Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (Form: F-1/A, Received: 08/16/2013 17:08:47)

As filed with the Securities and Exchange Commission on August 16, 2013

No. 333-189121

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pre-Effective Amendment No. 3 to

Form F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Controladora Vuela Compañía de Aviación, S.A.B. de C.V.

(Exact name of Registrant as specified in its charter)

Volaris Aviation Holding Company

(Translation of Registrant’s name into English)

United Mexican States

4512

None

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification No.)

Av. Antonio Dovalí Jaime No. 70, 13 Floor, Tower B

Colonia Zedec Santa Fe

United Mexican States, D.F. 01210

+(52) 55-5261-6400

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Corporation Service Company

1090 Vermont Avenue NW, Suite 430

Washington, DC 20005

1-800-927-9800

(Name, address, including zip code, and telephone number, including area code, of agent for service)

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

Antonia E. Stolper, Esq.

Shearman & Sterling LLP

599 Lexington Avenue

New York, New York 10022

Michael L. Fitzgerald, Esq.

Paul Hastings LLP

75 East 55th Street

New York, New York 10022

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

CALCULATION OF REGISTRATION FEE



Title of each class of securities to be registered	Proposed maximum aggregate offering price(1)(2)	Amount of registration fee
Ordinary Participation Certificates (Certificados de Participación Ordinarios) (“CPOs”)(3)	U.S.$100,000,000	U.S.$13,640
Series A shares of common stock, no par value(4)	—	—

(1)	Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)

Includes public offering price of CPOs which the underwriters may purchase to cover over-allotments, if any, and CPOs that are to be offered and sold outside the United States but that may be resold in the United States in transactions requiring registration under the Securities Act of 1933, as amended.

(3)

American Depositary Shares evidenced by American Depositary Receipts issuable upon deposit of the CPOs registered hereby will be registered under a separate registration statement on Form F-6. Each such American Depositary Share represents ten CPOs and each CPO represents a financial interest in one share of the registrant’s Series A common stock, no par value.

(4)	The Series A shares of common stock comprise the CPOs registered hereby and are not being offered hereby.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

E XPLANATORY N OTE

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

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 6. Indemnification of Directors and Officers

The Registrant’s bylaws provide for the indemnification of the members of its board of directors and any committee, as well as the secretary, the assistant secretary and officers of the Registrant in connection with the performance of their duties, against any claim, suit, proceeding or investigation initiated in Mexico or in any jurisdiction where the Registrant’s shares or any other securities having as underlying asset such shares or other fixed-income or variable-income securities of the Registrant are registered or listed, or in any jurisdiction where the Registrant or the entities it controls operate; provided, however, that the indemnity will not apply if such claims, suits, proceedings or investigations result from gross negligence, willful misconduct or bad faith of the relevant indemnified party. Such indemnification includes the payment of any damage or loss that may have been caused by the conduct of such members of the board of directors or committee, secretary, assistant secretary or officers of the Registrant, and the amount needed, if deemed appropriate, to reach a settlement. Indemnification also includes all fees and expenses of legal counsel and other advisors working for the interests of the indemnified individuals. Pursuant to the Registrant’s bylaws, the board of directors retains the right to determine whether hiring of separate legal counsel and advisors to represent or advise the indemnified individuals is necessary.

Policies of insurance may be maintained by the Registrant under which the members of its board of directors and any committee, as well as the secretary, the assistant secretary and officers are insured, within the limits and subject to the limitations of the policies, against certain expenses in connection with the defense of, and certain liabilities which might be imposed as a result of, claims, suits, proceedings or investigations to which they are parties by reason of being or having been such members of the board of directors or committee, secretary, assistant secretary or officers of the Registrant.

Item 7. Recent Sales of Unregistered Securities

During the last three years, the Registrant made sales of the following unregistered securities:

(1) Through unanimous resolutions dated November 27, 2012, December 21, 2012 and December 26, 2012, the Registrant’s shareholders approved a corporate restructuring with the sole purpose of acquiring the shares held by other shareholders of Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., or Volaris Opco, in exchange for 86,040,097 Series A shares of capital stock of the Registrant. As a consequence, the Registrant increased its direct and indirect holding of the outstanding shares of Volaris Opco by acquiring on November 27, 2012 an additional 5.28% interest in the voting shares of Volaris Opco and on December 21, 2012 an additional 3.24% interest in the voting shares of Volaris Opco, increasing its ownership interest after both acquisitions to 97.95%. The difference of Ps.189.8 million between the consideration paid and the carrying value of the interest acquired has been recognized in additional paid-in capital within equity and attributed to the owners of the Registrant.

(2) In December 2012, the Registrant’s shareholders approved a share incentive plan for the benefit of certain executive officers. Under this plan, designated officers generally may receive up to 3.0% of the Registrant’s capital stock on a fully diluted basis immediately prior to the completion of the related performance condition (consummation of the global offering or change of control), exercisable after such performance condition and for a period of ten years. To implement the plan, the Registrant’s shareholders approved (i) the issuance of an aggregate of 25,164,126 Series A and Series B shares, representing 3.0% of the Registrant’s capital stock, (ii) the transfer of such shares to a Mexican trust for the benefit of certain officers and (iii) the execution of share sales agreements setting forth the terms and conditions upon which the officers will receive purchased shares from the trustee for the Mexican trust. On December 24, 2012, the trust was created and the share sales agreements were executed. On December 27, 2012, the trust acquired the aforementioned shares. The shares will accrue any dividends paid by the Registrant during the time elapsing prior to the delivery to officers upon payment therefor.

II-1

The sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act and/or Regulation S under the Securities Act. The Registrant believes that the recipients of the securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof. All recipients had adequate access, through their relationships with the Registrant, to information about it. There were no underwriters employed in connection with any of these transactions.

Item 8. Exhibits

(a) The following documents are filed as part of this registration statement:

The exhibit index attached hereto is incorporated herein by reference.

(b) Financial Statement Schedules

No financial statement schedules are provided because the information called for is not applicable or is shown in the financial statements or notes thereto.

Item 9. Undertakings

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(4) The Registrant will provide to the Underwriters at the closing specified in the Underwriting Agreement ADSs and CPOs in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.

II-2

SIGNATURES

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


Controladora Vuela Compañía de Aviación, S.A.B. de C.V.

By:		/ S / J AIME P OUS
Name:		Jaime Pous
Title:		General Counsel

By:		/ S / F ERNANDO S UÁREZ
Name:		Fernando Suárez
Title:		Chief Financial Officer

Pursuant to the requirements of the Securities Act, this pre-effective amendment No. 3 to the Registration Statement on Form F-1 has been signed by the following persons in the capacities indicated.

Date: August 16, 2013


Signature		Title

* Enrique Beltranena		Chief Executive Officer

* Fernando Suárez		Chief Financial Officer

* Carlos Alberto González		Corporate Controller Director

* Gilberto Perezalonso Cifuentes		Director and Chairman of the Board

* Pedro Carlos Aspe Armella		Director

* Brian H. Franke		Director

* William A. Franke		Director

* Harry F. Krensky		Director

* Roberto José Kriete Ávila		Director

* Rodolfo Montemayor Garza		Director

II-3


Signature		Title

* Jorge Antonio Vargas Diez Barroso		Director

* José Luis Fernández Fernández		Independent Director

* Joaquín Alberto Palomo Déneke		Independent Director

* John A. Slowik		Independent Director

* Donald Puglisi		Authorized U.S. Representative



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



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

II-4

EXHIBIT INDEX


Exhibit Number		Exhibit

1.1*		Form of Underwriting Agreement

3.1*		By-laws of the Registrant (estatutos) (English translation)

4.1*		Specimen certificate representing certificate for Series A share (English translation)

4.2*		Specimen certificate representing a Certificado de Participación Ordinario (English translation)

4.3*		Form of CPO Trust Agreement, between the Registrant and Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo (English translation)

4.4*		Form of CPO Deed, among Nacional Financiera, Sociedad Nacional de Crédito, Institucíon de Banca de Desarrollo, Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero and Comisíon Nacional Bancaria y de Valores (English translation)

4.5*		Form of Deposit Agreement among the Registrant, The Bank of New York Mellon, as depositary, and the Holders from time to time of American Depositary Shares issued thereunder, including the form of American Depositary Receipts

4.6*		Form of American Depositary Receipt (included in Exhibit 4.5)

4.7**		Form of Registration Rights Agreement among the Registrant and the shareholders named therein

5.1*		Opinion of Ritch Mueller, S.C., Mexican legal counsel of the Registrant, as to the legality of the Series A shares and CPOs

10.1†*		Engine Lease Agreement, dated as of November 24, 2009, between the Company, RRPF Engine Leasing Limited and Rolls-Royce & Partners Finance Limited

10.2†*		Engine Lease Agreement, dated as of June 28, 2007, between the Company and Celestial Aviation Trading 50 Limited, as amended by the Engine Lease Extension & Amendment Agreement, dated as of March 27, 2013 between the Company and Wells Fargo Bank Northwest, National Association

10.3†*		Amended and Restated Component Services and Pooling Agreement, dated as of February 10, 2009, between the Company and Aveos Fleet Performance Inc.

10.4†*		Lease Agreement, dated as of August 21, 2008, between the Company and Engine Lease Finance Corporation

10.5†		Fleet Hour Agreement, dated as of June 8, 2007 between the Company and IAE International Aero Engines AG including Side Letter dated as of May 31, 2012

10.6†*		Lease Agreement, dated as of April 28, 2006, between the Company and Engine Lease Finance Corporation, as amended by the Lease Extension and Amendment Agreement No. 1, dated as of September 30, 2011 between the Company and Engine Lease Finance Corporation

10.7†*		Lease Agreement, dated as of April 28, 2006, between the Company and Engine Lease Finance Corporation

10.8†*		Aircraft Repair and Maintenance Service Agreement, dated as of March 6, 2007, between the Company and Aeromantenimiento, S.A.

10.9†*		General Terms of Sale Agreement, dated as of December 8, 2006, between the Company and IAE International Aero Engines AG

10.10†*		A320 Family Purchase Agreement, dated as of October 28, 2005, between the Company and Airbus S.A.S., including Amendment No. 1, dated as of June 22, 2007, Amendment No. 2, dated as of July 11, 2008, Amendment No. 3, dated as of January 30, 2009, Amendment No. 4, dated as of October 28, 2010, Amendment No. 5, dated as of December 15, 2010, Amendment No. 6, dated as of December 15, 2010, Amendment No. 7, dated as of January 4, 2011 and Amendments Nos. 8 and 9 both dated as of December 28, 2011

10.11†*		Lease Agreement, dated as of March 9, 2007 between the Company Concesionaria Vuela and International Lease Finance Corporation


Exhibit Number		Exhibit

10.12†*		Lease Agreement, dated as of March 9, 2007 between the Company Concesionaria Vuela and International Lease Finance Corporation

10.13†*		Lease Agreement, dated as of March 12, 2007, between the Company and RBS Aerospace Limited

10.14†*		Lease Agreement, dated as of March 12, 2007, between the Company and RBS Aerospace Limited

10.15†*		Lease Agreement, dated as of March 12, 2007, between the Company and RBS Aerospace Limited

		Amendment Agreement, dated as of September 17, 2007, between Company and RBS Aerospace Limited with Wells Fargo Northwest, National Association

10.16†*		Lease Agreement, dated as of March 12, 2007, between the Company and RBS Aerospace Limited

		Amendment Agreement, dated as of October 10, 2007, between Company and RBS Aerospace Limited with Wells Fargo Northwest, National Association

10.17†*		Lease Agreement, dated as of March 26, 2007, between the Company and Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Múltiple, Entidad Regulada Grupo Financiero Inbursa

10.18†*		Lease Agreement, dated as of April 20, 2007, between the Company and International Lease Finance Corporation

10.19†*		Lease Agreement, dated as of June 18, 2007, between the Company and Arrendadora Financiera Inbursa, S.A. de C.V. Sociedad Financiera de Objeto Múltiple, Entidad Regulada Grupo Financiero Inbursa

10.20†*		Lease Agreement, dated as of January 25, 2008, between the Company and Wells Fargo Bank Northwest, National Association

10.21†*		Lease Agreement, dated as of January 25, 2008, between the Company and Wells Fargo Bank Northwest, National Association

10.22†*		Lease Agreement, dated as of November 7, 2008, between the Company and Amentum Leasing No. Four Limited

10.23†*		Lease Agreement, dated as of November 30, 2009, between the Company and CIT Aerospace International

10.24†*		Lease Agreement, dated as of November 30, 2009, between the Company and CIT Aerospace International

10.25†*		Lease Agreement, dated as of August 23, 2010, as amended between the Company and Macquarie Airfinance Acquisitions (Ireland) Limited

10.26†		Lease Agreement, dated as of August 23, 2010, as amended between the Company and Macquarie Aerospace Ireland Limited

10.27†*		Lease Agreement, dated as of November 9, 2010, between the Company and Wilmington Trust SP Services (Dublin) Limited

10.28†*		Lease Agreement, dated as of November 17, 2010, between the Company and Wilmington Trust SP Services (Dublin) Limited

10.29†*		Lease Agreement, dated as of November 17, 2010, between the Company and Wilmington Trust SP Services (Dublin) Limited

10.30†*		Lease Agreement, dated as of April 7, 2011, between the Company and MASL Ireland (22) Limited

10.31†*		Lease Agreement, dated as of April 13, 2011, between the Company and Wells Fargo Bank Northwest, National Association


Exhibit Number		Exhibit

10.32†*		Lease Agreement, dated as of April 29, 2011, between the Company and Amentum Leasing No. Three Limited

10.33†*		Lease Agreement, dated as of April 29, 2011, between the Company and Amentum Leasing No. Three Limited

10.34†*		Common Terms Agreement, dated as of June 28, 2007, between the Company and GE Commercial Aviation Services Limited, as amended by the Engine Lease Extension & Amendment Agreement, dated as of March 27, 2013 between the Company and Wells Fargo Bank Northwest, National Association

10.35†*		Fuel Sales Agreement, dated as of January 1, 2012, between the Company and World Fuel Services, Inc.

10.36†		Lease Agreement, dated as of April 14, 2011, between the Company and Wells Fargo Bank Northwest, National Association

10.37†		Lease Agreement, dated as of June 26, 2012, between the Company and Wells Fargo Bank Northwest, National Association

10.38†		Lease Agreement, dated as of April 14, 2011, between the Company and Wells Fargo Bank Northwest, National Association

10.39†		Lease Agreement, dated as of April 14, 2011, between the Company and Wells Fargo Bank Northwest, National Association

10.40†		Lease Agreement, dated as of April 14, 2011, between the Company and Wells Fargo Bank Northwest, National Association

10.41†		Lease Agreement, dated as of March 15, 2012, between the Company and Wells Fargo Bank Northwest, National Association

10.42†		Lease Agreement, dated as of June 26, 2012, between the Company and Wells Fargo Bank Northwest, National Association

10.43†		Aircraft Lease Agreement “A”, dated as of April 12, 2011, between Wells Fargo Bank Northwest, National Association and the Company

10.44†		Aircraft Lease Agreement “B”, dated as of April 12, 2011, between Wells Fargo Bank Northwest, National Association and the Company

10.45†		Aircraft Lease Agreement “C”, dated as of April 12, 2011, between Wells Fargo Bank Northwest, National Association and the Company

10.46†		Aircraft Lease Agreement “D”, dated as of April 12, 2011, between Wells Fargo Bank Northwest, National Association and the Company

10.47†		Agreement on Technical Services for A319/A320 Aircraft, dated as of August 15, 2012 between the Company and Lufthansa Technik AG;

		Attachment 1: Total Component Support to Agreement on Technical Services for A310/320 Aircraft between Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V. and Lufthansa Technik AG dated August 15, 2012.

10.48†		Aircraft Lease Agreement “A”, dated as of December 31, 2012, between Wells Fargo Bank Northwest, National Association and the Company

10.49†		Aircraft Lease Agreement “B”, dated as of December 31, 2012, between Wells Fargo Bank Northwest, National Association and the Company


Exhibit Number		Exhibit

10.50†		Aircraft Lease Agreement “C”, dated as of December 31, 2012, between Wells Fargo Bank Northwest, National Association and the Company

10.51†		The Engine Lease Extension & Amendment Agreement, dated as of March 27, 2013 between the Company and Wells Fargo Bank Northwest, National Association

10.52†		Revolving Credit Line Agreement dated July 27, 2011 among the Company, Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander Mexico and Banco Nacional de Comercio Exterior, S.N.C. and the First Amendment dated August 1, 2013

10.53†		Master Agreement, dated as of July 20, 2009, between the Company and Sabre, Inc. and Work Order Number 1, dated as of July 20, 2009 under the Master Agreement

10.54†		Navitaire Hosted Services Agreement, dated January 29, 2013

10.55†		Aircraft Lease Agreement “D”, dated as of December 31, 2012, between Wells Fargo Bank Northwest, National Association and the Company

21.1*		List of the Subsidiaries of the Registrant

23.1*		Consent of Mancera S.C. (a member practice of Ernst & Young Global)

23.2*		Consent of Ritch Mueller S.C., Mexican legal counsel of the Registrant (included in Exhibit 5.1)

24.1*		Powers of Attorney (included on signature page to the Registration Statement)

99.1*		Concession Title, dated as of May 9, 2005, as amended from time to time, granted to the Registrant by the Ministry of Communications and Transportation ( Secretaria de Comunicaciones y Transportes )

(*)	Previously filed.

(**)	To be filed by amendment.

†	Portions of the exhibit will be omitted pursuant to a request for confidential treatment.

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

Exhibit 10.05

IAE PROPRIETARY INFORMATION

FLEET HOUR AGREEMENT

between

CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.

and

IAE INTERNATIONAL AERO ENGINES AG

Page 1 of 37

IAE PROPRIETARY INFORMATION

Table of Contents


1.	Definitions	3
2.	FHA Services	7
3.	Period of Cover	7
4.	Shop Visit Coverage	8
5.	Lease Engine Support	9
6.	Transportation	10
7.	General Fleet Hour Agreement Services	10
8.	Excess Work	10
9.	Obligations of Vuela	12
10.	FHA Rates and Payment	14
11.	Escalation Protection	18
12.	Warranties	18
13.	Delays	19
14.	Duplicate Benefits	19
15.	Intellectual Property	20
16.	Amendment	21
17.	Assignment	21
18.	Exhibits	21
19.	Headings	21
20.	Notices	21
21.	Exclusion of Other Provisions and Previous Understandings	21
22.	Termination, Expiration and Events of Default	22
23.	Negation of Waiver	23
24.	Severability And Partial Invalidity	23
25.	Governing Law	23
26.	Limitation of Liability	24
27.	Publicity	24
28.	Confidentiality	24
29.	Records and Audit	24

Exhibit A Eligible Engine List		26

Exhibit B IAE FHA Escalation Formula		27

Exhibit C Accessories		28

Exhibit D Powerplant – Description		30

Exhibit E Addresses		33

Exhibit F IAE Engine Monitoring Services		36

Exhibit G Excess Work Labor and Fee Rates		37

Exhibit H FHA Rate Adjustment		38

Page 2 of 37

IAE PROPRIETARY INFORMATION

Fleet Hour Agreement

THIS FLEET HOUR AGREEMENT (the “ Agreement ”) is made this day of June 2007, between


IAE INTERNATIONAL AERO ENGINES AG		A joint stock company organized and existing under the laws of Switzerland, with a place of business at 400 Main Street, M/S 121-10, East Hartford, Connecticut 06108, USA, (hereinafter called “ IAE ”).
AND

CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN, S.A. DE C.V.		A corporation organized and existing under the laws of Mexico with a place of business at Av. Prolongación Reforma # 490 Primer Piso, Colonia Lomas Santa Fe, Delegación Álvaro Obregón, México, Distrito Federal, C.P. 01210 Mexico (hereinafter called “ Vuela ”).

(IAE and VUELA may be referred to herein collectively as the “ Parties ”, or individually as a “ Party ”.)

WHEREAS:

Vuela is acquiring from Airbus ***** new firm A319 aircraft powered by new V2527M-A5 engines and up to *****new option V2500 powered A320 family aircraft, and is purchasing from IAE ***** new V2527M-A5 firm spare engines as well as any additional option V2500-A5 spare engines necessary to support option aircraft acquired by Vuela;

B.	Vuela and IAE have entered a General Terms Agreement, of even date herewith, for the sale of the spare V2527M-A5 engines and the supply of certain support services and parts for V2527M-A5 engines; and

C.	IAE and Vuela now wish to agree upon terms whereby IAE shall arrange for, manage and subcontract certain maintenance of Vuela’s Eligible Engines (as hereinafter defined).

NOW THEREFORE IT IS AGREED AS FOLLOWS:

1.	Definitions

1.1

“ Accessory ” or “ Accessories ” includes those items listed in Exhibit C to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible engines.

1.2

“ Airbus ” shall mean Airbus Industrie SAS.

1.3

“ Aircraft ” shall mean all or each of

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

Page 3 of 37

IAE PROPRIETARY INFORMATION

1.3.1

The ***** Airbus A319 Firm Aircraft to be delivered in accordance with the schedule set forth in Exhibit B of the Support Contract, as such delivery schedule may be amended from time to time;

1.3.2

Up to ***** new V2500-A5 powered Airbus A320 family aircraft which Vuela may acquire in addition to the Aircraft identified in Clauses 1.3.1 above.

1.4

“ Aircraft Maintenance Manual ” or “ AMM ” means the aircraft maintenance manual published by Airbus for the Aircraft.

1.5

“ Airworthiness Directive ” shall mean any applicable airworthiness directive issued by the Aviation Authority based on certification rules current as of the date of this Agreement.

1.6

“ Aviation Authority ” shall mean the United States Federal Aviation Administration.

1.7

“ Beyond Economic Repair ” shall mean wear, tear or damage to an item of Eligible Engine that is beyond economic repair.

1.8

“ BFE Item ” shall mean those buyer furnished equipment items listed as such in Exhibit D of this Agreement.

1.9

“ Business Day(s) ” shall mean a Day other than a Saturday, Sunday or holiday scheduled by law for commercial banking institutions in the City of New York, New York, United States.

1.10

“ Day ” means a calendar day.

1.11

“ DGAC ” shall mean the Dirección General de Aeronáutica Civil of Mexico.

1.12

“ EBU Item ” shall mean those engine build up items listed as such in Exhibit D to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.

1.13

“ Eligible Engine(s) ” shall mean (a) the new Engines operated by Vuela originally installed on the Aircraft, (b) the Spare Engines, and (c) any other Engines mutually agreed by the parties and listed in Exhibit A, in each case so long as such Engine is operated by Vuela. Exhibit A to this Agreement identifies the Eligible Engines as of the date hereof by serial number, and will be updated by the Parties from time to time to identify Eligible Engines by serial number as Vuela takes delivery of the Aircraft and the Spare Engines (or as the parties agree to cover other Engines under this Agreement).

1.14

“ Eligible Engine Flight Cycles ” shall mean, for each Eligible Engine, the number of times the wheels of an Aircraft on which the Eligible Engine is installed leaves the ground on take-off during regularly scheduled revenue service.

1.15

“ Eligible Engine Flight Hours ” shall mean, for each Eligible Engine, the sum total of each hour or part thereof (fractions thereof measured to two decimal places) elapsing from the moment the wheels of an Aircraft on which the Eligible Engine is installed leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing.

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

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1.16

“ Eligible Removal ” shall mean the necessary removal of an Eligible Engine from an Aircraft during the Period of Cover following all reasonable and appropriate line maintenance actions and troubleshooting in accordance with the AMM and the FHA Manager’s recommendations, where such removal is due to (i) exceedance of AMM limits for continued operation as mutually agreed by Vuela and the FHA Manager to be necessary (such agreement not to be unreasonably withheld); (ii) Life Limited Parts time expiry, provided the last Shop Visit for the Eligible Engine was performed by IAE during the Period of Cover; or (iii) the written recommendation of the FHA Manager.

1.17

“ Engine(s) ” shall mean the basic IAE V2500-A5 turbofan engine, described in the V2500 Turbofan Engine Model Specifications set forth in Exhibit A of the Support Contract, and which excludes Accessories, EBU Items and QEC Items.

1.18

“ Engine Manual ” shall mean the IAE document which sets forth the requirements for Engine off-wing repair.

1.19

“ Excess Work ” shall mean work undertaken by the Maintenance Center during a Shop Visit pursuant to this Agreement that is not covered by the FHA Rates, as further described in Clause 0 of this Agreement.

1.20

“ Failure ” shall mean the breakage or malfunction of a Part (or Parts) rendering the Engine unserviceable and incapable of continued operation without corrective action which is not as a result of misuse, neglect, accident, maintenance error, or improper maintenance activities by any party other than IAE or the Maintenance Center.

1.21

“ FHA ” shall mean this Fleet Hour Agreement.

1.22

“ FHA Manager ” shall mean the manager provided by IAE for the support of the operation of this Agreement in accordance with the provisions of Clause 7 of this Agreement.

1.23

“ FHA Rate(s) ” shall mean the rate(s) collectively as set forth in Clause 10.1 below.

1.24

“ Foreign Object Damage ” shall mean damage to an Eligible Engine caused by the non-negligent ingestion of birds, hailstones or Runway Debris only.

1.25

“ Life Limited Parts ” or “ LLPs ” shall mean the Parts identified in Chapter 5 of the V2500-A5 Engine Manual as having specific life limits.

1.26

“ Maintenance Center ” shall mean the IAE shareholder maintenance center(s) designated by IAE and agreed by Vuela (such agreement not to be unreasonably withheld, conditioned, or delayed) from time to time to perform services under this Agreement and which is approved by the Aviation Authority as a certified repair station.

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1.27

“ Maintenance Management Plan ” or “ MMP ” shall mean the then-current V2500 engine maintenance planning documents described in Clause 7 of this Agreement, as customized for Vuela.

1.28

“ Miscellaneous Shop Visit ” shall mean any visit of an Eligible Engine to the Maintenance Center(s) following an Eligible Removal resulting from Failure of a Part in an Eligible Engine or any other unplanned cause and which does not result in a Restoration Shop Visit being undertaken.

1.29

“ Part(s) ” shall mean Engine part(s) provided under this Agreement and delivered by IAE to Vuela as original equipment in an Eligible Engine, or Engine spare parts sold to Vuela by IAE or Engine spare parts delivered to the designated Maintenance Center in support of Eligible Engines, excluding Accessories, EBU Items and QEC Items.

1.30

“ Period of Cover ” shall mean the applicable period for which IAE agrees to provide the services for each Eligible Engine pursuant to this Agreement, as set forth in Clause 3 of this Agreement.

1.31

“ QEC Item ” shall mean those items listed as such in Exhibit D to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.

1.32

“ Restoration Shop Visit ” shall mean any visit of an Eligible Engine to the Maintenance Center(s) following an Eligible Removal to accomplish Engine performance restoration sufficient to make the Eligible Engine serviceable in accordance with the then current revision of the MMP for the relevant Engine (or any successor to such MMP), IAE technical publications, Airworthiness Directives, and other IAE and Airworthiness Authority approved maintenance procedures, and which, as a minimum, includes a Level 3 refurbishment of the combustor and high pressure turbine.

1.33

“ Runway Debris ” shall mean any stones, gravel, or other small organic objects commonly found on properly maintained commercial airport runways.

1.34

“ Service Bulletin(s) ” shall mean those IAE target V2500-A5 service bulletins (excluding service bulletins for Accessories) as indicated in the MMP for Vuela, including service bulletins with a compliance code ***** which provide reliability and maintenance cost improvements;

1.35

“ Shop Visit ” shall mean either a Restoration Shop Visit or a Miscellaneous Shop Visit, as applicable.

1.36

“ Spare Engine(s) ” shall mean all or each of the new V2500-A5 Engines currently identified as Spare Engines in the Support Contract and either purchased or to be purchased by Vuela from IAE and to be delivered in accordance with the schedule set forth in Exhibit B of the Support Contract, as such delivery schedule may be amended from time to time in accordance with the Support Contract.

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

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1.37

“ Support Contract ” shall mean the V2500 General Terms Agreement, between IAE and Vuela dated of even date herewith, including all side letters and amendments thereto.

1.38

“ Taxes ” shall mean imposts, taxes, duties, levies, fees, assessments or other like charges imposed by any government entity or taxing authority.

1.39

“ Testable Engine ” shall mean an Eligible Engine with Accessories (including without limitation the Pneumatic Starter, ATA Code 80-13-41, and the Pneumatic Starter Valve, ATA Code 80-13-51) installed so as to enable the Engine to be tested either prior to or following its repair without the need for making use of units provided by the Maintenance Center, as further described in the applicable Engine Manual.

1.40

“ Vuela Affiliates ” shall mean any subsidiaries or other affiliates of Vuela that are either wholly-owned or otherwise controlled by Vuela or its shareholders.

1.41

“ Workscope ” shall mean an IAE written repair request to the Maintenance Center(s) compliant with the MMP that authorizes the Maintenance Center(s) to undertake work on Eligible Engines.

2.	FHA Services

IAE shall provide to Vuela the following FHA service coverage for the Period of Cover for each Eligible Engine:

2.1

Engine Shop Visit Coverage in accordance with the terms of Clause 4;

2.2

Lease Engine Coverage in accordance with the terms of Clause 5;

2.3

General FHA Services in accordance with the terms of Clause 7; and

2.4

Excess Work as required in accordance with the terms of Clause 0.

The provision of such coverage by IAE is subject to Vuela not being in material breach (beyond any applicable grace period) of its obligations under Clause 9.

3.	Period of Cover

3.1

FHA coverage and payment as set forth in this FHA will begin for each Eligible Engine as of the date of each Engine’s initial entry into service and will remain in force and effect for each Eligible Engine as follows:

3.1.1

For fifty percent (50%) of the Eligible Engines, until the expiration of ten (10) years after delivery of each such Eligible Engine (“ Period of Cover A ”); and

3.1.2

For each of the remaining fifty percent (50%) of the Eligible Engines, until the later of (a) the expiration of ten (10) years after delivery of each such Eligible Engine; and (b) completion of two (2) Restoration Shop Visits for each such Eligible Engine (“ Period of Cover B ”).

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3.2

Vuela shall have the option to elect which Period of Cover is applicable for each Eligible Engine within the constraints listed above by providing written notice to the IAE FHA Manager of its election for each Eligible Engine by no later than the date of induction for the first Restoration Shop Visit of each such Engine. For each Eligible Engine for which Vuela has not provided notice of its election prior to such Engine’s first Restoration Shop Visit, the applicable Period of Cover shall be Period of Cover A.

3.3

In the event that after the Period of Cover for an Eligible Engine has been determined in accordance with 3.2 above, Vuela sells or otherwise transfers such Engine to a lessor or financier as part of a sale and leaseback or similar financing arrangement, then Vuela at its election may request in writing that such Eligible Engine be reallocated from Period of Cover A to Period of Cover B (or vice versa). Following IAE’s receipt of Vuela’s request, the Parties will mutually evaluate whether some or all of the Eligible Engines can be reallocated between the two Period of Cover options to accommodate Vuela’s change in financing while at the same time maintaining (a) the Period of Cover balance set forth in Clause 3.1 and (b) the economic effects of the previous allocation. If the Parties determine that such reallocation can be accomplished within the criteria set forth in the preceding sentence, the Parties will amend Exhibit A to this Agreement to reflect the agreed-upon reallocation.

3.4

The Parties agree to amend Exhibit A to this Agreement from time to time to accurately reflect the Period of Cover applicable for each Eligible Engine, as determined in accordance with this Clause 3.

4.	Shop Visit Coverage

Following an Eligible Removal, the affected Eligible Engine shall be forwarded to the Maintenance Center. IAE shall provide Vuela with the proposed Workscope as early as possible (but in no event less than 3 days) prior to induction for a Shop Visit. IAE shall reasonably consider any modifications or additions to the Workscope proposed by Vuela and shall incorporate into such Workscope all such modifications or additions which are required to be made in accordance with the MMP and this Agreement. Notwithstanding the foregoing, the parties acknowledge that IAE shall have the ultimate control of the Workscope. IAE shall communicate the Workscope to the Maintenance Center and cause the Maintenance Center to complete the Shop Visit and provide Shop Visit reports with respect thereto in a timely manner. IAE shall pay to the Maintenance Center all charges directly incurred in respect of goods, work and services carried out during the Shop Visit, excluding charges for Excess Work (if such charges have been invoiced directly to Vuela), including for the following items:

4.1

Labor, new and used material, handling fees and charges, vendor fees, and test cell fees (including fuel and oil consumed at test) required to:

4.1.1

perform Engine reconditioning and repair in accordance with the Workscope to make the Eligible Engine serviceable to the specifications established in accordance with the then current customized MMP for Vuela, IAE technical publications, Airworthiness Directives and other IAE or FAA approved maintenance procedures.

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4.1.2

perform required Eligible Engine testing and retesting required by the Maintenance Center;

4.1.3

inspect, repair or replace Parts as required by Airworthiness Directives;

4.1.4

incorporate Service Bulletins ***** in accordance with the customized MMP;

4.1.5

Remove, repair or replace LLPs, except as provided in Clause 8.1.16 below;

4.1.6

provide Shop Visit documentation as follows:

(a)

serviceability tag FAA Form 8130-3 or -4, as applicable, and FAA Form 337;

(b)

a shop findings report on the services accomplished, including a report stating any damage detected and repairs accomplished;

(c)

a list of all Service Bulletins and Airworthiness Directives incorporated;

(d)

a list of all LLPs with associated times and cycles since new;

(e)

test cell performance data;

(f)

a list of Accessories by serial number.

4.2

IAE’s obligations for an Eligible Engine Shop Visit caused by Foreign Object Damage shall be limited to the provision of repair work and Parts provided through the Maintenance Center to a maximum of ***** per event and such liability shall only be incurred to the extent that the damage is uninsured or not covered by insurance for failure to have met any deductible.

5.	Lease Engine Support

*****

5.2

5.3

Unless otherwise agreed in writing by the FHA Manager, Vuela shall ship to IAE any lease Engines furnished pursuant to 5.1 above within the earlier of the thirty (30) days (as extended if applicable) as described above, or five (5) days after a Vuela Engine becomes available for installation at Vuela’s facilities.

5.4

Should Vuela require a spare Engine to support a shop visit not covered by this Agreement or that does not otherwise meet the above conditions, all terms of the STOBL then in effect between IAE and Vuela, including all applicable rates, charges and fees, shall apply.

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

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6.	Transportation

6.1

Following an Eligible Removal, Vuela shall deliver the affected Eligible Engines to the Maintenance Center in a Testable Engine configuration, with all Accessories attached and in a serviceable condition.

6.2

Vuela shall be responsible for transportation of Eligible Engines to the applicable Maintenance Center, and the return of such Engines from the Maintenance Center, including risk of loss or damage during such transportation.

7.	General Fleet Hour Agreement Services

IAE shall provide the following additional services:

7.1

7.2

Engine monitoring data program services set forth in Exhibit E;

7.3

The following FHA Engine management and maintenance planning services (which shall normally be undertaken by the FHA Manager):

7.3.1

overall FHA program coordination;

*****

8.	Excess Work

8.1

If a Maintenance Center charges Vuela or IAE for Excess Work, such charges shall be paid for by Vuela directly to the Maintenance Center or, if the Maintenance Center has invoiced IAE for such charges, to IAE in accordance with Clause 10.3 of this Agreement. “Excess Work” shall mean any labor, material and other charges for Eligible Engines that arise from the following:

8.1.1

repairs for inflight and/or ground accident damage, except Foreign Object Damage to the extent of IAE’s responsibility under Clause 4.2;

8.1.2

Service Bulletins requested by Vuela which are not required in accordance with the MMP;

8.1.3

Maintenance of any items other than Eligible Engines;

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

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8.1.4

Line Maintenance requirements, except if performed at a Shop Visit in accordance with the requirements of the MMP;

8.1.5

Incremental shop visits or additional work that was not required to be performed in accordance with the requirements of the MMP and was requested and authorized by Vuela in order to enable it to meet any lease return conditions;

8.1.6

Misuse, neglect, accident or maintenance error or improper maintenance activity by any party other than IAE or the Maintenance Center;

8.1.7

The removal and replacement of non-IAE approved part(s) or repaired part(s) and damage caused by such part(s);

8.1.8

Occurrences outside the course of Vuela’s normal business activities as a civil commercial airline, such occurrences including, but not limited to, acts of God, use by government agencies and services, acts of war, rebellion, seizure, terrorism, riots or other belligerent acts;

8.1.9

Exceedance of Engine operating limits published by IAE;

8.1.10

Work required to repair damage resulting from Engine operation in an abrasive or corrosive environment, excluding normal operations (for example ingestion of volcanic ash, fire extinguishing chemicals, or desiccants, etc.). *****

8.1.11

Delivery to the Maintenance Center with missing or non-serviceable Parts or Accessories, requiring the use of units provided by the Maintenance Center to permit the testing of the Eligible Engine following its refurbishment;

8.1.12

Delivery to the Maintenance Center with Parts or Accessories which require re-certification;

8.1.13

The exchanging of QEC Items or EBU Items between installed Engines and Spare Engines or the provisioning of such QEC Items or EBU Items;

8.1.14

Work requested by Vuela which is not covered by the terms of this Agreement;

8.1.15

Charges associated with placing an Eligible Engine into a Testable Engine configuration, unless the Eligible Engine was delivered by Vuela to the Maintenance Center in a Testable Engine configuration;

8.1.16

Charges for material and handling associated with replacing Life Limited Parts due to time expiry or MMP build requirements;

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

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IAE PROPRIETARY INFORMATION

8.1.17

Inspection, repair, or replacement of Accessories, QEC Items, EBU Items, or BFE Items, and provisioning, restocking, and availability of such items; or

8.1.18

Charges associated with IAE’s provision to Vuela of any accident and disassembly reports and pictures or “dirty fingerprint” records that may be reasonably requested by Vuela from time to time.

8.2

In addition to the above, at the discretion of IAE, “Excess Work” may mean any labor, material and other charges for Eligible Engines that arise from the failure of Vuela to undertake any of its obligations as set out in Clause 9 below. IAE shall provide ***** days’ notice that such failure shall result in Excess Work, during which time, Vuela may rectify such failure.

8.3

In the event IAE determines that the Workscope for a Shop Visit of an Eligible Engine will consist entirely of Excess Work, then the FHA Manager shall so notify Vuela and obtain Vuela’s written authorization to proceed prior to the commencement of such work.

9.	Obligations of Vuela

Vuela agrees to fulfill, or to cause the Vuela Affiliates that operate or maintain the Aircraft and Engines to fulfill, the following responsibilities and perform the following tasks and to reasonably cooperate with IAE in the performance of IAE’s responsibilities hereunder.

9.1

Data and Procedures

Vuela shall at its own expense maintain Eligible Engine electronic condition monitoring capabilities for each Eligible Engine, and with respect to information and data required for the performance of this Agreement, Vuela shall:

9.1.1

maintain, collect and provide to IAE performance trend monitoring data on each Eligible Engine in accordance with Exhibit E, maintain timely records in form and detail sufficient for the accurate and expeditious administration of the terms of this Agreement including the assessment of operating conditions relative to those set out in Clause 10.5 of this Agreement;

9.1.2

make available, and provide access to IAE’s provider of electronic condition monitoring data analysis, all data collected in accordance with 9.1.1 above in an electronic format agreed to by IAE, as required for the operation and administration of this Agreement;

9.1.3

implement and follow the IAE recommendations resulting from analysis of the performance trend monitoring data;

9.1.4

within ***** Days after the end of each month during the Period of Cover, report to IAE, in an electronic format agreed to by IAE, the hours and cycles flown, take off derate, and temperature (ISA+X° C) for each flight by each Eligible Engine during the preceding month;

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

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9.1.5

ensure that all data that is available to Vuela and requested by IAE to facilitate the correction and/or diagnosis of any problem causing an Eligible Engine Removal is promptly made available to IAE;

9.1.6

ensure that each Eligible Engine delivered to the Maintenance Center is accompanied by a record of Eligible Engine total time and cycles, date of Eligible Engine removal, and reason for removal;

9.1.7

upon written request from IAE, confirm the serial numbers of Eligible Engines installed on the Aircraft; and

9.1.8

after Eligible Removals, ship Eligible Engines to the applicable Maintenance Center in a Testable Engine configuration.

9.2

Engine Preparation for Transportation

For the purposes of the transportation of Eligible Engines as required under this Agreement, Vuela shall:

9.2.1

unless otherwise mutually agreed in writing, make Eligible Engines available for shipment as soon as practicable following Eligible Removal, but in any event Vuela shall deliver Eligible Engines to the Maintenance Center prior to the scheduled induction date for each Eligible Engine Shop Visit;

9.2.2

maintain in a serviceable condition one (1) IAE approved transportation stand per spare Engine plus one (1) additional serviceable IAE approved transportation stand; and

9.2.3

at the time of an Eligible Removal, remove the Eligible Engine from the Aircraft, mount it on an IAE approved transportation stand and prepare such Eligible Engine for shipment, all in accordance with the procedures specified in the applicable IAE manuals.

9.3

Operation, Maintenance and Troubleshooting of Eligible Engines

Vuela shall operate, maintain and troubleshoot the Eligible Engines consistent with standard industry practice in accordance with the applicable Airbus operating, maintenance and troubleshooting manuals, the then current MMP for Vuela, and IAE’s written recommendations and instructions (including, but not limited to, service information letters, all operator wires and non-modification service bulletins, component maintenance manuals and Airworthiness Directives), provided that such recommendations and instructions are (i) reasonable with reference to industry standards, and (ii) apply generally to and are applied generally (on a non-discriminatory basis) to V2500-A5 engines and operators operating under similar conditions. Vuela shall incorporate the relevant provisions of the MMP into its then current airworthiness maintenance program.

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IAE PROPRIETARY INFORMATION

9.4

Administration

Vuela shall cooperate with IAE to fulfill any reasonable administrative or other requirements of the Maintenance Center, including endorsement of Workscopes for Aviation Authority and DGAC requirements. Vuela shall accomplish quality audits and obtain certifications required by the Aviation Authority, the DGAC, and the Maintenance Center for accomplishment of work on the Eligible Engines at the Maintenance Center(s).

9.5

One Time Concessions

Vuela shall not unreasonably withhold its approval of any IAE proposed utilization of on-wing or off-wing “One Time Concessions” on Eligible Engines.

9.6

Payment

Vuela shall make payments as required in accordance with Clause 10 of this Agreement.

9.7

Records and Audit

Vuela shall comply with the provisions of Clause 29 of this Agreement.

10.

FHA Rates and Payment

10.1

FHA Rates

10.1.1

The FHA Rate per Eligible Engine Flight Hour for Restoration Shop Visit Coverage during the Period of Cover for Eligible Engines on A319 and A320 Aircraft shall be as follows:


Engine/Derate	At RSV 1	At RSV 2	At RSV 3
*****	*****	*****	*****

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

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

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

The FHA Rate per Eligible Engine Flight Hour for Restoration Shop Visit Coverage during the Period of Cover for Eligible Engines on A321 Aircraft shall be as follows:


Engine/Derate	At RSV 1	At RSV 2	At RSV 3
*****	*****	*****	*****

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

IAE shall invoice Vuela at induction of the Eligible Engine into the Maintenance Center for a Restoration Shop Visit, an amount equal to the above applicable FHA Rate (escalated in accordance with Clause 10.2) multiplied by the Eligible Engine Flight Hours flown by such

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

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IAE PROPRIETARY INFORMATION

Eligible Engine since new or if the Eligible Engine has had a prior Restoration Shop Visit, since its last Restoration Shop Visit. The above FHA Rates are subject to adjustment in accordance with the provisions of Exhibit G to the extent applicable.

10.1.2

The FHA Rate for Miscellaneous Shop Visit Coverage shall be ***** per Eligible Engine Flight Hour during the Period of Cover. IAE shall invoice Vuela on a monthly basis in an amount equal to the FHA Rate for Miscellaneous Shop Visit Coverage (escalated in accordance with Clause 10.2) multiplied by the Eligible Engine Flight Hours flown in the previous month by Eligible Engines within their respective Periods of Cover; *****

10.2

All FHA Rates in Clause 10.1 shall be paid in accordance with Clause 10.6.1 below, and are subject to escalation from the base month of January 2004 to the date of calculation of the applicable FHA Rate invoice in accordance with the formula set forth in Exhibit B.

10.3

Excess Work Rates

10.3.1

Charges for Excess Work shall be invoiced to Vuela by IAE in accordance with the rates identified in Exhibit F. However, where prior to the applicable Shop Visit Vuela notifies IAE that it has contracted Excess Work rates directly with the applicable Maintenance Center, IAE will consent to the Maintenance Center’s directly invoicing Vuela for such Excess Work charges, provided that such Maintenance Center agrees not to charge IAE for such Excess Work.

10.3.2

IAE may invoice Vuela its reasonable estimate of the cost of any Excess Work prior to commencement, or during the execution, of such Excess Work. IAE shall invoice Vuela for the balance of the cost of any Excess Work upon receipt of the corresponding invoice from the Maintenance Center (or either promptly credit Vuela’s account with IAE or, upon the parties’ mutual agreement, refund by electronic transfer to Vuela, the amount of any excess payment received from Vuela).

10.4

Payment for Additional or Loss of LLP Life

Where IAE provides a replacement LLP (the “ Replacement LLP ”) as a result of damage to an LLP (the “ Damaged LLP ”) and the Replacement LLP is provided pursuant to the coverage provided for under the terms of this Agreement, then either (a) Vuela shall pay to IAE the amount by which the value of the Replacement LLP exceeds the value of the Damaged LLP; or (b) IAE shall pay to Vuela the amount by which the value of the Damaged LLP exceeds the value of the Replacement LLP, in each case as determined in accordance with the following formula:

*****

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

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IAE PROPRIETARY INFORMATION

Where:


*****	=	*****
*****	=	*****
*****	=	*****
*****	=	*****
*****	=	*****

Upon completion of any Shop Visit at which IAE has provided a Replacement LLP, payment of the amount determined in accordance with the above formula shall be due (i) to IAE from Vuela in the event the calculation above results in a positive amount or (ii) to Vuela from IAE in the event the calculation above results in a negative amount. Vuela shall pay all invoices submitted by IAE pursuant to this Clause 10.4 in accordance with Clause 10.6.1. IAE will credit Vuela’ account with IAE with any amount due to Vuela from IAE under this Clause 10.4. Such credits may be used by Vuela toward the payment of FHA invoices from IAE, or for other goods and services provided by IAE.

10.5

General Conditions

The FHA Rates are predicated upon Vuela:

10.5.1

maintaining within its fleet of Aircraft an annual average flight cycle length of ***** hours per cycle (calculated from the moment the wheels of an Aircraft, on which any Eligible Engine is installed, leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing);

10.5.2

maintaining an average engine thrust derate of ***** relative to the V2527M-A5 thrust rating, ***** relative to the V2524-A5 thrust rating, or ***** relative to the V2522-A5 thrust rating, as applicable;

10.5.3

maintaining an average ambient temperature for take-off no greater than ISA + *****

10.5.4

taking delivery of all of the Aircraft and Spare Engines in accordance with the schedule set forth in Exhibit B of the Support Contract, as such delivery schedule may be amended from time to time in accordance with the Support Contract.

IAE may make adjustments to the FHA Rates in accordance with Exhibit G if there is a change in any of the operational parameters set forth in Clauses 10.5.1 through 10.5.3.

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

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IAE PROPRIETARY INFORMATION

10.6

Payment

10.6.1

Except as otherwise provided for herein, Vuela shall pay invoices submitted by IAE within ***** Days after submission.

10.6.2

Vuela undertakes that IAE shall receive the full amount of payments falling due under this Clause 10, without any withholding or deduction whatsoever.

10.6.3

All payments under this Clause 10 shall be made by electronic transfer and shall be deposited not later than the due date of payment with:

Bank of America

1185 Avenue of Americas

New York, NY 10038-4924

*****

or to such other account as IAE may from time to time designate in writing, which designation shall be effective upon receipt by Vuela of such notice.

10.6.4

10.7

Taxes and Other Like Charges

In addition to amounts stated to be payable by Vuela pursuant to this Agreement, Vuela shall pay:

10.7.1

any and all Taxes (excluding (i) any income, gains, or excess profit, franchise and similar Taxes imposed, levied, or assessed on, or otherwise payable by, IAE or the Maintenance Center; and (ii) any Taxes which would not have been imposed but for IAE’s failure to comply with applicable regulations or filing requirements (collectively, the “ Excluded Taxes ”) arising from IAE’s and the Maintenance Center’s performance under this Agreement; and

10.7.2

Taxes other than Excluded Taxes payable by IAE in connection with or pursuant to contracts for goods, work and/or services with Maintenance Center for or in connection with Eligible Engines.

If either IAE or Vuela becomes aware of any Taxes for which the other Party is responsible, the relevant party will promptly notify the other party, and both parties agree to consult in good faith and take such other reasonable steps in order to mitigate payment and/or the amount of such Taxes.

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

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IAE PROPRIETARY INFORMATION

All amounts stated to be payable by Vuela pursuant to this Agreement exclude any value added tax, sales tax or taxes on turnover. In the event that the supply of goods or services under this Agreement is chargeable to any value added tax, sales tax or taxes on turnover such tax will be borne by Vuela, subject to the receipt of any appropriate documentation that may be required to enable or assist Vuela to claim or verify any tax credit, exemption, set off, rebate or refund in respect of such Taxes paid or payable in connection with this Agreement. IAE shall give due consideration to whether any Parts provided by IAE to Vuela are exempt from Taxes under any applicable law.

11.

Escalation Protection

Except as otherwise noted to the contrary, for the period beginning January 1, 2006 and ending January 1, 2012 (the “ Cap Period ”), IAE agrees to cap escalation of all credits, FHA Rates, and other items escalated in accordance with the formula in Exhibit B (“ Base Amounts ”) at a cumulative rate of *****, compounding annually, provided that for any year in which escalation exceeds ***** over the previous year, such escalation exceedance above 6.5% shall be shared ***** by IAE and ***** by Vuela, as follows:

*****

12.

Warranties

12.1

If IAE fails to comply with its obligations set out in this Agreement, IAE shall, as its sole responsibility for such failure, undertake, at its sole cost and expense, all work necessary to achieve such obligations.

12.2

IAE shall warrant Excess Work to Vuela as follows: IAE will repair any Eligible Engines in which any defect in the Excess Work performed by the Maintenance Center or in any Parts incorporated by the Maintenance Center becomes evident, in each case within three thousand (3,000) flight hours or within eighteen (18) months after installation on an Aircraft or, if not installed on an Aircraft, within twenty-four (24) months after delivery of the Eligible Engine from the applicable Shop Visit, whichever occurs first. Transportation charges for the return of defectively serviced goods to IAE or the Maintenance Center, and their reshipment to Vuela and risk of loss thereof shall be borne by IAE only if such goods are returned in accordance with reasonable written shipping instructions from IAE.

12.3

IAE warrants to Vuela that that title to Parts or components thereof installed on an Eligible Engine by a Maintenance Center shall pass to the owner of such Eligible Engine free and clear of all security interests and rights of IAE, the Maintenance Center, or others upon installation. IAE’s liability and Vuela’s remedy under this warranty are limited to the removal of any title defect or, at the election of IAE, to the replacement of the new Parts or components thereof which are defective in title; provided, however, that the rights and remedies of the Parties with respect to patent infringement shall be limited to the provisions of Clause 15 of this Agreement.

12.4

Vuela warrants that title to Parts or components thereof removed from an Eligible Engine by a Maintenance Center shall pass to IAE free and clear of all security

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

Page 18 of 37

IAE PROPRIETARY INFORMATION

interests and rights of Vuela or others at the time that title to the replacement Part passes to Vuela. Vuela’s liability and IAE’s remedy under this warranty are limited to the removal of any title defect or, at the election of Vuela, to the replacement of the Parts or components thereof which are defective in title.

12.5

THE FOREGOING WARRANTIES TOGETHER WITH THE EXPRESS REMEDIES PROVIDED TO VUELA IN ACCORDANCE WITH THIS AGREEMENT ARE EXCLUSIVE AND ARE GIVEN AND ACCEPTED IN LIEU OF (I) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (II) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT, TORT OR STRICT LIABILITY AGAINST IAE OR ITS SHAREHOLDERS, WHETHER OR NOT ARISING FROM THE NEGLIGENCE, ACTUAL OR IMPUTED, OF IAE OR ITS SHAREHOLDERS. THE REMEDIES OF VUELA SHALL BE LIMITED TO THOSE PROVIDED HEREIN TO THE EXCLUSION OF ANY AND ALL OTHER REMEDIES INCLUDING, WITHOUT LIMITATION, INCIDENTAL OR CONSEQUENTIAL DAMAGES. NO AGREEMENT VARYING OR EXTENDING THE FOREGOING WARRANTIES, REMEDIES OR THIS LIMITATION SHALL BE BINDING UPON IAE UNLESS IN WRITING, SIGNED BY A DULY AUTHORIZED OFFICER OF IAE.

13.

Delays

13.1

Excusable Delays

IAE shall not be charged with any liability for delay in the performance of any of its obligations when such delay is caused by acts of God or the public enemy, compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it proves to be invalid, fires, riots, labor disputes, unusually severe weather, delays of suppliers as a result of any of the aforementioned reasons, or any cause beyond the reasonable control of IAE. To the extent that such causes actually delay performance on the part of IAE, the time for the performance shall be extended for as many days as are required to obtain removal of such causes. This provision shall not, however, relieve IAE from using commercially reasonable efforts to avoid or remove such causes, perform obligations not prevented by such causes, or continue performance with reasonable dispatch whenever such causes are removed.

13.2

Non-Excusable Delay

If IAE delays the delivery of an Eligible Engine from a Shop Visit beyond the time for delivery specified in the Workscope (as such time may be extended pursuant to the provisions of this Agreement) for any reason other than those specified in Clause 13.1 above, IAE’s obligations shall be as set forth in Clause 5.

14.

Duplicate Benefits

Vuela and IAE agree that it is not the intention to provide duplicate benefits under the terms of this Agreement and the Support Contract or under any other arrangement between IAE or IAE’s suppliers or Airbus and Vuela. In the event of any such

Page 19 of 37

IAE PROPRIETARY INFORMATION

duplication of benefits, Vuela may, at the relevant time in respect of the relevant circumstances, opt to receive any one such benefit to the exclusion of all other duplicate benefits.

15.

Intellectual Property

15.1

IAE shall conduct, at its own expense, the entire defense of any claim, suit or action brought against Vuela alleging that the use or resale by Vuela or any subsequent purchaser or user of the Parts furnished by IAE or a Maintenance Center hereunder infringes any United States patent or any patent of any other country that is a signatory to Article 27 of the Convention of International Aviation signed by the United States at Chicago on December 7, 1944, in which Vuela is authorized to operate.

15.2

Vuela shall provide prompt written notice to IAE of such claim, suit or action and shall provide IAE with full opportunity and authority to assume the sole defense thereof, including settlement and appeals, and all information available to Vuela or subsequent purchaser or user for such defense.

15.3

Provided that such Parts have been made according to a specification or design furnished by IAE or, if a process patent is involved, the process performed with such Parts if recommended in writing by IAE, IAE shall, at its own expense, either settle said claim, suit or action or shall pay all damages awarded by the court thereon, and, if the use or resale of such Parts is finally enjoined, IAE shall, at IAE’s option:

15.3.1

procure for Vuela the right to use or resell the Parts,

15.3.2

replace them with equivalent non-infringing Parts,

15.3.3

modify them so they become non-infringing but equivalent, or

15.3.4

remove them and refund the purchase price (less a reasonable allowance for use, damage and obsolescence).

15.3.5

IAE shall not be liable to Vuela for any consequential damage or any loss of use of any Parts or of the Aircraft in which the Parts may be incorporated arising as a result directly or indirectly of any claim subject to this Clause 15.3.

15.4

The indemnity contained in Clause 15.3 shall not apply to any claim, suit or action based on infringement in respect of:

Parts manufactured to a design or specification furnished by Vuela; or

ii)

Parts not of IAE design (but IAE shall in the event of any claim for infringement pass on to Vuela, so far as it has the right to do so, the benefits of any indemnity given to IAE by the designer, manufacturer or supplier of such Parts); or

Page 20 of 37

IAE PROPRIETARY INFORMATION

iii)

the manner of method in which any of the Parts have been installed in the Aircraft; or

iv)

the performance of a process not recommended in writing by IAE, or

the use or sale of the Parts delivered hereunder in combination with other new parts not delivered to Vuela by IAE.

16.

Amendment

This Agreement shall not be amended, changed, or modified in any way other than by agreement in writing, signed by the Parties hereto after the date of this Agreement, which is expressly stated to amend this Agreement.

17.

Assignment

Neither Party may assign any of its rights or obligations hereunder without the written consent of the other Party, except that IAE may assign its rights to receive money hereunder, and may assign any or all of its rights and/or obligations hereunder to any of IAE’s shareholders. Any assignment made in violation of this Clause 17 shall be null and void. IAE shall support Vuela in its pursuit to secure a workmanship warranty from the Maintenance Center for the Eligible Engines at the end of the Period of Cover.

18.

Exhibits

In the event of any conflict or discrepancy between the Exhibits (which are hereby incorporated by reference as part of this Agreement) and the Clauses of this Agreement, the Clauses of this Agreement shall prevail.

19.

Headings

Captions, clause headings, and the Table of Contents are for convenience of reference only and shall not be deemed or construed in any way as forming a part of this Agreement, nor shall they govern or affect the interpretation of the language or provisions of this Agreement.

20.

Notices

Any notice to be served pursuant to this Agreement shall be sent by registered mail, by internationally recognized overnight courier, or by facsimile (with the original notice sent by registered mail or internationally recognized overnight courier) to the applicable addresses indicated in 0.

21.

Exclusion of Other Provisions and Previous Understandings

21.1

This Agreement is the sole and entire agreement of the Parties with respect to the subject matter hereof and shall apply to the exclusion of any other provisions on or attached to or otherwise forming part of any order form of Vuela, or any acknowledgment or acceptance by IAE, or of any other document which may be issued by either Party relating to such services.

Page 21 of 37

IAE PROPRIETARY INFORMATION

21.2

The Parties agree that neither of them have placed any reliance whatsoever on any representations, agreements, statements or understandings made prior to the signature of this Agreement, whether orally or in writing, relating to such services, other than those expressly incorporated in this Agreement, which has been negotiated on the basis that its provisions represent their entire agreement relating to such services and shall supersede all such representations, agreements, statements and understandings.

22.

Termination, Expiration and Events of Default

22.1

Bankruptcy/Insolvency

Either Party shall have the option, at its sole discretion, to terminate this Agreement upon the occurrence of any of the following events: (a) a receiver or trustee is appointed for any of the other Party’s property, or (b) the other Party is adjudicated or voluntarily becomes bankrupt under any bankruptcy or winding up laws or other similar legislation, or (c) the other Party becomes insolvent or makes an assignment for the benefit of creditors.

