Document:

Exhibit

EXECUTION VERSION 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
AIRCRAFT SALE AGREEMENT
Dated as of December 20, 2019
between
MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY, 
as Seller
and
CONTRAIL AVIATION LEASING IRELAND DAC, 
as Buyer
_____________________________________
Concerning
One (1) Used Airbus Model A320-200 Airframe with 
Two (2) IAE International Aero Engines AG Model V2527-A5 Engines  
Manufacturer’s Serial Number 1183
_____________________________________

	
			
	 
	 
	 

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TABLE OF CONTENTS

Page

	
			
	Clause 1.
	Definitions and Interpretation
	1

	1.1
	Definitions
	1

	1.2
	Interpretation
	5

	Clause 2.
	Subject Matter of Sale
	5

	Clause 3.
	Price and Payment
	6

	3.1
	Purchase Price
	6

	3.2
	Deposit
	6

	3.3
	Payment of Closing Payment Amount
	7

	3.4
	Receipt of Payments in Error
	7

	3.5
	No Withholdings
	8

	3.6
	Currency
	8

	3.7
	Appropriation
	9

	Clause 4.
	Closing and Acceptance of the Aircraft; Title and Risk of Loss
	9

	4.1
	Closing and Acceptance
	9

	4.2
	Risk and Title
	9

	4.3
	Inspection
	10

	Clause 5.
	Loss of or Damage to the Aircraft Prior to the Closing
	10

	5.1
	Total Loss Prior to the Closing
	10

	5.2
	Material Damage to the Aircraft Prior to the Closing
	10

	Clause 6.
	Conditions Precedent
	10

	6.1
	Conditions Precedent to Obligation of Buyer
	10

	6.2
	Conditions Precedent to Obligation of Seller
	13

	6.3
	Termination for Delay
	14

	Clause 7.
	Representations and Warranties
	14

	7.1
	Seller’s Representations and Warranties
	14

	7.2
	Buyer’s Representations and Warranties
	16

	Clause 8.
	Indemnification and Insurance
	17

	8.1
	Seller Indemnification
	17

	8.2
	Limitation to Seller’s Indemnification
	18

	8.3
	Buyer Indemnification
	18

	8.4
	Limitation to Buyer’s Indemnification
	18

	8.5
	Insurance
	19

	
			
	 
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	8.6
	Insurance Certificates
	21

	Clause 9.
	Manufacturer’s Warranties
	21

	Clause 10.
	DISCLAIMERS AND EXCLUSION OF LIABILITY
	21

	10.1
	SELLER’S DISCLAIMERS OF WARRANTIES
	21

	10.2
	EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES
	22

	10.3
	TECHNICAL ACCEPTANCE
	22

	Clause 11.
	Excusable Delay and Termination
	22

	Clause 12.
	Assignment
	23

	Clause 13.
	Transfer Taxes
	23

	Clause 14.
	Notices
	23

	Clause 15.
	Miscellaneous
	24

	15.1
	Further Assurances
	24

	15.2
	Certain Filings
	25

	15.3
	Waiver; Remedies Cumulative
	25

	15.4
	Severability of Provisions
	25

	15.5
	Counterparts
	25

	15.6
	Documentation and Costs
	25

	15.7
	Attorneys’ Fees
	26

	15.8
	Confidentiality
	26

	15.9
	No Brokers
	26

	15.1
	Negotiated Agreement
	26

	15.11
	Entire Agreement; Amendments
	26

	15.12
	Corporate Obligations
	26

	15.13
	Governing Law
	27

	15.14
	Submission to Jurisdiction; Waiver of Jury Trial
	27

	 
	 
	 

	 
	 
	 

	SCHEDULES AND EXHIBITS
	 

	Schedule 1
	—  Aircraft Description
	 

	Exhibit A
	—  Warranty Bill of Sale
	 

	Exhibit B
	—  Acceptance Certificate
	 

	
			
	 
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This AIRCRAFT SALE AGREEMENT (this “Agreement”) dated as of December 20, 2019 is made BETWEEN
(1)    MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY, a designated activity company incorporated under the laws of Ireland, having its registered office address at 32 Molesworth Street, Dublin 2, D02Y512, Ireland (“Seller”); and
(2)    CONTRAIL AVIATION LEASING IRELAND DAC, a designated activity company incorporated under the laws of Ireland, having its registered office address at 32 Molesworth Street, Dublin 2, D02Y512, Ireland (“Buyer”).
BACKGROUND:
A.     Subject to the terms and conditions set forth herein, Buyer desires to purchase the Aircraft (as defined below) from Seller and Seller desires to sell the Aircraft to Buyer.
B.     In consideration of the mutual covenants contained in this Agreement and the other consideration provided for herein, the receipt and sufficiency of which are hereby acknowledged by both Seller and Buyer, and under the terms and conditions set forth below, the parties hereto agree as follows:
Clause 1.Definitions and Interpretation
1.1    Definitions.  Capitalized terms used in this Agreement without definition shall have the meanings given to them in the Lease (as defined below) and the following terms shall have the following meanings:
“Acceptance Certificate” means an acceptance certificate substantially in the form of Exhibit B.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person.  For this purpose “control” of any Person means the power to direct the management or policies of such person whether through the ownership of voting rights or control of the board (or control of the composition) of such Person.
“After-Tax Basis” means, with respect to any payment required by this Agreement to be made on an After-Tax Basis to or for the account of any Person, that such payment shall be increased by such additional amount (the “gross-up amount”) as is necessary to hold that Person and its Affiliates harmless from all Taxes imposed on that Person or any of its Affiliates by any Government Entity or other taxing authority as a result of the receipt or accrual of such payment and such gross-up amount (taking into account any Tax savings realized by that Person or any of its Affiliates as a result of allowance of a Tax credit, deduction or other Tax benefit for the Tax, liability, loss, cost or expense that gave rise to the obligation to make such payment on an After-

	
			
	 
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Tax Basis) so that, after deduction of all Taxes resulting from such receipt or accrual, the net amount received by that Person is equal to the payment due to that Person.
“Agreement” has the meaning set forth in the introductory paragraph.
“Aircraft” means the Airframe, the Engines and all Parts installed in or appurtenant thereto so long as title thereto is vested in Seller, and includes, where the context permits, the Aircraft Documents.
“Aircraft Documents” has the meaning given to such term in the Lease.
“Airframe” means the Airbus model A320-200 airframe (including all Parts from time to time belonging to, installed in or appurtenant to such airframe so long as title thereto is vested in Seller, other than the Engines) as described in Schedule 1 and includes, where the context permits, the Aircraft Documents relating to the Airframe.
“Bill of Sale” means the warranty bill of sale substantially in the form of Exhibit A to be executed by Seller and to be delivered to Buyer or its designee pursuant to Clause 4.1(b) of this Agreement.
“Business Day” means any day other than a Saturday, Sunday or day on which the banks in Ireland or New York are authorized or required by law to be closed.
“Buyer” has the meaning set forth in the introductory paragraph.
“Buyer Claim” has the meaning set forth in Clause 8.1.
“Closing” means the time at which Seller conveys and transfers all of its right, title and interest in and to the Aircraft to Buyer or its designee pursuant to the Bill of Sale.
“Closing Date” means the date on which the Closing occurs.
“Closing Payment Amount” has the meaning set forth in Clause 3.1.
“Deed of Novation” means the Deed of Novation to be entered into among Seller, Buyer and Lessee.
“Delivery Location” means the location at which the Aircraft is located at Closing as reasonably agreed between Seller and Buyer.
“Deposit” means [                             ] United States Dollars (US$[       ]).
“Dollars”, “$” and “US$” means United States Dollars, being the lawful currency of the United States of America.
“Economic Closing Date” means July 10, 2019.
“Effective Time Notice” shall have the meaning provided in the Deed of Novation.
“Engines” means the two (2) IAE International Aero Engines AG model V2527-A5 engines (including all Parts from time to time belonging to, installed in or appurtenant to such engine so long as title thereto is vested in Seller) whether or not installed on the Airframe at the 

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Closing as described in Schedule 1 and includes, where the context permits, the Aircraft Documents relating to the Engines.
“Event of Default” has the meaning given to such term in the Lease.
“Excluded Payment” means any indemnity payment or third party liability insurance payment payable to any Seller Indemnitee pursuant to the provisions of the Lease and/or the Deed of Novation or any payment due, accrued and payable to any Seller Indemnitee with respect to or relating to the period prior to Closing.  
“Excusable Delay” has the meaning set forth in Clause 11.
“Final Closing Date” means December 20, 2019, or such later date as the parties may mutually agree in writing.
“Government Entity” means any (a) national, state or local government, (b) board, commission, department, division, instrumentality, court, agency or political subdivision thereof and (c) association, organization or institution to whose jurisdiction any of the entities listed in (a) or (b) is subject.
“Lease” means the Aircraft Lease Agreement MSN 1183 dated as of January 5, 2017 between Heston Services Ltd. (the “Original Lessor”) and the Lessee, as novated by that Deed of Lease Novation dated as of November 7, 2017 among the Original Lessor, Seller and the Lessee, as further amended, supplemented or modified from time to time.
“Lease Documents” means the documents listed in Schedule 1 of the Deed of Novation.
“Lessee” means SmartLynx Airlines Estonia OÜ.
“Lessee Guarantee” means the guarantee to be issued by the Lessee Guarantor in favor of Buyer with respect to the obligations of Lessee under the Lease, in form and substance acceptable to Buyer. 
“Lesseee Guarantor” means SmartLynx Airlines SIA.
 “Lessee Security Deposit” has the meaning given to the term “Deposit” in the Lease.
“Lessor’s Lien” has the meaning given to such term in the Lease.
“Lien” shall mean any mortgage, pledge, lien, charge, encumbrance, hypothecation, lease, exercise of rights, security interest or claim (including any imposed with respect to any Taxes, or any airport or landing fees or related charges). 
“Material Damage” means damage to the Aircraft (including the Airframe and either Engine, whether or not installed on the Airframe) which would reasonably be expected to cost in excess of $[       ] to repair.
“Part” means all appliances, components, parts, instruments, appurtenances, avionics, accessories, furnishings and other equipment of whatever nature (other than complete Engines or engines), which may now or from time to time be incorporated or installed in or attached to the Airframe or any Engine to which Seller has title.

