITAIRE will work with Customer to create a project plan and project schedule, including NAVITAIRE and Customer responsibilities, used to determine the Target Date.	
 
 	3.5.2	The Hosted Revenue Accounting Services installation process will include:	
 
 	•	 	Set up of physical and database environments	
 
 	•	 	Data import services	
 
 	•	 	Initialization of the Hosted Revenue Accounting Services software	
 
 	•	 	Import/load of reference data	
 
 	•	 	Technical and functional testing	
 
 	•	 	User Training with New Skies test data	
 
 	•	 	Conversion plan for open PNR liability data	
 
 	•	 	Load ***** of reservation data	
 
 	•	 	Complete ***** accounting close	
These elements will be incorporated into the project plan with input from Customer.
 
 	3.6	Customer Site Services. NAVITAIRE will assist Customer with the testing of the required telecommunications connection between the NAVITAIRE data center and the designated Customer facility. Customer shall be responsible for the cost of troubleshooting or connecting Customer’s internal network. Additional technical support for on-site assistance after the initial conversion for production use of the Hosted Revenue Accounting Services shall be quoted on a project basis at the request of Customer using the rates as outlined in Exhibit K, Section 1.3.	
 
Exhibit G - 74

Hosted Services Agreement
 
 	3.7	Initial Training Services. NAVITAIRE will supply the following training and Customer agrees to participate in such training for the Hosted Revenue Accounting Services:	
 
 	3.7.1	System Training: Up to a maximum of ***** which may be attended by up to a maximum of ***** Customer employees at the NAVITAIRE corporate offices located in Minneapolis, Minnesota. If Customer desires on-site initial training, Customer will be responsible for providing the training site, all required computer hardware, stable technical environment, and any related expenses including NAVITAIRE trainer(s) travel, quality lodging including high-speed internet access, NAVITAIRE standard per-diem for meals and incidentals, and additional costs for the trainer’s time away from their home office. All training will be conducted in English.	
Topics will include the definition of the expected daily and month-end activities required to support the Hosted Revenue Accounting Services and user and administrative features and functions. Customer must complete basic computer familiarization and Windows training for all trainees prior to the initial training. As Customer is contracting to use the NAVITAIRE Hosted Reservation Services, and the Hosted Revenue Accounting Services uses the data extracts from this system, trainees must also have completed a basic course on the features and functions of the Hosted Reservation Services.
Customer will be provided an electronic copy of the manual in Adobe Acrobat (PDF) format for download via the NAVITAIRE web site. Technical specification and technical reference manuals are for internal NAVITAIRE use only, unless otherwise specified in this Agreement or by other arrangement. All materials provided by NAVITAIRE are in the English language unless otherwise specified within this Agreement.
*****
 
 	3.8	Project Reporting	
 
 	3.8.1	During the course of Implementation Services, the NAVITAIRE Hosted Revenue Accounting Services Project Manager will coordinate status reporting with the NAVITAIRE Hosted Reservation Services Project Manager. Following completion of installation of the Hosted Reservation Services, the NAVITAIRE Hosted Revenue Accounting Services Project Manager will provide Customer with status on the remaining Implementation Services for Hosted Revenue Accounting Services as follows: (a) Weekly Project Plan Update and Status Report; (b) Weekly Updated Issues/Resolution List; and (c) Executive Summary.	
 
 	a)	Weekly Project Plan Update and Status Report. Weekly status reports will be transmitted to Customer on a weekly basis during the provision of Implementation Services. This report will include updated status on the process and an updated project plan. A list of the following week’s tasks and goals will be included in the report.	
 
 	b)	Weekly Updated Issues/Resolution List. Weekly updated issues/resolution lists will be forwarded to Customer on the same schedule as the Weekly Project Plan Update and Status Report. The Issues/Resolution List will include specific additional items discovered in the project analysis, or critical issues that deserve heightened priority apart from the project plan. The Issues/Resolution List will include the task, the responsible party, date, open/close status, priority, and date of closed task. Every issue will be given a priority relative to a mutually agreed priority with Customer. Priorities will be ranked 1-5, 1 being most critical. Below is a description of each priority:	
 
 	•	 	Priority 1 - Urgent. All issues included in this priority are deemed critical and will be given priority attention. These issues may affect a milestone or dependency related to the completion of conversion services. Issues in this category are critical to resolve prior to other project dependencies and milestones being completed.	
 
Exhibit G - 75

Hosted Services Agreement
 
 	•	 	Priority 2 - High. Issues included in this priority may affect the Target Date and require resolution prior to the completion of conversion services.	
 
 	•	 	Priority 3 - Medium. Issues included in this priority are not required prior to completion of conversion services, but must be finished prior to the end of Implementation Services.	
 
 	•	 	Priority 4 - Low. These items are not critical to either the completion of conversion services or Implementation Services but require monitoring for subsequent follow up or entry into NAVITAIRE’s Internet based customer support tool.	
 
 	•	 	Priority 5 - Excluded. These items are deemed excluded and are either unnecessary or may be addressed in a business process change or work-around.	
 
 	c)	Executive Summary. An Executive Summary will be provided to both the NAVITAIRE and Customer Executive Sponsors upon reaching critical milestones. These milestones will be established mutually with Customer as the final project plan has been established.	
 
 	3.9	Implementation Services Time Frame	
 
 	3.9.1	Upon receipt of the Implementation Fees due at signing, NAVITAIRE agrees to work with Customer to plan, coordinate, and to make progress toward completion of the required Implementation Services within the time frame preceding the Target Date. NAVITAIRE further agrees to initiate, mutually with Customer, project-scope-analysis and project-planning communication to establish the final schedule for Implementation Services. Depending on requirements for the loading of data included in the ***** Input files outlined as Interface Files in Section 7 below, into the Hosted Revenue Accounting Services and conversion, the project timeline and Target Date for Implementation Services of Hosted Revenue Accounting Services will be determined as part of the implementation project plan.	
 
 	3.9.2	During the court of planning discussions related to this Agreement, NAVITAIRE acknowledges the Target Date as requested by Customer for completion of applicable portions of Implementation Services. For Customers who are converting to the NAVITAIRE Hosted Reservation Services, the Target Date for completion of Implementation Services is no later than ***** after the first date that passengers are checked in at the airport using the Host Reservation Services. NAVITAIRE and Customer will detail dates and dependencies of the project plan, as summarized in the table below, in order to confirm the Target Date achievability.	

 	 	 	  	Primary
Responsibility	  	Duration to
Complete	  	Milestone Dependency	
Key Milestones & Supporting Tasks	  	NAVITAIRE	  	Customer	  		  		
0	 	Agreement Signature and Project Start Date	  	ü	  	ü	  	*****	  	Agreement Signed*	
1	 	Project Start Components	  		  		  	*****	  	Milestone 0	
	 	SkyLedger data collector	  		  	ü	  		  		
	 	Project Statement of Work signoff	  	ü	  	ü	  		  		
2	 	Account Setup Complete	  		  		  	*****	  	Milestones 0 and 1	
	 	SkyLedger software loaded	  	ü	  		  		  		
	 	Connectivity to NAVITAIRE data center	  	ü	  	ü	  		  		
3	 	SkyLedger Training	  		  		  	*****	  	Milestone 2	
	 	SkyLedger training complete	  		  	ü	  		  		
 
Exhibit G - 76

Hosted Services Agreement

Key Milestones & Supporting Tasks	  	Primary
Responsibility	  	Duration to
Complete	  	Milestone
Dependency	
4	 	User Acceptance Testing	  		  		  	*****	  	Milestone 3	
	 	Confirm business critical functionality that is available in SkyLedger release	  	ü	  		  		  		
	 	Approved functionality is working as documented	  		  	ü	  		  		
5	 	Go-Live Readiness Review	  		  		  	*****	  	Milestone 4	
	 	Go-live walk-through	  	ü	  	ü	  		  		
	 	Confirm go-live date with all necessary teams	  	ü	  	ü	  		  		
6	 	Go-Live	  		  		  	*****	  	Milestone 5	
	 	Load data	  	ü	  		  		  		
	 	Perform data integrity check	  		  	ü	  		  		
	 	Perform go-live activities	  	ü	  		  		  		
	 	Approve go-live	  		  	ü	  		  		
7	 	First Monthly Close	  		  		  	*****	  	Milestone 6	
	 	Execute first monthly close	  	ü	  		  		  		
	 	Review monthly close	  		  	ü	  		  		
	 	Approve monthly close	  		  	ü	  		  		
 
*	Implementation services will not be scheduled until this Agreement is fully-executed and any implementation fees due and payable by Customer as outlined in Exhibit K, have been received by NAVITAIRE.	
 
 	3.9.3	NAVITAIRE recommends at least ***** of data included in the ***** Input files outlined as Interface Files in Section 7 below, containing Customer’s open PNR data from NAVITAIRE’s Hosted Reservation Services, prior to activation and initialization of the Hosted Revenue Accounting Services. Open PNR data will include unflown future Segments which still have a positive remaining balance.	
 
 	3.9.4	Typical timelines for implementation average ***** for full project implementation. The Hosted Revenue Accounting Services implementation process will be conducted in parallel with the NAVITAIRE Hosted Reservation Services implementation (if applicable); however, the Hosted Reservation Services conversion to production will normally precede the conversion of the Hosted Revenue Accounting Services implementation.	
 
 	3.9.5	The NAVITAIRE Hosted Revenue Accounting Services implementation team will have an assigned project lead and central contact point that will interface with the Customer Revenue Accounting Contact during the Implementation Services period.	
 
 	3.9.6	If Customer is implementing Hosted Reservation Services concurrently with the Hosted Revenue Accounting Services implementation, the NAVITAIRE Revenue Accounting project lead will communicate and coordinate with the primary Hosted Reservation Services project manager during the Hosted Reservation Services implementation effort. After Hosted Reservation Services conversion, the NAVITAIRE Revenue Accounting project lead will communicate status with the Customer Project Manager.	
 
 	3.9.7	Upon completion of the Implementation Services as described in this Exhibit G, Section 3, NAVITAIRE will provide written notification to the Customer Revenue Accounting Contact or Customer Account Liaison named in Exhibit D of this Agreement.	
 
4	Data Circuits	
 
 	4.1	Primary and Backup Data Circuits. Customer shall be responsible for all telecommunication circuits used by Customer in connection with the transmission of data between the Hosted Services System and Customer’s site(s), as stated in Section 4.10 of this Agreement. It is anticipated that Customer will use the same primary and back-up	
 
Exhibit G - 77

Hosted Services Agreement
 
 	data circuits to transmit data for the Hosted Revenue Accounting Services as those used to support the delivery of the Hosted Reservation Services. Customer shall be responsible to ensure that the data circuits are capable of handling the additional data volume required for the Hosted Revenue Accounting Services. If Customer wishes to use any alternative arrangement to the Hosted Reservation Services data circuits, Customer must submit this request to NAVITAIRE for approval.	
 
 	4.2	Facility Locations. The facility locations provided for in this Agreement are as follows:	
 
 	•	 	The NAVITAIRE Hosted Revenue Accounting Services data center will be located in *****	
 
 	•	 	Customer’s primary facility will be located in *****.	
 
