AIRCRAFT LEASE AGREEMENT Dated as of March 9, 2007 BETWEEN CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. DE C.V. as LESSEE and INTERNATIONAL LEASE FINANCE CORPORATION as LESSOR

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

2.3 General Definitions.

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

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

“Airframe” means the airframe listed in the Estoppel and Acceptance Certificate executed at Delivery together with all Parts relating thereto (excluding each Basic Engine or engines and the APU).

“Airworthiness Directives” or “ADs” means all airworthiness directives (or equivalent) applicable to the Aircraft issued by any one or more of the Aviation Authority, DGAC, FAA and EASA.

“APU” means (a) the auxiliary power unit of the Aircraft listed in the Estoppel and Acceptance Certificate executed at Delivery, (b) any replacement auxiliary power unit acquired by LESSOR and leased to LESSEE pursuant to Article 19.6 following a Total Loss of the APU and (c) all Parts installed in or on such APU at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in LESSOR in accordance with the terms of Article 12.4.

ARTICLE 2

“Aviation Authority” means the Federal Aviation Administration of the Department of Transportation or any successor thereto under the Laws of the United States of America or any Government Entity which under the Laws of the United States of America from time to time has control over civil aviation or the registration, airworthiness or operation of aircraft in the United States of America. If the Aircraft is registered in a country other than the United States of America, “Aviation Authority” means the agency which regulates civil aviation in such other country.

“Aviation Documents” means any or all of the following which at any time may be obtainable from the Aviation Authority: (a) if required, a temporary certificate of airworthiness from the Aviation Authority allowing the Aircraft to be flown after Delivery to the State of Registration, (b) an application for registration of the Aircraft with the appropriate authority in the State of Registration, (c) the certificate of registration for the Aircraft issued by the State of Registration, (d) a Standard Certificate of Airworthiness for the Aircraft specifying transport category (passenger), (e) an air transport license, (f) an air operator’s certificate, (g) such recordation of LESSOR’s title to the Aircraft and interest in this Lease as may be available in the State of Registration and (h) all such other authorizations, approvals, consents and certificates, if any, in the State of Registration as may be required to enable LESSEE lawfully to operate the Aircraft.

“Basic Engine” means, with respect to an Engine, the Engine Manufacturer’s engine modules, components and systems as specified in the Engine Manufacturer’s delivered xxxx of material for that engine model. The “Basic Engine” does not include the nacelle, installed components related to the Aircraft systems, thrust reversers, quick engine components (QEC), primary exhaust nozzle and any other Parts which are not considered by the Engine Manufacturer to be part of a “basic engine”.

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

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

“Cape Town Convention” means both the Convention and the Protocol.

“Consolidated Text” means the Consolidated Text of the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment.

ARTICLE 2

“Convention” means the Convention on International Interests in Mobile Equipment which was adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa as it may be amended from time to time.

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

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

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

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

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

“DGAC” means the French Direction Générale de l’Aviation Civile or any successor thereto.

“Dollars”, “$” and “US$” mean the lawful currency of the U.S.

“EASA” means the European Aviation Safety Agency or any successor thereto. Where it is stated in this Lease that a repair station or a repair, overhaul or maintenance facility will be an “EASA-approved” station or facility, such station or facility must be approved by EASA to perform maintenance and repair work on the Aircraft, an Engine or Part submitted to it for maintenance or repair, as applicable.

“Engine” means (a) each of the engines listed on the Estoppel and Acceptance Certificate; (b) any replacement engine acquired by LESSOR and leased to LESSEE pursuant to Article 19.5 following a Total Loss of an Engine; and (c) all Parts installed in or on any of such engines at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in LESSOR in accordance with the terms of Article 12.4.

“Eurocontrol” means the European Organization for the Safety of Air Navigation established by the Convention related to the Co-operation for the Safety of Air Navigation (Eurocontrol) signed on December 13, 1960, as amended.

ARTICLE 2

“Engine Manufacturer” means IAE International Engines A.G.

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

“FAA” means the Federal Aviation Administration of the U.S. Department of Transportation or any successor thereto under the Laws of the U.S. Where it is stated in this Lease that a repair station or a repair, overhaul or maintenance facility will be an “FAA-approved” station or facility, such station or facility must be approved by the FAA to perform maintenance and repair work on the Aircraft, an Engine or Part, as applicable.

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

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

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

“International Registry” means the international registration facilities established for the purposes of the Cape Town Convention.

“JAA” means the Joint Aviation Authorities, an associated body of the European Civil Aviation Conference.

“JARs” means the EASA/JAA regulations, as amended from time to time, or any successor regulations thereto.

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

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

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

ARTICLE 2

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

“Manufacturer” means Airbus S.A.S. “Mexico” means the United Mexican States.

“MPD” means the then-current Maintenance Planning Document published by Manufacturer and applicable to the Aircraft. With respect to the hour/cycle/calendar time limitation of Parts and inspections, references to the MPD mean the most restrictive limitation set forth therein.

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

“Part” means any part, component, appliance, system module, engine module, accessory, material, instrument, communications equipment, furnishing, LESSEE-furnished or LESSOR-purchased equipment or other item of equipment (other than complete Engines or engines or the APU) for the time being installed in or attached to the Airframe, any Engine or the APU or which, having been removed from the Airframe, any Engine or the APU, remains the property of LESSOR in accordance with Article 12.4.

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

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

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

ARTICLE 2

“Prohibited Country” means any country other than Mexico to which the export and/or use of an Airbus A319-100 aircraft with V2524 engines attached thereto is not permitted under (a) any United Nations sanctions, (b) the Council Regulation (EC) No. 149/2003 which updates and amends Council Regulation (EC) 1334/2000, (c) the United States Export Administration Act 1979 (as amended) or any successor legislation and/or the Export Administration Regulations promulgated thereunder, (d) where applicable, the various regulations administered from time to time by the Office of Foreign Assets Control of the U.S. Treasury Department, (e) any similar or corresponding legislation then in effect in the U.S., the United Kingdom, France, Spain or Germany or (f) any subsequent United Nations Sanctions Orders the effect of which prohibits or restricts the export and/or use of Airbus A319-100 aircraft with V2524 engines attached thereto to such country. Prohibited Country will be defined by applicable regulations as modified, amended or superceded from time to time.

“Protocol” means the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment which was adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa, as it may be amended from time to time.

“Return Check” means the accomplishment of the subsequent “C” check (or equivalent) of the Aircraft in accordance with the MPD (including all non-routine work generated as a result of performance of such MPD tasks) to clear the Aircraft for the next 20 months, 6,000 hours and 4,500 cycles of operation from the Termination Date. For avoidance of doubt, if the inspection interval pursuant to the MPD for a particular task only refers to one or two of the three measurements above (i.e. months, hours or cycles), then only those particular measurements referred to in the MPD will be utilized in determining whether the task must be performed.

“Qualified Performance Restoration” means that the gaspath core major module of an Engine shall have, as a minimum, a Refurbishment accomplished in accordance with the Engine Manufacturer’s current V2500 Maintenance Management Plan recommendations. The gaspath core major module shall consist of the high pressure compressor module, diffuser/combustor group, outer/inner combustion xxxxxxxx, No. 4 bearing, high pressure turbine stage one nozzle vane group and high pressure turbine module. For the sole purposes of this paragraph, the term “Refurbishment” means the Engine Manufacturer’s definition of a refurbishment as stated in the then-current V2500 Maintenance Management Plan recommendations at the time of the applicable shop visit.

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

ARTICLE 2

PLACE AND DATE OF DELIVERY

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

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

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


Terms		Article
Agreed Value		19.1
Airframe Reserves (6 Year Check)		5.4.1
Airframe Reserves (12 Year Check)		5.4.1
APU Reserves		5.4.1
Default Interest		5.7
Delivery Location		3.1
Engine LLP Reserves		5.4.1
Engine Performance Restoration Reserves		5.4.1
Expenses		17.1
Expiration Date		4.3
Extension Lease Term		4.2
FHA Agreement		13.3
Future Agreements		28.8
Indemnitees		17.1
Initial Lease Term		4.1
Landing Gear Reserves		5.4.1
Lease Term		4.1
LESSEE Customization Costs		5.3.1
LESSOR’s Assignee		24.2.1
LESSOR’s Bank		5.6
LESSOR’s Lender		24.3
Modification		12.9.1
Net Total Loss Proceeds		19.1
OEM Parts		1722
Operative Documents		20.1.3
PMA Parts		17.2.2
Rent		5.3.1
Reorganization Transaction		20.7.5
Reorganized Entity		20.2.5
Reserves		5.4.1
Scheduled Delivery Date		3.2
Security Deposit		5.1.1
Taxes		16.1
Termination Date		4.4
Total Loss		19.
Total Loss Date		19.1
Total Loss Proceeds		19.1
Transaction Fee		5.2
Transfer		24.2.1
Waste Expense		13.4

ARTICLE 2

DEFINITIONS

ARTICLE 3

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

3.8 Scheduled Delivery Date. As of the date of this Lease, delivery of the Aircraft from Manufacturer to LESSOR and LESSOR to LESSEE is scheduled to occur in the month of April 2008. LESSOR will notify LESSEE from time to time and in a timely manner of the exact date on which LESSOR expects Delivery to take place (the “Scheduled Delivery Date”).

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

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

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

3.12 Cancellation for Delay. Promptly after LESSOR becomes aware that in Manufacturer’s opinion a delay will cause Delivery to be delayed beyond October 30, 2008, LESSOR will notify LESSEE. By written notice given within ten (10) Business Days after LESSEE’s receipt of such LESSOR notice, either party may by written notice to the other party terminate this Lease and this Lease will terminate on the date of receipt of such notice. In the event of such termination, neither party will have any further liability to the other party except that LESSOR will return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent, and if LESSOR subsequently collects (at its discretion) from Manufacturer monetary damages as compensation for such delay, LESSOR shall share such compensation (minus any out of pocket costs incurred by LESSOR in pursuing such damages) equally with LESSEE. If neither party gives notice of termination within such ten (10) Business Days, both parties lose all right to terminate under this Article 3.6 unless otherwise agreed in writing by the parties.

ARTICLE 3

PLACE AND DATE OF DELIVERY

ARTICLE 4

LEASE TERM AND EXTENSION OPTION

4.5 Initial Lease Term. The term of leasing of the Aircraft will commence on the Delivery Date and continue for an initial lease term of ten (10) years (“Initial Lease Term”).

4.6 Lease Extension Option. So long as no Default or Event of Default has occurred and is continuing hereunder on the date of exercise of the option, LESSEE will have two (2) options to extend the term of the Lease for a period of one (1) year each from the then-existing Expiration Date (the “Extension Lease Term”). In order to exercise an option, LESSEE must give written notice to LESSOR not less than ten (10) months prior to the then-existing Expiration Date of this Lease. Any notice given by LESSEE in accordance herewith will be irrevocable.

4.7 “Lease Term” and “Expiration Date”. “Lease Term” means the term of leasing commencing on the Delivery Date and terminating on the Expiration Date. “Expiration Date” means the date on which LESSEE is required to redeliver the Aircraft to LESSOR in the condition required by this Lease on the last day of the Initial Lease Term or Extension Lease Term, if and as applicable.

4.8 “Termination Date”. If LESSEE returns the Aircraft to LESSOR on the Expiration Date in the condition required by Article 23, then “Termination Date” has the same meaning as “Expiration Date”. If LESSEE does not do so, then “Termination Date” means the date on which the first of the following events occurs:

(a) there is a Total Loss of the Aircraft prior to Delivery pursuant to Article 3.5;

(b) cancellation of this Lease occurs pursuant to Article 3.6;

(d) prior to the Expiration Date, LESSOR repossesses the Aircraft or otherwise terminates this Lease and recovers possession and control of the Aircraft following an Event of Default;

(e) an Event of Default occurs hereunder by LESSEE returning the Aircraft in the condition required by this Lease after the Expiration Date; or

(f) after the Expiration Date, LESSOR repossesses the Aircraft or otherwise terminates this Lease and recovers possession and control of the Aircraft following an Event of Default.

ARTICLE 4

LEASE TERM AND EXTENSION OPTION

ARTICLE 5

SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND OTHER PAYMENTS

5.15 Security Deposit.

5.15.1

LESSEE will pay LESSOR a security deposit of ***** for its lease of the Aircraft (the “Security Deposit”). The Security Deposit is payable as follows (in US$):


Payment Date	Amount
Received		*****
Within two (2) Business Days after execution of the Lease		*****
April 1, 2007		*****
May 1, 2007		*****
June 1, 2007		*****
July 1, 2007		*****
August 1, 2007		*****
September 1, 2007		*****
October 1, 2007		*****
November 1, 2007		*****
December 1 2007		*****

5.15.2

The Security Deposit may be commingled with LESSOR’s general funds and any interest earned on such Security Deposit will be for LESSOR’s account. If the Security Deposit is reduced below the required amount by application to meet LESSEE’s unperformed obligations under this Lease, LESSEE will replenish the Security Deposit within ten (10) days after LESSOR’s written demand therefor in accordance with the provisions of Article 26.1. The Security Deposit will serve as security for the performance by LESSEE of its obligations under this Lease and any other agreements between LESSEE and LESSOR or any direct or indirect subsidiary of LESSOR relating to aircraft, engines, aircraft equipment or the extension of credit and may be applied by LESSOR upon the occurrence of an Event of Default hereunder or of a default by LESSEE under any such other agreements.

5.15.3

Upon termination of this Lease in accordance with Article 4.4 other than if an Event

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

ARTICLE 5

SECURITY DEPOSIT, TRANSACTION FEE,

RENT, RESERVES AND OTHER PAYMENTS

of Default has occurred and is continuing, LESSOR will return to LESSEE the amount of the Security Deposit then held by LESSOR (so long as no default by LESSEE exists under any other agreement between LESSEE and LESSOR relating to aircraft, engines or aircraft equipment or the extension of credit by LESSOR to LESSEE), without interest, less an amount determined by LESSOR to be a reasonable estimate of the costs, if any, which LESSOR will incur to remedy any unperformed obligations of LESSEE under this Lease, including the correction of any discrepancies from the required condition of the Aircraft on return of the Aircraft.

5.16 Transaction Fee. Within two (2) Business Days after execution of this Lease, LESSEE will pay LESSOR a nonrefundable transaction fee of ***** (the “Transaction Fee”).

5.17 Rent.

5.17.1

LESSEE will pay LESSOR the following amounts monthly in advance as rent for the Aircraft (“Rent”):

Lease Term: Payable monthly in advance and equal to the sum of:

(a)

***** per month expressed in January 2006 U.S. Dollars*

*The above base rent is expressed in January 2006 U.S. Dollars and will increase in accordance with Airbus’s announced escalation rates for the period from and including the 1^st day of January 2006 through and including the delivery month of the aircraft, compounded monthly; provided, however, that the escalation of such base rent will not exceed a rate of ***** for each whole year following January 2006 or a proportional part of ***** for such lesser periods.

plus

(b)

***** per month

plus

(c) the “LESSEE Customization Costs” amortized over the Lease Term, together with interest thereon at a rate equal to the Prime Rate in effect at Delivery

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

ARTICLE 5

SECURITY DEPOSIT, TRANSACTION FEE,

RENT, RESERVES AND OTHER PAYMENTS

The “LESSEE Customization Costs” consist of the cost of (i) all agreed-to BFE (whether buyer-furnished equipment or seller-purchased equipment) paid for by LESSOR in place of or in addition to LESSEE’s baseline BFE for the Aircraft as specified in Exhibit A and (ii) all other agreed-to changes to LESSEE’s baseline specification specified in Exhibit A paid for by LESSOR.

Any increases to the above base rent will be calculated immediately prior to Delivery.

5.17.2

The first payment of Rent during the Lease Term will be paid no later than three (3) Business Days prior to the Scheduled Delivery Date. Each subsequent payment of Rent will be due monthly thereafter no later than the same day of the month as the Delivery Date of the Aircraft except that, if such day is not a Business Day, the Rent will be due on the immediately preceding Business Day. If Delivery occurred on the 29^th, 30^th or 31^st of the month and in any given month during the Lease Term in which a Rent payment is due there is no such corresponding date, Rent will be payable on the last Business Day of such month. In the event that LESSEE has paid the first payment of Rent three (3) Business Days prior to the Scheduled Delivery Date and Delivery is subsequently delayed for a period in excess of ten (10) days, LESSOR shall return such Rent payment to LESSEE at LESSEE’s request, unless LESSOR advises LESSEE in writing that the Aircraft will be delivered in the next seven (7) days from the date of such request.

5.18 Reserves.

5.18.1

LESSEE will pay to LESSOR supplemental Rent, based on LESSEE’s use of the Aircraft during the Lease Term, in the form of the following reserves in the following amounts (individually, “Airframe Reserves (6 Year Check)”, “Airframe Reserves (12 Year Check)”, “Engine Performance Restoration Reserves”, “Engine LLP Reserves”, “Landing Gear Reserves” and “APU Reserves”, and collectively “Reserves”):


Type of Reserves		Amount of Reserves

Airframe Reserves (6 Year Check):		***** per calendar month

Airframe Reserves (12 Year Check):		***** per calendar month
Engine Performance Restoration Reserves:		***** per Engine flight hour for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)

Engine LLP Reserves:		***** per Engine cycle for each Engine (payable when the Engine is utilized on the Aircraft or another aircraft)

Landing Gear Reserves:		***** per calendar month

APU Reserve:		***** per APU hour (payable when the APU is utilized on the Aircraft or another aircraft)

*	All Reserves are subject to an annual escalation rate of ***** (compounded yearly) on January 1, 2009 and on each one-year anniversary thereof.