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“Permitted Lien” means (a) the Lease and the rights of the Lessee thereunder, (b) “Permitted Liens” as defined in the Lease (but excluding any Lessor’s Liens), (c) any Liens which the Lessee is required to remove or indemnify Lessor against pursuant to the Lease and (d) any Lien created by or through Buyer.
“Person” means any human being, corporation, company, limited liability company, partnership, firm, joint stock company, joint venture, trust, estate, unincorporated organization, association or Government Entity.
“Purchase Price” has the meaning set forth in Clause 3.1(a).
“Seller” has the meaning set forth in the introductory paragraph.
“Seller Guarantee” means the guarantee to be issued by the Seller Guarantor in favor of Buyer with respect to the obligations of Seller under the Transaction Documents to which it is a party, in form and substance acceptable to Buyer. 
“Seller Guarantor” means Marathon Structured Product Strategies Fund, LP.
“Seller Indemnitees” means Seller, Seller’s Affiliates and each of their respective officers, directors, shareholders, members, controlling persons, agents and employees, and their respective successors and assigns.
“Target Closing Date” means November 1, 2019.
“Tax” means any tax, fee, levy, impost, duty, charge, deduction or withholding of any nature (including without limitation any value added, franchise, transfer, sales, gross receipts, use, business, excise, turnover, personal property, stamp duty, withholding, export, import or other tax) now or hereafter imposed by any Government Entity or other taxing authority.
“Total Loss” has the meaning given to the term “Casualty Occurrence” under the Lease.
“Transaction Documents” means this Agreement, the Lease, the Deed of Novation, the Effective Time Notice, the Bill of Sale, the Acceptance Certificate, the Seller Guarantee and any agreement amending or supplementing any of the foregoing documents, and any other agreement agreed between Seller and Buyer from time to time deemed to be a Transaction Document.
“Transfer Taxes” has the meaning set forth in Clause 13 of this Agreement.
1.2    Interpretation.  Unless the context otherwise indicates, any reference in this Agreement to:
(a)    a “regulation” includes any present or future directive, regulation, request or requirement (in each case whether or not having the force of law) but, if not having the force of law, the compliance with which is in accordance with the general practice of the Persons to whom it is addressed;
(b)    any “agreement”, “license” or other document or instrument includes any agreement, license or other document or other instrument as varied, assigned, novated or replaced from time to time (but without prejudice to any restrictions on such variation, assignment, novation or replacement);

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(c)    the expressions “hereof”, “hereto”, “herein” and similar expressions shall be construed as references to this Agreement as a whole and shall not be limited to the particular clause in which the relevant expressions appear and the expressions “thereof”, “thereto”, “therein” and similar expressions shall be construed in like fashion;
(d)    a reference to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended and supplemented in accordance with the terms thereof, or as the case may be, with the agreement of the relevant parties and in force at any relevant time;
(e)    any statute or other legislative provision shall be read to include any statutory or legislative modification or re-enactment thereof or any substitution therefor;
(f)    a Clause, Schedule or Exhibit shall be construed as a reference to a clause hereof or a schedule or exhibit hereto, and references to this Agreement include its Schedules and Exhibits;
(g)    a word importing the singular number shall be construed so as to include the plural and vice versa;
(h)    the expression “in writing” includes by facsimile or email;
(i)    references to any party hereto shall include such party’s successors and assigns permitted hereunder; and
(j)    the index, clause and other headings in this Agreement (including their use in cross references) are for ease of reference only and shall not affect the interpretation of this Agreement.
Clause 2.    Subject Matter of Sale.  Seller hereby agrees to sell and deliver to Buyer, and Buyer hereby agrees to purchase and to accept delivery of from Seller, the Aircraft for the Purchase Price, upon and subject to the terms, conditions and provisions of this Agreement and subject to and with the benefit of the Lease.  Seller and Buyer agree to use reasonable commercial efforts to cause the Closing to occur on or before the Target Closing Date; provided that the Closing Date shall occur in any event prior to the Final Closing Date unless mutually agreed between Seller and Buyer in writing.
Clause 3.    Price and Payment.
3.1    Purchase Price.  The purchase price for the Aircraft to be paid by Buyer for the account of Seller shall be the sum of:
(a)    [                                       ] United States Dollars (US$[          ]) (the “Purchase Price”);
(b)    increased by an amount equal to the interest that accrues on the Purchase Price during the period from, but excluding, the Economic Closing Date until, and including, the Closing Date at a rate of [                  ] percent ([   ]%) per annum (based on a 360 day year); and
(c)    decreased by a sum equal to:

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(i)    the amount of the cash Lessee Security Deposit held by Seller on the Closing Date;
(ii)    the net credit balance of the cash Maintenance Reserves (as defined in the Lease) held by Seller on the Closing Date;
(iii)    the monthly Rent (as defined in the Lease) prorated on a daily basis that is actually received by Seller pursuant to the Lease relating to the period from the Economic Closing Date until, and including, the first Rent Payment Date (as defined in the Lease) following the Closing Date; 
(iv)    the monthly Rent (as defined in the Lease) that is actually received by Seller pursuant to the Lease relating to the period from and after the Closing Date but only to the extent that such amounts are not included in the deduction set forth in clause (iii) immediately above; and
(v)    the amount of the Deposit.
(the Purchase Price, as adjusted pursuant to paragraphs (b) and (c), the “Closing Payment Amount”).  Such payment of the Closing Payment Amount shall be made with no withholdings, deductions or set-offs, whether in respect of Taxes or otherwise, in accordance with Clause 3.3.
(d)    Seller shall have no obligation to transfer any amount of cash Maintenance Reserves (as defined in the Lease) or Lessee Security Deposit that is held by Seller and netted from the Purchase Price pursuant to Clause 3.1(c) above. 
3.2    Deposit.
(a)    Seller confirms receipt of the Deposit from Buyer in the amount of US$[       ].  No interest shall accrue on the Deposit.
(b)    The Deposit shall be non-refundable and applied as a credit in calculating the Purchase Price at Closing unless: 
(i)    the Aircraft suffers a Total Loss or Material Damage prior to the Closing Date;  
(ii)    Seller breaches this Agreement; 
(iii)    Seller fails to satisfy any of Buyer’s conditions to Closing set forth in Clause 6.1 for which Seller is responsible (except where such failure is a result of actions or omissions of Buyer or Buyer’s breach of this Agreement), and such conditions are not satisfied or waived by Buyer (in Buyer’s sole discretion) on or before the Final Closing Date; or
(iv)    Closing does not occur on or before the Final Closing Date for any reason except as a result of (x) a breach by Buyer of its obligations under this Agreement or (y) Buyer’s failure to satisfy any of the conditions to Closing set forth in Clause 6 for which Buyer is responsible (except where such failure is a result of Seller’s breach of this Agreement).

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(c)    If the Deposit is refundable under Clause 3.2(b) above, Seller shall promptly return the Deposit to Buyer following receipt of a written notice from Buyer electing to terminate this Agreement with a description of the event that so makes the Deposit refundable. Upon receipt of such notice and return of the Deposit, the parties’ obligations or liabilities to one another with respect to this transaction shall terminate (except in respect of the confidentiality obligations set forth in Clause 15.8).  Notwithstanding the foregoing, in the event of a Total Loss, no such notice from Buyer shall be required to terminate this Agreement, and this Agreement shall automatically terminate upon Buyer’s receipt of a notice from Seller notifying Buyer that a Total Loss has occurred pursuant to Clause 5.1 below.
3.3    Payment of Closing Payment Amount.  On the Closing Date, (i) subject to satisfaction or waiver of the conditions set forth in Clause 6.1, Buyer shall remit to Seller an amount equal to the Closing Payment Amount by electronic transfer in immediately available United States Dollars to Seller’s account set forth below:
	
		
	Beneficiary
	MAM Seldon Aviation 2 Designated Activity Company

	Bank Identifier
	[        ]

	Bank Name
	Barclays Bank IR

	IBAN
	[                      ]

	Account Name
	MAM Seldon 2

	Account No.
	[        ]

	Address
	Barclays Bank Ireland plc
MOLESWORTH STREET ONE TWO PARK PLACE
DUBLIN D02 RF29, IRELAND

or such other account as Seller may inform Buyer in writing at least three (3) Business Days in advance of the Closing Date.
3.4    Receipt of Payments in Error.
(a)    If, after the Closing, Seller receives from Lessee any amounts payable by the Lessee pursuant to the terms of the Lease and/or the Deed of Novation, Seller shall procure that such payments (other than any Excluded Payments) are promptly paid to Buyer in an amount equal to the amount that it has actually received from Lessee in full, and pending such payment shall hold the same in trust for Buyer.  Any payments made by the Seller pursuant to this Section 3.4(a) shall be made to an account designated by the Buyer from time to time upon at least five (5) Business Days prior written notice.
(b)    If, after the Closing, Buyer receives from Lessee any Excluded Payment pursuant to the provisions of the Lease and/or the Deed of Novation, Buyer shall procure that such amount is promptly paid to Seller to Seller’s account set forth in Section 3.3 above in an amount equal to the amount that it has actually received from Lessee in full, and pending such payment shall hold the same in trust for Seller.
3.5    No Withholdings.