5	Included Support	
 
 	5.1	Support Center Support. NAVITAIRE will include English-speaking Support Center Support via email, an Internet based customer support tool (English version only), or telephone. A customized version of the NAVITAIRE Procedures Manual will be provided to Customer.	
The allotment of ***** for included support is for the specified period only and may not be carried forward. Allotted monthly ***** of Support Center Support are not deducted for System Error reporting and use of the online support system. All other related hours are deducted in ***** increments with a minimum of ***** per occurrence.
Customer is allotted, at no additional charge, a maximum number of included Support Center Support hours as described in Exhibit K, Section 1.3. If Customer utilizes the Support Center more than the allotted number of ***** the Support Fees in Section 5.3 hereof will apply.
 
 	5.2	Hours - Non-Emergency. NAVITAIRE Support Center Support is available *****, excluding NAVITAIRE holidays (Christmas Eve, Christmas Day and New Year’s Day).	
 
 	5.3	Support Rate. Charges for additional support ***** exceeding the applicable included support for the Support Center will be invoiced at the rate specified in Exhibit K, Section 1.3.	
 
 	5.4	Available Assistance. The NAVITAIRE Support Center may be contacted for assistance. All services are in English, unless otherwise specified in this Agreement. This Section 5.4 outlines procedures for reporting Emergencies, errors, and requests.	
 
 	5.4.1	Emergency. An Emergency is defined as the Hosted Revenue Accounting Services not functioning for Customer due to an Interrupted Service which prevents the delivery of the daily Postings Report or the general ledger output file on the last day of the accounting period. Interrupted Service due to Customer misuse of the Hosted Services System will incur Support Fees at the rate specified in Exhibit K, Section 1.3.	
 
 	•	 	The NAVITAIRE Support Center may be reached, without charge, in the event of an Emergency ***** by calling the number provided in Exhibit C, Section 1.	
 
 	•	 	Customer will be requested to call the Support Center and report the Emergency, in English, to the representative, or if all representatives are busy with other calls, a message may be left in English on the voicemail response system, which will page an appropriate contact. A representative of NAVITAIRE will return Customer’s call within ***** with an acknowledgment and initial response to Customer.	
 
 	•	 	Provided the Emergency is due to an Interrupted Service event pertaining to the provision of the Hosted Revenue Accounting Services, NAVITAIRE will	
 
Exhibit G - 78

Hosted Services Agreement
 
 	advise Customer regarding the status of the error or problem and the anticipated period to resolution. During normal business hours, the NAVITAIRE Account Manager and Customer Account Liaison will be notified and briefed on the situation.	
 
 	•	 	Customer is required to provide NAVITAIRE with an after-hours emergency contact number in Exhibit D, Section 1, which will be answered by Customer when called by the NAVITAIRE support representative.	
 
 	5.4.2	Error Reporting. Customer may report an identified Hosted Revenue Accounting Services System Error at no additional cost through the Support Center or the Internet based customer support tool.	
 
 	5.4.3	Request Reporting. Customer may utilize the NAVITAIRE Internet support tool to contact the NAVITAIRE Support Center electronically for the following service requests:	
 
 	•	 	Custom Enhancement requests	
 
 	•	 	New product concepts or requests	
 
 	•	 	Additional training requests	
 
 	•	 	Product expertise	
These services are subject to the Support and/or Other Fees as described in Exhibit K, Section 1.3 and/or 1.4, and are accepted at the sole discretion of NAVITAIRE. If the request is accepted by NAVITAIRE, a price quote and time schedule will be generated. Customer will then decide whether to authorize the work to be performed by NAVITAIRE.
 
 	5.5	Third Party Interfaces	
 
 	5.5.1	NAVITAIRE will only supply and support defined interfaces to third party systems utilized by Customer if listed in this Section.	
 
 	5.5.2	Unless third party software is incorporated into the Hosted Services System and indicated specifically in the specifications included in this Exhibit G, neither NAVITAIRE nor such third party shall be liable for the performance or failure to perform of the other in respect to Service Level Targets.	
 
6	Scheduled Maintenance	
The Hosted Revenue Accounting Services will be available to Customer for normal application operations Monday - Friday from *****, local Customer time. The hours of ***** will be used by NAVITAIRE for daily processing, including updates, optimization and creation of scheduled reports. Saturdays and Sundays will be used by NAVITAIRE for software installations, database backups, database maintenance, operating system patches, third party software upgrades, hardware maintenance, and hardware upgrades. If Customer requires access to the Hosted Revenue Accounting Services outside of normally available hours, Customer may request additional access through an INC, with at least ***** advance notice. NAVITAIRE will make a concerted effort to minimize impacts of scheduled downtime during Customer’s normal business hours.
 
7	Hosted Revenue Accounting Services Functionality	
The table below outlines the basic and optional products and features in NAVITAIRE’s Hosted Revenue Accounting Services that, depending on terms of the contract, as defined in this Exhibit G, Section 2, may be included in this Agreement. Such list describes features that are in force as of the Effective date. This list may be expanded or modified in the future based upon new releases.
 
Exhibit G - 79

Hosted Services Agreement
 
Hosted Revenue Accounting Services – SkyLedger
Base Functionality
General Features – SkyLedger
 
 	•	 	Captures financial events for NAVITAIRE reservation activity and relates the activity to the relevant financial accounting period.	
 
 	•	 	Maintains a historical PNR, Voucher, and Credit Shell database with a separate version whenever a financial change occurs.	
 
 	•	 	Provides periodic financial reporting with accounting period integrity.	
 
 	•	 	Provides a financial audit trail for financial activity related to the life of each PNR.	
 
 	•	 	Provides a financial audit trail for each accounting entry down to the specific transaction event detail.	
 
 	•	 	Provides data retention for PNR(s), Vouchers, Credit Shells, and accounting details.	
 
 	•	 	Includes a web based report creation tool which enables the user to create and view a set of reports.	
 
 	•	 	Provides the ability to map accounting events to airline specified general ledger accounts for reporting or electronically interfacing to the airline’s general ledger system.	
 
 	•	 	Provides financial detail in the airline’s designated “host” accounting currency without loss of the sales currency in the reporting data.	
 
 	•	 	Provides the ability to re-map transactions and automatically reprocess those affected by the mapping changes.	
 
 	•	 	Provides a pre-defined set of reports for critical accounting events with the flexibility of these reports being available in text, PDF, or Excel.	
 
 	•	 	Provides simple proration of fare over each leg within a given through segment.	
 
 	•	 	Provides flexibility to map account numbers to specific transactional data elements, e.g. aircraft type, tax code, or country code.	
Standard Reports
Accounting Reports
 
 	•	 	Account Center Balance Report. Displays account/center balances for each of the carrier’s accounts.	
 
 	•	 	Journal Entry Detail Report. Displays account/center balances grouped by Journal Entry.	
 
 	•	 	Activity Balance Report. Summarizes daily postings by account event/account type.	
 
 	•	 	Account Mappings Report. Displays all relevant information related to an account mapping for a user-specified company code, effective period, account event and account type.	
 
 	•	 	Suspense Report. Displays account items that are currently in suspense.	
Revenue Reports
 
 	•	 	Revenue by Distance. Displays base and gross revenue by seat mile/kilometer on a specific date or within a specified date range for flights between two cities.	
 
 	•	 	Revenue by Fare Class. Displays revenue by fare class on a specific date or within a specified date range.	
 
 	•	 	Revenue by Flight. Displays revenue by average seat mile/kilometer for individual flights.	
 
 	•	 	City Pair Load Factor. Displays passenger totals, load factor, ASM, Revenue, RPM, yield, RASM, and other data by city pair as well as by individual flights serving each city pair.	
 
 	•	 	Earned/Unearned Revenue. Displays information on earned and unearned revenue for flights between a designated city pair including analysis by booking date and equipment type.	
 
 	•	 	Route Profitability Report. Displays a summary of revenue and costs by route. Costs must be entered through the Expenses User Interface before the report can be used.	
Business Reports
 
 	•	 	Credit Shell/Voucher Expiration. Lists expired credit files, credit shells and vouchers for a specified time period.	
 
 	•	 	Fees and Discounts. Displays fees and discounts, by currency and type, entered into the system.	
 
 	•	 	Tax History. Displays information for selected tax payments.	
 
 	•	 	Payment Report. Displays information about payments made against a PNR grouped by date, agent or type based on parameters specified.	
 
 	•	 	Flight Reconciliation Report. Displays Flight Statistics and what has been received and accounted for within SkyLedger.	
 
 	•	 	Unearned Revenue Liability Report. This report displays unearned revenue, earned revenue, no-show revenue, expired revenue, and unearned revenue liability at an accounting period level. This report will provide the user with exposure to their unearned revenue liability (items sold, but not flown).	
 
 	•	 	Delta Report. Displays all transactions for which the total debit and credit amount do not balance for the account specified by the user	
Operational Reports
 
 	•	 	Extract Load Errors Report. Displays all transactions that could not be successfully loaded to the historical database.	
 
 	•	 	Reconciliation Report. Daily report that is used to ensure all transactions listed on the historical database are also posted to the accounting detail database with the appropriate amounts. Only discrepancies between the historical and accounting database are displayed.	
 
Exhibit G - 80

Hosted Services Agreement
 
Modules and Interfaces
Modules
 
 	•	 	PNR Load. Accept PNR XML from the NAVITAIRE reservation system and validate file, load to Temporary Database for further processing by Version History module.	
 
 	•	 	Voucher Load. Accept Voucher XML from the NAVITAIRE reservation system and validate file, load to Temporary Database for further processing by Version History module.	
 
 	•	 	Credit Shell Load. Accept Credit Shell XML from the NAVITAIRE reservation system and validate file, load to Temporary Database for further processing by Version History module.	
 
 	•	 	Flight Following Load. Accept Flight Following XML from the NAVITAIRE reservation system and validate file, load to Temporary Database for further processing by Version History module.	
 
 	•	 	PNR Version History. Version incoming PNR and insert a control row to trigger action by the accounting generator.	
 
 	•	 	Voucher Version History. Version incoming Voucher and insert a control row to trigger action by the accounting generator.	
 
 	•	 	Credit Shell Version History. Version incoming Credit Shell and insert a control row to trigger action by the accounting generator.	
 
 	•	 	Flight Following Version History. Version incoming Flight and insert a control row to trigger action by the accounting generator.	
 
 	•	 	Accounting Generator. Generate accounting transactions based on prior versions of PNR, Voucher and Credit Shell comparing differences to determine what financial events have changed.	
 
 	•	 	Account Mapping. Assign an account period, company code, journal entry, debit/ credit account/ center to a specific accounting transaction.	
 
 	•	 	Remap Request. Identify and process the transactions that must be reversed and remapped as a result of modifications to the account mapping table.	
 
 	•	 	Re-conversion Request. Identify and process the transactions that must be reversed and reposted as a result of modifications to the currency conversion rate table.	
 
 	•	 	Account Reversal. Update the accounting detail table to reverse all accounting related to the transaction key provided.	
 
 	•	 	Transaction Reconciliation. Ensure the accounting database is in sync with the historical transaction database.	
 
 	•	 	Monthly Close Processing. Perform a variety of actions related to the close of an accounting period.	
 
 	•	 	Simple Proration. Retrieve air miles for each leg within a given through segment and divide the fare among the constituent legs. Alternatively the square root of air miles can be used to divide the fare among the constituent legs.	
 
 	•	 	Expiration. Generate accounting to relieve liability related to unused transactions (PNR(s), Credit Shells, and Vouchers) following a user-specified expiration period.	
 