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

ARTICLE 5

SECURITY DEPOSIT, TRANSACTION FEE,

RENT, RESERVES AND OTHER PAYMENTS

5.18.2

All Reserves will be paid on or before the 15^th day of the calendar month next following the month in which the Delivery Date occurs and on or before the 15^th day of each succeeding calendar month for flying performed during the calendar month prior to payment and for the calendar-based Reserves pertaining to such prior calendar month. All Reserves pertaining to the month in which the Termination Date occurs will be paid on the Termination Date, unless otherwise agreed by the parties.

5.18.3

No interest will accrue or be paid at any time to LESSEE on such Reserves and, subject to LESSOR’s obligations under Article 13, LESSOR may commingle the Reserves with LESSOR’s general funds.

5.19 Additional Rent for Excess Cycles. If on the Termination Date the Airframe or any Engine has operated more cycles than the maximum number of cycles which would result from an hour/cycle ratio of 1.25 hours to 1 cycle over the period of the Lease Term, LESSEE will pay LESSOR as additional Rent ***** for each Airframe cycle and ***** for each Engine cycle the Airframe and any Engine actually operated during the Lease Term in excess of the number of cycles which result from an hour/cycle ratio of 1.25 hours to 1 cycle. A calculation will be made by LESSOR as of the Termination Date and such additional Rent will be due and payable by LESSEE within three (3) Business Days following the date LESSEE receives such calculation, in writing, from LESSOR.

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

International Lease Finance Corporation Account No. ***** JPMorgan

Chase Bank 000 Xxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 ABA# *****

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

ARTICLE 5

SECURITY DEPOSIT, TRANSACTION FEE,

RENT, RESERVES AND OTHER PAYMENTS

or to such other bank account in the United States as LESSOR may from time to time designate by written notice (“LESSOR’s Bank”). When it is stated in this Lease that an installment of the Security Deposit, the monthly Rent, Reserves or any other payment is due or must be paid or made by LESSEE by a specific date, then such payment actually must be received by LESSOR’s Bank on or before such specific date, even if, in order for such payment to be received by LESSOR’s Bank by such specific date, LESSEE must initiate the wire transfer prior to such specific date.

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

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

(a) Ensure that the deduction or withholding does not exceed the minimum amount legally required;

(b) Pay to the relevant Government Entities within the period for payment permitted by applicable Law the full amount of the deduction or withholding (including the full amount of any deduction or withholding from any additional amount paid pursuant hereto) unless the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR; and

(c) Furnish to LESSOR within thirty (30) days after each payment a certified copy of an official receipt of the relevant Government Entities involved, if available, or other evidence of payment reasonably accepted by LESSOR for all amounts so deducted or withheld.

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

ARTICLE 5

SECURITY DEPOSIT, TRANSACTION FEE,

RENT, RESERVES AND OTHER PAYMENTS

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

5.24 Wire Transfer Disbursement Report. At the time of each Rent or other payment, LESSEE will advise LESSOR (including by way of a reference included in a bank transfer instruction that is available to LESSOR) in writing of the payment being made by LESSEE and the allocation of such payment to the Security Deposit, Rent, Reserves, Default Interest and other charges. Notwithstanding the allocation set forth in LESSEE’s report, in the event LESSEE is in default under this Lease, LESSOR will have complete discretion to allocate LESSEE’s payments as LESSOR determines.

5.25 Net Lease.

5.25.1

This Lease is a net lease and LESSEE’s obligation to pay Rent and make other payments in accordance with this Lease will be absolute and unconditional under any and all circumstances and regardless of other events, including the following:

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

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

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

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

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

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

5.25.2

Nothing in Article 5.11 will be construed to limit LESSEE’s rights and remedies in the event of LESSOR’s breach of its warranty of quiet enjoyment set forth in Article 21.2 or to limit LESSEE’s rights and remedies to pursue in a court of law any claim it may have against LESSOR or any other Person.

ARTICLE 5

SECURITY DEPOSIT, TRANSACTION FEE,

RENT, RESERVES AND OTHER PAYMENTS

5.26 Currency Indemnity. If under any applicable Law, whether as a result of a judgment against LESSEE or the liquidation of LESSEE or for any other reason, any payment hereunder is required to be made or recovered in a currency other than Dollars then, to the extent that the payment (when converted into Dollars at the “rate of exchange” on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount payable under this Lease, LESSEE will as a separate and independent obligation, fully indemnify LESSOR against the amount of the shortfall. If the amount received by LESSOR upon converting the payment into Dollars exceeds the amount payable under this Lease, LESSOR will remit such excess to LESSEE. For the purposes of this paragraph “rate of exchange” means the rate at which LESSOR is able on the relevant date to purchase Dollars in New York or London (at LESSOR’s option) with such other currency.

5.27 LESSOR Performance of LESSEE Obligation. If LESSEE fails to make any payment under this Lease to a third party in connection with the Aircraft or fails to perform any other obligation required under this Lease, LESSOR may (but is not required to) at its election, after the expiry of any applicable cure or similar period and without waiver of its rights perform such obligation and/or pay such amount unless the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR.

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

ARTICLE 5

SECURITY DEPOSIT, TRANSACTION FEE,

RENT, RESERVES AND OTHER PAYMENTS

ARTICLE 6

INVOLVEMENT WITH AIRCRAFT MANUFACTURER

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

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

6.11 Procurement of BFE. LESSOR will procure all BFE for the Aircraft in accordance with the Aircraft specification set forth in Exhibit A. With respect to any additional BFE not part of such specifications, LESSOR and LESSEE agree to use commercially reasonable efforts to procure such BFE under the supplier contract of LESSOR or LESSEE which provides the most favorable pricing, unless LESSOR is prohibited from doing so or unless any such change could cause, in LESSOR’s reasonable opinion, a delay in Delivery of the Aircraft.

6.12 Assignment of Training. LESSOR agrees to give LESSEE a product support allowance as set forth in Appendix 3 of the Participation Agreement to be entered into between LESSEE and LESSOR in the form set forth in Exhibit B. If LESSEE fails to take Delivery of the Aircraft when tendered in accordance with Article 6.7, LESSEE will immediately pay to LESSOR an amount equal to the Dollar value of any goods or services used under the Participation Agreement.

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

6.14 Aircraft at Delivery. At Delivery, the Aircraft will be as set forth in Exhibit A, as such description may be modified by any change requests agreed to among LESSEE, LESSOR

ARTICLE 6

INVOLVEMENT WITH AIRCRAFT MANUFACTURER

and Manufacturer (which will be reflected in amendment(s) to this Lease). In the event of any discrepancies, LESSEE and LESSOR will cooperate in good faith with one another and with Manufacturer and the Engine and other manufacturers, as applicable, in order to arrive at a mutually acceptable resolution of any such discrepancies.

6.15 Delivery of the Aircraft to LESSEE. Subject to LESSEE having performed all of the conditions precedent to Delivery set forth in this Lease (or LESSOR’s waiver of one or more of such conditions precedent), immediately following delivery of the Aircraft from Manufacturer to LESSOR, LESSOR will deliver the Aircraft to LESSEE at the Delivery Location. Upon tender of the Aircraft by LESSOR to LESSEE in the condition required by Article 6.6, LESSEE will accept the Aircraft and the date of tender by LESSOR to LESSEE will be deemed to be the Delivery Date for all purposes under this Lease, including the commencement of LESSEE’s obligation to pay Rent hereunder. However, nothing in this Lease will obligate LESSOR to deliver the Aircraft to LESSEE if LESSEE has not complied with the conditions contained in Articles 7.1 and 7.2.

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

ARTICLE 6

INVOLVEMENT WITH AIRCRAFT MANUFACTURER

ARTICLE 7

PRE-DELIVERY. DELIVERY AND POST-DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS

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

7.4.1

Within one (1) month after execution of this Lease or such other period as the parties shall agree, LESSEE will deliver to LESSOR each of the following:

(a) copies of resolutions of the Board of Directors of LESSEE or other written evidence of appropriate action, duly certifying and authorizing the lease of the Aircraft hereunder and the execution, delivery and performance of this Lease, together with an incumbency certificate as to the person or persons authorized to execute and deliver documents on behalf of LESSEE hereunder. Such resolutions or other written evidence must also specifically grant the individual executing this Lease on behalf of LESSEE with the authority and power to commit and bind LESSEE to the arbitration clause contained in Article 27 under the Laws of Mexico;

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

(c) an opinion of counsel in substantially the form and substance of Exhibit G such as LESSOR accepts from third party legal counsel in Mexico in the course of LESSOR’s business.

7.4.2

At least seven (7) days prior to the Scheduled Delivery Date, LESSEE will have delivered to LESSOR a Certificate of Insurance and Brokers’ Letter of Undertaking substantially in the same form as Exhibits C and D evidencing insurance of the Aircraft in accordance with this Lease from the Delivery Date.

7.4.3

At least three (3) Business Days prior to the Scheduled Delivery Date, LESSEE will do each of the following:

(a) pay to LESSOR the first monthly installment of Rent in accordance with Article 5.3.7;

(b) to the extent required, provide LESSOR with documents evidencing that LESSEE has obtained any necessary licenses for the importation and ferrying of the Aircraft into Mexico and that all applicable customs duties and sales taxes in respect

ARTICLE 7

PRE-DELIVERY, DELIVERY AND

POST-DELIVERY DOCUMENTARY AND

OTHER REQUIREMENTS

of the Aircraft, if any, have been discharged by LESSEE (or arrangements satisfactory to LESSOR have been made for obtaining or paying for the same), such that at return of the Aircraft to LESSOR no additional fees, duties or taxes will be payable in order to export the Aircraft from Mexico;

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

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

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

(f) provide LESSOR with a power of attorney in substantially the form of Exhibit H;

(g) provide LESSOR with a power of attorney for purposes of the Cape Town Convention in the form of Exhibit I; and

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

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

7.5.1

LESSEE will execute and deliver to LESSOR an Estoppel and Acceptance Certificate in the form of Exhibit F covering the Aircraft and effective as of the Delivery Date.

7.5.2

If not previously done, LESSEE and LESSOR will sign an amendment or supplement to Exhibit A evidencing all agreed-to changes to the specification of the Aircraft.

7.5.3

LESSEE will deliver a certificate signed by an officer of LESSEE stating all of the following:

(a) the representations and warranties contained in Article 20 are true and

ARTICLE 7

PRE-DELIVERY, DELIVERY AND

POST-DELIVERY DOCUMENTARY AND

OTHER REQUIREMENTS

accurate on and as of the Delivery Date as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and

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

7.5.4

LESSEE’s counsel will deliver an opinion confirming the matters set forth in the opinion of counsel described in Article 7.1 and advising that all filing and other requirements described in the earlier opinion of counsel have been met or will be met (if permitted by Law) upon or immediately following Delivery.

7.5.5

If any Creditor Agreement provides that such Creditor will or may obtain any right, title or interest in an Engine which is installed on such Creditor’s aircraft, LESSEE will deliver to LESSOR an engines cooperation agreement in form and substance acceptable to LESSOR which is executed by LESSEE and LESSEE’s Creditors (as defined therein).

7.5.6

LESSEE and LESSOR will execute assignments of Manufacturer and Engine Manufacturer rights in the form and substance of Exhibits J and K, respectively, subject to the manufacturers’ consents, if and as applicable.

7.5.7

LESSEE will deliver to LESSOR a copy of such Aviation Documents as have not been previously delivered which are available.

7.6 Post-Delivery Requirements.

7.6.1

Within seven (7) days after Delivery, if not previously provided, LESSEE will do each of the following:

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

(b) cause the interests of LESSOR in the Aircraft (including in the Engines, if possible), this Lease and the other Operative Documents to be registered in the International Registry to the fullest extent such interests may be registered, including by consenting to or causing such registration via a “designated entry point” (as such term is defined in the Cape Town Convention) in the United States;

ARTICLE 7

PRE-DELIVERY, DELIVERY AND

POST-DELIVERY DOCUMENTARY AND

OTHER REQUIREMENTS

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

7.6.2

Within one (1) month after Delivery, LESSEE will provide LESSOR with a Technical Evaluation Report for the Aircraft in the form and substance of Exhibit O, as revised.

ARTICLE 7

PRE-DELIVERY, DELIVERY AND

POST-DELIVERY DOCUMENTARY AND

OTHER REQUIREMENTS

ARTICLE 8

DISCLAIMERS AND WAIVERS

ANY COMMITMENT OR COVENANT ON THE PART OF LESSOR REGARDING THE CONDITION OF THE AIRCRAFT EXPIRES AFTER DELIVERY AND THE DISCLAIMERS AND WAIVERS SET FORTH IN THIS ARTICLE 8 REGARDING THE CONDITION OF THE AIRCRAFT WILL THEN APPLY. THUS, FROM AND AFTER THE TIME OF LESSEE’S ACCEPTANCE OF THE AIRCRAFT AND EXECUTION OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE, AS BETWEEN LESSOR AND LESSEE:

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

8.9 Waiver of Warranty of Description. LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE

ARTICLE 8

DISCLAIMERS AND WAIVERS

MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE TO THE REMEDIES SET FORTH IN SECTIONS 10508 THROUGH 10522 OF THE CALIFORNIA COMMERCIAL CODE. EVEN IF AT ANY TIME AFTER DELIVERY, THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND EITHER (i) LESSEE ACCEPTED THE AIRCRAFT BASED ON A REASONABLE ASSUMPTION THAT THE NONCONFORMITY WOULD BE CURED AND IT WAS NOT SEASONABLY CURED OR (ii) LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY LESSORS ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO LESSOR FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION. NOTWITHSTANDING THE FOREGOING, NOTHING HEREIN SHALL INVALIDATE ANY AGREEMENT BETWEEN LESSOR AND MANUFACTURER TO RECTIFY DISCREPANCIES DISCOVERED PRIOR TO DELIVERY.

8.10 LESSEE Waiver. LESSEE HEREBY WAIVES AS BETWEEN ITSELF AND LESSOR AND AGREES NOT TO SEEK TO ESTABLISH OR ENFORCE ANY RIGHTS OR REMEDIES, EXPRESS OR IMPLIED (WHETHER STATUTORY, IN CONTRACT OR TORT OR UNDER ANY STRICT LIABILITY OR OTHER THEORY) AGAINST LESSOR OR THE AIRCRAFT RELATING TO ANY OF THE MATTERS MENTIONED IN ARTICLES 8.1 OR 8.2, REGARDLESS OF THE NEGLIGENCE, ACTIVE OR PASSIVE OR ANY OTHER TYPE, OF LESSOR.

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

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

ARTICLE 8

DISCLAIMERS AND WAIVERS

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

8.7 Consideration for Waivers. LESSEE’s waiver of warranties and acceptance of the disclaimers expressly set forth in this Article 8 are made in consideration of (a) LESSEE’s rights hereunder to inspect the Aircraft, (b) LESSOR’s assignment to LESSEE of any existing and assignable warranties of Manufacturer and the Engine Manufacturer and (c) the amount of the Rent and other payments contained in this Lease.

ARTICLE 8

DISCLAIMERS AND WAIVERS

ARTICLE 9

MANUFACTURERS’ AND VENDORS’ WARRANTIES

9.4 Warranties. As set forth in Article 7.2.6, at Delivery LESSOR will assign to LESSEE for the duration of the Lease Term the benefit of all warranties and indemnities given to LESSOR by Manufacturer and the Engine Manufacturer. Effective on the Delivery Date, all other assignable vendor warranties with respect to the Aircraft are hereby assigned by LESSOR to LESSEE.

9.5 Reassignment. On the Termination Date, the benefit of any warranty assigned by LESSOR to LESSEE pursuant to Articles 7.2.6 and 9.1 will be reassigned automatically to LESSOR or its designee except to the extent of any amounts received by LESSOR and due to LESSEE as a result of out of pocket costs incurred by LESSEE as a result of such claims. At LESSOR’s election, LESSEE’s rights under such warranties (including LESSEE’s claims and rights to payment thereunder) will revert to LESSOR during any period in which an Event of Default is continuing. Similarly, any additional warranties received by LESSEE from Manufacturer, the Engine Manufacturer and any other vendor or repair facility for work performed on the Aircraft, Engine or any Part during the Lease Term will be automatically assigned by LESSEE to LESSOR or its designee on the Termination Date except to the extent of any amounts received by LESSOR and due to LESSEE as a result of out of pocket costs incurred by LESSEE as a result of such claims. LESSEE at its own cost and expense will do all such things and execute such documents as may be required for these purposes.

9.6 Warranty Claims. LESSEE will diligently and promptly pursue any valid claims it may have against Manufacturer and others under such warranties with respect to the Aircraft.

ARTICLE 9

MANUFACTURERS’ AND

VENDORS’ WARRANTIES

ARTICLE 10

OPERATION OF AIRCRAFT

10.6 Costs of Operation. LESSEE will pay all costs incurred in the operation of the Aircraft during the Lease Term and until the Termination Date, for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, movement and operation of the Aircraft.