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(a)    Except as otherwise agreed in writing, all payments to be made by Seller or Buyer to another party under this Agreement and the other Transaction Documents shall be made without any deduction (whether in respect of set-off, counterclaim, charges or otherwise howsoever arising).
(b)    All payments to be made under this Agreement and the other Transaction Documents by any party hereto (the “paying party”) to another party hereto (the “payee”) shall be made in full without any deduction or withholding in respect of Taxes unless the deduction or withholding is required by law, in which event such paying party shall:
(i)    ensure that the deduction or withholding does not exceed the minimum amount legally required;
(ii)    promptly pay to the payee such additional amount so that the net after-Tax amount received by the payee will equal the full after Tax amount which would have been received by it had no such deduction or withholding been made;
(iii)    pay to the relevant taxation authority or other authorities within the period for payment permitted by law the full amount of the deduction or withholding (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 (b)); and
(iv)    provide the payee, within the period for payment permitted by the relevant law, with an official receipt of the relevant taxation authorities involved in respect of all amounts so deducted or withheld or if such receipts are not issued by the taxation authorities concerned on payment to them of amounts so deducted or withheld, a certificate of deduction or equivalent evidence of the relevant deduction or withholding.
3.6    Currency.
(a)    The parties acknowledge that the specification of Dollars in this Agreement is of the essence and that Dollars shall be the currency of account in any and all events between Buyer and Seller.
(b)    If a party (the “recipient”) receives an amount in respect of a liability of the other party under this Agreement or if such liability is converted into a claim, proof, judgment or order in a currency other than the currency (the “contractual currency”) in which the amount is expressed to be payable under this Agreement:
(i)    such other party will indemnify recipient as an independent obligation against any loss arising out of or as a result of such conversion;
(ii)    if the amount received by recipient, when converted into the contractual currency (at the market rate at which recipient is able on the date of receipt by recipient (or on the next date thereafter on which under normal banking practice recipient is able to convert the amount received into the contractual currency) to purchase the contractual currency in New York or at its option London with that other currency) is less than the amount owed in the contractual currency, such other party will, forthwith on demand, pay to recipient an amount in the contractual currency equal to the deficit; and

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(iii)    such other party will pay to recipient on demand any exchange costs and Taxes payable in connection with the conversion.
3.7    Appropriation.  If any sum paid or recovered by a party in respect of the liabilities of the other party under this Agreement is less than the amount then due, such party may apply that sum to amounts due under this Agreement in such proportions and order and generally in such manner as such party may determine at its sole discretion.
Clause 4.    Closing and Acceptance of the Aircraft; Title and Risk of Loss.
4.1    Closing and Acceptance.
(a)    Following the satisfaction (or waiver or deferral with the agreement in writing) of the conditions precedent set forth in Clause 6.1 and Clause 6.2, the Closing shall occur.  
(b)    On the Closing Date, Seller shall transfer good and marketable title in and to the Aircraft in its “as, is, where is, with all faults” condition free and clear of any and all Liens (but subject to the Lease with respect to the Aircraft) whatsoever other than Permitted Liens by delivering a duly completed and executed Bill of Sale to Buyer or its designee against payment by Buyer to Seller of the Closing Payment Amount on the Closing Date.  Subject to satisfaction or waiver of the conditions set forth in Clause 6.1 and Clause 6.2, Buyer and its designee shall accept delivery of the Bill of Sale and Buyer shall execute and deliver the Acceptance Certificate.
4.2    Risk and Title.  All right, title and interest of Seller in and to the Aircraft and all risk of loss or destruction of, or damage to, the Aircraft or any other tangible or intangible thing provided under this Agreement shall pass from Seller to Buyer or its designee upon the delivery of the Bill of Sale.
4.3    Inspection. 
(a)    Buyer confirms that it has inspected the Aircraft to its satisfaction and that the Aircraft is in all respects satisfactory to Buyer.  Buyer acknowledges that it is purchasing the Aircraft based on its own inspection and knowledge of the Aircraft, the Aircraft Documents and the Lease Documents (as defined below) and is not relying on any inspection or warranty of or made by Seller or Lessee in respect of the condition of the Aircraft, the Aircraft Documents or the Lease Documents.
(b)    Buyer confirms that it has (i) had an opportunity to review the Lease Documents and all related ancillary documentation that it desires to review and (ii) determined that the Lease Documents and all such ancillary documentation are in all respects satisfactory to Buyer.  Buyer acknowledges that, in determining whether the Lease Documents and such ancillary documentation are satisfactory, Buyer has relied on its own due diligence review and knowledge of the Lease Documents and such ancillary documentation.
(c)    Buyer acknowledges that it has been and will be solely responsible for making its own independent investigation and appraisal of the operations, financial condition, creditworthiness, status and affairs of the Lessee, and, except for the representations and warranties made by Seller herein and in the other Transaction Documents (as applicable), has not 

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relied upon, and will not at any time rely upon, either Seller to provide Buyer with any information relating to any such matters or to assess or keep under review any of such matters. It is agreed that Seller will be solely responsible for all contact with Lessee until after Closing, and Buyer agrees that neither Buyer nor its Affiliates will communicate directly with Lessee at any time prior to Closing without the prior written consent of Seller.
Clause 5.    Loss of or Damage to the Aircraft Prior to the Closing.
5.1    Total Loss Prior to the Closing.  If prior to Closing, a Total Loss or any event or circumstance which with the passage of time or the giving of notice or both, would constitute a Total Loss shall have occurred and be continuing, Seller shall, promptly upon becoming aware of the foregoing, notify Buyer in writing of the fact and details of such occurrence, and such notice shall discharge and terminate all obligations and liabilities of the parties hereunder to proceed with the sale of the Aircraft and Seller shall promptly return to Buyer the Deposit.
5.2    Material Damage to the Aircraft Prior to the Closing.  If prior to Closing, the Aircraft suffers Material Damage, Seller shall promptly notify Buyer in writing of the facts and details of such occurrence. 
Clause 6.    Conditions Precedent.
6.1    Conditions Precedent to Obligation of Buyer.  The obligations of Buyer to pay the Closing Payment Amount and accept the Aircraft under this Agreement are conditioned upon the following:
(a)    the receipt by Buyer on or before the Closing Date of the following documents duly executed by the parties thereto (other than Buyer) satisfactory in form and substance to Buyer (with the documents listed in subclauses (i) through (iv) being held in escrow without being released until payment of the Closing Payment Amount):
(i)    the Deed of Novation;
(ii)    the Effective Time Notice;
(iii)    the Seller Guarantee;
(i)    the Lessee Guarantee;
(ii)    the Bill of Sale;
(iii)    a PDF copy of the Lease;
(iv)    an Incident/Accident Clearance Statement, in form and substance acceptable to Buyer, from Lessee;
(v)    evidence that all the conditions precedent under Schedule 2 of the Deed of Novation shall have been satisfied (except to the extent waived or deferred by the relevant party thereto) and that the transactions contemplated by the Deed of Novation will occur on the Closing Date;

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(vi)    Buyer shall be reasonably satisfied that the sale of the Aircraft to Buyer at the Delivery Location is exempt from Transfer Tax or that the applicable Transfer Tax is acceptable to Buyer in which case Buyer has paid or shall confirm that it shall pay any such Transfer Tax owing on the transaction in accordance with Clause 13;
(b)    Seller shall have provided to Buyer (i) a copy of all relevant powers of attorney and other corporate authorizations for Seller in relation to the execution of this Agreement and the other documents it has executed in connection herewith, in each case certified by an officer of Seller that each such document is a true and up to date copy of the original and, in the case of each corporate authorization, that such authorization has not been varied, revoked or rescinded, and (ii) a copy of Seller’s constitutional documents, in each case certified by an officer of Seller that each such document is a true and up to date copy of the original;
(c)    Seller shall have delivered to Buyer (a) an incumbency certificate of Seller signed by officers thereof as to the Person or Persons authorized to execute and deliver this Agreement and the other Transaction Documents on behalf of Seller, and (b) evidence satisfactory to Buyer that Seller has all necessary corporate power to enter into and perform, and has taken all necessary corporate steps to approve the entry into and performance of, this Agreement and the transactions contemplated hereby;
(d)    Buyer shall have received a certificate of insurance with respect to the Aircraft that is in compliance with the requirements described in the Lease and the Deed of Novation;
(e)    no Material Damage shall have occurred and no Total Loss, or any event or circumstance which with the giving of notice or the passage of time or both, would constitute a Total Loss shall have occurred;
(f)    on the Closing Date, the Lease shall be in full force and effect and shall not have been amended, rescinded or terminated;
(g)    no change shall have occurred after the date of execution and delivery of this Agreement in applicable law or regulation or in the interpretation thereof which would make it illegal for Buyer (i) to perform fully its obligations under any of the Transaction Documents, or (ii) to acquire the Aircraft; provided that if any such change has occurred, the parties shall use all reasonable cooperative endeavors to restructure the transaction contemplated by this Agreement so as to avoid the aforementioned illegality;
(h)    no change shall have occurred after the date of execution and delivery of this Agreement in applicable law or regulation or in the interpretation thereof which would make it illegal for Seller (i) to perform fully its obligations under any of the Transaction Documents to which it is a party or (ii) to sell the Aircraft; provided that if any such change has occurred, the parties shall use all reasonable cooperative endeavors to restructure the transaction contemplated by this Agreement so as to avoid the aforementioned illegality;
(i)    no action or proceeding shall have been instituted by any Government Entity, no governmental action shall be threatened by any Government Entity and no other judgment, order or decree shall have been issued or proposed to have been issued by any 