22.2

Failure to Make Payments or to Meet Obligations

A non-defaulting Party shall have the right to declare an event of default and terminate this Agreement (i) if the other Party fails to pay any amount hereunder not reasonably subject to dispute when and as the same becomes due and payable and such default continues for a period of ***** or more; or (ii) if the other Party fails to perform any other material obligation under this Agreement and such default or failure shall not have been fully corrected within thirty (30) days after the non-defaulting Party gives notice thereof to the defaulting Party.

If Vuela fails to make any payment to IAE as set forth in Clause 10 of this Agreement (including any late interest due thereon) not reasonably subject to dispute and such default continues for a period of *****, then, without prejudice to IAE’s other rights which IAE may have in contract or in law, IAE reserves the right not to induct, to suspend all work on, or not to release from the Maintenance Center(s) any Eligible Engine, Accessory, EBU Item or QEC Item until full payment is made by Vuela to IAE.

The obligation of IAE to provide, or cause to be provided, the services set out in this Agreement shall be subject to the non-existence of a continuing event of default by Vuela, after the expiration of any applicable grace or cure period, in any payment or other obligation of Vuela under any other agreement in effect between the Parties (an “ Event of Default ”). Should any such Event of Default exist, IAE reserves the right not to induct, to stop all work on, or not to release from the Maintenance Center any Eligible Engine until such Event of Default is rectified by Vuela to IAE’s satisfaction.

*****

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

Page 22 of 37

IAE PROPRIETARY INFORMATION

22.4

Expiration

This Agreement shall be effective from the day and year first above written until the end of the Period of Cover for each Eligible Engine.

22.5

Effect of Termination or Expiration

Except as otherwise set out in this Clause 22.5 and any rights or obligations arising under applicable law, the rights and obligations of the Parties under this Agreement shall terminate upon the termination or expiration of this Agreement, and Vuela shall no longer be provided with FHA coverage under the terms of this Agreement.

Upon any termination or expiration of this Agreement, all liabilities and obligations (including payment obligations) that have accrued prior to such termination or expiration (including payment for Excess Work) shall survive.

This Clause 22.5 and Clauses 25 and 26 of this Agreement shall survive any expiration or termination of this Agreement.

23.

Negation of Waiver

Failure by either Party to enforce any term of this Agreement shall not constitute a waiver of such term.

24.

Severability And Partial Invalidity

If any provision of this Agreement or the application thereof to either Party shall be invalid, illegal or unenforceable to any extent, the remainder of the Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.

25.

Governing Law

This Agreement shall be construed and the performance thereof determined in accordance with the laws of the State of New York, United States of America2, without regard to its conflict of laws provisions. The Parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods.

The Parties irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York, United States of America, in connection with any suit, action or proceeding arising out of or relating to this Agreement and irrevocably waive to the fullest extent permitted by law, any objection to the laying of venue of any such suit, action or proceeding in any such court or any claim that any suit, action or proceeding has been brought in an inconvenient forum. Further, the Parties hereto agree to waive any rights either of them may have to a jury trial in connection with any such suit, action or proceeding.

Page 23 of 37

IAE PROPRIETARY INFORMATION

26.

Limitation of Liability

26.1

The liability of IAE to Vuela arising out of, connected with, or resulting from the furnishing of Parts and services under this Agreement, whether in contract, tort (including, negligence, but excluding gross negligence, reckless misconduct, and intentionally wrongful conduct) or otherwise, shall be as expressly set forth in this Agreement, and shall not in any event exceed per claim the fair market value of the Engine giving rise to Vuela’s claim. The foregoing shall constitute the sole remedy of Vuela and the sole liability of IAE. In no event shall IAE be liable for special, incidental or consequential damages, including, damage to, or loss of use, revenue or profit with respect to any aircraft, engine, or part thereof.

26.2

For the purpose of this Clause 26, “IAE” shall be deemed to include IAE; Pratt and Whitney of East Hartford, Connecticut, USA; Rolls-Royce plc of London, United Kingdom; JAEC, Japanese Aero Engine Corporation, of Tokyo, Japan; and MTU Aero Engines, Motoren und Turbinen Union Munchen, of Munich, Germany and the respective directors, officers, employees and agents of each.

27.

Publicity

Vuela shall not use the name of IAE or the V2500 engine in any publicity material without the prior written consent of IAE.

28.

Confidentiality

Each of IAE and Vuela acknowledge and understand that certain commercial and financial information contained in or provided in connection with this Agreement is considered by the other to be confidential. IAE and Vuela each hereby agree, for the benefit of the other, that it shall treat the contents of this Agreement as confidential and shall not, without the prior written consent of the other, disclose or cause to be disclosed the terms hereof to any person except to its legal and financial advisors and auditors, or expect as may be required by applicable law or governmental regulation, including federal and state securities laws, or pursuant to an order issued by any court or governmental authority having jurisdiction over Vuela or IAE as the case may be.

29.

Records and Audit

The Parties shall maintain adequate records as required to meet their obligations and compliance with the applicable provisions of this FHA.

A Party shall not unreasonably condition or deny the other Party access to such adequate and applicable records for the administration of this Agreement. Vuela or its nominee may visit the premises of IAE or the Maintenance Center at a time mutually agreeable to the Parties and upon reasonable notice to IAE, for the purpose of quality assurance and to inspect the materials, parts, equipment and tools being used, the work being performed, and to review the quality assurance system in use by IAE and the Maintenance Center.

If IAE or its nominee requires access to the premises of Vuela under this FHA it shall provide reasonable written notice to Vuela and such visit or inspection will be at a time mutually agreeable to the Parties.

Page 24 of 37

IAE PROPRIETARY INFORMATION

Each Party will comply and ensure that its personnel comply with the other Party’s conduct policies, rules, regulations and directions governing the conduct of visitors upon their premises.

IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be signed on their behalf by the hands of their authorized officers as of the day and year first above written:


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

/s/ Robert G. J. Stire Name				/s/ Andres Fabre Name

Robert G. J. Stire Printed Name				Andres Fabre Printed Name

Commercial Director Title				Technology Director Title

Page 25 of 37

IAE PROPRIETARY INFORMATION

Exhibit A

Eligible Engine List


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

Page 26 of 37

IAE PROPRIETARY INFORMATION

Exhibit B

IAE FHA Escalation Formula

1.	FHA Rates will be subject to escalation in accordance with the formula set forth below:

*****

Where:

*****

Base Month shall mean the base month specified for the FHA Rates in the Proposal.

*****

For avoidance of doubt, the quarterly values of CIU2023211000000I will apply to each month of a given quarter.

2.	The values of the factors ***, and *** respectively, shall be determined to the nearest fourth decimal place. If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number.

If the U.S. Department of Labor ceases to publish the above statistics or modifies the basis of their calculation, then IAE, in its sole discretion, shall select a substitute for such values from data published by the Bureau of Labor Statistics or otherwise make revisions to the escalation formula such that the escalation will as closely as possible approximate the result that would have been attained by continuing the use of the original escalation formula and values as they may have fluctuated during the applicable time period.

4.	If the application of the formula contained in this Exhibit results in an FHAR for the month which is lower than FHARb, FHAR for the month will be set equal to FHARb.

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

Page 27 of 37

IAE PROPRIETARY INFORMATION

Exhibit C

Accessories


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

Page 28 of 37

IAE PROPRIETARY INFORMATION


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

Page 29 of 37

IAE PROPRIETARY INFORMATION

Exhibit D

Powerplant – Description

*****

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

Page 30 of 37

IAE PROPRIETARY INFORMATION

Exhibit E

Addresses

1.	Vuela ADDRESSES

(a)

Address for Notices:

Av. Prolongacion Reforma # 490,

Primer Piso,

Colonia Lomas Santa Fe,

Delegacion Alvaro Obregon

Mexico,

Distrito Federal

C.P 01210

Facsimile No. 52 55 5261 6460

Attention: Chief Financial Officer

(b)

Address for Invoices:

Av. Prolongacion Reforma # 490,

Primer Piso,

Colonia Lomas Santa Fe,

Delegacion Alvaro Obregon

Mexico,

Distrito Federal

C.P 01210

Facsimile No. 52 55 5261 6460

Attention: Financial Controller

2.	IAE ADDRESSES

(a)

Address for Notices:

Attention: Chief Legal Officer & Company Secretary

IAE International Aero Engines AG

400 Main Street

Mail Stop 121-10

East Hartford, CT 06108

Fax: (860) 565-5220

(b)

Address for Invoices:

Attention: Accounts Receivable Manager

IAE International Aero Engines AG

400 Main Street

Mail Stop 121-10

East Hartford, CT 06108

Fax: (860) 565-9332

Page 31 of 37

IAE PROPRIETARY INFORMATION

(c)

Address for all Other FHA Matters:

Attention: Customer Fleet Director

IAE International Aero Engines AG

400 Main Street

Mail Stop 121-10

East Hartford, CT 06108

Fax: (860) 565-xxxx

Page 32 of 37

IAE PROPRIETARY INFORMATION

Exhibit F

IAE Engine Monitoring Services

1.	IAE will provide the following Engine monitoring services (“ Services ”) through the ***** system:

(a)

Engine Trend Monitoring

(i)

Provide processing of in-flight Engine data received from Vuela into IAE’s EHM database as provided per the data input and transmission requirements set forth in Section 3 herein. All processed data will be provided to Vuela via IAE’s web portal. Daily updates require web portal access described in Section 1(b) herein.

(ii)

Provide automated mechanical exceedance reporting for those Aircraft that are equipped with required on-board hardware and software.

(iii)

Provide technical analysis of Eligible Engines’ performance data and report anomalies indicated by such data to designated Vuela personnel as required.

(iv)

Provide access to monthly Eligible Engine operating trend analysis report covering post Period of Cover operations to assist Vuela in the planning and scheduling of Eligible Engines for shop visits.

(v)

Provide automated alert notification of parameters that have exceeded level and rate change limits.

(vi)

Provide access to alert details reports that identify Aircraft and Eligible Engines by serial number and provide the date, time, magnitude and details of occurrences when such Eligible Engine exceeds specific performance parameters and provide the ability to store comments associated with a given alert.

(vii)

Provide exhaust gas temperature (subject to data availability) Watch-Lists, updated monthly utilizing data received from Vuela to assist Vuela in scheduling Eligible Engine removals for maintenance purposes. The Watch-Lists provide an engine ranking and predicted removal date for a given Eligible Engine based on the measured parameter and deterioration rate to assist with proactive on-wing management and maintenance planning.

(viii)

Provide access to the following engine performance parameter trend plots that are updated real-time as new in-flight Engine data is received from Vuela:

•

EGT Margin

•

Sea Level Outside Air Temperature Limits

•

N1 and N2 Shaft Speeds

•

Fuel Flow

•

Vibration

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

Page 33 of 37

IAE PROPRIETARY INFORMATION

•

Oil Temperature

•

Oil Pressure

•

P2.5, T2.5, P3.0, T3.0, P12.5

(ix)

Upon special request, raw in-flight Engine data can be supplied to Vuela.

(x)

Input data files and individually processed records will be stored for a minimum period of five (5) years.

(b)

WEB PORTAL ACCESS

(i)

Provide twenty-four (24) hour per day access to reports and processed information, provided to under Section 1(a) herein, through a secure web portal created and maintained by IAE. Such web portal access shall be created and provided to Vuela approximately thirty (30) days from the execution of this Agreement. Vuela must meet IAE defined requirements for access as detailed in Section 2 herein. IAE will use all reasonable efforts to ensure a service availability target of 96% when measured on an annual basis and that down time of the system is no longer than one (1) Business Day for any one incident.

(ii)

IAE shall provide Services under the terms of this Agreement contingent upon the timely receipt of data required by IAE from Vuela. It is understood between the parties that the ability of IAE to provide timely and accurate reports and processed information through these web-based services is dependent upon the quality and timeliness of the data received from Vuela.

(iii)

If email, or pager or cell phone alert notifications are required by Vuela, Vuela shall be responsible for acquiring and maintaining the required pager and cell phone hardware and software and pay any associated communications fees. It is Vuela’s responsibility to establish an alert notification contact list and advise IAE of any changes.

2.	ACCESSIBILITY

(a)

To facilitate internet portal access, Vuela is required to maintain the following: (i) internet access; (ii) Internet Explorer version 5.5 or higher; (iii) 128 bit Secure Socket Layer (“ SSL ”) encryption capability; and (iv) a minimum internet speed of 56K bits per second to access the internet portal.

(b)

All information being transmitted through the internet portal will be protected using SSL encryption. In addition, each user of the internet portal will be authenticated at logon with a unique user identification and password. Once authenticated to the internet portal, Vuela will only be allowed to access the information that Vuela and IAE mutually agree a specific user may review. IAE shall review security requirements for web portal access from time to time to ensure an appropriate level of data protection. Updated security requirements shall be communicated to Vuela on a timely basis.

Page 34 of 37

IAE PROPRIETARY INFORMATION

3.	TRANSMISSION OF DATA BY VUELA

(a)

Vuela shall provide all data requested by IAE in order to perform the Services, including but not limited to the date and time the data was recorded, aircraft and engine number, engine position, altitude and mach (or air speed), total air temperature, engine pressure ratio, rotor speeds, fuel flow, oil temperature, oil pressure, mechanical exceedances and pertinent maintenance actions (EHM Eligible Engine changes, sensor changes, other items that may impact engine performance). Vuela shall electronically transmit engine condition monitoring data to IAE’s designated ground station via air-to-ground service providers (e.g., ARINC and SITA) or via such other routing as the parties mutually agree.

(b)

Using the facilities available within IAE’s V2500 engine monitoring program services, Vuela shall provide feedback of on-wing maintenance actions taken as a result of an alert notification as provided in accordance with Section 1(a)(v) herein.

Page 35 of 37

IAE PROPRIETARY INFORMATION

Exhibit G

Excess Work Labor and Fee Rates


Item	Basis	Rates/Fees ⁴
Hourly labor rate	Labor hours	*****

Handling fee, new parts	Current catalog part price	*****

Handling fee, LLP’s	Current catalog part price ¹	*****

Handling fee, used parts	***** of current catalog part price	*****

Handling fee, customer supplied material	Current catalog part price	*****

Handling fee, vendor repair	Vendor invoice amount	*****

Rotable fee ³	Vendor invoice amount	*****

Notes:

1.	The price of used LLPs will be adjusted pro-rata on the basis LLP cycle life remaining.

2.	A line item cap of *****applies.

3.	Rotable transactions are subject to both the rotable material fee and the vendor repair handling fee.

4.	The above labor rates are expressed in United States Dollars and are subject to escalation from the base month of January 2004 in accordance with the formula set forth in Exhibit B (as may be modified in accordance with the provisions of Clause 11 to this Agreement.

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

Page 36 of 37

IAE PROPRIETARY INFORMATION

Exhibit H

FHA Rate Adjustment

For each Eligible Engine whose individual operational parameters differ from those set forth in Clause 10.5 of the Agreement, the Restoration Shop Visit FHA Rates shall be adjusted for the different parameters in accordance with the following formula:

*****

Where:


*****	=	*****
*****	=	*****
*****	=	*****
*****	=	*****

The MTBR model will be Model V1.2.TB, as provided by IAE to Vuela.

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

Page 37 of 37

LOGO

628 Hebron Ave, Suite 400

Glastonbury, CT 06033

USA

May 31, 2012.

Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V.

Av. Prolongación Reforma # 490, Primer Piso,

Colonia Santa Fe Peña Blanca, Delegación Álvaro

Obregón, México, Distrito Federal, C.P. 01210.

Subject:

Side Letter No. 3 to the Fleet Hour Agreement between IAE International Aero Engines AG and Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V.

Ladies and Gentlemen:

We refer to the Fleet Hour Agreement bearing reference marks VOL_FHA-v8 (2007-JUN8) (Final) and dated June 18, 2007 between IAE International Aero Engines AG (“ IAE ”) and Controladora Vuela Compañía de Aviación, S.A. de C.V. (“ Vuela ”), such contract being hereinafter referred to as the “ FHA ”. Unless expressly stated to the contrary, terms used in this Side Letter No. 3 shall have the same meaning given to them in the FHA.

This Side Letter No. 3 sets forth the terms by which the parties will include certain additional Engines under the coverage of the FHA, which are or will be installed on the aircraft detailed herein, and amend certain FHA terms for the Eligible Engines.

1. Definitions

1.1.

The “ Incremental Engines ” are defined as follows:

1.1.1.

The four (4) V2527M-A5 Engines bearing serial numbers V15528, V15543, V15554, and V15557 installed on the two (2) A319 Aircraft leased to Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (“ Volaris ”) by CIT Aerospace International bearing manufacturing serial numbers 4403 and 4422 and delivered to Volaris in August 2010 (the “ 2010 Leased Aircraft ”); and

1.1.2.

The two (2) V2527-A5 Engines bearing serial numbers V15855 and V15857, which will be upgraded by Volaris or its lessor to V2527E-A5 Engines in 2012 at its cost, installed on one (1) A320 aircraft bearing serial number 4741, leased to Volaris by Avolon (the “ Avolon Aircraft ”); and

1.1.3.

The eight (8) V2527E-A5 Engines bearing serial numbers V15912, V15917, V15946, V15954, V15934, V15955, V16042 and V16050 installed on the four (4) Aircraft numbers 13, 14, 15, and 16 from the initial Vuela purchase agreement order to be delivered in accordance with Exhibit B-1 of the Support Contract (the “ 2006 Purchased Aircraft ”); and

Page 1 of 23

1.1.4.

The six (6) V2524-A5 Engines bearing serial numbers V11736, V11741, V12778, V12759, V12697, and V12701, which were originally installed on Airbus A319 aircraft bearing manufacturer’s serial numbers 2296, 3317, and 3252 leased to Volaris by CIT Aerospace International (the “ CIT Short Term Leased Aircraft ”); and

1.1.5.

The two (2) V2527-A5 Engines bearing serial numbers V11674 and V11672, which will be upgraded by Volaris or its lessor to V2527E-A5 Engines in 2012 and which were originally installed on Airbus A320 aircraft bearing serial number 2204 leased to Volaris by Macquarie Air Finance (the “ Macquarie Short Term Leased Aircraft ”); and

1.1.6.

The four (4) V2527-A5 Engines bearing serial numbers V12957, V12961, V12938 and V12972, which will be upgraded by Volaris or its lessor to V2527E-A5 Engines in 2012 at its cost, originally installed on Airbus A320 aircraft bearing serial number 3524 and 3543 leased to Volaris by Amentum Aircraft Leasing (the “ Amentum Short Term Leased Aircraft, ” and, together with the CIT Short Term Leased Aircraft and the Macquarie Short Term Leased Aircraft, the “ Short Term Leased Aircraft ”).

1.2.

Upon execution of this Side Letter No. 3, each of the Incremental Engines shall be treated for all purposes as Eligible Engines in accordance with the FHA except as set forth in this Side Letter No. 3.

1.3.

“ Engine Shop Visit Condition(s) ” shall mean, for each Eligible Engine, the Restoration Shop Visit entry conditions specified in Exhibit J.

1.4.

“ Lease Return Condition(s) ” shall mean, for each Eligible Engine, the lease return conditions specified in Exhibit I.

1.5.

“ Lease Return Date ” shall mean, for each Eligible Engine, the lease return date specified in Exhibit A.

1.6.

Clause 1.3, Aircraft Definition, of the FHA is hereby deleted in its entirety and replaced with the following:

“1.3

“ Aircraft ” shall mean all or each of

1.3.1

the thirty (30) Firm Aircraft to be delivered in accordance with the schedule set forth in Exhibit B-1 of the Support Contract as such delivery schedule may be amended from time to time; and

1.3.2

the four (4) Additional Aircraft (as defined in Side Letter No. 1 to the FHA); and

1.3.3

the four (4) Leased Aircraft (as defined in Side Letter No. 2 to the FHA); and

1.3.4

the one (1) leased A320 Aircraft (bearing manufacturing serial number 3672) leased to Volaris by Wells Fargo (hereby added to the definition of Leased Aircraft as set forth in Side Letter No. 2) and delivered to

Page 2 of 23

Volaris in November 2008 with two (2) Engines (bearing serial numbers V13073 and V13079 and hereby added to the definitions of Leased Engines as defined by Side Letter No. 2) that were included in Exhibit A by Amendment No. 1 to the FHA; and

1.3.5

the two (2) 2010 Leased Aircraft (as defined in this Side Letter No. 3); and

1.3.6

the one (1) Avolon Aircraft (defined in this Side Letter No. 3); and

1.3.7

the six (6) Short Term Leased Aircraft (as defined in this Side Letter No. 3).”

1.7.

If Vuela leases additional V2500-A5 powered A320 family aircraft in the ordinary course of business, IAE and Vuela shall consider adding such aircraft to the FHA under mutually agreeable terms and conditions.

1.8.

Clause 1.6, Aviation Authority, of the FHA is hereby deleted in its entirety and replaced with the following:

“1.6

“ Aviation Authority ” shall mean: (i) the United States Federal Aviation Administration and (ii) the European Aviation Safety Agency.”

1.9.

Clause 1.16, Eligible Removal, of the FHA is hereby deleted in its entirety and replaced with the following:

“1.16

“ Eligible Removal ” shall mean the necessary removal of an Eligible Engine from an Aircraft during the Period of Cover following all reasonable and appropriate line maintenance actions and troubleshooting in accordance with the AMM and IAE Technical Services’ recommendations, where such removal is due to (i) exceedance of AMM limits for continued operation as mutually agreed by Vuela and IAE to be necessary (such agreement not to be unreasonably withheld); (ii) Life Limited Parts time expiry, provided the last Shop Visit for the Eligible Engine was performed by IAE during the Period of Cover; (iii) the written recommendation of IAE, which includes the technical reason for the removal; (iv) meet the Lease Return Conditions for such Eligible Engine; or (v) meet the Engine Shop Visit Conditions for such Eligible Engine.”

Page 3 of 23

1.10.

Clause 1.32, Restoration Shop Visit, of the FHA is hereby deleted in its entirety and replaced with the following:

“1.32

“ Restoration Shop Visit ” shall mean any visit of an Eligible Engine to the Maintenance Center(s) following an Eligible Removal to (i) accomplish Engine performance restoration, (ii) meet Lease Return Conditions, or (iii) meet Engine Shop Visit Conditions sufficient to make the Eligible Engine serviceable in accordance with the then current revision of the MMP for the relevant Engine (or any successor to such MMP), IAE technical publications, Airworthiness Directives, and other IAE and Airworthiness Authority approved maintenance procedures, and which, as a minimum, includes a Level 3 refurbishment of the combustor and high pressure turbine.”

1.10

Clause 1.26, “Maintenance Center”, of the FHA is hereby deleted in its entirety and replaced with the following:

“1.26

“ Maintenance Center ” shall mean any of the IAE shareholder maintenance center(s) designated by IAE and agreed by Vuela (such agreement not to be unreasonably withheld, conditioned, or delayed) from time to time to perform services under this Agreement and which is approved by the Aviation Authority and DGAC as a certified repair station, provided that Vuela has met its obligations to obtain Aviation Authority and DGAC approval under Clause 4.3. Notwithstanding the foregoing, IAE shall promptly provide Vuela with any and all necessary information reasonably requested by Vuela in order to meet the requirements of the Aviation Authority and DGAC, provided that IAE shall not bear any significant additional costs and/or liabilities in connection with obtaining and providing such information.”

2. Period of Cover

Clauses 3.1 through Clause 3.4 are hereby stricken in their entirety and replaced with the following:

“3.1

FHA coverage and payment as set forth in this Agreement will begin for each Eligible Engine as of the date of each Engine’s initial entry into service, except for the Incremental Engines, which will begin FHA coverage and payment as set forth in this Agreement as of May 2012, and will remain in force and effect for each Eligible Engine until the Lease Return Date for each such Eligible Engine as detailed in Exhibit A; provided, however, that (i) such FHA coverage will include no more than two Restoration Shop Visits and will include Miscellaneous Shop Visit coverage until the Lease Return Date after the second Restoration Shop Visit; and (ii) if Vuela has extended its lease return date for such Eligible Engine with its lessor and if Vuela provides notice of the same to IAE in writing at least six (6) months prior to the Lease Return Date, IAE shall extend the coverages for an Eligible Engine as set forth in this FHA for up to twenty-four (24) months from the Lease Return Date (the “ Lease Return Extension Period ”).

Notwithstanding any other provision of this Agreement to the contrary, in the event that the coverages for Eligible Engines as set forth in this FHA are extended as per this Clause 3.1(i) and (ii) and, as a result, an Eligible Engine experiences a second Restoration Shop Visit that would not have otherwise been required but for Vuela’s election to extend the FHA term through the Lease Return Extension Period, such Restoration Shop Visit shall not be covered under the FHA and shall be considered Excess Work.

For the purposes of clarity, a Restoration Shop Visit that would have been required before Vuela extended the actual lease return date for an Eligible Engine pursuant to (ii) above and that occurs during the Lease Return Extension Period shall continue to be a Restoration Shop Visit covered under the FHA.

3.2

In the event that (i) Vuela’s actual or contemplated Eligible Engine thrust ratings, lease return conditions, lease return dates, or engine shop visit conditions for Eligible Engines change relative to those set forth in Exhibit A, Exhibit I, or Exhibit J or (ii) Vuela ceases operation of an Aircraft and associated Engines during the period of cover set forth in Clause 3.1 (the changes described Section 3.2(i) and (ii) shall collectively be referred to as “ Operational Changes ”), Vuela shall notify IAE in writing of any such Operational Changes within sixty (60) days of Vuela’s knowledge of such Operational Changes. IAE shall then notify Vuela in writing within thirty (30) days of what adjustments, if any, to the FHA Rates set forth herein are required to incorporate and amend the FHA coverage set forth in this Agreement to include such Operational Changes and eliminate any negative impact of such Operational Changes to IAE. The Parties will then mutually agree within ninety (90) days to either (x) incorporate and amend the FHA coverage set forth in this Agreement to include such Operational Changes and make reasonable adjustments to the FHA Rates set forth herein to eliminate any negative impact of such Operational Changes to IAE or (y) leave the FHA coverage and FHA Rates unchanged.

Page 4 of 23

3.3

Notwithstanding Clause 3.1, if at the time of the first Restoration Shop Visit of an Eligible Engine (i) Vuela instructs IAE to build such Eligible Engine for fewer LLP cycles than required for a full run as specified in the eMMP; and (ii) IAE and Vuela mutually agree prior to such Eligible Engine’s induction that a second Restoration Shop Visit for such Eligible Engine should not be required due to LLP time expiry or to satisfy Lease Return Conditions or Engine Shop Visit Conditions based on a reasonable and good faith interpretation of past and expected future operational data; and (iii) such Eligible Engine subsequently requires a second Restoration Shop Visit due to LLP time expiry or to satisfy Lease Return Conditions or Engine Shop Visit Conditions, then such second Restoration Shop Visit shall be ineligible for coverage under the FHA Rates and will be charged as Excess Work. For the purposes of clarity, if IAE and Vuela mutually agree at the time of the first Restoration Shop Visit of an Eligible Engine that a second Restoration Shop Visit for such Eligible Engine will be required due to LLP time expiry or to satisfy Lease Return Conditions or Engine Shop Visit Conditions based on a reasonable and good faith interpretation of past and expected future operational data pursuant to (ii) above, then such second Restoration Shop Visit shall be covered under the FHA.”

3. Shop Visit Coverage

3.1

Clause 4.1.6 is hereby stricken in its entirety and replaced with the following:

“4.1.6

provide Shop Visit documentation as follows:

serviceability tag FAA Form 8130-3 or -4, as applicable, and FAA Form 337;

a shop findings report on the services accomplished, including a report stating any damage detected and repairs accomplished;

a list of all Service Bulletins and Airworthiness Directives incorporated;

a list of all LLPs with associated times and cycles since new;

test cell performance data;

a list of Accessories by serial number; and

traceability and back-to-birth documentation for any LLPs replaced during a Shop Visit.”

3.2

A new Clause 4.3 is hereby added to the FHA as follows:

“4.3

IAE acknowledges that Vuela’s preferred Maintenance Center is ****and will allocate at least seventy percent (70%) of Restoration Shop Visits for Eligible Engines to **** for any given two (2) consecutive calendar year period provided (i) there is an induction slot available at **** at the planned date of the Restoration Shop Visit; (ii) **** maintains, at all times, the level of key performance metrics, including TAT and quality, specified in agreements

Page 5 of 23

between IAE and ****; and (iii) **** remains a Maintenance Center within IAE’s aftermarket network of maintenance providers. Vuela shall maintain, at all times, approval from the Aviation Authority and DGAC for **** and at least two additional IAE shareholder maintenance centers as certified repair centers. Notwithstanding the foregoing, IAE shall promptly provide Vuela with any and all necessary information reasonably requested by Vuela in order to meet the requirements of the Aviation Authority and DGAC provided that IAE shall not bear any significant additional costs and/or liabilities in connection with obtaining and providing such information.”

“3.3

A new Clause 4.4 is hereby added to the FHA as follows:

“4.4

If Vuela believes that the Maintenance Center is responsible for continual and/or repetitive breaches of the quality, turnaround time and/or workmanship commitments in this FHA, Vuela shall notify IAE in writing providing full details accompanied by any supporting evidence. Within ten (10) business days of receipt of such notice from Vuela, Vuela and IAE will agree upon a date, time and place whereby senior management representatives from IAE and Vuela will meet to review such claim and supporting evidence. Should IAE agree with Vuela’s claim, then within ten (10) business days of such meeting, IAE shall arrange to conduct an audit of the Maintenance Center in light of Vuela’s claim and make appropriate recommendations. Should the Maintenance Center fail to comply with IAE’s recommendations, if any, within thirty (30) days or fail to achieve a consistent improvement in quality, turnaround time, and/or workmanship, as the case may be, as soon as reasonably practicable after receipt of IAE’s recommendations, Vuela shall have the right to change the designated Maintenance Center under this FHA.”

4. Lease Engine Support

4.1.

All references within Clause 5 of the FHA to IAE’s Standard Terms of Business for Lease (“ STOBL ”) are hereby stricken and replaced with the “the International Air Transport Association (“ IATA ”)”.

4.2.

Clause 5.2 is hereby stricken in its entirety and replaced with the following:

“5.2

IAE’s obligation to provide such V2500-A5 lease Engine to Vuela is contingent on Vuela being in compliance with its obligations under Clause 9 and Vuela demonstrating the availability of reasonably sufficient Spare Engines, Accessories, components and Parts to maintain proper support of the Eligible Engines, including (i) at least a ****Spare Engine to installed Engine ratio and at least a total of ****available Spare Engines starting on ****, (ii) at least a ****Spare Engine to installed Engine ratio and at least a total of ****Spare Engines starting on ****, and (iii) at least an ****Spare Engine to installed engine ratio and at least ****Spare Engines starting on ****. The Spare Engine availability requirement is summarized as follows:

Page 6 of 23


	January 1, 2012	January 1, 2013	January 1, 2014
Spare Engine to installed Engine ratio	Six percent (6%)	Seven percent (7%)	Eight percent (8%)
Minimum number of available Spare Engines	Five (5)	Five (5)	Six (6)

Notwithstanding the foregoing, IAE shall not be obligated to waive the daily rental fee for an emergency lease pool Engine under Clause 5.1 if Vuela does not have at least an ****Spare Engine to installed Engine ratio and a minimum of six (6) available Spare Engines at the time of the AOG situation. The IAE emergency lease pool Engine daily rental fee for the calendar year 2012 is **** per day for a V2524-A5 engine and ****per day for a V2527-A5 engine, V2527M-A5 engine, or V2527E-A5 engine in January 2012 U.S. dollars. The IAE emergency lease pool Engine daily rental fee is subject to change by IAE starting in January 2014.”

5. General Fleet Hour Agreement Services

Clause 7.1 is hereby stricken in its entirety and replaced with the following:

“7.1

A customized MMP for the Eligible Engines will be produced for Vuela by IAE in consultation with Vuela, taking into account the specifics of the operation of the Aircraft and Eligible Engines. The MMP shall be determined in good faith and on a nondiscriminatory basis by IAE, and approved by Vuela (such approval not to be unreasonably withheld or delayed). The MMP shall establish maintenance requirements including LLP management, incorporation of applicable Service Bulletins and Aviation Authority Airworthiness Directive requirements and Eligible Engine removal planning. IAE will manage the Eligible Engines’ maintenance requirements to maximize the usage of LLPs to the extent required to satisfy the Lease Return Dates, Lease Return Conditions and Engine Shop Visit Conditions as specified in this Side Letter No. 3.”

6. FHA Rates and Payment

Clause 10.1 is hereby stricken in its entirety and replaced with the following:

“10.1

FHA Rates

10.1.1

The FHA Rate per Eligible Engine Flight Hour for Restoration Shop Visit Coverage during the Period of Cover for Eligible Engines on A319 and A320 Aircraft shall be as follows:

Engine/Derate At RSV 1 At RSV2

****

IAE shall invoice Volaris at induction of the Eligible Engine into the Maintenance Center for a Restoration Shop Visit, an amount equal to the above applicable FHA Rate (escalated in accordance with Clause 10.2)

Page 7 of 23

multiplied by the Eligible Engine Flight Hours flown by such Eligible Engine since new or if the Eligible Engine has had a prior Restoration Shop Visit, since its last Restoration Shop Visit. The above FHA Rates are subject to adjustment in accordance with the provisions of Exhibit H and Clause 3.2 to the extent applicable.

10.1.2

The FHA Rate for Miscellaneous Shop Visit Coverage shall be ****per Eligible Engine Flight Hour during the Period of Cover. IAE shall invoice Vuela on a monthly basis in an amount equal to the FHA Rate for Miscellaneous Shop Visit Coverage (escalated in accordance with Clause 10.2) multiplied by the Eligible Engine Flight Hours flown in the previous month by Eligible Engines within their respective Periods of Cover.

10.1.3

Notwithstanding Clause 10.1.1, for the first Restoration Shop Visit for the Eligible Engines listed in Exhibit K only, IAE shall invoice Vuela at induction of each such Eligible Engine into the Maintenance Center for its first Restoration Shop Visit an amount equal to (i) the FHA Rate Specified in this Clause 10.1.3 (escalated in accordance with Clause 10.2) multiplied by the number of Eligible Engine Flight Hours specified for such Eligible Engine in Exhibit K (“Pre-Side Letter No. 3 Flight Hours”) plus (ii) the applicable “At RSV1” FHA Rate specified in Clause 10.1.1 (escalated in accordance with Clause 10.2) multiplied by the Eligible Engine Flight Hours flown by such Eligible Engine since new less the number of Pre-Side Letter No. 3 Flight Hours for such Eligible Engine.


Engine/Derate		At RSV 1

*****		*****

*****		*****

*****		*****

The above FHA Rates are subject to adjustment in accordance with the provisions of Exhibit H and Clause 3.2 to the extent applicable.

10.2

All FHA Rates in Clause 10.1 shall be paid in accordance with Clause 10.6.1 below, and are subject to escalation from the base month of January 2012 to the date of calculation of the applicable FHA Rate invoice in accordance with the formula set forth in Exhibit B.”

7. General Conditions

Clause 10.5, General Conditions, is hereby stricken in its entirety and replaced with the following:

“10.5

General Conditions

The FHA Rates are predicated upon Vuela:

10.5.1

maintaining within its fleet of Aircraft an annual average flight cycle length of 1.82 hours per cycle (calculated from the moment the wheels of an Aircraft, on which any Eligible Engine is installed, leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing);

10.5.2

maintaining an average engine thrust derate ******** relative to the V2527M-A5 and V2527E-A5 thrust rating, **** relative to the V2524-A5 thrust rating, or **** relative to the V2522-A5 thrust rating, as applicable;

10.5.3

maintaining an average ambient temperature for take-off no greater than ISA ****; and

10.5.4

IAE may make adjustments to the FHA Rates as set forth in Exhibit H, if there is a change in any of the operational conditions set forth in Clauses 10.5.1 through 10.5.3.”

Page 8 of 23

8. Payment Grace Period

Clause 10.6.4 is hereby stricken in its entirety and replaced with the following:

“10.6.4

Should Vuela fail to make any payment to IAE required as set forth in this Clause 10, then, notwithstanding any rights which IAE may have in contract or in law, IAE reserves the right to assess interest on such late payment at the rate of **** of the outstanding amount per month from the date the payment was due to be made until the date such payment is received by IAE; provided, however, that IAE shall not charge Vuela interest on any such late payment for the Restoration Shop Visit FHA Rates specified under Clause 10.1.1 until thirty (30) days after the payment came due.”

9. Escalation Protection

The first paragraph of Clause 11 is hereby stricken in its entirety and replaced with the following:

“Except as otherwise noted to the contrary, for the period beginning January 1, 2006 and for the term of this FHA (the “ Cap Period ”), IAE agrees to cap escalation for all credits, FHA Rates, and other items escalated in accordance with the formula in Exhibit B (“ Base Amounts ”) at a cumulative rate of ****, compounding annually, provided that for any year in which escalation exceeds ****over the previous year, such escalation overage above ****shall be shared ****by IAE and ****by Volaris as follows:”

10. Restoration Shop Visits

For a Restoration Shop Visit necessary to meet the Lease Return Condition of an Eligible Engine, such Restoration Shop Visit shall not occur more than one hundred and twenty (120) days prior to the Lease Return Date for such Eligible Engine provided that an induction slot in a Maintenance Center is available within such one hundred and twenty (120) day period.

11. Used Additional Engines – Specific Provisions

Notwithstanding any provisions in the FHA to the contrary, for the purpose of determining the FHA Rate per Eligible Engine Flight Hour for Restoration Shop Visit Coverage during the Period of Cover for the Eligible Engines bearing serial numbers V12557 and V12636, each such Eligible Engine shall be considered to have already completed one Restoration Shop Visit. Accordingly, the applicable “At RSV 2” rate specified in Clause 10.1.1 shall apply for the next Restoration Shop Visit of each such Eligible Engine.

12. Used Additional Engines – Specific Provisions

Notwithstanding any provisions in the FHA to the contrary, the Used Additional Engines with engine serial numbers V10645, V10648, V10657, and V10660 shall be considered to have already completed two Restoration Shop Visits. Accordingly, such Used Additional Engines shall not be eligible for any additional Restoration Shop Visits under the FHA.

13. Incremental Engines – Specific Provisions

Notwithstanding any provisions in the FHA to the contrary and for the avoidance of doubt, with respect to the Incremental Engines, the following shall apply:

For the purpose of calculating all invoices for Incremental Engines under Clause 10.1.1 of the FHA, IAE shall invoice Vuela an amount equal *****. Such FHA Rates are subject to adjustment in accordance with the provisions of Exhibit H of the FHA to the extent applicable, based on the operational parameters of the Incremental Engines.

14. New Aircraft Exclusivity

This Side Letter No. 3 is subject to Vuela and IAE terminating, in writing, and to the mutual satisfaction of Vuela and IAE, the aircraft exclusivity provisions of (i) Clause 2.2.1 of Amendment No. 1 to the V2500 General Terms of Sale between IAE and Vuela dated December 13, 2006 (as amended from time to time) (the “GTA”) and (ii) Clause 1.1.2 of Amendment No. 1 to Side Letter No. 1 of the GTA no later than July 31, 2012. In the event that Vuela and IAE do not reach an agreement by such date, this Side Letter No. 3 shall null and void.

15. Eligible Engine List

Exhibit A to the FHA is hereby deleted in its entirety and replaced with the revised Exhibit A attached hereto as Appendix 1.

16. Used Additional Engine List

Appendix 2 to Side Letter No. 1 to the FHA is hereby deleted in its entirety and replaced with the revised Appendix 2 attached hereto.

Page 9 of 23

17. Lease Return Conditions

Exhibit I, Eligible Engine Lease Return Conditions, is hereby added to the FHA and is attached hereto as Appendix 3.

18. Engine Shop Visit Conditions

Exhibit J, Eligible Engine Shop Visit Conditions, is hereby added to the FHA and is attached hereto as Appendix 4.

19. Pre-Side Letter No. 3 Flight Hours

Exhibit K, Pre-Side Letter No. 3 Flight Hours, is hereby added to the FHA and is attached hereto as Appendix 5.

Except as expressly amended by this Side Letter No. 3, all provisions of the FHA remain in full force and effect.


Very truly yours,				Agreed to and accepted on behalf of
IAE International Aero Engines AG				Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V.

/s/ William Gorton				/s/ Fernando Suárez Gerard
Name William Gorton				Name Fernando Suárez Gerard

Commercial Director				CFO
Title				Title

June 1, 2012
Date				Date

				/s/ Holger Blankenstein
				Name Holger Blankenstein

				CCO
				Title

				May 31, 2012
				Date

Page 10 of 23

Appendix 1

Exhibit A

Eligible Engine List

Engine

No.

Thrust

Rating

ESN

Aircraft Tail
Number

Aircraft Serial
Number

EIS Date

Delivery date to
Volaris

Lease Return
Date

V2524-A5

V12891

N502VL

3463

18-Apr-08

18-Apr-18

V2524-A5

V12908

N503VL

3491

21-Apr-08

21-Apr-18

V2524-A5

V13000

N504VL

3590

22-Jul-08

22-Jul-18

V2524-A5

V12893

N502VL

3463

18-Apr-08

18-Apr-18

V2524-A5

V12912

N503VL

3491

21-Apr-08

21-Apr-18

V2524-A5

V13002

N504VL

3590

22-Jul-08

22-Jul-18

V2524-A5

V10660

N473TA

1140

29-Nov-99

08-Jun-06

29-Mar-13

V2524-A5

V10657

N474TA

1159

13-Mar-00

19-Jan-06

27-Mar-13

V2524-A5

V10645

N473TA

1140

29-Nov-99

06-Feb-06

29-Mar-13

V2524-A5

V10648

N474TA

1159

13-Mar-00

19-Jan-06

27-Mar-13

V2524-A5

V12144

XA-VOI

2657

01-Mar-06

01-Mar-18

V2524-A5

V12170

XA-VOL

2666

01-Mar-06

28-Feb-18

V2524-A5

V12146

XA-VOI

2657

01-Mar-06

01-Mar-18

V2524-A5

V12172

XA-VOL

2666

01-Mar-06

28-Feb-18

V2527E-A5

V13073

XA-VON

3672

10-Nov-08

09-Nov-16

V2527E-A5

V13079

XA-VON

3672

10-Nov-08

09-Nov-16

V2527E-A5

V13051

XA-VOM

3624

09-Oct-08

09-Oct-14

V2527E-A5

V13053

XA-VOM

3624

09-Oct-08

09-Oct-14

V2527E-A5

V16154

N509VL

5062

29-Mar-12

29-Mar-23

V2527E-A5

V16151

N509VL

5062

29-Mar-12

29-Mar-23

V2527E-A5

TBD

Jun-12

Jun-23

V2527E-A5

TBD

Jun-12

Jun-23

V2527E-A5

TBD

Jun-12

Jun-23

V2527E-A5

TBD

Jun-12

Jun-23

V2527E-A5

TBD

Sep-12

Sep-23

V2527E-A5

TBD

Sep-12

Sep-23

V2527E-A5

TBD

Oct-12

Oct-23

V2527E-A5

TBD

Oct-12

Oct-23

V2527E-A5

TBD

Oct-12

Oct-23

V2527E-A5

TBD

Oct-12

Oct-23

Page 11 of 23

Engine

No.

Thrust

Rating

ESN

Aircraft Tail
Number

Aircraft Serial
Number

EIS Date

Delivery date to
Volaris

Lease Return
Date

V2527E-A5

TBD

Nov-12

Nov-23

V2527E-A5

TBD

Nov-12

Nov-23

V2527M-A5

V12886

XA-VOK

3450

28-Mar-08

27-Mar-15

V2527M-A5

V12532

XA-VOD

3045

15-Mar-07

14-Sep-16

V2527M-A5

V12545

XA-VOD

3045

15-Mar-07

14-Sep-16

V2527M-A5

V12557

XA-VOE

3069

16-Mar-07

15-Sep-16

V2527M-A5

V12559

XA-VOE

3069

16-Mar-07

15-Sep-16

V2527M-A5

V12706

XA-VOH

3253

21-Sep-07

20-Mar-17

V2527M-A5

V12708

XA-VOH

3253

21-Sep-07

20-Mar-17

V2527M-A5

V12728

XA-VOJ

3279

19-Oct-07

18-Apr-17

V2527M-A5

V12736

XA-VOJ

3279

19-Oct-07

18-Apr-17

V2527M-A5

V12883

XA-VOK

3450

28-Mar-08

27-Mar-15

V2527M-A5

V12472

N501VL

2979

19-Jan-07

18-Jan-19

V2527M-A5

V12487

N501VL

2979

19-Jan-07

18-Jan-19

V2527M-A5

V13093

XA-VOO

3705

13-Nov-08

13-Nov-14

V2527M-A5

V13095

XA-VOO

3705

13-Nov-08

13-Nov-14

V2527M-A5

V12274

XA-VOA

2771

30-May-06

29-May-18

V2527M-A5

V12278

XA-VOA

2771

30-May-06

29-May-18

V2527M-A5

V12286

XA-VOB

2780

30-May-06

29-May-18

V2527M-A5

V12288

XA-VOB

2780

30-May-06

29-May-18

V2527M-A5

V12476

XA-VOC

2997

17-Jan-07

16-Jan-19

V2527M-A5

V12490

XA-VOC

2997

17-Jan-07

16-Jan-19

V2527M-A5

V12561

XA-VOF

3077

28-Mar-07

30-Sep-16

V2527M-A5

V12563

XA-VOF

3077

28-Mar-07

30-Sep-16

V2527M-A5

V12636

XA-VOG

3175

22-Jun-07

31-Mar-17

V2527M-A5

V12638

XA-VOG

3175

22-Jun-07

31-Mar-17

V2527E-A5

TBD

Mar-13

Mar-24

V2527E-A5

TBD

Mar-13

Mar-24

V2527E-A5

TBD

Mar-13

Mar-24

V2527E-A5

TBD

Mar-13

Mar-24

Page 12 of 23

Engine

No.

Thrust Rating

ESN

Aircraft Tail
Number

Aircraft Serial
Number

EIS Date

Delivery date to
Volaris

Lease Return
Date

V2527E-A5

TBD

May-13

May-24

V2527E-A5

TBD

May-13

May-24

V2527E-A5

TBD

Jun-13

Jun-24

V2527E-A5

TBD

Jun-13

Jun-24

V2527E-A5

TBD

Sep-13

Sep-24

V2527E-A5

TBD

Sep-13

Sep-24

V2527E-A5

TBD

Mar-14

Mar-25

V2527E-A5

TBD

Mar-14

Mar-25

V2527E-A5

TBD

May-14

May-25

V2527E-A5

TBD

May-14

May-25

V2524-A5

V11736

XA-VOR

2296

01-Oct-04

19-Nov-10

18-Mar-14

V2524-A5

V11741

XA-VOR

2296

01-Oct-04

19-Nov-10

18-Mar-14

V2524-A5

V12697

XA-VOS

3252

20-Nov-07

01-Dec-10

14-Sep-13

V2524-A5

V12701

XA-VOS

3252

20-Nov-07

01-Dec-10

14-Sep-13

V2524-A5

V12778

XA-VOT

3317

19-Sep-07

24-Nov-10

23-Nov-13

V2524-A5

V12759

XA-VOT

3317

19-Sep-07

24-Nov-10

23-Nov-13

V2527E-A5

V15912

N505VL

4798

28-Jul-11

28-Jul-22

V2527E-A5

V15917

N505VL

4798

28-Jul-11

28-Jul-22

V2527E-A5

V15934

N507VL

4832

08-Sep-11

08-Sep-22

V2527E-A5

V15946

N506VL

4828

29-Sep-11

29-Sep-22

V2527E-A5

V15954

N506VL

4828

29-Sep-11

29-Sep-22

V2527E-A5

V15955

N507VL

4832

08-Sep-11

08-Sep-22

V2527E-A5

V16042

N508VL

4950

13-Dec-11

13-Dec-22

V2527E-A5

V16050

N508VL

4950

13-Dec-11

13-Dec-22

V2527E-A5

V15855

XA-VOX

4741

23-Jun-11

22-Jun-22

V2527E-A5

V15857

XA-VOX

4741

23-Jun-11

22-Jun-22

V2527E-A5

V11674

XA-VOU

2204

25-Jun-04

14-Apr-11

22-May-15

V2527E-A5

V11672

XA-VOU

2204

25-Jun-04

14-Apr-11

22-May-15

V2527E-A5

V12957

XA-VOV

3524

19-Jun-08

24-May-11

24-May-16

V2527E-A5

V12961

XA-VOV

3524

19-Jun-08

24-May-11

24-May-16

Page 13 of 23

Engine

No.

Thrust Rating

ESN

Aircraft Tail
Number

Aircraft Serial
Number

EIS Date

Delivery date to
Volaris

Lease Return
Date

V2527E-A5

V12938

XA-VOW

3543

08-Jul-08

10-Jun-11

10-Jun-16

V2527E-A5

V12972

XA-VOW

3543

08-Jul-08

10-Jun-11

10-Jun-16

V2527M-A5

V15528

XA-VOP

4403

05-Aug-10

04-Aug-16

V2527M-A5

V15543

XA-VOP

4403

05-Aug-10

04-Aug-16

V2527M-A5

V15557

XA-VOQ

4422

26-Aug-10

25-Aug-16

V2527M-A5

V15554

XA-VOQ

4422

26-Aug-10

25-Aug-16

V2527M-A5

V12285

02-Oct-07

01-Mar-06

27-Apr-18

V2527M-A5

V12671

03-Nov-09

09-Jun-07

28-Feb-13

V2527M-A5

V13063

12-May-10

31-Aug-08

21-Oct-13

V2527E-A5

V13183

02-Jul-10

01-Nov-09

13-Jul-17

V2527E-A5

V16007

22-Feb-12

01-Sep-11

29-Sep-17

V2527E-A5

Spare 6

TBD

Page 14 of 23

Appendix 2

The Used Additional Aircraft delivered to Vuela as follows:


ESN		Delivered to Vuela
V10657		29-Jan-06
V10648		29-Jan-06
V10645		16-Feb-06
V10660		16-Feb-06

Page 15 of 23

Appendix 3

Exhibit I

Eligible Engine Lease Return Conditions

Lease Return Conditions

Engine

No.

Thrust

Rating

ESN

Aircraft

Serial

Number

Engine FH and FC

remaining at Lease

Return Date

Maximum Engine FH

and FC since last

Restoration Shop Visit

at Lease Return Date

Maximum LLP FC

since last

Restoration Shop

Visit

LLP FH and FC

remaining at Lease

Return Date

V2524-A5

V12891

3463

4000FH & 3500FC

4000 FC

V2524-A5

V12908

3491

4000FH & 3500FC

4000 FC

V2524-A5

V13000

3590

4000FH & 3500FC

4000 FC

V2524-A5

V12893

3463

4000FH & 3500FC

4000 FC

V2524-A5

V12912

3491

4000FH & 3500FC

4000 FC

V2524-A5

V13002

3590

4000FH & 3500FC

4000 FC

V2524-A5

V10660

1140

6000FH & 4500FC

7500 FC

4500 FC

V2524-A5

V10657

1159

6000FH & 4500FC

7500 FC

4500 FC

V2524-A5

V10645

1140

6000FH & 4500FC

7500 FC

4500 FC

V2524-A5

V10648

1159

6000FH & 4500FC

7500 FC

4500 FC

V2524-A5

V12144

2657

3000FH

8000 FC

V2524-A5

V12170

2666

3000FH

8000 FC

V2524-A5

V12146

2657

3000FH

8000 FC

V2524-A5

V12172

2666

3000FH

8000 FC

V2527E-A5

V13073

3672

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527E-A5

V13079

3672

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527E-A5

V13051

3624

10000FH & 6500FC

5000 FC

V2527E-A5

V13053

3624

10000FH & 6500FC

5000 FC

V2527E-A5

V16154

5062

6000 FH

3000 FC

V2527E-A5

V16151

5062

6000 FH

3000 FC

V2527E-A5

TBD

6000 FH

3000 FC

V2527E-A5

TBD

6000 FH

3000 FC

V2527E-A5

TBD

6000 FH

3000 FC

V2527E-A5

TBD

6000 FH

3000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

Page 16 of 23

Lease Return Conditions

Engine

No.

Thrust

Rating

ESN

Aircraft

Serial

Number

Engine FH and FC

remaining at Lease

Return Date

Maximum Engine FH

and FC since last

Restoration Shop Visit

at Lease Return Date

Maximum LLP FC

since last

Restoration Shop

Visit

LLP FH and FC

remaining at Lease

Return Date

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527M-A5

V12886

3450

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12532

3045

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12545

3045

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12557

3069

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12559

3069

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12706

3253

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12708

3253

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12728

3279

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12736

3279

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12883

3450

5000 FH & 3000 FC

8000FH & 4000FC

7500 FC

5000FH & 3000FC

V2527M-A5

V12472

2979

6000FH & 4500FC

7500 FC

4500 FC

V2527M-A5

V12487

2979

6000FH & 4500FC

7500 FC

4500 FC

V2527M-A5

V13093

3705

10000FH & 6500FC

5000 FC

V2527M-A5

V13095

3705

10000FH & 6500FC

5000 FC

V2527M-A5

V12274

2771

3000FH

8000 FC

V2527M-A5

V12278

2771

3000FH

8000 FC

V2527M-A5

V12286

2780

3000FH

8000 FC

V2527M-A5

V12288

2780

3000FH

8000 FC

V2527M-A5

V12476

2997

3000FH

8000 FC

V2527M-A5

V12490

2997

3000FH

8000 FC

V2527M-A5

V12561

3077

3000FH & 1500FC

1500FC

V2527M-A5

V12563

3077

3000FH & 1500FC

1500FC

V2527M-A5

V12636

3175

3000FH & 1500FC

1500FC

V2527M-A5

V12638

3175

3000FH & 1500FC

1500FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

Engines 57 to 70: Lease Return Conditions will be determined at the time of such Engine’s

lease agreement signature. Data included for these Engines in this Exhibit I is a target and

not the final data.

Page 17 of 23

Lease Return Conditions

Engine

No.

Thrust

Rating

ESN

Aircraft

Serial

Number

Engine FH and FC

remaining at Lease

Return Date

Maximum Engine FH

and FC since last

Restoration Shop Visit

at Lease Return Date

Maximum LLP FC

since last

Restoration Shop

Visit

LLP FH and FC

remaining at Lease

Return Date

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2527E-A5

TBD

8000 FH

6000 FC

V2524-A5

V11736

2296

10500 FH

4500 FC

V2524-A5

V11741

2296

10500 FH

4500 FC

V2524-A5

V12697

3252

10500 FH

4500 FC

V2524-A5

V12701

3252

10500 FH

4500 FC

V2524-A5

V12778

3317

10500 FH

4500 FC

V2524-A5

V12759

3317

10500 FH

4500 FC

V2527E-A5

V15912

4798

6000 FH

3000 FC

V2527E-A5

V15917

4798

6000 FH

3000 FC

V2527E-A5

V15934

4832

6000 FH

3000 FC

V2527E-A5

V15946

4828

6000 FH

3000 FC

V2527E-A5

V15954

4828

6000 FH

3000 FC

V2527E-A5

V15955

4832

6000 FH

3000 FC

V2527E-A5

V16042

4950

6000 FH

3000 FC

V2527E-A5

V16050

4950

6000 FH

3000 FC

V2527E-A5

V15855

4741

13000 FH & 6000 FC

15000 FC

V2527E-A5

V15857

4741

13000 FH & 6000 FC

15000 FC

V2527E-A5

V11674

2204

2000 FC

4500 FC

V2527E-A5

V11672

2204

2000 FC

4500 FC

V2527E-A5

V12957

3524

7000FH & 7000FC

4500 FC

V2527E-A5

V12961

3524

7000FH & 7000FC

4500 FC

Engines 57 to 70: Lease Return Conditions will be determined at the time of such Engine’s

lease agreement signature. Data included for these Engines in this Exhibit I is a target and

not the final data.

Page 18 of 23

Lease Return Conditions

Engine

No.

Thrust

Rating

ESN

Aircraft

Serial

Number

Engine FH and FC

remaining at Lease

Return Date

Maximum Engine FH

and FC since last

Restoration Shop Visit

at Lease Return Date

Maximum LLP FC

since last

Restoration Shop

Visit

LLP FH and FC

remaining at Lease

Return Date

V2527E-A5

V12938

3543

7000FH & 7000FC

4500 FC

V2527E-A5

V12972

3543

7000FH & 7000FC

4500 FC

V2527M-A5

V15528

4403

4000 FH

8000 FH

8000 FC

V2527M-A5

V15543

4403

4000 FH

8000 FH

8000 FC

V2527M-A5

V15557

4422

4000 FH

8000 FH

8000 FC

V2527M-A5

V15554

4422

4000 FH

8000 FH

8000 FC

V2527M-A5

V12285

5000 FH

1000 FC

2500 FC

V2527M-A5

V12671

3000 FH

7500 FC

V2527M-A5

V13063

3000 FH

7500 FC

V2527E-A5

V13183

3000 FH

7500 FC

V2527E-A5

V16007

6000 FH

4500 FC

V2527E-A5

Spare 6

6000 FH

3000 FC

Engine S6: Lease Return Conditions will be determined at the time of such Engine’s

lease agreement signature. Data included for this Engine in this Exhibit I is a target and not the

final data.

Where:

“FC” = Flight Cycles*

“FH” = Flight Hours*

“NA” = Not Applicable

“Y” = Years*

*	will be based on IAE’s relevant historical records and good faith determination at the time of the shop visit.

Page 19 of 23

Appendix 4

Exhibit J

Eligible Engine Shop Visit Conditions


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

Page 20 of 23


				Engine Shop Visit Conditions
Engine No.	Thrust Rating	ESN	Aircraft Serial Number	Engine FH and Time Remaining at Restoration Shop Visit Exit	LLP FC remaining at Restoration Shop Visit Exit
31	V2527E-A5	TBD	TBD	NA	NA
32	V2527E-A5	TBD	TBD	NA	NA
33	V2527M-A5	V12886	3450	11000 FH &3Y	7500 FC
34	V2527M-A5	V12532	3045	11000 FH &3Y	7500 FC
35	V2527M-A5	V12545	3045	11000 FH &3Y	7500 FC
36	V2527M-A5	V12557	3069	11000 FH &3Y	7500 FC
37	V2527M-A5	V12559	3069	11000 FH &3Y	7500 FC
38	V2527M-A5	V12706	3253	11000 FH &3Y	7500 FC
39	V2527M-A5	V12708	3253	11000 FH &3Y	7500 FC
40	V2527M-A5	V12728	3279	11000 FH &3Y	7500 FC
41	V2527M-A5	V12736	3279	11000 FH &3Y	7500 FC
42	V2527M-A5	V12883	3450	11000 FH &3Y	7500 FC
43	V2527M-A5	V12472	2979	7500 FC	NA
44	V2527M-A5	V12487	2979	7500 FC	NA
45	V2527M-A5	V13093	3705	NA	NA
46	V2527M-A5	V13095	3705	NA	NA
47	V2527M-A5	V12274	2771	NA	NA
48	V2527M-A5	V12278	2771	NA	NA
49	V2527M-A5	V12286	2780	NA	NA
50	V2527M-A5	V12288	2780	NA	NA
51	V2527M-A5	V12476	2997	NA	NA
52	V2527M-A5	V12490	2997	NA	NA
53	V2527M-A5	V12561	3077	13000 FH	NA
54	V2527M-A5	V12563	3077	13000 FH	NA
55	V2527M-A5	V12636	3175	13000 FH	NA
56	V2527M-A5	V12638	3175	13000 FH	NA
57	V2527E-A5	TBD	TBD	NA	NA
58	V2527E-A5	TBD	TBD	NA	NA
59	V2527E-A5	TBD	TBD	NA	NA
60	V2527E-A5	TBD	TBD	NA	NA

Engines 57 to 70: Engine Shop Visit Conditions will be determined at the time of such

Engine’s lease agreement signature. Data included for these Engines in this Exhibit J is a

target and not the final data.