10.7 Compliance with Laws. Except as otherwise explicitly provided in this Lease, LESSEE agrees throughout the Lease Term and until the Termination Date to maintain operational control of the Aircraft and use the Aircraft in accordance with applicable Laws of the State of Registration and of any country, state, territory or municipality into or over which LESSEE may operate. LESSEE will not employ, suffer or cause the Aircraft to be used in any business which is forbidden by Law or in any manner which may render it liable to condemnation, destruction, seizure, or confiscation by any authority. LESSEE will not permit the Aircraft to fly to any airport or country if so doing would cause LESSEE or LESSOR to be in violation of any Law applicable to either of them or the Aircraft, except as may be reasonably required to preserve the Aircraft or the safety, well being or life of passengers or crew; provided, however, in such case, LESSEE shall immediately notify LESSOR and undertake its best efforts to remove the Aircraft from such airport or country as soon as reasonably possible.

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

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

10.10 Flight and Airport Charges.

10.10.1

LESSEE will pay promptly when due all airport or enroute navigation charges (including Eurocontrol charges), navigation service charges, landing fees and all charges due and payable by LESSEE for the use of or for services provided at any airport, whether in respect of the Aircraft or any other aircraft of LESSEE, unless

ARTICLE 10

OPERATION OF AIRCRAFT

the same is being reasonably contested in good faith by LESSEE in accordance with applicable Law, so long as such contest poses no likelihood of seizure or impairment of, or the imposition of a Security Interest on, the Aircraft or any other property of LESSOR.

10.10.2

If requested in writing by LESSOR (but not more frequently than twice annually, unless a Default or Event of Default shall have occurred and be continuing), LESSEE will provide LESSOR with a list of the airports to which LESSEE regularly operates the Aircraft or its other aircraft (in the event that the operation of such other aircraft may reasonably be expected to give rise to a lien on the Aircraft for landing, navigation, parking, storage or similar charges). LESSEE hereby authorizes Eurocontrol (if applicable) or another aviation authority or airport or creditor claiming or threatening to claim a Security Interest in the Aircraft to confirm the status of LESSEE’s payments to such creditor in respect of navigation, landing, parking, storage and similar charges for the Aircraft and its other aircraft, to the extent that the failure to make any payment in respect of such other aircraft has or might give rise to a Security Interest in the Aircraft, as and when requested by LESSOR.

ARTICLE 10

OPERATION OF AIRCRAFT

ARTICLE 11

SUBLEASES

11.9 No Sublease without LESSOR Consent. LESSEE WILL NOT SUBLEASE OR PART WITH POSSESSION OF THE AIRCRAFT (EXCEPT FOR MAINTENANCE AND REPAIR) AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (NOT TO BE UNREASONABLY WITHHELD) AND IN ACCORDANCE WITH SUCH REQUIREMENTS AS MAY FROM TIME TO TIME BE AGREED IN WRITING BETWEEN LESSOR AND LESSEE. NO SUBLEASING OF AN ENGINE WILL BE PERMITTED.

11.10 LESSOR Costs. LESSEE will indemnify LESSOR on demand for all reasonable out-of-pocket expenses (including legal fees) incurred in connection with LESSOR’s assessment of the subleasing proposal (whether or not LESSOR’s consent to such sublease is ultimately given) and implementation of the sublease.

11.11 Permitted Sublessees. LESSOR hereby acknowledges that upon a request by LESSEE for a sublease in accordance with this Article 11 to one of the following entities, LESSOR shall consent to such sublease, such consent not to be unreasonably withheld or delayed: TACA International Airlines, S.A.; Lineas Aereas Costarricenses, S.A.; AVIATECA, S.A.; TACA Costa Rica, S.A.; and Trans American Airlines, S.A. (d/b/a TACA PERU); provided, however, that at the time of such consent such entity has not suffered such a material deterioration in its condition such that a sublease to it would reasonably be expected to result in the operation or maintenance of the Aircraft in contravention of one or more terms of this Lease, and that nothing herein shall limit the terms and requirements otherwise set forth in this Article 11.

11.12 Any Approved Sublease. Any sublease approved by LESSOR will be for a term no greater than the remaining Lease Term. The applicable sublease agreement will contain provisions consistent with this Lease protecting LESSOR’s title to the Aircraft, providing appropriate LESSOR disclaimers and indemnities, regarding the maintenance and repair standards for the Aircraft and concerning the insurances which will be carried by the sublessee and the circumstances which constitute a Total Loss of the Aircraft. Any such sublease will be subject and subordinate to this Lease. LESSOR will have an opportunity to review the proposed sublease agreement in advance in order to determine that it meets the requirements of this Article 11.4. In its sole discretion, LESSOR may require an opinion of counsel in connection with such sublease, including LESSOR’s right to repossess the Aircraft in the event of an Event of Default hereunder and LESSEE’s and LESSOR’s rights to repossession in the case of an event of default under such sublease. LESSEE will not amend the terms of any approved sublease agreement without the prior written consent of LESSOR, which will not be unreasonably withheld.

ARTICLE 11

SUBLEASES

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

11.14 Application of Cape Town Convention. At LESSOR’s request, LESSEE will cause such sublease and LESSEE’s assignment of such sublease to LESSOR to be registered in the International Registry to the fullest extent such interests may be registered. In addition, LESSEE will obtain in favor of LESSOR a power of attorney from the approved sublessee for purposes of the Cape Town Convention in the form of Exhibit I.

11.15 Wet Leases. The wet leasing of the Aircraft during the Lease Term (in which LESSEE and its crews retain operational control of the Aircraft) will not be considered a sublease of the Aircraft and will be permitted without LESSOR’s consent, provided that (a) the Aircraft remains registered in the State of Registration, (b) the Aircraft will neither be based in nor operated in or to a Prohibited Country, (c) LESSEE provides LESSOR with either a certified copy of the applicable provisions from the wet lease agreement or an officer’s certificate confirming that LESSEE or the wet lessee will be responsible for maintaining the primary passenger, baggage and cargo liability insurance relating to operation under the wet lease unless LESSEE shall be responsible under the Wet Lease for maintaining the same and (d) LESSEE complies with Article 18.10.

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

ARTICLE 11

SUBLEASES

ARTICLE 12

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

12.15 Specific Engine Requirements.

12.15.1

No Engine will remain in an unserviceable condition for more than three (3) months, unless engine restoration or repair is ongoing and has not been suspended or delayed without reasonable cause and LESSEE is using commercially reasonable efforts to cause such Engine to be returned to service.

12.15.2

When replacing Parts in an Engine, LESSEE will use original equipment manufacturer parts (“OEM Parts”). If LESSEE wishes to replace Parts in an Engine with parts which are not OEM Parts, LESSEE must obtain approval from LESSOR before such parts are installed, such approval not to be unreasonably withheld or delayed. If given, LESSOR’s approval will generally be given only for the installation of parts manufactured in accordance with FAR Part 21.303 (or its EASA equivalent) (“PMA Parts”) which are consumable parts such as brackets, gaskets and seals. The use of stationary and high energy rotating PMA Parts in the gaspath will not be approved by LESSOR. Any proposed repair to an OEM Part or PMA Part in an Engine which has been approved by an FAA Designated Engineering Representative (DER) must also be approved by LESSOR prior to performance of the repair, such LESSOR approval not to be unreasonably withheld or delayed.

ARTICLE 12

12.15.3

LESSEE will not discriminate against the Engines with respect to build standards and life-limited Part replacements. Without limiting the foregoing, at any shop visit during which a Qualified Performance Restoration is performed, LESSEE will

(a) build the Engine life-limited Parts to at least 6,000 cycles remaining and

(b) perform, at a minimum, a workscope sufficient to allow such Engine to achieve at least 10,000 hours and 6,000 cycles of operation following such shop visit.

12.15.4

With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, LESSEE will submit to LESSOR at least thirty (30) days in advance the intended workscope of such shop visit, unless the shop visit is unscheduled, in which case LESSEE will immediately notify LESSOR and the workscope will be submitted to LESSOR as soon as it is available. If LESSOR requests, LESSEE will perform additional work at such shop visit at LESSOR’s cost; provided, however, that in the event that through no fault of LESSEE such work delays the return of the Aircraft to LESSOR or causes the Engine to be removed from LESSEE’s revenue service for a period in excess of the period the Engine would have been removed from revenue service had such additional work not been ordered, Article 23.13 shall be applicable and LESSEE and LESSOR will negotiate in good faith to expedite the return and minimize the costs incurred by the parties.

12.15.5

LESSEE will not enter into any Engine maintenance cost per flight hour, power-by-the-hour or similar agreement with the Engine Manufacturer or any other Engine maintenance facility or organization without LESSOR’s prior written consent, which consent will not be unreasonably withheld or delayed. LESSEE will be responsible at its cost for performing all work necessary to meet the return conditions with respect to the Engines set forth in Article 23 even if such work is not covered by LESSEE’s Engine maintenance agreement. Without limiting the foregoing, any such Engine maintenance agreement will provide that:

(a) LESSOR will receive and retain the Engine Performance Restoration Reserves paid by LESSEE with respect to an Engine until an Engine shop visit has been completed and the applicable Engine has been released to LESSEE;

(b) LESSEE will pay the Engine maintenance facility directly for any costs in excess of the amount reimbursable from the Engine Performance Restoration Reserves, including any differential between the hourly Engine Performance Restoration Reserves payable by LESSEE to LESSOR and the hourly rates charged by the Engine maintenance facility; and

(c) LESSEE will pay the Engine maintenance facility directly for any services provided by the Engine maintenance facility over and above repair of the Engines, such as trend monitoring, spare engines or spare parts.

ARTICLE 12

MAINTENANCE OF AIRCRAFT

12.16 Specific Obligations. Without limiting Article 12.1, LESSEE agrees that such maintenance and repairs will include but will not be limited to the specific items set forth in this Article 12.3.

12.16.1

LESSEE will perform all routine and non-routine maintenance work in accordance with the Maintenance Program.

12.16.2

LESSEE will perform all applicable Airworthiness Directives, all mandatory service bulletins of Manufacturer, the Engine Manufacturer and other vendors or manufacturers of Parts incorporated on the Aircraft and all other service bulletins which must be performed in order to maintain the warranties on the Aircraft, Engines, APU and Parts.

12.16.3

LESSEE will incorporate in the Aircraft all other service bulletins of Manufacturer, the Engine Manufacturer and other vendors which LESSEE schedules to adopt during the Lease Term for the rest of its Airbus A319 aircraft fleet. It is the intent of the parties that, in terms of service bulletin compliance (including method of compliance) and other maintenance matters, the Aircraft not be discriminated against in comparison to the rest of LESSEE’s fleet of similar aircraft unless LESSEE’s exclusion of the Aircraft is reasonable and occurs during the last year of the Lease Term.

12.16.4

LESSEE’s Maintenance Program for the Aircraft will include a corrosion prevention and control program as recommended by Manufacturer and all discrepancies will be corrected in accordance with the recommendations of Manufacturer and the Structural Repair Manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.

12.16.5

If LESSEE performs structural inspections or tasks on its Airbus A319 fleet on a sampling basis, then all such structural inspections or tasks will be performed on the Aircraft. LESSEE will provide LESSOR with written summaries of the sampling programs involving or affecting the Aircraft.

12.16.6

All Aircraft Documentation will be in English or regularly translated into English and in an up-to-date status.

12.16.7

ARTICLE 12

cycles since new. In the case of hard-time, time-controlled or time-tracked Parts, the documentation will also state the time since last Overhaul or refurbishment, will have a reference to the relevant section of the Component Maintenance Manual under which the Part was Overhauled or refurbished, as applicable, and will identify the FAA-approved repair agency which performed the last Overhaul or refurbishment.

12.16.8

All Parts other than those referred to in Article 12.3.7 installed on the Aircraft will have FAA-acceptable or EASA-acceptable documentation demonstrating that such Parts were airworthy at the time of most recent installation on the Aircraft.

12.16.9

All repairs and Modifications and the addition, removal or replacement of equipment, systems or components will be properly documented in accordance with the rules and regulations of the Aviation Authority and reflected in the Aircraft Documentation, including Manufacturer’s manuals as required by such rules and regulations. In addition, all repairs to the Aircraft will be accomplished in accordance with Manufacturer’s Structural Repair Manual (or FAA-approved data supported by FAA Form 8110-3 or 8100-9). All Modifications will also be accomplished in accordance with FAA-approved data.

12.17 Replacement of Parts.

12.17.1

LESSEE, at its own cost and expense, will promptly replace all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered unfit or beyond economical repair (BER) for use for any reason. In the ordinary course of maintenance, service, repair, Overhaul or testing, LESSEE may remove any Part provided that LESSEE replaces such Part as promptly as practicable. All replacement Parts will (a) be owned by LESSEE free and clear of all Security Interests (except Permitted Liens) of any kind or description (or, if not owned by LESSEE, LESSEE guarantees to LESSOR such title and clearance of all Security Interests), (b) be in airworthy condition and of at least equivalent model, service bulletin and modification status and have a value and utility at least equal to the Parts replaced, assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof and (c) meet the requirements of Articles 12.3.7 or 12.3.8, as applicable. So long as a substitution meets the requirements of the Maintenance Program and Aviation Authority, LESSEE may substitute for any Part a part that does not meet the requirements of the foregoing sentence if a complying Part cannot be procured or installed within the available ground time of the Aircraft and as soon as practicable having due regard to LESSEE’s operations, the noncomplying part is removed and replaced by a complying Part. Any replacement Parts will also comply with the requirements set forth in Article 12.2.2.

ARTICLE 12

12.17.2

All Parts removed from the Aircraft will remain the property of LESSOR and subject to this Lease no matter where located, until such time as such Parts have been replaced by Parts (which have been incorporated or installed in or attached to the Aircraft) which meet the requirements for replacement Parts specified above and title to such replacement Parts has passed to LESSOR under the Laws of the State of Registration and the lex situs. To the extent permitted by the Laws of the State of Registration and the lex situs, it is the intent of LESSOR and LESSEE that without further act and immediately upon any replacement Part becoming incorporated, installed or attached to the Aircraft as above provided, (a) title to the removed Part will thereupon vest in LESSEE, free and clear of all rights of LESSOR, (b) title to the replacement Part will thereupon vest in LESSOR free and clear of all rights of LESSEE and (c) such replacement Part will become subject to this Lease and be deemed to be a Part hereunder to the same extent as the Parts originally incorporated or installed in or attached to the Aircraft.

12.18 Removal of Engines.

12.18.1

If an Engine is removed for testing, service, repair, maintenance, Overhaul work, alterations, modifications or any other reason, title to such Engine will at all times remain vested in LESSOR.

12.18.2

LESSEE will be entitled to remove any of the Engines from the Aircraft and install another engine or engines on the Aircraft, provided that LESSEE complies with each of the following obligations:

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

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

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

12.19 Removal of APU.

12.19.1

If the APU is removed for testing, service, repair, maintenance, Overhaul work, alterations, modifications or for any other reason, title to the APU will at all times remain vested in LESSOR.

ARTICLE 12

MAINTENANCE OF AIRCRAFT

12.19.2

LESSEE will be entitled to remove the APU from the Aircraft and install another auxiliary power unit on the Aircraft, provided that LESSEE complies with each of the following obligations:

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

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

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

12.21 Installation of Engines on other aircraft. Any Engine removed from the Aircraft may be installed on another aircraft in LESSEE’s fleet which utilizes engines of the same type as the Engine only if one of the situations described in this Article 12.8 exists:

12.21.1

LESSEE or LESSOR has title to such other aircraft free and clear of all Security Interests (except Permitted Liens).

12.21.2

LESSEE, LESSOR and all of the Creditors of LESSEE of such aircraft enter into an engines cooperation, recognition of rights or similar agreement in form and substance acceptable to LESSOR acting reasonably in which each party agrees to recognize one another’s rights in the engines. LESSEE will reimburse LESSOR and LESSOR’s Lender for their reasonable attorneys’ fees and reasonable documented costs in negotiating and finalizing engine cooperation agreement arrangements with LESSEE and its Creditors.

12.21.3

Such other aircraft is subject to a Creditor Agreement (but no other Security Interests except Permitted Liens) which by its terms expressly or effectively states that such Creditor and its successors and assigns will not acquire any right, title or interest in any Engine by reason of such Engine being installed on such aircraft. LESSEE hereby agrees that if LESSOR’s title to an Engine is in fact impaired under any such Creditor Agreement, such impairment will be a Total Loss of such Engine and the

ARTICLE 12

MAINTENANCE OF AIRCRAFT

provisions of Article 19.5 will apply. To the extent another Creditor Agreement contains such provisions, then LESSOR hereby agrees for the benefit of the Creditor of such Creditor Agreement that neither LESSOR nor its successors or assigns will acquire or claim any right, title or interest in any engine in which LESSEE or another Creditor has an interest as a result of such engine being installed on the Airframe nor any right, title or interest in any airframe of such Creditor on which an Engine is installed.

12.22 Modifications.

12.22.1

No modification, alteration or addition to or removal from the Aircraft (“Modification”) expected to cost over ***** or deviation from the Aircraft’s original type design or configuration will be made without the prior written consent of LESSOR, which consent will not be unreasonably withheld or delayed. Airworthiness Directives, Manufacturer’s service bulletins and other mandatory orders and service bulletins, compliance with which are required under this Lease, will not constitute “Modifications” and will not require LESSOR consent.

12.22.2

LESSOR may review LESSEE’s proposed designs, plans, engineering drawings and diagrams, and flight and maintenance manual revisions for any proposed Modification. If requested by LESSOR, LESSEE will furnish LESSOR (at LESSEE’s expense) with such documents in final form and any other documents required by Law, as a result of such Modification. All modifications incorporated on the Aircraft will be properly documented in the Aircraft Documentation as required by and shall, if required, be approved by the FAA and the Aviation Authority. All Modifications will also be accomplished in accordance with FAA and Aviation Authority-approved data. All major modifications will be supported by an STC FAA Form 8100-9 or FAA Form 8110-3.