10

Government Entity to set aside, restrain, enjoin or prevent the execution, delivery or performance of the Transaction Documents, or the consummation of the transactions contemplated by the Transaction Documents;
(j)    the representations of Seller in Clause 7.1 shall be true and accurate on the Closing Date, except to the extent that such representations relate to a date prior to the Closing Date, and Buyer shall have received an officer’s certificate from Seller dated the Closing Date confirming the same;
(k)    the Aircraft shall be free and clean of all Liens other than Permitted Liens; and 
(l)    the Aircraft shall be at the Delivery Location.
The conditions specified in this Clause 6.1 are for the sole benefit of Buyer and may be waived in whole or in part and with or without conditions by Buyer without prejudicing the right of Buyer to receive fulfillment of such conditions, in whole or in part, at any time thereafter.
6.2    Conditions Precedent to Obligation of Seller.  The obligations of Seller to sell the Aircraft to Buyer under this Agreement and to deliver the Bill of Sale are conditioned upon the following:
(a)    The receipt by Seller on or before the Closing Date of the following documents executed by the parties thereto (other than Seller) satisfactory in form and substance to Seller (with the documents listed in subclauses (i) through (iv) being held in escrow without being released until the payment of the Closing Payment Amount):
(i)    the Deed of Novation;
(ii)    the Acceptance Certificate;
(iii)    the Effective Time Notice;
(iv)    evidence that all the conditions precedent under Schedule 2 of the Deed of Novation shall have been satisfied (except to the extent waived or deferred by the relevant party thereto);
(v)    Seller shall be reasonably satisfied that the sale of the Aircraft to Buyer at the Delivery Location is exempt from Transfer Tax or that the applicable Transfer Tax is acceptable to Buyer in which case Buyer has paid or shall confirm that it shall pay any such Transfer Tax owing on the transaction in accordance with Clause 13;
(b)    Buyer shall have provided to Seller (i) a copy of all relevant powers of attorney and other corporate authorizations for Buyer in relation to the execution of this Agreement and the other documents it has executed in connection herewith, in each case certified by an officer of Buyer that each such document is a true and up to date copy of the original and, in the case of each corporate authorization, that such authorization has not been varied, revoked or rescinded, and (ii) a copy of Buyer’s constitutional documents, in each case certified by an officer of Buyer that each such document is a true and up to date copy of the original;

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(c)    Buyer shall have delivered to Seller (a) an incumbency certificate of Buyer signed by officers thereof as to the Person or Persons authorized to execute and deliver this Agreement and the other Transaction Documents on behalf of Buyer, and (b) evidence satisfactory to Seller that Buyer has all necessary power to enter into and perform, and has taken all necessary steps to approve the entry into and performance of, this Agreement and the transactions contemplated hereby;
(d)    Seller shall have received an insurance certificate and insurance broker’s letter of undertaking, each in form and substance satisfactory to Seller, complying with the provisions of Clause 8.5;
(e)    Seller shall have received the Closing Payment Amount;
(f)    no change shall have occurred after the date of execution and delivery of this Agreement in applicable law or regulation or in the interpretation thereof which would make it illegal for Seller (i) to perform fully its obligations under any of the Transaction Documents or (ii) to sell the Aircraft; provided that if any such change has occurred, the parties shall use all reasonable cooperative endeavors to restructure the transaction contemplated by this Agreement so as to avoid the aforementioned illegality;
(g)    no change shall have occurred after the date of execution and delivery of this Agreement in applicable law or regulation or in the interpretation thereof which would make it illegal for Buyer (i) to perform fully its obligations under any of the Transaction Documents to which it is a party or (ii) in the case of Buyer, to acquire the Aircraft; provided that if any such change has occurred, the parties shall use all reasonable cooperative endeavors to restructure the transaction contemplated by this Agreement so as to avoid the aforementioned illegality;
(h)    no action or proceeding shall have been instituted by any Government Entity, no governmental action shall be threatened by any Government Entity and no other judgment, order or decree shall have been issued or proposed to have been issued by any Government Entity to set aside, restrain, enjoin or prevent the execution, delivery or performance of the Transaction Documents, or the consummation of the transactions contemplated by the Transaction Documents; and
(i)    the representations of Buyer in Clause 7.2 shall be true and accurate on the Closing Date, and Seller shall have received an officer’s certificate from Buyer dated the Closing Date confirming the same.
The conditions specified in Clause 6.2 are for the sole benefit of Seller and may be waived in whole or in part and with or without conditions by Seller without prejudicing the right of Seller to receive fulfillment of such conditions, in whole or in part, at any time thereafter.
6.3    Termination for Delay.  If, for any reason, Closing has not occurred on or before the Final Closing Date, either party (or, in the case of a delay caused by Buyer’s or Seller’s breach of this Agreement, the non-breaching party only) may terminate this Agreement by giving the other party written notice within three (3) Business Days after the Final Closing Date and this Agreement will terminate on the date of receipt of such notice.  In the event of such termination, neither party will have any further liability to the other with respect to the Aircraft, and this Agreement shall terminate, except that if Buyer is not then in breach of this Agreement, and provided that the cause of such delay is not Buyer’s failure to satisfy any of the conditions to 

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Closing set forth in Clause 6 for which Buyer is responsible (except where such failure is a result of Seller’s breach of this Agreement), Seller will promptly return the Deposit to Buyer.  If neither party gives a notice of termination within three (3) Business Days, the Final Closing Date shall be automatically extended for a period of thirty (30) Business Days beyond the later of (a) the originally scheduled Final Closing Date, and (b) the Final Closing Date as most recently extended.
Clause 7.    Representations and Warranties.
7.1    Seller’s Representations and Warranties.  Seller represents and warrants to Buyer that the following statements are on the date hereof, and on the Closing Date will be, true and correct:
(a)    Title.  Immediately before Closing, Seller shall have full legal and beneficial and good and marketable title to the Aircraft and Seller’s delivery of the Bill of Sale to Buyer or its designee shall convey to Buyer or such designee full legal and beneficial and good and marketable title to the Aircraft and all other right, title and interest of Seller in and to the Aircraft free and clear of all Liens other than Permitted Liens, and Seller will warrant and defend such title forever against all claims and demands whatsoever.
(b)    Status.  Seller is a designated activity company incorporated and validly existing under the laws of Ireland.
(c)    Power and Authority.  Seller has the power to enter into and perform and has taken all necessary action to authorize its entry into, performance and delivery of this Agreement and the other Transaction Documents to which it is a party and the transactions contemplated hereby and thereby.
(d)    Legal Validity.  This Agreement has been, and the other Transaction Documents to which Seller is a party, when executed, were or will be, duly executed and delivered by Seller.  This Agreement constitutes, and the other Transaction Documents to which it is a party when executed were or will constitute, the legal, valid and binding obligations of Seller enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, examinership, moratorium and other similar laws affecting the rights of creditors generally and general principles of equity, whether considered in a proceeding at law or in equity.
(e)    Non-conflict with Laws.  Seller’s entry into and performance of this Agreement and the other Transaction Documents to which it is a party and the transactions contemplated hereby and thereby do not and will not conflict with:
(i)    any law or regulation or any official or judicial order applicable to Seller; or
(ii)    the certificate of incorporation, constitution or any other corporate governing documents of Seller; or
(iii)    any agreement or document to which Seller is a party or which is binding upon Seller or its assets.

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(f)    Consents.  All authorizations, approvals, consents, licenses, exemptions, filings, registrations, notarizations and other matters, official or otherwise applicable to Seller which are required or advisable in connection with the entry into, performance, validity and enforceability of this Agreement and the other Transaction Documents to which Seller is a party, the delivery of the Aircraft hereunder or any of the transactions contemplated hereby or thereby shall be obtained by Seller prior to the date upon which they are required or it is advisable (in the absence of a stipulated date) that they be obtained.
(g)    Litigation.  No litigation or other proceeding before any court, administrative agency or government body is pending or, to the best of Seller’s knowledge, threatened against Seller, or affecting or relating to the Aircraft, the outcome of which could materially and adversely affect the validity of this Agreement, the performance by Seller of its obligations hereunder, or the rights, benefits or interest of Seller conveyed hereunder.
(h)    No Bankruptcy.  No liquidator, examiner, receiver or similar officer has been appointed in respect of all or any part of the assets of Seller nor has any application been made to a court which is still pending for an order for, or to the best of Seller’s knowledge, any act, matter or thing been done which with the giving of notice, lapse of time or satisfaction of some other condition (or any combination thereof) will lead to, the appointment of any such officer or equivalent in any jurisdiction.
(i)    Maintenance Reserves.  Except as set forth in a written notice to Buyer which is acceptable to Buyer, Lessee has not submitted to Seller any requests for reimbursement from the Supplemental Rent that are unsatisfied. 
(j)    Reimbursements.  Seller has not waived or deferred any of its rights under the Lease with respect to claims for reimbursement from the Supplemental Rent. 
(k)    Rent.  Except as set forth in a written notice to Buyer, Lessee has not prepaid any Rent other than under and in accordance with the Lease. 
(l)    Lease Documents.  The Lease Documents provided or to be provided to Buyer are true, correct and complete (originals or copies, as applicable) of such Lease Documents and constitute the entire agreement between the Seller and Lessee with respect to the Aircraft immediately prior to Delivery and there have been no other amendments or modifications entered into with respect to such Lease Documents which have not been disclosed by Seller to Buyer. 
7.2    Buyer’s Representations and Warranties.  Buyer represents and warrants to Seller that the following statements are on the date hereof, and on the Closing Date will be, true and correct:
(a)    Status.  Buyer is a designated activity company incorporated and validly existing under the laws of Ireland.
(b)    Power and Authority.  Buyer has the power to enter into and perform and has taken all necessary action to authorize the entry into, performance and delivery of this Agreement and the other Transaction Documents to which it is a party and the transactions contemplated hereby and thereby.