 	•	 	Purge. Delete fully-used, closed transactions from the historical and accounting databases following a user-specified retention period.	
 
 	•	 	General Ledger Creation. Extract all accounting records in local and/or host currency on a daily or monthly basis to be fed via XML interface into Customer’s General Ledger system.	
 
 	•	 	Agency Billing and Commission Load. Accept Agency Billing and Commission file from the NAVITAIRE reservation system, validate file, and load to database (optional).	
Interface Files
SkyLedger is populated by the XML extract files provided by the NAVITAIRE Reservation System. The main output of the SkyLedger system will be the general ledger feed, which supplies the data that can be interfaced into Customer’s financial system. Please note that each of the interface files listed below has a standard file specification and all files accepted or created by the SkyLedger system must be formatted in accordance with these file specifications.
Inputs
 
 	•	 	PNR Booking Data Extract from the NAVITAIRE Reservation System with PNR/Passenger information such as booking, flown, or payments.	
 
 	•	 	Credit Shell XML. Daily XML Extract from the NAVITAIRE Reservation System with Credit Shell information such as creation of, usage.	
 
 	•	 	Voucher XML. Daily XML Extract from the NAVITAIRE Reservation System with Voucher information such as creation of, usage.	
 
 	•	 	Flight Following XML. Daily XML Extract from the NAVITAIRE Reservation System with flight information such as origin, destination, or passenger counts.	
 
 	•	 	Agency Data XML. XML extract from the NAVITAIRE Reservation System with agent and contact information. This information is used to allow mapping by department and location for certain accounting events.	
Outputs
 
 	•	 	Standard General Ledger Feed. The NAVITAIRE standard general ledger feed, which provides SkyLedger data to Customer’s general ledger system to update the journal entry/account balances, is included at no extra cost to Customer.	
User Interfaces
SkyLedger provides a user interface for: a) viewing and managing accounts, b) viewing journals and account mappings to allow customization accounts, and c) viewing journal entries to track how transactions are applied to those specific accounts. The following six user interfaces will be included in SkyLedger:
 
 	•	 	Accounts. The accounts user interface will be used to insert, update, and delete entries from the SkyLedger account table, center table, and company account center table. These tables in turn are used to validate entries to the SkyLedger account mapping table.	
 
 	•	 	Journal Maintenance. The journal maintenance user interface will be used to insert, update, and delete entries on the SkyLedger journal entry table. This table in turn will be used to validate entries to the SkyLedger account mapping table.	
 
Exhibit G - 81

Hosted Services Agreement
 
 	•	 	Journal Approval. The journal approval user interface will be used to approve the debit/credit balance for each journal entry. Please note that this interface is intended to be used in conjunction with the SkyLedger journal entry detail report. Quality Assurance and management approval of a journal entry is required before data related to this journal entry may be bridged to the user via the automated monthly G/L feed (where the carrier has requested user-approval of the journal entry balance).	
 
 	•	 	Mappings. The mappings user interface will be used to insert, update, and delete entries from the SkyLedger account mapping table. This table in turn will be used to assign a debit account/center and credit account/center to accounting transactions based upon the type of accounting event (account event/account code) and the specific characteristics of the transaction (mapping fields). The account mapping table also enables individual accounting transactions to be classified under the proper company code and journal entry.	
 
 	•	 	Currency Maintenance. This user interface will allow the user to enter the exchange rate from each currency to the host currency at the company level with an effective date for each exchange rate.	
 
 	•	 	Service Types. This user interface will allow the carrier to identify each service type and specify whether or not the revenue related to that service will be earned at the time of booking or the time of flight.	
Revenue Accounting System Data Storage and Access
 
 	•	 	Online access for historical revenue accounting system data up to ***** from current date.	
 
 	•	 	Access to historical revenue accounting system data more than ***** to the current date is the responsibility of Customer.	
Standard General Ledger Extract
 
 	•	 	Provides a daily or monthly extract file containing account postings data.	
 
 	•	 	Allows Customer to upload the data into their financial system.	
Month End Close Process
 
 	•	 	User initiated process which is executed by NAVITAIRE operations staff.	
 
 	•	 	Provides automated closure of each accounting period.	
Hosted Revenue Accounting Services – SkyLedger
Add-on Functionality
Custom General Ledger Feed
General Features – Custom General Ledger Feed
 
 	•	 	Provides SkyLedger data to Customer’s general ledger system to update the journal entry/account balances and is based upon a custom file specification.	
Credit Card Settlement Data
General Features – Credit Card Settlement Data
 
 	•	 	Accepts credit card settlement data at the PNR level if provided by Customer’s Payment Service Provider (PSP) or NAVITAIRE’s payment service.	
 
 	•	 	Performs accounting for settled and chargeback amounts.	
 
 	•	 	Includes sixty (60) days of historical data storage.	
 
 	•	 	Must be enabled for each credit card payment service provider or bank.	
 
 	•	 	Test data will be provided to NAVITAIRE from the payment service provider or bank, to ensure the data is successful prior to going into production.	
Inbound Interline/Operating Codeshare Settlement
General Features – Inbound Interline/Operating Codeshare Settlement
 
 	•	 	Identifies bookings associated with inbound interline and operating Codeshare requests and consolidates the information for accounting and billing purposes.	
 
 	•	 	Facilitates billing and settlement by creating invoices, reports and output files.	
 
 	•	 	Functionality must be enabled for each interline/operation codeshare partner.	
 
 	•	 	NAVITIARE charges a flat fee per interline/operation codeshare partner to cover the cost of generating the settlement file.	
Additional Reports
Outward Billing Report
 
 	•	 	Displays revenue and billable tax information by flight and partner for interline transactions.	
 
Exhibit G - 82

Hosted Services Agreement
 
Additional Modules and Interfaces
Additional Interface Files
 
 	•	 	Invoice Summary Report. Displays interline invoice summary information based on the ATA/IATA Interline Passenger Summary Invoice format.	
 
 	•	 	Invoice Coupon Report. Displays interline invoice details based on the ATA/IATA Interline Passenger Summary Invoice format.	
 
 	•	 	Billing File. This file is created by SkyLedger and contains invoice and transaction details for interline billable activity. File format is based on the Interline Data Exchange Centre (IDEC) format.	
 
 	•	 	Passenger Reconciliation Data File. This file is created by SkyLedger and should be sent to the partner airline to advise them a flight has operated.	
 
 	•	 	Web F12 File. This file is an electronic claims file created by SkyLedger containing Forms One and invoice details only and enables Clearing House members to electronically communicate with the Clearing House system in order to submit electronic Forms One and generate an electronic Forms Two.	
 
 	•	 	Currency Conversion File. This file is required for SkyLedger. It can either be the IATA 5-day rate if settling through the clearinghouse, or a file of currency rates from New Skies.	
Additional User Interfaces
 
 	•	 	Interline Configuration. Allows an airline to configure various properties related to outward billing for each partner airline.	
 
 	•	 	Billing Request. Enables the airline to request the creation and transfer of one or more outward billing files/reports.	
 
 	•	 	ISC Detail Application. Allows an airline to specify specific ISC rates that apply at the segment level.	
 
 	•	 	Fares Settlement. Allows an airline to use an amount for interline and codeshare settlement which differs from the fare in the booking.	
ARC Reporting
General Features – ARC Reporting
 
 	•	 	SkyLedger accepts ARC CAT files which are validated against PNR details for fare, tax and payment.	
 
 	•	 	ARC Reconciliation report details any variances between the ARC and PNR data for fare, tax and payment	
 	•	 	Creates accounting for commission and agency debit and credit memos	
 
8	Customer Hardware, Software, Connectivity and Network Requirements	
 
 	8.1	Software Use and Upgrades. Customer is required to maintain the latest version ***** of supported NAVITAIRE and ***** related third party software as directed by the NAVITAIRE Support Center, ***** Upon receipt of upgraded software, newer versions or software, or notification of third party software updates, Customer must update their software version(s) within *****. Failure to complete the advised upgrades may result, at NAVITAIRE’s option, in the suspension of Included Support, as described in this Exhibit G, Section 5.	
 
 	8.1.1	Unless third party software is incorporated into the Hosted Services System and indicated specifically in the specifications included in this Exhibit G, neither NAVITAIRE nor such third party shall be liable for the performance or failure to perform of the other in respect to Service Level Targets.	
 
 	8.2	Equipment Specifications. The equipment specifications below outline the required, supported hardware and software necessary for the proper function and efficient operation of the Hosted Revenue Accounting Services and applicable products. Unless otherwise specified in this Section, the equipment and software listed below are the responsibility of Customer. All specifications are subject to change. Customer will be provided a minimum of thirty (30) days’ notice of incremental hardware upgrade requirements.	
SkyLedger
Workstation:
 
 	•	 	Windows XP	
 
 	•	 	Microsoft Office	
 
 	•	 	2.0 GHz Intel Pentium 4 Processor with MMX (or higher)	
 
 	•	 	512 MB RAM (or higher); AGP and PCI bus; 100-133 MHz FSB	
 
 	•	 	17” Monitor minimum	
 
 	•	 	Internet Explorer Version 7 or higher	
 
 	•	 	100 MB Network Card (with 100 MB network, end to end)	
 
Exhibit G - 83

Hosted Services Agreement
 
Network Hardware, Software, and Data Circuits
 
 	•	 	Data Circuits: Customer must already have or must install the necessary equipment and circuits to support their primary revenue accounting site and any remote locations. NAVITAIRE requires a LAN/WAN network supporting TCP/IP protocols.	
 
 	•	 	Routers, DSU/CSUs, and Modems: Customer should contact NAVITAIRE for recent information regarding supported routers and other network communication equipment.	
 
 	•	 	IP Addressing: NAVITAIRE requires that all hosted Customers use Internet Registered IP addresses on all client workstations or devices that require connectivity to the Hosted Revenue Accounting Services. Alternatively, NAVITAIRE requires a NAT (Network Address Translation) router to be installed behind the NAVITAIRE gateway router. The NAT must then have the Internet Registered IP address.	
 
 	•	 	Customer Provided Data Circuits: NAVITAIRE requires a review of the proposed primary or backup data circuit(s) prior to a third party agreement and installation. Where possible, NAVITAIRE will use reasonable effort to provide all necessary specifications and extend management of the data circuit as permitted by Customer and the third party supplying the data circuit(s).	
 
 	8.2.1	Data Circuits. Customer must arrange and pay for necessary circuits for Hosted Revenue Accounting Services file transmissions. NAVITAIRE may act as Customer’s agent to order and facilitate installation of these circuits upon written request by Customer.	
 
9	System Errors and System Changes	
 
 	9.1	System Errors	
 
 	9.1.1	System Error Definition. A System Error occurs when functionality that is included in the NAVITAIRE product user documentation is currently not working on Customer’s site in all material respects consistent with the manner that it is described in the documentation.	
 
 	Note:	Customer must refer to the documentation that matches the version of software they are running. If Customer wants a feature that is not currently included in their software version, but the feature is included in a later software version, Customer must upgrade their software to that version to be able to take advantage of the new features and functionality.	
System Errors detected during testing in Customer’s test environment should also be logged through the NAVITAIRE internet support tool with a reference to the test database code. NAVITAIRE will respond to all Emergency INCs for the test environment within *****
 
 	9.1.2	System Error Reporting. Customer may report an identified Hosted Revenue Accounting Services System Error at no additional cost using the Internet based customer support tool INC schema. A System Error is defined in Section 9.1.1 above.	
 