Page 21 of 23


				Engine Shop Visit Conditions
Engine No.	Thrust Rating	ESN	Aircraft Serial Number	Engine FH and Time Remaining at Restoration Shop Visit Exit	LLP FC remaining at Restoration Shop Visit Exit
61	V2527E-A5	TBD	TBD	NA	NA
62	V2527E-A5	TBD	TBD	NA	NA
63	V2527E-A5	TBD	TBD	NA	NA
64	V2527E-A5	TBD	TBD	NA	NA
65	V2527E-A5	TBD	TBD	NA	NA
66	V2527E-A5	TBD	TBD	NA	NA
67	V2527E-A5	TBD	TBD	NA	NA
68	V2527E-A5	TBD	TBD	NA	NA
69	V2527E-A5	TBD	TBD	NA	NA
70	V2527E-A5	TBD	TBD	NA	NA
71	V2524-A5	V11736	2296	16500 FH	8500 FC
72	V2524-A5	V11741	2296	16500 FH	8500 FC
73	V2524-A5	V12697	3252	16500 FH	8500 FC
74	V2524-A5	V12701	3252	16500 FH	8500 FC
75	V2524-A5	V12778	3317	16500 FH	8500 FC
76	V2524-A5	V12759	3317	16500 FH	8500 FC
77	V2527E-A5	V15912	4798	8000 FC	NA
78	V2527E-A5	V15917	4798	8000 FC	NA
79	V2527E-A5	V15934	4832	8000 FC	NA
80	V2527E-A5	V15946	4828	8000 FC	NA
81	V2527E-A5	V15954	4828	8000 FC	NA
82	V2527E-A5	V15955	4832	8000 FC	NA
83	V2527E-A5	V16042	4950	8000 FC	NA
84	V2527E-A5	V16050	4950	8000 FC	NA
85	V2527E-A5	V15855	4741	20000 FH	10000 FC
86	V2527E-A5	V15857	4741	20000 FH	10000 FC
87	V2527E-A5	V11674	2204	7000 FC	NA
88	V2527E-A5	V11672	2204	7000 FC	NA
89	V2527E-A5	V12957	3524	NA	NA

Engines 57 to 70: Engine Shop Visit Conditions will be determined at the time of such

Engine’s lease agreement signature. Data included for these Engines in this Exhibit J is a

target and not the final data.

Page 22 of 23


				Engine Shop Visit Conditions
Engine No.	Thrust Rating	ESN	Aircraft Serial Number	Engine FH and Time Remaining at Restoration Shop Visit Exit	LLP FC remaining at Restoration Shop Visit Exit
90	V2527E-A5	V12961	3524	NA	NA
91	V2527E-A5	V12938	3543	NA	NA
92	V2527E-A5	V12972	3543	NA	NA
93	V2527M-A5	V15528	4403	16500 FH	10000 FC
94	V2527M-A5	V15543	4403	16500 FH	10000 FC
95	V2527M-A5	V15557	4422	16500 FH	10000 FC
96	V2527M-A5	V15554	4422	16500 FH	10000 FC
S1	V2527M-A5	V12285	NA	NA	RSV1 8000 FC RSV2 11000 FC
S2	V2527M-A5	V12671	NA	NA	NA
S3	V2527M-A5	V13063	NA	NA	RSV1 9000 FC RSV2 11000 FC
S4	V2527E-A5	V13183	NA	NA	10000 FC
S5	V2527E-A5	V16007	NA	NA	RSV1 8000 FC RSV2 11000 FC
S6	V2527E-A5	Spare 6	NA	NA	NA

Engine S6: Engine Shop Visit Conditions will be determined at the time of such

Engine’s lease agreement signature. Data included for this Engine in this Exhibit J is a target and not

the final data.

Where:

“FC” = Flight Cycles*

“FH” = Flight Hours*

“NA” = Not Applicable

“Y” = Years*

*	will be based on IAE’s relevant historical records and good faith determination at the time of the shop visit.

Appendix 5

Exhibit K

Pre-Side Letter No. 3 Flight Hours


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

Page 23 of 23

Exhibit 10.26

DATED AUGUST 23, 2010

INTERNATIONAL LEASE FINANCE CORPORATION,

AS ASSIGNOR

MACQUARIE AEROSPACE IRELAND LIMITED,

AS ASSIGNEE

AND

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.

(SUCCESSOR TO CONCESIONARIA VUELA

COMPANIA DE AVIACION, S.A. DE C.V.),

AS LESSEE

ASSIGNMENT, ASSUMPTION AND AMENDMENT

AGREEMENT

RELATING TO ONE (1) AIRBUS A319-100 AIRCRAFT

MANUFACTURER’S SERIAL NUMBER 3590,

FAA REGISTRATION MARK N504VL

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

CONTENTS


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

- i -


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

- ii -

THIS ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT (this “ Agreement ”), is entered into as of August 23, 2010, by and among (1) INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation (“ Assignor ”), (2) MACQUARIE AEROSPACE IRELAND LIMITED, a company organized under the laws of Ireland (“ Assignee ”), and (3) CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), a company organized under the laws of Mexico (“ Lessee ”).

PRELIMINARY STATEMENTS :

WHEREAS , Assignor and Lessee have entered into an Aircraft Lease Agreement, dated as of March 9, 2007 (as amended and supplemented by Side Letter #1 to Aircraft Lease Agreement described as item 3 on Annex 1 hereto, the “ Lease ”), pursuant to which Assignor has leased to Lessee one (1) Airbus A319-100 (shown on the international registry as AIRBUS model A319) aircraft bearing manufacturer’s serial number 3590 and FAA registration mark N504VL together with two (2) IAE International Aero Engines AG model IAE V2524-A5 (shown on the international registry as INTERNATIONAL AERO ENGINES model V2500-A5) engines bearing manufacturer’s serial numbers V13000 and V13002, respectively (each of which has 550 or more rated take-off horsepower) (collectively and as more fully described in the Lease, the “ Aircraft ”), as more fully described in Annex 7 hereto.

WHEREAS , International Lease Finance Corporation (“ Seller ”) has agreed, among other things, to sell the Aircraft or cause its affiliate to sell the Aircraft to Macquarie Aerospace Limited (“ Buyer ”) or Buyer’s designee subject to the Lease and Buyer has agreed to purchase or cause its designee to purchase the Aircraft from Seller or Seller’s affiliate pursuant to an Aircraft Sale Agreement dated as of April 13, 2010 between Seller and Buyer (the “ Sale Agreement ”).

WHEREAS , Buyer has designated Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3590 Trust (“ New Owner ”) to purchase the Aircraft in accordance with the Sale Agreement and will cause New Owner to lease the Aircraft to Assignee pursuant to a head lease agreement.

WHEREAS , concurrently with the sale of the Aircraft to New Owner, Assignor will, subject to the terms and conditions of this Agreement, assign to Assignee all of its rights, obligations and interest to and under the Lease and all other agreements (including all Operative Documents as such term is defined in the Lease) described on Annex 1 hereto and delivered in connection with, or relating to, the leasing of the Aircraft and that affect the rights or obligations of the “LESSOR” or “LESSEE” thereunder as of or after the Effective Time (as defined below) (the “ Lease Documents ”), subject to the rights of Lessee (as more fully described in Section 3(a) below and collectively with the other assignments, assumptions, releases and covenants in Section 3, the “ Assignment ”).

WHEREAS , Assignor, Assignee and Lessee have agreed to enter into this Agreement in order to, among other things, (i) effect the Assignment, (ii) evidence Lessee’s acknowledgment of, and consent to, the Assignment and (iii) amend certain provisions of the Lease Documents.

- 1 -

NOW , THEREFOR , in consideration of and subject to the mutual covenants, terms and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:

Section 1. Defined Terms . Any and all initially capitalized terms used herein (including the Annexes hereto) and not otherwise defined herein shall have the meanings assigned thereto in the Lease.

Section 2. Effectiveness . Subject to satisfaction of or waiver by Lessee (in its sole discretion) of the conditions precedent set forth in Annex 5 hereto, the Assignment, the amendment to the Lease Documents described herein and in Annex 2 hereto and Lessee’s consent in Section 4 will take effect as of the time of the transfer of title to the Aircraft by Assignor to New Owner (the “ Effective Time ”), as evidenced by a Confirmation of Effective Time substantially in the form of Annex 3 hereto to be delivered to and acknowledged by Lessee from Assignor and Assignee at or promptly after the Effective Time (a “ Confirmation ”). Lessee agrees to countersign and deliver to Assignor and Assignee a copy of such Confirmation promptly upon receipt thereof.

Section 3. Assignment, Assumption and Release.

(a) Assignment.

(i) Effective as of the Effective Time, Assignor hereby assigns, conveys, transfers and sets over to Assignee except as may be otherwise expressly specified in the following sentence all of Assignor’s rights and obligations and Assignor’s interest in, to and under the Lease Documents, arising on and after the Effective Time, subject to the rights of Lessee under the Lease Documents. Notwithstanding any other term or agreement in this Agreement:

(x) Assignor is not assigning its rights and obligations under Article 6.4 of the Lease.

(y) Assignor shall continue to be responsible to perform the obligations of “LESSOR” under Article 6.4 of the Lease and in respect of any other obligation arising in connection with any other right retained by Assignor in accordance with the provisions hereof (those portions of the Lease Documents assigned under this Section 3(a)(i), hereinafter the “ Assigned Lease Documents ”).

(ii) Effective as of the Effective Time, Lessee, Assignor and Assignee hereby agree that, except with respect to the matters set forth in Section 3(a)(i)(x) above, Assignor shall have no further rights and obligations under the Assigned Lease Documents, except that the disclaimers and indemnities contained in Articles 8 (Disclaimers and Waivers) and 17 (Indemnities) of the Lease and any other provisions of the Lease Documents which are expressly stated to survive the expiration or termination of the leasing of the Aircraft under the Lease shall continue in full force and effect for the benefit of Assignor in addition to the Assignee in

- 2 -

accordance with the provisions of the Lease. Notwithstanding the above, Assignor and Lessee shall have the same rights and remedies against each other as each would have had under the Lease in respect of any rights and obligations arising, losses, liabilities or claims suffered or incurred or brought against or payments due to each other in respect of or attributable to the period prior to the Effective Time as if the Assignor had remained the “LESSOR” under the Lease.

(b) Assumption.

(i) Effective as of the Effective Time, Assignee hereby accepts and assumes all of Assignor’s rights and obligations assigned, conveyed, transferred and set over by Assignor pursuant to Section 3(a).

(ii) Assignee warrants, covenants and agrees with Lessee that on and after the Effective Time, Assignee will perform all obligations to be performed by Lessor under the Assigned Lease Documents that arise on or after the Effective Time and will be bound by all of the terms thereof.

(iii) Any reference to the rights of “LESSOR” under the Lease in connection with the right of “LESSOR” to assign such rights, shall include any “associated rights”, as defined in The Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment (the “ Cape Town Convention ”) in effect at the Effective Time of the Assignee in, and to, this Agreement and the Lease. Any such associated rights may consist of any of Assignee’s rights to procure payment or other performance by Lessee (as “debtor” under the Cape Town Convention) under this Agreement, the Lease and/or any other operative document associated with the Lease.

(c) Retained Obligations and Release. Subject to the terms of this Agreement including without limitation Sections 2 and 3(a) and except as otherwise provided therein, effective as of the Effective Time, Lessee hereby releases Assignor from any obligations of “LESSOR” under the Assigned Lease Documents which arise on or after the Effective Time including but not limited to any obligations with respect to the return to Lessee of any Security Deposit or the reimbursement of any Reserves, all of which obligations in respect of such Security Deposits and Reserves having been assumed by New Owner and Assignee.

- 3 -

Section 4. Lessee Consent and Agreement . Subject to the provisions hereof, and Lessee’s rights hereunder and under the Lease, Lessee hereby acknowledges and consents to the Assignment and to Assignor’s assignment to New Owner of all of Assignor’s reversionary rights and interest in the manufacturer warranties that were assigned to Lessee by Assignor pursuant to the Lease Documents and agrees that Assignee will be obligated to fulfill all of the obligations of Lessor under the Assigned Lease Documents which arise on and after the Effective Time and that and until otherwise notified in writing Lessee will perform for the benefit of Assignee all of Lessee’s obligations under the Assigned Lease Documents which arise on and after the Effective Time, save for its obligations in respect of any rights expressly retained by Assignor hereunder.

Section 5. Payments to Assignee . Lessee and Assignee hereby agree that on and after the Effective Time all Rent, Reserves, Security Deposits and other payments due from Lessee to Lessor under the Lease will be made by wire transfer to the bank account of Assignee described in Annex 2 hereto or to such other account in the United States or Ireland (unless otherwise agreed by Lessee), notified to Lessee pursuant to Section 16 (Notices) below.

Section 6. Payments to Assignor . Lessee and Assignee hereby agree that as of the Effective Time all Rent, Reserves, Security Deposits and other payments paid to Assignor in accordance with the Lease prior to the Effective Time shall be deemed to have been paid for all purposes under the Lease and the Reserves and Security Deposit shall be deemed to have been received by Assignee and Assignee covenants and agrees that it shall hold, apply, retain and reimburse the Reserves and Security Deposit or cause to be held, applied, released and reimbursed the Reserves and Security Deposit strictly in accordance with all relevant provisions of the Lease.

Section 7. Insurance . From and after the Effective Time and until otherwise notified in writing, Lessee will cause:

(a) New Owner to be named as loss payee for the Agreed Value under the hull insurances required to be maintained by Lessee under the Lease;

(b) Servicer (as defined in Section 14 below), New Owner, Sub-Servicer, Macquarie Bank Limited and the Persons providing financing to New Owner and their agents and security trustees identified on Annex 4 hereto and each of their respective successors and permitted assigns and each of their respective shareholders, directors, officers, agents, employees and, in the case of a trustee or security trustee, the institution acting as such in its individual capacity to be named as additional insureds under Lessee’s aviation and general third party liability insurance maintained by Lessee under the Lease;

(c) continue to name Assignor and each of its respective successors and permitted assigns and each of their respective shareholders, directors, officers, agents, employees and, in the case of a trustee or security trustee, the institution acting as such in its individual capacity as an additional insured under the third party liability insurances until the earlier to occur of the second anniversary of the Effective Time; and

- 4 -

(d) each of the agreements described on Annex 4 hereto to be identified as “contracts” with respect to the insurances required under the Lease and this Section 7.

Section 8. Identification Plates . Lessee will as soon as is reasonably practical after the Effective Time, prepare at Assignee’s expense new identification plates for the Aircraft bearing the legends set forth in Annex 2 hereto, remove the existing identification plates and install the replacement identification plates on the Aircraft.

Section 9. Quiet Enjoyment . So long as no Default or Event of Default has occurred and is continuing, from and after the Effective Time, Assignee hereby agrees that neither it nor any person lawfully claiming through it will interfere with or otherwise disturb Lessee’s quiet, peaceful use, possession and enjoyment of the Aircraft.

Section 10. Post Effective Time . Assignor, Assignee and Lessee hereby agree that with effect on and from the Effective Time, the Lease shall be amended as set forth in Annex 2 hereto. Except as set out in this Agreement, the Lease shall remain unmodified and in full force and effect.

Section 11. Cooperation .

(a) The parties hereby agree to cooperate with one another in order to close the Assignment at a convenient time when the Aircraft is in a jurisdiction reasonably acceptable to Assignee, Assignor and Lessee on one of Lessee’s regular routes. Provided that Assignor notifies Lessee in writing of the proposed date of the Assignment a minimum of three (3) Business Days prior to such date, Lessee will provide Assignor notice of the scheduled route of the Aircraft for such date.

(b) Lessee agrees to provide promptly, but in any event, prior to the Effective Time, the following in the English language and in form and substance reasonably satisfactory to Assignor and Assignee:

(i) unless covered by the documents provided at Delivery, to Assignor and Assignee, an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Lessee naming the person or persons authorized to execute this Agreement and the documents delivered in connection therewith;

(ii) to Assignor and Assignee, an insurance certificate and, if applicable, broker’s letter of undertaking confirming that the insurances required under the Lease and under Section 7 of this Agreement are in effect;

- 5 -

(iii) to Assignee, an executed Assumption Agreement substantially in the form of Annex 12 hereto; and

(iv) to Assignor and Assignee written confirmation, signed by Lessee, specifying the location of the Aircraft at the Effective Time.

(c) Subject to the provisions hereof and Lessee’s rights hereunder and under the Lease, Lessee hereby agrees to perform and do all such other and further acts and things and execute and deliver any and all such other instruments (including any notification to the Aviation Authority of changes in the ownership structure of the Aircraft) as Assignee may reasonably require to reflect the change in the identity of the owner and lessor of the Aircraft as contemplated by this Agreement and to perfect or protect the interests of Assignee, New Owner, LESSOR’s Lender (as defined in the Lease) and any other interest holder, and for the purpose of carrying out the intent of and giving Assignee full benefit of the Assignment including, but not limited to consenting electronically, at Assignee’s expense to a registration by Assignee of the international interest created by this Agreement pursuant to the Cape Town Convention on the international registry established pursuant to the Cape Town Convention.

(d) Assignee shall pay or reimburse Lessee for its reasonable out-of-pocket costs and expenses (including reasonable legal fees and expenses) in preparing, reviewing, negotiating and executing documents required by Lessor and Assignee or performing any other obligations under Article 24 of the Lease. As between Assignor and Assignee, nothing in this clause (d) shall modify the agreement of Seller and Buyer under Section 8.1(b) of the Sale Agreement.

(e) Upon return to Lessee of either the deregistration power of attorney provided to Assignor, marked “cancelled”, or a facsimile copy of the same, Lessee shall deliver to Assignee a replacement deregistration power of attorney in the form previously provided to Assignor pursuant to the Lease; provided that in the event that a facsimile copy is provided, Assignor shall deliver to Lessee the original copy, marked “cancelled”, via international express courier within seven (7) Business Days after the Closing Date.

Section 12. Representations and Warranties .

(a) Lessee Representations. Lessee represents and warrants to Assignor and Assignee as of the Effective Time the following:

(i) Lessee is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing under the laws of its jurisdiction of its organization;

(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Lessee (x) have been duly authorized by all necessary corporate action of Lessee and (y) do not and will not violate the charter, certificate of incorporation, by laws or other organizational instruments, any applicable law, rule or regulation or any provision in any existing agreement binding on it;

- 6 -

(iii) this Agreement constitutes a valid, binding and enforceable agreement of Lessee except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights; and

(iv) all authorizations, consents, registrations and notifications required to be obtained by Lessee in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect.

(b) Assignor Representations. Assignor hereby represents and warrants to Lessee and Assignee as of the Effective Time the following:

(i) Assignor is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing and in good standing under the laws of the jurisdiction of its organization;

(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Assignor (x) have been duly authorized by all necessary corporate action of Assignor and (y) do not and will not violate the articles of incorporation, by laws or other organizational instruments of Assignor, any applicable law, rule or regulation or any provision in any existing agreement binding on Assignor;

(iii) this Agreement constitutes a valid, binding and enforceable agreement of Assignor except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights; and

(iv) all authorizations, consents, registrations and notifications required to be obtained by Assignor in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect.

(c) Assignee Representations. Assignee represents and warrants to Lessee and Assignor as of the Effective Time the following:

(i) Assignee is duly organized in the manner set forth in the first paragraph of this Agreement, is validly existing under the laws of the jurisdiction of its organization;

(ii) the transactions contemplated hereby and the execution, delivery and performance of this Agreement by Assignee (x) have been duly authorized by all necessary corporate action of Assignee and (y) do not and will not violate the articles of incorporation, by-laws or other organizational instruments of Assignee, any applicable law, rule or regulation or any provision in any existing agreement binding on Assignee;

- 7 -

(iii) this Agreement constitutes a valid, binding and enforceable agreement of Assignee except as enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application affecting the enforcement of creditor’s rights;

(iv) all authorizations, consents, registrations and notifications required to be obtained by Assignee in connection with the entry into, performance, validity and enforceability of this Agreement and the transactions contemplated by this Agreement, have been obtained or effected (as appropriate) and are in full force and effect;

(v) the assignment and assumption contemplated hereby is in conformity with and subject to the provisions of Article 24 of the Lease and will not result in any increase in or to or the imposition of additional obligations or liabilities that are not de minimis;

(vi) Macquarie Aerospace Limited is the sole beneficiary of the MSN 3590 Trust; and

(vii) Assignee is an Irish tax resident.

(d) Assignee Covenant. Assignee covenants that so long as no Event of Default has occurred and is continuing, it will not permit New Owner to take or omit to take any action which would jeopardize the registration of the Aircraft on the FAA registry.

Section 13. Lease Acknowledgments, Representations and Warranties.

(a) Assignor, Assignee and Lessee hereby make the acknowledgments set forth on Annex 10.

(b) Each of Lessee and, unless otherwise stated, Assignor hereby makes the following representations and warranties as of the date hereof (unless otherwise noted):

(i) the Lease Documents are all described on Annex 1 hereto and such, together with this Agreement, constitute the entire agreement of Lessee and Assignor with respect to the leasing of the Aircraft;

(ii) the Lease is in full force and effect, and has not been modified or amended by any agreement between Assignor and Lessee which is currently in effect except to the extent set forth in the Lease Documents and, without waiver of or prejudice to Lessee’s rights under the Lease, Lessee has not exercised its option to extend the Lease Term;

(iii) the Aircraft was delivered on the Delivery Date in accordance with the terms of the Lease;

(iv) the Aircraft is not subject to a sublease;

(v) no Default in respect of the payment of Rent or any Event of Default has occurred and is continuing under the Lease;

- 8 -

(vi) to Lessee’s knowledge and without waiver of or prejudice to any right, remedy or claim it may have, Lessee is not entitled as of the date hereof to any offset against Rent or any other amounts payable under the Lease Documents;

(vii) to Lessee’s knowledge, without waiver of or prejudice to any right, remedy or claim it may have, Lessee as of the date hereof has no claim against, and there are no actions by Lessee against, Assignor with respect to the Aircraft or the Lease Documents;

(viii) without waiver of or prejudice to any right, remedy or claim Lessee may have, Assignor has no unperformed Reserve payment obligations;

(ix) no unrepaired partial loss with a repair cost in excess of ***** or Total Loss has occurred in respect of the Aircraft or Engines;

(x) to Lessee’s knowledge, no notice of assignment of any Security Interest in the Lease has been received by the Lessee or, if the Lessee has received any such notice of assignment, it has subsequently received notice that such Security Interest has been terminated or will be terminated as of the Effective Time;

(xi) Lessee has not prepaid any Rent, the payment of which does not become due until after the Effective Time; and

(xii) Lessee is not subject to any voluntary bankruptcy, insolvency or reorganization proceeding.

Section 14. Assignee Servicer and Assignments . As of and with effect from the Effective Time, Macquarie Aircraft Leasing Services (Ireland) Limited will act as Assignee’s servicer for all matters related to the Lease and the Aircraft (in such capacity as servicer, the “ Servicer ”). Accordingly, with effect from the Effective Time and until Lessee receives notice from Assignee to the contrary, Lessee shall be entitled to and shall communicate with and deal with Servicer with respect to all matters relating to the Lease and the Aircraft to the exclusion of Assignor and Assignee and may rely on any communication, direction or determination made or purportedly made by Servicer. Subject to the provisions hereof and its rights under the Lease, upon written notice from Assignee, Lessee shall acknowledge and consent to any Security Interest Assignee grants in and to Assignee’s or New Owner’s rights to the Aircraft and under the Lease in the form of Annex 8 or such other form as may be reasonably acceptable to Lessee.

Section 15. Assignment . This Agreement will be binding upon and inure to the benefit of each party hereto and its respective successors and assigns as permitted under the Lease.

Section 16. Notices . Any notices hereunder will be in writing and will be delivered as and in the manner specified in the Assigned Lease Documents. The address of Assignee for notices under the Assigned Lease Documents is, until further notice, as set forth on Annex 2 hereto.

- 9 -

Section 17. Modifications . This Agreement may not be amended or modified except by a written agreement signed by Assignor, Assignee and Lessee; provided that Assignee and Lessee shall be entitled to amend, modify or vary the terms of the Assigned Lease Documents after the Effective Time without reference to or the signature of Assignor.

Section 18. Delivery of Documents by Fax or E-mail . Delivery of an executed counterpart of this Agreement or of any other documents in connection with this Agreement by fax or email will be deemed as effective as delivery of an originally executed counterpart. Any party delivering an executed counterpart of this Agreement or other document by fax or email will also deliver an originally executed counterpart, but the failure of any party to deliver an originally executed counterpart of this Agreement or such other document will not affect the validity or effectiveness of this Agreement or such other document.

Section 19. Governing Law, Etc . The provisions of the Lease, as amended by this Agreement, with respect to governing law, jurisdiction, service of process, waiver of trial by jury, venue and inconvenient forum are incorporated in this Agreement by reference as if such provisions were set forth herein.

Section 20. Further Assurances . Each party hereto agrees that it shall, at any time and from time to time, promptly and duly execute and deliver any and all such further instruments and documents and take such further action as may be reasonably required in order to obtain the full benefits of this Agreement and to implement the rights and powers herein granted.

Section 21. Headings . All section and paragraph headings and captions are purely for convenience and will not affect the interpretation of this Agreement. Any reference to a specific section or paragraph will be interpreted as a reference to such section or paragraph of this Agreement.

Section 22. Invalidity of any Provision . If any of the provisions of this Agreement become invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.

Section 23. Survival . Notwithstanding anything contained herein to the contrary, all agreements, indemnities, representations and warranties contained in this Agreement shall survive the Effective Time.

- 10 -

IN WITNESS WHEREOF , the parties hereto or their duly authorized representatives have executed this Agreement as of the day and year first herein written.


INTERNATIONAL LEASE FINANCE CORPORATION, as Assignor	MACQUARIE AEROSPACE IRELAND LIMITED as Assignee

By: /s/ Frederick S. Cromer	By:	/s/ Aidan Culchrist
Name: Frederick S. Cromer	Name:	Aidan Culchrist
Title: Chief Financial Officer	Title:	Director

	By:	/s/ James S. Simpson
	Name: Title:	James S. Simpson Director


CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., as Lessee

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

By:		/s/ Fernando Suárez Gerard
Name:		Fernando Suárez Gerard
Title:		Director of Finance, CFO

RECEIPT OF CHATTEL PAPER ORIGINAL

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


MACQUARIE AEROSPACE IRELAND LIMITED

By:		/s/ Aidan Culchrist
Name:		Aidan Culchrist
Title:		Director

By:		/s/ James S. Simpson
Name:		James S. Simpson
Title:		Director

ANNEX 1

LEASE DOCUMENTS

1.	Aircraft Lease Agreement dated as of March 9, 2007 between Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“Volaris”), as lessee and International Lease Finance Corporation (“ILFC”), as lessor.

2.	Estoppel and Acceptance Certificate dated July 22, 2008 by Volaris.

3.	Side Letter #1 to Aircraft Lease Agreement dated as of June 14, 2009 by and between ILFC and Volaris.

4.	Assignment of Rights (Airframe) dated July 22, 2008 between ILFC and Volaris.

5.	Airbus Consent dated July 22, 2008 by Airbus S.A.S. and acknowledged by ILFC and Volaris.

6.	Assignment Agreement (Engines) dated July 22, 2008 among ILFC, Volaris and IAE International Aero Engines AG.

Annex 1-1

ANNEX 2

AMENDMENTS TO LEASE DOCUMENTS

1. Reference . This Annex 2 to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010, by and among International Lease Finance Corporation , as Assignor, Macquarie Aerospace Ireland Limited, as Assignee and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee (the “ Assignment Agreement ”) sets forth the amendments to the Aircraft Lease Agreement dated as of March 9, 2007 (as amended and supplemented prior to the date of the Assignment Agreement, between Lessee and Assignor the “ Lease ”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Lease.

2. Amendments by Operation of Law Not Excluded . The amendments set forth in this Annex 2 hereto are intended to be the only amendments to the Lease to be effected upon the Effective Time except for such amendments to the language and operation of the Lease as are otherwise necessitated and effected by the execution of the Assignment Agreement or upon the effectiveness of the Assignment.

3. Amendments to Certain Definitions.

(a) The definition of “LESSOR” in the preamble of the Lease is deleted in its entirety and replaced with the following:

“MACQUARIE AEROSPACE IRELAND LIMITED, a company organized under the laws of Ireland, whose principal place of business is Level 1, South Bank House, Barrow Street, Dublin 4, Ireland (“ LESSOR ”).”

(b) The following definitions in Article 2.1 of the Lease are amended:

(i)

The definition of “APU” is amended such that the word “LESSOR” in part (c) of the definition is deleted and replaced with “OWNER”.

(ii)

The definition of “Aviation Documents” is amended such that the word “LESSOR’s” in part (g) of the definition is deleted and replaced with “OWNER’s”.

(iii)

The definition of “Engine” is amended such that the word “LESSOR” in part (c) of the definition is deleted and replaced with “OWNER”.

(iv)

The definition of “LESSOR’s Lien” is amended such that the words “, OWNER, Owner Participant, Lessor’s Lender and/or Servicer” are inserted after the word “LESSOR”.

(v)

The definition of “Operative Documents” is amended such that it also includes “Assignment Agreement” among the list of documents.

Annex 2-1

(vi)

The definition of “Part” is amended such that the word “LESSOR” is deleted each time it appears and is replaced with “OWNER” and such that the words “which is owned by OWNER and (if LESSOR is not the OWNER) leased to LESSOR and leased by LESSOR to LESSEE hereunder” are inserted immediately following the words “or other item of equipment”.

(c) The definition of LESSOR’s Lender in Article 24.3 is amended such that the word “OWNER” is inserted in lieu of the word “LESSOR” in the first line. Article 24.3 is further amended such that the word “OWNER’s” is inserted in lieu of the word “LESSOR’s” in the third line.

4. New Definitions . The following definitions shall be added to Article 2.1 of the Lease in the proper alphabetical order:

(a) ““ Assignment Agreement ” means the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 by and among International Lease Finance Corporation, as Assignor, Macquarie Aerospace Ireland Limited, as Assignee, and Lessee as Lessee.”

(b) ““ Assumption Agreement ” means the Assumption Agreement dated [ ] [ ] 2010 among LESSOR, MBL and LESSEE.”

(d) ““ Mortgagee ” any entity or entities to which OWNER grants a security interest in the Aircraft ad such entity’s or entities’ successors and assigns provided that LESSOR or OWNER has given notice of any such assignment.”

(e) ““ OWNER ” means Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3590 Trust, a national banking association, with its address at 299 South Main Street, MAC: U1228-120, Salt Lake City, Utah 84111, United States of America, the owner of the Aircraft.”

(f) ““ Owner Participant ” means Macquarie Aerospace Limited.”

(g) ““ Servicer ” means Macquarie Aircraft Leasing Services (Ireland) Limited or such other person as may be notified to LESSEE by the LESSOR.”

(h) ““ Sub-Servicer ” means any of Macquarie Aircraft Leasing Services (US), Inc., Macquarie Aircraft Leasing Services (UK) Ltd. and Macquarie Aircraft Leasing Services (Singapore) Pte. Ltd., and each of their respective successors, transferees and assigns.”

(i) ““ Tax Indemnitee ” means each of LESSOR, OWNER, Owner Participant, Servicer, any Mortgagee, any LESSOR’s Lender and each person with whom any of the foregoing files a consolidated tax return.

Annex 2-2

5. LESSOR’s Bank Account . Articles 1.12 (LESSOR’s Bank Account) and 5.6 (LESSOR’s Bank Account) of the Lease are amended by replacing details of the Lessor’s bank account with the following:

Bank: Citigroup Europe, plc

Swift: *****

IBAN: *****

Account: Macquarie Aerospace Limited Collections

*****

Ref.: MSN 3590

6. Maintenance of Aircraft

(a) In Article 12.4.2, the first, second, fourth and fifth references to “LESSOR” are each replaced with a reference to “OWNER”.

(b) In Articles 12.5 (Removal of Engines) and 12.6 (Removal of APU), each reference to “LESSOR” is replaced with a reference to “OWNER”.

(d) In Article 12.8.3, the words “LESSOR’s title” are replaced with the words “OWNER’s title” and the words “neither LESSOR nor its” are replaced with the words “none of LESSOR, OWNER or their”.

(e) In Article 12.9.5, the references to “LESSOR” on the third and penultimate lines are each replaced with a reference to “OWNER”.

7. Title and Registration

(a) In Article 14.1, the first reference to “LESSOR” is replaced with a reference to “OWNER”.

(b) In Article 14.2, the reference to “LESSOR” in the second line is replaced with a reference to “OWNER”, and the words “protect and perfect LESSOR’s interest” are replaced with the words “protect and perfect OWNER’s, LESSOR’s and Owner Participant’s respective interest”.

8. Nameplates .

(a) Article 15.1 of the Lease shall be amended by replacing the description of the legend on the Airframe identification plates with the following:

*****

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

Annex 2-3

“THIS AIRCRAFT IS OWNED BY WELLS FARGO BANK NORTHWEST, N.A., NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE UNDER MSN 3590 TRUST

MANUFACTURER’S SERIAL NO: 3590”

(b) Article 15.2 of the Lease shall be amended by replacing the description of the legend on the Engine identification plates with the following:

“THIS ENGINE [INSERT MSN] IS OWNED BY WELLS FARGO BANK NORTHWEST, N.A., NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE UNDER MSN 3590 TRUST”

9. Tax Indemnity.

(a) Article 16.1 (General Obligation of LESSEE) of the Lease is amended by adding the words “or the City of Dublin” immediately after the words “the City or County of Los Angeles” and by replacing each reference to “LESSOR” with a reference to “each Tax Indemnitee”.

(b) Article 16.2(a) of the Lease is amended by adding after the words “the City or County of Los Angeles” the words “the City of Dublin or the Republic of Ireland or any political subdivision thereof”.

(c) Articles 16.2(a), 16.2(e), 16.2(g), 16.2(h), 16.2(i), 16.2(j), 16.3, 16.4, 16.5, 16.6, and 16.7 are amended by replacing each reference to “LESSOR” with a reference to “any Tax indemnitee”.

(d) Articles 16.2(d) is amended such that the first, second, fourth, and fifth references to “LESSOR” are each replaced with a reference to “any Tax indemnitee”.

(e) Articles 16.2(c), 16.2(h), and 16.5 are amended by replacing each reference to “LESSOR’s” with a reference to “each Tax Indemnitee’s”.

10. General Indemnity . Article 17.1 of the Lease is amended by replacing the words “LESSOR and its” with the words “LESSOR, OWNER, MBL, Servicer and their respective”.

11. Insurance . Article 18.4 is amended by replacing “LESSOR” with “OWNER” in the second line.

12. Loss, Damage and Requisition

(a) Article 19.4 (Surviving Engine(s)) is amended by replacing the words “LESSOR will transfer all its” with “LESSOR shall procure the transfer of all” and by deleting the words “on the part of LESSOR”.

(b) Articles 19.5.1 is amended by replacing the first occurrence of “LESSOR” with “OWNER” and by deleting the words “by LESSOR”.

Annex 2-4

(d) Articles 19.6.1 is amended by replacing the first occurrence of “LESSOR” with “OWNER” and by deleting the words “by LESSOR”.

(e) Article 19.6.2 is amended by replacing the second occurrence of “LESSOR” with “OWNER”.

13. Return of Aircraft . Article 23.9.13 is amended by replacing the first occurrence of “LESSOR’s” with “OWNER’s”.

14. Assignment .

(a) Article 24.2.1 is amended by replacing the words “LESSOR may” with “LESSOR or OWNER may, in each case subject to the terms, conditions and limitations set forth in this Article 24”.

(b) Article 24.2 is amended by adding the following provision as Article 24.2.3: “Any assignment, conveyance, transfer or other disposition by Owner and/or Owner Participant of all or any of their respective right, title and interest in, to or under the Lease and/or other Operative Documents and/or the Aircraft shall be subject to the terms, conditions and restrictions of this Article 24 to the same extent and with the same effect as if the same were an assignment, conveyance, transfer or other disposition of any or all of Lessor’s right, title or interest herein or in any other Operative Document or in respect of the Aircraft.”

(c) Article 24.4 (LESSEE Cooperation) is amended by adding to the end of the second sentence thereof the words “and executing and delivering a Lessee Acknowledgement substantially in the form of Annex 8 to the Assignment Agreement”.

15. Defaults of Lessee .

(a) Article 25.3(e) is amended by replacing “LESSOR” with “LESSOR and OWNER”.

(b) Article 25.6(c) is amended by replacing the words “LESSOR elects” with the words “LESSOR and OWNER elect” and by replacing reference to “LESSOR” in the fifth line with the words “LESSOR and OWNER”.

16. Notices . Article 26.2 of the Lease shall be amended by replacing the address information relating to the Lessor set forth therein with the following:

MACQUARIE AEROSPACE IRELAND LIMITED

Level 1, South Bank House

Barrow Street

Dublin 4

Annex 2-5

Ireland

Attn: Aircraft Portfolio Administration

Fax: +353 1 238 3299

E-mail: notices@macquarie.aero

with a copy to:

Macquarie Aircraft Leasing Services (Ireland) Limited

Level 1, South Bank House

Barrow Street

Dublin 4

Ireland

Attn: Aircraft Portfolio Administration

Fax: +353 1 238 3299

Macquarie Aircraft Leasing Services (US), Inc.

Suite 200

Two Embarcadero Center

San Francisco, CA 94111

Attn: Contracts Management Group

Fax: +1 415 829 6899

Macquarie Bank Limited

Corporate and Asset Finance Group

1 Martin Place

Sydney, NSW 2000

Australia

Attn: Peter Stokes

Fax: +61 2 8232 6013

17. Arbitration . Article 27 is deleted in its entirety and all references thereto in the Lease shall have no further effect.

18. Governing Law and Jurisdiction .

(a) Article 28.1 (California Law) is deleted in its entirety and replaced with the following:

“ New York Law . THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.”

Annex 2-6

(b) Article 28.2 (Non-Exclusive Jurisdiction in California) is deleted in its entirety and replaced with the following:

“ Non-exclusive Jurisdiction in New York . The parties hereto hereby irrevocably consent to the non-exclusive jurisdiction of the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York, and each party agrees to comply with all requirements necessary to effect the intent of this Article 28.2. Each of the parties hereto irrevocably consents to the service of process in any action or proceeding hereunder by the mailing of copies thereof by registered or certified airmail, postage prepaid, to such party at is respective address applicable pursuant to Article 26 (Notices). The provisions of this subsection (i) shall not limit the rights of any party to serve process in any other manner permitted by law or to obtain execution of judgment in any jurisdiction.”

(c) Article 28.3 (Protection of Interest in the Aircraft) is amended by deleting the words “NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ARTICLE 27”.

(d) Article 28.4 is amended by replacing part (c) with “(c) the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York.”

(e) Article 28.6 is amended by deleting the phrase “in accordance with Section 415.40 of the California Code of Civil Procedure”.

(f) Article 28.8 is amended by replacing the words “California (notwithstanding the conflict Laws of the State of California)” with the words “New York” and by replacing the words “Federal District Court for the Central District of California and the State of California Superior or Municipal Court in Los Angeles” with the words “New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York”.

Annex 2-7

ANNEX 3

FORM OF CONFIRMATION OF EFFECTIVE TIME

TO BE INTENTIONALLY OMITTED FOR FAA FILING PURPOSES

, 2010

Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.

Re: Confirmation of Effective Time

Ladies & Gentlemen:

Reference is hereby made to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 by and among International Lease Finance Corporation, as Assignor, Macquarie Aerospace Ireland Limited, as Assignee, and Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), as Lessee (the “ Assignment Agreement ”) pertaining to one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 and registration mark N504VL. Any and all initially capitalized terms used herein shall have the meanings ascribed thereto in the Assignment Agreement, unless specifically defined herein.

In accordance with Section 2 of the Assignment Agreement, the undersigned hereby confirm to Lessee that the sale of the Aircraft to New Owner and the Assignment occurred today, [ ] [ ], 2010 (Time: [Pacific time]) (the “ Effective Time ”).

Each of Existing Lessor and, by its acknowledgement below, Lessee hereby confirms that, as of the Effective Time, the Reserve rates and the Reserve balances held by Assignor pursuant to the terms and conditions of the Lease are as follows:


Type of Reserves	Rate of Reserves	Reserve Balances
Airframe Reserves (6 Year Check):	***** calendar month	US$[______]
Airframe Reserves (12 Year Check):	***** per calendar month	US$[______]
Engine Performance Restoration Reserves for MSN V13000:	***** per Engine flight hour	US$[______]
Engine Performance Restoration Reserves for MSN V13002:	***** per Engine flight hour	US$[______]
Engine LLP Reserves for MSN V13000:	***** per Engine cycle	US$[______]
Engine LLP Reserves for MSN V13002:	***** per Engine cycle	US$[______]
Landing Gear Reserves:	***** per calendar month	US$[______]
APU Reserves:	***** per APU hour	US$[______]

*****

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

Annex 3-1


Sincerely,

INTERNATIONAL LEASE FINANCE CORPORATION

By:
Name:
Title:

MACQUARIE AEROSPACE IRELAND LIMITED

By:
Name:
Title:

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


CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.

By:
Name:
Title:

By:
Name:
Title:

Annex 3-2

ANNEX 4

INSURANCE INFORMATION

I.	CONTRACT PARTIES

A.	New Owner and Headlessor:

Wells Fargo Bank Northwest, N.A., not in its individual capacity, but solely as owner trustee under MSN 3590 Trust (“ Owner Trustee ”)

299 South Main Street

MAC: U1228-120

Salt Lake City, Utah 84111

United States of America

Fax: +1 801-246-5053

B.	Assignee and Lessor

Macquarie Aerospace Ireland Limited (“ MAL Ireland ”)

Level 1, South Bank House

Barrow Street

Dublin 4

Ireland

Fax: +353 1 238 3299

C.	Owner Participant:

Macquarie Aerospace Limited

Level 1, South Bank House

Barrow Street

Dublin 4

Ireland

Fax: +353 1 238 3299

Annex 4-1

D.	Macquarie Aircraft Leasing Services (Ireland) Limited (“ Servicer ”)

E.	Macquarie Aircraft Leasing Services (US), Inc. (MALSUS), Macquarie Aircraft Leasing Services (UK) Ltd. (MALSUK) and Macquarie Aircraft Leasing Services (Singapore) Pte. Ltd. (MALSSING), as Servicer Delegates

F.	Macquarie Bank Limited

G.	Prior Lessor and Assignor

International Lease Finance Corporation (“ ILFC ”)

10250 Constellation Boulevard, 34th Floor

Los Angeles, California 90067

U.S.A.

Attention: Legal Department

Fax: 310 788 1990

Telephone: 310 788 1999

and, in respect of Legal Liability Insurances, Wells Fargo Bank Northwest, National Association (in its individual capacity), Macquarie AirFinance Ltd, and the above Contract Parties, and each of their respective successors and permitted assigns and transferees and each of their respective subsidiaries, shareholders, affiliates, directors, officers, agents, employees and servants, and, in the case of any trustee or security trustee, the institution in its individual capacity acting as such

II.	CONTRACTS :

Aircraft Lease Agreement dated as of March 9, 2007 between Concesionaria Vuela Compania de Aviacion, S.A. de C.V. (succeeded by Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V.) (“ Volaris ”) and MAL Ireland as assignee of ILFC pursuant to the Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 between and among ILFC, MAL Ireland and Volaris, as supplemented and amended from time to time.

B.	Assignment, Assumption and Amendment Agreement dated as of August 23, 2010 between and among ILFC, as Assignor, MAL Ireland, as assignee and Volaris, as lessee.

C.	Aircraft Sale Agreement dated as of April 13, 2010 between International Lease Finance Corporation and Macquarie Aerospace Limited

D.	Head Lease Agreement dated as of [ ] [ ], 2010 between Owner Trustee and MAL Ireland.

E.	Trust Agreement dated as of [ ] between the Owner Trustee and Owner Participant.

Annex 4-2

F.	Assumption Agreement dated [ ] among Lessee, Lessor and Macquarie Bank Limited.

G.	Servicing Agreement dated as of April 29, 2010 among Owner Participant, the Servicer and certain other entities as more particularly described therein.

H.	Servicer Delegate Agreement dated as of April 29, 2010 between the Servicer and MALSUS.

I.	Servicer Delegate Agreement dated as of April 29, 2010 between the Servicer and MALSUK.

J.	Servicer Delegate Agreement dated as of April 29, 2010 between the Servicer and MALSSING.

Annex 4-3

ANNEX 5

LESSEE CONDITIONS PRECEDENT

On or before the Effective Time, the following conditions shall have been satisfied or waived by Lessee:

Lessee shall have received the following, all of which shall be in the English language and be reasonably satisfactory in form and substance to Lessee:

an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Assignor naming the person or persons authorized to execute this Agreement and the documents delivered in connection herewith;

ii.

an incumbency certificate or power of attorney or equivalent corporate authority, as the case may be, of Assignee naming the person or persons authorized to execute this Agreement and the documents delivered in connection herewith; and

iii.

with respect to Assignee, a certificate of tax residency in Ireland.

Lessee shall have received from Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as First Lien Security Trustee, Second Lien Security Trustee, Third Lien Security Trustee and Fourth Lien Security Trustee, a Notice of Removal and Discharge substantially in the form of Annex 6 hereto.

Lessee shall have received from Macquarie Aerospace Limited a guarantee substantially in the form of Annex 11 hereto.

The deregistration power of attorney originally issued by Lessee shall have been marked “cancelled” and returned to Lessee. For purposes of closing the transaction contemplated hereby, a copy of the cancelled original deregistration power of attorney sent to Lessee via facsimile on the Closing Date shall suffice, provided the original, marked “cancelled”, is delivered to Lessee via international express courier within seven (7) Business Days after the Closing Date.

Lessee shall have received an executed Letter of Quiet Enjoyment from New Owner substantially in the form attached hereto as Annex 9.

Lessee shall have received from Lessor and Macquarie Bank Limited an Assumption Agreement substantially in the form of Annex 12 hereto.

Annex 5-1

ANNEX 6

NOTICE OF REMOVAL AND DISCHARGE

From: Wells Fargo Bank Northwest, National Association, as First Lien Security Trustee, Second Lien Security Trustee, Third Lien Security Trustee and Fourth Lien Security Trustee (collectively, the “ Security Trustees ”)

To: Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. (the “ Lessee ”)

Date: [ ] [ ], 2010

Re:

Aircraft Lease Agreement dated as of March 9, 2007, currently between International Lease Finance Corporation (the “ Lessor ”) and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) (as the same may be amended, supplemented or otherwise modified, the “ Lease ”) relating to an Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 (the “ Aircraft ”).

The purpose of this letter is to notify you that (i) the Aircraft has been removed as of from International Lease Finance Corporation’s facility provided by an AIG affiliate with funding provided to the AIG affiliate by the Federal Reserve Bank of New York, (ii) all encumbrances and liens in favor of the Security Trustees are hereby released and discharged and (iii) any and all payments due under the Lease shall cease to be paid to the following account:

[INSERT ACCOUNT DETAILS FROM PRIOR NOTICE]

Very truly yours,

WELLS FARGO BANK NORTHWEST, NATIONAL

ASSOCIATION, not in its individual capacity but solely

as First Lien Security Trustee, Second Lien Security Trustee,

Third Lien Security Trustee and Fourth Lien Security Trustee


By:
Name:
Title:

Confirmed and Acknowledged

International Lease Finance Corporation


By:
Name:
Title:

Annex 6-1

ANNEX 7

FEDERAL AVIATION ADMINISTRATION CONVEYANCE AND ENGINE THRUST

INFORMATION

•

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

Annex 7-1

ANNEX 8

FORM OF LESSEE ACKNOWLEDGEMENT

From:

MACQUARIE AEROSPACE IRELAND LIMITED (the “ Lessor ”)

[NAME OF SECURITY TRUSTEE] (the “ Security Trustee ”)

To:	CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V. (the “ Lessee ”)

[ ] [ ], 2010

Dear Sirs:

We refer to the lease agreement dated March 9, 2007 currently between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) (as supplemented and amended from time to time, the “ Lease Agreement ”) relating to one Airbus A319-100 with manufacturer’s serial number 3590 (together with the engines described in the Lease Agreement, the “ Aircraft ”) together with all related agreements (including, without limitation, any supplements or amendments) entered into in connection with, or relating to, the lease of the Aircraft and any letter of credit related thereto (together with the Lease Agreement, the “ Lease Documents ”);

All terms defined in the Lease Agreement (including terms expressly defined therein or by reference to another document or otherwise), unless the context otherwise requires, have the same meanings in this Lessee Acknowledgement (this “ Acknowledgment ”).

We hereby notify you, and for good and valuable consideration, the receipt of which is hereby acknowledged, you acknowledge and agree to the following:

1. By the Security Agreement made [DATE OF SECURITY AGREEMENT] (the “ Security Agreement ”) between, inter alios, the Lessor (as assignor) and the Security Trustee, the Lessor has assigned and encumbered to the Security Trustee, as security, all of its right, title and interest in and to all of its rights, title and interests, present and future, actual or contingent, in and to, inter alia the Lease Documents (other than in relation to the Excluded Property (as defined below)) and all other rights and benefits whatsoever accruing to it under the Lease Documents (collectively, the “ Lease Assignment Documents ”). By execution of the acknowledgement to this Acknowledgment you hereby consent, effective as of the date hereof, to the security assignment in favor of the Security Trustee described in the preceding sentence. In this Acknowledgment, “ Excluded Property ” means all right, title and interest, present or future (actual or contingent) of the Lessor in and to the operational indemnities contained in the Lease Documents, to the extent such indemnities are given expressly for the benefit of the Lessor or any of its directors, officers, employees, servants or agents only.

2. Until the Security Trustee serves a Relevant Notice (as defined below) on you, you shall continue to (a) deal directly with the Lessor in respect of the Lease Documents and the other Lease Assignment Documents to which you are party and (b) make payments as provided in the Lease Agreement.

Annex 8-1

3. If the Security Trustee delivers to you a written notice that it has exercised its rights under the Security Agreement (a “ Relevant Notice ”), then you shall thereafter perform, observe and comply with all terms of the Lease Documents and the other Lease Assignment Documents to which you are party for the benefit of the Security Trustee as if the Security Trustee were named in place of the Lessor as a party to the Lease Assignment Documents. After the Security Trustee delivers any Relevant Notice, you shall not recognize the exercise by the Lessor of any of its rights and powers under the Lease Assignment Documents unless and until requested to do so by the Security Trustee.

4. Save as expressly provided herein, we hereby confirm that none of your rights and obligations under the Lease Documents will be affected (including, without limitation, any obligations in respect of the payment of Rent, Reserves, Taxes or other amounts due and payable under the Lease) as a result of (a) the giving of this Acknowledgment or any Relevant Notice; or (b) the execution of the Lease Assignment.

5. This Acknowledgment is governed by New York law.

This Acknowledgment and the authorizations and instructions contained in this Acknowledgment are irrevocable unless and until you receive written notice to the contrary from the Security Trustee. This Acknowledgment and the instructions contained herein cannot be amended or modified without the written consent of the Security Trustee and the Lessor. The Security Trustee shall, in exercising any right, privilege or remedy under or in respect of the Lease be bound by and exercise the same in accordance with the terms of the Lease and, to the extent it receives any sums, whether of Rent, proceeds of Insurances, Reserves or otherwise, shall hold, invest, apply, retain and reimburse such sums as provided in the Lease but otherwise shall have no liability for the performance of, any other of the Lessor’s obligations under the Lease Assignment Documents unless expressly agreed to in writing by the Security Trustee.

By its signature below, Lessee expressly acknowledges receipt of the Acknowledgment and expressly and irrevocably agrees to the provisions contained in this Acknowledgment, including paragraph 3 hereof.

[Signature Page Follows]

Annex 8-2

Yours faithfully,

FOR AND ON BEHALF OF

MACQUARIE AEROSPACE IRELAND LIMITED

(as Lessor)

For and on behalf of

[NAME OF SECURITY TRUSTEE]

(as Security Trustee)

ACKNOWLEDGED AND AGREED

this day of , 20

CONCESIONARIA VUELA COMPANIA

DE AVIACION, S.A .P.I . DE C.V. (as Lessee)

By:

Name:

Title:

By:

Name:

Title:

Annex 8-3

ANNEX 9

FORM OF LETTER OF QUIET ENJOYMENT

[ ] [ ], 2010

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V.

Prolongación Paseo de la Reforma #490

Piso 1 (Edificio GE)

Col. Santa Fe Peña Blanca

Del. Álvaro Obregón

01210 México, D.F.

México

Ladies and Gentlemen:

We confirm that we have received a copy and are aware of the terms of Aircraft Lease Agreement, dated March 9, 2007, as amended from time to time (the “ Lease ”), between Macquarie Aerospace Ireland Limited (“ Lessor ”) and yourselves (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.) concerning that certain Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 (the “ Aircraft ”). Words and expressions defined in the Lease shall have the same respective meanings when used in this letter.

By a Security Agreement dated as of [DATE OF SECURITY AGREEMENT] and acceded to by the Lessor on [ ] (the “ Security Agreement ”) among, amongst others, Lessor and [NAME OF SECURITY TRUSTEE], as Security Trustee (“ Security Trustee ”), Lessor has assigned to the Security Trustee, as security, all of its rights, title and interest in, to and under the Lease and the other Collateral (as defined in the Security Agreement), including certain insurance proceeds.

We hereby confirm that so long as no Default or Event of Default shall have occurred and be continuing, we will not, through our own actions or through the actions of others lawfully claiming through or under us, interfere with your quiet, peaceful use, possession and enjoyment of the Aircraft in accordance with the terms of the Lease.

[Signature Page Follows]

Annex 9-1

Very truly yours,

[NAME OF SECURITY TRUSTEE]

(as Security Trustee)

Annex 9-2

ANNEX 10

ASSIGNOR, ASSIGNEE AND LESSEE REPRESENTATIONS AND WARRANTIES

TO BE INTENTIONALLY OMITTED FOR FAA FILING PURPOSES

(d) Assignor, Assignee and Lessee hereby agree and acknowledge that immediately prior to the Effective Time, Assignor holds a cash Security Deposit in the amount of ***** pursuant to the terms and conditions of the Lease and that from and after the Effective Time, Assignee is deemed to have received and shall hold (subject to and in accordance with the provisions of the Lease) such Security Deposit;

(e) Assignor, Assignee and Lessee Acknowledgment. Assignor, Assignee and Lessee hereby agree and acknowledge as of the Effective Time that Rent under the Lease is ***** per month; and

(f) The Reserve Rates and balance of the reserve accounts as of , 2010 are as set forth in Annex 3 hereof and as of the Effective Time such amounts shall be deemed to have been received by and shall be held by Assignee subject to and in accordance with the relevant provisions of the Lease.

*****

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

Annex 10-1

ANNEX 11

FORM OF GUARANTEE

THIS GUARANTEE AND UNDERTAKING (this “ Guarantee ”) is made on this [ ] day of [ ] 2010, between:

(1) MACQUARIE AEROSPACE LIMITED , a company incorporated under the laws of Bermuda (“ MAL ”); and

(2) CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A.P.I. DE C.V., a company incorporated under the laws of Mexico (“ Lessee ”).

NOW, THEREFORE , for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

Clause 1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for all purposes of this Guarantee and shall be equally applicable both to the singular and plural forms of the terms defined. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Lease (as defined below).

“ Assumption Agreement ” means the assumption agreement dated [ ], among MBL, Lessor and Lessee.

“ Lease ” means the Aircraft Lease Agreement, dated as of March 9, 2007 between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.), pursuant to which Lessor has leased to Lessee one (1) Airbus A319-100 aircraft bearing manufacturer’s serial number 3590 and FAA registration mark N504VL together with two (2) IAE International Aero Engines AG V2524-A5 engines bearing manufacturer’s serial numbers V13000 and V13002.

“ Lessor ” means Macquarie Aerospace Ireland Limited, a company incorporated under the laws of Ireland.

“ New Owner ” means Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely as owner trustee of MSN 3590 Trust.

“ MBL ” means Macquarie Bank Limited, a company with limited liability with Australian Business Number 46 008 583 543 incorporated under the laws of Australia.

Clause 2. Representations and Warranties of MAL . MAL represents and warrants that:

2.1 this Guarantee constitutes a valid and binding agreement of MAL. MAL is duly incorporated, validly existing and in good standing under the laws of Bermuda. The transactions contemplated hereby and the execution, delivery and performance of this Guarantee by MAL (i) have been duly authorized by all necessary corporate action of MAL and (ii) are within MAL’s power and authority and do not and will not violate the constitutional documents of MAL, any applicable law, rule, regulation, judgment or court order or any provision in any existing agreement binding on MAL;

Annex 11-1

2.2 all authorizations, consents, registrations and notifications required to be obtained by MAL in connection with the entry into, performance, validity and enforceability of this Guarantee and the transactions contemplated by this Guarantee, have been (or will on or before the date hereof have been) obtained or effected (as appropriate) and are (or will be on their being obtained or effected) in full force and effect; and

2.3 on or prior to the date of this Guarantee, MAL has not and does not anticipate the need to (i) commence a voluntary case or other proceeding, or become subject to an involuntary case or other proceeding, seeking liquidation, reorganization, adjudication as bankrupt, winding-up, or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property; (ii) consent to any relief or to the appointment of or taking possession by any such official in any voluntary case or other proceeding commenced against it; (iii) sell, assign, transfer all or a material part of its assets; (iv) admit in writing its inability to pay its debts generally as they come due; (v) make a general assignment for the benefit of creditors; (v) cease to operate its business as a going concern; or (vi) commence any corporate action to authorize any of the foregoing.

Clause 3. Guarantee .