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(c)    Legal Validity.  This Agreement has been, and the other Transaction Documents to which Buyer is a party, when executed, will be, duly executed and delivered by Buyer.  This Agreement constitutes, and the other Transaction Documents to which Buyer is a party when executed will constitute, the legal, valid and binding obligations of Buyer enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, examinership, moratorium and other similar laws affecting the rights of creditors generally and general principles of equity, whether considered in a proceeding at law or in equity.
(d)    Non-conflict with laws.  Buyer’s entry into and performance of this Agreement and the other Transaction Documents to which Buyer is a party and the transactions contemplated hereby and thereby do not and will not conflict with:
(i)    any law or regulation or any official or judicial order applicable to Buyer; or
(ii)    the certificate of incorporation, constitution or any other corporate governing documents of Buyer; or
(iii)    any agreement or document to which Buyer is a party or which is binding upon Buyer or any of its assets.
(e)    Consents.  All authorizations, approvals, consents, licenses, exemptions, filings, registrations, notarizations and other matters official or otherwise applicable to Buyer which are required or advisable in connection with the entry into, performance, validity and enforceability of this Agreement and the other Transaction Documents to which Buyer is a party, the acceptance of the delivery of the Aircraft hereunder or any of the transactions contemplated hereby or thereby shall be obtained by Buyer prior to the date upon which they are required or it is advisable (in the absence of a stipulated date) that they be obtained.
(f)    Litigation.  No litigation or other proceeding before any court, administrative agency or government body is pending or, to the best of Buyer’s knowledge, threatened against Buyer, the outcome of which could materially and adversely affect the validity of this Agreement.
(g)    No Bankruptcy.  No liquidator, examiner, receiver or similar officer has been appointed in respect of all or any part of the assets of Buyer nor has any application been made to a court which is still pending for an order for, or any act, matter or thing been done which with the giving of notice, lapse of time or satisfaction of some other condition (or any combination thereof) will lead to, the appointment of any such officer or equivalent in any jurisdiction.
(h)    No Restrictions on Payments.  There are no restrictions on Buyer making the payments required by this Sale Agreement.
Clause 8.    Indemnification and Insurance.
8.1    Seller Indemnification.  Without limiting the provisions of Clause 10.1, Seller hereby agrees at all times to indemnify, protect, defend and hold harmless the Buyer on an After-Tax Basis from and against all and any Taxes (other than Transfer Taxes, which, for the 

15

avoidance of doubt, are the responsibility of Buyer), liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Buyer Claim”) that any of them at any time suffers or incurs with respect to any event attributable to (i) the period prior to Closing arising directly or indirectly out of, or in any way connected with the purchase, manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, subleasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft or relating to loss or destruction or damage to any property, or death or injury to any person caused by, relating to or arising from or out of (in each case whether directly or indirectly) any of the foregoing matters or (ii) the breach by Seller of any of its representations, warranties, covenants or obligations hereunder or under any of the Transaction Documents to which it is a party.
8.2    Limitation to Seller’s Indemnification.  The indemnities contained in Clause 8.1 do not extend to Buyer Claims:
(a)    which are indemnified by the Lessee or covered by insurances in respect of the Aircraft, provided that in the event that Lessee’s indemnification does not make Buyer whole, then Buyer shall be entitled to seek indemnification from Seller;
(b)    relating to the condition of the Aircraft at the Closing;
(c)    caused by the willful misconduct or gross negligence of Buyer;
(d)    caused by any acts or omissions of Buyer in its capacity as a manufacturer, servicer or repairer of aviation products;
(e)    to the extent caused by the failure of Buyer to comply with any of its express obligations under the Transaction Documents (unless such failure is caused by the failure of Seller to comply with any of its express obligations under the Transaction Documents) or any of Buyer’s representations and warranties not being true and correct;
(f)    which are ordinary or usual operating or overhead expenses of Buyer; or
(g)    which Buyer is expressly required to bear pursuant to the provisions of this Agreement.
8.3    Buyer Indemnification.  Buyer hereby agrees at all times to indemnify, protect, defend and hold harmless Seller Indemnitees on an After-Tax Basis from and against all and any Taxes, liabilities, losses, claims, proceedings, damages, penalties, fines, fees, costs and expenses whatsoever (any of the foregoing being referred to as a “Seller Claim”) that any of them at any time suffers or incurs with respect to any event attributable to (i) the period following Closing arising directly or indirectly out of, or in any way connected with the purchase, manufacture, ownership, possession, registration, performance, transportation, management, control, use or operation, design, condition, testing, delivery, leasing, subleasing, maintenance, repair, service, modification, overhaul, replacement, removal or redelivery of the Aircraft or relating to loss or destruction or damage or any property, or death or injury to any person caused by, relating to or arising from or out of (in each case whether directly or indirectly) any of the foregoing matters or (ii) the breach by Buyer of any of its representations, warranties, covenants or obligations hereunder or under any of the Transaction Documents to which it is a party.

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8.4    Limitation to Buyer’s Indemnification.  The indemnities contained in Clause 8.3 do not extend to Seller Claims:
(a)    which are indemnified by the Lessee or covered by insurances in respect of the Aircraft, provided that in the event that Lessee’s indemnification does not make Seller whole, then Seller shall be entitled to seek indemnification from Buyer;
(b)    caused by the willful misconduct or gross negligence of any Seller Indemnitee;
(c)    caused by any acts or omissions of a Seller Indemnitee in its capacity as a manufacturer, servicer or repairer of aviation products;
(d)    caused by the failure of Seller to comply with any of the express obligations under the Transaction Documents (unless such failure is caused by the failure of Buyer to comply with any of its express obligations under the Transaction Documents) or any of Seller’s representations and warranties not being true and correct;
(e)    which are ordinary or usual operating or overhead expenses of Seller; or
(f)    which Seller is expressly required to bear pursuant to the provisions of this Agreement.
8.5    Insurance.  Buyer shall, from the Closing Date until the earlier of (i) the second anniversary thereof and (ii) the date of completion of the next major airframe check (the “Tail Period”), (A) require that any lessee (including the Lessee) leasing the Aircraft from Buyer shall be contractually obligated to maintain the Insurances and shall use reasonable efforts to cause such lessee to maintain such Insurances; (B) require that any purchaser of the Aircraft from Buyer shall be contractually obligated to make the same agreements set forth in this Clause 8.5, as if each reference herein to Buyer were a reference to such purchaser and its subsidiaries and affiliates, and shall cause such purchaser to maintain such Insurances; and (C) include the Seller Indemnities, Heston Services Ltd. And each of their affiliates, subsidiaries, shareholders, members, partners, officers, directors, managers, employees, successors and assigns (the “Seller Parties”) as additional insureds on any Insurances maintained by Buyer or any lessee (including the Lessee) on a primary basis; provided that, in the event that Buyer is unable to procure such insurance cover for the Aircraft under the Lessee’s or any future operator’s or any purchaser’s liability insurance for any reason whatsoever, Buyer shall obtain and maintain such equivalent insurance cover for the Aircraft for its own account and at its own expense, which equivalent insurance cover shall name the Seller Parties as additional insureds for the Tail Period.
In this Clause 8.5, “Insurances” means comprehensive aircraft/airline liability insurance for the Aircraft with reputable insurers and meeting the requirements set forth below:
(a)    noting the interest of and including the Seller Parties as additional insureds;
(b)    when the Airframe or either Engine is subject to (i) the Lease, providing coverage in an amount not less than the amount which the Lessee is contractually obligated to maintain under the Lease on the Sale Date, or (ii) another lease, providing coverage in an amount not less than $600,000,000;

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(c)    when the Airframe and each Engine are not being operated but the Airframe or either Engine has not been removed from service to be parted out, providing coverage in an amount not less than $200,000,000;
(d)    if the Airframe and both Engines have been permanently removed from service to be parted out, comprehensive aviation products legal liability insurance in respect of the Aircraft of not less than $10,000,000 each and every loss (but in the aggregate in respect of products liability) in accordance with customary terms and conditions available in the leading international insurance markets;
(e)    providing that the Seller Parties have no responsibility for payment of premium;
(f)    providing that insurers waive rights of subrogation against each Seller Party;
(g)    providing that the insurance as to the interests of each Seller Party will not be invalidated by any action or inaction by any other insured party, and that such Seller Parties shall be held covered for their respective interests notwithstanding any breach or violation of warranty, condition or declaration, or by any non-disclosure or any false statement concerning the policy or the subject thereof, whether occurring before or after the Closing Date or before or after any loss relating thereto;
(h)    providing that the insurance is primary without rights of contribution in relation to any other insurance and not subject to average;
(i)    providing for severability of interest endorsements;
(j)    providing that that insurance will operate in all respects as if a separate policy had been issued to and covering each insured thereunder; provided, however, that the total liability under the policy will not exceed the limits of liability under the policy; and
(k)    providing that the insurance shall not be cancelled or materially changed without thirty (30) days’ advance written notice to Seller.
The amount and other provisions of any insurance and reinsurance provided by Lessee at the time of Closing or any subsequent sale of the Aircraft by Buyer subject to the Lease shall be sufficient to satisfy the requirements of this Clause 8.5 so long as such insurance and reinsurance remains in place.  Upon Seller’s request at any time, Buyer shall use reasonable efforts to, and at the commencement of a new lease of the Aircraft or any sale of the Aircraft by Buyer, Buyer shall provide a certificate of insurance and reinsurance (if any) (and, if applicable, a letter of undertaking from the brokers or insurer or reinsurer (if any)) addressed, and in a form or forms reasonably acceptable, to Seller setting forth the Seller Parties as additional insureds, the policy numbers, a description of the Aircraft and Engines (including manufacturer’s serial numbers), and a detailed description of the coverages, policy forms and endorsements and otherwise meeting the requirements hereunder (it being agreed that certificates conforming to AVN67B shall be deemed acceptable to Seller if the Lease expressly permits such certificates or Buyer is currently accepting such certificates from the Lessee).  In the event Buyer is unable to procure the Insurances from an insurer of recognized responsibility, then it shall procure reinsurance 