 	9.1.3	System Error Classification. When Customer reports an INC for a System Error, it will be assigned a priority based on the severity of the issue. These priorities will be assigned using the following table:	

 	  	Business Functionality	
Impact Analysis	  	No loss of
business
function	  	Partial loss
of business
function.
Work-around
exists.	  	Partial loss of
business
function. No
work-around
exists.	  	Complete
loss of
business
function.
Work-
around
exists.	  	Complete
loss of
business
function.
No work-
around
exists.	
Immediate impact is significant. Affects many and/or critical users.	  	*****	  	*****	  	*****	  	*****	  	*****	
Immediate impact is moderate.
Affects few and/or non-critical users.	  	*****	  	*****	  	*****	  	*****	  	*****	
Immediate impact is marginal.
Affects few or no users.	  	*****	  	*****	  	*****	  	*****	  	*****	
 
Exhibit G - 84

Hosted Services Agreement
 
An example of an ***** System Error might include:
 
 	•	 	*****.	
 
 	•	 	*****.	
An example of a ***** System Error might include:
 
 	•	 	****tely.	
An example of a ***** System Error might include:
 
 	•	 	*****.	
 
 	9.1.4	Emergency Response Procedure. In the event of a Customer Emergency, the NAVITAIRE Support Center may be contacted for assistance, according to the procedures outlined in this Exhibit G, Section 5.4.	
 
 	9.2	System Changes	
 
 	9.2.1	Change Control. Change control covers all events that impact application software, custom software, systems software, or hardware. The Change Control process effectively plans and facilitates changes to the Hosted Revenue Accounting Services system, including ownership for mitigating problems that may occur with a change to minimize any associated downtime. This function is responsible for coordinating and controlling all change administration activities (i.e., document, impact, authorize, schedule, implementation control), and determining if and when a change will be implemented in the production environment.	
 
 	9.2.2	Enhancements. An “Enhancement” is a request for a new report or application or an improvement to an existing application related to usability, performance, additional functionality, or flexibility. Enhancements will be logged in the Support Center Support tool. Such requests can be in response to:	
 
 	a)	Mandates controlled by external third parties including governments, governing industry bodies such as International Air Transport Association [IATA], Société Internationale de Télécommunications Aéronautiques [SITA], or airport authorities.	
 
 	b)	Customer requests that are initiated through a direct request, user conference, or through Customer’s NAVITAIRE Account Manager. Examples include:	
 
 	•	 	Competitive advantage	
 
 	•	 	Improved passenger services	
 
 	•	 	Specific client requirements	
 
 	•	 	Improved business management	
 
 	c)	Internal requests that are initiated through the sales cycle, Technology, Development, or NAVITAIRE line of business. Examples include:	
 
 	•	 	Cost reduction initiatives	
 
Exhibit G - 85

Hosted Services Agreement
 
 	•	 	Product obsolescence	
 
 	•	 	Corporate business plan objective	
Efforts required to develop, implement, document, and/or train on Enhancements are payable by Customer.
 
 	9.2.3	Urgency Classifications for Enhancements. Enhancements will be assigned a priority according to the criteria in the table below. If there is a disagreement as to the priority of the requested Enhancements, these will be decided between the NAVITAIRE Account Manager and the Customer Account Liaison. If this cannot be resolved at this level, it will be escalated to the respective Executive Sponsors for determination.	

Urgency	    	Description	
		
*****	    	A requirement from a business critical third party or other outside influence such as an airline buyout, purchase of another airline, a new government regulation, or a requirement that cannot be completed in a manual nature without severe negative impact. Such requests are Urgent only if a third party controls the requirement, it is non-discretionary to the customer, and the third party places an immediate time constraint on the customer.
 
Note: Documentation from the governing entity, which clearly states the nature of the requirement, the time frame allowed for implementation, and the penalties for non-compliance may be required. Due to the nature of an Emergency request, NAVITAIRE expects to receive no more than ***** such requests per year. Every attempt will be made to meet the established regulatory deadline communicated in these instances; however should the deadline be compromised NAVITAIRE will communicate specific issues that may make this deadline unattainable with an estimate of when it can be completed.	
*****	    	 
A requirement from a business critical third party or outside influence such as an airline buyout, purchase of another airline, a new government regulation, or a requirement that cannot be completed in a manual nature without severe negative impact, but DOES NOT have an immediate time constraint placed on the customer by the 3rd party.
 
Note: Such requests are classified as High to prevent them from becoming Very High/Emergencies. A new business requirement that cannot be completed in a manual nature without severe negative impact. Such requests are not Emergencies because the request is discretionary to the customer.	
*****	    	 
Supports all required Hosted Services System operations; the request is required eventually but could wait until a later release if necessary. Would enhance the product, but the product is not unacceptable if absent. More of a want than a need, but would provide benefit to the customer.	
*****	    	 
A functional or quality enhancement that corrects an aesthetic problem or improves usability from the customer’s perspective. It does not greatly affect or alter core functionality.
 
Examples:
 
•   Adding more feeds (imports or exports) to 3rd party packages for data sharing.
 
•   Making minor adjustments to screen layouts or design to increase readability.
 
•   Adjusting reports to increase readability and decrease questions to support.	
 
 	9.2.4	Releases . NAVITAIRE software changes are bundled into work units called releases. The type and content of each release will vary. As previously stated in Section 4.12 of the Agreement, Customer is responsible for maintaining current versions ***** of the NAVITAIRE software and all costs associated with implementing a release.	
 
 	9.2.5	Month End Closure. SkyLedger operates with ***** accounting periods open at all times. Prior to closing the accounting month end, Customers must ensure that following are managed:	
 
 	•	 	All flights for that month have been set to “Close” within the NAVITAIRE Reservation System.	
 
 	•	 	All no-show passengers on all flights for the month have been set to “No-Show”.	
 
 	•	 	Balance in the SkyLedger Suspense account has been cleared to “Nil” balance or to a reasonable level.	
 
Exhibit G - 86

Hosted Services Agreement
 
Customers are required to close the accounting period within the first ***** of the next month (e.g. ***** accounting month would be set to close by *****). Customers are requested to log an INC to request NAVITAIRE Operations to close the accounting month. For example:
 
 	•	 	***** accounting periods are open	
 
 	•	 	***** accounting period is closed no later than *****As soon as ***** is closed ***** accounting period will be open	
In the event Customer has not requested the earliest accounting period to be closed prior to the start of the ***** (in the example above this is *****) NAVITAIRE Operations will close the accounting period (***** in the above example). Customer will be provided ***** notice that the accounting period will be scheduled for closure. This is to ensure that September booking data can be loaded and accounting is generated without any delays.
If NAVITAIRE Operations confirms the accounting close is to be scheduled and Customer does not accept this, Customer will be responsible for any incurred costs associated with holding back and the loading of data for subsequent months. This effort is chargeable based on time and materials at the rates listed in Exhibit K.
 
Exhibit G - 87

Hosted Services Agreement
 
EXHIBIT H
(INTENTIONALLY OMITTED)
 
Exhibit H - 88

Hosted Services Agreement
 
EXHIBIT I
(INTENTIONALLY OMITTED)
 
Exhibit I - 89

Hosted Services Agreement
 
EXHIBIT J
(INTENTIONALLY OMITTED)
 
Exhibit J - 90

Hosted Services Agreement
 
EXHIBIT K
PRICE AND PAYMENT
 
1	Fee Schedule	
All fees in this Exhibit are specified in USD.
 
 	1.1	Service Fees	
 
 	1.1.1	Monthly Recurring Service Fees – Core Services:	

***** Tier	  	Hosted Reservation
Services – New Skies	 	Hosted Revenue
Accounting Services
– SkyLedger	
	  	Per *****	 	Per *****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
*****	  	*****	 	*****	
SELECTED	  	X	 	X	
 
 	a) 	***** Guarantees. Customer agrees to guarantee and pay as a ***** the total number of ***** according to the table below. This table will also be used for the purposes of calculating the minimum recurring Service Fees, effective upon the Target Date:	

*****	  	***** Guarantees*	
	  	*****	
1 (First *****)	  	*****	
2 (Following *****)	  	*****	
3 (Following *****)	  	*****	
4 (Following *****)	  	*****	
5 (Following *****)	  	*****	
*****	  	*****	
***** *****)	  	*****	
*****)	  	*****	
*****)	  	*****	
*****	  	*****	
 
*	All Host Segments and Segments booked via SkySpeed, SkySales Internet Suite, Booking API Suite, or Allotment API Suite in excess of these monthly minimum guarantees will be invoiced per terms described in Section 6.3 of the Agreement.	
*****Factors to be considered include but are not limited to the following: *****
 
 	b)	Availability Request Overage Fee is the fee applied to each Utilized Availability Request in excess of the Maximum Availability Requests Allowed *****. The fee is determined by the following Load Factor sliding scale, based on the average monthly Load Factor, and will be applied to each excess call:	
 
 	•	 	Load Factor lower *****	
 
Exhibit K - 91

Hosted Services Agreement
 
 	•	 	Load Factor between *****	
 
 	•	 	Load Factor between *****	
 
 	•	 	Load Factor greater *****	
The average monthly Load Factor is rounded to the nearest whole number to determine the fee to be applied.
Should Customer not utilize the Low Fare Finder functionality, a ***** will apply per Standard Availability Call in excess of the Maximum Availability Requests Allowed *****
 
 	c) 	***** Ratio. A ***** Ratio of ***** will apply to ***** as described in Section 1 of Exhibit A. If the established ***** Ratio is exceeded, the excess usage fees will be calculated in accordance with the Availability Request Overage Fee.	
 
 	d) 	*****.	
 
 	•	 	***** .	
For example:

 	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	 	*****	
 
 	•	 	*****means the *****.	
*****For Example: *****
 
 	1.1.2	Monthly Recurring Service Fees – Hosted Reservation Services – New Skies Add-On Products/Services:	

SELECTED	  	Products and/or Services	  	Description	  	Partners or
Connections	  	Monthly
Minimum
Recurring
Service Fee
(per partner
/
connection)	  	Included
in
Monthly
Recurring
Service
Fee	  	Monthly
Overage
Fee	
Note: If products and/or services are not part of Customer’s initial purchase, the prices listed below will remain valid for ***** following the Effective Date of the Agreement. Following this time period, the pricing for Services not previously selected in this Section is subject to change.	
	