3.1 MAL, with effect from the date hereof, hereby unconditionally and irrevocably guarantees to Lessee the prompt payment and performance of Lessor’s obligations to Lessee under the Lease, and compliance by Lessor with, all obligations, covenants, terms, conditions and undertakings of Lessor contained in the Lease and the Operative Documents to which Lessor is a party in accordance with the terms thereof; provided, however, that such guarantee specifically excludes any and all obligations expressly assumed by MBL pursuant to the Assumption Agreement (such obligations of Lessor being referred to as the “ Guaranteed Obligations ”); and

3.2 MAL undertakes to Lessee that, if Lessor does not perform any of the Guaranteed Obligations when required to do so, it shall within two (2) Business Days of written demand from Lessee procure the performance by Lessor or perform itself the relevant Guaranteed Obligation.

3.3 MAL as a principal obligor and as a separate and independent stipulation shall indemnify Lessee upon written demand against any loss, liability or cost or expense suffered by Lessee (including reasonable attorneys’ fees and disbursements reasonably incurred by Lessee in the enforcement of this Guarantee) if (i) it does not perform the Guaranteed Obligations; and (ii) if any obligation guaranteed by it becomes unenforceable, void or illegal.

3.4 The guarantee set out in this Clause 3 shall be automatically terminated, without the requirement for any further action by any party, with effect from the occurrence of any transfer by Lessor of its rights and obligations under the Lease in conformity with Article 24 of the Lease, and MAL shall have no further liability or obligation hereunder with effect from such transfer save in respect of any liabilities or obligations arising prior to such transfer and any liabilities and obligations arising in connection with any rights retained by MAL, and save as expressly set out herein.

Annex 11-2

3.5 MAL shall not permit Lessor or New Owner to act or refrain from acting in any manner contrary to the provisions of the Lease.

Clause 4. Release . Once all the Guaranteed Obligations have been satisfied in full and MAL does not have any further actual or contingent liabilities thereunder, Lessee shall irrevocably and unconditionally release and discharge MAL from this Guarantee.

Clause 5. Miscellaneous .

5.1 Governing Law . THIS GUARANTEE SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT REFERENCE TO ANY CONFLICT OF LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

5.2 Successors and Assigns . The terms of this Guarantee shall be binding on, and inure to the benefit of, Lessee and MAL and their respective permitted successors and assigns.

5.3 Waiver of Notice and Defense . Except as provided in Clause 3.2, MAL hereby waives diligence, promptness, presentment, demand for payment or performance and protest and notice of protest, notice of acceptance and any other notice in respect of the Guaranteed Obligations or any part of them, and any defense arising by reason of any disability or other defense.

5.4 Jurisdiction . The parties agree that the courts of the United States District Court for the Southern District of New York, or any court sitting in the county of New York, New York, are to have non-exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) which may arise in connection with the legal relationships established by this Guarantee or otherwise arising in connection with this Guarantee. Nothing herein will prevent either party from bringing suit in any other appropriate jurisdiction. MAL further consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient or inappropriate court and agrees not to plead or claim the same.

5.5 Severability . Should any one or more of the provisions of this Guarantee be held to be invalid, illegal or unenforceable in any jurisdiction, the same shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity, illegality or unenforceability of a particular provision in a particular jurisdiction shall not render such provision invalid, illegal or unenforceable in any other jurisdiction.

5.6 Waivers, Amendments and Variations in Writing . The provisions of this Guarantee shall not be capable of being waived, amended or varied otherwise than by an express waiver or amendment in writing; and in particular any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver, amendment or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on Lessee’s part or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension of any variation or amendment of any such right.

Annex 11-3

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

The notice details of MAL are as follows:


Address:		c/o Macquarie Aircraft Leasing Services (Ireland) Limited Level 1, South Bank House Barrow Street Dublin 4 Ireland
Fax:		+353 1 238 3299
Attention:		Contracts Management Group

With a copy to:

Address:		Macquarie Aircraft Leasing Services (US) Inc. Two Embarcadero Center, Suite 200 San Francisco, CA 94111 U.S.A.
Fax:		+ 1 415 829 6899
Attention:		Contracts Management Group

* * *

Annex 11-4

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


CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.		MACQUARIE AEROSPACE LIMITED

By:		By:
Name:		Name:
Title:		Title:

By:
Name:
Title:

Annex 11-5

ANNEX 12

FORM OF ASSUMPTION AGREEMENT

Assumption Agreement

Date

[Insert Date]

Parties

Macquarie Aerospace Ireland Limited , a company duly organized and validly existing under the laws of Ireland having its registered office at Level 1, South Bank House, Barrow Street, Dublin 4, Ireland ( Lessor );

Macquarie Bank Limited ***** of No. 1 Martin Place, Sydney, NSW 2000 ( MBL ); and

Concesionaria Vuela Compania de Aviacion, S.A.P.I. de C.V. , a company duly organized and validly existing under the laws of Mexico having its office at Prolongación Paseo de la Reforma #490, Piso 1 (Edificio GE), Col. Santa Fe Peña Blanca, Del. Álvaro Obregón, México, D.F., México 01210 ( Lessee )

It is agreed as follows.

1.	Interpretation

1.1

Definitions

The following definitions apply unless the context requires otherwise.

Aircraft means the A319-100 Aircraft bearing manufacturer’s serial number 3590 and United States registration mark N504VL.

Assumed Obligations means Lessor’s payment obligation under Articles 5.1.3 and 13 of the Lease, in each case which are existing on the date of this Assumption Agreement or which are incurred or become due at any time pursuant to and in accordance with the terms and conditions of the Lease.

Lease means the Aircraft Lease Agreement, dated as of March 9, 2007, as amended from time to time between Lessor and Lessee (as successor to Concesionaria Vuela Compania de Aviacion, S.A. de C.V.).

*****

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

Operative Document has the meaning given to it in the Lease.

1.2

Interpretation

Headings are for convenience only and do not affect interpretation. The following rules apply unless the context requires otherwise.

(a)

The singular includes the plural and the converse.

(b)

A gender includes all genders.

(c)

Where a word or phrase is defined, its other grammatical forms have a corresponding meaning.

(d)

A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them.

(e)

A reference to a party to this Assumption Agreement or another agreement or document includes the party’s successors and permitted substitutes or assigns.

(f)

Clause headings are for ease of reference only.

(g)

A reference to (or to any specified provision of) this Assumption Agreement, any other Operative Document or any other document shall be construed as a reference to this Assumption Agreement, such other Operative Document, that provision or that document as in force for the time being and as amended, supplemented, modified, varied, assigned, novated or otherwise transferred in accordance with the terms applicable thereto or, as the case may be, with the agreement of the relevant parties, except to the extent prohibited by this Assumption Agreement.

(h)

A reference to applicable law includes (i) applicable laws, statues, decrees, decree-laws, acts, codes, legislation, treaties, conventions and similar instruments and, in respect of any of the foregoing, any instrument passed in substitution therefore or for the purposes of consolidation thereof with any other instrument or instruments, in each case, as amended, modified, varied or supplemented from time to time, (ii) applicable final judgements, orders, determinations or awards of any court from which there is no right of appeal or if there is a right of appeal such appeal is not prosecuted within the allowable time, and (iii) applicable orders, guidelines, notice, rules and regulations of any Government Entity.

1.3

Operative Document

This Assumption Agreement is an Operative Document for the purpose of the Lease.

2.	Effect

With effect on and from the date of this Assumption Agreement and for good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge:

(a)

MBL assumes the Assumed Obligations, and shall be substituted for Lessor under each Operative Document to the extent it applies to the Assumed Obligations, as if it had originally been a party to such Operative Document instead of Lessor; and

(b)

MBL (i) is bound by and will comply with the provisions of each Operative Document to the extent it applies to the Assumed Obligations, (ii) assumes Lessor’s obligations and liabilities under and in relation to each Operative Document to the extent they apply to the Assumed Obligations, and (iii) enjoys all the rights and benefits of Lessor under the Operative Documents to the extent they apply to the Assumed Obligations.

(c)

MBL will not be liable for any payment owed to Lessee under an Operative Document which does not arise from or relate to the Assumed Obligations.

(d)

Subject to the provisions of (a) through (c) above, Lessor is irrevocably and unconditionally discharged and released from the Assumed Obligations;

3.	Automatic release

Once all the Assumed Obligations have been irrevocably and unconditionally satisfied in full and MBL does not have any further actual or contingent liabilities thereunder, Lessee shall irrevocably and unconditionally release and discharge MBL from this Assumption Agreement.

4.	Governing law

(a)

This Assumption Agreement is governed by the laws of New York.

(b)

The parties hereto hereby irrevocably consent to the non-exclusive jurisdiction of the New York State Supreme Court, New York County or the United States Federal District Court for the Southern District of New York. Nothing herein will prevent either party from bringing suit in any other appropriate jurisdiction.

Each of the attorneys executing this Assumption Agreement states that the attorney has no notice of revocation of the attorney’s power of attorney.


MACQUARIE AEROSPACE IRELAND LIMITED, as Lessor

By:
Name: Title:

MACQUARIE BANK LIMITED

By:
Name: Title:

By:
Name: Title:

CONCESIONARIA VUELA COMPANIA DE AVIACION, S.A. P.I. DE C.V., as Lessee

By:
Name: Title:

By:
Name: Title:

Exhibit 10.36

AIRCRAFT LEASE AGREEMENT [4798]

Dated as of April 14, 2011

Between

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual

capacity but solely as trustee under the Trust Agreement,

as Lessor,

and

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

(d/b/a VOLARIS),

as Lessee,

Concerning:

Lease of one (1) Airbus A320-200 Aircraft

Manufacturer’s Serial No: 4798

United States Registration Mark N505VL

Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines

COUNTERPART NO. OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES TANGIBLE CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

TABLE OF CONTENTS


		Page

CLAUSE 1.	DEFINITIONS AND INTERPRETATION		1

1.1	Definitions		1
1.2	Interpretation		13

CLAUSE 2.	REPRESENTATIONS AND WARRANTIES		14

2.1	Lessee’s Representations and Warranties		14
2.2	Lessor’s Representations and Warranties		17
2.3	No Prejudice		19

CLAUSE 3.	CONDITIONS PRECEDENT		19

3.1	Lessor’s Conditions Precedent		19
3.2	Waiver		22
3.3	Lessee’s Conditions Precedent		22

CLAUSE 4.	COMMENCEMENT		22

4.1	Term of Leasing		22
4.2	Delivery		23
4.3	Licenses		23
4.4	Quiet Enjoyment; Lessor Party Covenants		24

CLAUSE 5.	DISCLAIMERS		25

5.1	General Disclaimers		25
5.2	Deficiencies and Delays		26
5.3	Repairs and Replacement		26

CLAUSE 6.	RENT AND OTHER PAYMENTS		26

6.1	Rent		26
6.2	Security		26
6.3	Maintenance Payments		27
6.4	Payment Obligations Unconditional		27
6.5	Currency of Payments		28
6.6	Currency Indemnity		28
6.7	Authorizations for Payments		28
6.8	Set-off		28
6.9	Lessor’s Account; Receipt of Payment		29

(i)



CLAUSE 7.	FEES AND EXPENSES	29

CLAUSE 8.	GENERAL UNDERTAKINGS	29

8.1	Duration	29
8.2	Notice of Event of Default; Certificate	30
8.3	Financial and Other Information	30
8.4	Existence	32
8.5	ERISA	32
8.6	Lessee’s Jurisdiction	32
8.7	Cape Town Convention	32

CLAUSE 9.	OPERATIONAL UNDERTAKINGS	34

9.1	Registration, Title and Nameplates	34
9.2	Liens	36
9.3	Possession and Subleases	37
9.4	Information and Records	38
9.5	Lawful and Safe Operation; Costs of Operation	40
9.6	Right of Inspection	41

CLAUSE 10.	MAINTENANCE AND REPAIR	42

10.1	General	42
10.2	Specific Requirements	42
10.3	Substitution of Parts; Ownership	43
10.4	Pooling of Parts	45
10.5	Permitted Modifications	45

CLAUSE 11.	ENGINES	46

11.1	General Principles	46
11.2	Removal of Engines	47

CLAUSE 12.	TITLE	48

CLAUSE 13.	MANUFACTURER’S WARRANTIES	48

CLAUSE 14.	INSURANCES	48

14.1	Obligation to Insure	48
14.2	Insurance with Respect to the Aircraft	49
14.3	Terms Specific to Hull Insurance	49
14.4	Liability Insurance with Respect to the Aircraft	50
14.5	Provisions Relating to all Insurance	50
14.6	Information	51
14.7	Additional Insurance; No Lien	52
14.8	Failure to Insure	53
14.9	Settlement of Claims	53

(ii)


14.10	Assignment	53
14.11	Post Termination	54

CLAUSE 15.	LOSS, DAMAGE AND REQUISITION	54

15.1	Total Loss of Aircraft or Airframe	54
15.2	Total Loss of Engine(s)	54
15.3	Other Loss or Damage	56
15.4	Requisition	56

CLAUSE 16.	DEFAULT	56

16.1	Events of Default	56
16.2	Rights and Remedies	59
16.3	Power of Attorney	62
16.4	Mitigation Credit	63

CLAUSE 17.	REDELIVERY	63

17.1	Redelivery	63
17.2	Condition of Aircraft and the Aircraft Documents	63
17.3	Inspection; Corrections; Additional Work	64
17.4	Compliance after Term	65
17.5	Deregistration and Export	66
17.6	Ferry Flight	66
17.7	Storage	66

CLAUSE 18.	INDEMNITIES.	67

18.1	General Indemnities	67
18.2	General Tax Indemnity	69
18.3	Notice and Contest Rights	71
18.4	Mitigation	73
18.5	Payments on After-Tax Basis	73
18.6	No Deductions or Withholdings	73
18.7	Tax Benefit	74
18.8	Reports	74
18.9	Continuation of Indemnities	75
18.10	Forms	75
18.11	Non-Parties	75

CLAUSE 19.	FURTHER PROVISIONS	75

19.1	Nature of Lessee’s Obligations	75
19.2	Benefit of Agreement	76
19.3	Further Assurances	77
19.4	Rights Cumulative; Waivers; Variation; Counterparts; Language	77
19.5	Delegation	78
19.6	Evidence of Indebtedness	78
19.7	Applications of Moneys	78

(iii)


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



SCHEDULE 1		AIRCRAFT DESCRIPTION

SCHEDULE 1A		AIRCRAFT DOCUMENTS

SCHEDULE 2		LEASE SUPPLEMENT

SCHEDULE 3		CERTIFICATE

SCHEDULE 4		REDELIVERY CONDITION

SCHEDULE 5		MONTHLY MAINTENANCE STATUS REPORT

SCHEDULE 6		FORM OF QUIET ENJOYMENT LETTER

SCHEDULE 7		TECHNICAL ACCEPTANCE CERTIFICATE

SCHEDULE 8		PART A LESSEE FURNISHED EQUIPMENT

		PART B IN FLIGHT ENTERTAINMENT

SCHEDULE 9		LESSEE’S CONDITIONS PRECEDENT

SCHEDULE 10		PERMITTED SUBLESSEES

SCHEDULE 11		IRREVOCABLE POWER OF ATTORNEY

ANNEX A		CERTAIN DEFINITIONS AND PAYMENTS

(iv)

AIRCRAFT LEASE AGREEMENT [4798] dated as of April 14, 2011 between:

(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and

(2)

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS), a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Prolongación Paseo de la Reforma 490, Piso 1, Col. Santa Fe Peña Blanca, 01210, México, D.F. (“ Lessee ”).

IT IS AGREED as follows:

CLAUSE 1. DEFINITIONS AND INTERPRETATION .

1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:

“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.

“ Affiliate ” means, in respect of any person, any person directly or indirectly controlling, controlled by, or under common control with such first person; and a person shall be deemed to control another person if such first person possesses, directly or indirectly, the power to direct or cause the direction of the management of such other person, whether through the ownership of voting securities or otherwise.

“ After-Tax Basis ” means, in respect of an amount (the “base amount”) with respect to a person, the base amount supplemented by a future payment (the “additional amount”), if necessary, to such person such that, the sum of the base amount and the additional amount (after reduction for all Taxes, if any, imposed on such person in respect of the sum of the base amount and the additional amount and net of any current deductions or credits from the payment of such Taxes), shall be equal to the base amount . The calculation of the net amount of Taxes required to be paid by a person for purposes of the preceding sentence shall be based on the good faith estimate of such person, determined in its sole discretion of the actual tax rates to be imposed on its income and the actual current deductions and credits to be realized by it that are allocable to the Taxes assessed on the base amount and the additional amount.

“ Agreed Value ” shall have the meaning set forth in Annex A.

“ Agreement ” means this Aircraft Lease Agreement [4798] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

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“ Aircraft ” means (a) the aircraft described in Schedule 1 including the Airframe, the Engines and all Parts installed in or on the Airframe at Delivery; and (b) all substituted, renewed and replacement Parts at any particular time installed in or on such aircraft; including, in the case of (a) and (b), any Part which is for the time being detached from such aircraft but remains the property of Lessor pursuant to this Agreement.

“ Aircraft Documents ” means all of the documentation set forth or referred to in Schedule 1A hereto and all technical data, manuals supplied by the Manufacturer or any other manufacturer or supplier, logs, records, computer data media and other materials and documents kept by Lessee after Delivery including, without limitation, those generated by Lessee during the Term or required to be kept with respect to the Aircraft or any part thereof whether in compliance with any applicable law or this Agreement or any requirement for the time being of the Aviation Authority.

“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.

“ Airframe ” means the Aircraft, excluding the Engines.

“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.

“ Approved Maintenance Performer ” means any maintenance facility approved by the Aviation Authority and/or otherwise approved in writing by Lessor (such approval not to be unreasonably withheld or delayed).

“ APU ” means the auxiliary power unit specified in Schedule 1 and any replacement auxiliary power unit installed on the Aircraft in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.

“ APU Heavy Repair ” means, with respect to the APU, disassembly and rework of the power section, load impeller and gearbox modules according to the Manufacturer’s then-current performance restoration and full gas path overhaul criteria in order to restore full service release life for all APU modules.

“ APU Hour ” means each hour or part thereof that the APU is operated.

“ Aviation Authority ” means the FAA and any successor thereto or other Government Entity which shall have control or supervision of civil aviation in the State of Registration or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.

“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).

“ Basic Rent Amount ” has the meaning provided in Annex A.

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“ Basic Rent Payment Date ” means the Delivery Date, and the numerically corresponding day in each calendar month thereafter during the Term, and if such day is not a Business Day, then the immediately preceding calendar day which is a Business Day.

“ Beneficiary ” means JSA Aircraft 4798, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.

“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.

“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Lessor at Delivery.

“ Business Day ” means a day, other than a Saturday or Sunday, on which banks are open in New York, New York, San Francisco, California and México, D.F. for the transaction of business of the nature required by this Agreement.

“ Cape Town Convention ” means collectively, the official English language text of the Convention on International Interests in Mobile Equipment (the “Convention”), the Protocol to the Convention on Matters Specific to Aircraft Equipment and the regulations and procedures enacted by the Supervisory Authority of the International Registry thereunder.

“ C-Check ” means those tasks performed in accordance with the Maintenance Program which incorporates at a minimum the full requirements of the Maintenance Planning Document for those tasks to be normally performed at 20-month intervals in respect thereof.

“ Citizen of the United States ” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).

“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.

“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.

“ Damage Notification Threshold ” has the meaning provided in Annex A.

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“ Default ” means any Event of Default and any event or circumstance that, with the giving of notice and/or lapse of time and/or the making of a relevant decision contemplated by Clause 16.1 would constitute an Event of Default.

“ Default Rate ” has the meaning provided in Annex A.

“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.

“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.

“ Delivery Date ” means the date on which Delivery occurs.

“ Delivery Documents ” means (a) the Bill of Sale, (b) the Lessor Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.

“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.

“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.

“ DGAC ” means the Dirección General de Aeronáutica Civil of Mexico and any successor that under the laws of Mexico shall from time to time have control or supervision of civil aviation in Mexico or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.

“ EASA ” means the European Aviation Safety Agency established by the European Parliament and the Council of the European Union under Regulation (EC) Number 1592/2002 and any successor that under the laws of the European Union shall have from time to time control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of all other matters relating to the Aircraft.

“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Lessor and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Lessor pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Lessor pursuant to this Agreement.

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“ Engine Manufacturer ” means IAE International Aero Engines AG.

“ Engine Performance Restoration ” means, with respect to an Engine, the accomplishment of a Level 3 Shop Maintenance workscope on each of the core Engine modules (namely, the HPC, HPT and Diffuser/Combustor) pursuant to the then-current IAE V2500-A5 Maintenance Management Plan (“IMMP”) and a Level 2 or 3/HPC Shop Maintenance workscope on each of the other Engine modules pursuant to the IMMP, in each which is designed to result in at least a further 8,000 Cycles of on-wing operation of the applicable Engine before its next anticipated removal.

“ Engine Purchase Agreement ” means that certain V2500 General Terms of Sale dated as of December 13, 2006 between the Engine Manufacturer and Controladora, as the same may be thereafter amended and/or supplemented.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date hereof and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.

“ Event of Default ” means any of the events referred to in Clause 16.1.

“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.

“ Expiry Date ” means the one hundred thirty-second (132 ^nd ) monthly anniversary of the Delivery Date.

“ FAA ” means the Federal Aviation Administration of the Department of Transportation of the United States of America and any successor that under the laws of the United States of America shall from time to time have control or supervision of civil aviation in the United States of America or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.

“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.

“ Financing Documents ” means all Loan Agreements, Security Documents, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Lessor or any third party by way of security for, or as a guarantee of the performance by, Lessor or any Affiliate of Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).

“ Flight Hour ” means each hour or part thereof elapsing from the moment at which the wheels of the Aircraft (or other aircraft in the case of Parts or Engines temporarily installed on such other aircraft) leave the ground on the take-off of the Aircraft (or such other aircraft) until the wheels of the Aircraft (or such other aircraft) touch the ground on the landing of the Aircraft (or such other aircraft) following such take-off.

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“ Government Entity ” means (a) any national government, political subdivision thereof or local jurisdiction therein, (b) any instrumentality, board commission, court or agency of any of the foregoing, however constituted, and (c) any association, organization or institution of which any of the foregoing is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant.

“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.

“ IATA ” means the International Air Transport Association.

“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.

“ IFE ” means the equipment and components listed on Part B of Schedule 8.

“ Indemnitee ” means: Lessor, Beneficiary, JSA, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.

“ International Interest ” has the meaning given to such term in the Cape Town Convention.

“ International Registry ” means the international registry established pursuant to the Cape Town Convention.

“ JAA ” means the Joint Airworthiness Authority established by the members of the European Civil Aviation Conference and any successor that under the laws of the European Union shall from time to time have control or supervision of civil aviation in the European Union or have jurisdiction over the registration, airworthiness or operation of, or other matters relating to, the Aircraft.

“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.

“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.

“ Landing Gear ” means the landing gear specified in Schedule 1 and any replacement landing gear installed on the Airframe in accordance with the terms of this Agreement, title to which is vested in Lessor in accordance with this Agreement.

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“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.

“ Lease Supplement ” means a Lease Supplement, substantially in the form of Schedule 2 hereto, to be entered into between Lessor and Lessee on the Delivery Date for the purpose of leasing the Aircraft under and pursuant to the terms of this Agreement, and any subsequent Lease Supplement entered into in accordance with the terms of this Agreement.

“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor or an Affiliate of Lessor in relation to Lessor’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders.

“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.

“ Lessor Certificate of Acceptance ” means the certificate of acceptance from the Beneficiary and/or Lessor confirming acceptance of the Aircraft from the Manufacturer.

“ Lessor Party ” means Lessor, the Beneficiary, and JSA.

“ Lessor’s Lien ” means any Lien over the Aircraft arising as a result of (a) any act or omission of a Lessor Party or a Lender other than as expressly provided in this Agreement, (b) any indebtedness, liability or other obligation arising by, through or under a Lessor Party or a Lender which is unrelated to this Agreement or the other Operative Documents or the transactions contemplated thereby, (c) the Security Documents from time to time entered into by any Lessor Party or any Lender, or (d) Taxes imposed on any Indemnitee or payments to or the property of any Indemnitee for which Lessee is not required to indemnify.

“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.

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“ LIBOR ” means the arithmetic mean (rounded to the nearest four decimal places) of the rates for deposits in Dollars with maturities of 30 days which appear on the Bloomberg screen (or any successor or substitute page of such service, or any successor to, or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service) as of 11:00 a.m. London time on the second Business Day before the relevant date of determination, provided that if such rates are not available at such time for any reason, LIBOR shall mean the rate for deposits of an amount comparable to the relevant amount in Dollars for that period determined to be the arithmetic mean (rounded to the nearest four decimal places) of the rates offered at or about 11:00 a.m. London time on the second Business Day before the first day of the relevant period by any two leading commercial banks: one selected by Lessor and one selected by Lessee.

“ Lien ” means any mortgage, charge, pledge, lien, right of detention, right of set-off (but excluding any right of set-off arising in favor of a banker by operation of law), right of de-registration or export, any “international interest” or “national interest” as defined in the Cape Town Convention or any encumbrance or security interest whatsoever, howsoever created or arising.

“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s acquisition or continuing ownership of the Aircraft.

“ Maintenance Payments ” has the meaning provided in Annex A.

“ Maintenance Payments Date ” means the *****

“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).

“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document.

“ Maintenance Support Contracts ” means the maintenance support contracts, if any, between Lessee and the Engine Manufacturer covering performance of overhaul and performance restoration of each Engine.

“ Major Modifications ” shall mean (i) cabin modifications that materially change the interior layout of the Aircraft other than an addition or reduction in the number of seats or the seat mix between classes so long as the Aircraft remains a passenger aircraft, (ii) changes that affect the performance of the Aircraft, (iii) changes that adversely affect interchangeability or replaceability of Parts, (iv) changes that invalidate or impair any warranty with respect to the Airframe or any Engine or Part, (v) changes that adversely affect the eligibility of the Aircraft to obtain an airworthiness certificate from the Aviation Authority and/or (vi) any change to the Aircraft the cost of which, at the time of completion of such change, exceeds *****; provided that software and content modifications to the in-flight entertainment system shall not be Major Modifications.

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“ Manufacturer ” means Airbus, S.A.S.

“ Mexico ” means the United Mexican States.

“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.

“ Mitigation Credit ” has the meaning set forth in Clause 16.4.

“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, and the Financing Documents.

“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Lessor pursuant to this Agreement.

“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien arising from the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.

“ Permitted Sublessee ” means any air operator listed on Schedule 10 hereto, provided that at the time of commencement of any such subleasing, the relevant permitted sublessee (i) has not experienced a material adverse change in its financial condition as compared to its condition on the date hereof and (ii) is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.

“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.

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“ PMA Part ” means a Part manufactured under the FAA Parts Manufacturer Approval (PMA) and subject to a combined design and production approval process.

“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.

“ Purchase Agreement ” means that certain Airbus A320 Aircraft Purchase Agreement dated as of October 28, 2005 between the Manufacturer, as seller, and the Seller, as buyer, in relation to the Aircraft, as the same may be thereafter amended and/or supplemented.

“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.

“ Rent ” means Basic Rent and Supplemental Rent.

“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):

(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);

(b) that has no greater Flight Hours or Cycles operated than the replaced Engine since new or since the last Engine Performance Restoration (as applicable) and the replacement of life limited Parts, and the life limited Parts in the Replacement Engine shall have on average Cycles of life remaining not fewer than those in the replaced Engine; and

“ Return Location ” has the meaning provided in Clause 17.1.

“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.

“ Scheduled Delivery Date ” means a date in July, 2011, to be advised by the Manufacturer.

“ Security ” has the meaning provided in Clause 6.2.

“ Security Amount ” has the meaning provided in Annex A.

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“ Security Documents ” means any and all agreements or documents from time to time entered into by any Lessor Parties assigning by way of security or mortgage any or all of Lessor’s or any Lessor Parties’ right, title and interest in and to the Aircraft, this Agreement and/or the other Lessee’s Documents and notified in writing to Lessee by Lessor or any Lessor Party.

“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.

“ 6Y/4C-Check ” means the intermediate Airframe structural and zonal inspection of the Aircraft (and resulting repairs), including a C Check, all MPD tasks having an interval of six years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.

“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).

“ Supplemental Rent ” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay under this Agreement or any other Lessee’s Document to Lessor or any Indemnitee, including, without limitation, Maintenance Payments, Security, and Agreed Value.

“ Tax Indemnitee ” means Lessor, Beneficiary, JSA, and each Lender, and each of their respective officers, directors, agents and employees and the Affiliates.

“ Taxes ” means all present and future taxes, levies, civil penalties, imposts, duties, withholdings, fees or charges of any nature whatsoever, imposed by a taxing authority of any country, or governmental subdivision thereof or therein or by any international authority, including, without limitation, value added tax, consumption tax or any other tax in respect of added value or any income (including, without limitation, gross income, minimum, alternative minimum, capital gains income, gross receipts and net receipts), franchise, transfer, sales, use, business, occupation, excise, personal property, real property, stamp or other tax, together with any penalties, additions to tax, fines or interest with respect to any of the foregoing; and “tax” and “taxation” shall be construed accordingly.

“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.

“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.

“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.

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“ Total Loss ” means, in relation to the Aircraft, the Airframe or any Engine: (a) its actual, constructive, compromised, arranged or agreed total loss (including any damage thereto or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (b) its destruction or damage beyond repair or being rendered permanently unfit for normal use for any reason whatsoever; or (c) its requisition (other than a requisition by the State of Registration not involving a loss of title and if the State of Registration is the United States of America not extending beyond the last day of the Term and otherwise not extending beyond the earlier of the last day of the Term and the 180th day after the commencement of such requisition), confiscation, sequestration, detention, forfeiture, compulsory acquisition or seizure, in any such case resulting in loss of title; or (d) its hijacking, theft or disappearance, or the attachment ( embargo ), resulting in loss of possession by Lessee for a period of 45 consecutive days or longer or extending beyond the last day of the Term, including any attachment ( embargo ) being the result of a deposit under any type of proceedings against Lessee or in connection with any proceedings initiated by any third party.

“ Transportation Code ” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.

“ Trust Agreement ” means Trust Agreement 4798 dated on or about the date hereof between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.

“ 12Y/8C-Check ” means the heavy Airframe structural and zonal inspection of the Aircraft (and resulting repairs) including a C-Check, all MPD tasks having an interval or twelve years, and performed concurrently therewith such additional Flight Hour or Cycle controlled MPD structural and zonal tasks.

“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if, with respect to any financing statement or by reason of any provisions of law, the attachment of a security interest or the perfection or the effect of perfection or non-perfection of the security interests is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.

“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.

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“ US$, US Dollars or $ ” means the lawful currency of the United States of America.

1.2 Interpretation .

(a) References in this Agreement to:

(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;

(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;

(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;

(iv) the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, limited liability companies, corporations, Government Entities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;

(v) “Lessor” or “Lessee” include any assignee of Lessor or Lessee, respectively, permitted in accordance with Clause 19.2 and any successors of such persons and references to a Lender includes any assignee or successor of that Lender;

(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;

(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);

(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);

(ix) “indebtedness” with respect to any person includes any obligation of that person (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise) for the payment or repayment of money, including, without limitation, (a) under acceptances, bills, bonds, debentures, notes or similar instruments, (b) under guarantees, indemnities or other assurances against financial loss, (c) under any finance or operating lease relating to any asset or (d) in respect of any liability for the payment of any purchase price for any asset or services, payment of which is deferred for more than 180 days;

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(x) “law” include common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, regulatory requirement, rule, statute, treaty, convention or other legislative measure in any jurisdiction or any present or future directive, regulation, procedure, request or requirement, or official or judicial interpretation of any of the foregoing, in each case having the force of law;

(xi) “month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to “months” shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the preceding Business Day, and provided that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in such month; and

(xii) a “guarantee” also includes any other obligation (whatever called) of any person to pay, purchase, provide funds (whether by way of the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, to indemnify against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.

(b) Headings are for ease of reference only.

(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.

CLAUSE 2. REPRESENTATIONS AND WARRANTIES .

2.1 Lessee’s Representations and Warranties . Lessee acknowledges that each of Lessor and the other Lessor Parties, has entered into this Agreement and the other Operative Documents in full reliance on representations and warranties by Lessee in this Clause 2.1; and Lessee now represents and warrants to Lessor that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:

(a) Lessee is a sociedad anónima promotora de inversiones de capital variable that is duly incorporated, validly existing and in good standing under the laws of the United Mexican States, and has full corporate power and authority to conduct its business as presently conducted, to own or hold under lease its assets, to enter into and perform its obligations under the Lessee’s Documents and to consummate the transactions contemplated by the Lessee’s Documents;

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(b) Lessee’s organizational documents incorporate provisions that permit, and all necessary authorizations, approvals, consents, licenses, permits and orders of and registrations with any Government Entity, have been duly and unconditionally obtained and are now in full force and effect that are required to authorize, Lessee to sign and deliver, and perform its obligations under and the transactions contemplated by, the Lessee’s Documents;

(c) Lessee has duly authorized, executed and delivered this Agreement and this Agreement constitutes, and the other Lessee’s Documents when executed and delivered by Lessee will constitute, legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);

(d) neither the execution and delivery of the Lessee’s Documents by Lessee nor the performance by Lessee of any of the transactions contemplated herein and therein will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which Lessee or any of its assets is bound, any agreement to which it is a party or Lessee’s organizational documents; (ii) cause any limitation on Lessee or its assets or the powers of its directors or officers, whether imposed by or contained in Lessee’s organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige Lessee to create, any Lien (other than Permitted Liens) over its undertaking or any of its assets, rights or revenues;

(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;

(f) the obligations of Lessee under the Lessee’s Documents are, or upon execution thereof by Lessee will be, direct, general and unconditional obligations of Lessee and rank, or will rank, at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee save for obligations mandatorily preferred by law and not by reason of any Lien;

(g) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessee or any of its assets is bound or affected, and that could reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents;

(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to

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have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;

(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2010 have been prepared in accordance with Mexican generally accepted accounting principles and practices (“GAAPP”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards and fairly present the results of its operations for that period and its financial condition at December 31, 2010 and, in particular, to the extent required by International Financial Reporting Standards accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2010, except as otherwise previously disclosed to Lessor in writing;

(j) all necessary returns have been timely delivered by Lessee to the applicable taxation authorities for which the failure to file could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, Lessee is not in default in the payment of any Taxes shown to be payable on any such returns and no claim is being asserted with respect to Taxes that is not disclosed in the audited financial statements referred to in clause (i) above that if payable, could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time;

(k) the financial and other information furnished by or on behalf of Lessee to Lessor and its Affiliates in writing does not, to Lessee’s knowledge, contain any untrue statement of a material fact or omit to state any material fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter that has or could reasonably be expected to have a material adverse effect on the financial condition of Lessee or an adverse effect on Lessee’s ability to observe or perform any of its obligations under the Lessee’s Documents and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by Lessee;

(l) Lessee, under applicable law, is subject to private commercial law and suit, and neither Lessee nor its properties or assets have any right of immunity from suit or execution on the grounds of sovereignty in the United States;

(m) no Default or Event of Default has occurred and is continuing;

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(n) Lessee has not granted to, or registered in favor of, any person other than Lessor an “international interest,” “national interest,” “prospective international interest” (as such terms are defined in the Cape Town Convention) or a de-registration and export request authorization with respect to the Airframe or any Engine;

(o) assuming that no part of the assets to be used by Lessor to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and

(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.

2.2 Lessor’s Representations and Warranties .

(a) Lessor acknowledges that Lessee has entered into this Agreement and the other Lessee’s Documents to which it is a party in full reliance on representations and warranties by Lessor on the terms set forth in this clause; and Lessor now represents and warrants to Lessee that the following statements are on the date hereof, and on the Delivery Date will be, true and accurate:

(i) Lessor is a national banking association duly organized, validly existing and in good standing under the federal banking laws of the United States of America and has full power and authority to conduct its business as presently conducted, and has full power and authority to the extent provided herein or in the other Operative Documents to which it is a party, to enter into and perform its obligations hereunder and under the other Operative Documents to which it is a party and to consummate the transactions contemplated hereby and thereby;

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required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;

(iii) Lessor has duly authorized, executed and delivered this Agreement, and this Agreement constitutes, and when executed and delivered by Lessor the other Operative Documents to which Lessor is a party will constitute, the legal, valid and binding obligations of Lessor enforceable against it accordance with their respective terms (except to the extent such enforceability may be limited by insolvency, moratorium, bankruptcy, reorganization or other laws affecting the rights of creditors generally);

(iv) neither the execution and delivery of the Operative Documents to which Lessor is a party nor the performance by Lessor of any of the transactions contemplated therein to be performed by Lessor will: (i) contravene or constitute a violation or breach of or a default under any existing law or agreement by which it or any of its assets is bound, any agreement to which it is a party or its organizational documents, provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor; (ii) cause any limitation on it, or the power of its directors and officers, whether imposed by or contained in its organizational documents or any existing law, agreement or otherwise, to be exceeded; or (iii) result in the creation or imposition of, or oblige it to create, any Lessor’s Lien (other than pursuant to an Operative Document or a Security Document);

(v) no event has occurred that constitutes a contravention of, or default under, any agreement by which Lessor or any of its assets is bound or affected, and that would have a material adverse effect on Lessor’s ability to observe or perform its obligations under the Operative Documents to which it is a party;

(vi) no litigation, arbitration or administrative proceeding that would (by itself or together with any other such proceedings or claims) have a material adverse effect on the ability of Lessor to observe or perform its obligations under the Operative Documents to which it is a party is (to Lessor’s knowledge) presently in progress or pending or threatened against Lessor or any of its assets;

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(vii) on the Delivery Date, Lessor shall have received whatever title to the Aircraft was conveyed to it by Manufacturer under the Purchase Agreement;

(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and

(ix) Lessor is a Citizen of the United States.

2.3 No Prejudice . The rights of any party hereto in relation to any misrepresentation or breach of warranty by the other party shall not be prejudiced by any investigation by or on behalf of the first party into the affairs of the other party, by the performance of this Agreement and the other Operative Documents to which it is a party or by any other act or thing done or omitted by the first party that would, but for this Clause 2.3, prejudice such rights.

CLAUSE 3. CONDITIONS PRECEDENT .

3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:

(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:

(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);

(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance reasonably acceptable to Lessor and the Lenders;

(iii) an opinion of Crowe & Dunlevy, FAA counsel, addressed to Lessor, Beneficiary, JSA, and the Lenders in form and substance acceptable to Lessor and the Lenders;

(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;

(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;

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(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;

(c) copies of all consents, licenses, authorizations and approvals of any governmental agency or authority and of any trustee or holder of any indebtedness or obligations of Lessee (if any), that are required in connection with the execution, delivery and performance of this Agreement and the other Operative Documents to which it is a party, duly certified by an authorized officer of Lessee, including, but not limited to:

(i) a certified copy of an extract of the board of directors resolution of the Lessee (i) approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;

(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;

(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;

(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft and to a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;

(v) any other consents or authorizations required by the Aviation Authority and the DGAC;

(d) evidence that the owner’s ownership interest, Lessor’s interest in this Lease and any Lender’s security interest in the Lease and in the Aircraft have been duly recorded in the State of Registration;

(e) promptly after Delivery, evidence satisfactory to the Lessor that all applicable required import licenses (pedimento de importación) and customs duties in respect of the Aircraft have been paid in full by the Lessee (or, if the same are not yet payable, that arrangements satisfactory to the Lessor have been made for the payment thereof by the Lessee when they become payable), being acknowledged that the document evidencing importation of the Aircraft can only be made upon Lessee’s import of the Aircraft into Mexico) and that import is exempt from Taxes;

(f) an insurance brokers’ certificate addressed to Lessor and the Indemnitees evidencing to the reasonable satisfaction of Lessor that the insurance required by Clause 14 on and with respect to the Aircraft is in full force and effect, together with a broker’s letter of undertaking addressed to the Indemnitees in form and substance reasonably acceptable to Lessor;

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(g) a summary of the Maintenance Program;

(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;

(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;

(j) Lessor shall have received 6 (six) counterparts duly executed by Lessee of this Agreement and the other Lessee’s Documents; and, at least 1 (one) additional original set, executed by Lessee and duly ratified before a Mexican Notary Public or corredor;

(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;

(l) confirmation that Lessee has duly registered itself as a transaction user entity with the International Registry and has consented to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;

(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a search certificate from the International Registry confirming the same;

(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;

(o) no Event of Default hereunder or default by Lessee under any other Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;

(p) each of the representations and warranties of Lessee contained in Clause 2.1 and each of the other Lessee’s Documents shall be true and accurate on the Delivery Date as if made on the date thereof;

(q) no change shall have occurred after the date of this Agreement in any applicable law or in the interpretation thereof that, in Lessor’s reasonable opinion, would make it illegal for Lessor and/or Lessee to perform any of their respective obligations under this Agreement or any of the other Lessee’s Documents;

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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:

“THIS AIRCRAFT/ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF [WILMINGTON TRUST COMPANY], AS SECURITY TRUSTEE”.

(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;

(t) a Spanish translation of this Lease and the Lease Supplement certified by an approved translator authorized by the Superior Tribunal of Justice of the Federal District of Mexico or by the Council of the Federal Judicature;

(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;

(v) an Irrevocable Power of Attorney, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;

(w) promptly after Delivery, evidence of the filing and recordation or registration of this Lease, the Lease Supplement and any amendments thereto with the DGAC or any other relevant Governmental Entity if and to the extent required under Applicable Law, and the payment of all fees and Taxes in connection therewith, if any; and

(x) the Delivery Documents.

3.2 Waiver . The conditions precedent set forth in Clause 3.1 are for the sole benefit of Lessor and may be waived or deferred by Lessor in whole or in part and with or without conditions. If any of such conditions precedent are not satisfied on the Delivery Date and Lessor (in its absolute discretion) nonetheless agrees to deliver the Aircraft to Lessee, Lessee shall ensure that such conditions precedent are satisfied within ten (10) Business Days after the Delivery Date and failure of Lessee to do so shall constitute an Event of Default.

3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.

CLAUSE 4. COMMENCEMENT .

4.1 Term of Leasing .

(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.

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(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.

(c) Risk of Loss . During the Term and until physical possession of the Aircraft is accepted by Lessor upon the tender of return by Lessee, the Aircraft, the Engines and every Part will be in every respect at the sole risk of Lessee, who will bear all risk of loss, theft, damage or destruction to the Aircraft, any Engine or any Part from any cause whatsoever.

4.2 Delivery . Lessor, subject to satisfaction of the conditions precedent set forth in Clause 3.1, will deliver the Aircraft to Lessee and Lessee will accept the Aircraft at the Delivery Location or such other location at which the Aircraft is delivered to Lessor by the Manufacturer under the Purchase Agreement, and Lessor and Lessee will commence the leasing of the Aircraft under this Agreement by the execution and delivery of the Lease Supplement. Lessee will, at the time of Delivery, execute and deliver to Lessor the Technical Acceptance Certificate. Lessee’s acceptance of the Aircraft shall be regarded for all purposes as absolute, unconditional and irrevocable. Lessee shall not be entitled for any reason whatsoever to refuse to accept delivery of the Aircraft or any part thereof under this Agreement once the same has been accepted by buyer. Lessor shall not have any responsibility to Lessee for, or arising out of, any delay in the delivery of the Aircraft or any part thereof or for any damage incurred in the course of delivery except to the extent that it refuses to deliver the Aircraft to Lessee hereunder after it has received it from the Manufacturer pursuant to the Purchase Agreement and all conditions precedent under Clause 3.1 have been satisfied. It is understood and agreed that Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.

4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the

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Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.

4.4 Quiet Enjoyment; Lessor Party Covenants .

(a) Quiet Enjoyment . Subject to the provisions of this Agreement, including the provisions for early termination, or unless compelled to do so by any applicable law, so long as no Event of Default has occurred and is continuing, each Lessor Party agrees that it will not disturb Lessee’s quiet use, possession and enjoyment of the Aircraft during the Term.

(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to Lessor of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).

(c) Lessor Payments . Provided that no Default or Event of Default has occurred and is continuing, Lessor shall make the contribution payments in respect of the maintenance, overhaul and modification of the Aircraft provided in Annex A. Except as expressly provided in Annex A, no Lessor Party shall have any obligation whatsoever in respect of any repair, maintenance, overhaul or modification of the Aircraft.

(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.

(e) Citizenship . Lessor agrees that if, during such time as the Aircraft is registered or is to be registered in the United States, (a) it shall not be a Citizen of the United States and (b) the Aircraft shall be, or would therefore become, ineligible for registration in the name of Lessor under the Act and regulations then applicable thereunder (without giving consideration to Section 47.9 of the FAA regulations or any other provision that may restrict Lessee’s use or operation of the Aircraft), then Lessor shall immediately effect voting trust or other similar arrangements or take any other action as may be necessary to prevent any deregistration or maintain the United States registration of the Aircraft. Lessee agrees, upon the request and at the sole expense of Lessor, to provide reasonable cooperation with Lessor in complying with its obligations pursuant to this Clause 4.4(e).

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CLAUSE 5. DISCLAIMERS .

5.1 General Disclaimers .

(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.

(b) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, UNCONDITIONALLY AGREES THAT THE AIRCRAFT AND EACH PART THEREOF IS TO BE LEASED IN AN “AS IS, WHERE IS” CONDITION AS AT THE DELIVERY DATE AND THROUGHOUT THE TERM, AND NO TERM, CONDITION, WARRANTY, REPRESENTATION OR COVENANT OF ANY KIND HAS BEEN MADE OR IS GIVEN BY ANY LESSOR PARTY OR ITS SERVANTS OR AGENTS IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR USE OR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHT; AND ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.

(c) DELIVERY OF THE LEASE SUPPLEMENT AND THE TECHNICAL ACCEPTANCE CERTIFICATE BY LESSEE TO LESSOR SHALL BE CONCLUSIVE PROOF AS BETWEEN EACH LESSOR PARTY ON THE ONE HAND AND LESSEE ON THE OTHER HAND THAT LESSEE’S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.

(d) TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES ALL OF THE RIGHTS AND REMEDIES CONFERRED UPON A LESSEE UNDER SECTIONS 2-A-508 THROUGH 522 OF THE UCC (EXCEPT ANY RIGHTS OF LESSEE TO BRING A CLAIM FOR DAMAGES, OTHER THAN FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES, ARISING AS A RESULT OF ANY BREACH BY LESSOR OF ANY EXPRESS COVENANT IN AN OPERATIVE DOCUMENT OR A REPUDIATION OF THIS LEASE BY LESSOR (PROVIDED THAT THIS PARENTHETICAL SHALL NOT REDUCE

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LESSEE’S OBLIGATIONS UNDER THIS AGREEMENT)). LESSEE AND LESSOR HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING HAS BEEN NEGOTIATED.

5.2 Deficiencies and Delays . Lessee agrees that, from and after the Delivery Date, no Lessor Party not in possession of the Aircraft shall be liable for any liability, claim, proceeding, loss, damage, fee, cost or expense of any kind caused directly or indirectly by, or associated with, the Aircraft or any part thereof, any inadequacy of the Aircraft for any purpose or any deficiency or defect therein, the use or performance of the Aircraft, any maintenance, repairs, replacement or modification to the Aircraft or for any interruption or loss of service or use of the Aircraft or any loss of business or other consequential damage or any damage whatsoever relating to such matters.

5.3 Repairs and Replacement . If the Aircraft or any part thereof is lost, confiscated, damaged, destroyed or otherwise rendered unfit or unavailable for use after Delivery, Lessor shall not be liable to repair the same or to supply any equipment in substitution therefor.

CLAUSE 6. RENT AND OTHER PAYMENTS .

6.1 Rent .

(a) Basic Rent . On each Basic Rent Payment Date, Lessee will pay to Lessor as Basic Rent an amount equal to the Basic Rent Amount; provided that on the Delivery Date, Lessee shall pay to Lessor an amount equal to ***** (the “Initial Basic Rent Payment”). Upon determination of the Basic Rent Amount pursuant to the definition thereof in Annex A, Lessor will notify Lessee of such amount to be recorded in the Technical Acceptance Certificate.

(b) Supplemental Rent . Lessee also agrees to pay to Lessor, or at Lessor’s direction to whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as the same shall become due and owing, and in the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.

6.2 Security.

(a) Security Amount . At least ***** prior to the Scheduled Delivery Date, Lessee shall pay as Supplemental Rent to Lessor the Security Amount (such amount of Supplemental Rent together with all other and further payments made to Lessor under this Clause 6.2, the “ Security ”). No interest will accrue or be paid to Lessee in respect of the Security and Lessor shall be free to commingle the Security with its unrestricted cash accounts.

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(b) Application . If an Event of Default has occurred and is continuing, Lessor may apply all or any portion of the Security in or towards satisfaction of any sums due to Lessor by Lessee or to compensate Lessor for any sums that it may in its discretion advance or expend pursuant to Clause 19.10 as a result of any such failure or default by Lessee. If Lessor so applies all or any portion of the Security, such application shall not be deemed a cure or waiver of any such failure or default, unless and until Lessee has paid to Lessor as Supplemental Rent an amount equal to the amount so applied.

(c) Return of Security . Provided that no Default or Event of Default has occurred and is continuing, the balance of the Security (if any) shall be returned to Lessee within ***** after full and final performance by Lessee of all of its obligations under all of the Lessee’s Documents.

6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.

6.4 Payment Obligations Unconditional . Lessee’s obligation to pay Rent shall be absolute and unconditional irrespective of any contingency whatsoever including, without limitation, (i) any right of set-off, counterclaim, recoupment, defense, withholding (other than any withholding of Taxes required by law to be made from payments of Rent hereunder for which the Lessee has no gross-up or indemnity obligation pursuant to Clause 18 or 19.2(a)) or other right Lessee may have against Lessor or any other person, (ii) any unavailability of the Aircraft for any reason, (including, without limitation, a requisition thereof not constituting a Total Loss) or any prohibition or interruption of or other restriction against Lessee’s use, operation or possession of the Aircraft, any interference with such use, operation or possession or any lack or invalidity of title or any other defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of Lessor or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.

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6.5 Currency of Payments . All payments hereunder shall (except in any case where Lessee is obliged to pay any amount to Lessor or indemnify or reimburse an Indemnitee in respect of any amount, and such amount is denominated in another currency, in which case Lessee shall pay such amount in such other currency) be made in US Dollars in immediately available funds on the due date for payment settled through the New York Clearing House System (or such other funds as may for the time being be customary for the settlement in New York City of international payment in dollars).

6.6 Currency Indemnity . If, under any applicable law, whether as a result of judgment against Lessee or the liquidation of Lessee or for any other reason, any payment under or in connection with this Agreement is made or is recovered in a currency (the “other currency”) other than the currency (the “currency of obligation”) in which it is payable pursuant to this Agreement then:

(i) to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Agreement, Lessee shall, as a separate and independent obligation, fully indemnify Lessor and any other person entitled to such payment against the amount of the shortfall;

(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and

(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.

For the purposes of this clause “rate of exchange” means the rate at which Lessor or such other person entitled to payment is able on the relevant date to purchase the currency of obligation in New York (or at its option, London) with the other currency.

6.7 Authorizations for Payments . Lessee shall obtain or procure that there are obtained all certificates, licenses, permits and other authorizations that are from time to time required for the making of the payments required by this Agreement on the date and in the amounts and currency that are stipulated herein, and shall maintain the same or procure that the same are maintained in full force and effect for so long as the same shall be required.

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currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.

6.9 Lessor’s Account; Receipt of Payment . All payments by Lessee under this Agreement shall be made to such bank and/or account as Lessor may from time to time notify Lessee no less than five Business Days prior to the due date of any such payment. All payments must be received at such account for value on the due date therefor. If any due date is not a Business Day, payment is due on the preceding Business Day.

CLAUSE 7. FEES AND EXPENSES .

Each party to this Agreement shall pay its own expenses (including, without limitation, legal and other out-of-pocket expenses) incurred in connection with the negotiation, preparation and completion of this Agreement and the Operative Documents except Lessee shall pay: (a) all legal fees and expenses of its counsel incurred in providing the opinions required under Clause 3.1(a)(i), (ii) and (iii); (b) all fees, costs and expenses associated with (i) perfecting this Agreement or any other Lessee’s Document in the State of Registration or any state thereof and the Habitual Base including (but not limited to) the provision of translations, registrations, notarizations or legalizations, if required, and all fees and expenses incurred by Lessor and Beneficiary with respect to the Purchase Agreement (such costs to be in line with customary industry expenses for such transactions as benchmarked against similar transactions completed by or for the benefit of Lessee and Lessor in the past), and any registrations on or searches of the International Registry in connection with the Delivery of the Airframe and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.

CLAUSE 8. GENERAL UNDERTAKINGS .

8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until

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expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.

8.2 Notice of Event of Default; Certificate .

(a) Lessee shall immediately notify Lessor if Lessee becomes aware of the occurrence of an Event of Default or of any other event or circumstance that could have a material adverse effect on its ability to perform any of its obligations under Lessee’s Documents, taking into account all other obligations that Lessee must observe or perform at that time, and shall provide Lessor with full detail of any steps that Lessee is taking, or proposes to take, to remedy or mitigate the effect of the Event of Default or such other event or circumstance.

(b) If the Aircraft is subleased to a sublessee, Lessee shall immediately notify Lessor if that sublease is terminated or terminates (other than as a result of the normal expiration thereof) and if Lessee becomes aware of any breach of or default thereunder, Lessee shall provide Lessor with full detail of any steps it or the applicable sublessee is taking, or proposes to take, to remedy or mitigate the effect of such breach or default.

(c) Lessee shall, upon written request by Lessor, provide to Lessor a confirmation as to whether an Event of Default or such other event or circumstance as is referred to in paragraphs (a) or (b) above has then occurred or is then subsisting.

(d) Lessee shall, upon written request by any Lessor Party, provide to a new transferee or assignee of a Lessor Party’s rights in the Aircraft or any Operative Document or to a new Lender a certificate containing representations as to (i) the matters set forth in Clause 8.2(c), (ii) the truth and accuracy of each of the representations and warranties set forth in Clause 2.1 as of the date of such certificate with such qualifications and exceptions as shall be necessary so that the same are true and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.

8.3 Financial and Other Information .

(a) Lessee shall deliver or cause to be delivered to Lessor promptly after the same are available (and in any event within 180 days) after the end of each of its financial years ending after the date hereof, a copy of its audited financial statements for such financial year, which (i) shall be audited by independent, certified public accountants in accordance with Mexican generally accepted accounting principles and practices (“ GAAPP ”) or International Financial Reporting Standards (“ IFRS ”), provided that once Lessee has elected to use IFRS, such election shall be final and Lessee shall not then revert to Mexican GAAPP to fulfill its reporting obligations hereunder, (ii) shall

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fairly present the financial position of Lessee as at the date as of which they were prepared and the results of the operations of Lessee for the period to which they relate and (iii) shall disclose all significant liabilities, actual or contingent, of Lessee.

(b) Lessee shall promptly provide Lessor with such financial, operational and other information concerning Lessee and its affairs as Lessor may from time to time reasonably request in the context of Lessee’s Documents and the transactions contemplated thereby.

(c) Lessee shall promptly provide Lessor with copies of such reports, notices, financial statements, correspondence and other documentation and information which are to be provided to or by any sublessee pursuant to its sublease as Lessor may from time to time reasonably request which relate to any breach of, or default under, any sublease.

(d) Lessee’s obligations hereunder shall be deemed satisfied should Lessee or Controladora publish, on a website generally available free of charge to the public, the equivalent of the information required to be provided by Lessee hereunder, and further notify Lessor in writing of the website address.

(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Lessor, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or owner, acknowledge before any judicial or administrative authority the right of ownership of the Lessor and/or owner in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.

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8.4 Existence . Lessee will not consolidate with or merge into or with any other corporation or other person, and not convey, transfer, lease or otherwise dispose of all or substantially all of its property and other assets to, or acquire all or substantially all of the property or other assets or capital stock of (if such acquisition is analogous in either purpose or effect to a consolidation or merger of Lessee), any corporation or other person, unless Lessee provides Lessor with thirty days prior written notice of such transaction and unless:

(a) the person formed by or surviving such consolidation or merger or the person which acquires by conveyance, transfer, lease or other disposition all or substantially all of such property and other assets or stock (the “ Successor Entity ”): (A) immediately after giving effect to such transaction, shall be Lessee or shall have acquired or succeeded to all or substantially all of the property and other assets of Lessee (if such assets are being transferred) as an entirety, and shall have a tangible net worth of not less than Lessee’s tangible net worth (determined in each case in accordance with International Financial Reporting Standards) immediately prior to such transaction; (B) shall make such recordations and filings with any Government Entity of the State of Registration as are reasonably necessary to evidence such consolidation, merger, sale, lease, transfer or other disposition; and (C) either (x) executes and delivers, or causes to be executed and delivered, to Lessor an agreement, in form and substance reasonably satisfactory to Lessor which is a legal, valid, binding and enforceable assumption by such Successor Entity of the due and punctual performance and observance of each covenant and condition of this Agreement and the other Lessee Documents or (y) by operation of law becomes bound by this Agreement and the other Lessee’s Documents, and in either case delivers to Lessor an officer’s certificate to such effect and to the effect that the other requirements of this Clause 8.4 have been satisfied, and a legal opinion from independent counsel reasonably satisfactory to Lessor to such effect and otherwise in such form and substance reasonably satisfactory to Lessor; and

(b) no Event of Default shall have occurred and be continuing as a result thereof.

Lessee shall pay all reasonable costs and expenses incurred by each Lessor Party (including reasonable legal fees and expenses) in relation to such consolidation or merger; provided, however, that for purposes of clarification, a public offering of up to 100% of the voting equity shares of Lessee shall not be deemed a change of existence under this Clause 8.4.

8.5 ERISA . At no time shall Lessee use or attempt to use any assets that would be deemed to be “plan assets” under the “plan asset regulations” promulgated pursuant to ERISA to satisfy any or all obligations under the Lessee’s Documents.

8.6 Lessee’s Jurisdiction . Lessee shall not change the jurisdiction in which it is located for purposes of Section 9-301 and 9-307 of the UCC and shall remain situated in Mexico (as described in the Cape Town Convention) except in either case upon thirty days prior written notice to Lessor.

8.7 Cape Town Convention. Lessor and Lessee agree:

(a)

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Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;

(b)

the Lessee shall execute and deliver for filing with the Aviation Authority the IDERA in accordance with its procedures;

(c)

the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;

(d)

as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;

(e)

the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number [ ], and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are [ ] engines as more particularly described in the Technical Acceptance Certificate;

(f)

this Agreement shall be registered as a contract of lease in respect of the Aircraft at the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;

(g)

the Lessor may assign the associated rights under any Assignment, and any such assignment shall be in accordance with the terms of this Agreement and shall transfer to the relevant assignee the related international interests of the Lessor;

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(h)

the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Lender as creditor in respect of the relevant Financing Documents; and

(i)

if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition, to the Replacement Engine being vested in the Lessor, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.