12.22.3

Notwithstanding any other provision of this Lease, no modification will be made which has the effect of decreasing the utility or value of the Aircraft or invalidating any warranty applicable to the Aircraft.

12.22.4

No modification will be made by LESSEE if an Event of Default exists and is continuing hereunder.

12.22.5

Unless otherwise agreed by LESSOR in writing, all permanent or structural modifications will forthwith become a part of the Aircraft and LESSEE relinquishes to LESSOR all rights and title thereto. However, all temporary and non-structural modifications will remain the property of LESSEE and, at LESSOR’s request and LESSEE’s cost, will be removed from the Aircraft prior to return of the Aircraft, with

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

ARTICLE 12

LOSS, DAMAGE AND REQUISITION

LESSEE restoring the Aircraft to the condition it was in prior to the modification in a manner cosmetically acceptable to LESSOR acting reasonably. Notwithstanding the foregoing, no such removal will be permitted without LESSOR’s permission after the occurrence of an Event of Default hereunder and immediately upon the occurrence and during the continuance of an Event of Default hereunder, without the requirement of any further act or notice, all right, title and interest in such modifications will immediately vest in LESSOR unless and until such Event of Default is cured to LESSOR’s reasonable satisfaction.

12.22.6

LESSOR will bear no liability for the cost of modifications of the Aircraft whether in the event of grounding or suspensions of certification, or for any other cause.

12.23 Performance of Work by Third Parties.

12.23.1

All off-wing maintenance and repair work on an Engine, the APU and the Landing Gear must be performed by an FAA-approved repair station unless otherwise approved in advance by LESSOR.

12.23.2

Whenever maintenance or repair work on the Airframe or on-wing maintenance or repair work on an Engine or the APU will be performed by a Person other than LESSEE, such Person must be an FAA-approved repair station.

12.24 Reporting Requirements.

12.24.1

Commencing with a report furnished ten (10) days after the end of the calendar month in which Delivery occurs, LESSEE will furnish to LESSOR a Monthly Report in English in the form attached hereto as Exhibit M. Each Monthly Report will be furnished within ten (10) days after the end of each calendar month, except that the Monthly Report pertaining to the last month (or any portion thereof) of flying will be furnished to LESSOR on the Termination Date.

12.24.2

On each anniversary of the Delivery Date, following each twenty (20)-month period during the Lease Term, LESSEE will provide LESSOR with a Technical Evaluation Report for the Aircraft in the form and substance of Exhibit O, as revised.

12.24.3

From time to time, LESSEE will provide LESSOR with such other technical information or documents as LESSOR may reasonably request.

12.25 Maintenance Policies and Procedures Manuals. At LESSOR’s request for the purposes of demonstrating to LESSOR how the Aircraft has been maintained, LESSEE at reasonable times without disruption of its operations and not more often that once annually, provide LESSOR, at LESSOR’s cost (unless an Event of Default has occurred and is continuing),

ARTICLE 12

MAINTENANCE OF AIRCRAFT

with on site access to its Maintenance Program, general maintenance manual, general policies and procedures manual, maintenance exposition manual, general engineering manual, or their equivalents, and any other related controlled documentation which affects the Aircraft. Recognizing that LESSEE’s maintenance policies and procedures manuals are proprietary to LESSEE, LESSOR agrees that no copies of the same will be made without the consent of the LESSEE and that the same will be only utilized as set forth in this Article 12.12 and Article 23.6.

12.26 LESSOR Inspection Rights.

12.26.1

At any time (subject to Article 12.13.4), LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) will have the right to inspect and take photographs of the Aircraft and review the Aircraft Documentation.

12.26.2

LESSEE will give LESSOR reasonable written notice before the Aircraft undergoes any “C” or equivalent check.

12.26.3

If the Aircraft is at a third party maintenance facility, LESSEE will use reasonably efforts to cause such facility to allow LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) to inspect and take photographs of the Aircraft and review the Aircraft Documentation, notwithstanding the fact that LESSEE (as the party opening the work order) is considered the “customer” of such facility, subject, in each case, to the rules, regulations and conditions of such maintenance facility and compliance by LESSOR and/or its authorized representatives or agents therewith.

12.26.4

LESSOR will provide LESSEE with reasonable notice prior to any inspection by LESSOR and/or its authorized agents or representatives (which may be Manufacturer or the Engine Manufacturer) and will coordinate with LESSEE and/or any applicable third party maintenance facility so as to cause minimum practical disturbance to the operation or maintenance of the Aircraft or the personnel of LESSEE or the applicable third party maintenance facility.

12.26.5

In the event that LESSOR disagrees with or otherwise disputes any information provided by LESSEE with respect to the Aircraft (unless LESSOR reasonably believes that LESSEE would not provide the information), LESSEE expressly authorizes and consents to allowing Manufacturer, the Engine Manufacturer and their field service representatives to provide LESSOR with information about the condition and maintenance of the Aircraft (including the Aircraft Documentation) on an ongoing basis. Manufacturer, the Engine Manufacturer and their field service representatives may report their findings and provide documentation to LESSOR without the need for any further notice to or authorization from LESSEE.

12.26.6

LESSOR will have no duty to make any inspection of the Aircraft and will not incur any liability or obligation by reason of (and LESSEE’s indemnity obligations pursuant to Article 17 will apply notwithstanding) LESSOR and/or its authorized agents or representatives making or not making any such inspection or by reason of any reports LESSOR receives regarding the Aircraft.

ARTICLE 12

MAINTENANCE OF AIRCRAFT

ARTICLE 13

USE OF RESERVES

13.12 Airframe Reserves (6 Year Check). LESSOR will reimburse LESSEE the Airframe Reserves (6 Year Check) that have accrued in such account from Delivery to the commencement date of the “6Y” check for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.

13.13 Airframe Reserves (12 Year Check). In the event that LESSEE performs a “12Y” check on the Aircraft (including as part of a Return Check pursuant to Article 23.10.1), LESSOR will reimburse LESSEE ***** of the Airframe Reserves (12 Year Check) and Airframe Reserves (6 Year Check) that have accrued and remain in such accounts on the commencement date of the “12Y” check for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.

13.14 Engine Performance Restoration Reserves. LESSOR acknowledges that LESSEE has entered into a maintenance cost per flight hour agreement with the Engine Manufacturer (the “FHA Agreement”). LESSEE acknowledges that it is required under this Lease to pay to LESSOR the Engine Performance Restoration Reserves even if the Engines are placed under the FHA Agreement. With respect to each Engine, LESSOR will reimburse LESSEE from the Engine Performance Restoration Reserves as follows.

13.14.1

For the first Qualified Performance Restoration that occurs following Delivery, LESSOR will reimburse LESSEE an amount equal to the total hours that such Engine has accumulated during the Lease Term times ***** per Engine flight hour.

13.14.2

For the second Qualified Performance Restoration that occurs following Delivery, LESSOR will reimburse LESSEE an amount equal to the amount present (at the time of removal of the Engine) in the particular Engine Performance Restoration Reserves account for such Engine.

13.14.3

For the avoidance of doubt, the reimbursements shall remain subject to Article 16.1.

13.15 Engine LLP Reserves. LESSOR will reimburse LESSEE from the Engine LLP Reserves for an Engine for the actual out-of-pocket materials cost without overhead, xxxx-up or profit factor, and reduced by the amount of any “Waste Expense” (if applicable), associated with the replacement of life-limited Parts in such Engine during completed Engine shop visits (i.e. heavy maintenance visits), with work performed for all other causes excluded, including those causes set forth in Article 13.8. “Waste Expense” means the product of (a) the number of unused cycles on a life-limited Part that is in excess of ***** of such part’s approved life when

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

ARTICLE 13

USE OF RESERVES

new, at the time such life-limited Part is removed for replacement, multiplied by (b) the quotient of the cost of the new replacement life-limited Part divided by the number of cycles which constitutes the approved life of such life-limited Part. Subject to Article 16.1 and excluding exchange, material markup and outside vendor fees, and handling, packaging and shipping charges, reimbursement for replacement of life-limited Parts in an Engine will be made up to the amount in the Engine LLP Reserves applicable to such Engine at the time of removal of such Engine.

13.16 Landing Gear Reserves. LESSOR will reimburse LESSEE ***** of the Landing, Gear Reserves that have accrued in such account from Delivery to the commencement date of the Overhaul of the Landing Gear for which reimbursement is requested. For the avoidance of doubt, the reimbursement shall remain subject to Article 16.1.

13.17 APU Reserves. LESSOR will reimburse LESSEE from the APU Reserves for the actual cost of a completed medium or heavy repair workscope in accordance with the APU manufacturer’s approved manuals, with work performed for all other causes excluded, including those causes set forth in Article 13.8. Subject to Article 16.1 and excluding exchange, material markup and outside vendor fees, and handling, packaging and shipping charges, reimbursement will be made up to the amount in the APU Reserves at the time of removal of the APU.

13.18 Reimbursement.

13.18.1

LESSEE will be entitled to reimbursement from the Reserves after the work is completed and the Airframe, Engine, Landing Gear or APU, as applicable, has left the repair agency, by submitting reasonable evidence (which shall include the items below) of performance of such work and, if requested by LESSOR, an invoice from LESSEE to LESSOR for LESSEE’s reimbursement claim within six (6) months after completion of the work. If LESSEE seeks reimbursement from the Reserves for work performed by LESSEE, such work will be charged at LESSEE’s out-of-pocket and unburdened labor and material costs. LESSEE may only seek reimbursement from the Airframe Reserves one time in any calendar year.

13.18.2

For the Airframe, reasonable evidence of performance includes a list of all routine and non-routine tasks performed with corresponding references to the MPD and an itemized labor and materials report.

13.18.3

For an Engine and the APU, reasonable evidence of performance includes (a) an original invoice from LESSEE to LESSOR for LESSEE’s reimbursement claim, (b) a description of the reason for removal, (c) the date of removal and the aircraft removed from (which may be the Aircraft), (d) the total hours and cycles at the time

ARTICLE 13

USE OF RESERVES

of removal, (e) the hours and cycles since last shop visit, (f) a full description of the final workscope, (g) a description of the type of maintenance performed (including on each module, if applicable), (h) complete disk records for the Engine both prior to and after the shop visit, (i) a shop findings report, (j) a copy of any test cell performance data, (k) an on and off log of Parts (configuration listing) tracked by LESSEE and the repair facility, (l) a current service bulletin and Airworthiness Directive listing, (m) written verification from the repair facility that the Engine or APU has been released and shipped from the repair facility back to LESSEE, (n) the status of all warranty claims and (o) an itemization of all concessions, warranty credits or other credits which have been or will be provided for work accomplished on the Engine or APU during the applicable shop visit (or, if none, a written statement from LESSEE stating that it has not received and does not have pending any such concessions, warranty credits or other credits).

13.18.4

For the Landing Gear, reasonable evidence of performance includes (i) a release tag from the overhaul facility and all associated build records, including traceability on all life-limited parts, and (ii) the total calendar time, hours and cycles on the Landing Gear both prior to and after the Overhaul.

13.19 Reimbursement Adjustment.

13.19.1

By way of example, among the exclusions from reimbursement are work or items:

(a) resulting from repairs actually covered by LESSEE’s or a third party’s insurance (deductibles being for the account of LESSEE and not reimbursable) or covered by warranties to the extent of recovery by LESSEE under such insurance or warranties; or

(b) required as a result of an Airworthiness Directive, manufacturer’s service bulletin (unless approved in advance by LESSOR, which approval will not be unnecessarily withheld or delayed), negligence, non-routine or non-scheduled maintenance, faulty maintenance or installation, improper operations, misuse, accident, incident, ingestion (foreign object damage) or other accidental cause.

13.19.2

All invoices subject to reimbursement from LESSOR will be reduced (by adjustment between LESSEE and LESSOR retroactively if necessary) by the actual amounts received by LESSEE on account of such work from responsible third parties or other sources, such as insurance proceeds, manufacturer’s warranties, guarantees, concessions and credits (including, with respect to Engines, credits due to life remaining on any removed Engine Parts). Notwithstanding anything to the

ARTICLE 13

USE OF RESERVES

contrary herein, in the event that any accident, incident, injection incident or other accidental cause necessitates a repair and during such repair the workscope performed results in performance restoration to the Engine or installation of LLPs with more life remaining, the performance of such workscope may be claimed by LESSEE from the Engine Performance Restoration Reserves and/or Engine LLP Reserves.

13.20 Costs in Excess of Reserves. LESSEE will be responsible for payment of all costs in excess of the amounts reimbursed hereunder. If on any occasion the available balance in the Airframe Reserves, Engine Performance Restoration Reserves for a particular Engine, Engine LLP Reserves for a particular Engine, Landing Gear Reserves or APU Reserves (at the time of the structural check, in the case of the Airframe, or at the time of removal, in the case of an Engine, the Landing Gear and the APU) is insufficient to satisfy a claim for reimbursement in respect of the Airframe, such Engine, the Landing Gear or the APU, as applicable, the shortfall may not be carried forward or made the subject of any further claim for reimbursement.

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

13.22 Total Loss. Upon receipt by LESSOR of the Agreed Value and all other amounts then due by LESSEE, LESSOR shall return to LESSEE ***** of all amounts then held by LESSOR as reserves. In the event of a Total Loss and payment of the Agreed Value in accordance with the terms of this Article 13.11, LESSEE agrees that no invoices to LESSOR will be reimbursed.

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

ARTICLE 13

USE OF RESERVES

ARTICLE 14

TITLE AND REGISTRATION

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

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

14.7 Cape Town Convention. If the Cape Town Convention has been or is ratified or made applicable in the United States or Mexico, then:

14.7.1

LESSOR may elect to cause the interests of LESSOR in this Lease, the other Operative Documents and the Aircraft (including in the Engines) to be registered in the International Registry to the fullest extent such interests may be registered. At LESSOR’s request, LESSEE will provide reasonable assistance and cooperation to LESSOR in order to procure such registration, including consenting to or causing such registration to be made, at LESSOR’s election, as a prospective international interest or an international interest and via a designated entry point (as such terms are used in the Cape Town Convention).

14.7.2

At LESSOR’s request, LESSEE will perform such additional acts and execute and deliver such agreements and instruments as may be reasonably determined by LESSOR to be necessary or appropriate to (a) protect and perfect LESSOR’s interest in the Aircraft, this Lease and the other Operative Documents under the Cape Town Convention and (b) enhance the enforceability of the commercial agreements of LESSEE and LESSOR under the Cape Town Convention to the greatest extent permitted by the Cape Town Convention. Actions to be requested by LESSOR may include entering into amendments to this Lease or the other Operative Documents as are necessary to constitute a prospective international interest or an international interest under the Cape Town Convention.

14.7.3

Unless LESSEE obtains LESSOR’s prior written consent, LESSEE undertakes that it will not consent to or permit any Person other than LESSOR and LESSEE (as

ARTICLE 14

TITLE AND REGISTRATION

permitted under this Lease) to make any International Registry filings (including prospective filings) under the Cape Town Convention in relation to this Lease, the other Operative Documents or the Aircraft (including the Engines).

14.7.4

LESSEE will be responsible for all costs and expenses arising out of the requirements of this Article 14.3.

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

ARTICLE 14

TITLE AND REGISTRATION

ARTICLE 15

IDENTIFICATION PLATES

LESSOR will affix and LESSEE will at all times maintain on the Airframe and each Engine the identification plates containing the following legends or any other legend requested by LESSOR in writing:

15.3 Airframe Identification Plates.


Location:		One to be affixed to the Aircraft structure above the forward entry door adjacent to and not less prominent than that of Manufacturer’s data plate and another in a prominent place on the flight deck.

Size:		No smaller than 2” x 3”.

Legend:		“THIS AIRCRAFT IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION.

		MANUFACTURER’S SERIAL NO: {MSN of Aircraft, if known}

		OWNER’S ADDRESS:

		INTERNATIONAL LEASE FINANCE CORPORATION 10250 Constellation Boulevard, 00xx Xxxxx Xxx Xxxxxxx, Xxxxxxxxxx 00000, X.X.X. Fax: (000) 000-0000”

15.4 Engine Identification Plates.


Location:		The legend on the plate must be no less prominent than the Engine data plate and must be visible. Size: No smaller than 1” x 4”.

Legend:		“THIS ENGINE IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION, LOS ANGELES, CALIFORNIA, USA.”

ARTICLE 15

IDENTIFICATION PLATES

ARTICLE 16

TAXES

16.9 General Obligation of LESSEE. Except as set forth in Article 16.2, LESSEE agrees to pay promptly when due, and to indemnify and hold harmless LESSOR on a full indemnity basis from, all license and registration fees and all taxes, fees, levies, imposts, duties, charges, deductions or withholdings of any nature (including without limitation any value added, franchise, transfer, sales, gross receipts, use, business, excise, turnover, personal property, stamp or other tax) together with any assessments, penalties, fines, additions to tax or interest thereon, however or wherever imposed (whether imposed upon LESSEE, LESSOR, on all or part of the Aircraft, the Engines or otherwise), by any Government Entity or taxing authority in the U.S., Mexico or any foreign country or by any international taxing authority (including the City or County of Los Angeles), upon or with respect to, based upon or measured by any of the following (collectively, “Taxes”):

(a) the Aircraft, Engines, APU or any Parts;

(b) the use, operation or maintenance of the Aircraft or carriage of passengers or freight during the Lease Term and until the Termination Date;

(d) the ownership, financing, delivery, import or export, return, sale, payment of Total Loss Proceeds or other disposition of the Aircraft.