Hosted Reservation Services – New Skies
Add-On Products/Services	
							
X	  	API Suites**	  	Booking and Voucher API Suites	  	N/A	  	*****	  	*****	  	*****	
	  		  	Check-In API Suite	  	N/A	  		  		  		
X	  	Data Store	  	Data Store Workbench	  	N/A	  	*****	  	*****	  	*****	
 
Exhibit K - 92

Hosted Services Agreement

SELECTED	  	Products and/or Services	  	Description	  	Partners or
Connections	  	Monthly
Minimum
Recurring
Service Fee
(per partner
/
connection)	  	Included
in
Monthly
Recurring
Service
Fee	  	Monthly
Overage
Fee	
Note: If products and/or services are not part of Customer’s initial purchase, the prices listed below will remain valid for ***** following the Effective Date of the Agreement. Following this time period, the pricing for Services not previously selected in this Section is subject to change.	
X	  	Type B / Teletype
Connectivity for
Operational Messaging*	  	BSM or BTM
messages
(outbound only)	  	Type B / Teletype	  	*****	  	*****	  	*****	
X	  		  	PNL/ADL/PFS
messages
(inbound and/or
outbound)	  	Type B / Teletype	  	*****	  	*****	  	*****	
X	  		  	MVT (PXA/PXB)
messages
(inbound and/or
outbound)	  	Type B / Teletype	  	*****	  	*****	  	*****	
							
X	  	All-Inclusive Pricing	  	All-Inclusive Pricing	  	N/A	  	*****	  	*****	  	*****	
N/A	  	Travel Commerce	  	Travel Commerce	  	Insurance Partners:
TBD	  	*****	  	*****	  	*****	
N/A	  		  		  	Car Partners:
TBD	  		  	*****	  	*****	
N/A	  		  		  	Hotel Partners:
TBD	  		  	*****	  	*****	
N/A	  		  		  	Activity Partners:
TBD	  		  	*****	  	*****	
							
X	  	Secure Flight/AQQ	  	Secure Flight/AQQ	  	N/A	  	*****	  	*****	  	*****	
							
X	  	Revenue Management Extract	  	Revenue
Management Extract	  	N/A	  	*****	  	*****	  	*****	
							
X	  	GoNow Agent and Kiosk***	  	GoNow Agent and
Kiosk	  	N/A	  	*****	  	*****	  	*****	
 
*	Any applicable message fees, Segment fees, or data circuits pertaining to the CRS/GDS/ARS, SITA/ARINC, and/or other Connectivity Providers are the responsibility of Customer; including, but not limited to the following:	
 
 	(1)	CRS/GDS/ARS Imposed Message Fees (applicable to CRS/GDS/ARS messages only):	
Per CRS/GDS/ARS agreement with NAVITAIRE, additional CRS/GDS/ARS fees may be billed to NAVITAIRE. Any and all such fees and/or charges attributable to Customer’s Hosted Reservations Services, will be payable by Customer to NAVITAIRE, on a monthly basis. Upon request and on a time and materials basis, NAVITAIRE will provide Customer with a copy of the CRS/GDS invoice for Type A/EDIFACT, Type B/Teletype, or other related charges with each monthly invoice.
These fees are in addition to the standard Host Reservation Services charges and are subject to any increases imposed upon NAVITAIRE by CRS/GDS/ARS. If CRS/GDS/ARS begins to assess message fees for test messages, these will also be billed cost to Customer at cost.
 
 	(2)	SITA/ARINC or other Connectivity Provider Fees:	
All fees from SITA/ARINC and/or other Connectivity Providers for routing of traffic need to be billed directly to Customer. Customer should pursue an arrangement with these providers independent of NAVITIARE.
 
 	(3)	Any hardware required.	
 
**	Customer is required to obtain a valid NAVITAIRE API NDA with each API partner prior to initiating API development efforts.	
*****		
 
Exhibit K - 93

Hosted Services Agreement
 
 	1.1.3	*****	

SELECTED	  	*****	  	*****	  	*****	  	*****)	  	*****	  	*****	
*****	  		  		  		  		  		  		
*****	
*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
*****
 
 	1.2	Implementation Fees	

SELECTED	  	Products and/or Services	  	Description	  	Partners or
Connections	  	Installation
Price
(per partner  /
connection)	  	Installation
*****
(additional
*****)	
Note: If products and/or services are not part of Customer’s initial purchase, the prices listed below will remain valid for ***** following the Effective Date of the Agreement. Following this time period, the pricing for Services not previously selected in this Section is subject to change.	
	
Hosted Reservation Services – New Skies
Core Products/Services	
						
X	  	New Skies*	  	Hosted Reservation Services	  	N/A	  	*****	  	*****	
	
Hosted Reservation Services – New Skies
Add-On Products/Services	
						
X	  	API Suites	  	Booking and Voucher API Suites	  	N/A	  	*****	  	*****	
	  		  	Check-In API Suite	  	N/A	  		  		
						
X	  	Data Store	  	Data Store Workbench	  	N/A	  	*****	  	*****	
						
X	  	Type B / Teletype Connectivity for
Operational
Messaging	  	BSM messages, BTM
messages;
PNL/ADL/PFS
messages	  	Type B / Teletype	  	*****	  	*****	
						
N/A	  	Travel Commerce	  	Travel Commerce	  	Insurance Partners:
TBD	  	 
*****	  	 
*****	
	  		  		  	 
Car Partners:
TBD	  		  		
N/A	  		  		  	 
Hotel Partners:
TBD	  		  		
N/A	  		  		  	 
Activity
Partners:
TBD	  		  		
						
X	  	Secure Flight/AQQ	  	Secure Flight/AQQ	  	N/A	  	*****	  	*****	
						
X	  	Revenue
Management Extract	  	Revenue Management Extract	  	N/A	  	*****	  	*****	
						
X	  	GoNow Agent and
Kiosk**	  	GoNow Agent and Kiosk	  	N/A	  	*****	  	*****	
 
Exhibit K - 94

Hosted Services Agreement

SELECTED	  	Products and/or
Services	  	Description	  	Partners or
Connections	  	Installation
Price
(per partner  /
connection)	  	Installation
*****
(additional
*****)	
Note: If products and/or services are not part of Customer’s initial purchase, the prices listed below will remain valid for ***** following the Effective Date of the Agreement. Following this time period, the pricing for Services not previously selected in this Section is subject to change.	
	
Hosted Revenue Accounting Services – SkyLedger
Core Products/Services	
						
X	  	SkyLedger	  	Hosted Revenue
Accounting Services	  	N/A	  	*****	  	*****	
 
*	Price includes *****.	
**	Price excludes *****.	
 
 	1.3	Support Fees	

Support Center Support	  	Fees	
Initial Support: For first ***** after implementation, ***** of included Support Center Support.	  	*****	
		
Basic Support: After initial support, ***** included Support Center Support.	  	*****	
		
Additional Training Requests Scheduled through NAVITAIRE	  	*****	
		
Additional Support, Engineer Direct Support and/or Custom Solution Development: Support Center Support and/or custom solution development resources requested through an INC or Work Order.	  	Dependent on level of resource:
 	
	  	Level	  	***** Rate	
	  	Director	  	*****	
	  	Manager	  	*****	
	  	Senior	  	*****	
	  	Engineer	  	*****	
	  	Associate	  	*****	
 
 	1.4	Other Fees	

Other Fees	  	Fees	
		
Custom Programming/Professional Services	  	*****	
		
Dedicated Account Management	  	*****	
		
Business Process and Professional Services	  	*****	
 
 	1.5	Payment of Security Deposit and Implementation Fees. *****	
***** this Agreement, ***** of all Implementation Fees are due and payable. The Implementation Fees due ***** are ***** The remaining balances of all Implementation Fees are due and payable on the earlier of: ***** as detailed in Section 3 of Exhibits A and G provided, however, that NAVITAIRE does not request a delay as described in the Exhibits. Work on the Implementation Services will commence once the Implementation Fees due ***** are paid in full.
*****
 
Exhibit K - 95

Hosted Services Agreement
 
 	1.6	Fee Commencement after Implementation. The following four (4) scenarios will determine the commencement schedule for the monthly recurring Service Fees as outlined in this Exhibit and the due date for the remaining balances of the implementation fees:	
 
 	1.6.1	Implementation by Target Date. Upon ***** availability of the Hosted Services for use by Customer; or (b) the Target Dates as detailed in Exhibits A and G; all remaining implementation fees are due and applicable monthly recurring Service Fees will commence. These fees will commence regardless of actual use of Hosted Service(s) or subsequent delay by Customer.	
 
 	1.6.2	Requested Delay by NAVITAIRE. In the event that NAVITAIRE requests a delay in order to complete remaining Implementation Services, the remaining implementation fees will be due and applicable monthly recurring Service Fees will commence only on the earlier of the actual date of completion of Implementation Services or the new Target Date and ***** NAVITAIRE will provide written notice of the new planned Target Date and outline remaining Implementation Services.	
 
 	1.6.3	Requested Delay by Customer. In the event Customer requests a delay in the completion of Implementation Services past the Target Date, remaining implementation fees are due and any monthly recurring Service Fees will remain effective. Such requested delay may result in rescheduling portions or all of the remaining Implementation Services to the next available timeframe as evaluated by NAVITAIRE, unless mutually agreed in writing otherwise. Customer will provide written notice of the new requested Target Date.	
 
 	1.6.4	Mutual Agreement for Delay. In the event that both NAVITAIRE and Customer agree to delay in order to complete the required Implementation Services, the remaining implementation fees will be due and the applicable monthly recurring Service Fees will commence on the newly agreed Target Date for the Implementation Services. ***** will document the new planned Target Date.	
 
Exhibit K - 96

Hosted Services Agreement
 
EXHIBIT L
WORK ORDER TERMS AND FORM
The purpose of this Exhibit L is to define additional Terms exclusively applicable to Professional Services and provide the Work Order form under which such Professional Services will be provided.
 
1	Additional Terms	
 
 	1.1	Acceptance: Customer’s Operation and Use of Deliverables	
 
 	1.1.1	Unless otherwise set forth in a Work Order, all Professional Services and Deliverables will be deemed accepted if Customer does not reject the Professional Services and Deliverables by providing written notice within ***** after delivery specifically identifying the manner in which the Professional Services or Deliverables fail to materially comply with their applicable specifications. Customer is responsible for its operation and use of the Deliverables and for ensuring that the Deliverables meet Customer’s requirements.	
 
 	1.2	Liability and Limited Warranties and Remedies	
 
 	1.2.1	Notwithstanding anything contained in this Agreement, the following sections will apply to the Professional Services and Deliverables, in lieu of Section 10.1 of the Agreement.	
THE AGGREGATE LIABILITY OF NAVITAIRE UNDER OR IN CONNECTION WITH ANY WORK ORDER FOR PROFESSIONAL SERVICES REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT, OR OTHERWISE), SHALL NOT EXCEED THE FEES RECEIVED BY NAVITAIRE WITH RESPECT TO THE PROFESSIONAL SERVICES AND DELIVERABLES UNDER THE APPLICABLE WORK ORDER.
For the avoidance of doubt, Section 10.4 of the Agreement shall apply to all Work Orders.
 
 	1.2.2	Notwithstanding anything contained in this Agreement, the following sections will apply to the Professional Services and Deliverables, in lieu of Section 10.2 of the Agreement:	
 
 	1.2.3	NAVITAIRE warrants that its Services will be performed in a good and workmanlike manner. NAVITAIRE agrees to re-perform any Professional Services not in compliance with this warranty brought to its attention in writing within ***** after those Professional Services are performed. Additionally, NAVITAIRE warrants that its Deliverables which are original content shall materially conform to their relevant specifications, for a period of ***** from delivery to Customer. NAVITAIRE agrees to correct any such Deliverable not in compliance with this warranty brought to its attention in writing within ***** after delivery of such Deliverable to Customer. THIS SECTION IS NAVITAIRE’S ONLY EXPRESS WARRANTY CONCERNING THE PROFESSIONAL SERVICES, ANY DELIVERABLES AND ANY WORK PRODUCT, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, CONDITIONS AND REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, INFORMATIONAL CONTENT, SYSTEMS INTEGRATION, NON-INFRINGEMENT, INTERFERENCE WITH ENJOYMENT OR OTHERWISE.	
 