CLAUSE 9. OPERATIONAL UNDERTAKINGS .

9.1 Registration, Title and Nameplates .

(a) At its own cost and expense, Lessee shall ensure that upon Delivery and at all times thereafter during the Term, the Aircraft is registered with the Aviation Authority in the name of Lessor as owner in accordance with applicable laws of the State of Registration (except to the extent that such registration cannot be effected with the Aviation Authority solely because of Lessor’s failure to comply with the citizenship requirements for registration of the Aircraft under the Transportation Code). During the Term, Lessee will cause this Agreement, all Lease Supplements and all amendments to this Agreement to be promptly filed and recorded or filed for recording with the Aviation Authority. Each of Lessor and Lessee agrees to cooperate with each other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.

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(including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.

(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(i) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:

“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”

(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor and Lender as permitted under the Operative Documents).

Except as provided above or as required by applicable law, Lessee will not allow the name of any person to be placed on the Airframe or on any Engine as a designation that might be interpreted as a claim of ownership or any security interest; provided, that nothing herein contained shall prohibit Lessee or any sublessee from placing its chosen colors and insignia on the Airframe or any Engine.

(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.

(e) Lessee has no authority to pledge, and shall not pledge, the credit of Lessor, any Lessor Party or any Lender for any fees, costs or expenses connected with any maintenance, overhaul, repairs, replacements, or modifications to the Aircraft or any part thereof or otherwise connected with the use or operation of the Aircraft or any part thereof.

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(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.

(g) Solely in connection with the subleasing of the Aircraft pursuant to the terms hereof and subject to the prior written consent of Lessor, the Aircraft may be re-registered with the Aviation Authority of any country in which the sublessee is organized and the Habitual Base may be changed to such country. Lessor agrees to provide such consent within thirty days of Lessee’s written request therefor if:

(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;

(ii) no Event of Default has occurred and is continuing;

(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and

(iv) Lessee provides favorable opinions of counsel (reasonably satisfactory to Lessor) addressed to each Lessor Party and each Lender with respect to the laws of the new State of Registration (including, without limitation, the matters addressed in Clauses 9.1(g)(iii)(C) above).

Upon the termination of any sublease permitted hereunder, the Aircraft shall be registered in the United States and the provisions of Clause 9.1(g)(iii)(B) and (C) and (iv) shall apply to such registration.

Lessee shall pay on demand all costs and expenses of each Lessor Party and the Lenders (including legal fees and expenses) reasonably and properly incurred or payable in connection with any change in registry.

9.2 Liens . Lessee shall not create or permit to arise or subsist any Lien (other than Permitted Liens) over the Aircraft or any part thereof, shall not register or permit any person lawfully claiming through Lessee to register on the International Registry any interest in the Airframe or any Engine, and shall not attempt or hold itself out as having any power to sell, charge, lease or otherwise dispose of or encumber the Aircraft or any Engine or any Part other than as permitted under this Agreement.

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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:

(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or

(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or

(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:

(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;

(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;

(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;

(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);

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(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;

(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and

(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee.

Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c).

Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.

9.4 Information and Records .

(a) Lessee shall promptly furnish to Lessor all such information as Lessor may from time to time reasonably request regarding the Aircraft or any part thereof, its use, registration, location and condition. In addition, Lessee shall, on each Maintenance Payments Date and the Termination Date, furnish to Lessor a monthly maintenance status report substantially in the form of Schedule 5.

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(b) Lessee shall keep, or procure that there are kept, (i) the Aircraft Documents and shall keep as part thereof accurate, complete and current records of all flights made by the Aircraft during the Term, including all Flight Hours and Cycles of the Airframe, each Engine and the Parts, and of all maintenance and repairs carried out on the Aircraft and each Engine and every Part and (ii) historical records for condition monitored, hard time and life-limited Parts (including tags from the manufacturer of such Part or a repair facility which evidence that such Part is new or overhauled and establish authenticity, total time in service and time since overhaul for such Part). Such Aircraft Documents and historical records referred to in subclause (ii) shall be kept for the duration of the Term and maintained in English and in such manner, form and location as the Aviation Authority and any applicable law may from time to time require and the Aircraft Documents shall disclose the location of all Engines and Parts not installed on the Aircraft. In addition, the Aircraft Manuals shall be kept in such manner, form and location as the FAA may require to the extent that the requirements of the FAA do not conflict with the requirements of the Aviation Authority. Except as required by applicable law, the Aircraft Documents and historical records referred to in subclause (ii) shall be the property of Lessor. Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format, provided, that Lessee shall send to Lessor all hard copies of all such Aircraft Documents.

(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;

(ii) any loss, theft, damage or destruction to the Aircraft or any part thereof if (A) the potential cost of repairs or replacement may exceed the Damage Notification Threshold or its equivalent in any other currency, or (B) Lessee is required to report the same to the Aviation Authority;

(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and

(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.

(d) Lessee shall provide Lessor with prior written notice of each 6Y/4C-Check, 12Y/8C-Check, Engine Performance Restoration, APU Heavy Repair and Landing Gear Overhaul, provided that if any such maintenance event is to occur less than thirty days after the scheduling thereof, Lessee shall provide written notice of such maintenance event promptly upon the scheduling thereof.

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9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:

(a) comply and procure compliance with all laws in force in any country or jurisdiction which may then be applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;

(b) not use or permit the use of the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft is not designed or reasonably suitable;

(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;

(d) not knowingly use or permit the use of the Aircraft for the carriage of any goods, materials, livestock or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the insurances required hereby, or any item or substance whose possession or carriage is illegal under any applicable law; and comply with any carriage regulations or restrictions from time to time issued by the Aviation Authority;

(e) not use or permit the use of the Aircraft for purposes of training, qualifying or reconfirming the status of cockpit personnel (except for Lessee’s own cockpit personnel), provided , however , that Lessee shall not discriminate against the Aircraft in its use of the Aircraft for such purposes;

(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions, the effect of which is to prohibit flights to and from such jurisdiction or which would result in civil or criminal sanctions against Lessor by or under:

(i) any Government Entity of the State of Registration or the Habitual Base; or

(ii) any Government Entity of the country in which such location is situated; or

(iii) any Government Entity having jurisdiction over Lessor, or any Lender, of which Lessee has notice, or over the Aircraft;

(g) obtain and maintain in full force all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and

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(h) not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located during the Term in any manner not covered by the insurances required hereby or in any area excluded from coverage by such insurances or in any manner which would prejudice the interests of the Indemnitees in such insurances, the Aircraft, any Engine or any Part.

Lessee will pay all costs incurred in the operation of the Aircraft from the Delivery up to the Termination Date and the return of the Aircraft for profit or otherwise, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance (other than where expressly set forth in this Agreement), insurance, storage, landing and navigation fees, airport charges, passenger service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.

9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall be limited to a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor or any Lender shall have any obligation to make any inspection.

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CLAUSE 10. MAINTENANCE AND REPAIR .

10.1 General . Lessee shall at all times during the Term:

(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);

(b) maintain the Aircraft or procure that the Aircraft is maintained in accordance with the Maintenance Program through the Approved Maintenance Performer and perform or procure performance of (at the respective intervals provided in the Maintenance Program) all C-Checks, 6Y/4C-Checks, 12Y/8C-Checks, Engine Performance Restorations, APU Heavy Repairs and Landing Gear Overhauls;

(c) comply or procure compliance with all Aviation Authority mandatory inspection and modification requirements, all mandatory inspection and modification requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;

(d) comply or procure compliance with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over Lessee (and, during the term of any sublease permitted by the terms of this Agreement, the sublessee), any person (other than a Lessor Party) in possession of the Aircraft, any Engine or any Part, regardless of upon whom such requirements are imposed, and which relate to the maintenance, inspection, service, repair condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, any Engine or Part;

(e) maintain or procure maintenance of a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to Lessor a copy on request;

(f) if required by the Aviation Authority, maintain or procure maintenance of a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to Lessor a copy on request; and

(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.

10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:

(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set

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forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;

(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;

(c) shall not discriminate against the Aircraft in the maintenance of the Aircraft compared to similar aircraft owned or operated by Lessee, and Lessee shall service, repair, maintain and overhaul the Aircraft so as to keep the Aircraft maintained in the same manner and with the same care as used by Lessee with similar aircraft owned or operated by Lessee;

(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;

(e) shall, at the time Lessee provides Lessor notice in accordance with Clause 9.4 of each 6Y/4C-Check, 12Y/8C-Check, each Engine Performance Restoration for each Engine, each APU Heavy Repair and each Landing Gear Overhaul for each Landing Gear expected to occur during the Term, provide to Lessor a description of the work-scope and materials to be used during any such maintenance event; and

(f) shall ensure that normal progressive maintenance will continue to be performed on the Aircraft throughout the Term, and that no unusual maintenance procedures or cessation of maintenance shall occur during the one year period prior to the Expiry Date.

10.3 Substitution of Parts; Ownership .

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model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. Unless prohibited by the Financing Documents, PMA Parts may be installed on the Airframe, provided that such parts are cosmetic, non-structural and non-critical items within the cabin interior.

(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become, the property of Lessor subject to this Agreement and be free and clear of any Lien other than Permitted Liens.

(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Lessor, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Lessor, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Lessor (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).

(d) Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to replace or permit the replacement of any Part with a Part which does not satisfy the requirements of Clause 10.3(a) and (b) provided that:

(i) there shall not have been available to Lessee, at the time and in the place that such Part was required to be installed on the Aircraft or Engines, a Part complying with the requirements of Clause 10.3(a) and (b) (a “ Qualifying Part ”);

(ii) it would have resulted in an unreasonable disruption of the operation of the Aircraft to have grounded the Aircraft until such time as a Qualifying Part became available for installation on the Aircraft;

(iii) as soon as reasonably practicable after installation of such Part on the Aircraft (and in any event no later than the next occasion on which the Aircraft is scheduled for a C-Check or higher check pursuant to the Maintenance Program) Lessee shall remove or procure the removal of such Part and replace or procure the replacement of it with a Qualifying Part; and

(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Lessor) remain with Lessor free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Lessor.

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10.4 Pooling of Parts . Lessee shall not permit any Part to become subject to pooling or interchange arrangements, or allow any Part to go out of its possession pursuant to any such arrangement, except pursuant to an arrangement whereby:

(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and

(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Lessor until the Part which replaced it becomes the property of Lessor or is replaced by a Part which thereupon becomes the property of Lessor, and at which time, the title to the Part which has been replaced will pass to Lessee.

Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Lessor remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Lessor, or will, upon fitting, become the property of Lessor.

10.5 Permitted Modifications .

(a) Notwithstanding the foregoing provisions of this Clause 10 and provided that no Default has occurred and is continuing, Lessee may from time to time at no expense to Lessor (i) modify, alter or add further Parts or accessories and make or permit such modifications in and alterations and additions to the Aircraft as it may reasonably consider desirable in the proper conduct of its business; provided that such modification, alteration or addition (x) shall not materially diminish or impair the value, utility or airworthiness of the Aircraft, (y) shall not result in any change in the category or status of the Aircraft for purposes of any rules or regulations of the State of Registration or of the Aviation Authority and (z) must be capable of being removed from the Aircraft at the end of the Term without diminishing or impairing the value (in each case, compared to the value, or cosmetic appearance, as the case may be, of the Aircraft before the relevant modification, alteration or addition was made), utility or airworthiness of the Aircraft and (ii) install and incorporate the BFE. Lessee shall, promptly following the completion of the relevant work, inform Lessor of any such modifications, alterations and/or additions which it may make to the Aircraft during the Term. Lessee shall not make any Major Modifications without the prior written consent of Lessor acting reasonably except to the extent the same is required by law, permitted by any provision of this Agreement or required to comply with any manufacturer’s service bulletin.

(b) Lessor shall cooperate, including by executing documents as the Lessee may reasonably request when Lessee requests that the Aircraft be temporarily re-assigned into an experimental airworthiness category on a short term basis for the express and limited purpose of conducting any FAA required testing necessary to support Aircraft modifications authorized under Clause 10.5(a). Once such testing is complete, and upon authorization of the FAA, the Aircraft will immediately be placed back into a standard airworthiness category.

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(c) All parts, components and equipment incorporated or installed in or attached or added to the Aircraft as a result of any such modification, alteration or addition shall be Parts and title to all such Parts and all related documentation shall, without further act, vest in Lessor free of all Liens (other than Permitted Liens); provided that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor, if at the time of such removal each of the following conditions are fulfilled:

(i) either:

(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Lessor; or

(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;

(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;

(iii) such Part can be removed from the Aircraft without materially diminishing or impairing the overall value, utility or airworthiness of the Aircraft and the Aircraft is restored to the condition it was in immediately prior to the installation of such Part; and

(iv) no Event of Default shall have occurred and be continuing.

CLAUSE 11. ENGINES .

11.1 General Principles .

(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.

(b) Lessee shall not at any time during the Term remove or permit the removal of an Engine from the Airframe or install or permit to be installed an engine on the Airframe except (i) for the purpose of testing, service, overhaul work, maintenance or repair or alterations, modifications or additions permitted or required by this Agreement, or (ii) as expressly permitted by this Clause 11.

(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.

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(d) If an Engine is at any time removed from the Airframe for any reason whatsoever, title to the Removed Engine shall remain vested in Lessor at all times and the Removed Engine shall remain subject to this Agreement and the Security Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor and any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Lessor.

11.2 Removal of Engines . Lessee shall be entitled, so long as no Event of Default has occurred and is continuing, to remove or permit the removal of an Engine from the Airframe and to install on the Airframe an engine; provided that:

(i) such engine is leased to or is owned by Lessee;

(ii) the Removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on another aircraft owned or operated by Lessee (and the provisions of Clause 11.1(d) concerning preservation of title shall apply to the Removed Engine); and

(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;

Provided that:

(aa) Lessee maintains or causes to be maintained insurance in accordance with Clause 14 in respect of the Removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which the Removed Engine is installed);

(bb) subject to Clause 15.2, as soon as reasonably practicable and in any event on or before expiration or termination of the Term such engine is removed from the Airframe and the Removed Engine is reinstalled on the Airframe.

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whatsoever in relation to the Removed Engine for so long as it remains owned by Lessor. Such acknowledgment may take the form of an acknowledgment contained within the lease or financing document in respect of the airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.

CLAUSE 12. TITLE .

Title to the Aircraft shall remain vested in Lessor subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.

CLAUSE 13. MANUFACTURER’S WARRANTIES .

Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Lessor including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself and Lessor.

CLAUSE 14. INSURANCES .

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U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.

14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:

(a) “Hull All-Risks” of loss or damage to the Aircraft and Engines when installed on an aircraft while flying and on the ground with respect to the Aircraft on an “agreed value” basis for the Agreed Value;

(b) “All-Risks” (including “War and Allied Risk” except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on an aircraft on an “agreed value” basis for their full replacement value and including engine test and running risks; and

(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.

14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:

(a) include Lessor, Beneficiary, JSA, and each Lender as additional insureds for their respective rights and interests;

(b) include a loss payable clause that provides that all insurance proceeds in respect of a Total Loss up to the Agreed Value shall be payable to Lessor or its assignee and that all other insurance proceeds shall be paid in accordance with the terms of this Agreement to such parties as may be necessary to repair the Aircraft;

(c) be subject to such exclusions and deductibles as Lessor may reasonably approve, provided that in no event shall the deductible under the Hull All-Risks and the Hull War-Risks insurance exceed the current industry standard deductible of $750,000 for the A320-200 aircraft; and

(d) provide that all insurance proceeds shall be payable in US Dollars.

In the event separate insurances are arranged to cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related insurances, the underwriters subscribing to such insurance agree that in the event of any dispute as to whether a claim is covered by the “Hull All-Risks” or “Hull War-Risks” policies, such claim be settled on a 50/50 claim funding basis in accordance with AVS103 (or similar).

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14.4 Liability Insurance with Respect to the Aircraft .

(a) Lessee shall obtain and maintain a policy or policies of comprehensive insurance covering third party legal liability, bodily injury and property damage, passenger legal liability, baggage, cargo and mail for a combined single limit of not less than ***** or the equivalent thereof in any other currency approved by Lessor, for any one accident, such policy or policies to cover war risks and allied perils.

(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:

(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;

(ii) provide that all the provisions thereof, except the limits of liability, shall operate to give each Additional Insured the same protection as if there were a separate policy covering each named insured; and

(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.

14.5 Provisions Relating to all Insurance . The policies and/or certificates evidencing the insurances with respect to the Aircraft required under this Clause 14 shall, to the extent not in conflict with AVN 67B:

(a) provide that the insurance shall not be invalidated, so far as concerns any Additional Insured, by any action or inaction or omission (including misrepresentation and nondisclosure) of any person or party that results in a breach of any term, condition or warranty of such policy; provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the action, inaction or omission, as the case may be;

(b) specifically reference this Agreement;

(c) provide for worldwide coverage (subject only to such exceptions as are customary in insurance coverages carried by international commercial air carriers operating aircraft of the same type as the Aircraft);

(d) provide that upon payment of any loss or claim to or on behalf of any Additional Insured, the respective insurer shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Additional Insured indemnified hereby (but not against any other Additional Insured); provided that such insurer shall not exercise such rights without the consent of the indemnified Additional Insured, such consent not to be unreasonably withheld. At the expense of such insurer, such Additional Insured shall do all things reasonably necessary to assist the insurer to exercise said rights;

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(e) provide that none of Lessor or any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against Lessor or any Lender except in respect of unpaid premiums in respect of the Aircraft;

(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and

(g) provide coverage with respect to losses and claims in connection with the change of year from 1999 to 2000, and/or any other change of year, date or time to the fullest extent as customary in the worldwide aviation insurance market, including date recognition limited coverage clauses AVN 2001A and AVN 2002A.

14.6 Information .

(a) On or before the Delivery Date and promptly after each renewal of the insurances, Lessee shall provide Lessor with certificates of insurance and a broker’s letter of undertaking that (i) evidence to the reasonable satisfaction of Lessor that the insurances are and will continue in full force after the Delivery Date or the renewal date (as the case may be) for such period as shall then be stipulated and in accordance with the terms hereof, (ii) upon the request of Lessor, specify the insurers with whom the insurances are carried and (iii) contain such other certifications and undertakings as are customarily provided to lessors and mortgagees by insurance brokers acting for international commercial air carriers. If the Aircraft is insured outside of the United States or the United Kingdom, then all of the insurances required hereunder shall be reinsured and such reinsurance shall contain a “cut-through” clause reasonably satisfactory to Lessor and Lender, and Lessee will furnish to Lessor and Lender a certificate of insurance and a broker’s letter of undertaking describing in reasonable detail the reinsurance carried on the Aircraft and certifying that the reinsurance then maintained on the Aircraft complies with the terms of this Lease.

(b) Lessee shall from time to time upon request from Lessor provide to Lessor evidence reasonably satisfactory to Lessor that any and all premiums payable in respect of the insurances have been paid in accordance with the terms of the relevant policy.

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(c) Lessee shall furnish such information regarding the status of renewal negotiations as may from time to time during the 30-day period preceding the expiry of any annual policy be reasonably requested by Lessor.

(d) Lessee shall furnish, or cause to be furnished, to Lessor on the Delivery Date and thereafter following each annual renewal date and upon each transfer of the Aircraft or assignment of rights hereunder as permitted by Clause 19.2 of this Agreement, certificates and undertakings of its brokers (and, if further reasonably requested, of its insurers) that evidence that the requirements of this Clause 14 are being complied with.

(e) Lessee shall, at the request of Lessor, make copies of the policies and endorsements and any amendments thereto with respect to the insurance available to Lessor (or its respective authorized representatives) for inspection by any representative of Lessor, at the office of Lessee or its insurance brokers during normal business hours.

14.7 Additional Insurance; No Lien .

(a) Lessee shall not, without the prior written consent of Lessor, maintain insurances with respect to the Aircraft or any Engine, (other than total loss only insurance, hull deductible insurance and as required under this Agreement) which would prejudice the cover provided by the insurances required hereunder or recovery by the Additional Insureds under such cover.

(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to Lessor, or any Lender to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.

(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.

(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, save as constituted by this Agreement and the Operative Documents.

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14.8 Failure to Insure . If at any time Lessee fails to maintain in full force and effect insurances in compliance with any provision of this Clause 14, Lessor and any Lender shall be entitled but not bound (without prejudice to any other rights that it may have or acquire under this Agreement by reason of such failure):

(i) to pay any premiums due or to effect or maintain insurances in accordance with the provisions hereunder satisfactory to it or otherwise remedy such failure in such manner as it considers appropriate (including, without limitation to effect and maintain an “owner’s interest” policy), and Lessee shall promptly reimburse Lessor or Lender, as the case may be, together with interest thereon from the date of expenditure by it up to the date of reimbursement by Lessee; and/or

(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.

14.9 Settlement of Claims .

(a) Lessee will not settle or permit settlement of any claims arising under any of the insurances referred to in Clause 14.2 in excess of an amount in any currency equal to the Damage Notification Threshold or make any payment in connection therewith without the prior written consent of Lessor, and will not settle or permit settlement of any claims under such insurances without such consent if, in each case, an Event of Default has occurred and is continuing. The proceeds of insurances in respect of a Total Loss up to the Agreed Value shall be paid to Lessor or its assignee. The proceeds of such insurances in respect of any loss other than a Total Loss shall be paid (i) to Lessee if such loss proceeds are less than the Damage Notification Threshold or in excess of the Agreed Value, or (ii) to such parties as may be necessary to repair the Aircraft if such loss proceeds are equal to or greater than the Damage Notification Threshold provided that if an Event of Default has occurred and is continuing, all such proceeds shall be paid to Lessor or its assignee.

(b) Upon completion of the repairs of any loss on which the insurers have paid insurance proceeds to Lessee, Lessee shall deliver to each of Lessor and the Lender(s) an officer’s certificate certifying that such repairs to the Aircraft have been completed in accordance with the Manufacturer’s recommended procedures.

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such person effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.

14.11 Post Termination . For a period ending on the second anniversary of the Termination Date, Lessee shall effect and maintain for the benefit of the Indemnitees ongoing third party legal liability insurance in respect of the risks and liabilities covered by the insurance required by Clause 14.4.

CLAUSE 15. LOSS, DAMAGE AND REQUISITION .

15.1 Total Loss of Aircraft or Airframe .

(a) If a Total Loss of the Airframe or the Aircraft occurs prior to Delivery, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 18.9, except that Lessor will pay to Lessee an amount equal to the balance of the Security Amount paid by Lessee under Clause 6.2(a).

(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay the Agreed Value to Lessor within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.

(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of the Agreed Value and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.

15.2 Total Loss of Engine(s) .

(a) Upon a Total Loss of any Engine not installed on the Aircraft, or a Total Loss of an Engine installed on the Airframe not involving a Total Loss of the Airframe (in either case, a “destroyed Engine”), Lessee shall promptly, after becoming aware of the same, give written notice thereof to Lessor and Lessee shall replace the destroyed Engine as soon as reasonably possible and in any event within the earlier of (i) 90 days after the Total Loss and (ii) the date of receipt of insurance proceeds in respect of such Total Loss by procuring that Lessor acquires (at no expense to Lessor) title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition by Lessor, be an Engine as defined herein.

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(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Lessor and become subject to this Agreement and any Security Documents executed by Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Lessor with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Lessor all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.

Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Lessor and Lender, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.

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form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.

Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.

15.3 Other Loss or Damage . If the Aircraft or any part thereof suffers loss or damage not constituting a Total Loss of the Aircraft or the Airframe, all the obligations of Lessee under this Agreement shall continue in full force, and Lessee shall, at Lessee’s expense, promptly procure the repair or replacement of all damaged or lost Parts in accordance with this Agreement.

15.4 Requisition .

(a) If there is a requisition for use or hire of the Aircraft or any part thereof then, unless and until the Aircraft becomes a Total Loss and Lessee shall have paid all sums due pursuant to Clause 15.1, the leasing of the Aircraft to Lessee under this Agreement shall continue in full force and effect, and Lessee shall remain fully responsible for performance and observance of all its obligations under this Agreement, other than obligations (which shall not include reporting requirements and payment of Rent) with which Lessee is unable to comply solely by virtue of such requisition.

(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.

(c) Lessor shall apply any requisition payments or other compensation received by it, directly or indirectly, as a result of the requisition for use of the Aircraft in or towards discharge of Rent and other amounts due from Lessee hereunder (including such amounts as may be required to restore the Aircraft to the condition required by this Agreement after the end of such requisition) and shall (provided no Event of Default shall have occurred and be continuing) release to Lessee any surplus remaining after such application.

CLAUSE 16. DEFAULT .

16.1 Events of Default . Each of the following shall constitute an Event of Default:

(a) Lessee fails to pay any Basic Rent, Security, Maintenance Payments or Agreed Value within three (3) Business Days of the due date or any other amount due under any of Lessee’s Documents within five Business Days of the date of receipt of any demand;

(b) Lessee fails to maintain the insurance required by Clause 14 of this Agreement, or a notice of cancellation is given in respect of any such insurance and the same is not renewed or replaced prior to such cancellation’s taking effect so as to ensure continued compliance with the provisions of Clause 14 of this Agreement;

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(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;

(d) Lessee fails (i) to observe or perform any of its obligations set forth in Clause 8.4 of this Agreement within five (5) Business Days of the date on which it is to be provided or (ii) to redeliver the Aircraft to Lessor in accordance with Clause 17;

(e) Lessee fails to observe or perform any of its obligations (other than the obligations mentioned in paragraphs (a), (b), (c) and (d) above) under any of Lessee’s Documents or under any undertaking or arrangement entered into in connection herewith or therewith and Lessee’s failure is incapable of being remedied or, if capable of being remedied, is not remedied within thirty (30) days after notice from Lessor requiring such remedy; provided that nothing in this paragraph (e) shall permit operation of the Aircraft otherwise than in accordance with all applicable laws;

(f) Any representation, warranty or statement made or deemed to be made by Lessee in connection with any of Lessee’s Documents or in any certificate, written statement or notice provided by Lessee under or in connection with any of Lessee’s Documents is or proves to have been incorrect in any material respect when made, and if such representation or warranty is capable of being remedied, such failure is not remedied within thirty (30) days after notice from Lessor requiring such remedy;

(g) Lessee consents to the appointment of a custodian, receiver, trustee, síndico or liquidator of itself or all or substantially all of Lessee’s property, or Lessee admits in writing its inability to, or is unable to, or does not, pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any concurso mercantil , bankruptcy or insolvency laws (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any other bankruptcy, insolvency, concurso mercantil or other similar law providing for the reorganization or winding-up of corporations or other entities, or provides for an agreement, composition, extension or adjustment with its creditors, or any corporate action (including, without limitation, any board of directors or shareholder action) is taken by Lessee in furtherance of any of the foregoing, whether or not the same is fully effected or accomplished;

(h) An order, judgment or decree is entered by any court appointing, without the consent of Lessee, a custodian, receiver, trustee , síndico or liquidator of Lessee, or of all or substantially all of Lessee’s property or Lessee’s property is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof or at any time an order for relief is granted;

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(i) An involuntary petition against Lessee in a proceeding under the United States Federal Bankruptcy Laws, the Mexican Insolvency Proceedings Law or other insolvency laws (as now or hereafter in effect) is filed and is not withdrawn or dismissed within 90 days thereafter or at any time an order for relief is granted in such proceeding, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or substantially all of Lessee’s property, and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of 60 days or at any time an order for relief is granted in such proceeding;

(j) Lessee suspends or ceases to carry on its business as an air carrier;

(k) Lessee disposes, or takes any action to dispose of all or substantially all of its assets, whether by one or a series of transactions, related or not, other than in a transaction permitted by Clause 8.4;

(l) Any of Lessee’s Documents or any provision thereof shall cease to be in full force or effect, or Lessee or Lessee’s Affiliates shall deny or disaffirm Lessee’s obligations under any of Lessee’s Documents except in the case of a partial invalidity, illegality or unenforceability if that partial invalidity, illegality or unenforceability does not materially adversely affect the interests of Lessor or Lessee’s ability to perform its obligations under any of Lessee’s Document;

(m) The existence, validity, enforceability or priority of the rights of Lessor in respect of the Aircraft hereunder is challenged by Lessee or Lessee’s Affiliates;

(n) Lessee shall (i) default in any payment of any indebtedness having an aggregate outstanding value of more than ***** (or the equivalent thereof) beyond the period of grace (not to exceed ***** days) if any, provided in the instrument or agreement under which such indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such indebtedness to become due prior to its stated maturity; or (iii) any such indebtedness of Lessee shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof;

(o) A final judgment, or in the aggregate, final judgments for the payment of money in excess of ***** (or the equivalent thereof) not covered by insurance shall be rendered against Lessee and the same shall remain undischarged for a period of at least thirty days during which neither execution of such judgment or judgments shall be effectively stayed nor adequate bonding fully covering such judgment or judgments shall exist; or

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(p) An Event of Default (as defined therein) shall occur under any aircraft lease, financing document, services agreement, or any other agreement between the Lessor (in its capacity solely as trustee to the Beneficiary or any Affiliate of the Beneficiary) and the Lessee or any Affiliate of the Lessee, or between Beneficiary or any Affiliate of the Beneficiary and the Lessee or any Affiliate of the Lessee.

16.2 Rights and Remedies . If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under this Agreement), at any time thereafter (without notice to Lessee except as required under applicable law):

(a) by notice to Lessee and with immediate effect on dispatch of such notice, without need of prior judicial declaration, cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease, and/or

(b) proceed by appropriate court action or actions to enforce performance of this Agreement, including, without limitation, the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms hereof; and/or

(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:

(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;

(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the amount, if any, of the Mitigation Credit (calculated as provided below in Clause 16.4);

(iii) all reasonable costs and other incidental damages associated with Lessor’s exercise of its remedies hereunder or otherwise incurred by Lessor as a result of an Event of Default, including, but not limited to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;

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(iv) any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”;

(v) any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and

(vi) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement; and/or

(d) either:

(i) enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine, part or component which is not an Engine or a Part but which is installed on the Airframe or Engine, subject to the rights of the owner, lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or

(ii) by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at such location and on the date specified in such notice and in all respects in the condition required by this Agreement pursuant to Clause 17 (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or

(e) sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights of Lessee; and/or

(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice),

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Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:

(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;

(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);

(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and

(iv) such additional amount, if any, as may be necessary to place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement;

it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (a) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (b) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee hereunder.

In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable law and Lessee shall be liable on an After-Tax Basis for, and shall pay Lessor on demand interest on all unpaid amounts at the Default Rate, from the due date until the date of payment in full.

Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).

Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.

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No remedy referred to in this Clause 16 is intended to be exclusive, but, to the extent permissible hereunder or under applicable law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Clause 16 shall be construed to permit Lessor to obtain a duplicate recovery of any elements of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Event of Default.

16.3 Power of Attorney . Lessee acknowledges and agrees that following termination of this Lease or service of a notice of termination, in each case, in accordance with its terms, Lessor shall have an unrestricted and unlimited right to deregister the Aircraft. Lessee will not oppose any attempts of Lessor to deregister the Aircraft and, at Lessor’s request, will immediately take any and all steps necessary or desirable to effect deregistration of the Aircraft and/or its export from the country where the Aircraft is for the time being situated. Lessee is aware and hereby acknowledges that the right of Lessor to deregister the Aircraft pursuant to this Clause 16.3 may be exercised unilaterally, unconditionally and without restrictions, and, in the event that such deregistration of the Aircraft shall be applied for by Lessor, Lessee’s right to the registration of the Aircraft, if any, shall be considered waived and transferred to Lessor. In connection with any deregistration pursuant to this Clause 16.3, Lessee shall provide Lessor with such instruments, authorizations and other documented approvals, including but not limited to an IDERA, that may be necessary or required (i) to remove the Aircraft from the operating certificates of Lessee, (ii) to conduct on behalf of Lessee or to otherwise complete deregistration of the Aircraft, (iii) to demonstrate termination of the Lease or to otherwise execute on behalf of the Lessee any termination agreement in respect of the Lease as may be required for deregistration purposes, (iv) to demonstrate the consent of Lessee to deregister the Aircraft, and (v) to export the Aircraft from the Mexico (including, if required, a valid and subsisting export permit and certificate of airworthiness for the Aircraft) or anything otherwise required in relation to the deregistration of the Aircraft with the Aviation Authority. In addition Lessee will take any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with the Lease, including but not limited to discharge of any International Interests if action by Lessee is required for such discharge.

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16.4 Mitigation Credit . Lessee shall be entitled to have a mitigation credit (the “ Mitigation Credit ”) deducted from any recovery by Lessor from Lessee of Basic Rent for the unexpired portion of the Term. Such Mitigation Credit shall be in one of the following amounts, with Lessor to select the amount which in its reasonable judgment will place Lessor in the same economic position, on an After-Tax Basis, as Lessor would have been in if Lessee had timely performed each of its obligations under this Agreement:

(a) in the event that Lessor has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor regards as being substantially similar to the terms of this Agreement, an amount equaling the aggregate basic rental payments to become due for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or

(b) in the event that Lessor has not re-leased the Aircraft or has re-leased the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not regard as being substantially similar to the terms of this Agreement, an amount equaling the fair market rental value of the Aircraft (specified in an appraisal by a recognized independent aircraft appraiser selected by Lessor) for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-leased at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee.

CLAUSE 17. REDELIVERY .

17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:

(a) the Aircraft shall be in such condition and all modifications and maintenance shall have been performed, and the Aircraft Documents shall be compiled and shall have been maintained, in such a manner as to demonstrate that Lessee has in all respects complied with its obligations contained in this Agreement;

(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);

(c) at Lessor’s election, such election to be made no less than 90 days prior to the Expiry Date, the Aircraft shall immediately prior to redelivery have in effect either a certificate of airworthiness or an export airworthiness certificate issued by the Aviation Authority dated no earlier than 30 days prior to the date the Aircraft is re-delivered in accordance herewith (in either case with no exception listed), and such other current certificates, permits and licenses as shall allow the Aircraft to be used for the public transport of passengers under the regulations of the Aviation Authority;

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(d) the Aircraft shall comply fully with the return conditions set forth in Schedule 4; provided that Lessor may, in its absolute discretion, agree to relax or waive any of such return conditions, subject to Lessee and Lessor reaching agreement as to appropriate compensation to be paid by Lessee to Lessor in consideration for such relaxation or waiver;

(e) the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the FAA, and (ii) immediate operation in the United States in full compliance with FAR Part 129 by delivering to Lessor at its option either an actual U.S. standard certificate of airworthiness (if the Aircraft is to be registered in the U.S.) or a letter acceptable to Lessor signed by an FAA Designated Airworthiness Representative (“DAR”) or another person acceptable to Lessor stating that the DAR or such person has inspected the Aircraft and the Aircraft Documents and has found that the Aircraft meets the requirements for issuance of a U.S. standard certificate of airworthiness for transport category aircraft in accordance with FAR Part 21 and in addition meets the operating requirements of FAR Part 129 with no restrictions. At Lessor’s request (such request to be provided in a timely manner) and expense, the Aircraft and the Aircraft Documents shall be in such condition as qualifies it, without necessity of any repair, modification or maintenance for (i) immediate issuance of a current and valid certificate of airworthiness by, and registration with, the JAA/EASA member states, and (ii) immediate operation in the JAA member states in full compliance with JAR OPS1 and the JAA/EASA Type Certificate Data Sheet.

17.3 Inspection; Corrections; Additional Work . For the period commencing at least 30 Business Days prior to the Termination Date and continuing until the date on which the Aircraft is returned to Lessor in the condition required by this Lease, Lessee will provide for the review by Lessor and/or its representative all of the Aircraft Documents described in Schedule 1A. Immediately prior to and during the check referred to in Clause 1(a) of Schedule 4, Lessee, at its own expense, shall make the Aircraft and the Aircraft Documents available to Lessor’s representatives at the Return Location for inspection (“ Final Inspection ”) in order to verify that the condition of the Aircraft complies with the provisions of this Agreement. The period allowed for the Final Inspection shall have such duration as to permit the conduct by Lessor, at Lessee’s expense, of the following:

(a) inspection of the Aircraft structure and Parts during which inspection Lessee shall open all inspection doors and panels specified by Lessor which are normally opened in the course of a C-Check or its equivalent under the Maintenance Program and Lessee shall open any other doors or panels or other zonal areas specified by Lessor if Lessor, acting in good faith, can show reasonable grounds (based on the physical appearance or condition of the Aircraft and/or information contained in the Aircraft Documents) for believing that such opening will result in corrosion being revealed;

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(b) acceptance flight or flights (following the Manufacturer’s acceptance procedures for used aircraft) with Lessor’s representatives as technical observers, of such duration as is necessary (but not less than two hours or more than three hours) to demonstrate the satisfactory operation of the Aircraft, its equipment and systems;

(c) inspection of the Engines including, without limitation, (i) a full cold and hot section video tape borescope inspection of the Engines and (ii) full on-wing Engine maximum power assurance runs (including condition, acceleration, vibration monitoring and bleed valve scheduling checks) on each Engine to successfully demonstrate (x) take-off power in accordance with the limits shown in Manufacturer’s manual and (y) that each Engine will have a remaining hot day takeoff EGT margin sufficient to permit the operation of such Engine for the Flight Hours and Cycles set forth in Schedule 4, Redelivery Conditions (based on a review of the Engine historical and technical records, borescope inspection results, power assurance run results, and trend monitoring data); and

(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.

Lessee will, at Lessee’s expense, correct all discrepancies found during any such inspection or flight determined not to have been in compliance with the Maintenance Program, the specifications of the Manufacturer or the requirements of this Agreement and provide to Lessor satisfactory evidence of such corrections. In addition, at the time of the check referred to in Clause 1(a) of Schedule 4, as applicable, Lessee will, subject to reasonable scheduling requirements, perform or cause to be performed additional work on the Aircraft as may be requested by Lessor; provided that: (i) Lessor will pay the reasonable incremental cost of: (A) such additional work; and (B) the cost of insurance premiums for the Aircraft beyond the Expiry Date; (ii) if the work is to be performed by Lessee or an Affiliate of Lessee, such cost shall not include any mark-up; and (iii) Lessee will be credited for the time required to perform such additional work in connection with the payment of Basic Rent.

17.4 Compliance after Term . In the event that Lessee does not return the Aircraft to Lessor on the Expiry Date and in the condition required for any reason (whether or not the reason is within Lessee’s control):

(a) Until such time as the Aircraft is redelivered to Lessor and put into the condition required to meet Return Conditions, instead of paying the Rent, Lessee will pay 200% (two hundred percent) of the amount of Rent for each day from the Expiry Date until the Termination Date prorated based on the actual number of days in the applicable month. Lessor acknowledges that Lessee has agreed to withdraw the Aircraft from commercial service and begin the work required to comply with the return conditions on a date prior to the Expiry Date and which affords a reasonable amount of time (based upon industry standards) to return the Aircraft to Lessor on or before the Expiry Date. Provided Lessee has withdrawn the Aircraft in compliance with the terms above, Lessor acknowledges and agrees that in the event an unforeseeable

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discrepancy from the return conditions prevents the return of the Aircraft on the Expiry Date, Lessee shall only be responsible for normal Rent for a period of fifteen (15) days following such Expiry Date. Thereafter, Lessee shall be responsible for ***** of the amount of Rent until the actual Termination Date.

(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.

17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:

(a) promptly take all such steps (not including procuring the discharge of any Lessor’s Liens) as may be necessary to cancel the existing registration of the Aircraft (subject to Lessor giving, or procuring that any mortgagee of the Aircraft gives, such notices and/or required consents to the cancellation of such registration) and obtain and deliver to Lessor all certificates relating to the Aircraft required by applicable law on any transfer of or alteration to the registration thereof;

(b) provide to Lessor all assistance and execute such documents as Lessor may reasonably request so as to enable Lessor to obtain any documents (including, without limitation, any export certificate of airworthiness) required by applicable law in relation to the export of the Aircraft from the State of Registration, the Habitual Base or such other country in which the Aircraft is for the time being located and shall re-assign or otherwise confirm to Lessor the benefit of any indemnities or warranties available to Lessee from Manufacturer or any other supplier or manufacturer of the Engines or any Part or any repair or overhaul facility;

(c) provide to Lessor such assistance with respect to information and documentation as Lessor may reasonably require so as to enable the Aircraft to be registered and certified as to airworthiness under any applicable laws and/or regulations of any country other than the State of Registration.

17.6 Ferry Flight . Upon redelivery of the Aircraft, Lessee will, upon the prior written request of Lessor (such request to be received by Lessee no less than 30 days prior to the Expiry Date), fly the Aircraft from the Return Location to such location in the continental United States as Lessor may designate (the “ Ferry Flight ”), provided that the Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.

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60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.

CLAUSE 18. INDEMNITIES .

18.1 General Indemnities .

(a) Lessee hereby agrees at all times to indemnify, protect, defend and hold harmless each Indemnitee from and against all and any liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Claim”) that any of them at any time suffers or incurs:

(i) arising directly or indirectly out of, or in any way connected with, the manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft (either in the air or on the ground) or any part of the Aircraft, whether or not such Claims may be attributable to any defect in the Aircraft or any part thereof or to the design, testing or use thereof or to any maintenance, service, repair, overhaul, or to any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise (whether during, or after termination of, the leasing of the Aircraft under this Agreement);

(ii) arising as a result of any design, article or material in the Aircraft or any part thereof or the operation or use thereof constituting or being alleged to constitute an infringement of any patent, copyright, design or other proprietary right; or

(iii) in relation to preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of the Aircraft other than from any Lessor’s Lien.

(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):

(i) any Claim judicially determined to be attributable to an act, matter, circumstance or thing done, arising or occurring after the date on which Lessee shall have redelivered the Aircraft and the Aircraft Documents to Lessor in accordance with this Agreement and shall have complied with all of its obligations under this Agreement and Lessee’s Documents (such date, the “Compliance Date”), but only to the extent not attributable or related, in whole or in part, to acts or omissions of Lessee or to circumstances, acts, omissions, incidents or events occurring on or before the Compliance Date;

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(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;

(iii) any Claim which is a Tax or a loss of a Tax benefit or that is a cost or expense of such Indemnitee contesting a Tax imposed on it or a loss of a Tax benefit by such Indemnitee, which shall be governed by Clauses 18.2 through 18.10 and 19.2(b)(ii); or

(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.

(c) An Indemnitee shall promptly after obtaining actual knowledge thereof notify Lessee of any Claim as to which indemnification is sought; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, except to the extent Lessee’s successful defense of any Claim is precluded thereby. Without prejudice to the obligation of Lessee to indemnify pursuant to this Clause 18.1, Lessee shall have the right to investigate and, in its discretion and provided that no Default has occurred and is continuing, to defend or compromise (other than with respect to a compromise of a non-monetary Claim, the compromise of which may adversely affect the Indemnitee), any Claim for which indemnification is sought under this Clause 18.1 and each Indemnitee shall cooperate at Lessee’s cost with all reasonable requests of Lessee in connection therewith; provided that (i) such proceedings do not involve any material risk of loss or forfeiture of title to the Aircraft (unless Lessee shall have posted a bond or other security satisfactory to Lessor in respect of such risk) or any material risk of any civil or criminal penalty being assessed against any Indemnitee and (ii) Lessee shall have agreed to indemnify, and shall indemnify on demand, such Indemnitee in a manner satisfactory to it for all costs and expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this

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Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.

18.2 General Tax Indemnity . Lessee shall pay and discharge or cause to be paid or discharged, within the period for payment permitted by law (and shall, if requested by a Tax Indemnitee, produce to that Tax Indemnitee evidence of the payment and discharge thereof) and indemnify each Tax Indemnitee and keep each Tax Indemnitee fully indemnified at all times from and against all Taxes payable by that Tax Indemnitee at any time in respect of this Agreement, any of Operative Documents, or the Aircraft, the Airframe, any Engine, or any Part or interest therein or in respect of any transaction contemplated by this Agreement or any of the Operative Documents including, without limitation, the purchase (including, without limitation, under the Purchase Agreement), ownership, delivery, redelivery, transport, leasing, subleasing, financing, refinancing, mortgaging, location, registration, use, possession and operation, repair, import to or export from any country, return, storage, maintenance, protection, sale, attempted sale, acceptance, abandonment, rejection or other disposition of the Aircraft, the Airframe, any Engine, or any Part or interest therein, or the rentals, receipts, income or earnings arising from any of the foregoing. The preceding sentence shall not apply to, and Lessee shall have no liability to a Tax Indemnitee pursuant to this Clause 18.2 with respect to the following Taxes (collectively, “Excluded Taxes”):

(a) any Taxes arising with respect to periods after the termination of the leasing of the Aircraft under this Agreement and the return of the Aircraft in compliance with the terms hereof; provided, however, that the exclusion set forth in this subparagraph (a) shall not apply to Taxes relating to events occurring or matters arising on or prior to such time or to Taxes relating to payments made by Lessee to or for the benefit of such Tax Indemnitee under Lessee’s Documents following such time;

(b) any Taxes imposed on such Tax Indemnitee to the extent that such Taxes are directly attributable to any Tax Indemnitee’s gross negligence or willful misconduct or breach by such Tax Indemnitee or any Related Tax Indemnitee of its representations or covenants under any Lessee’s Document provided that, in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee, any Tax indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;

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replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);

(d) any Taxes imposed on such Tax Indemnitee with respect to, or measured by, the net or gross income, capital gain, profits, receipts, capital, net worth, corporate franchise, business activity, conduct of business or privilege to conduct business of such Tax Indemnitee or an Affiliate thereof or in the nature or a minimum income tax, (i) by the United States or any state or local jurisdiction therein (other than by reason of the replacement or substitution of an Engine or any part of the Aircraft) or (ii) by any other jurisdiction except in the case of this clause (ii), Taxes that would not have been imposed but for a connection between such Tax Indemnitee and the jurisdiction imposing the Tax due to any or all of (x) the negotiation, presence, execution or delivery by Lessee, or the enforcement or registration of any of Lessee’s Documents in such other jurisdiction, (y) the presence, use, operation, maintenance, alteration, registration, repair or replacement of the Aircraft or any part thereof in such other jurisdiction, or (z) the presence or organization of Lessee or other user of the Aircraft in, or payment by, or for the benefit of, Lessee of any amount under the Lessee’s Documents from, such other jurisdiction (Taxes described in sub-clauses (x), (y) or (z) above shall be referred to as “Lessee Connection Taxes”);

(e) any Tax other than a Lessee Connection Tax imposed on a Tax Indemnitee as a result of any Tax Indemnitee, any Related Tax Indemnitee or any Affiliate of any Tax Indemnitee (A) being organized in the jurisdiction imposing such Taxes, (B) maintaining or having maintained an office or other place of business in the jurisdiction imposing such Taxes or (C) conducting or having conducted business that is unrelated to the transactions contemplated in the Lessee’s Documents in the jurisdiction imposing such Taxes;

(f) a Tax that would not have been imposed but for a Lessor’s Lien;

(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;

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(h) any Tax imposed on a Tax Indemnitee in respect of a “prohibited transaction” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended, or the regulations issued thereunder, or Section 406 of ERISA or the regulations of the US Department of Labor implementing Section 406 of ERISA other than any such Tax arising as a result of Lessee’s breach of Clause 2.1(p) or 8.5 hereof;

(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;

(j) any Tax imposed on (i) a transferee of the interests held by a Tax Indemnitee in the Aircraft or any Operative Documents, or (ii) a transferee of any interest in a Tax Indemnitee, in each case to the extent that, under law in effect on the date of transfer such Tax exceeds the amount of the Tax that would have been imposed on the transferor Tax Indemnitee, provided however that this sub-clause (j) shall not apply to any transfer described in the proviso to clause (c) above;

(k) in the case of any Tax Indemnitee that is a Lender or a Related Tax Indemnitee of a Lender, any Taxes unless such Taxes are subject to indemnification pursuant to the indemnification provisions of the Financing Documents;

(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and

(m) any Tax arising from the failure of a Tax Indemnitee to comply with any certification or other requirement of the jurisdiction imposing the Tax as a precondition to any exemption from or reduction of such Tax to which such Tax Indemnitee may be entitled; provided such certification or other requirement or compliance therewith would not expose such Tax Indemnitee to any risk of material adverse consequences and further provided that Lessee has notified such Tax Indemnitee or such Tax Indemnitee has otherwise acquired knowledge of the relevant Tax and such certification or other requirement within sufficient time so as to allow such Tax Indemnitee, acting with diligence, to comply with such certification or requirement;

provided the exclusions set forth in this Clause 18.2 shall not be interpreted to exclude the making of any payment on an After-Tax Basis.

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Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall

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determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.

18.4 Mitigation . If Lessee becomes liable to indemnify and hold harmless an Indemnitee for Taxes under Clause 18.2, Lessor shall use reasonable commercial efforts to procure that the Indemnitee consults in good faith with Lessee and uses reasonable commercial efforts to avoid or reduce such Taxes, provided that (i) Lessee indemnifies and hold harmless Lessor and the Indemnitee against any external costs and expenses (including legal costs and expenses) Lessor and/or the Indemnitee reasonably incurs in taking any action under this Clause 18.4.

18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.

18.6 No Deductions or Withholdings . Lessee shall ensure that all payments to be made under this Agreement, whether in respect of Basic Rent, Agreed Value, Maintenance Payments, Security, interest, fees, indemnities or any other item, shall be made in full without any deduction or withholding in respect of Taxes unless such deduction or withholding is required by law, in which event Lessee shall:

(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;

(b) in the case of Taxes indemnified against by Lessee pursuant to Clause 18.2 on the due date for such payment pay to the payee such additional amount as shall result in the net amount received by such payee being equal on an After-Tax Basis to that amount which would have been received by such payee had no such deduction or withholding been made;

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(c) pay to the applicable taxation or other authorities within the period for payment permitted by law the full amount of the deduction or withholding legally required to be paid by it (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this sub-clause); and

(d) furnish to such payee, within thirty days of payment of such Taxes by it either (i) an official receipt of the applicable taxation or other authorities for all amounts deducted or withheld as aforesaid or (ii) a certificate of deduction or other evidence of the relevant deduction or withholding and payment to the applicable taxation or other authorities reasonably acceptable to Lessor.

18.7 Tax Benefit . If an Indemnitee or a Tax Indemnitee determines in its sole discretion exercised in good faith that it has actually realized a tax benefit or refund as a result of any claims or Taxes paid by Lessee or against which it has been indemnified by Lessee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6, it shall (to the extent in its sole discretion that it can do so without prejudicing the retention of the amount of such benefit or refund and without prejudice to the right to any other relief or allowance which may be available to it) pay to Lessee, promptly after actual realization of such tax benefit or refund or receipt of such other compensation, an amount that is equal to the amount of such benefit or refund or other compensation plus the amount of any Taxes saved by it as a result of the payment to Lessee pursuant to this Clause 18.7; provided, however, that in no event shall such payment exceed (x) the amount of all prior payments by Lessee to such Indemnitee or Tax Indemnitee under Clauses 18.1, 18.2, 18.3, 18.5 or 18.6 minus (y) the amount of all prior payments by such Indemnitee or Tax Indemnitee pursuant to this Clause 18.7 and provided, further however, that no such payment shall be required to be made while a Default or an Event of Default shall have occurred and be continuing. If an Indemnitee or a Tax Indemnitee shall have paid Lessee any amounts under this Clause 18.7 and it is subsequently determined that it was not entitled to a tax benefit or refund, such determination shall be treated as the imposition of a Tax for which Lessee is obligated to indemnify it pursuant to the provisions of Clause 18.2 without regard to the exclusions set forth in Clause 18.2.

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or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.

18.9 Continuation of Indemnities . The rights of each Indemnitee and Tax Indemnitee in respect of the indemnities contained in this Agreement, including, without limitation, in this Clause 18, shall continue in full force and effect in favor of each such Indemnitee and Tax Indemnitee (but always in accordance with the provisions of and subject to the limitations provided herein) notwithstanding the termination of this Agreement, the other Lessee’s Documents and/or the leasing of the Aircraft hereunder for any reason whatsoever, and notwithstanding cessation of business of such Indemnitee or Tax Indemnitee, dissolution of such Indemnitee, Tax Indemnitee or Lessee, any change in the constitution of such Indemnitee, Tax Indemnitee or Lessee, any transfer or assignment by an Indemnitee or Tax Indemnitee of its rights in the Aircraft or its interest hereunder (subject to the terms of Clauses 18.2 and 19.2(b)(ii)), or any other fact, event or circumstance of any kind whatsoever, whether similar to any of the foregoing or not.

18.10 Forms . Each Tax Indemnitee agrees to furnish from time to time to Lessee or to such other person as Lessee may designate, at Lessee’s request and expense, such duly executed and properly completed forms as such Tax Indemnitee may be permitted and legally able to deliver and as may be necessary or appropriate in order to claim any reduction of, or exemption from any Tax which Lessee may be required to indemnify against hereunder, unless such Tax Indemnitee determines that furnishing such forms may have a material adverse effect on the business or operations of such Tax Indemnitee.

18.11 Non-Parties . By accepting the benefits and rights of the Tax indemnification provisions of this Clause 18, except as expressly provided herein, each Tax Indemnitee that is not a party hereto agrees to be bound by the limits, duties and obligations imposed on Tax Indemnitees pursuant to this Clause 18 as a precondition to such indemnification.

CLAUSE 19. FURTHER PROVISIONS .

19.1 Nature of Lessee’s Obligations . All obligations of Lessee under this Agreement shall constitute conditions, and the time for the performance of such conditions shall be of the essence (without prejudice to the grace periods granted hereunder).

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19.2 Benefit of Agreement .

(a) Lessor Transfer . Lessor may at its own expense assign or transfer the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents.

(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.

(c) Lessee Cooperation; Release . Lessee shall upon request from Lessor and at the expense of Lessor cooperate in effecting any assignment or transfer referred to in paragraphs (a), (b) and (c) above and will execute any agreements or other instruments (including, without limitation, any supplement or amendment to or novation of this Agreement) and promptly (in accordance with the Cape Town Convention and the International Registry) provide an electronic consent to any registration or release of any Lien on the International Registry that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security

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Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.

Subject to mutual agreement between the parties as to schedule pursuant to the terms and conditions of this Agreement, Lessee will, consistent with its operational requirements, make the Aircraft and the Aircraft Documents available for inspection by any potential transferee or assignee of Lessor; provided that arrangements for such inspection are made through Lessor and that such potential transferee or assignee shall be accompanied by Lessor during such inspection.

19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.

19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .

(a) The rights of all parties under this Agreement are cumulative, may be exercised as often as the relevant party considers appropriate and are in addition to its rights under the general law. The rights of all parties against the other or in relation to the Aircraft (whether arising under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.

(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.

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may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.

(d) All documents delivered to Lessor or required to be delivered pursuant to this Agreement shall be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement or any document delivered hereunder and any other version in any other language, the English version will prevail.

19.5 Delegation . Lessor may delegate to any person or persons all or any of the rights, powers or discretions vested in it by this Agreement and any such delegation may be made upon such terms and conditions as Lessor in its absolute discretion thinks fit.

19.6 Evidence of Indebtedness . Save where expressly otherwise provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any amount payable under this Agreement shall contain reasonable details of the calculation of such rate or, as the case may be, amount and, if appropriate, the circumstances giving rise thereto and shall, in the absence of manifest error, be conclusive and binding on Lessee.

19.7 Applications of Moneys . If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply such sum to Rent, interest, fees or any other amount due under this Agreement in such proportions and order and generally in such manner as Lessor shall determine.

19.8 Notices . Any notice or communication under or in connection with this Agreement shall be in English and in writing and shall be delivered personally or sent by a recognized international courier service, courier fee prepaid or certified, registered or express mail, postage prepaid to the respective addresses given below or such other address as the recipient may have notified to the sender in writing. Notices or communications shall be deemed received:

(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:

to Lessor at:

Wells Fargo Bank Northwest, National Association

299 South Main Street, 12 ^th Floor

MAC: U1228-120

Salt Lake City, UT 84111


Telephone:		(801) 246-5630
Attention:		Corporate Trust Services

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with a copy to:

JSA Aircraft 4798, LLC

c/o Jackson Square Aviation, LLC

559 Pacific Avenue

San Francisco, CA 94133


Telephone:		(415) 821-8300
Attention:		General Counsel

to Lessee at:

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)

Prolongación Paseo de la Reforma 490, Piso 1

Col. Santa Fe Peña Blanca

01210, México, D.F.


Telephone:		(52 55) 5261-6400
Attention:		General Counsel

19.9 Invalidity of any Provision . If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

19.10 Lessor’s Right to Remedy . If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such failure as an Event of Default, upon notice to Lessee (unless notice is prohibited by law) effect compliance on behalf of Lessee, whereupon Lessee shall indemnify Lessor in respect of any amount thereby expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith.

19.11 Entire Agreement . The Operative Documents constitute the entire agreement between the parties hereto in relation to the leasing of the Aircraft by Lessor to Lessee, and supersede all previous proposals, agreements and other written and oral communications in relation thereto.

19.12 Governing Law . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).

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The foregoing election of the laws of the state of New York is without prejudice to the right of Lessor to apply the laws of the Federal District of Mexico to any repossession or other enforcement of rights under the Lease while the aircraft is located in Mexico.

This Agreement, together with all exhibits and attachments are being executed by the parties in the presence of a notary public in Mexico, and such notary shall certify this agreement as a public document and to be attached with the capacity to be enforced through an executive commercial process in accordance with Mexican law, as set forth in the Commercial Code.

19.13 Jurisdiction; Service of Process; Inconvenient Forum.

Each party hereby irrevocably consents that any legal action or proceeding against it or any of its assets with respect to this Agreement may be brought in any court of the State of New York or any Federal court of the United States of America located in the Borough of Manhattan, New York, New York, United States of America (and all related appellate courts), in the courts of the Federal District of Mexico or in the courts of any other jurisdiction where the Aircraft may be located. By execution and delivery of this Lease, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby irrevocably waives its rights to bring an action or commence a proceeding on this Agreement in any other jurisdiction to which it may be entitled by virtue of its present or future domicile. As a form of alternative dispute resolution, Lessor may require that Lessee execute a transaction agreement before the Centre of Alternative Justice of the Superior Tribunal of Justice of the Federal District of Mexico, upon terms that shall be satisfactory to Lessor.

Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in the State of New York and the Supreme Court of the state of New York (and all related appellate courts), in the Federal District of Mexico or in any other jurisdiction where the Aircraft may be located has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or other proceeding, any

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claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such suit, action or other proceeding is brought in an inconvenient forum, that the venue of such suit, action or other proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.

Each party hereby additionally agrees that the courts of the place in which the Registrar (as defined in the Cape Town Convention) has its centre of administration shall have exclusive jurisdiction to award damages or make orders against the Registrar.