16.10 Exceptions to Indemnity. The indemnity provided for in Article 16.1 does not extend to any of the following Taxes:

(a) Taxes imposed by the U.S. or the State of California or the City or County of Los Angeles on the gross or net income, gross receipts, gains, profits, capital or net worth of LESSOR;

(b) Taxes attributable to the period prior to Delivery or after the Termination Date;

(c) Taxes attributable to LESSOR’s gross negligence, willful misconduct or breach of this Lease or any other agreement, document or instrument entered into and/or delivered in connection herewith by or between LESSOR and LESSEE (unless such breach was caused by an act or omission by LESSEE);

ARTICLE 16

TAXES

(d) Taxes imposed upon LESSOR by any jurisdiction which would have been imposed upon LESSOR had LESSOR and LESSEE not entered into and consummated the transactions contemplated by this Lease and other Taxes imposed upon LESSOR as a result of any past, present or future activities of LESSOR in the jurisdiction imposing any such Taxes which are unrelated to the transactions contemplated by this Lease;

(e) Taxes imposed upon LESSOR as a result of a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by LESSOR or any Person claiming by or through LESSOR of all or any part of its interest in or to the Aircraft and/or this Lease unless, in each case, such sale, assignment, transfer or other disposition occurs pursuant to (i) Article 11, 12 or 19 of this Lease or (ii) the exercise of remedies pursuant to Article 25 of this Lease;

(f) Taxes attributable to a LESSOR’s Lien, to the extent that such Taxes would not have arisen or been assessed in the absence of a LESSOR’s Lien;

(g) Taxes or additional or incremental Taxes and penalties or interest thereon that would not have been imposed but for a failure of LESSOR to provide, following a reasonable request therefor, information necessary for LESSEE to complete and file any tax return or request an otherwise legally available exemption or which result from any failure by LESSOR to file any return which LESSOR is required by Law to file in respect of any such Tax; but only if such information was reasonably available to LESSOR and, in the case of certificates, documentation or other evidence requiring disclosure of knowledge of factual information (such as the location of an Aircraft) that is known to LESSEE but not readily ascertainable by such LESSOR, only if LESSEE provides such information to LESSOR in a timely manner and at LESSEE’s cost;

(h) Without limiting LESSOR’s right to pursue payment from LESSEE for a particular Tax under this Article 16 or Article 25.6, Taxes for which LESSOR actually receives payment from LESSEE for under any provision of this Lease and the payment of which would otherwise constitute a double recovery;

(i) Taxes which are not yet due or are being contested in good faith by LESSOR or any Person claiming by or through LESSOR by appropriate proceedings, during the pendency of such proceedings; or

(j) Taxes which constitute the normal operating expense or overhead of LESSOR.

ARTICLE 16

TAXES

16.11 After-Tax Basis. The amount which LESSEE is required to pay with respect to any Taxes indemnified against under Article 16.1 is an amount sufficient to restore LESSOR on an after-tax basis to the same position LESSOR would have been in had such Taxes not been incurred.

16.12 Timing of Payment. Any amount payable to LESSOR pursuant to this Article 16 will be paid within ten (10) Business Days after receipt of a written demand therefor from LESSOR accompanied by a written statement describing in reasonable detail the basis for such indemnity and the computation of the amount so payable; provided, however, that such amount need not be paid by LESSEE prior to the earlier of (a) the date any Tax is payable to the appropriate Government Entity or taxing authority or (b) in the case of amounts which are being contested by LESSEE in good faith or by LESSOR pursuant to Article 16.5, the date such contest is finally resolved.

16.13 Contests. If a claim is made against LESSOR for Taxes with respect to which LESSEE is liable for a payment or indemnity under this Lease, LESSOR will promptly give LESSEE notice in writing of such claim; provided, however, that LESSOR’s failure to give notice will not relieve LESSEE of its obligations hereunder except to the extent such failure materially impairs or precludes LESSEE’s ability to contest the claim or results in penalties, interest or additions to Taxes which are attributable to such delay. So long as (a) a contest of such Taxes does not involve any likelihood of the sale, forfeiture or loss of the Aircraft or any interest therein, (b) if LESSOR so requests, LESSEE has provided LESSOR with an opinion of independent tax counsel that a reasonable basis exists for contesting such claim and (c) adequate reserves have been made for such Taxes or, if required, an adequate bond has been posted, then LESSOR at LESSEE’s written request will in good faith, with due diligence and at LESSEE’s expense, contest (or permit LESSEE to contest in the name of LESSEE or LESSOR) the validity, applicability or amount of such Taxes.

16.14 Refunds. Upon receipt by LESSOR of a refund of all or any part of any Taxes (including any deductions or withholdings referred to in Article 5.8) which LESSEE has paid, LESSOR will pay to LESSEE the net amount of such Taxes refunded.

16.15 Cooperation in Filing Tax Returns. LESSEE and LESSOR will cooperate with one another in providing information which may be reasonably required to fulfill each party’s tax filing requirements and any audit information request arising from such filing.

For the avoidance of doubt, LESSEE will for purposes of the calculation and its payment of the Mexican assets tax (including without limitation Article 25 of the Assets Tax Law Regulation), elect to treat its rights on the Aircraft pursuant to this Lease as an “asset”.

16.16 Survival of Obligations. The representations, warranties, indemnities and agreements of LESSEE provided for in this Article 16 will survive the Termination Date.

ARTICLE 16

TAXES

ARTICLE 17

INDEMNITIES

17.11 General Indemnity. Except as set forth in Article 17.2, LESSEE agrees to indemnify and hold harmless LESSOR and its officers, directors, employees, agents and shareholders (individually an “Indemnitee” and collectively “Indemnitees”) from any and all liabilities, obligations, losses, damages, fines, penalties, claims, actions, suits, costs, disbursements and expenses (including legal fees, costs and related expenses) of every kind and nature (collectively “Expenses”) which are imposed on, incurred by or asserted against any Indemnitee or the Aircraft by any Person other than LESSEE and which are in any way relating to, based on or arising out of any of the following:

(a) the operation, possession, use, non-use, control, leasing, subleasing, maintenance, storage, overhaul, testing or inspections of the Aircraft, any Engine, the APU or any Part (whether by LESSEE, any sublessee or any other Person) during the Lease Term and until the Termination Date (including the acceptance flights at return), whether or not the same is in compliance with the terms of this Lease, including without limitation claims for death, personal injury, property damage, other loss or harm to any Person and claims relating to any Laws, including without limitation environmental control, noise and pollution laws, rules or regulations;

(b) fuel, airport or enroute navigation charges (including Eurocontrol charges), navigation service charges, landing fees and all charges payable for the use of or for services provided at any airport, whether in respect of the Aircraft or any other aircraft of LESSEE, during the Lease Term and until the Termination Date;

(c) the manufacture, design, acceptance, rejection, delivery, return, sale after an Event of Default, import, export, condition, repair, modification, servicing, rebuilding, enforcement of warranties whether in LESSOR’s or LESSEE’s name, customer support, product support, information or training provided by Manufacturer and other vendors, airworthiness, registration, reregistration, performance, sublease, merchantability, fitness for use, substitution or replacement of the Aircraft, an Engine, the APU or any Part under this Lease or other transfer of use or possession of the Aircraft, an Engine, the APU or any Part, including under a pooling or interchange arrangement prior to the Termination Date, including without limitation latent and other defects, whether or not discoverable and patent, trademark or copyright infringement;

ARTICLE 17

IDEMNITIES

(d) the prevention or attempt to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft; or

(e) as a consequence of any Default or Event of Default by LESSEE, without duplication of remedies or recovery.

The foregoing indemnity by LESSEE is intended to include and cover any Expense to which an Indemnitee may be subject (in contract, tort, strict liability or under any other theory) regardless of the negligence, active or passive or any other type, of such Indemnitee, so long as such Expense does not fall within any of the exceptions listed in Article 17.2.

17.12 Exceptions to General Indemnities. The indemnity provided for in Article 17.1 will not extend to Expenses of any Indemnitee to the extent resulting from or arising out of any of the following:

(a) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are judicially determined to have resulted from the willful misconduct of such Indemnitee;

(b) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are judicially determined to be attributable to acts or events which occur after the Termination Date and return of the Aircraft to LESSOR in the condition required hereunder, but in any such case only to the extent not attributable to acts or omissions of LESSEE;

(c) Expenses representing Taxes, it being acknowledged that the terms of Article 16 apply exclusively to LESSEE’s indemnity obligations with respect to Taxes;

(d) Expenses due to the breach by LESSOR of its covenant of quiet enjoyment pursuant to Article 21.2 (except to the extent covered by the insurances LESSEE is required to carry pursuant to Article 18);

(e) Expenses which constitute ordinary and usual operating or overhead expenses of LESSOR or any other Indemnitee; or

(f) Expenses attributable to a sale, assignment, transfer or other disposition, whether voluntary or involuntary, by LESSOR or any Indemnitee of all or any part of its interest in or to the Aircraft and/or this Lease unless, in each case, such sale, assignment, transfer or other disposition occurs pursuant to (i) Article 11, 12 or 19 of this Lease or (ii) the exercise of remedies pursuant to Article 25 of this Lease.

ARTICLE 17

IDEMNITIES

17.13 After-Tax Basis. The amount which LESSEE will be required to pay with respect to any Expense indemnified against under Article 17.1 will be an amount sufficient to restore the Indemnitee, on an after-tax basis, to the same position such Indemnitee would have been in had such Expense not been incurred.

17.14 Timing of Payment. It is the intent of the parties that each Indemnitee will have the right to indemnification for Expenses hereunder as soon as a claim is made and as soon as an Expense is incurred, whether or not such claim is meritorious and whether or not liability is established (but subject to Article 17.8). LESSEE will pay an Indemnitee for Expenses pursuant to this Article 17 within ten (10) Business Days after receipt of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the basis for such indemnity.

17.15 Subrogation. Upon the payment in full of any indemnity pursuant to this Article 17 by LESSEE, LESSEE will be subrogated to any right of the Indemnitee in respect of the matter against which such indemnity has been made.

17.16 Notice. Each Indemnitee and LESSEE will give prompt written notice one to the other of any liability of which such party has knowledge for which LESSEE is, or may be, liable under Article 17.1; provided, however, that failure to give such notice will not terminate any of the rights of Indemnitees under this Article 17 except to the extent that LESSEE has been materially prejudiced by the failure to provide such notice.

17.17 Refunds. If any Indemnitee obtains a recovery of all or any part of any amount which LESSEE has paid to such Indemnitee, such Indemnitee will pay to LESSEE the net amount recovered by such Indemnitee.

17.18 Defense of Claims. Unless a Default or Event of Default has occurred and is continuing, LESSEE and its insurers will have the right (in each such case at LESSEE’s sole expense) to investigate or, provided that LESSEE or its insurers have not reserved the right to dispute liability with respect to any insurance policies pursuant to which coverage is sought, defend or compromise any claim covered by insurance for which indemnification is sought pursuant to Article 17.1 and each Indemnitee will cooperate with LESSEE or its insurers with respect thereto. If LESSEE or its insurers are retaining attorneys to handle such claim, such counsel must be reasonably satisfactory to the Indemnitees. If not, the Indemnitees will have the right to retain counsel of their choice at LESSEE’s expense.

17.19 No Double Recovery. Without limiting LESSOR’s right to pursue payment from LESSEE for a particular Expense under both this Article 17 and Article 25.6, LESSOR will not be entitled to actually receive payment from LESSEE for the same Expense twice.

17.20 Survival of Obligation. Notwithstanding anything in this Lease to the contrary, the provisions of this Article 17 will survive the Termination Date and continue in full force and effect notwithstanding any breach by LESSOR or LESSEE of the terms of this Lease, the termination of the lease of the Aircraft to LESSEE under this Lease or the repudiation by LESSOR or LESSEE of this Lease.

ARTICLE 17

INDEMNITIES

ARTICLE 18

INSURANCE

18.18 Categories of Insurance. Throughout the Lease Term and until the Termination Date, LESSEE will, at its own expense, effect and maintain in full force and effect the types of insurance and amounts of insurance (including deductibles) described in Exhibit C through such brokers and with such insurers as may be acceptable to LESSOR, such acceptance not to be unreasonably withheld or delayed, in London or New York or such other insurance markets as mutually agreed upon by the parties.

18.19 Write-back of any Date Recognition Exclusion. In the event any of LESSEE’s insurances (either the primary insurance or the reinsurance) contain any date recognition exclusion clause or similar clause excluding from such insurance coverage damage to any property (including the Aircraft) or death or injury to any person on account of accidents, incidents or occurrences caused by date recognition or other Year 2000-related problems, LESSEE at its cost will obtain for the benefit of itself, and LESSOR the broadest write-back available in the London or U.S. insurance market with respect to such exclusion.

18.20 Write-backs of LSW555.D and AVN48C Exclusions. In the event that a write-back of the exclusions (losses due to causes such as dirty bombs, electromagnetic weapons, radioactive contamination and chemical, biological and/or biochemical hazards) to the standard London policy forms LSW555.D and, if issued, AVN48C becomes available at commercially reasonable terms, LESSEE at its cost will obtain for the benefit of itself and LESSOR the broadest write-back available in the London or U.S. insurance market with respect to such exclusions to the extent and with policy limits consistent with general market practices applicable to similarly situated carriers or, if greater, as maintained in respect of any other aircraft of like make and model in LESSEE’s fleet.

18.21 Installation of Third Party Engine. If LESSEE installs an engine not owned by LESSOR on the Aircraft, either (a) LESSEE’s hull insurance on the Aircraft will automatically increase to such higher amount as is necessary in order to satisfy both LESSOR’s requirement to receive the Agreed Value in the event of a Total Loss and the amount required by the third party engine owner or (b) separate additional insurance on such engine will attach in order to satisfy separately the requirements of the LESSEE to such third party engine owner.

18.22 LESSOR Coverage for LESSEE’s Employees. LESSOR and the other additional insureds will be covered under LESSEE’s legal liability insurance for death or injury to LESSEE’s employees.

ARTICLE 18

INSURANCE

18.6 Insurance for Indemnities. The insurance referred to in Article 18.1 will in each case include and insure (to the extent of the risks covered by the policies) the indemnity provisions of Article 17 and LESSEE will maintain such insurance of the indemnities for a period of two (2) years following the Termination Date.

18.7 Insurance required by Manufacturer. During the Lease Term, LESSEE will carry any insurance required by Manufacturer in connection with the assignment of any Manufacturer warranties, customer support or product support to LESSEE.

18.8 Renewal. From time to time when reasonably requested by LESSOR, LESSEE will confirm to LESSOR regarding the status of the renewal or replacement of LESSEE’s insurance. Prior to or on the expiration or termination date of any insurance required hereunder, LESSEE will provide LESSOR with fax or e-mail confirmation from LESSEE’s insurance brokers that such insurance has been renewed or has been replaced in a manner consistent with the requirements hereof and that certificates of insurance evidencing the renewal or replacement of such insurance and complying with Exhibit C will be issued on the termination date of the prior certificate. Within seven (7) days after such renewal, LESSEE will furnish its brokers’ certificates of insurance to LESSOR.

18.9 Assignment of Rights by LESSOR. If LESSOR assigns all or any of its rights under this Lease or otherwise disposes of any interest in the Aircraft to any other Person, LESSEE will, upon written request, procure that such Person, in each case as permitted by this Lease, hereunder be added as loss payee and/or additional assured in the policies effected hereunder and, if applicable substituted as Loss Payee under the hull insurance and enjoy the same rights and insurance enjoyed by LESSOR under such policies. LESSOR will nevertheless continue to be covered by such policies.

18.10 Insurance for Wet Lease Operations. In the event LESSEE is performing wet lease operations with the Aircraft pursuant to Article 11.7 and the wet lessee is carrying the primary passenger, baggage cargo liability insurance with respect to the flights, then such insurance will meet the requirements of Exhibit C, including with respect to the amounts of coverage, naming of LESSOR as an additional insured and inclusion of the other endorsements described in Exhibit C. Moreover, LESSEE will at all times carry contingent passenger, baggage and cargo liability insurances for such flights. Prior to commencement of wet lease operations for a particular wet lessee, LESSOR will receive certificates of insurance from the insurance brokers for LESSEE and, if applicable, the wet lessee evidencing such coverages.

18.11 Other Insurance. In the event of a material change in standard market practices with respect to air carriers similarly situated to LESSEE occurs following Delivery, LESSOR may, acting reasonably and upon consultation with LESSEE’s designated brokers and other

ARTICLE 18

INSURANCE

LESSORS of Aircraft within LESSEE’s fleet from time to time by notice to LESSEE require LESSEE at LESSEE’s expense to effect such other insurance or such variations to the terms of the existing insurance as may then be customary in the airline industry for aircraft of the same type as the Aircraft operated by carriers similarly situated to LESSEE and at the time commonly available in the insurance market on commercially reasonable terms.

18.12 Information. LESSEE will provide LESSOR with any information reasonably requested by LESSOR from time to time concerning the insurance maintained with respect to the Aircraft or in connection with any claim being made or proposed to be made thereunder, except for information regarding insurance premiums and the level of insurance LESSEE has obtained above the requirements of this Lease, so long as such level is not in violation of this Lease.