 	1.2.4	Exclusions. The NAVITAIRE warranties under Section 1.3.2 of this Exhibit do not apply to any noncompliance resulting from any: (a) items furnished by Customer; (b) use not in accordance with this Agreement or any applicable Work	
 
Exhibit L - 97

Hosted Services Agreement
 
 	Orders; (c) modification, damage, misuse or other action of Customer or any third party; (d) combination with any goods, services or other items provided by Customer or any third party to the extent that the noncompliance arises out of such combination with the Deliverables provided under this work order, or (e) any failure of Customer to comply with this Agreement or any applicable Work Order to the extent that the failure to comply by the Customer causes NAVITAIRE’s noncompliance. Further, NAVITAIRE does not warrant that the Deliverables or any other items furnished by NAVITAIRE under this Agreement or any Work Order are free from bugs, errors, defects or deficiencies.	
 
 	1.2.5	Customer-Furnished Items. NAVITAIRE MAKES NO WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY CUSTOMER-FURNISHED ITEMS.	
 
 	1.2.6	Remedy. Customer’s sole and exclusive remedy for any claim arising out of the Professional Services and Deliverables shall be for NAVITAIRE, upon receipt of written notice, to use commercially reasonable efforts to re-perform the Professional Services or correct the Deliverables as stated above, or failing that, NAVTIAIRE will return the fees paid to NAVITAIRE for the portion of the work related to the breach.	
 
 	1.3	License	
 
 	1.3.1	Notwithstanding anything contained in this Agreement, the following section will apply to the Professional Services and Deliverables, in lieu of Section 7.1 of the Agreement.	
 
 	1.3.2	After acceptance of a Deliverable by the Customer, and pending final payment, NAVITAIRE hereby grants to Customer a revocable, nontransferable, non-exclusive unpaid right and license to use, copy, modify and prepare derivative works of such Deliverable for purposes of Customer’s internal business only. Upon final payment, NAVITAIRE shall grant to Customer a perpetual, nontransferable, non-exclusive, paid-up right and license to use, copy, modify and prepare derivative works of the Deliverables, for purposes of Customer’s internal business only. All licenses granted will be subject to any restrictions applicable to any third party materials embodied in the Deliverables. To the extent any Deliverable contains NAVITAIRE Confidential Information it shall be subject to Section 9 of the Agreement. All other intellectual property rights in the Deliverables shall consist of NAVITAIRE Property, as defined in Section 7.2 of the Agreement.	
 
 	1.3.3	The License does not include the right to, and Customer will not directly or indirectly: (a) grant any sublicense or other rights to any Deliverables; (b) authorize any other party to grant any sublicense with respect to any Deliverables; (c) reverse engineer, disassemble or decompile any of the Deliverables or attempt to discover or recreate the source code to any Deliverables; or (d) remove, obscure, or alter any notice of copyright, trademark, trade secret, or other proprietary right related to the Deliverables.	
 
 	1.4	Termination	
 
 	1.4.1	Unless otherwise set forth in a Work Order, either party may, upon giving ***** written notice identifying specifically the basis for such notice, terminate a Work Order for breach of a material term unless the party receiving the notice cures such breach within the ***** period. In the event a Work Order is terminated, Customer will pay NAVITAIRE for all Services rendered and expenses incurred prior to the date of termination. All provisions of this Work Order which are by their nature intended to survive the expiration or termination of this Work Order will survive such expiration or termination.	
 
Exhibit L - 98

Hosted Services Agreement
 
2	Form of Work Order	
[Customer]
WORK ORDER
INC ######
PROJECT NAME: Project Name
NAVITAIRE TEAM: Navitaire Professional Services (NPS)
NAVITAIRE POINT OF CONTACT: [SAM, CAM, or IPM]
NOTE: the rates and the dates of performance contained in this Work Order are subject to change if this Work Order is not executed within fourteen (14) days of first receipt by Customer.
This Work Order is effective as of Month Day, 20XX (engagement start date) and is entered pursuant to the                     , as amended, (the “Agreement”) by and between Navitaire LLC, a Delaware limited liability company (“NAVITAIRE”), and                     , a                      corporation (“Customer”), dated as of Month Day, 20XX.
 
1.	Scope of Work: NAVITAIRE will perform the following activities (on and/or off-site):	
 
 	•	 	Plan	
 
 	•	 	    	
 
 	•	 	Analyze	
 
 	•	 	    	
 
 	•	 	Design	
 
 	•	 	    	
 
 	•	 	Build	
 
 	•	 	    	
 
 	•	 	Test	
 	•	 	Assist Customer in resolving issues identified during QA and/or user acceptance testing results.	
 
 	•	 	Deploy	
 
 	•	 	    	
 
 	•	 	Manage Project	
 
 	•	 	Status reports will be sent to the Customer on a weekly basis.	
Out of Scope: Customer is responsible for the following:
 
 	•	 	[Add out of scope here if needed]	
 
 	•	 	Performing project management duties as required by Customer’s business needs.	
 
 	•	 	Creating and executing QA test cases and performing user acceptance testing on the solution.	
 
2.	Assumptions: The following assumptions are made:	
 
 	•	 	[Add assumptions here if needed]	
 
 	•	 	Customer shall perform those tasks and fulfill those responsibilities specified in this Work Order (“Customer Responsibilities”) so that the Service Provider can perform NPS Services and provide Deliverables. Customer understands that Service Provider’s performance is dependent on Customer’s timely and effective performance of Customer Responsibilities under this Work Order and timely decisions and approvals by Customer.	
 
 	•	 	Service Provider shall be entitled to rely on all decisions and approvals of the Customer in connection with the NPS Services or Deliverables.	
 
Exhibit L - 99

Hosted Services Agreement
 
 	•	 	NPS project management will be limited to monitoring the overall health of the engagement and is not intended to replace a project manager to manage the engagement in accordance with Customer’s needs.	
 
 	•	 	Any changes required to the Scope of Work outlined above will be addressed as follows:	
 
 	•	 	The party requesting the change(s) will submit a Change Request Form (attached hereto as Appendix A to this Work Order) and complete the details found in Section 1, Description of Change.	
 
 	•	 	Both parties will review the Change Request Form and Service Provider will complete the details found in Section 2, Scope of Change.	
 
 	•	 	If the Change Request is approved and signed by both parties, the Change Request Form will be incorporated as an attachment to this Work Order.	
 
 	•	 	If the change request is disputed by either party, the following will occur:	
 
 	•	 	The dispute will be brought to the attention of the Project Managers.	
 
 	•	 	If the Project Managers are unable to resolve the dispute they will escalate to the Customer Account Manager.	
 
 	•	 	If, after ten (10) business days, the dispute remains unresolved, either party may request that the issue be raised to an appropriate senior executive.	
 
 	•	 	Changes to the Scope of Work may be initiated at any time, prior to the completion of this Work Order, by either party if there is reasonable good faith belief that such change is required.	
 
3.	*****: The following ***** will be provided to Customer:	
 
 	•	 	***** as described in section 1, Scope of Services above.	
 
 	•	 	[Add deliverables here if needed]	
 
4.	Payment: Customer agrees to pay NAVITAIRE for the total actual work performed under this Work Order and for NAVITAIRE’s expenses outlined in Section 6 below. The actual fees and expenses for this Work Order will be invoiced to Customer on a monthly basis subject to the payment terms specified in the Agreement.	
 
5.	Estimated Dates of Performance: [Project Duration – Month Day, Year – Month Day, Year]	
The total effort estimated for this project by component:

Project Component	  	Hours	 	  	% of Total	 	
Plan	  	 	0	  	  	 	0	% 	
Analyze	  	 	0	  	  	 	0	% 	
Design	  	 	0	  	  	 	0	% 	
Build	  	 	0	  	  	 	0	% 	
Test	  	 	0	  	  	 	0	% 	
Deploy	  	 	0	  	  	 	0	% 	
Admin	  	 	0	  	  	 	0	% 	
	  	 	 	 	  	 	 	 	
ESTIMATED TOTAL	  	 	0	  	  	 	0	% 	
	  	 	 	 	  	 	 	 	
The date(s) listed are provided as an estimate only and will be modified if necessary to reflect the expected dates of performance upon execution of this Work Order. If modified, the new dates will be communicated to Customer via the Remedy INC. Work may progress up to two (2) weeks beyond the estimated completion date without any further action required by either party.
 
Exhibit L - 100

Hosted Services Agreement
 
6.	Estimated Total Dollar Amount: *****:	

Expense Component	  	Cost	 	
Resources*	  	$	0	  	
	  	$	0	  	
	  	 	 	 	
TOTAL	  	$	0	  	
	  	 	 	 	
This is a time and materials based Work Order. The hours and dollar amounts represent a good faith estimate based on information provided by Customer to the Service Provider. As such, the actual hours required to complete the NPS Services and Deliverables and/or the actual Travel and other related expenses may be more or less than the total estimated above.
 
*	Resources are applied at the rate of $XXX.XX per hour as provided for in ***** of ***** of the Agreement.	
**	Travel and other related expenses are applied as provided under ***** of the Agreement.	
 
7.	Planned Hosting Solution	
 
 	¨	Customer Hosted	
 
 	¨	NAVITAIRE Hosted (Agreement between Customer and NAVITAIRE must be reached prior to deployment of the solution)	
 
 	¨	N/A or covered in existing Hosted Reservation Services Agreement	
If the proposed solution is to be hosted by NAVITAIRE and is not already included within the scope of the Agreement, an Amendment for the hosting services will be required.
 
8.	For the avoidance of doubt, the terms and conditions of ***** of ***** of the Agreement shall apply to this Work Order.	
IN WITNESS WHEREOF , the parties hereto have executed this Work Order as of the date set forth below.

Signed for and on behalf of	 		 	Signed for and on behalf of	
			
CUSTOMER*	 		 	NAVITAIRE LLC	
					
By:	 	 	 		 	By:	 	 	
Name:	 		 		 	Name:	 		
					
Title:	 	 	 		 	Title:	 	 	
					
Company:	 	 	 		 	Date:	 	 	
					
Date:	 	 	 		 		 		
 
*	Please indicate your agreement by signing and sending to:	
Navitaire LLC
Attn: Gordon P. Evans
Fax Number: +1 (801) 947-7801
A fully-executed copy will be returned for your records.
 