19.14 Waiver of Jury Trial . EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. The scope of the above waiver and agreement is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.

19.15 Lease for U.S. Federal Income Tax Law Purposes . Lessee and Lessor and the other parties hereto agree that this Agreement is, and shall be treated as, a lease for U.S. Federal and state income tax purposes in relation to the Aircraft and agree that it is their intention that this Lease be treated as a “Lease” under the UCC and not a “security interest” thereunder. The execution of this Agreement by the parties hereto constitutes the authorization by Lessee for Lessor to file such UCC-1 financing statements under Article 9 of the UCC as Lessor reasonably deems necessary or desirable to protect the interest of Lessor hereunder.

19.16 Confidentiality .

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within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.

(b) Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein shall not apply to the U.S. federal tax structure or U.S. federal tax treatment of the underlying transaction, and each party thereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the US federal tax structure and U.S. federal tax treatment of the transaction. The preceding sentence is intended to cause the transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provisions) of the Treasury Regulations promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.

[Remainder of Page Intentionally Left Blank; Signature Page Follows.]

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [4798] to be executed as of the date first above written.


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

By:		/s/ Mario E. Geyne Pliego
Name:		Mario E. Geyne Pliego
Title:		Financial and Fleet Planning Director

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

By:		/s/ Alejandra M. Llopis Loza
Name:		Alejandra M. Llopis Loza
Title:		Attorney in Fact

COUNTERPART NO. OF 6 SERIALLY NUMBERED, MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS LEASE CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE IN THE UNITED STATES OR ANY CORRESPONDING LAW IN ANY OTHER JURISDICTION, NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HERETO OTHER THAN COUNTERPART NO. 1.

-Signature Page-

Aircraft Lease Agreement, msn. 4798

CONFIDENTIAL TREATMENT REQUESTED

SCHEDULE 1

AIRCRAFT DESCRIPTION

Aircraft Manufacturer, Model and Series: Airbus A320-200 Aircraft

Manufacturer’s Serial Number: 4798

Engine Manufacturer and Model: IAE International Aero V2527E-A5 Select One (or better)

Engine Serial Numbers: As specified in the Technical Acceptance Certificate.

Auxiliary Power Unit Manufacturer: *****

Auxiliary Power Unit Serial Number: As specified in the Technical Acceptance Certificate.

Landing Gear Part Numbers: *****

Landing Gear Serial Numbers: As specified in the Technical Acceptance Certificate.

Date of Manufacture: July, 2011

Seating Configuration: 174 Economy Class


Weights & Capacity		Tonnes

Maximum Take Off Weight		*****
Maximum Landing Weight		*****
Maximum Zero Fuel Weight		*****

Schedule 1-1

SCHEDULE 1A

AIRCRAFT DOCUMENTS

The following documentation and information is part of the Aircraft, and is the property of the Lessor. The documentation shall be in English, complete, current, accurate and include the latest revisions, in good condition, readable and capable of being reproduced using standard reproduction processes. All documentation shall have the necessary stamps, endorsements, certifications and signatures where appropriate.

Bulk storage media (microfilm, CD, DVD) shall be in an industry standard format, requiring no proprietary or “fee added” software to access. One set of any such bulk storage media or one set of paper documentation shall be provided.

All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.

1)	Certificates

Certificate of Airworthiness;

Certificate of Registration;

Aircraft De-Registration Confirmation (if applicable);

Export Certificate of Airworthiness issued by the last country of registry (if applicable);

Noise Limitation Certificate (AFM page) (if applicable); and

Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:

Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;

ii)

Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;

iii)

Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;

iv)

Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;

Carpets;

vi)

Curtains;

vii)

Interior Surfaces (if refurbished); and

2)	Manuals

Reference Regulatory Agency approved Airplane Flight Manual;

Weight and Balance Control and Cargo Loading Manual and Supplements;

Operations Manual (Manufacturer’s generic);

Quick Reference Handbook (Manufacturer’s generic);

Schedule 1A-1

Structural Repair Manual;

Aircraft Maintenance Manual;

Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:

Galleys;

ii)

Coffee Makers, Ovens, Hot Jugs and other galley equipment;

iii)

Lavatories;

iv)

Toilet Assemblies;

Closets;

vi)

Class Dividers;

vii)

Passenger Seats;

Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);

Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;

Aircraft Wiring Diagrams;

Engine shop manual and IPC;

APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);

Fault Isolation Manual, if applicable;

Schematics Manual, if applicable;

Summary of Lessee’s Maintenance Program;

List of Certification Maintenance Requirements;

Master Minimum Equipment List;

Configuration Deviation List; and

Fault Reporting Manual, if applicable.

3)	Airworthiness Directives Documentation

The Aircraft shall have all records associated with A.D. compliance:

A complete and current applicable A.D. status list of the Airframe and each appliance, Engine and APU Airworthiness Directive applicable to the Aircraft. This list shall include, but not be limited to:

(1)

A.D. number and revision number;

(2)

A.D. title;

(3)

Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;

(4)

Engineering documentation reference;

(5)

Manufacturer’s Service Bulletin reference and cross-references where appropriate;

(6)

Specify terminated or repetitive status;

(7)

Date of initial accomplishment;

(8)

Date of last maintenance accomplishment, if repetitive;

(9)

Name and serial number of the internal maintenance form used to document accomplishment, if applicable;

(10)

The means by which compliance was accomplished (e.g., modified, repaired, inspected);

(11)

Details of any alternate means of compliance, including references, intervals, and applicability;

Schedule 1A-2

The list shall be typed, certified and signed by an authorized quality assurance representative of last operator at Delivery or of Lessee at Redelivery, and countersigned by Lessee at Delivery or by Lessor at Redelivery;

Legible copies of the dirty fingerprint work card completion documents that accomplish each A.D. If the A.D. is a repetitive inspection, documentation of the last accomplishment is sufficient. These documents must have date of accomplishment, signature of a certified mechanic and/or inspector, and/or the mechanics/inspector’s certificate number or repair station number of the mechanic accomplishing the work. The document must reference the A.D. number and the operator’s internal maintenance form used to document accomplishment of the A.D;

Exemptions or deviations granted by the Aviation Authority (or other applicable civil aviation authority with jurisdiction over the Aircraft) on A.D. compliance, including copy of exemption request; and

Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.

4)	Engineering Documentation

A current list of Engine and APU Service Bulletins, Engineering Orders, major repairs and Supplemental Type Certificates accomplished on each Engine and the APU. A current list of Airframe Engineering Orders, major repairs and Supplemental Type Certificates accomplished on the Airframe. For appliances, a current list of A.D. related Service Bulletins, major repairs, Supplemental Type Certificates and Engineering Orders are required;

Legible copies of the detailed dirty fingerprint work card accomplishment documentation for each Airframe, appliance, Engine and APU Service Bulletin, Engineering Order, major repair and Supplemental Type Certificate accomplished on the Aircraft, each Engine and the APU, to include the following:

SB number and revision number;

ii)

SB title;

iii)

Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;

iv)

Engineering documentation reference;

Manufacturer’s Service Bulletin reference and cross-references where appropriate;

vi)

Specify terminated or repetitive status;

vii)

Date of accomplishment of each portion of such engineering document;

viii)

Date of last maintenance accomplishment, if repetitive;

Schedule 1A-3

ix)

Name and serial number of the internal maintenance form used to document accomplishment, if applicable;

Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);

FAA or EASA approvals (DER Form 8110-3, Form 8100-9 or EASA Part 21 approval sheet, if applicable) for modifications or alterations not covered by manufacturer’s Service Bulletins (including appliances, if applicable);

A current copy of all Engineering documentation related to all Aircraft alterations, repairs and configuration changes. This shall include documentation for work done by the previous owner(s) and operators(s), the manufacturer or any vendor;

Data packages covering all designed repairs or alterations that do not have manufacturer approval, including the submittal to the FAA or EASA for an STC or EASA Part 21 approval sheet, if applicable. The data packages shall include the following:

engineering orders;

ii)

drawings;

iii)

parts lists;

iv)

installation documentation;

engineering analysis as submitted to obtain the STC approval;

vi)

all manual supplements (MM, IPC, WD, AFM);

vii)

maintenance program supplements;

viii)

any and all reference documents referenced by documents contained in this section 4(e);

Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and

Digital Flight Data Recorder System technical description

5)	Aircraft Maintenance Status Summaries

Certified current Time in Service (Flight Hours & Cycles);

Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;

Certified status of structural tasks, including SSI (including last accomplished and next due);

Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;

Certified current status for all life limited parts and hard time components for the Airframe, Landing Gears, Engines and APU, including back-to-birth history for all Landing Gear and Engine life limited parts and, to the extent any Engine life limited parts (“Engine LLPs”) have been used in higher rated engines, a summary of the Engine Flight Hours and Engine Cycles consumed on each such Engine LLP by use on such higher rated engines(s);

Schedule 1A-4

Certified listing of Aircraft, Landing Gear, Engine and APU components status by P/N – S/N – Description Position – TSI – TSO – TSN, CSI – CSO – CSN, Total time, Total Cycles, next Due Time, including explanations of abbreviations;

Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;

List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and

Declaration of Aircraft Accident/Incident Report and major repairs, if any.

6)	Aircraft Maintenance Records

Aircraft maintenance log from the past 12 months;

Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;

A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);

C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);

Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);

Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;

Last Weight & Balance Report including Schedule;

Compass Swing Report;

Last Test Flight Report;

Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;

Service Difficulty Reports (if any);

Aircraft Historical Log;

Last Flight Data Recorder read-out;

Weighing reports; and

Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.

7)	Configuration Status

FAA or EASA approved and certified LOPA;

Galley Drawings;

Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;

Inventory Listing of Avionics installed units;

Schedule 1A-5

Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;

List of applicable STC’s;

Aircraft Detail Specification;

Aircraft Inspection Record;

Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and

Electrical Load Analysis documents and data.

8)	Manufacturer Historical Records at New Delivery

Copy of EASA Form 52 Aircraft Statement of Conformity;

Manufacturer’s AD Report;

Manufacturer’s Inspection Report, Initial Equipment list;

Manufacturer’s repair/alteration report or statement that no such report was produced;

Manufacturer’s SB Report;

Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and

Rigging document.

9)	Engine Records

Engine log book or Engine Data Submittal;

Current Disk Sheet (LLP Sheet) signed and certified;

Manufacturer Delivery Documents;

Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;

Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;

On Wing Repair records;

Engine Log Book/ Master Records of Installation/Removals;

Last Borescope Report, including video if available;

Test Cell Run Report;

Certified Statement that Engines are not involved in an accident;

Certified “On-Watch” statement;

List of “On-Watch Items” items requiring repetitive inspections;

List of repetitive inspections that are not required by AD;

List of technical variances or maintenance requirements unique to the particular Engine;

Engine Trend Monitoring data for the last 12 months of operation;

Last engine run and power assurance report;

Schedule 1A-6

of each LLP in respect of each Engine or module where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;

Each LLP will have a signed and certified cover page including engine or module total Flight Hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable Engine or module;

Engine manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the Engine Manufacturer’s Engine Manual shop limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:

Approval form;

ii)

Complete description of the discrepancy;

iii)

Supporting analysis and documentation; and

Engine manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the Engine Manufacturer’s Engine Manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:

Approval form;

ii)

Complete description of repair;

iii)

Supporting analysis and documentation.

10)

APU

Certified Statement on Status of APU;

In house modifications (if applicable);

Approved Release to Service Certification for installed units;

APU Log Book/ Master Record of Installation/ Removals;

APU Shop Visit Reports & reason for removal, for all APU shop visits;

Dirty finger print shop work cards and material data sheets for all APU shop visits;

Statement of APU hours to Aircraft Flying hours (if applicable);

APU Borescope Report;

Last Test Run Report;

All Life Limited Parts (LLPs) will have complete life traceability of time consumed (Cycles and/or Flight Hours as applicable) since new. Such traceability shall include historical removal and installation documentation of each LLP in respect of each APU where such LLP had been installed and where time has been consumed. Each removal and installation document will evidence LLP total Flight Hours and LLP total Cycles accumulated in each Engine or module;

Schedule 1A-7

Each LLP will have a signed and certified cover page including engine or module total hours, total Cycles, part total Flight Hours, total Cycles and date for each removal and installation depicting the life of the part since new. Notwithstanding, any LLPs replaced during the term of the lease will have the most recent FAA 8130-3 tag or JAA Form 1, as applicable, used to install such LLP into the applicable APU;

APU manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of the APU manufacturer’s APU shop manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:

Approval form;

ii)

Complete description of the discrepancy;

iii)

Supporting analysis and documentation;

APU manufacturer’s or FAA or EASA approved data shall be provided for any repairs not in accordance with the APU manufacturer’s APU shop manual that documents approval for unlimited continued service, without time limitations for removal, repair or replacement, or have any special or distinct inspection requirements. The data shall include:

Approval form;

ii)

Complete description of repair;

iii)

Supporting analysis and documentation; and

Current disk sheet (LLP) signed and certified, if applicable.

11)

Components

FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;

FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;

Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;

Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.

12)

Landing Gear

Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;

Last shop visit report; and

Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;

Schedule 1A-8

13)

Damage and Repairs

Manufacturer’s or FAA or EASA approved data shall be provided for any discrepancies outside of Manufacturer’s Structural Repair Manual limits or applicable Maintenance Manual limits that documents approval for unlimited continued service, without time limitations for removal, repair or replacement. There shall be no special or distinct inspection requirements;

All repairs will be in accordance with the Manufacturer’s Maintenance Manual and Manufacturer’s Structural Repair Manual, or will have Manufacturer’s or FAA or EASA approved data. Time limitations for repair will coincide with the 6Y/4C-Check or the 12Y/8C-Check.

All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;

A repair and dent map shall be provided which includes the following:

Drawing or description of the location, type and form of the repair;

ii)

Details of the repair including dimensions of the damage, location, copies of the SRM if referenced, Form 8110-3, Form 8100-9 or EASA Form-1, material utilized in the repair, DER paperwork, and any engineering data utilized;

iii)

A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.

14)

Software

A certified listing of onboard loadable software and databases to include the following:

ATA chapter;

ii)

nomenclature;

iii)

part number;

iv)

revision date;

expiration date; and

Procedures for obtaining downloadable software from the internet, if applicable.

15)

Electronic Format

Notwithstanding any terms of this Schedule 1A to the contrary (including without limitation, any references to “dirty fingerprint” records), Lessee may maintain all Aircraft Documents (or any subset thereof) in electronic format; provided that Lessee shall send to Lessor all hard copies of all Aircraft Documents.

Schedule 1A-9

SCHEDULE 2

LEASE SUPPLEMENT

THIS LEASE SUPPLEMENT [ MSN ], dated [ ], 20 , between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“Lessee”).

Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ MSN ] dated as of , 2011 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.

NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:

1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-200 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:

Airframe: FAA Registration Number N , Manufacturer’s Serial No. ; and

Engines: Two IAE International Aero V2527E-A5 Select One (or better) engines installed thereon bearing Engine Manufacturer’s Serial Numbers and .

2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is $ .

3. Lessee hereby confirms to Lessor that Lessee has accepted the Delivered Aircraft and Engines for all purposes hereof and of the Lease, including its being airworthy, in accordance with specifications, in good working order and repair and without defect in condition, design, operation or fitness for use, whether or not discoverable by Lessee as of the date hereof.

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.

Schedule 2-1

5. THIS LEASE SUPPLEMENT IS BEING DELIVERED IN AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

6. This Lease Supplement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.


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

By:
		Name:
		Title:

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

By:
		Name:
		Title:

By:
		Name:
		Title:

Schedule 2-2

SCHEDULE 3

CERTIFICATE

I, the undersigned, of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (d/b/a VOLARIS) (“ Lessee ”), a corporation organized and existing under the laws of Mexico DO HEREBY CERTIFY that:

1. This Certificate is furnished in accordance with the Aircraft Lease Agreement dated as of [ ] (the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement and Lessee, relating to that certain Airbus A320-200 Aircraft, manufacturer’s serial number (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.

2. The persons named below have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions below set opposite their names and the signatures set opposite their names are their genuine signatures.


Name	Office	Signature

3. Attached hereto as Exhibit A is a copy of the certificate of incorporation and by-laws of Lessee together with all amendments thereto adopted through the date hereof.

4. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.

5. The representations and warranties of Lessee under the Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.

6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.

Schedule 3-1

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


By:
		Name:
		Title:

Schedule 3-2

I, the undersigned, of Lessee, DO HEREBY CERTIFY that is a duly elected and qualified of Lessee and the signature above is his genuine signature.

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


By:
Name:
Title:

Schedule 3-3

SCHEDULE 4

REDELIVERY CONDITIONS

At the time of its redelivery to Lessor under the Agreement the Aircraft shall, subject to fair wear and tear in accordance with limits under the Maintenance Program, comply with the following conditions:

General Condition

(a)

The Aircraft shall:

(i)

be clean by international commercial airline standards;

(ii)

have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;

(iii)

Lessee will return the Aircraft to Lessor in as good condition as when delivered, reasonable wear and tear from commercial passenger operations excepted, and ready for flight and with the same equipment, components and systems as at the commencement of this Lease, as substituted, modified or replaced in accordance with the Agreement, which equipment, components and systems shall be fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the Aviation Authority, with all discrepancies and deferred maintenance items cleared on a terminating action basis (where terminating action is available) provided that those items that can be deferred to the next “SC Check” need not be completed on a terminating action basis, if the return check is not an “SC Check”, and the parties shall agree, on a fair basis, upon the reasonable cost of completing such items during the next heavy maintenance check, for which LESSEE will compensate LESSOR upon return of the Aircraft).

•

“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.

(iv)

There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.

(v)

There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.

Schedule 4-1

(vi)

The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.

(vii)

A full video borescope inspection of the Engines (of areas borescoped on engines on wing) and APU shall be performed at Lessee’s expense with Lessor’s representative present. Lessee shall provide evidence satisfactory to Lessor reflecting the correction of any discrepancies from the guidelines set out by the Engine manufacturer, APU manufacturer or AMM, as applicable, which may be discovered during such inspection. Lessee will provide Lessor with timely written notice of when Lessee intends to perform such borescope inspection. In a case where an Engine or APU does not meet the on wing operating criteria as required by the AMM and if requested by Lessor, a serviceable Replacement Engine or APU which does so comply shall be provided and title thereto transferred to Lessor. All repairs shall have been performed in accordance with the Engine Manufacturer’s manual.

(viii)

If the Engine historical and maintenance records and/or trend monitoring data indicate a rate of acceleration in performance deterioration of any Engine which is higher than normal based on Lessee’s maintenance experience in operating such engines, Lessee shall, prior to return, correct or cause to be corrected such conditions which are determined to have exceeded AMM tolerances or otherwise be causing such performance deterioration in a manner that allows operation of such Engine for the remaining time as set forth below.

(ix)

If the Aircraft is so equipped, the cargo loading system shall be demonstrated to be fully functional. Cargo linings shall be free of holes, dents, gouges. Cargo nets will be in good condition with no tears or frayed areas.

(x)

The exterior of the fuselage, vertical stabilizer and Engine cowlings shall have been sanded and freshly painted white and all required markings applied in accordance with the Manufacturer’s then-applicable painting standards and procedures. All other painted exterior surfaces will have been touched up as necessary. Lessee shall be responsible at redelivery for permanent rectification of any scribe marks.

Schedule 4-2

(xi)

The thrust reversers, nacelles and inlet nose cowlings shall have been removed for detailed internal and external inspection of all structures, acoustical coverings, attachment points and faying surfaces for damage, corrosion and de-lamination immediately prior to redelivery and all damage, corrosion and de-lamination shall have been repaired in accordance with the manufacturer’s repair manual.

(xii)

Lessee shall carry out on the Aircraft the final completion of all deferred maintenance items, pilot log-book reports and service bulletins as required, and shall complete, on a terminating action basis (if such option is available), all AD’s issued by the Aviation Authority which require termination on or before the Expiry Date.

•

In the event that Lessee has received the necessary no-charge modification kit with respect to any vendor and/or manufacturer’s service bulletin modification, and to the extent that any such kit is appropriate for the Aircraft and has not been installed prior to the Termination Date (other than as a consequence of a Total Loss), such kit shall be furnished free of charge to Lessor and be on-board the Aircraft as cargo and title to such kit shall be deemed to have passed to Lessor upon Lessee’s receipt thereof; but Lessor will reimburse Lessee for its actual out-of-pocket costs, if any, for such kit if the kit was not purchased by Lessee as part of its implementation of a service bulletin or other mandatory requirement on its fleet of aircraft of the same type as the Aircraft.

(xiii)

Any ADs which must be complied with within 90 days following the Expiry Date must also be complied with by Lessee, but at Lessor’s cost. Such compliance by Lessee shall not be required (i) should Lessee be unable to acquire, after using its best efforts to do so, the items, material, parts or components, necessary to accomplish such compliance before the Expiry Date, or (ii) should such compliance be waived in writing by Lessor, Lessor will pay Lessee for the ADs performed at Lessor’s cost, if any, upon execution of the Return Acceptance Receipt.

(xiv)

There will be no temporary, time limited or interim repairs on the Aircraft. There shall be no external doubler repairs on the Aircraft unless the Manufacturer specifically recommends such repair exclusive of other options.

Schedule 4-3

(xv)

Redelivery will be subject to satisfactory completion of an acceptance flight based on the Manufacturer’s acceptance flight profile for used Aircraft. The duration of such flight shall be no more than two (2) Flight Hours. Lessor’s representatives and representatives of the next operator (subject to applicable laws and regulatory and insurance requirements) shall be entitled to observe.

Check and Part Lives

Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:

Airframe:

(i)

The next consecutive full and complete “C” Check, “6 Year” Check or “12 Year” (12Y/8C) Check, as may be applicable, that would be due and owing under Lessee’s Aviation Authority approved Maintenance Program (including all lesser checks required to be performed in conjunction with the applicable check) and the hard time tasks of the Maintenance Program sufficient to clear the Aircraft for a period equal to *****

(ii)

The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****

Engines:

At the date of redelivery, no individual Engine shall ***** A maximum power assurance run will be carried out on each Engine following completion of the redelivery check. Following the acceptance flight, a video recorded borescope of all modules in each of the Engines will be completed by an agency selected by Lessor at Lessor’s cost.

APU:

The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 ^st of each year thereafter.

Landing Gear:

(i)

The Landing Gear shall ***** In the event that Lessee must replace the Landing Gear in order to meet these requirements, Lessee agrees that such replacement landing gear will have at least the same remaining life as such Landing Gear’s full allotment of time remaining to operate until overhaul.

(ii)

The Landing Gear brakes and tires will each have an average of at least ***** percent ***** service life remaining before their removal with no individual brake or tire having less than ***** percent ***** service life remaining.

Schedule 4-4

Components:

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

Schedule 4-5

SCHEDULE 5

Monthly Maintenance Status Report


Aircraft Reg				Report Data From

Aircraft S/N				Report Data To

Type

Total Flight Hours				FH Utilization for Period

Total Cycles				FC Utilization for Period

Installed Equipment at Delivery

( Engines, APU, Landing Gear )

Engines/APU

Landing Gear

Engine 1

Engine 2

APU

Left

Nose

Right

Type/Model

Part Number

S/N

TSN

CSN

Currently Installed Equipment

( Engines, APU, Landing Gear )

Engines/APU

Landing Gear

Engine 1

Engine 2

APU

Left

Nose

Right

Type/Model

Part Number

S/N

TSN

CSN

TSO

CSO

DSO

LLP First Limiter Remaining (cycles)

Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED

NEXT CHECK DUE

CHECK TYPE

CHECK

TOTAL
HRS

TOTAL
CYC

DATE

CHECK TYPE

CHECK

TOTAL
HRS

TOTAL
CYC

DATE

A-Check

C-Check

D-Check

TECHNICAL ACTIVITY DURING PERIOD

1.	Engine, APU and Landing Gears – details of removal activity


S/N OFF	S/N ON	REASON / CAUSE

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

DEFERRAL LIST

3.	See following pages for current open deferrals report.

AIRCRAFT ACCIDENT/INCIDENT REPORT

4.	Description of any aircraft accident/incident since last reporting period:


Date	Station	Details
None

AD STATUS REPORT

5.	See following pages for current AD status report.

Schedule 5-2

AIRCRAFT STATUS CERTIFICATION

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


Signed:


(Lessee)
Title:

Return by e-mail to : utilization@jacksonsquareaviation.com

Schedule 5-3

SCHEDULE 6

FORM OF QUIET ENJOYMENT LETTER

From: [Beneficiary][Security Trustee], as Security Trustee (“Security Trustee”)

To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (d/b/a Volaris) (“ Lessee ”)

Dated: [ ]

Re: Aircraft Lease Agreement [MSN] dated as of [ ] 2011 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-200 aircraft bearing manufacturer’s serial number [MSN] (as more particularly described in the Lease, the “ Aircraft ”)

Ladies and Gentlemen:

All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.

1. We hereby covenant and undertake to Lessee that during the Term, so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the use and possession of the Aircraft without interference by us or any person lawfully claiming by or through us.

2. THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

Please countersign this letter in order to confirm your agreement to the arrangements contained herein.


Very truly yours,
[Beneficiary][Security Trustee]

By
Name:
Title:

Schedule 6-1

Agreed and Accepted :

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


By:
Name:
Title:

By:
Name:
Title:

Schedule 6-2

SCHEDULE 7

TECHNICAL ACCEPTANCE CERTIFICATE

TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement

DATE:

Aircraft Lease Agreement [ MSN ] dated as of , 2011 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement and relating to Airbus A320-200 Aircraft, manufacturer’s serial number (the “Aircraft”)

Terms used in this Certificate bear the meanings given to such terms in the Lease.

Lessee confirms that as at hours on , 20 being the Delivery Date at :

(i)

the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;

(ii)

the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;

(iii)

the Basic Rent Amount is US$ ;

(iv)

the manufacturer’s serial numbers of the installed Engines are and ;

(v)

the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:

(a)

Airframe Serial No: :


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

Schedule 7-1

(b)

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


Position	1	2
Serial No:	[ ]	[ ]

Total Flight Hours:
Total Cycles:

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

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

Cycles remaining to next expected Engine Performance Restoration

(c)

APU Model:


Serial No:

Total [Flight]/[APU] Hours:

Total Cycles:

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

(d)

Landing Gear:


Position	LH Main	Nose	RH Main

Model:

Serial No:

Total Flight Hours:

Total Cycles:

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

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

Schedule 7-2

(e)

Fuel on Board:

(f)

Status of components or Parts with time/cycle and calendar limits (see attached sheet); and

(g)

All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;

(vi)

the Lease is in full force and effect, Lessor has fully, duly and timely performed all of its obligations of every kind or nature thereunder and Lessee has no claims, offsets, deductions, set-off or defenses of any kind or nature in connection with the Lease;

(vii)

the Aircraft is insured in accordance with the Lease;

(viii)

the representations and warranties made by Lessee in Clause 2 of the Lease and the representations and warranties made by Lessee contained in the other Lessee’s Documents are, by reference to the facts and circumstances existing today, true and accurate as if made on the date hereof;

(ix)

no Event of Default has occurred and is continuing;

(x)

attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;

(xi)

attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and

(xii)

attached is a schedule listing the Aircraft Manuals.




By:

Name:

Title:

Schedule 7-3

CONFIDENTIAL TREATMENT REQUESTED

SCHEDULE 8

PART A

LESSEE FURNISHED EQUIPMENT

July 2011

SCN

A320-200 STANDARD SPECIFICATION Ref. Issue 5.1


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

Schedule 8-1

CONFIDENTIAL TREATMENT REQUESTED


*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
	Air conditioning
*****	*****	*****
*****	*****	*****
*****	*****	*****
ATA 22	Auto Flight
*****	*****	*****
*****	*****	*****
ATA 23	Communications
*****	*****	*****
*****	*****	*****
*****	*****	*****	*****
*****	*****	*****

Schedule 8-2

CONFIDENTIAL TREATMENT REQUESTED


*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
ATA 25	Cabin & cockpit
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****

Schedule 8-3

CONFIDENTIAL TREATMENT REQUESTED


*****	*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
*****	*****	*****
ATA 29	Hydraulic Power
*****	*****	*****
*****	*****	*****
ATA 31	Indicating/Recording
*****	*****	*****
*****	*****	*****
*****	*****	*****
ATA 32	Landing gear
*****	*****	*****

Schedule 8-4

CONFIDENTIAL TREATMENT REQUESTED


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

Schedule 8-5

CONFIDENTIAL TREATMENT REQUESTED


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

SSBFE


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


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

Schedule 8-6

CONFIDENTIAL TREATMENT REQUESTED


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

BFE

Airline:

CONCESIONARIA VUELA COMPANIA DE AVIACION

Contractual

Delivery

Date

Delivery

Date

Jul-11

Operator:

CONCESIONARIA VUELA COMPANIA DE AVIACION

MSN

4798

A/C Type:

320-200

Issue

ATA/Item

Description

Manufacturer

P/N

Unit

A/C

Qty

A/C

Qty

*****

Schedule 8-7

CONFIDENTIAL TREATMENT REQUESTED

PART B

IN FLIGHT ENTERTAINMENT


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


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

Schedule 8-8

SCHEDULE 9

LESSEE’S CONDITIONS PRECEDENT

Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:

(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;

(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;

(d) Lessee shall have received from each of Beneficiary and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.

Schedule 9-1

SCHEDULE 10

PERMITTED SUBLESSEES

-Any airline affiliate of Avianca-TACA Ltd.

Schedule 10-1

SCHEDULE 11

IRREVOCABLE POWER OF ATTORNEY


Form of Irrevocable Power of Attorney [THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC] The undersigned, [ ] in its capacity as [ ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated , 2011 (the “Lease”) between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [ ] dated [ ] (the “Lessor”) and the Company with respect to one Airbus A320-200 bearing manufacturer’s serial number [ ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.		Formato de Poder Irrevocable [ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO] El suscrito, en su carácter de [ ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha , 2011 (el “Arrendamiento”) celebrado entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [ ] de fecha [ ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-200 con número de serie del fabricante [ ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.

FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [ ] dated [ ] and JSA AIRCRAFT [ ], LLC(each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Civil Code For the Federal District of the United Mexican States and its concordant articles of the several Codes ruling in the states of the Mexican Republic, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:		PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [ ] de fecha [ ] y JSA AIRCRAFT [ ], LLC (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los términos establecidos en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil para el Distrito Federal de los Estados Unidos Mexicanos y sus artículos concordantes de los diversos Códigos que rigen en los Estados de la República Mexicana, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:

(i) request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America; (ii) to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign; (iii) to request and obtain the removal of the Aircraft from the operation permits of Lessee before the		(i) solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América; (ii) solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera; (iii) solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;

Schedule 11-1


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

For purposes of this power of attorney, the term Aircraft includes: (a) any and all engines installed on the Aircraft or

Schedule 11-2

that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.

SECOND.- This Power of Attorney is granted to be exercised within the Mexican Republic and/or the United States of America according to the Inter-American Convention on the legal regime of Powers of Attorney to be used abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.

THIRD. This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.

FOURTH. Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.

FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.

Para todos los efectos previstos en este poder, el término Aeronave incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que el un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.

SEGUNDA.- Este poder se otorga para ser ejercitado dentro de la República Mexicana y/o los Estados Unidos de América de conformidad con la Convención Interamericana del régimen legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.

TERCERA. Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.

CUARTA. Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar el registro y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil ejecutado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.

QUINTA. La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.

Schedule 11-3

CONFIDENTIAL TREATMENT REQUESTED

ANNEX A

CERTAIN DEFINITIONS AND PAYMENTS

1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:

“ Agreed Value ” means *****

“ Basic Rent Amount ” means ***** such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:

Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.

“ Damage Notification Threshold ” means *****

“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****

“ Discount Rate ” means *****

“ Security Amount ” means at any time the amount equal to *****

2. Maintenance Payments .

Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:

Airframe “SC Checks ”: *****

(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.

ANNEX A-1

CONFIDENTIAL TREATMENT REQUESTED

Engines: (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for each Flight Hour for each of the Engines and shall be allocated to each of the Engine modules. The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:

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

1.0

1.5

2.0

2.5

3.0

3.5

4.0

5% Derate

*****

10% Derate

*****

15% Derate

*****

20% Derate

*****

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

1.0

1.5

2.0

2.5

3.0

3.5

4.0

5% Derate

*****

10% Derate

*****

15% Derate

*****

20% Derate

*****

The above amounts assume an average thrust de-rate of 10%.

(b) LLP’s – ***** per Cycle per Engine. At redelivery, the LLP Maintenance Payments balance shall be adjusted to reflect the then-current LLP catalogue prices and then-current LLP intervals adjusted by a ***** stub life factor.

Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.

APU : US ***** per APU Hour for the APU Heavy Repair.

The Flight Hours and Cycles to calculate the Maintenance Payments shall be provided to Lessor on or prior to the 15 ^th calendar day of each month for the prior month’s utilization. The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 ^st of each year thereafter, with the exception of the Engine LLPs, which shall be escalated in accordance with the then-current OEM LLP catalogue prices.

ANNEX A-2

CONFIDENTIAL TREATMENT REQUESTED

Adjustments to the Maintenance Payments rates will also be made if the Maintenance Program, engine thrust, engine derate, operating environment (Region), and Flight Hour to Cycle ratios or utilization vary from the original assumptions. Such adjustment shall be made on January 1 ^st of each year during the Term and on the redelivery date. Lessor shall notify Lessee of revised Maintenance Payments rates. The rates will be applied retroactively to the previous calendar year. If the new Maintenance Payments rates result in a credit to Lessee, the credit shall be applied against Maintenance Payments payments owed by Lessee for subsequent months of operation. If the adjustment results in amounts owed by Lessee, Lessee shall remit payment within ***** after receipt of Lessor’s invoice.

Subject to Lessor prior approval of each applicable repair workscope, Lessor shall make the applicable Maintenance Payments available to Lessee as a Lessor contribution for the following: (i) the 6Y/4C Check on the Airframe; (ii) the 12Y/8C Check on the Airframe; (iii) APU Heavy Repair(s); (iv) replacement LLPs in an Engine; (v) overhauls of the Landing Gear; and (vi) for Engine Performance Restoration(s).

Repair, overhaul or replacement of thrust reversers and non-modular components, such as QEC (Quick Engine Change), LRU or accessory units are not eligible for reimbursement from Engine Maintenance Payments. Repair, overhaul or replacement of APU accessories or line replaceable units are not eligible for reimbursement from APU Maintenance Payments.

*****

All contributions from the Maintenance Payments shall be reduced by the actual amounts received by Lessee or due to Lessee under any applicable manufacturer’s warranties, guarantees and concessionary adjustments. If, on any occasion, the balance of any funds held in the particular Maintenance Payments account is insufficient to meet a request for contribution in respect of such Maintenance Payments, the shortfall will be Lessee’s responsibility and may not be carried forward or made the subject of any further request for contribution.

If on any occasion following a qualified Maintenance Payments contribution event:

•

The balance of funds held in the applicable 6Y/4C Check, 12Y/8C Check, Landing Gear, and APU Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.

•

The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.

•

The balance of funds held in each (piece-part) Engine LLP account exceeds the amount of the request for contribution applicable per LLP piece-part, the excess amount in such account will be contributed to Lessee.

ANNEX A-3

CONFIDENTIAL TREATMENT REQUESTED

No contribution shall be made from any Maintenance Payments account for any repair, overhaul or inspection caused by foreign object damage (FOD) or any ADs, CNs (Change Notifications) or repair of damage from accidental cause, improper operation, improper maintenance, misuse or abuse. Lessee shall be entitled to claim reimbursement from a manufacturer under the applicable manufacturer warranties.

The workscope and estimated cost of each qualified Maintenance Payments event shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).

If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****

3. Redelivery Financial Adjustments . Upon redelivery of the Aircraft, Lessee shall pay to Lessor a Redelivery Financial Adjustment in the following amounts (for the avoidance of doubt, any amounts owed by Lessee for Redelivery Financial Adjustments shall first be netted from Maintenance Payments (if any) then held by Lessor):

Airframe SC Checks : *****

(b) US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.

Engines : (a) Maintenance Payments for Engine Performance Restoration (not repair) shall be paid for ***** The rate shall be established from the applicable matrix below based on the anticipated Flight Hour to Cycle ratio and region of operation:

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

1.0

1.5

2.0

2.5

3.0

3.5

4.0

5% Derate

*****

10% Derate

*****

15% Derate

*****

20% Derate

*****

ANNEX A-4

CONFIDENTIAL TREATMENT REQUESTED

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

1.0

1.5

2.0

2.5

3.0

3.5

4.0

5% Derate

*****

10% Derate

*****

15% Derate

*****

20% Derate

*****

The above amounts assume an average thrust de-rate of 10%.

(b) For each LLP within each Engine, the product of the Cost Per Cycle of such LLP and the Cycles since new accumulated on such LLP. “Cost Per Cycle” means an amount equal to the then-current LLP catalogue price for such LLP divided by ***** of the then-current Cycle life limit for such LLP.

Landing Gear : The greater of (i) US ***** per Cycle for each Cycle elapsed since overhaul of the set of landing gear (or since new, if never overhauled) and (ii) ***** per month for each month elapsed since overhaul of the set of landing gear (or since new, if never overhauled).

APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.

The above amounts are quoted in January 2011 US dollars and shall be increased by ***** on January 1 ^st of each year thereafter. Adjustments to the Redelivery Financial Adjustment amounts will also be made if the Maintenance Program, engine thrust or engine derate vary from the original assumptions.

The workscope and estimated cost of each event subject to Redelivery Financial Adjustments shall be agreed by Lessor and Lessee prior to the commencement of any work. Lessor or Lessor’s representative(s) shall be entitled to observe such work and shall be provided with copies of pertinent documents (including but not limited to estimated cost of routine and non-routine labor and materials).

4. AD Cost Sharing .

(a) With respect to each AD ***** to be performed by Lessee during the Term, the cost of compliance for which exceeds ***** Lessor shall reimburse Lessee for a portion of such work in accordance with the following formula:

*****

(b) Lessor’s obligation to make any payments under this Clause 4 shall be conditioned upon ***** and receipt by Lessor no later than ***** of invoices and proper documentation ***** in support of the invoices and verifying that *****

ANNEX A-5

Exhibit 10.37

AIRCRAFT LEASE AGREEMENT [5207]

Dated as of June 26, 2012

Between

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual

capacity but solely as owner trustee under the Trust Agreement,

as Lessor,

and

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.,

as Lessee,

Concerning:

Lease of one (1) Airbus A320-233 Aircraft

Manufacturer’s Serial No: 5207

United States Registration Mark N510VL

Two (2) IAE International Aero V2527E-A5 Engines

TABLE OF CONTENTS


		Page
CLAUSE 1.	DEFINITIONS AND INTERPRETATION		1

1.1	Definitions		1
1.2	Interpretation		14

CLAUSE 2.	REPRESENTATIONS AND WARRANTIES		15

2.1	Lessee’s Representations and Warranties		15
2.2	Lessor’s Representations and Warranties		18
2.3	No Prejudice		20

CLAUSE 3.	CONDITIONS PRECEDENT		20

3.1	Lessor’s Conditions Precedent		20
3.2	Waiver		23
3.3	Lessee’s Conditions Precedent		24

CLAUSE 4.	COMMENCEMENT		24

4.1	Term of Leasing		24
4.2	Delivery		24
4.3	Licenses		25
4.4	Quiet Enjoyment; Lessor Party Covenants		25

CLAUSE 5.	DISCLAIMERS		26

5.1	General Disclaimers		26
5.2	Deficiencies and Delays		27
5.3	Repairs and Replacement		27

CLAUSE 6.	RENT AND OTHER PAYMENTS		27

6.1	Rent		27
6.2	Security		28
6.3	Maintenance Payments		28
6.4	Payment Obligations Unconditional		28
6.5	Currency of Payments		29
6.6	Currency Indemnity		29
6.7	Authorizations for Payments		30
6.8	Set-off		30
6.9	Lessor’s Account; Receipt of Payment		30

(i)


		Page
CLAUSE 7.	FEES AND EXPENSES		30

CLAUSE 8.	GENERAL UNDERTAKINGS		31

8.1	Duration		31
8.2	Notice of Event of Default; Certificate		31
8.3	Financial and Other Information		32
8.4	Existence		33
8.5	ERISA		34
8.6	Lessee’s Jurisdiction		34
8.7	Cape Town Convention		34

CLAUSE 9.	OPERATIONAL UNDERTAKINGS		35

9.1	Registration, Title and Nameplates		35
9.2	Liens		38
9.3	Possession and Subleases		38
9.4	Information and Records		40
9.5	Lawful and Safe Operation; Costs of Operation		41
9.6	Right of Inspection		43

CLAUSE 10.	MAINTENANCE AND REPAIR		43

10.1	General		43
10.2	Specific Requirements		44
10.3	Substitution of Parts; Ownership		45
10.4	Pooling of Parts		46
10.5	Permitted Modifications		47

CLAUSE 11.	ENGINES		48

11.1	General Principles		48
11.2	Removal of Engines		49

CLAUSE 12.	TITLE		50

CLAUSE 13.	MANUFACTURER’S WARRANTIES		50

CLAUSE 14.	INSURANCES		50

14.1	Obligation to Insure		50
14.2	Insurance with Respect to the Aircraft		51
14.3	Terms Specific to Hull Insurance		51
14.4	Liability Insurance with Respect to the Aircraft		52
14.5	Provisions Relating to all Insurance		52
14.6	Information		53
14.7	Additional Insurance; No Lien		54
14.8	Failure to Insure		55
14.9	Settlement of Claims		55

(ii)


		Page
14.10	Assignment		55
14.11	Post Termination		56

CLAUSE 15.	LOSS, DAMAGE AND REQUISITION		56

15.1	Total Loss of Aircraft or Airframe		56
15.2	Total Loss of Engine(s)		56
15.3	Other Loss or Damage		58
15.4	Requisition		58

CLAUSE 16.	DEFAULT		58

16.1	Events of Default		58
16.2	Rights and Remedies		61
16.3	Power of Attorney		64
16.4	Mitigation Credit		65

CLAUSE 17.	REDELIVERY		65

17.1	Redelivery		65
17.2	Condition of Aircraft and the Aircraft Documents		65
17.3	Inspection; Corrections; Additional Work		66
17.4	Compliance after Term		68
17.5	Deregistration and Export		68
17.6	Ferry Flight		68
17.7	Storage		69

CLAUSE 18.	INDEMNITIES		69

18.1	General Indemnities		69
18.2	General Tax Indemnity		71
18.3	Notice and Contest Rights		74
18.4	Mitigation		75
18.5	Payments on After-Tax Basis		75
18.6	No Deductions or Withholdings		75
18.7	Tax Benefit		76
18.8	Reports		76
18.9	Continuation of Indemnities		77
18.10	Forms		77
18.11	Non-Parties		77

CLAUSE 19.	FURTHER PROVISIONS		78

19.1	Nature of Lessee’s Obligations		78
19.2	Benefit of Agreement		78
19.3	Further Assurances		79
19.4	Rights Cumulative; Waivers; Variation; Counterparts; Language		79
19.5	Delegation		80
19.6	Evidence of Indebtedness		80
19.7	Applications of Moneys		80

(iii)


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


SCHEDULE 1		AIRCRAFT DESCRIPTION

SCHEDULE 1A		AIRCRAFT DOCUMENTS

SCHEDULE 2		LEASE SUPPLEMENT

SCHEDULE 3		CERTIFICATE

SCHEDULE 4		REDELIVERY CONDITION

SCHEDULE 5		MONTHLY MAINTENANCE STATUS REPORT

SCHEDULE 6		FORM OF QUIET ENJOYMENT LETTER

SCHEDULE 7		TECHNICAL ACCEPTANCE CERTIFICATE

SCHEDULE 8		PART A LESSEE FURNISHED EQUIPMENT

		PART B IN FLIGHT ENTERTAINMENT

SCHEDULE 9		LESSEE’S CONDITIONS PRECEDENT

SCHEDULE 10		[RESERVED]

SCHEDULE 11		IRREVOCABLE POWER OF ATTORNEY

SCHEDULE 12		FORM OF EUROCONTROL LETTER

ANNEX A		CERTAIN DEFINITIONS AND PAYMENTS

(iv)

AIRCRAFT LEASE AGREEMENT [5207 ] dated as of June 26, 2012 between:

(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as owner trustee under the Trust Agreement (as defined below) (“ Lessor ”); and

(2)

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., a company duly organized and existing under the laws of the United Mexican States, having its principal place of business at Antonio Dovali Jaime No. 70, Torre B, Piso 13, Col. Zedec Santa Fe, Delegación Alvaro Obregon, CP 01210, México, D.F. (“ Lessee ”).

IT IS AGREED as follows:

CLAUSE 1. DEFINITIONS AND INTERPRETATION .

1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:

“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.

“ Agreed Value ” shall have the meaning set forth in Annex A.

“ Agreement ” means this Aircraft Lease Agreement [5207] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.

“ Airframe ” means the Aircraft, excluding the Engines.

“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.

“ APU Hour ” means each hour or part thereof that the APU is operated.

“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).

“ Basic Rent Amount ” has the meaning provided in Annex A.

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“ Beneficiary ” means JSA Aircraft Ireland 5207 Limited, a private limited liability company incorporated in Ireland, having its registered address at 70 Sir John Rogerson’s Quay, Dublin, Ireland, its successors and permitted assigns.

“ BFE ” (or “Lessee Furnished Equipment”) means the buyer furnished equipment and components selected by Lessee and included with the Aircraft in accordance with Schedule 8.

“ Bill of Sale ” means the bill of sale issued by the Manufacturer to Owner at Delivery.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Coface ” means Compagnie Francaise d’Assurance pour le Commerce Extérieur.

“ Compliance Date ” shall have the meaning provided in Clause 18.1(b)(i).

“ Controladora ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.

“ Cycle ” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft.

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“ Damage Notification Threshold ” has the meaning provided in Annex A.

“ Default Rate ” has the meaning provided in Annex A.

“ Delivery ” means delivery of the Aircraft by Lessor to Lessee hereunder.

“ Delivery Consent Agreement ” means the consent of the Manufacturer to the Delivery Purchase Agreement Assignment.

“ Delivery Date ” means the date on which Delivery occurs.

“ Delivery Documents ” means (a) the Bill of Sale, (b) the Owner Certificate of Acceptance, (c) the Delivery Purchase Agreement Assignment, and (d) the Delivery Consent Agreement.

“ Delivery Location ” means the Manufacturer’s facilities located in Blagnac, France or Hamburg Germany.

“ Delivery Purchase Agreement Assignment ” means the Delivery Purchase Agreement Assignment to be entered into between Seller and Beneficiary on or about the Delivery Date.

“ ECA Finance Party ” means (i) Crédit Agricole CIB (“CA”), in its capacity as lender, national agent, facility agent and security trustee under the ECA Loan Agreement dated on or about June 27, 2012 relating to the Aircraft, and the transferees, successors and assigns of CA in any such capacity and (ii) ECGD, Coface and Euler Hermes.

“ ECGD ” means The Secretary of State of Her Britannic Majesty’s Government acting by the Export Credits Guarantee Department.

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“ Engine ” means (a) each of the engines of the manufacture and model and having the respective manufacturer’s serial numbers specified in Schedule 1 and all Parts installed in or on such engines at Delivery; (b) any Replacement Engine acquired by Owner and leased to Lessor under the Head Lease and leased to Lessee hereunder pursuant to Clause 15.2 and all Parts installed in or on such engine at the time of such acquisition and lease; and (c) all substituted, renewed and replacement Parts at any particular time installed in or on any of the said engines in accordance with this Agreement; including, in the case of (a) and (b) above, any such engine which, having been removed from the Aircraft, remains the property of Owner pursuant to this Agreement and, in the case of (a), (b) and (c) above, any Parts which, having been removed from any such engine, remain the property of Owner pursuant to this Agreement.

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

“ EU ETS ” means both (a) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC and (b) Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, together with any related, connected or successive law, statute, decree, constitution, regulation, authorization, judgment, injunction or other directive of any Government Entity of the European Union.

“ Euler Hermes ” means Euler Hermes Deutschland A.G.

“ Eurocontrol ” means the European Organisation for the Safety of Air Navigation.

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“Eurocontrol Letter ” means a letter in the form set out in Schedule 12 hereto.

“ Event of Default ” means any of the events referred to in Clause 16.1.

“ Excluded Taxes ” has the meaning ascribed to such term in Clause 18.2 herein.

“ Expiry Date ” means the one hundred thirty-second (132 ^nd ) monthly anniversary of the Delivery Date.

“ Federal Aviation Regulations ” means the regulations promulgated by the FAA pursuant to Title 49, Subtitle VII of the United States Code.

“ Financing Documents ” means all Loan Agreements, Security Documents, Head Leases, swaps and forward interest rate agreements entered into in connection with any Loan Agreement and all other documents from time to time executed by Owner or Lessor or any third party by way of security for, or as a guarantee of the performance by, Owner, Lessor or any Affiliate of Owner or Lessor of its obligations under any Loan Agreement (whether or not such document secures any other obligations as well).

“ Forward Purchase Agreement ” means that certain Forward Purchase Agreement dated 14 April 2011 entered into by and between Seller (as defined therein) and Beneficiary, as purchaser, as the same may be thereafter amended and/or supplemented.

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“ Habitual Base ” means Mexico, or, if the Aircraft is subleased in accordance with Clause 9.3, the principal place of business of the sublessee.

“ Head Lease ” means the lease between Lessor, as lessee, and Owner, as lessor, with respect to the Aircraft.

“ IATA ” means the International Air Transport Association.

“ IDERA ” means the Irrevocable Deregistration and Export Request Authorization executed in favor of the Lessor and in the form annexed as an Annex to the Protocol.

“ IFE ” means the equipment and components listed on Part B of Schedule 8.

“ Indemnitee ” means: each Lessor Party, each Lender and their respective successors and permitted assigns, and the officers, directors, agents, shareholders, partners, members, Affiliates and employees of all of the foregoing.

“ International Interest ” has the meaning given to such term in the Cape Town Convention.

“ International Registry ” means the international registry established pursuant to the Cape Town Convention.

“ JAR ” means the Joint Airworthiness Requirements of the JAA/EASA.

“ JSA ” means Jackson Square Aviation, LLC, a Delaware limited liability company, in its capacity as lease manager.

“ Landing Gear Overhaul ” means all scheduled landing gear maintenance and repair of the nose or main Landing Gear in the nature of overhaul and requiring complete disassembly.

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“ Lender ” means one or more banks or financial institutions or other persons notified in writing by Lessor to Lessee that may from time to time provide financing to Lessor, Owner or an Affiliate of Lessor or Owner in relation to Lessor’s, Owner’s or such Affiliate’s acquisition or continuing ownership of the Aircraft and shall include any person acting as agent or security agent or trustee for one or more Lenders, and any ECA Finance Party.

“ Lessee’s Documents ” means this Agreement, the Technical Acceptance Certificate, the Irrevocable Deregistration Power of Attorney, the IDERA, each assignment of warranties, any confirmation of the assignment of warranties signed by Lessee and the Manufacturer or the Engine manufacturer (including, but not limited to, the confirmation from Manufacturer and the Engine Manufacturer with respect to Lessor’s or Owner’s entitlement to the applicable product support package (including warranties and training for the Aircraft) and all assignable credits (if any) and guarantees applicable to the Aircraft), in respect of the Aircraft, each consent to or acknowledgment of the Security Documents signed by Lessee, each notice, and all notices, consents, certificates, confirmations and other documents from time to time issued or entered into by Lessee pursuant to or in connection with any thereof which contain a statement to effect that the same is a Lessee’s Document.

“ Lessor Party ” means Owner, Lessor, the Beneficiary, and JSA.

“ LFE ” means the Lessee-furnished equipment and components listed on Part A of Schedule 8.

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“ Loan Agreement ” means any agreement from time to time entered into between Beneficiary or any Affiliate of Beneficiary and one or more Lenders providing financing in relation to Lessor’s or Owner’s acquisition or continuing ownership of the Aircraft.

“ Maintenance Payments ” has the meaning provided in Annex A.

“ Maintenance Payments Date ” means the *****

“ Maintenance Planning Document ” means the Manufacturer’s recommended maintenance program for the Aircraft (including the Engine maintenance program) (latest revision).

“ Maintenance Program ” means a maintenance program for the Aircraft approved by the Aviation Authority, in conformity with the Maintenance Planning Document, and which includes requirements for long-term storage during extended periods of non-use of the Aircraft.

“ Manufacturer ” means Airbus, S.A.S.

“ Mexico ” means the United Mexican States.

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“ Mexican Insolvency Proceedings Law ” means the Ley de Concursos Mercantiles together with any amendment or revision made from time to time in respect thereto.

“ Mitigation Credit ” has the meaning set forth in Clause 16.4.

“ Operative Documents ” means Lessee’s Documents, the Engine Purchase Agreement, the Purchase Agreement, the Forward Purchase Agreement, the Participation Agreement and the Financing Documents.

“ Owner ” means Jackson Square A320 Leasing (Ireland) Limited, a private limited liability company incorporated in Ireland.

“ Owner Certificate of Acceptance ” means the certificate of acceptance from Owner confirming acceptance of the Aircraft from the Manufacturer.

“ Part ” means each part, component, appliance, accessory, instrument or other item of equipment (other than complete Engines or other engines) and shall include cabin components and in-flight entertainment system for the time being installed or incorporated in or attached to the Airframe or an Engine or which, having been removed therefrom, remains the property of Owner pursuant to this Agreement.

“ Participation Agreement ” means that certain Step-In Agreement dated 14 April 2011 entered into among the Seller, the Manufacturer, and the Beneficiary, among others, as the same may be thereafter amended and/or supplemented.

“ Permitted Lien ” means (a) any Lien in respect of Taxes which are either not yet assessed or, if assessed, not yet due and payable or are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (b) any Lien of an airport hangar-keeper, mechanic, material-man, carrier, employee or other similar Lien arising in the ordinary course of business by statute or by operation of law, in respect of obligations that are not overdue or that are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves or an adequate bond have been provided by Lessee); (c) any Lien created by or pursuant to or permitted by the Operative Documents; and (d) any Lessor’s Lien; provided that (in relation to (a) and (b) above) any such proceedings, or the continued existence of such Lien, do not, involve any material risk of the sale, forfeiture or loss of the Aircraft or any Engine or any interest therein.

“ Permitted Sublessee ” means any person holding all relevant certificates and consents for the operation of the Aircraft whose habitual base of operation is not located in a Prohibited Country and which is not subject to any bankruptcy, reorganization, insolvency, concurso mercantil or similar proceedings in any jurisdictions.

“ Permitted Transferee ” means any person which is a Citizen of the United States, has a minimum net worth of ***** or provides a guarantee in form and

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substance reasonably acceptable to Lessee of its obligations under the Lessee’s Documents to which it would become a party from a guarantor with such a net worth, has a reasonably demonstrated capability and experience in commercial aircraft leasing transactions, or which is owned, controlled or affiliated with a person that does, or which is an internationally recognized financial institution or other investment company, provided, however, that no such person shall be an airline or an Affiliate of an airline.

“ PMA Part ” means a Part which has not been manufactured by or with the written permission of the original manufacturer of that Part.

“ Prime Rate ” means the rate Citibank, N.A., New York announces to be in effect from time to time as its prime lending rate.

“ Prohibited Country ” means any state, country or jurisdiction (a) which is subject to any sanction or embargo by the United Nations, the European Union (or the United Kingdom, France or Germany), the United States of America, the State of Registration or the Habitual Base or (b) with which any of France, Germany or the United Kingdom does not maintain diplomatic relations.

“ Related Tax Indemnitee ” means with respect to a Tax Indemnitee such person’s officers, directors, agents and employees and the Affiliates of each.

“ Rent ” means Basic Rent and Supplemental Rent.

“ Replacement Engine ” means an IAE V2527E-A5 Select One (or better) engine (or an engine of an improved model suitable for installation and use on the Airframe):

(a) in at least the same operating condition as, and having a value and utility at least equal to, the replaced Engine (assuming that that replaced Engine was in the condition and repair in which it is required to be maintained under this Agreement);

“ Return Location ” has the meaning provided in Clause 17.1.

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“ SC Check ” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.

“ Scheduled Delivery Date ” means on or about June 27, 2012.

“ Security ” has the meaning provided in Clause 6.2.

“ Security Amount ” has the meaning provided in Annex A.

“ Seller ” means Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V., its successors and permitted assigns.

“ State of Registration ” means the United States of America or any other country in which the Aircraft is registered pursuant to Clause 9.1(g).

“ Tax Indemnitee ” means each Lessor Party, and each Lender, and each of their respective Affiliates, officers, directors, agents and employees.

“ Technical Acceptance Certificate ” means a certificate substantially in the form set out in Schedule 7.

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“ Term ” means the period commencing on the Delivery Date and ending on the Termination Date.

“ Termination Date ” means the Expiry Date, or, if earlier, (i) the date when Lessor terminates the leasing of the Aircraft to Lessee pursuant to the terms hereof, or (ii) the date when Lessor or the Security Trustee as loss payee under Lessee’s policies of insurance/reinsurance receives the Agreed Value together with any other amounts then due and unpaid under the Lessee’s Documents, following a Total Loss of the Aircraft; provided that if the Term is extended pursuant to Clause 17.4, and provided further that there has not been a Total Loss, the Termination Date shall be extended to the date when the Aircraft has been redelivered to Lessor in full compliance with this Agreement.

“ Trust Agreement ” means Trust Agreement (5207) dated as of June 25, 2012 between Beneficiary, as trustor, and Wells Fargo Bank Northwest, National Association, as trustee, with respect to the Aircraft.

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Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, UCC means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Lessee’s Document and any financing statement relating to such attachment, perfection or effect of perfection or non-perfection.

“ United States person ” has the meaning given to such term by Section 7701(a)(30) of the Code.

“ US$, US Dollars or $ ” means the lawful currency of the United States of America.

1.2 Interpretation .

(a) References in this Agreement to:

(i) clauses or Schedules are, unless otherwise specified, references to clauses of, and Schedules to, this Agreement;

(ii) any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;

(iii) the Aircraft includes any part of the Aircraft, and, where the context so admits, any of the Aircraft Documents, and references to any part of the Aircraft include any part of any Engine;

(vi) any agreement shall include such agreement as it may from time to time be amended, modified, supplemented, novated or substituted;

(vii) an “agreement” also includes a concession, contract, deed, instrument, franchise, license, treaty or undertaking (in each case, whether oral or written);

(viii) the “assets” of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, assets and revenues (including any right to receive revenues);

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(b) Headings are for ease of reference only.

(c) Where the context so admits, words importing the singular number shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender.

CLAUSE 2. REPRESENTATIONS AND WARRANTIES .