18.13 Currency. All proceeds of insurance pursuant to this Lease will be payable in Dollars except as may be otherwise agreed by LESSOR.

18.14 Grounding of Aircraft. If at any time any of the insurance required pursuant to this Lease will cease to be in full force and effect, LESSEE will forthwith ground the Aircraft and keep the Aircraft grounded until such time as such insurance is in full force and effect again.

18.15 Failure to Insure. If at any time LESSEE fails to maintain insurance in compliance with this Article 18, LESSOR will be entitled but not bound to do any of the following (without prejudice to any other rights which it may have under this Lease by reason of such failure):

(a) to pay any premiums due or to effect or maintain insurance satisfactory to LESSOR or otherwise remedy such failure in such manner as LESSOR considers appropriate (and LESSEE will upon demand reimburse LESSOR in full for any amount so expended in that connection); or

(b) at any time while such failure is continuing, to require the Aircraft to remain at any airport or (as the case may be), proceed to and remain at any airport designated by LESSOR, until such failure is remedied to LESSOR’s satisfaction.

18.16 Reinsurance. Any reinsurance will be maintained with reinsurers and brokers acceptable to LESSOR, acting reasonably. Such reinsurance will contain each of the following terms and will in all other respects (including amount) be satisfactory to LESSOR:

(a) the same terms as the original insurance;

(b) a cut-through and assignment clause satisfactory to LESSOR, acting reasonably; and

(c) payment will be made notwithstanding (i) any bankruptcy, insolvency, liquidation or dissolution of any of the original insurers and/or (ii) that the original insurers have made no payment under the original insurance policies.

ARTICLE 18

INSURANCE

18.17 Limit on Hull in favor of LESSEE. LESSEE may carry hull all risks or hull war and allied perils on the Aircraft in excess of the Agreed Value (which is payable to LESSOR) only to the extent such excess insurance which would be payable to LESSEE in the event of a Total Loss does not exceed ***** of the Agreed Value and only to the extent that such additional insurance will not prejudice the insurances required in this Lease or the recovery by LESSOR thereunder. LESSEE agrees that it will not create or permit to exist any liens or encumbrances over the insurances, or its interest therein, except as constituted by this Lease.

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

ARTICLE 18

INSURANCE

ARTICLE 19

Throughout the Lease Term and until the Termination Date, LESSEE will bear all risk of loss, theft, damage and destruction to the Aircraft.

19.10 Definitions. In this Article 19 and this Lease:

“Agreed Value” means an amount equal to ***** of the Manufacturer’s list price for the Aircraft on the Delivery Date, based upon the invoice provided by Manufacturer; provided, however, that the Agreed Value will be decreased by ***** of such amount on each yearly anniversary of the Delivery Date.

“Net Total Loss Proceeds” means the Total Loss Proceeds actually received by LESSOR following a Total Loss, less any reasonable legal and other out-of-pocket expenses, taxes or duties incurred by LESSOR in connection with the collection of such proceeds.

“Total Loss” means any of the following in relation to the Aircraft, Airframe, any Engine or the APU and “Total Loss Date” means the date set forth in parenthesis after each Total Loss:

(a) destruction, damage beyond repair or being rendered permanently unfit for normal use for any reason (the date such event occurs or, if not known, the date on which the Aircraft, Airframe, Engine or APU was last heard of);

(b) actual, constructive, compromised, arranged or agreed total loss (the earlier of the date on which the loss is agreed or compromised by the insurers or forty five (45) days after the date of notice to LESSEE’s brokers or insurers claiming such total loss);

(c) requisition of title, confiscation, forfeiture or any compulsory acquisition or other similar event (the date on which the same takes effect);

(d) sequestration, detention, seizure or any similar event for more than forty five (45) consecutive days (the earlier of the date on which insurers make payment on the basis of a total loss or the date of expiration of such period);

(e) requisition for use for more than one hundred eighty (180) consecutive days, except as set forth in Article 19.9 (the earlier of the date on which the insurers make payment on the basis of a total loss or the date of expiration of such period);

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

ARTICLE 19

LOSS, DAMAGE AND REQUISITION

(f) in the case of an Engine, the event described in Article 12.8.3 (the date on which the same takes effect);

(g) any sale of the Aircraft in connection with Eurocontrol or other navigation or airport charges (the date on which the sale occurs);

(h) any sale of the Aircraft in connection with a LESSEE bankruptcy, whether by an administrator, trustee or court (the date on which the intent to sell the Aircraft becomes known); or

(i) any other occurrence not permitted under this Lease which deprives LESSEE of use or possession for a period of sixty (60) consecutive days or longer (the 60^th day of such period).

“Total Loss Proceeds” means the proceeds of any insurance or any compensation or similar payment arising in respect of a Total Loss.

19.11 Notice of Total Loss. LESSEE will notify LESSOR in writing within two (2) Business Days after a Total Loss Date of the Aircraft, Airframe, any Engine or the APU.

19.12 Total Loss of Aircraft or Airframe. If the Total Loss of the Aircraft or Airframe occurs during the Lease Term, the following will occur:

19.12.1

After the Total Loss Date and until receipt by LESSOR of the Agreed Value and all other amounts then due under this Lease, LESSEE will continue to pay Rent and the parties will perform all of their other obligations under this Lease.

19.12.2

On the date which is the earlier of the following dates:

(a) the date on which the Total Loss Proceeds of the Aircraft or the Airframe are paid by LESSEE’s insurance underwriters or brokers and

(b) the date which falls thirty (30) days after the Total Loss Date,

LESSEE will pay to LESSOR an amount equal to the sum of:

(a) the Agreed Value and

(b) all other amounts then due and payable by LESSEE under this Lease, less an amount equal to the Net Total Loss Proceeds received by LESSOR by such date.

ARTICLE 19

LOSS, DAMAGE AND REQUISITION

19.12.3

LESSOR will apply the Net Total Loss Proceeds and any amounts received from LESSEE pursuant to Article 19.3.2 as follows:

(a) first, in discharge of any unpaid Rent and any other amounts accrued and unpaid up to the date of LESSOR’s receipt of the Agreed Value;

(b) second, in discharge of the Agreed Value; and

19.12.4

Upon receipt by LESSOR of all monies payable by LESSEE in Article 19.3, provided no Default or Event of Default has occurred and is continuing, this Lease will terminate except for LESSEE’s obligations under Articles 10.5, 16 and 17 which survive the Termination Date.

FOR AVOIDANCE OF DOUBT, THE AGREED VALUE OF THE AIRCRAFT WILL BE PAYABLE TO LESSOR PURSUANT TO THIS ARTICLE 19.3 WHEN A TOTAL LOSS OF THE AIRFRAME OCCURS EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE, ENGINES OR THE APU.

19.13 Surviving Engine(s). If a Total Loss of the Airframe occurs and there has not been a Total Loss of an Engine or Engines, then, provided no Default or Event of Default has occurred and is continuing, at the request of LESSEE (subject to agreement of relevant insurers) and on receipt of all monies due under Article 19.3 and payment by LESSEE of all airport, navigation and other charges on the Aircraft, LESSOR will transfer all its right, title and interest in the surviving Engine(s) to LESSEE, but without any responsibility, condition or warranty on the part of LESSOR other than as to freedom from any LESSOR’s Lien.

19.14 Total Loss of Engine and not Airframe.

19.14.1

Upon a Total Loss of any Engine not installed on the Airframe or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe, LESSEE will replace such Engine as soon as reasonably possible by duly conveying to LESSOR title to another engine from LESSEE (or another Person with a net worth at least equal to that of LESSEE) (a) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having

ARTICLE 19

LOSS, DAMAGE AND REQUISITION

a value and utility at least equal to the Engine which sustained the Total Loss, (c) not older (by reference to serial number or manufacture date) than the older of the two Engines delivered by LESSOR to LESSEE with the Aircraft on the Delivery Date, and (d) in the same or better operating condition as the Engine which sustained a Total Loss, including time in service, hours and cycles since new and hours and cycles available to the next inspection, Overhaul or scheduled or anticipated removal. Such replacement engine will be an “Engine” as defined in this Lease and the Engine which sustained such Total Loss will cease to be an “Engine”.

19.14.2

LESSEE agrees at its own expense to take such action as LESSOR may reasonably request in order that any such replacement Engine becomes the property of LESSOR and is leased hereunder on the same terms as the destroyed Engine. LESSEE’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by LESSOR with respect to such destroyed Engine will, subject to LESSOR’s right to deduct therefrom any amounts then due and payable by LESSEE under this Lease, be paid to LESSEE.

19.14.3

Notwithstanding Articles 19.5.1 and 19.5.2, if at the time of a Total Loss of an 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, LESSOR and LESSEE are parties to a spare engine lease pursuant to which LESSOR is leasing a spare engine to LESSEE of the same model and type as the Engine which has suffered such Total Loss, LESSOR will receive from LESSEE the replacement cost of the Engine instead of accepting a replacement engine. One (1) of such LESSOR spare engines will then be substituted under this Lease for the Engine which suffered such Total Loss and the applicable spare engine lease will terminate.

19.15 Total Loss of APU.

19.15.1

Upon a Total Loss of the APU when not installed on the Airframe or a Total Loss of the APU while installed on the Airframe not involving a Total Loss of the Airframe, LESSEE will replace such APU as soon as reasonably possible by duly conveying or causing to be conveyed to LESSOR title to another auxiliary power unit (a) free and clear of all Security Interests (except Permitted Liens) of any kind or description, (b) in airworthy condition and of the same or improved model, service bulletin and modification status and having a value and utility at least equal to the APU which sustained the Total Loss, (c) not older (by reference to serial number or manufacture date) than the APU delivered by LESSOR to LESSEE with the Aircraft on the Delivery Date and (d) in the same or better operating condition as the APU which sustained the Total Loss, including time in service, hours and cycles since new and hours and cycles available to the next inspection, Overhaul or

ARTICLE 19

LOSS, DAMAGE AND REQUISITION

scheduled or anticipated removal. Such replacement auxiliary power unit will be the “APU” as defined in this Lease and the auxiliary power unit which sustained such Total Loss will cease to be the “APU”.

19.15.2

LESSEE agrees at its own expense to take such action as LESSOR may reasonably request in order that any such replacement APU becomes the property of LESSOR and is leased hereunder on the same terms as the destroyed APU. LESSEE’s obligation to pay Rent will continue in full force and effect, but an amount equal to the Net Total Loss Proceeds received by LESSOR with respect to such destroyed APU will, subject to LESSOR’s right to deduct therefrom any amounts then due and payable by LESSEE under this Lease, be paid to LESSEE.

19.16 Other Loss or Damage.

19.16.1

If the Aircraft or any Part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe or any Engine or the APU, all the obligations of LESSEE under this Lease (including payment of Rent) will continue in full force.

19.16.2

In the event of any loss or damage to the Aircraft or Airframe which does not constitute a Total Loss of the Aircraft or the Airframe, or any loss or damage to an Engine or the APU which does not constitute a Total Loss of such Engine or the APU, LESSEE will at its sole cost and expense fully and with reasonable promptness repair the Aircraft, Engine or APU in order that the Aircraft, Engine or APU is placed in an airworthy condition and substantially the same condition as it was prior to such loss or damage. All repairs will be performed in a manner which preserves and maintains all warranties and service life policies to the same extent as they existed prior to such loss or damage. LESSEE will notify LESSOR forthwith of any loss, theft or damage to the Aircraft for which the cost of repairs is estimated to exceed *****, together with LESSEE’s proposal and timetable for carrying out the repair. In the event that LESSOR does not agree with LESSEE’s proposal for repair, LESSOR will so notify LESSEE within two (2) Business Days after its receipt of such proposal. LESSEE and LESSOR will then consult with Manufacturer and LESSEE and LESSOR agree to accept as conclusive, and be bound by, Manufacturer’s directions or recommendations as to the manner in which to carry out such repairs. If Manufacturer declines to give directions or recommendations, LESSEE will carry out the repairs in accordance with the directions of LESSOR. If the Aircraft is airworthy or the Engine or APU serviceable notwithstanding the loss or damage, LESSEE will repair such Aircraft, Engine or APU, as the case may be, within the time frame reasonably established by LESSOR given the circumstances.

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

ARTICLE 19

LOSS, DAMAGE AND REQUISITION

19.17 Copy of Insurance Policy. Promptly after the occurrence of a partial loss or Total Loss of the Aircraft, an Engine or the APU, LESSEE will provide LESSOR with a copy of LESSEE’s insurance policy, provided, however, that LESSEE may redact from such copy the commercial terms of its arrangement with the insurer.

19.18 Government Requisition. If the Aircraft, Airframe, any Engine or the APU is requisitioned for use by any Government Entity, LESSEE will promptly notify LESSOR of such requisition. All of LESSEE’s obligations hereunder will continue as if such requisition had not occurred. So long as no Default or Event of Default has occurred and is continuing, all payments received by LESSOR or LESSEE from such Government Entity will be paid over to or retained by LESSEE. If a Default or Event of Default has occurred and is continuing, all payments received by LESSEE or LESSOR from such Government Entity may be used by LESSOR to satisfy any obligations owing by LESSEE.

ARTICLE 19

LOSS, DAMAGE AND REQUISITION

ARTICLE 20

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE

20.3 Representations and Warranties. LESSEE represents and warrants the following to LESSOR as of the date of execution of this Lease and as of the Delivery Date:

20.3.1

Status. LESSEE is a company validly existing and in good standing under the Laws of Mexico. It has the power and authority to carry on its business as presently conducted and to perform its obligations hereunder.

20.3.2

Governmental Approvals. No authorization, approval, consent, license or order of, or registration with, or the giving of notice to the Aviation Authority or any other Government Entity is required for the valid authorization, execution, delivery and performance by LESSEE of this Lease, except as will have been duly effected as of the Delivery Date.

20.3.3

Binding. LESSEE’s Board of Directors has authorized LESSEE to enter into this Lease, any Side Letters hereto and any other documentation in connection with the leasing of the Aircraft from LESSOR (collectively, the “Operative Documents”) and perform its obligations under the Operative Documents. This Lease and the other Operative Documents have been duly executed and delivered by LESSEE and represent the valid and binding obligations of LESSEE, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights. When executed by LESSEE at Delivery, the same will apply to the Estoppel and Acceptance Certificate.

20.3.4

No Breach. The execution and delivery of the Operative Documents, the consummation by LESSEE of the transactions contemplated in this Lease and compliance by LESSEE with the terms and provisions hereof do not and will not contravene any Law applicable to LESSEE, or result in any breach of or constitute any default under or result in the creation of any Security Interest upon any property of LESSEE, pursuant to any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSEE is a party or by which LESSEE or its properties or assets may be bound or affected. When executed by LESSEE at Delivery, the same will apply to the Estoppel and Acceptance Certificate.

ARTICLE 20

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE

20.3.5

Filings. Except for any filing or recording that may be required with the Aviation Authority, no filing or recording of any instrument or document (including the filing of any financial statement) is necessary under the Laws of the State of Registration or of Mexico in order for this Lease to constitute a valid and perfected lease of record relating to the Aircraft.

20.3.6

Translation or Notarization. None of the Lease or any other Operative Document needs to be translated, notarized, legalized, apostilled or consularized as a condition to the legality, validity, filing, enforceability or admissibility in evidence thereof.

20.3.7

Licenses. LESSEE holds all licenses, certificates and permits from applicable Government Entities in Mexico and/or the United States for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease.

20.3.8

No Suits. There are no suits, arbitrations or other proceedings pending or to LESSEE’s knowledge threatened before any court or administrative agency against or affecting LESSEE which, if adversely determined, would have a material adverse effect on LESSEE or its ability to perform under this Lease, except as described in the filings provided to LESSOR pursuant to Article 22.

20.3.9

No Withholding. Under the Laws of Mexico, LESSEE will not be required to deduct any withholding or other Tax from any payment it may make under this Lease.

20.3.10

No Restrictions on Payments. Under the Laws of Mexico, there are no present restrictions on LESSEE making the payments required by this Lease.

20.3.11

General Obligations. The obligations of LESSEE under this Lease are 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, with the exception of such obligations as are mandatorily preferred by Law.

20.3.12

No Sovereign Immunity. LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, is subject to private commercial law and suit. Neither LESSEE nor its properties or assets is entitled to sovereign immunity under any such Laws. LESSEE’s performance of its obligations hereunder constitute commercial acts done for commercial purposes.

20.3.13

Tax Returns. All necessary returns have been delivered by LESSEE to all relevant taxation authorities in the jurisdiction of its formation and LESSEE is not in default in the payment of any taxes due and payable.

ARTICLE 20

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE

20.3.14

No Material Adverse Effect. LESSEE is not in default under any agreement to which it is a party or by which it may be bound which would have a material adverse effect on LESSEE’s ability to perform under this Lease.

20.3.15

No Default or Event of Default under this Lease. At the time of execution of this Lease, no Default or Event of Default has occurred and is continuing and the financial statements provided to LESSOR pursuant to Article 22 fairly present the financial condition of LESSEE.

20.4 Covenants. LESSEE covenants to LESSOR that it will comply with the following throughout the entire Lease Term:

20.4.1

Licensing. LESSEE will hold all required licenses, certificates and permits from applicable Government Entities in Mexico and/or the United States for the conduct of its business as a certificated air carrier and performance of its obligations under this Lease. LESSEE will advise LESSOR promptly in the event any such licenses, certificates or permits are cancelled, terminated, revoked or not renewed.