Exhibit L - 101

Hosted Services Agreement
Appendix A
Change Request Form
Customer Name:
Change Request Number:
Requested By:
Customer
NAVITAIRE
Work Order INC Number:
INC
Date Submitted:
Project Name:
This Change Request is effective as of Month Day, 20xx and unless it is fully-executed by both parties: (a) the estimated dates of performance and total dollar amount will expire five (5) days after the effective date shown above; and (b) the work outlined herein will not commence.
1. Description of Change:
Provide a brief description of the change being requested. Include the reason for the change and why it should be incorporated into the current Work Order and not submitted as its own Work Order.
2. Scope of Change
Outline the impact of the change, the scope of the change, and any assumptions. List specific exclusions if they have not been addressed in the initial Work Order.
The Estimated Completion Date of Performance is Month Day, 20xx. The hours and cost are adjusted as follows:
Component
Hours
Cost
Original Work Order
$
Previously Approved Change Requests
+/-
$
Current Change Request
+/-
$
NEW ESTIMATED TOTAL
+/-
$
Exhibit L - 102

Hosted Services Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Change Request as of the date set forth below.
Signed for and on behalf of
Signed for and on behalf of
CUSTOMER*
SERVICE PROVIDER
By:
By:
Name:
Name:
Gordon P. Evans
Title:
Title:
Vice President
Company:
Date:
Date:
* Please indicate your agreement by signing and sending to:
NAVITAIRE LLC
Attn: Gordon P. Evans
Fax Number: +1 (801) 947-7801
A fully executed copy will be returned for your records.
Exhibit L - 103

Exhibit 10.55
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
EXECUTION VERSION
AIRCRAFT LEASE AGREEMENT [D]
DATED AS OF DECEMBER 31, 2012
BETWEEN
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as owner trustee
as Lessor
and
CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.
as Lessee
incorporating the provisions of an
AIRCRAFT LEASE COMMON TERMS AGREEMENT
with respect to one Airbus A320-200 Aircraft
bearing manufacturer’s serial number 5651]

TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY LESSOR.
TO THE EXTENT THE CAPE TOWN CONVENTION 2001 AND ITS PROTOCOL ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT HAVE COME INTO EFFECT IN MEXICO OR (IF DIFFERENT) IN THE STATE OF AIRCRAFT REGISTRATION, THE INTERESTS OF LESSOR, OWNER & ANY FINANCING PARTIES UNDER THIS LEASE AND/OR IN RESPECT OF THE AIRCRAFT SHALL BE CAPABLE OF REGISTRATION AS INTERNATIONAL INTERESTS IN ACCORDANCE WITH SUCH CONVENTION AND PROTOCOL.

The parties listed below as Lessee and Lessor hereby agree that Lessor will lease the Aircraft to Lessee and Lessee will take delivery of and lease the Aircraft from Lessor subject to and in accordance with the Lease for the duration of the Term and further agree in this AIRCRAFT LEASE AGREEMENT dated as of December 31, 2012 the following:	

		
Lessee:	  	Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V.	
		
Lessor:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner:	  	Wells Fargo Bank Northwest, National Association, not in it individual capacity, but solely as owner trustee under the Trust Agreement	
		
Owner Participant:	  	Celestial Aviation Trading 40 Limited	
		
Trust Agreement:                        	  	that certain Trust Agreement (2013 A320-200 D) dated as of December 7, 2012 between Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee, and Owner Participant	
		
Guarantee required:	  	As set forth in Schedule D.	
		
Guarantor:	  	As set forth in Schedule D.	
		
Aircraft:	  	One (1) Airbus A320-200 aircraft bearing manufacturer’s serial number 5651, which is certified by the Air Authority to transport at least eight (8) persons, including crew, or goods in excess of 2750 kilograms.	
		
Engines:	  	Two (2) International Aero Engines V2527E-A5 Select One engines ****	
		
Common Terms Agreement:	  	The Aircraft Lease Common Terms Agreement dated as of April 12, 2011 entered into between the Lessee and GE Capital Aviation Services Limited as in effect on the date hereof without giving effect to any subsequent amendment, supplement, waiver or other modification thereto, unless Lessor and Lessee otherwise expressly agree (hereinafter the “Common Terms Agreement” or “CTA”).	
		
State of Registry:	  	United States of America	
		
Duration of Term:	  	One hundred forty-four (144) months	
		
Manufacturer:	  	Airbus S.A.S	
	
Payments	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	****	
		
****	  	****	
 
2

			
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
	
Delivery	
		
Scheduled Delivery Month:        	  	June 2013.	
		
Final Delivery Date:	  	December 31, 2014.	
		
Delivery Location:	  	Manufacturer’s facility in Toulouse, France or Hamburg, Germany.	
		
****	  	****	
		
Lease Supplement:	  	Lessee and Lessor shall, on or before Delivery, execute and deliver a Lease Supplement substantially in form of Schedule 14 to the Common Terms Agreement in connection with filing and recording the Lease with the FAA.	
	
Technical	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
	
Insurance	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
		
****	  	As set forth in Schedule D.	
 
3

			
Redelivery	
		
Redelivery Location:	  	An FAR certified maintenance facility in El Salvador notified to Lessee by Lessor or such other location as is agreed by Lessor and Lessee in writing (the “Redelivery Location”) or such other location where the Lessee and Lessor are satisfied that any applicable Taxes are minimised, other than Taxes which the Lessee or Lessor may agree in writing to bear , provided that:
 
(a) the Final Inspection of the Aircraft shall occur at Lessee’s facility at Mexico City International Airport;
 
(b) following the Final Inspection, and provided Lessee has complied with its obligations under Section 12 and Schedule 6 of the Common Terms Agreement, Lessor will deliver to Lessee a technical acceptance certificate (“Technical Acceptance Certificate”) confirming that the Aircraft meets the Redelivery Condition whilst the Aircraft is located in Mexico City;
 
(c) immediately following Lessor’s execution of the Technical Acceptance Certificate, Lessee shall ferry the Aircraft from Mexico City to the Redelivery Location (the “Ferry Flight”); and
 
immediately following the arrival and redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, and provided Lessee has complied with its obligations under the Lease, Lessor will (a) deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in accordance with the Lease which acknowledgement shall be without prejudice to Lessor’s accrued and continuing rights under the Lease or any Other Agreement and (b) transfer an amount in Dollars equal to the actual cost incurred by Lessee in respect of the fuel, ferry permits and landing and air navigation charges required to complete the Ferry Flight to such account as Lessee shall designate in writing to Lessor.	
		
Redelivery Condition Requirements:    	  	In addition to the provisions of the Common Terms Agreement, the terms and conditions relating to the return of the Aircraft are set out in Schedule B to this Aircraft Lease Agreement.	
	
Tax	
		
Lessor/Owner Tax Jurisdiction:	  	Ireland. Owner Participant is a resident of Ireland for tax purposes under the Ireland-Mexico income tax treaty and is liable to corporate income tax in Ireland. Owner Participant does not have an office located in Mexico and does not have any directors who are Mexican residents. If the foregoing ****	
		
Subpart F Indemnity:	  	As set forth in Schedule C.	

Other	
Account for payments:	 	Transfer To :	  	****	
			
	 	SWIFT Code :	  	****	
			
	 	For Credit To :	  	****	
			
	 	Account No:	  	****	
			
	 	Sort Code:	  	****	
			
	 	IBAN:	  	****	
			
	 	US Correspondent Bank Details:	  	****	
			
	 	US Correspondent Bank SWIFT Code:	  	****	
 
4

					
Notice Details:            	  	Lessor
 
Wells Fargo Bank Northwest, National Association,
as Owner Trustee
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, UT 84111
 
Attn: Corporate Trust Department
 
Fax: (801) 246-5053
 	  	Lessee
 
Concesionaria Vuela Compañía de
Aviación, S.A.P.I. de C.V.
Avenida Antonio Dovalí Jaime 70 piso 13, torre B
Col. Zedec Santa Fe
01210 Mexico D.F.
Delegacion Alvaro Obregon, Mexico
 
Attn: Director Juridico
 	
	  	E-mail: CTSLeaseGroup@wellsfargo.com
 
with a copy to:
 
Celestial Aviation Trading 40 Limited
c/o GE Capital Aviation Services Limited
Aviation House
Shannon
Co. Clare
Ireland
 
Attn: Contracts Leader
 
Fax: +353 61 706867
 
E-mail: asanotices@gecas.com	  	E-mail: sergio.rabago@volaris.com.mx	
ALL THE PROVISIONS OF THE SCHEDULES HERETO AND THE AIRCRAFT LEASE COMMON TERMS AGREEMENT DATED APRIL 12, 2011, ENTERED INTO BY AND BETWEEN GE CAPITAL AVIATION SERVICES LIMITED AND THE LESSEE ARE INCORPORATED BY REFERENCE HEREIN AND ARE PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN FULL HEREIN AND SHALL BE BINDING UPON LESSOR AND LESSEE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY ITS SIGNATURE BELOW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT THE LEASE OF THE AIRCRAFT HEREUNDER IS SUBJECT TO THE TERMS OF THE COMMON TERMS AGREEMENT AND THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET OUT IN FULL HEREIN.
No provision of this Lease, including any provision of the Schedules or the Common Terms Agreement, may be amended, changed, waived, discharged, terminated or otherwise modified in any way whatsoever, except by a writing signed by the party to be charged. Pursuant to and to comply with sub-section (2) of Section 2A-208 of the UCC, if and to the extent applicable, Lessor and Lessee acknowledge their agreement to the provisions of this paragraph by their signatures below.
 
5

Wells Fargo Bank Northwest, National Association, is entering into this Agreement and any other documents related to the Lease or the Aircraft solely in its capacity as owner trustee under the Trust Agreement and not in its individual capacity, and in no case shall Wells Fargo Bank Northwest, National Association, be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest, National Association shall be personally liable hereunder for its gross negligence or willful misconduct, for its breach of its covenants, representations and warranties contained herein or in the Common Terms Agreement, to the extent covenanted or made in its individual capacity, and for a failure to distribute in accordance with the Trust Agreement any amounts received and distributable by it hereunder.
Notwithstanding any provision to the contrary contained in this Aircraft Lease Agreement or in the CTA, in the event of a conflict between the provisions of this Aircraft Lease Agreement and the provisions of the CTA, the provisions of this Aircraft Lease Agreement shall control and prevail for such conflict.
[SIGNATURE PAGE FOLLOWS]
 
6

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement, each by its duly authorized representative(s), as of the date shown at the beginning of this Aircraft Lease Agreement.

LESSOR:	 		 	LESSEE:	
			
WELLS FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement	 		 	CONCESIONARIA VUELA COMPAÑÍA DE
AVIACIÓN, S.A.P.I. DE C.V.	
					
By:	 	/s/ David Wall	 		 	By:	 	/s/ Mario E. Geyne Pliego	
Name:	 	David Wall	 		 	Name:	 	Mario E. Geyne Pliego	
Title:	 	Assistant Vice President	 		 	Title:	 	Financial and Fleet Planning Director	
Signed at:	 	Utah	 		 	Signed at:	 	 	
 
-Signature Page-
-Aircraft Lease Agreement [D]-

SCHEDULE A
Delivery Condition Requirements
The Delivery Conditions described below are solely a description of such condition precedent and shall not be construed as a representation, warranty or agreement of any kind whatsoever, express or implied, by Lessor with respect to the Aircraft or its condition, all of which have been disclaimed by Lessor and waived by Lessee as set forth in the Lease, including in the Common Terms Agreement.
****
Lessee hereby represents and warrants to Lessor that as of the Date hereof it has not entered, and at Delivery will not have entered, into any agreement with Airbus without Lessor’s knowledge and written consent (which consent shall not be unreasonably withheld) which would amend or modify the Aircraft Detail Specification (as defined in the Aircraft Purchase Agreement) in respect of the Aircraft, except to the extent such modification is:
 
(a)	required by applicable law or regulation; or	
 
(b)	is made by the Manufacturer in conformity with Manufacturer’s rights under the Purchase Agreement; or	
 
(c)	is either an upgrade of the Detail Specification to Issue 8 or is made due to the evolution on the specifications prior to Delivery.	
 