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(e) except for such filings, registrations and recordings as are specified under this Agreement and the other Lessee’s Documents, it is not necessary or advisable under the laws of the State of Registration or the Habitual Base in order to ensure the validity, effectiveness or enforceability of any Lessee’s Document or to protect the rights of Lessor or Owner in the Aircraft or any part thereof that any Lessee’s Document or any other instrument be filed, registered or recorded or that any registration or any other action be taken, and under such laws, the rights of Lessor and Owner in the Aircraft will have priority in all respects over the claims of all creditors of Lessee;

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(h) no litigation, arbitration or administrative proceeding that could (by itself or together with any other such proceedings or claims) reasonably be expected to have a material adverse effect on Lessee’s ability to observe or perform its obligations under the Lessee’s Documents is (to Lessee’s knowledge) presently in progress or pending against Lessee or any of its assets;

(i) the unaudited financial statements of Lessee prepared by Lessee’s management for the fiscal year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and when delivered, the audited financial statements of Lessee for the fiscal year ended December 31, 2011 have been prepared in accordance with IFRS and fairly present the results of its operations for that period and its financial condition at December 31, 2011 and, in particular, to the extent required by IFRS accurately disclose or reserve against all the liabilities (actual or contingent) of Lessee, and, to Lessee’s knowledge, after reasonable inquiry, there has been no material adverse change to the financial condition of Lessee since December 31, 2011, except as otherwise previously disclosed to Lessor in writing;

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(m) no Default or Event of Default has occurred and is continuing;

(o) assuming that no part of the assets to be used by Lessor or Owner to acquire its interest in the Aircraft or any Lender to provide financing in respect of the Aircraft constitutes assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code which is subject to Section 4975 of the Code, an entity whose underlying assets include “plan assets” by reason of any such employee benefit plan’s or plan’s investment in such entity, or a governmental, church or non-U.S. plan which is subject to any federal, state, local or non-U.S. law that is similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, the execution and delivery of this Agreement and the other Lessee’s Documents and the transactions contemplated hereby and thereby will be exempt from, or will not involve any transaction which is subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of the Code and will not involve any transaction in connection with which a penalty could be imposed under Section 502(i) of ERISA or a tax could be imposed pursuant to Section 4975 of the Code; and

(p) Lessee has duly appointed and registered an officer of Lessee with the International Registry an administrator to act on behalf of Lessee as a transacting user entity.

2.2 Lessor’s Representations and Warranties .

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(ii) Lessor’s organizational documents incorporate provisions that permit, and all necessary action has been taken to authorize, and all necessary authorizations of any Government Entity have been duly and unconditionally obtained and are now in full force and effect that are required to authorize Lessor to sign and deliver, and to perform the transactions contemplated by, the Lessee’s Documents to which Lessor is a party; provided that no representation or warranty is made with respect to the Transportation Code or any laws relating to aviation or the nature of the equipment owned by Lessor other than such laws relating to the citizenship requirements of Lessor;

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(vii) on the Delivery Date, Lessor shall have received whatever rights in the Aircraft as were conveyed to it by Owner under the Head Lease and shall have all requisite authority to lease the Aircraft to Lessee hereunder;

(viii) on the Delivery Date, the Aircraft shall be free and clear of all Lessor’s Liens, other than Liens arising under the Security Documents; and

(ix) Lessor is a Citizen of the United States.

CLAUSE 3. CONDITIONS PRECEDENT .

3.1 Lessor’s Conditions Precedent . Lessor’s obligation to deliver and commence the leasing of the Aircraft under this Agreement is subject to fulfilment of each of the following conditions:

(a) Lessor shall have received the following documents, each in form and substance reasonably acceptable to Lessor, on or prior to Delivery or as soon as practicable after Delivery as noted below:

(i) an opinion of general in-house counsel to Lessee, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance reasonably acceptable to Lessor and the Lenders (which legal opinions do not include legal opinions as to the U.S. income tax consequences or matters arising from this Agreement);

(ii) an opinion of special U.S. counsel to Lessee, addressed to Lessor, Beneficiary, and JSA in form and substance reasonably acceptable to Lessor and the Lenders;

(iii) an opinion of DeBee Gilchrist, FAA counsel, addressed to Lessor, Beneficiary, JSA and the Lenders, in form and substance acceptable to Lessor and the Lenders;

(iv) the Lease Supplement and Technical Acceptance Certificate duly executed on behalf of Lessee;

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(v) a certificate substantially in the form of Schedule 3 signed by a duly authorized officer of Lessee together with the documents referred to in such certificate;

(b) copy of the constitutional documents of Lessee, updated, along with any modifications or amendments thereto;

(i) a certified copy of an extract of the board of directors resolution of the Lessee approving the entry into and execution of this Lease, the Lease Supplement and the Operative Documents in accordance with their terms and conditions;

(ii) copy of the approval required from the DGAC with respect to the leasing of a foreign-registered Aircraft;

(iii) promptly after Delivery, a certificate of airworthiness for the Aircraft from the Aviation Authority;

(iv) promptly after Delivery, evidence that Lessee has received authorization from the DGAC to incorporate the Aircraft to its fleet, which evidence shall include, but not be limited to, a copy of Lessee’s air operator’s certificate and/or operations specifications, duly annotated to reflect the inclusion of the Aircraft, and a copy of the approval issued by the DGAC for the commencement of operations of the Aircraft;

(v) any other consents or authorizations required by the Aviation Authority and the DGAC;

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(g) a summary of the Maintenance Program;

(h) UCC financing statements in respect of the Aircraft and Engines leased hereunder in a form acceptable for filing with the applicable Governmental Entity;

(i) any other documents reasonably required by Lessor with respect to the transactions contemplated by the Operative Documents and with respect to Lessee or the Aircraft;

(k) the Aircraft shall have been, or simultaneously with Delivery shall be, registered with the Aviation Authority in the name of Lessor in accordance with Clause 9.1 hereof;

(l) confirmation that Lessee has duly registered itself as a transacting user entity with the International Registry and has granted authorization to the person approved by Lessor as its professional user or professional user entity for dealings with the International Registry;

(m) Lessor shall have, promptly following Delivery, a valid registered “international interest” (as such term is defined in the Cape Town Convention) under this Agreement with respect to the Airframe and each Engine and Lessor shall have received a priority search certificate from the International Registry confirming the same;

(n) Lessor shall have received the Basic Rent and Security due on or before the Delivery Date;

(o) no Event of Default hereunder or under the Forward Purchase Agreement, or default by Lessee under any Lessee’s Document shall have occurred and be continuing on the Delivery Date or would arise by reason of the occurrence of the transactions contemplated in Lessee’s Documents;

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(r) Lessee or Manufacturer shall have affixed a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a prominent position in the cockpit of the Aircraft and on each Engine stating:

“THIS AIRCRAFT/ENGINE IS OWNED BY JACKSON SQUARE A320 LEASING (IRELAND) LIMITED, IS MORTGAGED TO CRÉDIT AGRICOLE CIB AS SECURITY TRUSTEE, IS LEASED TO WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS OWNER TRUSTEE) AND IS SUB-LEASED TO CONCESIONARIA VUELA COMPAŇIA DE AVIACIÓN, S.A.P.I. DE C.V. - VOLARIS”.

(s) evidence that all necessary stamp duties or other Taxes have been duly and timely paid by Lessee in relation to this Agreement, the Lease Supplement and any other Operative Documents;

(u) if applicable, a consent to deregistration and repossession, in the form of the IDERA;

(v) an Irrevocable Power of Attorney in favor of Lessor and the Security Trustee, notarized by a Mexican notary public to be valid and enforceable and otherwise in form and substance acceptable to Lessor, but substantially in the form attached hereto as Schedule 11;

(x) the Delivery Documents.

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3.3 Lessee’s Conditions Precedent . The conditions precedent to Lessee’s obligation to accept Delivery and commence the leasing of the Aircraft are set forth on Schedule 9 hereto.

CLAUSE 4. COMMENCEMENT .

4.1 Term of Leasing .

(a) General . Lessor will lease the Aircraft to Lessee and Lessee will take delivery of the Aircraft on lease in accordance with this Agreement for the duration of the Term.

(b) Termination Prior to Delivery . If (x) an Event of Default has occurred and is continuing under the Operative Documents, or (y) (1) a “Default” or “Event of Default” has occurred and is continuing under (and as defined in) the Forward Purchase Agreement, or (2) the obligation to buy or sell the Aircraft has been terminated under the Forward Purchase Agreement in accordance with the terms thereof, or (z) if the Purchase Agreement is terminated, Lessor may, at its option and without any liability therefor, by the giving of notice to Lessee, terminate its commitment hereunder to lease the Aircraft. Lessor shall not be responsible for any loss or expense or any loss of profit arising from failure to deliver the Aircraft to Lessee under this Agreement. Such termination by Lessor shall be without limitation of the rights of Lessor under Clause 16.2 hereof.

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Lessee shall participate with Lessor in the Manufacturer’s customary configuration development process for the Aircraft and shall consult with Lessor in a timely fashion to establish a mutually agreeable final specification for the Aircraft prior to the respective cut-off dates dictated by the customization milestones chart to be supplied by the Manufacturer to Lessor (and, subject to any applicable confidentiality obligations of Lessor, to Lessee) pursuant to the Purchase Agreement. In any event, the final specification for the Aircraft shall be agreed by the Contractual Definition Freeze Date (as defined in the Purchase Agreement), both parties acting reasonably and in good faith. Subject to the terms of the Purchase Agreement, the Standard Specification (as defined in the Purchase Agreement) may, by mutual agreement between Lessee and Lessor, be amended from time to time.

4.3 Licenses . Lessee will at its expense obtain all licenses, permits and approvals which may be necessary to export and/or transport the Aircraft from the Delivery Location. Lessor will furnish such data and information as Lessor may have in its possession and as may be reasonably requested by Lessee in connection with obtaining any such license, permit or approval.

4.4 Quiet Enjoyment; Lessor Party Covenants .

(b) Lessor Obligations Following Termination Date . Provided that no Default or Event of Default has occurred and is continuing, within five Business Days after (i) redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement, or (ii) payment to or at the direction of Lessor or, as applicable, the Security Trustee, of the Agreed Value following a Total Loss after the Delivery Date, or in each case unless, within such five Business Days period, Lessor provides written notice stating that Lessee has not paid all amounts which may then be outstanding under this Agreement and the other Lessee’s Documents, Lessor will pay to Lessee (x) the amount of any Basic Rent received from Lessee in respect of any period falling after the date of redelivery of the Aircraft or payment of the Agreed Value, as the case may be, and (y) an amount equal to the cash Security paid to Lessor less the sum of amounts (if any) applied pursuant to Clause 6.2(b).

(d) Registration of International Interest . Lessor will not discharge or consent to the discharge of the registration of an international interest with regard to the

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Airframe or the Engines unless: (i) the leasing of the Aircraft has been terminated in accordance with the terms of this Agreement; or (ii) the Lessor is pursuing remedies following the occurrence of an Event of Default, or (iii) such discharge is necessary in order to effect a transfer of the Aircraft in accordance with the terms of this Agreement.

CLAUSE 5. DISCLAIMERS .

5.1 General Disclaimers .

(a) LESSEE, AS BETWEEN ITSELF AND THE LESSOR PARTIES, ACKNOWLEDGES AND AGREES THAT LESSEE ALONE HAS SELECTED THE AIRCRAFT FOR PURCHASE FROM THE MANUFACTURER AND LEASING BY LESSOR TO LESSEE.

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HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND EACH PART THEREOF AND THAT THE AIRCRAFT AND EACH PART THEREOF IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR, WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT THE DELIVERY DATE) AND (EXCEPT AS OTHERWISE STATED THEREIN) IN EVERY WAY SATISFACTORY TO LESSEE.

CLAUSE 6. RENT AND OTHER PAYMENTS .

6.1 Rent .

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powers and remedies provided for herein or by law or equity as in the case of non-payment of Basic Rent. Lessee will also pay to Lessor, as Supplemental Rent, interest at the Default Rate (all computations of interest under this Agreement to be made on the basis of a 360-day year and the actual number of days elapsed) on any part of any installment of Basic Rent not paid on the due date thereof for any period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due hereunder for the period for which the same shall be overdue.

6.2 Security.

6.3 Maintenance Payments . Lessee shall pay to Lessor as Supplemental Rent the Maintenance Payments as provided in Annex A.

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laws of any relevant jurisdiction, or the Total Loss of, or any damage (not constituting a Total Loss) to, the Aircraft, (iii) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, concurso mercantil , or similar proceedings by or against Lessor or Lessee, (iv) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement or any of the other Operative Documents, (v) any failure or delay on the part of Lessee or of any Lessor Party or any Lender duly to perform or comply with its obligations under this Agreement or any Operative Document, and (vi) any other cause that, but for this provision, would or might have the effect of terminating, discharging or in any way affecting any obligation of Lessee hereunder. Nothing in this Clause 6.4 will be construed to extinguish or otherwise limit Lessee’s right to institute legal proceedings against Lessor or any other person for damages in the event of Lessor’s breach of this Agreement or otherwise.

(ii) Lessee shall indemnify Lessor and any other person entitled to such payment as an independent obligation against any loss or liability arising out of or as a result of the conversion; and

(iii) Lessee shall pay on an After-Tax Basis to Lessor and any other person entitled to such payment, any exchange costs and Taxes payable in connection with such conversion.

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6.8 Set-off . At any time after the occurrence of an Event of Default and as long as the same is continuing, a Lessor Party may set off any matured obligation owed by Lessee under this Agreement or the other Lessee’s Documents against any matured obligation owed by that Lessor Party to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, a Lessor Party may convert either obligation at the market rate of exchange available in New York for the purpose of the set-off. No Lessor Party will be obliged to pay any amounts to Lessee under this Agreement so long as any sums which are then due from Lessee to any Lessor Party under this Agreement or other Lessee’s Documents remain unpaid or any Event of Default is continuing, and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums and cured to Lessor’s satisfaction all such Events of Default, except to the extent that a Lessor Party otherwise agrees or sets off such amounts against such payment pursuant to the foregoing provisions.

CLAUSE 7. FEES AND EXPENSES .

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and Engines or the commencement or termination of this Agreement and (ii) the registration of the Aircraft and integration of the Aircraft into Lessee’s fleet; and (c) all fees, costs and expenses (including legal, professional, inspection and out of pocket expenses and other costs) payable or incurred by any Lessor Party in connection with any exercise of remedies under Clause 16.2 hereof or under any other Operative Document, the enforcement of or preservation of any Lessor Party’s rights under this Agreement, or in respect of the repossession of the Aircraft. Notwithstanding the foregoing, all costs and expenses associated with the filing or registering of any mortgage, security document or other security interest of any Lender shall be borne by Lessor.

CLAUSE 8. GENERAL UNDERTAKINGS .

8.1 Duration . Lessee shall perform and comply with all of its undertakings, covenants and agreements in this Agreement from the date of this Agreement until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor or after a Total Loss and payment of the Agreed Value to Lessor. All such undertakings, covenants and agreements shall be performed at Lessee’s expense except where this Agreement expressly provides otherwise.

8.2 Notice of Event of Default; Certificate .

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and accurate, (iii) payment of Rent and Maintenance Payments, (iv) receipt by Lessee of payments under Annex A and (v) whether to Lessee’s knowledge any Lessor Party is in breach of any term or condition contained in this Agreement or any other Lessee’s Document.

8.3 Financial and Other Information .

(e) Lessee shall notify Lessor promptly of the existence of any proceedings of a judicial or administrative nature involving Lessee, which could have a material adverse effect on the compliance of the obligations of Lessee under this Lease or that could affect its right of possession or use of the Aircraft, with the understanding that by being the property of Owner and leased to Lessor in accordance with the terms of the Head Lease, neither the Aircraft nor any Part thereof can be the subject of securement, trusteeship, attachment, deposit, lien, invasion, or seizure whether or not such act is the result of an order from competent authorities, and Lessee shall immediately take all steps to defend and promptly release the Aircraft or any Part thereof from any such securement, trusteeship, deposit, lien, invasion or seizure. Lessee shall for such purpose, at the request of Lessor or Owner, acknowledge before any judicial or administrative authority the right of ownership of Owner and the

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leasehold interest of Lessor in respect of the Aircraft and inform and demonstrate to such authorities as applicable and as often as it may be required by Lessor and/or Owner that the Aircraft is not owned by Lessee, that the relationship between Lessor and Lessee is strictly of a commercial nature and limited to the scope of this Lease, and that Lessee otherwise has no right, title or interest in the Aircraft and the Aircraft does not constitute any part of Lessee’s assets.

(b) no Event of Default shall have occurred and be continuing as a result thereof.

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8.7 Cape Town Convention. Lessor and Lessee agree:

(a)

that the events referred to in Clause 16.1 as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Convention and Articles IX and X of the Protocol; and in such events, Lessor may, exercise its rights under Articles 8, 10 and 13 of the Cape Town Convention and any rights expressed to be available to Creditors under the Cape Town Convention. Lessee hereby acknowledges that Article 13(2) of the Cape Town Convention shall be disapplied if Lessor chooses to exercise its rights under Article 13(1) of the Cape Town Convention in accordance with this Agreement. For the purpose of Article XI, alternative B of the Protocol, both parties hereby agree that the period required for the effects of Article XI, paragraph 2, shall be ten (10) days;

(b)

the Lessee shall execute and deliver the IDERA to the Lessor, and the Lessor shall promptly secure its recordation by the relevant Aviation Authority should the Aircraft become registered in the name of the Lessee;

(c)

If the IDERA has been filed with the relevant Aviation Authority, the Lessor shall not be required to provide the Lessee with any prior notice (whether written, verbal or otherwise) of the Lessor’s use or exercise of the IDERA in accordance with the provisions of this Lease;

(d)

as between Lessee and Lessor, the Lessor has the power to dispose of the Aircraft for the purposes of Article 7 (B) of the Convention;

(e)

the Airframe is an airframe and accordingly is an aircraft object to which this Agreement relates for the purposes of the Convention and the Protocol and is an Airbus A320-200 aircraft with a manufacturer’s serial number 5207, and the Engines are aircraft engines and, accordingly, aircraft objects for the purposes of the Convention and the Protocol and are International Aero Engines V2500- A5 engines as more particularly described in the Technical Acceptance Certificate;

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(f)

this Agreement shall be registered as a contract of lease in respect of the Aircraft with the International Registry, that such registration shall be initiated by the Lessor at any time after the date of execution of this Agreement and the Lessee shall provide all necessary co-operation and assistance to the Lessor in connection with such registration or subject to the provisions hereof, the amendment thereof and shall, in particular, provide the necessary electronic consent to such registration and any such amendment thereof, which electronic consent shall be given promptly after receipt by the Lessee of an electronic communication from the International Registry in accordance with the Cape Town Convention and the International Registry requesting the Lessee consent to such registration or amendment or, if earlier, Delivery;

(g)

(h)

the Lessee shall co-operate with the Lessor, at the Lessor’s expense with respect to effecting registration pursuant to the Cape Town Convention of the international interests of the Owner as owner and the Security Trustee as trustee on behalf of the Lenders as creditors in respect of the relevant Financing Documents; and

(i)

if any Engine is replaced by a Replacement Engine purchased in accordance with this Agreement, the Lessee shall, at the Lessee’s expense and promptly following title acquisition to the Replacement Engine being vested in the Owner, take such steps under the terms of the Cape Town Convention as requested by the Lessor to ensure that all relevant international interests in respect of such Replacement Engine are registered and protected to the same extent as in relation to the replaced Engine.

CLAUSE 9. OPERATIONAL UNDERTAKINGS .

9.1 Registration, Title and Nameplates .

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other, at the expense of Lessee, to the extent necessary to maintain such registration, (including renewals thereof at periodic intervals as required by applicable law), filing, and recording. Promptly upon Delivery, Lessee shall obtain (and at all times thereafter maintain in effect) with respect to the Aircraft a certificate of airworthiness in accordance with all applicable laws, rules and regulations of the State of Registration and provide Lessor with a copy of the same duly certified by an officer of Lessee, and Lessee shall comply with any special conditions attaching thereto within any time limits imposed for compliance by the Aviation Authority. Lessee shall promptly produce to Lessor true copies of each certificate of airworthiness for the Aircraft, and each certificate of registration issued in respect of the Aircraft.

(b) Lessee shall not do or knowingly permit to be done anything that would jeopardize the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft and shall cause to be taken all actions necessary or reasonably requested by Lessor to prevent the rights of Owner as owner of, Lessor as lessee of, or of any Lender in, the Aircraft from being jeopardized, and shall not do or permit to be done anything which, or omit to do anything the omission of which, would or would be likely to prejudice any material right that Owner or Lessor may have against Manufacturer, the Engine manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft or any part thereof. At the reasonable request of Lessor, Lessee will do all such reasonable acts and things (including making any filing, registration or recording with the Aviation Authority, the International Registry or any other Governmental Entity or as required to comply with any applicable law) and execute, notarize, file, register and record all documents as may be reasonably required by Lessor to establish, maintain, perfect, protect and preserve the rights and interests of Owner or Lessor hereunder and in the Aircraft and, at Lessor’s cost, the rights and interests of any Lender under the Security Documents. At the reasonable request of Lessor, Lessee shall furnish to Lessor, Owner and any Lender an opinion of counsel or other evidence reasonably satisfactory to Lessor of each such filing, recordation and act. Lessor will reimburse Lessee for reasonable out-of-pocket costs and expenses (including legal fees and expenses) incurred in doing such acts and things required by Lessor to establish, maintain, perfect, protect and preserve the rights of Lenders except when Lessee is elsewhere required to pay such expenses pursuant to this Agreement or to the extent such expenses are incurred by reason of the Aircraft being subleased or registered in a country other than the United States.

(c) Lessee shall maintain and shall not cover up (or permit to be covered up), the fireproof plate referred to in Clause 3.1(r) and, within thirty days after receipt of notice of any Lender and any Security Document and of payment for the cost of such additional inscription, Lessee shall cause the plate to contain the following additional inscription:

“AND IS SUBJECT TO A SECURITY INTEREST / LIEN IN FAVOR OF [ NAME OF LENDER(S) ] ”

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(such name plates to be replaced, if requested by Lessor, reflecting the name of any successor Lessor, Owner and Lender as permitted under the Operative Documents).

(d) Lessee shall not hold itself out to any third party as owner of the Aircraft or any part of it, and when any third party inquires as to the ownership of the Aircraft or any part thereof, it will make clear to such third party that title to the same is held by Owner and the Aircraft is leased to Lessee by Lessor and, if applicable, that the Aircraft is mortgaged to the Lender(s). Lessee shall not at any time represent or hold out Lessor, or any Lessor Party or any Lender as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of carriage (whether for hire or reward, or gratuitously) that may be undertaken by Lessee.

(f) Lessee shall not grant to any person other than Lessor a de-registration and export request authorization with respect to the Airframe or any Engine.

(i) such country is not listed or sanctioned by OFAC (Office of Foreign Assets Control of the United States) and the United States maintains diplomatic relations with such country;

(ii) no Event of Default has occurred and is continuing;

(iii) Lessee, at its expense, provides assurances reasonably satisfactory to Lessor (A) to the effect that the insurance provisions of this Agreement have been or will be complied with after giving effect to the change in registry, (B) of the payment of all costs and expenses of each Lessor Party and the Lenders (including reasonable legal fees and expenses) reasonably and properly incurred in connection with the change in registry, and (C) as to the continuation of this Agreement and the perfection of Owner and Lessor’s right in and title to the Aircraft and the enforceability, priority and perfection of each security interest granted by any Lessor Party over the Aircraft and/or any Lessee’s Documents; and

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9.3 Possession and Subleases . Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:

(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or

(c) pursuant to a sublease to a Permitted Sublessee that is a solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with the prior express written consent of Lessor acting reasonably provided that in each case:

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(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;

(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Owner, Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;

(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Owner’s rights as owner and lessor of the Aircraft under the Head Lease, Lessor’s rights as lessor of the Aircraft hereunder and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and

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9.4 Information and Records .

(i) any Total Loss with respect to the Aircraft, the Airframe or any Engine;

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(iii) any loss, arrest, hijacking, confiscation, seizure, requisition, impound, taking in execution, detention or forfeiture of the Aircraft or any part thereof; and

(iv) any event, accident or incident in respect of the Aircraft that might reasonably be expected to involve Owner, Lessor or Lessee in loss or liability in excess of the Damage Notification Threshold or its equivalent in any other currency, or which is required to be reported to the Aviation Authority.

9.5 Lawful and Safe Operation; Costs of Operation . Lessee will:

(a) comply and procure compliance with all (i) laws, statutes, decrees, regulations, authorizations, judgments, injunctions and other directives of any Government Entity (including, without limitation, when and if the Aircraft is operated to, from or within European airspace, EU ETS legislation, including any international treaty or similar instrument or agreement relating thereto which is applicable to Volaris), (ii) any treaty, pact, compact or other binding agreement to which any Government Entity is a signatory and (iii) any judicial or administrative interpretation with binding characteristics or application of those described in (i) and (ii), is a signatory or party which in each case is then applicable to (i) the Aircraft (including without limitation laws mandating insurance coverage) or (ii) so far as concerns the use, maintenance and operation of the Aircraft, an owner or operator thereof or the failure to comply with which would result in any criminal liability on the part of any Indemnitee and will procure that the Aircraft is not used for any illegal purpose or any illegal manner;

(c) use the Aircraft and procure that the Aircraft is used solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and under applicable law;

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(f) not cause or permit the Aircraft to proceed to, or remain at, any location which is at that time the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions in each case relevant to the export, location, use, leasing or financing of the Aircraft or matters arising therefrom, and the effect of which prohibition order (or similar order or directive), sanction or restriction is to prohibit flights to and from such jurisdiction or to prevent the Aircraft from remaining at such jurisdiction; in each case, in violation of such prohibition order (or similar order or directive), sanction or restriction except as may be necessary to safeguard the Aircraft, passengers or crew in the case of urgent circumstances resulting from atmospheric or climatic conditions, technical failure or other reasonable safety concerns (provided that in such case, Lessee shall take all measures to remove the Aircraft from such location as soon as such circumstances or conditions shall cease) whether made by or under:

(i) any Government Entity of the State of Registration, the Habitual Base, France, Germany, the United Kingdom or the United States of America; or

(ii) any Government Entity of the country in which such location is situated; or

(iii) any Government Entity having jurisdiction over any Lessor Party, or any Lender, of which Lessee has notice, or over the Aircraft;

(iv) the United Nations Security Council or the European Union;

(g) obtain and maintain in full force, and operate the Aircraft in accordance with, all certificates, licenses, permits and authorizations from time to time required for the use and operation of the Aircraft, and for the making of payments required by, and the compliance by Lessee with its other obligations under, the Lessee’s Documents and will ensure that the Habitual Base remains the habitual base of the Aircraft; and

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of any kind or nature, directly or indirectly, in connection with or related to the use, maintenance and operation of the Aircraft. The obligations, covenants and liabilities of Lessee under this paragraph arising prior to return of the Aircraft to Lessor will continue in full force and effect, notwithstanding the termination of the leasing of the Aircraft under this Agreement or expiration of the Term.

9.6 Right of Inspection . Lessee shall procure that Lessor and an individual acting as the authorized representative of any or all of the Lenders at any time during normal business hours throughout the Term (or at any other time mutually agreed to by Lessor and Lessee) may on reasonable notice (unless an Event of Default shall have occurred and be continuing, in which case no notice shall be required) inspect the Aircraft and the Aircraft Documents or any part thereof to ascertain the condition of the Aircraft or any part thereof and reasonably satisfy itself that the Aircraft is being properly repaired and maintained in accordance with the terms of this Agreement; provided, however, that, so long as no Event of Default shall have occurred and be continuing, any such inspection shall not: (A) occur more than once per calendar year; provided that, unless an Event of Default has occurred and is continuing, and without in any way affecting the right of the ECA Finance Parties to perform their own annual inspection, the Lessor agrees that, should the ECA Finance Parties elect to perform an inspection during any calendar year, Lessor shall coordinate with the ECA Finance Parties so as to participate in such inspection or shall rely on the inspection report generated by the ECA Finance Parties for such calendar year; (B) interfere with the normal commercial operations of the Aircraft; and (C) shall be conducted at Lessee’s normal maintenance base for the Aircraft. The cost and expenses of any such inspection shall be borne by (i) Lessee if an Event of Default has occurred and is continuing or if Lessee is thereby shown to be in material breach of its obligations under Clause 10 of this Agreement, or (ii) otherwise by the party making the inspection. Any inspection of the Aircraft hereunder, other than the inspection contemplated by Clause 17, shall include a visual, walk-around inspection that may include going on board the Aircraft and the opening of any doors that do not require any special tooling, but shall not include the opening or disassembly of any panels, bays or other components of the Aircraft. All time taken in respect of inspection or repairs shall form part of the Term. None of Lessor, any Lender or any ECA Finance Party shall have any obligation to make any inspection.

9.7 EU Operations . In the event the Aircraft is at any time to be operated in any jurisdiction in which Eurocontrol has jurisdiction over airport operations, Lessee shall, prior to commencing such operations, provide Lessor and the Lenders with a Eurocontrol Letter.

CLAUSE 10. MAINTENANCE AND REPAIR .

10.1 General . Lessee shall at all times during the Term:

(a) keep the Aircraft or procure that the Aircraft is kept airworthy in all respects and in good repair and condition (fair wear and tear excepted);

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(c) comply or procure compliance with all Aviation Authority mandatory requirements, all mandatory requirements of the FAA to the extent that they do not conflict with the Aviation Authority requirements in each case applicable to the Aircraft, the Engines or any Part and in the case of such requirements of the FAA applicable to aircraft and engines of the same type as the Aircraft and Engines;

(g) keep the Aircraft equipped with the Engines and Parts installed at the Delivery Date or with substitutes or replacements made in accordance with this Agreement.

10.2 Specific Requirements . Without limiting the maintenance and repair obligations specified in Clause 10.1, Lessee:

(a) without the prior approval of the Aviation Authority, shall not amend or materially modify, or permit to be amended or modified, the maintenance intervals set forth in the Maintenance Program (except that Lessee may make any such amendment or modification if: (i) mandated by the Aviation Authority, (ii) pursuant to an FAA approved reliability program; or (iii) due to a revision of the Maintenance Planning Document, in which case Lessee shall promptly notify Lessor thereof) and shall furnish to Lessor a copy of any amendments or additions made to the Maintenance Program;

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(b) shall not replace any Engine life-limited Part with a Part which has accumulated more Cycles than the aggregate Cycles since new on the Engine in which such replacement Part is to be installed;

(d) shall continue to use the Aircraft in its regular commercial passenger operations until delivery to the Return Location immediately prior to the Final Inspection;

10.3 Substitution of Parts; Ownership.

(a) Lessee, at its own cost and expense, will promptly replace all Parts that may from time to time be incorporated or installed in or attached to the Airframe or any Engine and that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever, except as otherwise provided in Clause 10.5. In addition, Lessee may, at its own cost and expense, remove or permit the removal in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided that, except as otherwise provided in Clause 10.5, at no cost or expense to Lessor, all such Parts are replaced as promptly as possible. All replacement Parts shall be in as good operating and maintenance condition as the Parts replaced assuming such replaced Parts were in the condition and repair required to be maintained by the terms hereof, shall be of the same make and model or a Part with same form, fit and function or an improved or advanced version thereof approved for installation on the Aircraft, shall have valid FAA certification (with 8130 tag) or JAA/EASA certification (JAA/EASA Form One) and origin traceability, and shall not impair the airworthiness or diminish the overall value of the Aircraft. For so long as the financing with respect to the Aircraft provided by the ECA Finance Parties remains outstanding, and unless otherwise permitted under subsequent Financing

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Documents, PMA Parts may not be installed on the Airframe; provided, that Lessor shall promptly notify Lessee should Lessor become aware of a change in ECA policy regarding the use of PMA Parts, and in such event Lessor and Lessee will take appropriate action to permit Lessee to make use of cosmetic, non-structural and non-critical interior cabin PMA Parts to the extent permitted by the new ECA policy.

(b) Lessee shall procure that any substituted or replacement Part shall be, or upon installation become the property of Owner subject to the Head Lease and this Agreement and be free and clear of any Lien other than Permitted Liens.

(c) Any Part at any time removed from the Airframe or any Engine shall remain the property of Owner, no matter where located, until such time as such Part shall be replaced by a Part that has been incorporated or installed in or attached to such Airframe or Engine and that meets the requirements for replacement Parts specified above and until title to such replacement Part shall have passed to the Owner, according to applicable law, or until the replacement Part is itself replaced by a replacement Part which thereupon becomes the property of Owner (whereupon title to the replaced Part shall vest in Lessee free and clear of all Lessor’s Liens).

(iv) title to the Part which has been replaced, substituted or renewed shall (if previously vested in Owner) remain with Owner free from all Liens (other than Permitted Liens) until the Part which replaced it becomes the property of Owner.

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(a) a record of the location of any Part will be kept and made available to Lessor at any time on request; and

(b) title to the Part which has been replaced shall (if previously vested in Lessor) remain with Owner until the Part which replaced it becomes the property of Owner or is replaced by a Part which thereupon becomes the property of Owner, and at which time, the title to the Part which has been replaced will pass to Lessee.

Lessee agrees that, unless otherwise agreed to in writing by Lessor, Lessee shall limit the time during which any Part which is not the property of Owner remains on the Aircraft and will as soon as practicable replace the same with a Part which either is the property of Owner, or will, upon fitting, become the property of Owner.

10.5 Permitted Modifications.

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that where as a result of any such modification, alteration or addition (other than a modification, alteration or addition required by any other provision of this Clause 10) Lessee has installed or permitted the installation of a Part on the Aircraft, then Lessee shall be entitled to remove or permit the removal of such Part from the Aircraft, free from any claim to title on the part of Lessor or Owner, if at the time of such removal each of the following conditions are fulfilled:

(i) either:

(aa) such Part when so removed is replaced by the original Part or a replacement therefor, which complies with the terms of Clause 10.3(a) of this Agreement and title to which is vested in Owner; or

(bb) such Part is in addition to and not in replacement of or substitution for any Part previously installed on or attached to the Aircraft;

(ii) such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement;

(iv) no Event of Default shall have occurred and be continuing.

CLAUSE 11. ENGINES .

11.1 General Principles .

(a) In this Clause 11, “Removed Engine” means an Engine that is for the time being detached from the Airframe.

(c) If an Engine is at any time removed from the Airframe for the purpose of maintenance or repairs, Lessee shall procure that the same are completed promptly.

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Documents, and Lessee shall not take any steps that could be reasonably expected to jeopardize the interests of Lessor, Owner or any Lender therein or that could be reasonably expected to lead any third party to believe that the Removed Engine is the property of any person other than Owner.

(i) such engine is leased to or is owned by Lessee;

(iii) the lease or other agreement pursuant to which Lessee from time to time operates or finances any aircraft contains provisions that are consistent with the maintenance at all times of the interests of Owner, Lessor and any Lender in the Removed Engine while such Removed Engine is installed on such aircraft, and that in particular do not state or require that any Removed Engine that is installed on such aircraft shall become the property of the lessor or owner of, or person having a lien on, such aircraft;

Provided that:

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airframe on which the Removed Engine is installed, so long as such acknowledgement is enforceable by Owner, Lessor and such Lender. Lessor hereby acknowledges for the benefit of such persons that it will respect the interests of owners or lenders of any engine (other than an Engine) installed on the Airframe and it will not seek to exercise any rights whatsoever in relation to such engine.

CLAUSE 12. TITLE .

Title to the Aircraft shall remain vested in Owner subject to the Security Documents and any Permitted Lien. Save as aforesaid, no Lessor Party gives any condition, warranty or representation in respect of title to or its interest in the Aircraft, and all such conditions, warranties or representations, expressed or implied, statutory or otherwise, are hereby expressly excluded.

CLAUSE 13. MANUFACTURER’S WARRANTIES .

Provided no Event of Default has occurred and is continuing hereunder, Lessor agrees to assign or otherwise make available to Lessee at the expense of Lessee such rights as Owner or Lessor may have under any warranty, express or implied, with respect to the Aircraft made by Manufacturer, any subcontractor or supplier thereof, or any other seller thereof, any manufacturer of any Engine or Part, or any Person undertaking maintenance, repairs or modifications in respect of the Aircraft, to the extent that the same may be assigned or otherwise made available to Lessee and without warranty by Owner or Lessor as to the enforceability of any of the rights so assigned. To the extent that the same may not be assigned or otherwise made available to Lessee, Lessor agrees, provided that no Event of Default has occurred and is continuing, and at Lessee’s request and expense, to enforce such rights as Lessor may have and to cause Owner to enforce such rights as it may have with respect thereto for the benefit of Lessee. Upon return to or repossession by Lessor of the Aircraft following the continuation of any Event of Default, all such rights shall immediately revert to Owner or Lessor, as the case may be, including all claims thereunder whether or not perfected. Where Lessee decides not to pursue any material claim, Lessee will immediately notify Lessor of such claim and of its intention not to pursue it. Lessor in such a case may direct Lessee to pursue such claim, and Lessee will pursue such claim in good faith on behalf of itself, Owner and/or Lessor.

CLAUSE 14. INSURANCES .

14.1 Obligation to Insure . From the Delivery Date until expiration or earlier termination of the Term and redelivery of the Aircraft to Lessor, Lessee shall, at its own expense, effect and maintain or cause to be effected and maintained in full force and effect insurances on and with respect to the Aircraft that comply with the provisions of this Clause 14. Lessee agrees that such insurances shall be carried with such insurers of recognized standing who regularly participate in aviation insurance and through reputable brokers regularly placing insurance in the aviation insurance markets in the U.S. or Western Europe or such other leading international insurance markets as mutually agreed upon by Lessee and Lessor. Lessee further agrees that such

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insurances shall reflect prudent practices in the international aviation insurance market for United States air carriers operating the same type of aircraft as the Aircraft on similar routes.

14.2 Insurance with Respect to the Aircraft . Lessee shall obtain and maintain, or cause to be obtained and maintained with respect to the Aircraft the following insurances:

(c) “Hull War and Allied Perils” to the fullest extent available from the leading international insurance markets, on an “agreed value” basis in an amount not less than for the Agreed Value.

14.3 Terms Specific to Hull Insurance . The insurances required under Clause 14.2 shall be provided on an agreed value basis and the policies shall, to the extent not in conflict with AVN 67B:

(a) include each Lessor Party and each Lender as additional insureds for their respective rights and interests;

(d) provide that all insurance proceeds shall be payable in US Dollars.

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14.4 Liability Insurance with Respect to the Aircraft .

(b) The policies evidencing the insurance required under Clause 14.4(a) shall, to the extent not in conflict with AVN 67B:

(i) include each Indemnitee as additional insureds (each, an “Additional Insured”) for their respective rights and interests;

(iii) be primary and without right of contribution from other insurance that may be available to any other Additional Insured.

(b) specifically reference this Agreement;

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(e) provide that no Lessor Party nor any Lender shall be liable for any premiums in respect thereof and that the insurers shall waive any right of set-off or counterclaim against any Lessor Party and any Lender except in respect of unpaid premiums in respect of the Aircraft;

(f) provide that the insurers shall promptly notify Lessor and any Lender in the event of cancellation of, or any material change in, the insurances or in the event that premiums shall not have been paid as agreed between Lessee and its insurers, after giving effect to the procedures and/or terms that exist between Lessee and its insurers from time to time regarding the payment of premiums, and that the insurances shall continue unaltered for the benefit of each Indemnitee for at least thirty days after written notice by registered mail of such cancellation, change, event or non-payment of premium or installment thereof shall have been issued to Lessor and any Lender or the relevant broker except in the case of War Risks for which seven days’ notice (or such period as may be customarily available in respect of War Risks or Allied Perils) will be given; and

14.6 Information .

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14.7 Additional Insurance; No Lien .

(b) Lessor may, having regard to insurances coverage from time to time carried by similarly situated international commercial air carriers operating aircraft of the same type as the Aircraft on routes similar to those flown by Lessee and to practices current from time to time in the aviation insurance market and to the requirements of lessors and mortgagees of aircraft, from time to time require Lessee at no cost to any Lessor Party or any Lender, to effect such other insurances, or such variations to the terms of the existing insurances, as Lessor may by notice to Lessee reasonably require in order fully to maintain the scope of protections of the interests of the Indemnitees at a level consistent herewith.

(c) If at any time Lessor reasonably considers that the insurances effected or procured by Lessee hereunder do not provide a satisfactory breach of warranty endorsement (in the case of Hull All-Risks and Hull War-Risks policies) and a satisfactory breach of warranty endorsement and cross liability and/or severability of interests clause (in the case of liability policies), then Lessee shall, at the request of Lessor and at its own expense, effect and maintain, a policy in respect of the interests of Owner, Lessor, and the Lender(s) in such form as Lessor reasonably consider(s) appropriate.

(d) Lessee shall not create or permit to exist any Lien over the insurances required by this Agreement, or its interest therein, except as constituted by this Agreement and the Operative Documents.

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(ii) at any time while such failure is continuing, to require the Aircraft to remain at any airport, or to proceed to and remain at any airport designated by it until such failure is remedied.

14.9 Settlement of Claims .

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effecting any such transfer, a “ Transferor ”), Lessee shall, at the request of such Transferor and at Lessee’s expense, effect and maintain for the benefit of such Transferor the insurance required by Clause 14.4 for such period (not exceeding two years) as the Transferor may request and shall ensure that the Transferor shall be named as an additional insured thereunder.

CLAUSE 15. LOSS, DAMAGE AND REQUISITION .

15.1 Total Loss of Aircraft or Airframe .

(b) If a Total Loss of the Airframe or the Aircraft occurs after Delivery, Lessee will pay or cause to be paid the Agreed Value to the Security Trustee for the benefit of the “Contract Parties” under Lessee’s policy of reinsurance, within three (3) Business Days after the date of receipt of insurance proceeds in respect of that such Total Loss, but in no event later than 45 days after the occurrence of such Total Loss.

(c) Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full of the Agreed Value as set forth above and all other amounts which may be or become payable to Lessor under this Agreement, Lessor will transfer to Lessee, at Lessee’s expense, without recourse or warranty (except as to the absence of Lessor’s Liens) all of Lessor’s rights to the Aircraft, on an as-is where-is basis, and will execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) such transfer, free and clear of all rights of Lessor and Lessor’s Liens. Lessee shall indemnify each Indemnitee for all fees and expenses incurred by it in connection with any such transfer.

15.2 Total Loss of Engine(s) .

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title to a Replacement Engine that shall be subject to this Agreement and any Security Documents executed by Owner and Lessor and free of all Liens other than Permitted Liens. Such Replacement Engine shall, upon acquisition of title by Owner, be an Engine as defined herein.

(b) At Lessee’s expense the parties hereto agree to take such actions as Lessor or Lessee may reasonably request in order that any such Replacement Engine shall be or immediately become the property of Owner and become subject to this Agreement, the Head Lease and any Security Documents executed by Owner or Lessor, and leased hereunder on the same terms as the destroyed Engine. Without limiting the foregoing, Lessee will (i) furnish Owner with a warranty (as to title) bill of sale (with an exception for Permitted Liens), in form and substance reasonably satisfactory to Owner, with respect to such Replacement Engine, (ii) cause a Lease Supplement covering such Replacement Engine to be delivered to Lessor for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (iii) cause to be filed all other documents or instruments reasonably requested by Lessor and necessary in order to perfect Owner’s, Lessor’s and any Lender’s interest in such Replacement Engine in the United States, or in such other jurisdiction in which the Aircraft is then registered, (iv) furnish Owner and Lessor with an opinion of Lessee’s counsel (which may be Lessee’s in-house counsel) addressed to Owner and Lessor to the effect that the documents, instruments and agreements referred to in clauses (i), (ii) and (iii) have been duly authorized, executed and delivered by Lessee and are effective to convey to Owner all right, title and interest of Lessee in and to the Replacement Engine, (v) furnish Lessor with a certificate signed by a duly authorized officer of the Lessee stating the following: (i) a description of the replaced Engine which shall be identified by manufacturer’s serial number, (ii) a description of the Replacement Engine (including the manufacturer’s name and serial number) as consideration for the replaced Engine, and (iii) that such Replacement Engine satisfies the requirements for a “Replacement Engine”, and (vi) furnish Lessor with evidence of compliance with the insurance provisions of Clause 14 with respect to such Replacement Engine.

Promptly upon the recordation of the Lease Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Lessee will cause to be delivered to Lessor an opinion of FAA counsel selected by Lessee if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of the United States (or, if at the time of the Total Loss of the destroyed Engine, the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Lessee, which counsel shall be reasonably satisfactory to Lessor) addressed to Owner, Lessor and the Lenders, as to the due recordation of such Lease Supplement or such other requisite documents or instruments.

Upon compliance with clauses (i) through (vi) above, Lessor will or will cause Owner to, transfer to or at the direction of Lessee without recourse or warranty (except

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as to the conveyance of whatever title was received from Lessee and as to the absence of Lessor’s Liens), all of Owner’s or Lessor’s, as the case may be, right, title and interest, if any, in and to (i) the Engine with respect to which such Total Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (ii) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Total Loss, and such Engine shall thereupon cease to be an Engine leased hereunder.

Lessee’s obligation to pay Rent shall continue in full force and effect and shall not be affected by such replacement.

15.4 Requisition .

(b) Lessee shall, as soon as practicable after the end of any requisition for use or hire, cause the Aircraft to be put into the condition required by this Agreement.

CLAUSE 16. DEFAULT .

16.1 Events of Default . Each of the following shall constitute an Event of Default:

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(c) The Aircraft is operated at a time or in a place where any insurance required by Clause 14 of this Agreement shall not be in effect;

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(j) Lessee suspends or ceases to carry on its business as an air carrier;

(m) The existence, validity, enforceability or priority of the rights of Owner or Lessor in respect of the Aircraft hereunder or under the Head Lease, as applicable, is challenged by Lessee or Lessee’s Affiliates;

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(c) proceed by appropriate court action or actions to recover damages for the breach of this Agreement which shall include, without limitation:

(i) all Rent and other amounts which are or become due and payable hereunder prior to the earlier to occur of the date Lessor or Owner sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to clause (ii) below;

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to, repossession costs, legal fees, Aircraft storage, maintenance and insurance costs, Aircraft re-lease or sale costs (including, in the case of a re-lease, any reasonable costs incurred to transition the Aircraft to the next operator’s maintenance program), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”;

(v) any loss, cost, expense or liability, or damage to the residual interest of Lessor or, without duplication of such loss, cost, expense, liability or damage, any Lessor Party in the Aircraft, sustained by such Lessor Party due to Lessee’s failure to maintain the Aircraft in accordance with the terms of this Agreement or Lessee’s failure to redeliver the Aircraft in the condition required by this Agreement, including, without limitation, any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and

(d) either:

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(f) by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment date specified in such notice (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts:

(i) all Rent and other amounts which are or are expected to become due and payable hereunder prior to the payment date specified by Lessor;

(ii) an amount equal to the aggregate Basic Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the payment date specified by Lessor to Lessee, less the amount, if any, of the Mitigation Credit (calculated as provided in Clause 16.4 below);

(iii) an amount equaling Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and

Lessor is hereby authorized and instructed, but shall have no obligation, to make any expenditures which Lessor, in its sole discretion, considers advisable to

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repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Clause 17 hereof (it being understood that Lessee shall be liable for all such expenditures).

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CLAUSE 17. REDELIVERY .

17.1 Redelivery . On the Termination Date (other than following a Total Loss) Lessee shall, at its own expense, redeliver the Aircraft and the Aircraft Documents to Lessor at ***** performing the redelivery checks, or such other location as Lessor and Lessee may agree (the “ Return Location ”). Lessee’s redelivery of the Aircraft to Lessor in accordance with the terms of this Agreement will be evidenced by execution and delivery by Lessor and Lessee of a redelivery acceptance certificate in form and substance satisfactory to Lessor and Lessee.

17.2 Condition of Aircraft and the Aircraft Documents . On redelivery of the Aircraft and the Aircraft Documents:

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(b) the Aircraft shall be free and clear of all Liens (other than Lessor’s Liens);

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(d) inspection of the installed APU including, without limitation a full cold and hot section video borescope inspection of the APU.

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(b) No Rent will be payable by Lessee during any delay that is a direct result of performing any additional work that is requested by Lessor.

17.5 Deregistration and Export . At such time as Lessee is obligated to redeliver the Aircraft to Lessor pursuant to this Agreement, Lessee shall at its expense upon the request of Lessor:

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Aircraft remains registered in the United States of America. Lessee will pay all reasonable costs and expenses of the Ferry Flight and will provide insurance coverage for the duration thereof equivalent to that provided by the policies required under Clause 14. Lessor will reimburse Lessee within ten (10) Business Days for all reasonable costs and expenses (without any element of profit or mark-up) reasonably incurred in performing the Ferry Flight upon receipt of an invoice identifying such costs in detail.

17.7 Storage . Upon redelivery of the Aircraft, Lessee will, upon the written request of Lessor and subject to availability, store and maintain the Aircraft at a location selected by Lessee and reasonably acceptable to Lessor for a period not exceeding 60 days (“ Storage Period ”) from the end of the Term. Lessor will reimburse Lessee for all costs and expenses (without any element of profit or mark up) incurred in storing and maintaining the Aircraft during the Storage Period upon receipt of an invoice and supporting documents reasonably acceptable to Lessor.

CLAUSE 18. INDEMNITIES .

18.1 General Indemnities .

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(b) The following are excluded from Lessee’s agreement to indemnify any particular Indemnitee under Clause 18.1(a):

(ii) any Claim judicially determined to have been caused by the willful misconduct, gross negligence or (in the case of any Indemnitee other than an ECA Finance Party) recklessness of such Indemnitee, its successors, servants or agents. For the avoidance of doubt, if this exclusion shall apply to an Indemnitee that is a “Lessor Party” as defined herein, then this exclusion shall apply to all such “Lessor Party” entities as defined herein;

(iv) any Claim for currency indemnification, which shall be governed by Clause 6.6.

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expenses which it may incur in connection with such Claim and shall deliver to such Indemnitee a written acknowledgement to indemnify it whether or not any contest of such Claim is successful. Where Lessee or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with such defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of Lessee or such insurers; provided, that if in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by Lessee. Subject to the requirements of any policy of insurance, any Indemnitee may participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the preceding provisions, and such participation shall not constitute a waiver of the indemnification provided in this Clause 18.1. Nothing in this Clause 18.1 shall be deemed to require an Indemnitee to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto.

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indemnification of such person shall (if requested by Lessee) be conditioned on an officer or other authorized signatory of Lessor certifying to Lessee that such Tax is not imposed due to the breach by a Tax Indemnitee or Related Tax Indemnitee of any of its representations, warranties or covenants under the Financing Documents;

(c) any Taxes imposed on such Tax Indemnitee that result from (i) any voluntary or involuntary sale, assignment, transfer or other disposition by such Tax Indemnitee or any Related Tax Indemnitee of any interest in the Aircraft or any part or portion thereof or this Agreement or any Operative Document, including any foreclosure by a creditor of such Tax Indemnitee or any Related Tax Indemnitee; provided , however , this sub-clause (c) shall not apply to Taxes arising or resulting from (t) any transfer of the Aircraft pursuant to the Purchase Agreement or the delivery of the Aircraft pursuant to this Agreement, (u) any transfer resulting from the repair, replacement or maintenance of the Aircraft or any part thereof, (v) any grant of a lien or security interest pursuant to any Financing Document upon or following a re-registration of the Aircraft in any jurisdiction other than the United States provided that Lessee is given at least 5 Business Days notice of such grant (but this subclause (v) shall apply only to the extent such Taxes exceed the amount of Taxes that would have been imposed had the Aircraft been and remained registered in the United States), (w) any transfer by the Lessee, including by reason of a sublease, whether or not permitted hereunder, (x) any sale, assignment, transfer or other disposition occurring in connection with the exercise of remedies hereunder or under any Financing Document while an Event of Default hereunder has occurred and is continuing (or would be continuing but for the exercise of remedies), (y) any loss, damage, destruction, casualty, requisition, seizure or condemnation of all or any part of the Aircraft or (z) while the Aircraft is subleased to any non-U.S. carrier (but this subclause (z) shall apply only to the extent such Taxes exceed the Taxes that would have been imposed had the Aircraft not been so subleased);

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(f) a Tax that would not have been imposed but for a Lessor’s Lien;

(g) any Tax that would not have been imposed but for the existence or status of any trust used to hold title to the Aircraft;

(i) any Tax imposed as a result of any Tax Indemnitee’s or its Affiliate’s, agent’s or advisor’s failure to comply with sections 6111, 6112, 6707, 6707A or 6708 of the Code;

(l) a Tax liability of any Tax Indemnitee which would have arisen even if this Lease had not been entered into; and

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18.3 Notice and Contest Rights . If a written notice of any claim is made against any Tax Indemnitee for any Taxes for which Lessee is required to pay or against which Lessee is required to indemnify such Tax Indemnitee pursuant to Clause 18.2, such Tax Indemnitee shall promptly notify Lessee thereof in writing; provided that a failure to so notify will not diminish or relieve Lessee of any obligations thereunder, unless and except to the extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for which Lessee would have been liable in the absence of such failure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding. No Tax Indemnitee shall, without Lessee’s prior written consent, take any action with respect to such a claim for a period of thirty days after Lessee’s receipt of such notice unless such Tax Indemnitee is required to take action prior to such thirty day period and notifies Lessee of such requirement. If reasonably requested by Lessee in writing within thirty days of Lessee’s receipt of notice of such claim, and to the extent that there are means available by which to do so, such Tax Indemnitee shall, provided that no Event of Default shall have occurred and be continuing unless the Lessee shall have provided security for its obligations under this Clause 18 in form and substance satisfactory to such Tax Indemnitee in its sole discretion exercised in good faith, in good faith diligently contest or, in the case of a Lessee-Controlled Contest (as hereafter defined) permit Lessee to contest the validity, applicability or amount of such Taxes by (a) resisting payment thereof, if practicable, (b) paying the same only under protest, if protest is necessary and proper or (c) if payment shall be made, seeking a refund thereof in appropriate administrative and judicial proceedings; provided that (i) prior to taking such action Lessee shall have agreed to indemnify, and shall indemnify on an After-Tax Basis on demand, such Tax Indemnitee for all costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim (including, without limitation, all reasonable legal and accountants’ fees and disbursements and the amount of any interest, penalties or additions to tax which may be payable as a result of contesting such claim), (ii) such Tax Indemnitee shall have determined in good faith that such contest shall not result in a risk of sale, forfeiture or loss of, or creation of any lien (other than a Permitted Lien) on, the Aircraft, (iii) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Tax Indemnitee sufficient funds (on an interest-free basis and, if such Tax Indemnitee shall have determined in good faith that such advance results in taxable income to such Tax Indemnitee, on an After-Tax Basis) to make such payment, (iv) in the case of a contest other than a Lessee-Controlled Contest, such Tax Indemnitee shall have received an opinion of independent tax counsel selected by such Tax Indemnitee that a reasonable basis exists for such contest, (v) in the case of a Lessee Controlled Contest, Lessee shall have delivered to such Tax Indemnitee a written acknowledgement of Lessee’s obligation to indemnify such Tax Indemnitee for the Tax being contested if the contest is not successful, (vi) in the case of a contest other than a Lessee-Controlled Contest, the amount of the potential indemnity for which Lessee may be liable to pay such Tax Indemnitee under Clause 18.2 exceeds ***** or the equivalent

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thereof, (vii) the contest is not for a Tax the imposition of which has been previously contested by Lessee or such Tax Indemnitee, and such contest (including all allowable appeals) was decided adversely to Lessee unless the Lessee shall have delivered an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee that based on a change in law after such previous decision, and taking into account such previous decision, it is more likely than not that the Tax Indemnitee will prevail on such claim and (viii) no appeal shall be required to the Supreme Court of the United States. The applicable Tax Indemnitee shall determine the method of any contest that is not a Lessee-Controlled Contest and (in good faith consultation with Lessee) control the conduct thereof; provided , however , that a Tax Indemnitee shall not settle a claim without the prior written consent of Lessee, which consent shall not be unreasonably withheld, conditioned or delayed. Lessee shall determine the method of any contest that is a Lessee-Controlled Contest and (in good faith consultation with the applicable Tax Indemnitee) control the conduct thereof. The term “Lessee-Controlled Contest” shall mean any contest (i) that, under applicable Law, may be conducted in Lessee’s name and that does not involve income taxes or Taxes imposed on the applicable Tax Indemnitee that are not subject to indemnification by Lessee or (ii) which the applicable Tax Indemnitee determines in good faith the contest of which by Lessee will not adversely affect the Tax Indemnitee; provided that in no event will Lessee control any contest as it relates to an ECA Finance Party without such ECA Finance Party’s prior written consent. Nothing contained in this Clause 18.3 shall require any Tax Indemnitee to contest, or permit Lessee to contest in the name of such Tax Indemnitee, a claim which such Tax Indemnitee would otherwise be required to contest pursuant to Clause 18.3 if such Tax Indemnitee shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under Clauses 18.3 and 18.6 in connection with such claim. If any Tax Indemnitee agrees to a settlement of any contest conducted pursuant to this Clause 18.3 without the prior written consent of Lessee, then such Tax Indemnitee shall be deemed to have waived its rights to the indemnification provided for in Clause 18.2 or 18.6 with respect to the Tax liability accepted in such settlement (and all directly-related claims, and claims based on the outcome of such claim). So long as no Event of Default has occurred and is continuing, in the event that a Tax Indemnitee either waives or is deemed to have waived its rights to indemnification as provided above, such Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to or on behalf of such Tax Indemnitee pursuant to subclause (iii) above with respect to such claim.

18.5 Payments on After-Tax Basis . Each payment and indemnity made by Lessee under this Clause 18 shall be made on an After-Tax Basis.

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(a) ensure that any deduction or withholding by it does not exceed the minimum amount legally required;

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18.8 Reports . Lessee will provide to each Tax Indemnitee such information as may reasonably be requested by such Tax Indemnitee to enable it to fulfill its Tax filing or other information reporting requirements with respect to the transactions contemplated by Lessee’s Documents. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Clause 18, to the extent legally permitted to do so Lessee shall timely file or cause to be filed the same (except for any such report, return or statement which a Tax Indemnitee has notified Lessee that it intends to file, or for income tax returns or any other return, report or statement which such Tax Indemnitee is required by law to file in its own name). Lessee shall either file or cause to be filed such report, return or statement required to be filed by it pursuant to the preceding sentence and send a copy of such report, return or statement to the relevant Tax Indemnitee, or, where Lessee is not so permitted to file such report, return or statement, it shall notify the relevant Tax Indemnitee of such requirement and prepare and deliver, such report, return or statement to such Tax Indemnitee in a manner satisfactory to it within a reasonable time prior to the time such report, return or statement is to be filed and such Tax Indemnitee shall file such report, return or statement; provided that the only consequence hereunder for failure to file shall be a loss of indemnification from Lessee in respect of Taxes resulting from such failure.

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CLAUSE 19. FURTHER PROVISIONS .