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coverage under terms reasonably acceptable to Seller, and such reinsurance shall contain a cut-through clause satisfactory to Seller. 
8.1    Insurance Certificates.  On or before the Closing Date, Lessee will provide an insurance certificate certifying that the insurance policies required under Clause 8.5 are in effect with respect to the Aircraft.  Thereafter, upon renewal Buyer will provide, or procure that there is provided, to Seller an insurance certificate certifying that the insurance policies required under Clause 8.5 are in effect with respect to the Aircraft (i) without further action by Seller if such insurance policies are maintained directly by Buyer or (ii) upon Seller’s reasonable request if such insurance policies are maintained by Lessee and Buyer lacks knowledge of Lessee’s failure to provide an insurance certificate to Seller.
Clause 9.    Manufacturer’s Warranties.  Effective as of Closing, Seller grants and does hereby irrevocably assign to Buyer the rights and benefits, to the extent that the same are not extinguished by the sale of the Aircraft, of any assignable warranties or indemnities of manufacturers, distributors, vendors, MROs or other service providers, which may exist in favor of Seller at the Closing with respect to the Airframe, any Engine or any Part.  At Buyer’s request and expense, Seller will provide reasonable cooperation to secure such rights and benefits in favor of Buyer (including, without limitation, giving notice of such assignment to the relevant manufacturers, distributors or service providers).
Clause 10.    DISCLAIMERS AND EXCLUSION OF LIABILITY.
10.1    SELLER’S DISCLAIMERS OF WARRANTIES.  BUYER UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT IT IS PURCHASING THE AIRCRAFT “AS IS”, “WHERE IS” AND “WITH ALL FAULTS” AND THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN CLAUSE 7.1(a) OF THIS AGREEMENT AND IN THE BILL OF SALE, THE AIRCRAFT (INCLUDING BUT NOT LIMITED TO THE AIRFRAME AND ANY ENGINE, APU, LANDING GEAR, COMPONENT, EQUIPMENT AND PART INSTALLED THEREON, AND ANY OF THE AIRCRAFT DOCUMENTS APPLICABLE TO THE AIRCRAFT, AND ANY OTHER EQUIPMENT, PART, DATA OR INFORMATION SOLD AND PROVIDED HEREUNDER) ARE SOLD AND PROVIDED ON AN “AS IS” “WHERE IS” BASIS, WITH ALL FAULTS AND WITHOUT RECOURSE TO SELLER.  THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE BILL OF SALE AND THE OBLIGATIONS AND LIABILITIES OF SELLER HEREUNDER ARE EXCLUSIVE AND EXPRESSLY IN LIEU OF, AND SELLER WILL NOT BE DEEMED TO HAVE MADE, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ANY AND ALL RIGHTS AND REMEDIES IT MAY HAVE AGAINST SELLER, WHETHER ARISING BY LAW OR OTHERWISE, RELATING TO ANY AND ALL OTHER REPRESENTATIONS, WARRANTIES, DUTIES, OBLIGATIONS, LIABILITIES AND GUARANTEES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, CONCERNING THE AIRCRAFT OR THE AIRWORTHINESS THEREOF (INCLUDING BUT NOT LIMITED TO THE AIRFRAME AND ANY ENGINE, APU, LANDING GEAR, COMPONENT, EQUIPMENT AND PART INSTALLED THEREON, AND ANY OF THE AIRCRAFT DOCUMENTS AND OTHER DOCUMENTATION APPLICABLE TO THE AIRCRAFT, AND ANY OTHER EQUIPMENT, PART, DATA OR INFORMATION SOLD AND PROVIDED HEREUNDER), OR THE VALUE, CONDITION, DESIGN, OPERATION, DURABILITY OR COMPLIANCE WITH SPECIFICATION OF THE 

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AIRCRAFT (INCLUDING BUT NOT LIMITED TO THE AIRFRAME AND ANY ENGINE, APU, LANDING GEAR, COMPONENT, EQUIPMENT AND PART INSTALLED THEREON, AND ANY OF THE AIRCRAFT DOCUMENTS APPLICABLE TO THE AIRCRAFT, AND ANY OTHER EQUIPMENT, PART, DATA OR INFORMATION SOLD AND PROVIDED HEREUNDER), INCLUDING, BUT NOT LIMITED TO:
(a)    ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND BUYER HEREBY WAIVES ANY AND ALL RIGHTS AND REMEDIES IT MAY HAVE AGAINST SELLER RELATING TO ANY OF THE FOREGOING AND ARISING BY LAW OR OTHERWISE;
(b)    ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
(c)    ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE ACTUAL OR IMPUTED NEGLIGENCE OF SELLER AND ITS ASSIGNS; AND
(d)    ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO ANY EQUIPMENT OR ANY OTHER TANGIBLE OR INTANGIBLE THING PROVIDED UNDER THIS AGREEMENT.
10.2    EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES.  NEITHER PARTY SHALL HAVE ANY OBLIGATION OR LIABILITY TO THE OTHER PARTY, WHETHER ARISING IN CONTRACT (INCLUDING WARRANTY), TORT OR OTHERWISE, FOR LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO THE AIRCRAFT OR ANY OTHER TANGIBLE OR INTANGIBLE THING PROVIDED UNDER THIS AGREEMENT.
10.3    TECHNICAL ACCEPTANCE.  DELIVERY BY BUYER TO SELLER OF THE ACCEPTANCE CERTIFICATE SHALL BE CONCLUSIVE PROOF AS BETWEEN SELLER (ON THE ONE HAND) AND BUYER (ON THE OTHER) THAT BUYER’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 ON THE SALE DATE) AND IN EVERY WAY SATISFACTORY TO BUYER.
Clause 11.    Excusable Delay and Termination.  The Closing may be delayed for any cause to the extent it is beyond Seller’s or Buyer’s reasonable control and not occasioned by that party’s fault or negligence, including, without limitation, acts of God; war, armed hostilities, riots, fires, floods, earthquakes or serious accidents; governmental acts or failures to act affecting materials, facilities or the Aircraft; strikes or labor troubles causing cessation, slowdown or interruption of work; failure of or delay in transportation; or inability, after due and timely diligence, to procure materials, systems, accessories, equipment or Parts.  A delay resulting from such causes is referred to as an “Excusable Delay”.  Each party will promptly notify the other of any actual or threatened Excusable Delay in delivery of the Aircraft and the estimated duration and cause thereof, and the Final Closing Date of the Aircraft will be equitably extended.

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Clause 12.    Assignment.  This Agreement will inure to the benefit of and be binding upon each of the parties hereto and their respective successors and assigns.  Neither the rights nor the duties of either party may be assigned or delegated, or contracted to be assigned or delegated, in whole or part, without the prior written consent of the other party, and any purported assignment or delegation without the consent of the other party shall be void ab initio.
Clause 13.    Transfer Taxes.  Buyer agrees to indemnify and hold harmless Seller for and against any and all Taxes imposed on any party in connection with the transfer of title to the related Aircraft and/or the novation of the Lease as contemplated in this Agreement and the other Transaction Documents excluding any Taxes assessed on the net income of Seller or gain realized by the Seller (“Transfer Taxes”).  Without limiting the generality of the foregoing, the Buyer and the Seller shall use commercially reasonable efforts to structure the transactions contemplated by this Agreement and the other Transaction Documents so as to lawfully avoid or minimize the incurrence of any Taxes.  Any amount payable by Buyer pursuant to this Clause 13 will be paid within five (5) Business Days after receipt of a written demand therefor from Seller, accompanied by a written statement describing in reasonable detail the basis for such demand and the computation of the amount so payable.
Clause 14.    Notices.  Any notice, request or information required or permissible under, or waiver or agreement contemplated by, this Agreement will be in writing and in English.  Notices will be delivered in person or sent by email or by expedited delivery addressed to the parties as set forth in this Clause 14.  In the case of an email, notice will be deemed received upon actual receipt.  In the case of a notice sent by expedited delivery, notice will be deemed received on the date of delivery set forth in the records of the Person which accomplished the delivery.  If any notice is sent by more than one of the above listed methods, notice will be deemed received on the earliest possible date in accordance with the above provisions:
		
	(i)
	If to Buyer:

Contrail Aviation Leasing Ireland DAC 
32 Molesworth Street 
Dublin 2 
Ireland 
Tel: 697 3200 
Fax: 697 3300 
Attn: The Directors
With a copy to:

Contrail Aviation Support, LLC 
435 Investment Court
Verona, Wisconsin 53593
United States of America 
Tel: 1 608 848-8100 
E-mail:  joe@contrail.com 
Facsimile: 608 848 8101 
Attn: Joseph G. Kuhn, CEO

(ii)    If to Seller:

21

MAM Seldon Aviation 2 Designated Activity Company 
32 Molesworth Street 
Dublin 2, D02Y512 
Ireland 
Tel: +353 1 697 3200 
Fax: +353 1 697 3300 
Email: mfdublin@maplesfs.com
With a copy to:
Marathon Structured Product Strategies Fund, LP 
c/o Marathon Asset Management, LP 
One Bryant Park, 38th Floor 
New York, NY 10036 
Email: cthaler@marathonfund.com and JThorstenson@marathonfund.com 
Fax:  +1 212 205 8735 and +1 212 205-8796 
Attn:  Craig Thaler and Joe Thorstenson
With a copy to:
Seldon Partners 
1636 3rd Avenue, Suite 135 
New York, NY 10128 
Attention:  Daniel Simons 
Tel:  +1 (646) 397-6982 
Email:  dsimons@seldonpartners.com
or to any party at such other address as the party may designate by notice duly given in accordance with this Clause 14.
Clause 15.    Miscellaneous.
15.1    Further Assurances.  Each party agrees from time to time to do and perform such other and further acts and execute and deliver any and all such other instruments as may be required by law or reasonably requested by the other party to establish, maintain and protect the rights and remedies of the requesting party and carry out and effect the intent and purpose of this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby.  Such other and further acts shall be at the expense of the requesting party unless such other or further act is related to an obligation of a party hereunder that has not been fully performed, in which case it shall be at the expense of the party bearing the obligation.
15.2    Certain Filings.  Seller and Buyer shall cooperate with one another (i) in determining whether any action by or in respect of, or filing with, any governmental body, agency, official or authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the consummation of the transactions contemplated by this Agreement and (ii) in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals or waivers.