A-1

EXHIBIT A

-Exhibit A-

SCHEDULE B
Redelivery Condition Requirements

Redelivery Check	  	The next relevant complete block check so that all Airframe inspections and tasks falling due (including without limitation CPCP and SSI programs) within the next check interval stipulated in the Manufacturer’s Maintenance Planning Document (previously defined by the Manufacturer as “C” check intervals and, as of the date of this Agreement, ****Flight Hours, ****Cycles and **** Months) in accordance with Lessee’s Maintenance Program and the then current Manufacturer’s Maintenance Planning Document (to the extent that the Lessee’s Maintenance Program does not comply with the then current Manufacturer’s Maintenance Planning Document) have been accomplished.	
		
Airworthiness Standard:	  	Suitable for immediate operation under FAR Part 129 or EU – OPS1 with an FAA Standard Certificate of Airworthiness, or an export certificate of airworthiness from the State of Registry to a country designated by Lessor no later than **** days prior to the Expiry Date which requirements are not further restrictive than those required to operate under FAR part 129.	
		
Configuration:	  	The Aircraft shall be in the same configuration as at Delivery or as may otherwise be acceptable to Lessor or permitted or required pursuant to the terms of the Lease.	
		
Livery:	  	Shall be freshly repainted in livery as advised by Lessor no later than **** month prior to the Expiry Date, which shall be of no more complexity and otherwise reasonably equivalent to Lessee’s livery and with the fuselage and empennage paint stripped, and the wings paint sanded prior to the application of the livery paint.	
		
Airworthiness Directives	  	Airworthiness Directives mandated during the Term and which require to be fulfilled before the expiry of the AD Compliance Period shall be accomplished before the Return Occasion.	
		
Engine Thrust Setting:	  	The Engine Thrust Setting shall be ****	
		
Minimum Engine Cycles:	  	****Cycles.	
		
Minimum Engine LLP Cycles:    	  	****Cycles.	
		
Minimum Engine Flight Hours:	  	****Flight Hours.	
		
Required EGT Margin	  	The EGT margin will be sufficient as referenced by Sage/Remote Diagnostics Performance Date and maximum power assurance runs to ensure that the Engine will remain on-wing (without restriction) for the Minimum Engine Cycles and Minimum Engine Flight Hours until the next expected removal for an Engine Refurbishment.	
		
Minimum Landing Gear Calendar Time:	  	**** months.	
		
Minimum Landing Gear Cycles:	  	****Cycles.	
		
Landing Gear:	  	Will have full back to birth traceability for Landing Gear Life Limited Components and shall have TSN/TSO and CSN/CSO recorded with wheels and brakes having no more than **** wear.	
		
Minimum Component Calendar Life:	  	**** months.	
		
Minimum Component Cycles:	  	****Cycles.	
		
Minimum Component Flight Hours:	  	****Flight Hours.	
 
B-1

			
		
Minimum APU Limit:	  	There shall not be more than **** APU Hours since the last medium repair in accordance with Lessee’s Maintenance Program, which shall include as a minimum a complete disassembly of the power station.	
		
Additional Redelivery Condition Requirements:	  	Any replacement life limited Part installed in the Landing Gear and/or Engine(s) during the Term shall have full back-to-birth traceability such that the Aircraft Documents and Records shall clearly demonstrate the history of each such replacement life limited Part back to the original entry into service of that replacement life limited Part.	

B-2

SCHEDULE C
Subpart F Indemnity
Lessor has assumed that neither Lessor nor any of the Tax Indemnitees will be subject to United States income tax under Subpart F of the United States Internal Revenue Code of 1986, as amended (the “Code”), with respect to income from the Lease nor will the Aircraft be treated as “United States property” for purposes of Subpart F of the Code (“Subpart F Assumption”).
 
(a)	Usage Covenant: To support Lessor’s or other applicable Tax Indemnitee’s entitlement to the treatment contemplated by the Subpart F Assumption, Lessee agrees that in each calendar year during the Term the Aircraft will be used for the transportation of passengers or property between airports at least one of which is located outside of the United States and the Aircraft will be used predominantly outside the United States.	
For the purpose of paragraph (a), the Aircraft will be considered to be used predominantly outside the United States if either:
1) the Aircraft will be located outside the United States more than **** per cent of the time; or
2) more than **** per cent of the miles traversed in the use of the Aircraft will be traversed outside the United States.
For the purpose of paragraph (a), references to the United States include the Commonwealth of Puerto Rico and the possessions of the United States (American Samoa, The Commonwealth of the Northern Mariana Islands, Guam, and The U. S. Virgin Islands) and references to Aircraft include a separate reference to each Engine.
Lessee will make available to Lessor any records relating to the use and location of the Aircraft and each Engine, to the extent used separately from the Airframe, that Lessor may reasonably request to fulfill Lessor’s or any Tax Indemnitees’ tax reporting, filing, audit or litigation requirements and will otherwise reasonably co-operate with any reasonable requests of Lessor with respect to compliance with requirements for achieving the treatment contemplated by the Subpart F Assumption.
 
(b)	Remedies: If Lessee breaches any of the covenants contained in paragraph (a), Lessor or the relevant Tax Indemnitee shall be entitled to receive as an indemnity, subject to Section 5.10 of the Common Terms Agreement, the amount of U. S. income tax that would not have been incurred but for the loss of the tax treatment contemplated by the Subpart F Assumption relating in whole, or in part, to such breach plus the amount of any interest, penalties and additions to tax payable by Lessor or the relevant Tax Indemnitee. Any such indemnity payments will be due within ****days after Lessee’s receipt of a written notice from Lessor describing in reasonable detail the circumstances of such loss, the amount of such loss, and the payment due.	
 
C-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
INTENTIONALLY OMITTED FROM THE VERSION OF THIS DOCUMENT FILED
WITH THE FAA AS CONTAINING CONFIDENTIAL AND PROPRIETARY
INFORMATION.
 
D-1

SCHEDULE D
CONFIDENTIAL COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial terms set forth in this Schedule D shall apply to the lease of the Aircraft under this Aircraft Lease Agreement.
In addition, Lessor and Lessee understand and agree that the commercial and financial information contained in this Schedule D are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Schedule D as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its agents, representatives, advisors, employees, counsel, underwriters, auditors, investors, financing parties, head lessors and sub-lessees as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other Government Entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information contained herein or therein pursuant to any such applicable Law, Lessor, Lessee or the assignee of either of them, as the case may be, shall request and use its all reasonable efforts to obtain confidential treatment of this Schedule D and the other party will cooperate in making and supporting any such request for confidential treatment.

Guarantee	
		
Guarantee required:	  	*****	
		
Guarantor:	  	*****	
	
Payments	
		
Rent:	  	Rent shall be payable monthly in advance in an amount calculated pursuant to the formula below:
*****
On the Quotation Date (as defined below), GECAS shall provide either:
*****
***** shall request each dealer for quotes on ****
For purposes hereof, the term “ Quotation Date ” means the date ***** prior to the delivery date of each aircraft.	
		
Supplemental Rent Applies:	  	*****	
		
Supplemental Rent Redelivery Adjustment Payments Applies:	  	*****	
		
Lessor Maintenance Contribution Obligation Applies:	  	*****
Provided no Default has occurred and is continuing, Lessor will pay (as a separate and independent obligation and not as a return of Supplemental Rent) the following amounts to Lessee by way of *****
*****
*****
*****
*****
*****
*****
(E) In respect of any amounts which, but for the continuance of an Event of Default, would have been paid to or for the benefit of Lessee pursuant to paragraphs*****
All invoices submitted for a Lessor contribution must *****
Lessor accepts that Lessee may not be able to *****	
																			
Assumed Ratio Adjustment Table:	  	Applicable Assumed Ratio Adjustment Table for each Engine prior to the first Engine Refurbishment of that Engine since new:	
	  	Hour Cycle Ratio:	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	Engine Supplemental Rent Rate:	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
		
	  	Applicable Assumed Ratio Adjustment Table for each Engine following the first Engine Refurbishment of that Engine since new:	
										
	  	Hour Cycle Ratio:	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	
	  	Engine Supplemental Rent Rate:	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	  	*****	

			
Engine Supplemental Rent Rate:	  	In lieu of Lessee making full cash Engine Supplemental Rent payments on a monthly basis, Lessee shall
(a)*****
(i)***** and
(ii)***** following the completion of the ***** and
(b)*****	

Engine Supplemental Rent Letter of Credit:	  	Lessee shall provide ***** on the ***** with irrevocable, standby Letters of Credit which shall secure Lessee’s *****
Lessee agrees that it shall provide a such Supplemental Rent Letter of *****
*****
*****
*****
Following redelivery of the Aircraft in accordance with the Lease, *****	
		
Engine Refurbishment:	  	For the purposes of this Aircraft Lease Agreement, Lessor and Lessee
agree that:
(a)     Engine Refurbishment shall mean, with respect to any Engine, an engine shop visit at which a *****
(b)     Engine Manufacturer Maintenance Management Plan shall mean the recommended maintenance program for an Engine issued by the Engine Manufacturer as in effect at the time of any applicable determination; and
(c)    Engine Supplemental Rent payments made by Lessee and any payment by Lessor by way of *****
 
LPC: *****
FAN: *****
HPC: *****
HPT: *****
LPT: *****	
		
Engine LLP
Supplemental Rent
Rate:	  	*****	
		
Airframe 6 Year Structural Check Supplemental Rent Rate:	  	***** for each calendar *****	
		
Airframe 12 Year Structural Check Supplemental Rent Rate:	  		
		
APU Supplemental Rent
Rate:	  	*****	
		
Landing Gear Supplemental
Rent Rate:	  	***** for each calendar *****	
		
Annual Supplemental Rent
Adjustment:	  	***** The Supplemental Rent Rates shown will be escalated from *****	
		
Deposit:	  	Lessee shall pay a Deposit ***** in an amount equal to the sum of ***** payable at the following times and in the following amounts:
 
a)*****and
b)      an amount equal to *****
 
Lessee shall have the option to replace all or part of the Deposit *****	
	
Technical	
AD Sharing Applies:	  	*****	
		
AD Threshold:	  	*****	
		
AD Factor:	  	*****	
		
AD Compliance Period:	  	*****	

Airframe Structural Check	  	*****	
		
PMA Parts	  	PMA Parts may be installed in the Airframe provided always that such parts:
 
(a)*****
(b)*****
 
Lessor and Lessee agree to continue to discuss, in good faith, whether *****	
		
Airframe 4C/6 Year Check
Supplemental Rent	  	The definition of “Airframe 4C/6 Year Check Supplemental Rent” in the CTA shall be amended and restated in its entirety as follows and all references in the CTA to “Airframe 4C/6 Year Check Supplemental Rent” shall be deemed references to Airframe 6 Year Check Supplemental Rent: *****	
		
Airframe 8C/12 Year Check
Supplemental Rent	  	The definition of “Airframe 8C/12 Year Check Supplemental Rent” in the CTA shall be amended and restated in its entirety as follows and all references in the CTA to “Airframe 8C/12 Year Check Supplemental Rent” shall be deemed references to Airframe 12 Year Check Supplemental Rent: *****	
	
Insurance	
		
Agreed Value:	  	*****	
		
Damage Notification
Threshold:	  	*****	
		
Deductible Amount:	  	*****	
		
Minimum Liability
Coverage:	  	*****	
	
Other	
		
Permitted Sub-Lessees	  	*****	
 
B-2