19.2 Benefit of Agreement .

(a) Lessor Transfer . Each of Lessor, Owner and Owner Participant may at its own expense assign or transfer its interest in the Aircraft and/or assign or transfer, including but not limited to as security for obligations under the Financing Documents, all or any part of its rights under this Agreement and any other Lessee’s Document, in each case, to a Permitted Transferee (or, in the case of an assignment for security, any person) without the consent of Lessee; provided that prior to any such assignment or transfer becoming effective, the assignee or transferee shall execute and deliver to Lessee an undertaking to the effect that it will not disturb the quiet use, possession and enjoyment of the Aircraft by Lessee (or any permitted sublessee if the Aircraft is then subleased by Lessee hereunder) in accordance with Clause 4.4 hereof during the Term so long as no Default or Event of Default has occurred and is continuing, and such assignment or transfer will not cause the deregistration or negatively affect the United States registration of the Aircraft. If at the time of such assignment or transfer and under laws then in effect, Lessee would be obligated to pay such assignee or transferee under Clauses 18.2, 18.3 or 18.5 hereof an amount that exceeds the amount which Lessee would have been obligated to pay under this Agreement to Lessor, if no such assignment or transfer had taken place, Lessee shall not be obligated to pay the amount of the excess. For the avoidance of doubt, adding a Lender or head lessor as an Additional Insured under Lessee’s liability insurance policy(ies) shall not be deemed to result in any increase of Lessee’s liabilities or obligations hereunder or under any of the other Operative Documents. Lessor shall procure that each of Owner and Owner Participant shall agree, in writing, in favor of Lessee, to be bound by the provisions of this Clause 19.2

(b) No Lessee Transfer . Except as provided in Clause 8.4, no assignment or transfer may be made by Lessee of all or any of its rights or obligations in respect of the Aircraft or this Agreement.

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that may be required in order to give effect to or perfect any such assignment or transfer and if the transfer involves the assumption by the transferee of any of Lessor’s obligations under any Lessee’s Documents, to release Lessor from the obligations so assumed and will execute such certificates and provide such legal opinions as shall be reasonably requested by Lessor in connection therewith. Without limiting the foregoing, in the event of any assignment to Lenders, Lessee undertakes upon request from Lessor and at the expense of Lessor to consent to and to acknowledge the Security Documents by executing and delivering a consent to such documents in such form as Lessor shall reasonably require and otherwise to provide all reasonable assistance and cooperation to Lessor, each Lender and their respective representatives and advisers in connection with the perfection and maintenance of such security interests, including, without limitation, the effecting of all necessary filings and registrations of the Security Documents in the State of Registration and Habitual Base. Lessee agrees that the transferring Indemnitees and Tax Indemnitees shall be entitled to remain Indemnitees and Tax Indemnitees for purposes of Clause 18.

19.3 Further Assurances . Lessee agrees from time to time upon request from Lessor to promptly do and perform such other and further acts and promptly execute and deliver and, if applicable, consent electronically to, any and all such other instruments or registrations as may be required by law or reasonably requested by Lessor to establish, maintain and protect the rights and remedies of Owner, Lessor and the Lender(s) under the Operative Documents and to carry out and effect the intent and purpose of the Operative Documents, including without limitation, if requested by Lessor and at Lessee’s expense, the execution and delivery of supplements or amendments hereto subjecting to this Agreement any Replacement Engine in accordance with the laws of any appropriate jurisdiction. Lessor will reimburse Lessee for any reasonable out-of-pocket expenses (including legal fees and expenses) incurred in relation to a request to take action or execute and deliver documents to establish, maintain or protect the rights and remedies of Lenders unless the request relates to actions and the execution and delivery of documents when entering into a sublease where the Aircraft is registered in a country other than the United States.

19.4 Rights Cumulative; Waivers; Variation; Counterparts; Language .

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writing; and in particular any failure to exercise or any delay in exercising any such rights shall not operate as a waiver or variation of that or any other such right; any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of such party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.

(b) The provisions of this Agreement shall not be varied other than by an instrument in writing executed by or on behalf of Lessor and Lessee.

(c) To the extent, if any, that this Lease constitutes tangible chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease or in any Lease Supplement may be perfected through the transfer or possession of any counterpart other than the original counterpart no. 1, which shall be so identified. Subject to the preceding sentence, this Agreement may be executed in counterparts each of which will constitute one and the same document.

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(a) in the case of personal delivery, recognized international courier service, certified, registered or express mail, on the date received:

to Lessor at:

Wells Fargo Bank Northwest, National Association

260 N. Charles Lindbergh Drive

MAC: U1240-026

Salt Lake City, UT 84116

Telephone: (801) 246-6000

Attention: Corporate Trust Department

with a copy to:

JSA Aircraft Ireland [5207] Limited c/o Jackson Square Aviation, LLC

559 Pacific Avenue

San Francisco, CA 94133

Telephone: (415) 821-8300

Attention: General Counsel

to Lessee at:

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (Volaris)

Antonio Dovali Jaime No. 70

Torre B, Piso 13

Col. Zedec Santa Fe

Delegación Alvaro Obregon

CP 01210 México, D.F.

México

Telephone: (52 55) 1105 2300

Attention: General Counsel

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19.12 Governing Law . (a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).

(b) NOTWITHSTANDING AND WITHOUT PREJUDICE TO SECTION 19.12(a), IN CASE ANY LEGAL ACTION, SUIT OR PROCEEDING IS BROUGHT IN ANY COURT OF COMPETENT JURSIDICTION IN THE UNITED MEXICAN STATES OR ANY POLITICAL SUBDIVISION THEREOF TO RECOVER THE AIRCRAFT OR ANY PART THEREOF (OR ANY LEGAL ACTION, SUIT OR PROCEEDING RELATED THERETO TO RECOVER ASSETS OR THAT CAN RESULT IN THE ATTCHMENT OF ASSETS IS BROUGHT IN ANY OF THE AFORESAID COURTS), THE PARTIES HERETO HEREBY AGREE, PURSUANT TO ARTICLE VIII (2) OF THE PROTOCOL TO THE CONVENTION ON MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT, THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED MEXICAN STATES, EXCEPT TO THE EXTENT THAT THE PARTY BRINGING ANY SUCH LEGAL ACTION, SUIT OR PROCEEDING ELECTS AT THE TIME OF THE COMMENCEMENT THEREOF THAT THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS AGREEMENT IN CONNECTION WITH ANY SUCH RECOVERY OR ATTACHMENT SHALL BE DEEMED TO BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, IN WHICH CASE AND TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SUCH RIGHTS AND/OR OBLIGATIONS, AS THE CASE MAY BE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATES OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE OF NEW YORK).

19.13 Jurisdiction; Service of Process; Inconvenient Forum.

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assets to be recovered or attached) may be located. By execution and delivery of this Agreement, each of the parties hereto hereby irrevocably submits to and accepts with regard to any such Proceedings, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered thereby and hereby irrevocably waives any right to resort to any other jurisdiction to which it may be entitled by virtue of its present or future domicile or otherwise.

Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to it at its address set forth in Clause 19.8. The foregoing, however, shall not limit the rights of any party to serve process in any other manner permitted by applicable law or to bring Proceedings or to obtain execution of judgment in any jurisdiction. Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any Proceeding arising out of or relating to this Agreement or any of the other Operative Documents brought in the State of New York and the Supreme Court of the State of New York (and all related appellate courts) and, in the case of Proceedings brought to recover the Aircraft (or Proceedings related thereto to recover assets or that could result in the attachment of assets) in any court located in the Federal District of Mexico or in any other jurisdiction where the Aircraft (or the assets to be recovered or attached) may be located, and hereby further irrevocably waives any claim that any Proceedings in any of the aforesaid courts has been brought in an inconvenient forum; and, to the extent that it has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process it hereby waives such immunity and agrees not to assert, by way of motion, as a defense, or otherwise, in any Proceeding, any claim that it is not personally subject to the jurisdiction of the above named courts, that it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, or attachment either prior to judgment or in aid of execution, that such Proceedings are brought in an inconvenient forum, that the venue of such Proceeding is improper, or that any of the Operative Documents may not be enforced in or by such courts.

-83-

other common law and statutory claims. Each party hereto acknowledges that the above waiver and agreement is a material inducement to enter into a business relationship, that each has already relied on the above waiver and agreement in entering into this Agreement, and that each will continue to rely on the above waiver and agreement in their related future dealings. Each party hereto further warrants and represents that it has reviewed the above waiver and agreement with its legal counsel and that it knowingly and voluntarily waives its jury trial rights and agrees as described above following consultation with legal counsel. THIS WAIVER AND AGREEMENT SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR AGREEMENTS RELATING HERETO.

19.16 Confidentiality .

(a) No party hereto shall, without each other party’s prior written consent, communicate or disclose the terms of this Agreement or any information or documents furnished pursuant to this Agreement (except to the extent the same are within the public domain) to any third party (other than Lenders and any prospective transferee or assignee and to its and their respective Affiliates and, in each case to, the respective external legal advisers, auditors, insurance brokers of such persons to the extent required for each such party to carry out its relevant task); provided however that disclosure will be permitted to the extent required: (i) pursuant to an order of any court of competent jurisdiction; (ii) pursuant to any procedure for discovery of documents in any proceeding before any such court or other Government Entity or to enforce the terms of this Agreement or any other Operative Document; (iii) pursuant to any law or regulation having the force of law; or (iv) in order to perfect any assignment of assignable warranties.

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Revenue Code of 1986, as amended, and shall be construed in a manner consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the U.S. federal tax structure of the transaction or any U.S. federal tax matter or U.S. federal tax idea related to the transaction.

[Remainder of Page Intentionally Left Blank; Signature Page Follows.]

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Aircraft Lease Agreement [5207] to be executed as of the date first above written.


CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

By:		/s/ Mario E. Geyne
Name:		Mario E. Geyne
Title:		Financial and Fleet Planning Director


WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement

By:		/s/ David Wall
Name:		David Wall
Title:		Assistant Vice President

-Signature Page-

Aircraft Lease Agreement, msn 5207

SCHEDULE 1

AIRCRAFT DESCRIPTION

Aircraft Manufacturer, Model and Series: Airbus A320-233 Aircraft

Manufacturer’s Serial Number: 5207

Engine Manufacturer and Model: IAE International Aero Engines A.G. V2500-A5

Engine Serial Numbers: V16294 and V16300

Auxiliary Power Unit Manufacturer: *****

Auxiliary Power Unit Serial Number: P-5119.

Landing Gear Part Numbers: *****

Landing Gear Serial Numbers: 12B12182 (Nose); 12MDG2639 (LH Gear); 12MDG2670 (RH Gear)

Date of Manufacture: June, 2012

Seating Configuration: 174 Economy Class


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

Schedule 1-1

SCHEDULE 1A

AIRCRAFT DOCUMENTS

All records listed in this Exhibit B shall be provided notwithstanding any policies of the Aviation Authority or the Reference Regulatory Agency that may allow the disposal of such records.

1)	Certificates

Certificate of Airworthiness;

Certificate of Registration;

Aircraft De-Registration Confirmation (if applicable);

Export Certificate of Airworthiness issued by the last country of registry (if applicable);

Noise Limitation Certificate (AFM page) (if applicable); and

Burn Certificates (Cabin Interiors), unless maintained as per Manufacturer type certificated configuration, as follows:

Certification of compliance with fire blocking requirements as outlined by the Reference Regulatory Agency;

ii)

Bottom Seat cushions (including “in combination” burn certification), Passenger and Cabin attendant;

iii)

Back rest cushions (including “in combination” burn certification), Passenger and Cabin attendant;

iv)

Dress covers (including “in combination” burn certification), Passenger and Cabin attendant;

Carpets;

vi)

Curtains;

vii)

Interior Surfaces (if refurbished); and

2)	Manuals

Reference Regulatory Agency approved Airplane Flight Manual;

Weight and Balance Control and Cargo Loading Manual and Supplements;

Operations Manual (Manufacturer’s generic);

Quick Reference Handbook (Manufacturer’s generic);

Schedule 1A-1

Structural Repair Manual;

Aircraft Maintenance Manual;

Component Overhaul Manuals, (MM, IPC, SRM) for the following cabin BFE, if such BFE is not factory installed and included in the Aircraft Manuals:

Galleys;

ii)

Coffee Makers, Ovens, Hot Jugs and other galley equipment;

iii)

Lavatories;

iv)

Toilet Assemblies;

Closets;

vi)

Class Dividers;

vii)

Passenger Seats;

Aircraft Illustrated Parts Catalog (I.P.C.) (operator customized);

Operator part number to manufacturer part number cross reference, if operator maintains its own part numbering system;

Aircraft Wiring Diagrams;

Engine shop manual and IPC;

APU shop manual and IPC (if such IPC is not part of the Aircraft IPC);

Fault Isolation Manual, if applicable;

Schematics Manual, if applicable;

Summary of Lessee’s Maintenance Program;

List of Certification Maintenance Requirements;

Master Minimum Equipment List;

Configuration Deviation List; and

Fault Reporting Manual, if applicable.

3)	Airworthiness Directives Documentation

The Aircraft shall have all records associated with A.D. compliance:

(1)

A.D. number and revision number;

(2)

A.D. title;

(3)

Aircraft serial number, Engine serial number, APU serial number, appliance serial number, as applicable;

(4)

Engineering documentation reference;

(5)

Manufacturer’s Service Bulletin reference and cross-references where appropriate;

(6)

Specify terminated or repetitive status;

(7)

Date of initial accomplishment;

(8)

Date of last maintenance accomplishment, if repetitive;

(9)

Name and serial number of the internal maintenance form used to document accomplishment, if applicable;

(10)

The means by which compliance was accomplished (e.g., modified, repaired, inspected);

Schedule 1A-2

(11)

Details of any alternate means of compliance, including references, intervals, and applicability;

Items c) and d) will be provided in document packages for each A.D. Each package will contain all documents relative to the A.D./Aircraft combination, and include copies of the AD.

4)	Engineering Documentation

SB number and revision number;

ii)

SB title;

iii)

Aircraft serial number, Engine serial number, APU serial number, appliance serial number as applicable;

iv)

Engineering documentation reference;

Manufacturer’s Service Bulletin reference and cross-references where appropriate;

vi)

Specify terminated or repetitive status;

vii)

Date of accomplishment of each portion of such engineering document;

viii)

Date of last maintenance accomplishment, if repetitive;

Schedule 1A-3

ix)

Name and serial number of the internal maintenance form used to document accomplishment, if applicable;

Statement of the means by which compliance was accomplished (e.g., modified, repaired, inspected);

engineering orders;

ii)

drawings;

iii)

parts lists;

iv)

installation documentation;

engineering analysis as submitted to obtain the STC approval;

vi)

all manual supplements (MM, IPC, WD, AFM);

vii)

maintenance program supplements;

viii)

any and all reference documents referenced by documents contained in this section 4(e);

Engineering deviations records, if any, applicable to the airframe, Engines and APU, components and piece parts; and

Digital Flight Data Recorder System technical description

5)	Aircraft Maintenance Status Summaries

Certified current Time in Service (Flight Hours & Cycles);

Certified maintenance status of the Aircraft, including Aircraft serial number, hours, cycles and days since major checks and applicable time remaining to major checks;

Certified status of structural tasks, including SSI (including last accomplished and next due);

Certified status of CPCP (including last accomplished and next due), where the CPCP is not part of the Manufacturer’s SSI program;

Schedule 1A-4

Certified status of all non-SB and Major Modifications/STC’s including acceptable State of Manufacture Certification and/or equivalent FAA or EASA approval;

List of out of Phase Checks, Service Bulletins requiring continuous surveillance and Special Requirements (if any); and

Declaration of Aircraft Accident/Incident Report and major repairs, if any.

6)	Aircraft Maintenance Records

Aircraft maintenance log from the past 12 months;

Cabin maintenance log (if maintained separately from the Aircraft maintenance log) from the past 12 months;

A Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of A Checks (or equivalent);

C Checks- Complete work card packages, tally sheets, material data sheets and maintenance releases for the last complete cycle of C Checks (or equivalent);

Complete work card packages, tally sheets, material data sheets and maintenance releases for all major checks (D, S4C, HMV or equivalent);

Documentation and records concerning the last Aircraft major structural inspection including CPCP Tasks and Structural Sampling Inspection;

Last Weight & Balance Report including Schedule;

Compass Swing Report;

Last Test Flight Report;

Cross reference list for MPD task number vs. last operator’s Task Card number including date/time/cycles each task was done;

Service Difficulty Reports (if any);

Aircraft Historical Log;

Last Flight Data Recorder read-out;

Weighing reports; and

Historical report showing cumulative times for last major inspection accomplishments, Engine changes, storage periods, landing gear and APU changes, etc.

7)	Configuration Status

FAA or EASA approved and certified LOPA;

Galley Drawings;

Emergency, Safety and Loose Equipment Layout/Listing showing description, quantity, manufacturer, part number and location;

Inventory Listing of Avionics installed units;

Schedule 1A-5

Aircraft Major Equipment listing or current equipment list if not included in Weight and Balance Control and Cargo Loading Manual;

List of applicable STC’s;

Aircraft Detail Specification;

Aircraft Inspection Record;

Passenger/ Cargo Buyer Furnished Equipment List (including, but not limited to seats, galley, lavatories, entertainment, cargo handling, emergency equipment.); and

Electrical Load Analysis documents and data.

8)	Manufacturer Historical Records at New Delivery

Copy of EASA Form 52 Aircraft Statement of Conformity;

Manufacturer’s AD Report;

Manufacturer’s Inspection Report, Initial Equipment list;

Manufacturer’s repair/alteration report or statement that no such report was produced;

Manufacturer’s SB Report;

Copies of all applicable Master Changes (M.C.)/ Supplemental Type Certificate; and

Rigging document.

9)	Engine Records

Engine log book or Engine Data Submittal;

Current Disk Sheet (LLP Sheet) signed and certified;

Manufacturer Delivery Documents;

Complete historical engine/ module shop visit reports and Engine Performance Restoration reports, for all Engine Performance Restorations;

Dirty finger print shop work cards and material data sheets covering the last overhaul of each module, for all shop visits;

On Wing Repair records;

Engine Log Book/ Master Records of Installation/Removals;

Last Borescope Report, including video if available;

Test Cell Run Report;

Certified Statement that Engines are not involved in an accident;

Certified “On-Watch” statement;

List of “On-Watch Items” items requiring repetitive inspections;

List of repetitive inspections that are not required by AD;

List of technical variances or maintenance requirements unique to the particular Engine;

Engine Trend Monitoring data for the last 12 months of operation;

Last engine run and power assurance report;

Schedule 1A-6

Approval form;

ii)

Complete description of the discrepancy;

iii)

Supporting analysis and documentation; and

Approval form;

ii)

Complete description of repair;

iii)

Supporting analysis and documentation.

10)

APU

Certified Statement on Status of APU;

In house modifications (if applicable);

Approved Release to Service Certification for installed units;

APU Log Book/ Master Record of Installation/ Removals;

APU Shop Visit Reports & reason for removal, for all APU shop visits;

Dirty finger print shop work cards and material data sheets for all APU shop visits;

Statement of APU hours to Aircraft Flying hours (if applicable);

APU Borescope Report;

Last Test Run Report;

Schedule 1A-7

Approval form;

ii)

Complete description of the discrepancy;

iii)

Supporting analysis and documentation;

Approval form;

ii)

Complete description of repair;

iii)

Supporting analysis and documentation; and

Current disk sheet (LLP) signed and certified, if applicable.

11)

Components

FAA Form 8130-3 or EASA Form-1 and last repair/overhaul records for Hard Time Components;

FAA Form 8130-3 or EASA Form-1 and last repair/ overhaul records for on-condition and condition monitored components;

Certified Quick Engine Change (QEC) rotable parts list and FAA 8130-3 or JAA Form-1 for each QEC rotable part;

Certified accessory LRU list and FAA 8130-3 or JAA Form-1 for installed LRU’s.

12)

Landing Gear

Approved Release to Service Certification for each fully built up gear assembly, or major assemblies on each gear, as applicable;

Last shop visit report; and

Complete work card packages, tally sheets, material data sheets and maintenance releases for the last Landing Gear overhaul;

Schedule 1A-8

13)

Damage and Repairs

All repairs to the pressure vessel shall be documented in accordance with the repair assessment guidelines set forth in FAR 121.370 or equivalent EASA standards;

A repair and dent map shall be provided which includes the following:

Drawing or description of the location, type and form of the repair;

ii)

iii)

A diagram of sufficient size and detail to illustrate all repairs to the entire pressure vessel as well as an additional separate map of all dents on the pressure vessel.

14)

Software

A certified listing of onboard loadable software and databases to include the following:

ATA chapter;

ii)

nomenclature;

iii)

part number;

iv)

revision date;

expiration date; and

Procedures for obtaining downloadable software from the internet, if applicable.

15)

Electronic Format

Schedule 1A-9

SCHEDULE 2

LEASE SUPPLEMENT

THIS LEASE SUPPLEMENT [ 5207 ], dated June , 2012, between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as owner trustee under the Trust Agreement, a national banking association (“Lessor”), and CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“Lessee”).

Lessor and Lessee have heretofore entered into that certain Aircraft Lease Agreement [ 5207 ] dated as of June 26, 2012 (as at any time amended, modified or supplemented, herein called the “Lease” and the terms defined therein being herein used with the same meanings), which Lease provides in Clause 4.2 for the execution of a Lease Supplement substantially in the form hereof for the purpose of leasing the Aircraft under the Lease in accordance with the terms thereof. The Lease relates, among other matters, to the Airframe and Engines described below, and this Lease Supplement is attached to a counterpart of the Lease for purposes of filing and recordation.

NOW, THEREFORE, in consideration of the premises and other good and sufficient consideration, and pursuant to Clause 4.2 of the Lease, Lessor and Lessee hereby agree as follows:

1. Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and leases from Lessor, under the Lease, as herein supplemented, the following described Airbus A320-233 aircraft (the “Delivered Aircraft”) which Delivered Aircraft as of the date hereof consists of the following:

Airframe: FAA Registration Number N510VL, Manufacturer’s Serial No.5207; and

Engines: Two IAE International Aero Engines A.G. V2527E-A5 engines installed thereon bearing Engine Manufacturer’s Serial Numbers V16294 and V16300 (each of which engines has 1,750 or more lbs. of thrust).

2. The Delivery Date of the Delivered Aircraft and Engines is the date of this Lease Supplement set forth in the opening paragraph hereof. Basic Rent Amount is as set forth in the Technical Acceptance Certificate.

Schedule 2-1

4. All the provisions of the Lease are hereby incorporated by reference in this Lease Supplement, on and as of the date of this Lease Supplement, to the same extent as if fully set forth herein.

IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to be duly executed and delivered as of the date and year first above written.


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

By:
		Name:
		Title:

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V., Lessee

By:
		Name:
		Title:

Schedule 2-2

SCHEDULE 3

CERTIFICATE

I, the undersigned, an officer of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (“ Lessee ”), a sociedad anónima promotora de inversión de capital variable organized and existing under the laws of Mexico, DO HEREBY CERTIFY that:

1. This Certificate is furnished in accordance with the Aircraft Lease Agreement [5207] dated as of June 26, 2012 (as the same may be supplemented, amended or modified from time to time, the “ Agreement ”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement (5207) and Lessee, relating to that certain Airbus A320-233 Aircraft, manufacturer’s serial number 5207 (the “Aircraft”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings assigned to them in the Agreement.

2. Attached hereto as Exhibit A is a copy of the constitutional documents and by-laws of Lessee together with all amendments thereto adopted through the date hereof.

3. Attached hereto as Exhibit B is a true and correct copy of the resolutions, duly adopted by the Board of Directors of Lessee, which resolution also includes the power of attorney and which have not been revoked, modified, amended or rescinded and are still in full force and effect, and no other resolutions have been adopted by the Board of Directors of Lessee which deal with the execution, delivery or performance of any of the Operative Documents.

4. Each person whose name, title and signature appears in the attached Exhibit C hereto have been duly elected and/or appointed, have duly qualified as, have been elected and/or appointed, officers of Lessee and/or attorneys-in-fact, holding the respective offices or positions set opposite their names and the signatures set opposite their names are their genuine signatures.

5. The representations and warranties of Lessee under Section 2.1 of the Lease and each of the other Lessee’s Documents are true and correct in all material respects on and as of this date with the same force and effect as though made on and as of this date.

6. No proceedings for the dissolution or liquidation of Lessee or threatening its existence has been taken, or is pending or contemplated.

7. No Event of Default or default by Lessee under the Lease or any other Lessee’s Document have occurred and is continuing as of this date or would arise by reason of the occurrence of the transactions contemplated in the Lessee’s Documents.

Schedule 3-1

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


By:
		Name:
		Title:

Schedule 3-2

I, the undersigned, of Lessee, DO HEREBY CERTIFY that is a duly elected and qualified of Lessee and the signature above is his genuine signature.

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


By:
Name:
Title:

Schedule 3-3

SCHEDULE 4

REDELIVERY CONDITIONS

General Condition

(a)

The Aircraft shall:

(i)

be clean by international commercial airline standards;

(ii)

have installed thereon the full complement of Engines and other equipment, parts and accessories as delivered and all LFE and IFE;

(iii)

•

“SC Check” means, with respect to the Airframe, a Structural Check, and shall be construed to imply either the 6Y/4C Check or the 12Y/8C Check.

(iv)

There will be no “on watch” conditions, special callouts, special repetitive inspections, special waivers or exemptions in effect on the Airframe, any Engine, the APU or any Part.

(v)

There will be no deferred maintenance items, open flight discrepancies or open maintenance discrepancies.

Schedule 4-1

(vi)

The Aircraft shall be in compliance with all MPD tasks as a single aircraft without reliance upon compliance status of other aircraft in the operator’s fleet or sampling of other aircraft.

(vii)

(viii)

(ix)

(x)

Schedule 4-2

(xi)

(xii)

•

(xiii)

(xiv)

Schedule 4-3

(xv)

Check and Part Lives

Prior to the Termination Date and immediately prior to the return of the Aircraft to Lessor, at Lessee’s own expense, the following shall be performed:

Airframe :

(i)

(ii)

The MPD tasks described in Lessee’s then-current MPD sufficient to clear the Aircraft for a period equal to *****

Engines :

APU:

The APU will be in serviceable condition and will have ***** The preceding amount is quoted in January 2010 US Dollars and shall be increased by ***** on January 1 ^st of each year thereafter.

Landing Gear:

(i)

(ii)

Schedule 4-4

Components:

Schedule 4-5

SCHEDULE 5

Monthly Maintenance Status Report


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

Total Flight Hours						FH Utilization for Period

Total Cycles						FC Utilization for Period

Installed Equipment at Delivery

( Engines, APU, Landing Gear )

Engines/APU

Landing Gear

Engine 1

Engine 2

APU

Left

Nose

Right

Type/Model

Part Number

S/N

TSN

CSN

Currently Installed Equipment

( Engines, APU, Landing Gear )

Engines/APU

Landing Gear

Engine 1

Engine 2

APU

Left

Nose

Right

Type/Model

Part Number

S/N

TSN

CSN

TSO

CSO

DSO

LLP First Limiter

Remaining (cycles)

Schedule 5-1

AIRFRAME MAINTENANCE CHECKS

LAST CHECK PERFORMED

NEXT CHECK DUE

CHECK
TYPE

CHECK #

TOTAL
HRS

TOTAL
CYC

DATE

CHECK

TYPE

CHECK #

TOTAL
HRS

TOTAL
CYC

DATE

A-Check

C-Check

D-Check

TECHNICAL ACTIVITY DURING PERIOD

Engine, APU and Landing Gears – details of removal activity


S/N OFF	S/N ON	REASON / CAUSE

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

DEFERRAL LIST

See following pages for current open deferrals report.

AIRCRAFT ACCIDENT/INCIDENT REPORT

Description of any aircraft accident/incident since last reporting period:


Date	Station	Details
None

AD STATUS REPORT

See following pages for current AD status report.

Schedule 5-2

AIRCRAFT STATUS CERTIFICATION

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

Signed:

(Lessee)

Title:

Return by e-mail to : utilization@jacksonsquareaviation.com

Schedule 5-3

SCHEDULE 6

FORM OF QUIET ENJOYMENT LETTER

From: [Lessor Party][Security Trustee], as Security Trustee (“Security Trustee”)

To: CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. de C.V. (“ Lessee ”)

Dated: [ ]

Re: Aircraft Lease Agreement [5207] dated as of June 26, 2012 (as amended and supplemented, the “ Lease ”) between Lessee and Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as trustee under the Trust Agreement (“ Lessor ”) pertaining to one (1) Airbus A320-233 aircraft bearing manufacturer’s serial number 5207 (as more particularly described in the Lease, the “ Aircraft ”)

Ladies and Gentlemen:

All terms defined in the Lease shall, unless the context otherwise requires, bear the same meanings herein.

Please countersign this letter in order to confirm your agreement to the arrangements contained herein.

Very truly yours,

[Lessor Party][Security Trustee]


By
Name:
Title:

Schedule 6-1

Agreed and Accepted:

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.


By:
Name:
Title:

Schedule 6-2

SCHEDULE 7

TECHNICAL ACCEPTANCE CERTIFICATE

TO:	Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement

DATE:

Aircraft Lease Agreement [5207] dated as of June 26, 2012 (the “Lease”) between Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as owner trustee under the Trust Agreement and Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. relating to Airbus A320-233 Aircraft, manufacturer’s serial number 5207 (the “Aircraft”)

Terms used in this Certificate bear the meanings given to such terms in the Lease.

Lessee confirms that as at hours on , 20 being the Delivery Date at :

(i)

the Aircraft and the Aircraft Documents were examined and duly accepted by Lessee in accordance with and subject to the provisions of the Lease;

(ii)

the execution and delivery of this Certificate further confirms the acceptance of the Aircraft and the Aircraft Documents by Lessee as satisfactory to it and otherwise for all purposes of the Lease;

(iii)

the Basic Rent Amount is US$ ;

(iv)

the manufacturer’s serial numbers of the installed Engines are V16294 and V16300;

(v)

the Airframe, Engines and Parts had the following Flight Hours/Cycles at Delivery:

(a)

Airframe Serial No: 5207:


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

Schedule 7-1

(b)

Engine Type: IAE V2527E-A5:


Position	1	2
Serial No:	V16294	V16300

Total Flight Hours:
Total Cycles:

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

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

Cycles remaining to next expected Engine Performance Restoration

(c)

APU Model: Honeywell P/N 3800708-1


		Serial No: P-5119

		Total [Flight]/[APU] Hours:

		Total Cycles:

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

(d)

Landing Gear:


Position	LH Main	Nose	RH Main

Model:	Messier Dowty Messier Dowty Messier DowtySerial No:
12MDG2639	12B12181	12MDG2670

Total Flight

Hours:

Total Cycles:

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

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

Schedule 7-2

(e)

Fuel on Board:

(f)

Status of components or Parts with time/cycle and calendar limits (see attached sheet); and

(g)

All of the foregoing has been delivered and accepted on the date set forth above to Lessee’s full satisfaction and pursuant to the terms and provisions of the Lease;

(vi)

(vii)

the Aircraft is insured in accordance with the Lease;

(viii)

(ix)

no Event of Default has occurred and is continuing;

(x)

attached hereto is a schedule of all Aircraft Documents delivered with the Aircraft;

(xi)

attached hereto is a schedule of Loose Equipment listing items of loose equipment delivered to Lessee with the Aircraft on the date hereof; and

(xii)

attached is a schedule listing the Aircraft Manuals.


By:
Name:
Title:

Schedule 7-3

SCHEDULE 8

PART A

LESSEE FURNISHED EQUIPMENT

June 2012

SCN

A320-200 STANDARD SPECIFICATION Ref. Issue 5.1


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

Schedule 8-1


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

Airline:

CONCESIONARIA VUELA COMPANIA DE AVIACION

Delivery Date

Mar-12

Operator:

CONCESIONARIA VUELA COMPANIA DE AVIACION

MSN

TBD

A/C Type:

320-200

Issue

ATA/Item

Description

Manufacturer

P/N

Unit

A/C Qty

*****

Schedule 8-2

Airline:

CONCESIONARIA VUELA COMPANIA DE AVIACION

Contractual

Delivery

Date

Delivery

Date

Mar-12

Operator:

CONCESIONARIA VUELA COMPANIA DE AVIACION

MSN

TBD

A/C Type:

320-200

Issue

ATA/Item

Description

Manufacturer

P/N

Unit

A/C Qty

*****

Schedule 8-3

PART B

IN FLIGHT ENTERTAINMENT

NONE

Schedule 8-4

SCHEDULE 9

LESSEE’S CONDITIONS PRECEDENT

Lessee’s obligation to take and to commence the leasing of the Aircraft under this Agreement is subject to fulfillment of each of the following conditions:

(a) Lessee shall have received counterparts duly executed by Lessor of this Agreement and the Lease Supplement;

(b) Each of the representations and warranties of Lessor contained in Clause 2.2 shall be true and correct in all material respects on the Delivery Date as if made on the date thereof;

(d) Lessee shall have received from each of Beneficiary, Owner and Security Trustee a letter of quiet enjoyment substantially in the form set forth in Schedule 6 of this Agreement.

Schedule 9-1

SCHEDULE 10

[Reserved]

Schedule 10-1

SCHEDULE 11

IRREVOCABLE POWER OF ATTORNEY/PODER IRREVOCABLE

Form of Irrevocable Power of Attorney

[THIS FORM OF POA MUST BE GRANTED BY LESSEE IN A PUBLIC DEED PREPARED BY A MEXICAN NOTARY PUBLIC]

The undersigned, [ ] in its capacity as [ ] of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (the “Company” / “Lessee”) in connection with the Aircraft Lease Agreement dated , 2012 (the “Lease”) entered it by and between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [ ] dated [ ] (the “Lessor”) and the Company with respect to one Airbus A320-233 bearing manufacturer’s serial number [ ] (the “Aircraft”), grants on behalf of the Company, this power of attorney.

FIRST.- The Company, in accordance with the Company’s obligations under the Lease, hereby grants an IRREVOCABLE SPECIAL POWER OF ATTORNEY FOR ADMINISTRATION ACTS, AND FOR PLEADINGS AND COLLECTIONS, to WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee under the Trust Agreement [ ] dated [ ] and CRÉDIT AGRICOLE CIB (each an “Attorney” and together the “Attorneys”), with all the special faculties that require a special clause, in accordance to the terms established in the first two paragraphs of article 2554 (two thousand five hundred and fifty four of the Federal Civil Code and its correlative articles of the several Civil Codes ruling in the federal entities of the Mexican United States, to be exercised jointly or individually in the United Mexican States, in the United States of America, or in any other jurisdiction where the Aircraft may be located, as required, to execute and perform on behalf of CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. all actions and to sign all documents necessary or appropriate to carry out and fulfill the terms provided in the Lease, including without limiting:

(i)	request and obtain the de-registration of the Aircraft and the cancellation of the registration marks from the Mexican Aviation Registry (“RAM”), or any other corresponding registry, or its equivalent in the United States of America;

(ii)	to request from the General Directorate of Civil Aviation (“DGAC”) or its equivalent in the United States of America to communicate such deregistration to any authority domestic or foreign;

Formato de Poder Irrevocable

[ESTE FORMATO DE PODER DEBE DE SER OTORGADO POR LA ARRENDATARIA EN UN ESCRITURA PÚBLICA ANTE UN NOTARIO PÚBLICO MEXICANO]

El suscrito, en su carácter de [ ] de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. (la “Sociedad” / “Arrendataria”) en relación con el Contrato de Arrendamiento de Aeronave de fecha , 2012 (el “Arrendamiento”) celebrado por y entre WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [ ] de fecha [ ] (la “Arrendadora”) y la Sociedad respecto a una Aeronave modelo Airbus A320-233 con número de serie del fabricante [ ] (la “Aeronave”), otorga en nombre y representación de la Sociedad, el presente poder.

PRIMERA.- La Sociedad, en cumplimiento de lo establecido en el Arrendamiento, en este acto otorga un PODER ESPECIAL IRREVOCABLE PARA ACTOS DE ADMINISTRACION, Y PLEITOS Y COBRANZAS, a favor de WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, no por su propio derechos, sino únicamente como fiduciario bajo el Contrato de Fideicomiso [ ] de fecha [ ] y CRÉDIT AGRICOLE CIB (cada uno, referidos en el presente como “Apoderado” y en conjunto los “Apoderados”) con todas las facultades especiales que requieren clausula especial de conformidad con los establecido en los dos primeros párrafos del artículo 2554 (dos mil quinientos cincuenta y cuatro) del Código Civil Federal y sus artículos correlativos de los diversos Códigos Civiles que rigen en las entidades federativas de los Estados Unidos Mexicanos, para ser ejercitado conjunta o separadamente dentro de los Estados Unidos Mexicanos, en los Estados Unidos de América, o cualquier otra jurisdicción donde la Aeronave se encuentre, según se requiera, para celebrar y ejecutar en nombre y representación de CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V. todas las acciones y ejecutar todos los documentos necesarios o apropiados para llevar a cabo y cumplir con los términos previstos en el Arrendamiento, incluyendo sin limitar:

(i)	solicitar y obtener la baja del registro y marcas de nacionalidad y matrícula (cancelación de registro) de la Aeronave del Registro Aeronáutico Mexicano (“RAM”) o de cualquier otro registro que corresponda, o de su equivalente en los Estados Unidos de América;

(ii)	solicitar de la Dirección General de Aeronáutica Civil (“DGAC”) o de su equivalente en los Estados Unidos de América, comuniquen la cancelación de la matrícula a cualquier autoridad nacional o extrajera;

Schedule 11-1

(iii)

to request and obtain the removal of the Aircraft from the operation permits of Lessee before the DGAC;

(iv)	to request and obtain from the DGAC or any other relevant authority the authorizations needed to complete the ferry flight of the Aircraft out of Mexico or from any other jurisdiction where the Aircraft may be located;

(v)	to perform all necessary and required filings to export the Aircraft from Mexico or from any other jurisdiction where the Aircraft may be located;

(vi)	to notify the termination of the Lease to the RAM or any other relevant authority;

(vii)

to perform any acts and execute any documents required for the purposes aforementioned, including without limitation, the execution or ratification of a termination agreement of the Lease, in the required form;

(viii)

in case of an event of total loss of the Aircraft and/or the Engines (as such term is defined in the Lease), to act on behalf of the Lessee and to perform all kind of acknowledgements and actions, to execute any kind of documents necessary or required by Lessee to collect the corresponding insurance proceeds (hull, war and perils insurance, etc.) related to the Aircraft and Engines, including without limitation the execution of releases;

(ix)	to request any information from the Air Navigation Service in Mexican Air Space (“SENEAM”) or from Airport and Auxiliary Services (“ASA”) in connection with any amounts owed by Lessee; and

(x)	to delegate in whole or in part the powers that have been granted herein, always retaining the power to execute them by themselves.

Likewise, the Attorneys will have, including without limitation, all the necessary faculties to make any filings and initiate any proceedings related to the Aircraft and, particularly, to interpose and abandon any action or proceeding, including the “ amparo ” procedure; to act as coadjutor of the office of the Public Prosecutor, to articulate and release positions, and grant pardon, desists from initiated proceedings and celebrate transactions.

Exclusively for the purpose for which this power of attorney is granted, jointly or separately, the Attorneys will, without limitation, have the necessary capacity to

(iii)

solicitar y obtener la baja de la Aeronave de los permisos de operación de la Arrendataria ante la DGAC;

(iv)	solicitar y obtener de la DGAC o de cualquier otra autoridad relevante las autorizaciones necesarias para realizar el vuelo de traslado de la Aeronave al extranjero o desde cualquier jurisdicción en donde la Aeronave se encuentre;

(v)	realizar todos los trámites necesarios y conducentes para la exportación de la Aeronave y a la transportación de la misma fuera del territorio mexicano o desde cualquier otra jurisdicción donde se pudiera encontrar localizada la Aeronave;

(vi)	notificar la terminación del Arrendamiento al RAM o cualquier otra autoridad para los fines conducentes;

(vii)

realizar cualquier acto y suscribir cualquier documento para la consecución de los fines anteriormente mencionados, incluyendo sin limitar, la ejecución o ratificación del convenio de terminación del Arrendamiento, en la forma que se requiera;

(viii)

en un caso de que ocurra un evento de pérdida total de la Aeronave y/o los Motores (según dicho es definido en el Arrendamiento), para actuar en representación de la Arrendataria y para llevar a cabo todo tipo de reconocimientos y acciones, y para firmar cualquier y todo tipo de documentos necesarios o requeridos por parte de la Arrendataria para el cobro de los recursos provenientes de cualquier tipo de seguro (de casco de la Aeronave, de riesgo y guerra, etc.) inherente a la Aeronave y sus Motores, incluyendo sin limitación la firma de formatos de finiquito y liberación;

(ix)	solicitar cualquier información a Servicios a la Navegación en el Espacio Aéreo Mexicano (“SENEAM”) o a Aeropuertos y Servicios Auxiliares (“ASA”) en relación con cualquier cantidad adeudada por la Arrendataria; y

(x)	delegar en todo o en parte las facultades que les han sido otorgadas en este instrumento, conservando en todo momento la facultad de ejercerlas por su cuenta.

De igual forma, enunciativa mas no limitativa, los Apoderados queda especialmente facultado para llevar a cabo cualquier presentación de documentos, trámites y procedimientos en relación con cualquier transacción relacionada con la Aeronave y, en ese particular, para interponer y desistirse de cualquier acción o procedimiento incluidos el juicio de amparo; para actuar como coadyuvante de la oficina del Ministerio Público, para articular y absolver posiciones, otorgar el perdón, celebrar transacciones y desistirse de cualquier procedimiento iniciado.

Única y exclusivamente para los fines para los que es otorgado el presente poder especial, conjunta o separadamente, de manera enunciativa mas no

Schedule 11-2

represent the Company before any and all authorities, either judicial or administrative, federal, state or municipal, of Mexico, particularly before the Labor Conciliation and Arbitration Board, and/or of the United States of America, or any other jurisdiction where the Aircraft may be located, including without limitation, the DGAC, the RAM, the General Customs Direction of the Ministry of Treasure of México (“SHCP”), the Customs Department of the United States of America, the Federal Aviation Administration, the Department of Transportation of the United States of America, and/or any and all other authorities that in the future shall have the capacities mentioned above (indistinctly the “Authorities”).

For purposes of this power of attorney, the term “Aircraft” includes: (a) any and all engines installed on the Aircraft or that in the future substitute said engines according to the terms of the Lease (in the understanding that Lessor shall not assert a right over those engines not property of Lessor); (b) any and all machinery, parts, equipment, accessories, components, records and documents installed on the Aircraft or that in the future might be installed substituting the first ones installed according to the terms of the Lease or that are part of the Aircraft.

SECOND.- This Power of Attorney is granted to be exercised within the Mexican United States and/or the United States of America according to the Inter-American Convention on the Legal Regime of Powers of Attorney to be Used Abroad and the Washington Protocol on Uniformity of Powers of Attorney. Finally, the Company agrees not to grant, a third party different from the Attorneys, a power with similar faculties and with similar purposes to those established herein with respect to the Aircraft.

THIRD.- This Power of Attorney is irrevocably granted for being a mean to fulfill an obligation agreed and acquired previously in terms of Article 2596 of the Federal Civil Code provided it has been agreed as a condition under the Lease.

FOURTH.- Each Attorney, indistinctly, may perform all the necessary acts or transactions; may sign as many public and/or private documents to fulfill its/their obligations according to the nature and purpose of this power. Additionally, each Attorney will be authorized to register, deregister or authorize the registration or deregistration of any right derived from the Aircraft in the International Registry according to the Convention on International Interests in Mobile Equipment signed on November 16, 2001 at Cape Town, and it’s Protocol of same date specifically related to aircraft equipment.

limitativa, los Apoderados tendrán todas las facultades necesarias para representar a la Sociedad ante todas y cualesquier autoridades ya sean judiciales o administrativas, federales, estatales o municipales de México, especialmente ante las Juntas de Conciliación y Arbitraje, y/o de los Estados Unidos de América, o cualquier otra jurisdicción donde pudiera localizarse la Aeronave, incluyendo enunciativa mas no limitativamente, la DGAC, el RAM, la Secretaría de Hacienda y Crédito Público (“SHCP”), el Departamento de Aduanas de los Estados Unidos de América, la Administración de Aviación Federal de los Estados Unidos de América y el Departamento de Transporte de los Estados Unidos de América, y/o cualesquiera otras entidades, agencias o autoridades que en el futuro asuman las funciones de las anteriormente citadas (indistintamente las “Autoridades).

Para todos los efectos previstos en este poder, el término “Aeronave” incluye: (a) cualesquiera motores instalados en la Aeronave o los que en el futuro sustituyan a los anteriormente citados de conformidad con los términos del Arrendamiento (en el entendido de que la Arrendadora no reclamará tener ningún derecho sobre aquellos motores que no sean de su propiedad); y (b) cualesquier maquinaria, partes, equipo, accesorios, componentes, registros y documentación instalados en la Aeronave o que en un futuro puedan ser instalados en sustitución de los mismos conforme al Arrendamiento o bien que sean pertenecientes a la Aeronave.

SEGUNDA.- Este poder se otorga para ser ejercitado dentro de los Estados Unidos Mexicanos y/o los Estados Unidos de América de conformidad con la Convención Interamericana del Régimen Legal de Poderes con uso amplio y el Protocolo de Washington de Uniformidad y Poderes. Finalmente, la Arrendataria conviene además en no otorgar ningún otro poder similar al contenido en el presente instrumento para la realización de los actos previstos en el mismo con respecto a la Aeronave, en favor de persona alguna distinta a los Apoderados mencionados en el presente.

TERCERA.- Este poder se confiere con carácter de irrevocable por ser un medio para cumplir con una obligación contraída con anterioridad en términos del artículo 2596 del Código Civil Federal en virtud de que su otorgamiento ha sido acordado como una condición dentro del Arrendamiento.

CUARTA.- Cada Apoderado, indistintamente, podrá llevar a cabo todos los actos u operaciones que hagan necesaria la naturaleza y objeto del presente poder, pudiendo firmar cuantos documentos públicos o privados sean menester para su cabal cumplimiento. Adicionalmente, cada Apoderado estará autorizado para registrar, cancelar y autorizar el registro o cancelación del registro de cualquier derecho derivado de la Aeronave en el Registro Internacional de conformidad con la Convención Internacional de Intereses en Equipo Móvil firmado el 16 de noviembre de 2001 en la Ciudad del Cabo, y su Protocolo de la misma fecha, específicamente relacionado con equipos aeronáuticos.

Schedule 11-3

FIFTH.- The Company herein expressly ratify the acts performed by the Attorneys and release them from any liability they may incur in by virtue of the exercise of their capacities and expressly agree to indemnify and hold them harmless from any liability derived therefrom.

In terms of Article VI of the Washington Protocol, the Spanish language which appears in this instrument is the authorized translation of the English language which also appears in this instrument, in all of its parts.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.


By:
Name:		[ — ]
Title:		[ — ]

QUINTA.- La Arrendataria en este acto expresamente ratifica todos los actos realizados por los Apoderados y los libera de toda responsabilidad que pueda derivar del ejercicio de su autoridad y expresamente acuerda indemnizar y mantenerlos en paz y a salvo de cualquier responsabilidad derivada del ejercicio de su autoridad.

De conformidad con el Artículo VI del Protocolo de Washington, el idioma español que aparece en este instrumento es la traducción autorizada del idioma inglés que también aparece en este instrumento, en todas sus partes.

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.


Por:
Nombre:		[ — ]
Cargo:		[ — ]

Schedule 11-4

SCHEDULE 12

FORM OF EUROCONTROL LETTER

[PRINT ON LESSEE HEADED PAPER]

DATE

The Director of the Central Route Charges Office

European Organisation for the Safety of Air Navigation (EUROCONTROL)

Rue de la Fusée, 96

1130 BRUXELLES

BELGIUM

Dear Sirs

AUTHORISATION LETTER

Aircraft model Airbus A320-200: registration mark N510VL, MSN 5207 - the “Aircraft”

We have leased the above Aircraft from Wells Fargo Bank Northwest, National Association (not in its individual capacity, but solely as owner trustee) (the “ Lessor ”) in accordance with a lease agreement dated [ — ] between us and the Lessor (the “ Initial Sub-Lease ”).

We hereby authorise you to provide the Lessor (or its duly authorised representative) with a general statement of account in relation to air navigation charges incurred by us and due to EUROCONTROL. Access to the statement(s) of account will be provided in accordance with the procedures established by EUROCONTROL.

The authorisation contained in this letter may only be revoked or amended by a written instruction signed by us and the Lessor.

Yours faithfully,

For and on behalf of

[LESSEE]


		(Name)

		(Title)

Schedule 12-1

ANNEX A

CERTAIN DEFINITIONS AND PAYMENTS

1. Certain Definitions . In this Agreement, the following words and expressions have, except when the context otherwise requires, the following meanings:

“ Agreed Value ” means *****

“ Basic Rent Amount ” $337,500.00, such amount being based on an assumed ten year US LIBOR swap rate of 3.00%, as adjusted two (2) Business Days prior to the Delivery Date to reflect the then actual ten year US LIBOR swap rate as follows:

Basic Rent Amount = ***** where “L” means the ten year US LIBOR swap rate expressed as a percentage two (2) Business Days prior to the Delivery Date.

“ Damage Notification Threshold ” means *****

“ Default Rate ” means a rate of interest per annum equal to the Prime Rate plus *****

“ Discount Rate ” means *****

“ Security Amount ” means at any time the amount equal to *****

*****

Lessee shall pay to Lessor Maintenance Payments monthly in arrears for the Aircraft in the following amounts:

Airframe “SC Checks ”: *****

(b) ***** per month for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.

Annex A-1

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

1.0

1.5

2.0

2.5

3.0

3.5

4.0

5% Derate

*****

10% Derate

*****

15% Derate

*****

20% Derate

*****

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

1.0

1.5

2.0

2.5

3.0

3.5

4.0

5% Derate

*****

10% Derate

*****

15% Derate

*****

20% Derate

*****

The above amounts assume an average thrust de-rate of 10%.

Landing Gear : ***** per Cycle but not less than ***** per month for overhaul of the set of landing gear.

APU : ****** per APU Hour for the APU Heavy Repair.

Annex A-2

*****

If on any occasion following a qualified Maintenance Payments contribution event:

•

The balance of funds held in the applicable Engine Maintenance Payments account exceeds the amount of the request for contribution, the excess amount in such account will be contributed to Lessee.

Annex A-3

•

If a Total Loss occurs in respect of the Airframe (with or without the Engines), and provided no Default of Event of Default has occurred and is continuing or upon a complete cure thereof, *****

Airframe SC Checks : *****

(b) US ***** for the 12Y/8C Check (labor and material for routine and non-routine) per the Airbus MPD.

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

1.0

1.5

2.0

2.5

3.0

3.5

4.0

5% Derate

*****

10% Derate

*****

15% Derate

*****

20% Derate

*****

Annex A-4

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

1.0

1.5

2.0

2.5

3.0

3.5

4.0

5% Derate

*****

10% Derate

*****

15% Derate

*****

20% Derate

*****

The above amounts assume an average thrust de-rate of 10%.

APU : US ***** per APU Hour for each APU Hour accumulated since the last APU Heavy Repair.

4. AD Cost Sharing .

*****

Annex A-5

Exhibit 10.38

AIRCRAFT LEASE AGREEMENT [4828]

Dated as of April 14, 2011

Between

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual

capacity but solely as trustee under the Trust Agreement,

as Lessor,

and

CONCESIONARIA VUELA COMPAÑÍA DE AVIACIÓN, S.A.P.I. DE C.V.

(d/b/a VOLARIS),

as Lessee,

Concerning:

Lease of one (1) Airbus A320-200 Aircraft

Manufacturer’s Serial No: 4828

United States Registration Mark N506VL

Two (2) IAE International Aero V2527E-A5 Select One (or better) Engines

TABLE OF CONTENTS


		Page

CLAUSE 1.	DEFINITIONS AND INTERPRETATION		1

1.1	Definitions		1
1.2	Interpretation		13

CLAUSE 2.	REPRESENTATIONS AND WARRANTIES		14

2.1	Lessee’s Representations and Warranties		14
2.2	Lessor’s Representations and Warranties		17
2.3	No Prejudice		19

CLAUSE 3.	CONDITIONS PRECEDENT		19

3.1	Lessor’s Conditions Precedent		19
3.2	Waiver		22
3.3	Lessee’s Conditions Precedent		22

CLAUSE 4.	COMMENCEMENT		22

4.1	Term of Leasing		22
4.2	Delivery		23
4.3	Licenses		24
4.4	Quiet Enjoyment; Lessor Party Covenants		24

CLAUSE 5.	DISCLAIMERS		25

5.1	General Disclaimers		25
5.2	Deficiencies and Delays		26
5.3	Repairs and Replacement		26

CLAUSE 6.	RENT AND OTHER PAYMENTS		26

6.1	Rent		26
6.2	Security		26
6.3	Maintenance Payments		27
6.4	Payment Obligations Unconditional		27
6.5	Currency of Payments		28
6.6	Currency Indemnity		28
6.7	Authorizations for Payments		28
6.8	Set-off		28
6.9	Lessor’s Account; Receipt of Payment		29

(i)


CLAUSE 7.	FEES AND EXPENSES	29

CLAUSE 8.	GENERAL UNDERTAKINGS	30

8.1	Duration	30
8.2	Notice of Event of Default; Certificate	30
8.3	Financial and Other Information	30
8.4	Existence	32
8.5	ERISA	32
8.6	Lessee’s Jurisdiction	32
8.7	Cape Town Convention	32

CLAUSE 9.	OPERATIONAL UNDERTAKINGS	34

9.1	Registration, Title and Nameplates	34
9.2	Liens	36
9.3	Possession and Subleases	37
9.4	Information and Records	38
9.5	Lawful and Safe Operation; Costs of Operation	40
9.6	Right of Inspection	41

CLAUSE 10.	MAINTENANCE AND REPAIR	42

10.1	General	42
10.2	Specific Requirements	42
10.3	Substitution of Parts; Ownership	43
10.4	Pooling of Parts	45
10.5	Permitted Modifications	45

CLAUSE 11.	ENGINES	46

11.1	General Principles	46
11.2	Removal of Engines	47

CLAUSE 12.	TITLE	48

CLAUSE 13.	MANUFACTURER’S WARRANTIES	48

CLAUSE 14.	INSURANCES	48

14.1	Obligation to Insure	48
14.2	Insurance with Respect to the Aircraft	49
14.3	Terms Specific to Hull Insurance	49
14.4	Liability Insurance with Respect to the Aircraft	50
14.5	Provisions Relating to all Insurance	50
14.6	Information	51
14.7	Additional Insurance; No Lien	52
14.8	Failure to Insure	53
14.9	Settlement of Claims	53

(ii)


14.10	Assignment	53
14.11	Post Termination	54

CLAUSE 15.	LOSS, DAMAGE AND REQUISITION	54

15.1	Total Loss of Aircraft or Airframe	54
15.2	Total Loss of Engine(s)	54
15.3	Other Loss or Damage	56
15.4	Requisition	56

CLAUSE 16.	DEFAULT	56

16.1	Events of Default	56
16.2	Rights and Remedies	59
16.3	Power of Attorney	62
16.4	Mitigation Credit	63

CLAUSE 17.	REDELIVERY	63

17.1	Redelivery	63
17.2	Condition of Aircraft and the Aircraft Documents	63
17.3	Inspection; Corrections; Additional Work	64
17.4	Compliance after Term	65
17.5	Deregistration and Export	66
17.6	Ferry Flight	66
17.7	Storage	66

CLAUSE 18.	INDEMNITIES	67

18.1	General Indemnities	67
18.2	General Tax Indemnity	69
18.3	Notice and Contest Rights	71
18.4	Mitigation	73
18.5	Payments on After-Tax Basis	73
18.6	No Deductions or Withholdings	73
18.7	Tax Benefit	74
18.8	Reports	74
18.9	Continuation of Indemnities	75
18.10	Forms	75
18.11	Non-Parties	75

CLAUSE 19.	FURTHER PROVISIONS	75

19.1	Nature of Lessee’s Obligations	75
19.2	Benefit of Agreement	76
19.3	Further Assurances	77
19.4	Rights Cumulative; Waivers; Variation; Counterparts; Language	77
19.5	Delegation	78
19.6	Evidence of Indebtedness	78
19.7	Applications of Moneys	78

(iii)


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


SCHEDULE 1	AIRCRAFT DESCRIPTION

SCHEDULE 1A	AIRCRAFT DOCUMENTS

SCHEDULE 2	LEASE SUPPLEMENT

SCHEDULE 3	CERTIFICATE

SCHEDULE 4	REDELIVERY CONDITION

SCHEDULE 5	MONTHLY MAINTENANCE STATUS REPORT

SCHEDULE 6	FORM OF QUIET ENJOYMENT LETTER

SCHEDULE 7	TECHNICAL ACCEPTANCE CERTIFICATE

SCHEDULE 8	PART A	LESSEE FURNISHED EQUIPMENT

	PART B	IN FLIGHT ENTERTAINMENT

SCHEDULE 9	LESSEE’S CONDITIONS PRECEDENT

SCHEDULE 10	PERMITTED SUBLESSEES

SCHEDULE 11	IRREVOCABLE POWER OF ATTORNEY

ANNEX A	CERTAIN DEFINITIONS AND PAYMENTS

(iv)

AIRCRAFT LEASE AGREEMENT [4828] dated as of April 14, 2011 between:

(1)	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee under the Trust Agreement (as defined below) (“ Lessor ”); and

(2)

IT IS AGREED as follows:

CLAUSE 1. DEFINITIONS AND INTERPRETATION .

1.1 Definitions . In this Agreement the following words and expressions shall have, except where the context otherwise requires, the following meanings:

“ Act ” means Subtitle VII, Title 49 of the United States Code, as amended from time to time.

“ Agreed Value ” shall have the meaning set forth in Annex A.

“ Agreement ” means this Aircraft Lease Agreement [4828] and the Schedules and Annex hereto as the same may be from time to time amended, modified, supplemented and novated in accordance with the terms hereof.

-1-

“ Aircraft Manuals ” means the Aircraft Documents identified as Aircraft Manuals in Schedule 1A hereto.

“ Airframe ” means the Aircraft, excluding the Engines.

“ Airworthiness Directive or “AD” ” means an airworthiness directive, airworthiness notice or mandatory order issued by the FAA or the Manufacturer.

“ APU Hour ” means each hour or part thereof that the APU is operated.

“ Basic Rent ” means all and any amounts payable under Clause 6.1(a).

“ Basic Rent Amount ” has the meaning provided in Annex A.

-2-

“ Beneficiary ” means JSA Aircraft 4828, LLC, a Delaware limited liability company with its address at c/o Jackson Square Aviation, LLC, 559 Pacific Avenue, San Francisco, California 94133, its successors and permitted assigns.