22

15.3    Waiver; Remedies Cumulative.
(a)    No delay on the part of either party in exercising any of its rights, powers or privileges under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right, power or privilege.
(b)    The rights and remedies herein provided are cumulative and, save as expressly stated to the contrary herein, are not exclusive of any rights or remedies provided by law.
15.4    Severability of Provisions.  If any provision of this Agreement is prohibited or unenforceable in any jurisdiction, such prohibition or unenforceability shall not invalidate the remaining provisions hereto or affect the validity or enforceability of such provisions in any other jurisdiction.
15.5    Counterparts.  This Agreement may be executed in any number of counterparts, and by each party on separate counterparts.  Each counterpart is an original, but all counterparts shall together constitute one and the same instrument.  Delivery of a counterpart of this Agreement by email attachment or telecopy shall be an effective mode of delivery.  In relation to each counterpart, upon confirmation by or on behalf of a party that such party authorizes the attachment of its counterpart signature page to the final text of this Agreement, such counterpart signature page shall take effect, together with such final text, as a complete authoritative counterpart.
15.6    Documentation and Costs.  Unless otherwise expressly set forth herein or in the Deed of Novation, each party shall be responsible for its respective out-of-pocket expenses, including, but not limited to, fees of legal counsel, accounting advisors, insurance advisors and equipment appraisers.  All fees and expenses with respect to the change of Aircraft registration and all registration and filing fees in connection with any financing arranged by Buyer shall be for the account of Buyer.  Any expenses relating to the assignment of the Lease and payable on behalf of or reimbursable to the applicable Lessee will be paid by Buyer and Seller on a 50/50 basis.
15.7    Attorneys’ Fees.  In any action or proceeding brought by any party against the other arising under or in connection with this Agreement or any other documents related thereto, the prevailing party shall, in addition to other allowable costs, be entitled to an award of reasonable attorneys’ fees.
15.8    Confidentiality.  The parties hereto shall keep this Agreement and any other agreements (other than the Bill of Sale or any of the other Transaction Documents to the extent they are required to be publicly filed) between the parties contemplated hereby strictly confidential without the prior written consent of the other party; provided that such consent shall not be required for any disclosure to any Affiliates, directors, shareholders, capital partners, investors, officers, employees, professional advisers or financiers of such party who are responsible for analyzing, negotiating and approving the transactions contemplated hereby and who are made aware of the confidential nature of the transactions contemplated hereby.  This Clause 15.8 imposes no obligation upon a recipient with respect to confidential information which (a) was in the recipient’s possession before receipt from the discloser; (b) is or becomes a matter of public knowledge through no fault of the recipient; (c) is rightfully received by the 

23

recipient from a rightfully possessing third party who does not have a duty of confidentiality; (d) is disclosed by the discloser to a third party who does not have a duty of confidentiality; (e) is disclosed under operation of law; (f) is disclosed by the recipient with the discloser’s prior written approval, or (g) is independently developed by the recipient without access to confidential information exchanged hereunder.
15.9    No Brokers.  If any person asserts any claim against either Seller or Buyer for fees or commissions by reason of any agreement to act as a broker for either Seller or Buyer in this transaction, the party for which said person claims to have acted will on demand defend, indemnify and hold harmless the other party from and against all claims, demands, liabilities, damages, losses, judgments and expenses of every kind (including legal fees, costs and related expenses) arising out of such claim.
15.10    Negotiated Agreement.  This Agreement, including the provisions of Clause 10 relating to DISCLAIMER AND RELEASE, the exclusion of consequential and other damages, and the provisions relating to indemnification and insurance, has been the subject of discussion and negotiation and is fully understood by the parties, and the Purchase Price and other agreements of the parties set forth in this Agreement were arrived at in consideration of such provisions.
15.11    Entire Agreement; Amendments.  This Agreement and the other Transaction Documents constitute the entire agreement of the parties hereto with respect to the subject matter hereof, and all prior or contemporaneous understandings or agreements, whether written or oral, among any of the parties hereto with respect to such subject matter are hereby superseded in their entireties.  This Agreement shall not be amended, modified or waived except by an instrument in writing executed by authorized representatives of the parties.
15.12    Corporate Obligations.  Notwithstanding any other provision of this Agreement, the Buyer acknowledges and agrees that the obligations of Seller hereunder are solely the corporate obligations of Seller and that it will not have or seek before any court or Government Entity to have any recourse against any shareholder, director, officer or employee of Seller from time to time with respect to any actions or inactions of Seller or any obligation, covenant, indemnity, representation or agreement of Seller under this Agreement, in each case except to the extent that any such action or inaction arises as a result of the fraud, gross negligence or wilful misconduct of the relevant shareholder, director, officer or employee of Seller.
15.13    Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, TO THE SAME EXTENT AS IF THIS AGREEMENT WAS ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK BY RESIDENTS OF SUCH STATE OF NEW YORK.
15.14    Submission to Jurisdiction; Waiver of Jury Trial.
(a)    Each party hereby irrevocably consents that the courts of the City, County and State of New York and the United States District Court for the Southern District of New York, in each case, located in the Borough of Manhattan, New York, New York, are to have exclusive jurisdiction to settle any disputes which may arise in connection with the legal relationships established by this Agreement (including, without limitation, claims for set-off or 

24

counterclaim) or otherwise arising in connection with this Agreement or any other Transaction Document or any non-contractual obligations connected with them.  Each of Buyer and Seller irrevocably and unconditionally submits to such courts in respect of such disputes.
(b)    Seller and Buyer irrevocably waive any objections to any proceedings in such courts on the ground of venue or forum non conveniens or any similar grounds.
(c)    Seller and Buyer irrevocably consent to service of process by mail or in any other manner permitted by the relevant law.
(d)    EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.
[Signature page follows.]

25

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered, as of the date first above written.
	
		
	 
	MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY, 
as Seller
By:   /s/ Jarlath Canning  
   Name: Jarlath Canning 
   Title: Director

	 
	CONTRAIL AVIATION LEASING IRELAND DAC, 
as Buyer
By:   /s/ Jonathan Reynolds 
   Name: Jonathan Reynolds 
   Title: Director

26

SCHEDULE 1
AIRCRAFT DESCRIPTION
		
	Airframe:
	One (1) used Airbus model A320-200 aircraft bearing manufacturer’s serial number 1183.

		
	Engines:
	Two (2) used IAE International Aero Engines AG model V2527-A5 engines bearing manufacturer’s serial numbers V10682 and V10683.

	
			
	 
	1
	 

CHICAGO/#3363549.10 

WARRANTY BILL OF SALE
December 20, 2019
For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY, a designated activity company incorporated under the laws of Ireland (“Seller”), owner of the title to the aircraft, Parts and Aircraft Documents described below (hereinafter referred to as the “Aircraft”): 
		
	1.
	one (1) used Airbus model A320-200 aircraft bearing manufacturer’s serial number 1183 together with its two (2) used IAE International Aero Engines AG model V2527-A5 engines bearing serial numbers V10682 and V10683;

		
	2.
	all Parts;

		
	3.
	all Aircraft Documents;

does hereby sell, grant, transfer and deliver all its right, title and interest in and to the Aircraft to CONTRAIL AVIATION LEASING IRELAND DAC, a designated activity company incorporated under the laws of Ireland (the “Buyer”) and does hereby represent and warrant to Buyer that it is the owner of full legal and beneficial and good and marketable title to the Aircraft free and clear of all Liens other than Permitted Liens.  Seller hereby further warrants to Buyer that there is hereby sold, granted, transferred and conveyed to Buyer full legal and beneficial and good and marketable title to the Aircraft and each part thereof which constitutes all of Seller’s right, title and interest therein free and clear of all Liens other than Permitted Liens, but otherwise in an “AS IS, WHERE IS, WITH ALL FAULTS” condition and Seller shall warrant and defend such title forever against all claims of any Person.
Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to such terms in the Aircraft Sale Agreement dated as of December 20, 2019 between Seller and Buyer (whether by reference to another document or otherwise).
This Warranty Bill of Sale, regardless of where executed, and any non-contractual obligations arising out of or in connection with this Bill of Sale, shall be subject to, governed by and construed in accordance with the laws of the State of New York (without regard to the conflicts of law rules which might result in the application of the laws of any other jurisdiction).
[Signature page follows.]