20.4.2

Payments. If at any time any such restrictions may be applicable, LESSEE will obtain all certificates, licenses, permits, exemptions and other authorizations which are from time to time required for the making of the payments required by this Lease on the dates and in the amounts and currency which are stipulated in this Lease, and will maintain the same in full force and effect for so long as the same will be required.

20.4.3

Sovereign Immunity. LESSEE, under the Laws of Mexico or of any other jurisdiction affecting LESSEE, will continue to be subject to private commercial law and suit. Neither LESSEE nor its properties or assets will be entitled to sovereign immunity under any such Laws. LESSEE’s performance of its obligations hereunder will constitute commercial acts done for commercial purposes. LESSEE will advise LESSOR promptly of any change in the foregoing.

20.4.4

Information about Suits. LESSEE will promptly give to LESSOR a notice in writing of any suit, arbitration or proceeding before any court, administrative agency or Government Entity which, if adversely determined, would materially adversely affect LESSEE’s ability to perform under this Lease.

ARTICLE 20

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE

20.4.5

Restrictions on Mergers. LESSEE will not consolidate with or merge into any other Person or sell, convey, lease, or otherwise transfer all or substantially all of its assets (whether in one transaction or a series of transactions) to any Person (a “Reorganization Transaction”), unless:

(a) the Person formed by such consolidation or surviving such merger, or the Person who acquires by sale, conveyance, transfer, or lease all or substantially all of LESSEE’s assets (the “Reorganized Entity”) has a net worth and financial capacity which are reasonably sufficient to meet (i) all obligations of LESSEE under the Operative Documents, (ii) all obligations of LESSEE under all other agreements between LESSEE and LESSOR concerning the leasing or financing of aircraft or the extension, restructuring or rescheduling of credit, and (iii) the other obligations of the Reorganized Entity on a going forward basis;

(b) the Reorganized Entity (i) executes and delivers to LESSOR an agreement, in form and substance reasonably satisfactory to LESSOR, containing an assumption by the Reorganized Entity of the due and punctual performance and observance of all of LESSEE’s obligations under the Operative Documents, and (ii) makes such filings and recordings, including any filing or recording with the FAA or any filing under the Uniform Commercial Code, as are necessary to evidence such Reorganization Transaction and all filings necessary in order to preserve and protect the rights of LESSOR as owner of the Aircraft and lessor under this Lease;

(c) (i) such transaction shall not create a Default, (ii) no Event of Default shall exist immediately after such transaction, and (iii) the benefits of Section 1110 of the U.S. Bankruptcy Code available to LESSOR immediately prior to such Reorganization Transaction shall not be adversely affected as a result of such Reorganization Transaction;

(d) the Reorganized Entity delivers to LESSOR:

(i) a certificate, signed on its behalf by a responsible officer, stating that all the conditions precedent set forth in the foregoing clauses of this Article 20.2.5 have been fulfilled, and

(ii) an opinion of counsel for LESSEE or for the Reorganized Entity, from counsel and in form and substance reasonably satisfactory to LESSOR, stating that [A] the agreements entered into to effect the assumption agreement referenced in Article 20.2.5(b) have been duly authorized, executed, and delivered by the Reorganized Entity and that they (and the Operative Documents so assumed) constitute legal, valid, and binding obligations of the Reorganized Entity, enforceable in accordance with their terms (to the same extent as the Operative Documents so assumed were enforceable against LESSEE immediately prior to such Reorganization Transaction), and [B] containing such other matters as LESSOR reasonably requests.

ARTICLE 20

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE

Upon effecting any such Reorganization Transaction, the Reorganized Entity shall succeed to all the obligations of LESSEE and shall succeed to, shall be substituted for, and may exercise every right and power of LESSEE under the Operative Documents, with the same effect as if the Reorganized Entity had been named as LESSEE therein. No such Reorganization Transaction shall have the effect of releasing LESSEE (or any Reorganized Entity) from any of its liabilities under the Operative Documents. LESSEE shall pay all reasonable out-of-pocket expenses of LESSOR (including but not limited to its reasonable attorneys’ fees) in respect of such transfer.

20.4.6

Restriction on Relinquishment of Possession. LESSEE will not, without the prior consent of LESSOR, deliver, transfer or relinquish possession of the Aircraft except in accordance with the provisions of this Lease, including Articles 11 and 12.

20.4.7

No Security Interests. LESSEE will not create or agree to or permit to arise any Security Interest (other than Permitted Liens) on or with respect to the Aircraft, title thereto or any interest therein. LESSEE will forthwith, at its own expense, take all action as may be necessary to discharge or remove any such Security Interest if it exists at any time unless the same results from an act or omission of LESSOR or LESSOR’s Lender. LESSEE will within twenty-four (24) hours after becoming aware of the existence of any such Security Interest give written notice thereof to LESSOR.

20.4.8

Representations to Other Parties. LESSEE will not represent or hold out LESSOR as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of the Aircraft.

ARTICLE 20

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE

ARTICLE 21

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR

21.3 Representations and Warranties. LESSOR represents and warrants the following to LESSEE as of the date of execution of the Lease and as of the Delivery Date and ALL OTHER WARRANTIES, EXPRESS OR IMPLIED HAVE BEEN WAIVED IN ACCORDANCE WITH ARTICLE 8:

21.3.1

Corporate Status. LESSOR is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of California. It has the corporate power and authority to carry on its business as presently conducted and to perform its obligations hereunder.

21.3.2

Governmental Approvals. No authorization, approval, consent, license or order of, or registration with, or the giving of notice to any U.S. Government Entity is required for the valid authorization, execution, delivery and performance by LESSOR of this Lease.

21.3.3

Binding. This Lease and the other Operative Documents have been duly authorized, executed and delivered by LESSOR and represent the valid and binding obligations of LESSOR, enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application affecting the enforcement of creditors’ rights.

21.3.4

No Breach. The execution and delivery of the Operative Documents, the consummation by LESSOR of the transactions contemplated in this Lease and compliance by LESSOR with the terms and provisions hereof do not and will not contravene any Law applicable to LESSOR, or result in any breach of or constitute any default under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, charter, by-law or other agreement or instrument to which LESSOR is a party or by which LESSOR or its properties or assets may be bound or affected.

21.4 Covenant of Quiet Enjoyment. So long as no Default or Event of Default has occurred and is continuing hereunder, LESSOR covenants that during the Lease Term neither LESSOR nor any Person lawfully claiming by or through LESSOR will interfere with or otherwise disturb LESSEE’s quiet, peaceful use, possession and enjoyment of the Aircraft in accordance with the terms of this Lease. LESSOR further agrees that LESSOR will procure that

ARTICLE 21

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR

any Person taking title to the Aircraft granted by LESSOR during the Lease Term shall provide to LESSEE a covenant of quiet enjoyment similar to that set forth in the immediately prior sentence.

ARTICLE 21

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR

ARTICLE 22

FINANCIAL AND OTHER INFORMATION

LESSEE agrees to furnish each of the following to LESSOR:

(a) within forty-five (45) days after the end of each fiscal quarter of LESSEE, three (3) hard copies of the unaudited consolidated financial statements (including a balance sheet and profit and loss statement) prepared for such quarter in accordance with generally accepted accounting principles in Mexico;

(b) within ninety (90) days after the end of each fiscal year of LESSEE, three (3) hard copies of the audited consolidated financial statements (including a balance sheet and profit and loss statement) prepared as of the close of such fiscal year in accordance with generally accepted accounting principles in Mexico;

(c) promptly after distribution, three (3) hard copies of all reports and financial statements which LESSEE sends or makes available to its creditors and other aircraft lessors; and

(d) from time to time, such other reasonable information as LESSOR may reasonably request concerning the location, condition, use and operation of the Aircraft or the financial condition of LESSEE; and

Notwithstanding the foregoing, if at any time LESSEE shall be required to file or otherwise furnish financial statements substantially equivalent to those required to be furnished hereunder to any governmental agency of the state of Registration and such financial statements are available, at no unreasonable effort and no charge on the internet, the furnishing of the same by LESSEE shall be deemed to satisfy the requirements of this Article.

ARTICLE 22

FINANCIAL AND OTHER INFORMATION

ARTICLE 23

23.19 Date of Return. LESSEE is obligated to return the Aircraft, Engines, APU, Parts and Aircraft Documentation to LESSOR on the Expiration Date, unless a Total Loss of the Aircraft occurred prior to the Expiration Date and this Lease was terminated early in accordance with Article 19.3. If an Event of Default occurs hereunder by LESSEE failing to return the Aircraft on the Expiration Date or if an Event of Default occurs prior to or after the Expiration Date and LESSOR repossesses the Aircraft, the return requirements set forth in this Article 23 nonetheless must be met on the date the Aircraft is actually returned to LESSOR or repossessed by LESSOR.

23.20 Last Engine Shop Visits. With respect to the last Engine shop visit of an Engine prior to return of the Aircraft, LESSEE will submit to LESSOR at least thirty (30) days in advance the intended workscope of such shop visit, unless the shop visit is unscheduled, in which case LESSEE will promptly notify LESSOR and the workscope will be submitted to Lessor as soon as it is available. If LESSOR requests, LESSEE will perform additional work at such shop visit at LESSOR’s cost.

23.21 Technical Report. No later than six (6) months prior to the Expiration Date (and in an updated form at return of the Aircraft), LESSEE will provide LESSOR with a Technical Evaluation Report in the form and substance of Exhibit O, as revised, and, in addition upon LESSOR’s request, will make copies available of (a) drawings of the interior configuration of the Aircraft both as it presently exists and as it will exist at return, (b) an Airworthiness Directive status list, (c) a service bulletin incorporation list, (d) rotable tracked, hard-time and life-limited component listings, (e) a list of modifications, alterations and repairs, (f) interior material burn certificates, (g) the Maintenance Program, (h) the complete workscopes for the checks, inspections and other work to be performed prior to return, (i) a forecast of the checks, inspections and other work to be performed within eighteen (18) months after return of the Aircraft, (j) a list of all no-charge service bulletin kits with respect to the Aircraft which were ordered by LESSEE from Manufacturer or the Engine Manufacturer, (k) current Engine disk sheets, (l) last Engine shop visit reports, (m) takeoff and cruise trend reports for the last nine (9) months and (n) any other data which is reasonably requested by LESSOR.

23.22 Return Location. LESSEE at its expense will return the Aircraft, Engines, APU, Parts and Aircraft Documentation to LESSOR at Aeromantenimiento. S.A. in El Salvador or another FAA-approved maintenance facility at a location mutually agreed to by LESSEE and LESSOR.

ARTICLE 23

23.5 Full Aircraft Documentation Review. For the period commencing at least one (1) month prior to the proposed redelivery 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 of LESSOR and/or its representative all of the Aircraft records and historical documents described in Exhibit N in one central room with access to telephone, photocopy, fax and Internet connections at the Aircraft return location.

23.6 Maintenance Policies and Procedures Manuals. At return of the Aircraft and at LESSOR’s request for the purposes of bridging and demonstrating to the next operator and its aviation authority how the Aircraft has been maintained, LESSEE will provide LESSOR with access to its Maintenance Program, general maintenance manual, general policies and procedures manual, maintenance exposition manual, general engineering manual, or their equivalents, and any other related controlled documentation which affects the Aircraft. Recognizing that LESSEE’s maintenance policies and procedures manuals are proprietary to LESSEE, LESSOR agrees that no copies of the same will be made without the consent of LESSEE (not to be unreasonably withheld or delayed) and that the same will be only utilized as set forth in Article 12.12 and this Article 23.6.

23.7 Aircraft Inspection.

23.7.1

During the maintenance checks performed prior to the proposed redelivery and at the actual return of the Aircraft, LESSOR and/or its representatives will have an opportunity to observe functional and operational system checks, perform a visual inspection of the Aircraft (taking into account the Aircraft type, age, use and other known factors with respect to the Aircraft) and perform a full inspection of the Aircraft Documentation (including records and manuals), all to LESSOR’s reasonable satisfaction. Any deficiencies from the Aircraft return condition requirements set forth in this Article 23 will be corrected by LESSEE at its cost prior to return of the Aircraft.

23.7.2

Prior to the Aircraft acceptance flight described in Article 23.7.3, with LESSOR and/or LESSOR’s representatives present, LESSEE will conduct a systems functional and operational inspection of the Aircraft in accordance with Manufacturer’s checklist procedures.

23.7.3

Immediately prior to redelivery of the Aircraft, LESSEE will carry out for LESSOR and/or LESSOR’s representatives an Aircraft acceptance flight in accordance with Manufacturer’s standard flight operation check flight procedures or, if agreed to in writing by LESSOR, in accordance with an airline acceptance flight procedure, either of which will be for not less than two (2) hours and not more than three (3)

ARTICLE 23

RETURN OF AIRCRAFT

hours. Flight costs and fuel will be furnished by and at the expense of LESSEE. Any deficiencies from the Aircraft return condition requirements set forth in this Article 23 will be corrected by LESSEE at its cost prior to return of the Aircraft.

23.7.4

To the extent that the ground inspection and acceptance flight extend beyond the Expiration Date, the Lease Term will be deemed to have been automatically extended and the obligations of LESSEE hereunder (including Article 23.14.3) will continue on a day-to-day basis until the Aircraft is accepted by LESSOR executing the Return Acceptance Receipt in the form of Exhibit L.

23.8 Certificate of Airworthiness Matters.

23.8.1

The Aircraft will possess a current Certificate of Airworthiness issued by the Aviation Authority (although this Certificate of Airworthiness may later be replaced by an Export Certificate of Airworthiness or equivalent if requested by LESSOR pursuant to Article 23.12). In addition, even if LESSEE must perform engineering, maintenance and repair work on the Aircraft beyond the requirements of Article 12, the Aircraft at return must be in the condition required in order to meet the requirements for issuance of a U.S. Standard Certificate of Airworthiness for transport category aircraft issued by the FAA in accordance with FAR Part 21 and, in addition, to meet the operating requirements of FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129, with no restrictions imposed.

23.8.2

At LESSOR’s request, LESSEE at its cost will demonstrate that the Aircraft meets the requirements for issuance of the U.S. Standard Certificate of Airworthiness for transport category aircraft specified in Article 23.8.1 by delivering to LESSOR at LESSOR’s 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 Aircraft Documentation (including records and manuals) 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 121 (to the extent such requirement was met at Delivery) and FAR Part 129, with no restrictions imposed.

23.8.3

If the Aircraft is to be registered in a country other than in the U.S. after return from LESSEE, LESSOR may in its sole discretion waive the requirements of Article 23.8.2 and instead require that LESSEE at its expense (to the extent such expense is no greater than that which LESSEE would have incurred pursuant to

ARTICLE 23

RETURN OF AIRCRAFT

Articles 23.8.1 and 23.8.2, with any additional expenses being for LESSOR’s account) put the Aircraft in a condition to meet the requirements for issuance of a Certificate of Airworthiness of the aviation authority of the next country of register.

23.9 General Condition of Aircraft at Return.

23.9.1

The Aircraft, Engines, APU and Parts will have been maintained and repaired in accordance with the Maintenance Program, the rules and regulations of the Aviation Authority and this Lease.

23.9.2

If any Part installed on the Airframe, any Engine or the APU at return was not installed at Delivery, then such Part will have met the requirements of Article 12.4.1 at the time of installation.

23.9.3

The requirements of Article 12.2.2 will have been met with respect to the installation of PMA Parts and OEM Parts in the Engines during the Lease Term. Without limiting the foregoing, all stationary high energy Parts in the gaspath of the Engines will be OEM Parts.

23.9.4

Aircraft Documentation (including records and manuals) will have been maintained in English and in an up-to-date status, in accordance with the rules and regulations of the Aviation Authority and the FAA and this Lease and in a form necessary in order to meet the requirements of Article 23.8.1. The records and historical documents set forth in Attachment 1 of Exhibit L will be in English. If LESSEE subscribes to Manufacturer’s on-line data access services, LESSEE must nonetheless return the Aircraft manuals with all current revisions provided by Manufacturer in CD, microfilm or other format acceptable to LESSOR.

23.9.5

All hard-time, time-controlled, time-tracked and life-limited Parts which are installed on the Aircraft will have an FAA Form 8130-3 evidencing the airworthiness of such Part at the most recent time of installation on the Aircraft. In the case of life-limited Parts, the documentation will also state the total hours and cycles since new. In the case of hard-time, time-controlled or time-tracked Parts, the documentation will also state the time since last Overhaul or refurbishment, will have a reference to the relevant section of the Component Maintenance Manual under which the Part was Overhauled or refurbished, as applicable, and will identify the FAA-approved repair agency or EASA-approved repair agency, as applicable, which performed the last Overhaul or refurbishment.

23.9.6

All Parts other than those referred to in Article 23.9.5 installed on the Aircraft will have FAA-acceptable documentation demonstrating that such Parts were airworthy at the most recent time of installation on the Aircraft.

ARTICLE 23

23.9.7

The Aircraft will be in the same working order and condition as at Delivery (subject to the other provisions of this Article 23, reasonable wear and tear from normal flight operations excepted), with all pilot discrepancies and deferred maintenance items cleared on a terminating action basis.

23.9.8

The Aircraft will be airworthy (conform to type design and be in a condition for safe operation), with all Aircraft equipment, components and systems operating in accordance with their intended use and within limits approved by Manufacturer, the Aviation Authority and FAA.

23.9.9

The Aircraft interior (including cabin and windows) and exterior will be clean, with all compartments free of foreign objects. The Aircraft will be substantially free of dirt, grease, fluids, stains, grime, cracks, tears and rips, consistent with worldwide commercial airline standards for used aircraft at completion of a heavy maintenance check.

23.9.10

No special or unique Manufacturer, Engine Manufacturer or Aviation Authority inspection or check requirements which are specific to the Aircraft or Engines (as opposed to all aircraft or engines of their types) will exist with respect to the Airframe, Engines and Aircraft equipment, components and systems.

23.9.11

All repairs to the Aircraft will have been accomplished in accordance with Manufacturer’s Structural Repair Manual (or FAA-approved data supported by FAA Form 8110-3 or 8100-9) for the Aircraft.

23.9.12

All major modifications will also be accomplished in accordance with FAA-approved data supported by a supplemental type certificate, FAA Form 8110-3 or 8100-9.

23.9.13

The Aircraft will be returned with LESSOR’s Engines and APU installed and with the same equipment as at Delivery, subject only to those replacements, additions and Modifications permitted under this Lease. To the extent LESSEE performed a Modification which cost in excess of ***** and LESSOR did not approve such Modification in accordance with Article 12.9.1, LESSOR may require LESSEE to return the Aircraft in its original condition prior to such Modification.

23.9.14

All Airworthiness Directives which are issued prior to the date of return of the Aircraft and require compliance by means of terminating action prior to return of the Aircraft to LESSOR or within 6 months after the Termination Date will have been complied with on the Aircraft on a terminating action basis at LESSEE’s cost. Airworthiness Directives which require compliance by means other than terminating

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

ARTICLE 23

action prior to return of the Aircraft or 6 months after Return to LESSOR, will have been performed to the highest level of accomplishment possible other than terminating action. If, after using commercially reasonable efforts, LESSEE is unable to acquire the material, parts or components necessary to accomplish such Airworthiness Directive, LESSEE will pay to LESSOR upon return of the Aircraft the estimated cost of terminating such Airworthiness Directive. If the estimated cost cannot be mutually agreed upon by LESSEE and LESSOR, LESSEE and LESSOR will each obtain an estimate from a reputable FAA- approved maintenance facility (unaffiliated with LESSEE or LESSOR) and the estimated cost will be the average of the two estimates.

23.9.15

All Modifications which must be performed prior to the date of return of the Aircraft or within 6 months after the Termination Date in order to meet the FAA requirements for FAR Part 121 (to the extent such requirement was met at Delivery) and FAR Part 129 operations will have been incorporated on the Aircraft at LESSEE’s cost.

23.9.16

The Aircraft will be in compliance with Manufacturer’s Corrosion Prevention and Control Program (CPCP) specified for the model type by Manufacturer and LESSEE will provide LESSOR with documentation substantiating such compliance.

23.9.17

If any waivers, deviations, dispensations, alternate means of compliance, extensions or carry-overs with respect to maintenance or operating requirements, repairs or Airworthiness Directives are granted by the Aviation Authority or permitted by the Maintenance Program, LESSEE at its sole cost and expense will nonetheless perform such maintenance or operating requirements, repairs or Airworthiness Directives as if such waivers, deviations, dispensations, alternate means of compliance, or extensions or carry-overs did not exist.

23.9.18

The Aircraft will be free from any Security Interest except LESSOR’s Liens and no circumstance will have so arisen whereby the Aircraft is or could become subject to any Security Interest or right of detention or sale in favor of the Aviation Authority, any airport authority, Eurocontrol or any other authority or Government Entity.

23.9.19

All no-charge vendor and Manufacturer’s service bulletin kits received by LESSEE for the Aircraft but not installed thereon will be on board the Aircraft as cargo. All no-charge vendor and Manufacturer’s service bulletin kits ordered by LESSEE but not yet received will, upon receipt by LESSEE and at LESSEE’s cost, be forwarded as instructed by LESSOR. At LESSOR’s request, any other service bulletin kit which LESSEE ordered specifically for the Aircraft and paid for will also be delivered to LESSOR on board the Aircraft, but LESSOR will reimburse LESSEE for its actual out-of-pocket costs for such kit, unless LESSEE purchased such kit as part of its

ARTICLE 23

implementation of a service bulletin on its fleet of aircraft of the same type as the Aircraft but had not yet installed such kit on the Aircraft, in which case such kit will be furnished free of charge to LESSOR.

23.9.20

The Aircraft will be free of any leaks found to be outside of maintenance manual limits and any damage resulting therefrom. All repairs will have been performed on a permanent basis in accordance with the applicable manufacturer’s instructions unless no such permanent repair is available.

23.9.21

The Aircraft fluid reservoirs (including oil, oxygen, hydraulic and water) will be serviced to full and the waste tank serviced in accordance with Manufacturer’s instructions. Fuel tanks will be at least as full as at Delivery.

23.10 Checks Prior to Return. Immediately prior to return of the Aircraft to LESSOR, LESSEE at its expense will do each of the following:

23.10.1

LESSEE will have the Return Check performed by an FAA-approved repair facility. LESSEE also agrees to perform during the Return Check any other work reasonably requested by LESSOR (and not otherwise required under this Lease) and LESSOR will reimburse LESSEE for performing such LESSOR-requested work based on LESSEE’s out-of-pocket and unburdened labor and material costs. In the event that LESSEE exercises any extension option with respect to the Initial Lease Term, and the next consecutive check due on the Aircraft pursuant to the MPD (regardless of whether or not such check would have fallen during the Lease Term) is a “12Y” check, then LESSEE will accomplish the “12Y” check (including all lesser checks) as described in the MPD.

23.10.2

LESSEE will perform an internal and external corrosion inspection and correct any discrepancies in accordance with the recommendations of Manufacturer and the Structural Repair Manual. In addition, all inspected areas will be properly treated with corrosion inhibitor as recommended by Manufacturer.

23.10.3

LESSEE will remove LESSEE’s exterior markings, including all exterior paint, by stripping (or, at LESSOR’S option, pneumatically sanding) the paint from the fuselage, empennage, wings and Engine cowlings, and clean, reseal, refinish, prepare (including application of alodine or another corrosion inhibitor) and prime the surfaces to be painted, all in accordance with Manufacturer’s and paint manufacturer’s recommendations. LESSEE will then repaint the fuselage, empennage, wings and Engine cowlings in the colors and logo specified by LESSOR. Such painting will be accomplished in such a manner as to result in a uniformly smooth and cosmetically acceptable aerodynamic surface. All external placards, signs and markings will be properly attached, free from damage, clean and

ARTICLE 23

RETURN OF AIRCRAFT

legible. Notwithstanding the foregoing, in the event that the cost of painting the Aircraft in the logo and colors specified by LESSOR exceeds the then-current cost of painting the Aircraft in the logo and colors in which it was painted at Delivery, then LESSOR will reimburse LESSEE for any such excess cost. After painting, the Aircraft will be weighed.

23.10.4

LESSEE will clean the exterior and interior of the Aircraft.

23.10.5

If reasonably required by LESSOR, LESSEE will repaint by touch-up the interior of the Aircraft, including flight deck, and replace missing, broken or illegible placards.

23.10.6

In accordance with Article 23.9.11, LESSEE will permanently repair damage to the Aircraft that exceeds Manufacturer’s limits and replace any non-flush structural patch repairs installed on the Aircraft with permanent flush-type repairs, in each case with no further inspection requirements unless a permanent flush-type repair is unavailable.

23.10.7

With LESSOR and/or its representatives present, LESSEE will perform a full and complete hot and cold section videotape borescope on each Engine and its modules in accordance with Manufacturer’s aircraft maintenance manual.

23.10.8

If the Engine historical and technical records and/or condition trend monitoring data of any Engine indicate an acceleration in the rate of deterioration in the performance of an Engine, LESSEE will correct, to LESSOR’s reasonable satisfaction, such conditions which are determined to be causing such accelerated rate of deterioration.

23.10.9

With LESSOR and/or its representatives present, LESSEE will accomplish a power assurance run on the Engines in accordance with Manufacturer’s aircraft maintenance manual Task 71-00-00-710-013 Test No. 11 “High Power Assurance Test” (or any subsequent equivalent replacement thereof). LESSEE will record the Engine power assurance test conditions and results on the Return Acceptance Receipt.

23.10.10

LESSEE will provide evidence to LESSOR’s reasonable satisfaction that the Engine historical and technical records, borescope inspection, trend monitoring and power assurance run do not reveal any condition which would cause the Engines or any module to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions under the Manufacturer’s aircraft maintenance manual. LESSEE will correct any discrepancies in accordance with the guidelines set out by the Engine Manufacturer which may be discovered during such inspection.

ARTICLE 23

RETURN OF AIRCRAFT

23.10.11

In the event the Engine historical and technical records, borescope inspection, trend monitoring and other checks specified in Article 23.10.9 result in a dispute regarding the conformity of an Engine with the requirements of this Article 23, LESSEE and LESSOR will consult with the Engine Manufacturer and follow the Engine Manufacturer’s recommendations (including the accomplishment of an Engine test cell operational check if so recommended) with regard to determining if such Engine complies with the requirements of this Article 23 and the manner in which any discrepancies from the requirements of this Article 23 will be rectified.

23.10.12

With LESSOR and/or its representatives present, LESSEE will perform an APU condition test in accordance with Manufacturer’s aircraft maintenance manual and a complete hot and cold section videotape borescope on the APU. LESSEE will provide evidence to LESSOR’s reasonable satisfaction that the APU condition test and borescope inspection do not reveal any condition which would cause the APU to be unserviceable, beyond serviceable limits or serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions. LESSEE will correct any discrepancies in accordance with the guidelines set out by the APU manufacturer which may be discovered during such test or inspections. If such APU is serviceable with an increased frequency of inspection or with calendar time, flight hour or flight cycle restrictions, LESSOR agrees to discuss with LESSEE in good faith for a resolution that compensates LESSOR for such deficiency and avoid or minimize any delays in return of the Aircraft to LESSOR.

23.10.13

If the APU historical and technical records and/or condition trend monitoring data indicate an acceleration in the rate of deterioration in the performance of the APU, LESSEE will correct, to LESSOR’s reasonable satisfaction, such conditions which are determined to be causing such accelerated rate of deterioration.

23.11 Part Lives. At return, the condition of the Aircraft will be as follows:

23.11.1

The Aircraft will have zero (0) hours consumed since the Return Check (excluding hours consumed on the acceptance flight).

23.11.2

Each Engine will meet all of the following:

(a) Each Engine will have at least 4,000 hours and 3,500 cycles remaining to operate until its next anticipated removal (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, trend monitoring data and the other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10).

ARTICLE 23

RETURN OF AIRCRAFT

(b) If any module of an Engine is returned with hours accumulated on such module since the last performance restoration of such module, LESSEE will pay LESSOR an amount equal to the hours accumulated on such module times then-current Engine Manufacturer performance restoration rate for such module, based on Engine Manufacturer’s estimated mean time between performance restoration for such module.

(c) Each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the hours and cycles set forth in the preceding subparagraph (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, trend monitoring data and the other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10).

(d) The Engine historical and technical records, borescope inspection, trend monitoring, power assurance run and other checks specified in Articles 23.10.7, 23.10.8, 23.10.9 and 23.10.10 indicate that the Engine should operate for the hours and cycles set forth in Article 23.11.2(a).

(e) Each Part of an Engine which has a life-limit will have at least 4,000 cycles remaining to operate until its next removal per the Engine Manufacturer’s limit.

(f) No life-limited Part of an Engine will have more hours and cycles consumed than such Engine’s data plate.

23.11.3

The APU will have not more than 2,000 APU hours consumed since the last APU manufacturer’s medium or heavy repair workscope. If the APU has life-limited Parts, the cycles remaining on the most restricted life-limited Part will be a minimum of 3,000 APU cycles at return.

In addition, to the extent there are life-limited Parts in the APU, then, for each such life-limited Part, LESSEE will pay LESSOR an amount equal to the product of (a) the quotient obtained by dividing (i) the cycles consumed on each such life-limited Part within the APU since new by (ii) the total life of each such life-limited Part, multiplied by (b) the replacement cost of the applicable life-limited Part, all as determined by the APU manufacturer’s then-current data.

23.11.4

Each leg of the Landing Gear will have at least 7 years remaining pursuant to the MPD until the next scheduled Overhaul.

23.11.5

Each Part of the Airframe, Engine or APU which has a hard time limit pursuant to the MPD will have the greater of (a) at least 50% of such hard time Part’s full allotment of

ARTICLE 23

RETURN OF AIRCRAFT

hours and cycles or (b) 6,000 hours and 5,000 cycles remaining to operate until its next scheduled Overhaul or scheduled removal pursuant to the MPD. However, if such hard time Part’s full allotment of hours and cycles between Overhauls pursuant to the MPD is less than 6,000 hours and 5,000 cycles, then such hard time Part will be returned with zero (0) hours and zero (0) cycles out of Overhaul.

23.11.6

Each life-limited Part of the Airframe or APU will have the greater of (a) at least 50% of such life-limited Part’s full allotment of hours and cycles or (b) 6,000 hours and 5,000 cycles remaining to operate until its next scheduled replacement pursuant to the MPD. However, if such life-limited Part’s full allotment of hours and cycles remaining to operate pursuant to the MPD is less than 6,000 hours and 5,000 cycles, then such life-limited Part will be returned with 100% of its total approved hours and cycles remaining.

23.11.7

No life-limited Part of the Airframe will have more hours and cycles consumed than the total hours and cycles of the Airframe.

23.11.8

No life-limited Part of the APU will have more hours and cycles consumed than the hours and cycles of the APU.

23.11.9

Each Part which has a calendar time limit will have 20 months remaining to operate until removal pursuant to the MPD. If a Part with a calendar time limit has a total approved calendar time remaining pursuant to the MPD of less than 20 months, then such Part will be returned with 100% of its total approved calendar time remaining until removal.

23.11.10

No Part (excluding the life-limited Parts which are covered by Articles 23.11.2(e), 23.11.2(f), 23.11.6, 23.11.7 and 23.11.8) will have total hours or total cycles since new greater than one hundred fifteen percent (115%) of that of the Airframe and, with respect to all such Parts as a group, such Parts will have an average total time since new no greater than that of the Airframe.

23.11.11

Each Landing Gear tire and brake will have fifty percent (50%) of its total wear remaining to its next Overhaul.

23.12 Export and Deregistration of Aircraft. At LESSOR’s request, LESSEE at its cost will (a) provide an Export Certificate of Airworthiness or its equivalent from the State of Registration so that the Aircraft can be exported to the country designated by LESSOR, (b) assist with deregistration of the Aircraft from the register of aircraft in the State of Registration, (c) assist with arranging for prompt confirmation of such deregistration to be sent by the registry in the State of Registration to the next country of registration and (d) perform any other

ARTICLE 23

RETURN OF AIRCRAFT

acts reasonably required by LESSOR in connection with the foregoing. If any Aircraft work which LESSEE is not otherwise required to perform hereunder, including engineering, is required in order to obtain such Export Certificate of Airworthiness, LESSEE will perform such work and LESSOR will reimburse LESSEE for such work at LESSEE’s out-of-pocket expenses.

23.13 Delay in Return of Aircraft Due to LESSOR Work Requests. LESSEE will not be required to pay Rent to LESSOR for any whole days that return of the Aircraft to LESSOR is delayed solely as a result of LESSOR’s requests that additional work be performed over and above the work necessary to place the Aircraft in the condition required by this Article 23, and in the event associated costs other than additional Rent are incurred, such as additional insurance, LESSOR shall reimburse reasonable costs associated therewith.

23.14 LESSEE’s Continuing Obligations. In the event that LESSEE does not return the Aircraft to LESSOR on the Expiration Date and in the condition required by this Article 23 for any reason (whether or not the reason is within LESSEE’s control), but subject to Article 23.13:

23.14.1

the obligations of LESSEE under this Lease will continue in full force and effect on a day-to-day basis until such return. This will not be considered a waiver of LESSEE’s Event of Default or any right of LESSOR hereunder.

23.14.2

Until such return, the Agreed Value will be an amount equal to the Agreed Value on the day the Aircraft should have been returned to LESSOR pursuant to this Lease.

23.14.3

Without limiting LESSOR’s rights and remedies under Article 25 and except for a delay in return of the Aircraft for the reason set forth in Article 23.13, until such time as the Aircraft is redelivered to LESSOR and put into the condition required by this Article 23, instead of paying the Rent specified in Article 5.3, LESSEE will pay twice the amount of Rent in effect on the Expiration Date for each day from the scheduled Expiration Date until the Termination Date. In determining the applicable normal Rent per day that will be doubled for purposes of this calculation, the monthly Rent payable under Article 5.3.1 will be prorated based on the actual number of days in the applicable month. Payment will be made upon presentation of LESSOR’s invoice.

23.14.4

LESSOR may elect, in its sole and absolute discretion, to accept the return of the Aircraft prior to the Aircraft being put in the condition required by this Article 23 and thereafter have any such non-conformance corrected at such time as LESSOR may deem appropriate (but within ninety (90) days following the return of the Aircraft) and at commercial rates then-charged by the Person selected by LESSOR to perform such correction. Any direct expenses incurred by LESSOR for such correction will be payable by LESSEE within fifteen (15) days following the submission of a written statement by LESSOR to LESSEE, identifying the items corrected and setting forth the expense of such corrections. LESSEE’s obligation to pay such amounts will survive the Termination Date.

ARTICLE 23