	
			
	 
	 
	 

CHICAGO/#3389674.2 

IN WITNESS WHEREOF, Seller has caused this Warranty Bill of Sale to be duly executed as of the date first set forth above.
	
		
	 
	MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY, 
as Seller
By:   /s/ Jarlath Canning 
   Name: Jarlath Canning 
   Title: Director

	
			
	 
	 
	 

CHICAGO/#3389674.2 

ACCEPTANCE CERTIFICATE AND ESTOPPEL
December 20, 2019
IN ACCORDANCE WITH that certain Aircraft Sale Agreement, dated as of December 20, 2019 (the “Sale Agreement”), by and between MAM Seldon Aviation 2 Designated Activity Company, a designated activity company incorporated under the laws of Ireland (“Seller”) and Contrail Aviation Leasing Ireland DAC, a designated activity company incorporated under the laws of Ireland (“Buyer”), Buyer hereby irrevocably and unconditionally accepts delivery of the below-described items (collectively, the “Aircraft”) in its “as-is, where-is, with all faults” condition and agrees that the Aircraft has been delivered to and accepted by Buyer in accordance with the Sale Agreement: 
One (1) used Airbus model A320-200 aircraft bearing manufacturer’s serial number 1183;
two (2) used IAE International Aero Engines AG model V2527-A5 engines bearing serial numbers V10682 and V10683; and
all Parts and Aircraft Documents
in German airspace at 1:16 (ET) on the date hereof.
Buyer confirms to Seller that Buyer has inspected the Aircraft to its satisfaction and that the Aircraft is in all respects satisfactory to Buyer.
Buyer confirms to Seller its irrevocable and unconditional acceptance of the Aircraft in its “as is”, “where is” and “with all faults” condition and confirms the matters referred to in Clause 10 of the Sale Agreement.
Buyer acknowledges to and agrees with Seller that it has no rights or claims against Seller in respect of the condition of the Aircraft or any of the matters relating to or referred to in Clause 10 of the Sale Agreement, except as expressly set forth in Clause 10 of the Sale Agreement.

	
			
	 
	 
	 

CHICAGO/#3390622.2 

EXECUTED by a duly authorized representative of Buyer as of the date first set forth above.
	
		
	 
	CONTRAIL AVIATION LEASING IRELAND DAC, 
as Buyer
By:   /s/ Jonathan Reynolds 
   Name: Jonathan Reynolds 
   Title: Director

18455578v1

	
			
	 
	 
	 

CHICAGO/#3390622.2Exhibit

Execution Version

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

DEED OF LEASE NOVATION
December 20, 2019

between
MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY,
as Existing Lessor

SMARTLYNX AIRLINES ESTONIA OÜ,
as Lessee

CONTRAIL AVIATION LEASING IRELAND DAC,
as New Lessor

IN RESPECT OF ONE USED AIRBUS MODEL A320-200 AIRCRAFT
BEARING MANUFACTURER'S SERIAL NUMBER 1183
WITH TWO IAE INTERNATIONAL AERO ENGINES AG MODEL V2527-A5 ENGINES 
BEARING ESN V10682 AND V10683

    

CHICAGO/#3363457.8 

THIS DEED OF LEASE NOVATION is dated December 20, 2019 (this “Deed of Lease Novation”) and made AMONG:
MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY (“Existing Lessor”) a designated activity company incorporated under the laws of Ireland, having its registered office address at 32 Molesworth Street, Dublin 2, D02Y512, Ireland, SmartLynx Airlines Estonia OÜ (“Lessee”) whose address is at Lennujaama tee 13, Tallinn, 11101, Estonia, and Contrail Aviation Leasing Ireland DAC (“New Lessor”), a designated activity company incorporated under the laws of Ireland, having its registered office address at 32 Molesworth Street, Dublin 2, D02Y512, Ireland.

BACKGROUND:
		
	(A)
	By an Aircraft Lease Agreement MSN 1183 dated as of 05 January 2017, between Heston Services Ltd. (the “Original Lessor”) and Lessee, as novated by that Deed of Lease Novation dated as of 07 November, 2017 among the Original Lessor, the Existing Lessor and the Lessee, as further amended, modified or supplemented up to the date of this Deed of Lease Novation (referred to herein as the “Lease”), Existing Lessor agreed to lease and Lessee agreed to take on lease one (1) Airbus model A320-200 aircraft bearing manufacturer's serial number 1183 with two (2) IAE International Aero Engines AG model V2527-A5 engines with engine serial numbers V10682 and V10683 (the “Aircraft”, as more fully defined in the Lease).  

		
	(B)
	In accordance with the Lease, the Aircraft was delivered to Lessee on 10 May, 2017 (the “Lease Delivery Date”).

		
	(C)
	Pursuant to the Aircraft Sale and Purchase Agreement (MSN 1183) dated December 20, 2019 between Existing Lessor and the New Lessor (the “Sale Agreement”), New Lessor has agreed to purchase the Aircraft from Existing Lessor upon the terms and conditions contained therein.

		
	(D)
	Simultaneously with the purchase of the Aircraft by New Lessor, Existing Lessor has agreed to transfer to New Lessor all of its rights, title, liabilities and obligations in and under the Lease Documents upon and subject to the terms of the Deed of Lease Novation and Lessee and New Lessor wish to effect certain amendments to the Lease Documents (the Lease as novated and amended by this Deed of Lease Novation is referred to in this Deed of Lease Novation as the “Novated Lease” and the Lease Documents as novated and amended by this Deed of Lease Novation are referred to in this Deed of Lease Novation as the “Novated Lease Documents”) on the terms and conditions set out below.

For good, adequate and valuable consideration received IT IS AGREED as follows:

		
	1.
	Definitions and Interpretation

In this Deed of Lease Novation:
“Aircraft” has the meaning given to it in the background paragraphs.
“Deed of Lease Novation” has the meaning given to it in the introductory paragraph.
“Effective Time” has the meaning given to it in Section 2.2;
“Effective Time Notice” has the meaning given to it in Section 2.1.
“Lease Delivery Date” has the meaning given to it in the background paragraphs.
“Lease Documents” means the documents listed in Schedule 1 hereto.
“Novated Lease Documents” has the meaning given to it in the background paragraphs.

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“Novated Lease” has the meaning given to it in the background paragraphs.
“Relevant Interests” has the meaning given to it in Section 2.4.
“Sale Agreement” has the meaning given to it in the background paragraphs.
Capitalised terms used in this Deed of Lease Novation shall, unless otherwise defined herein, have the same meaning given to them in the Lease Documents (prior to the amendments contemplated by this Deed of Lease Novation). 

		
	2.
	Novation

		
	2.1.
	The novation contemplated by this Deed of Lease Novation shall not be effected in accordance with the provisions of Section 2.2 below until Existing Lessor, New Lessor and Lessee confirm that all of the conditions precedent contained in paragraphs ‎1, 2 and 3 of Schedule 2, respectively, have been satisfied (or waived, deferred or extended in accordance with paragraph 4 of Schedule 2)‎ in form and substance reasonably satisfactory to Existing Lessor, New Lessor and Lessee, as applicable.  Upon the occurrence of the Effective Time (as defined below), New Lessor and Existing Lessor shall execute an Effective Time Notice (in the form attached as Schedule 4 (Form of Effective Time Notice)) (the “Effective Time Notice”) confirming the Effective Time for the purposes of this Deed of Lease Novation and the Novated Lease Documents and shall deliver to Lessee a copy of such Effective Time Notice, which shall be acknowledged by Lessee.

		
	2.2.
	With effect on and from the date and time specified in the Effective Time Notice (the “Effective Time”), the following will happen simultaneously without the need for physical delivery of the Aircraft:

		
	2.2.1.
	New Lessor agrees to assume the undertakings, rights, obligations and liabilities of Existing Lessor as lessor and owner under the Lease Documents (as amended and novated by this Deed of Lease Novation) and Lessee agrees to perform its undertakings, obligations, duties and liabilities under the Novated Lease Documents to New Lessor, in each case, to the extent attributable to the period, and which arise, after the Effective Time;

		
	2.2.2.
	Lessee consents to and accepts the assumption by New Lessor set forth in Section 2.2.1 above; 

		
	2.2.3.
	the Lease Documents are novated and constitute an agreement between New Lessor as lessor and Lessee as lessee on the terms of the Novated Lease Documents; 

		
	2.2.4.
	Existing Lessor and Lessee are each released by the other from their respective obligations and liabilities under the Lease Documents and shall have no rights against or obligations to the other under the Lease Documents, except that each of Existing Lessor and Lessee shall retain as against the other all pre-existing rights set out in the Lease Documents in respect of claims, liabilities or losses suffered, incurred, arising or attributable to the period prior to the Effective Time (and New Lessor shall not be responsible to Lessee in respect of any such claims, liabilities or losses suffered, incurred, arising or attributable to the period prior to the Effective Time) and Lessee shall not exercise any set-off or counterclaim in respect of any such losses, liabilities or claims against New Lessor.  Notwithstanding the foregoing, and in respect of matters arising or attributable to the period prior to the Effective Time, Lessee will continue to indemnify and insure each Indemnitee (as defined in the Lease Documents prior to the amendment and novation under this Deed of Lease Novation) on the terms set out in this Deed of Lease Novation and in the Lease Documents prior to the amendment and novation under this Deed of Lease Novation; 

		
	2.2.5.
	Lessee acknowledges that, except as provided in Section 2.2.4 of this Deed of Lease Novation with respect to periods prior to the Effective Time, its undertakings, duties, obligations and liabilities to the “Lessor” under the Novated Lease Documents are owed to, and to be performed in favour of, New Lessor and agrees with New Lessor to perform the undertakings, duties, obligations and liabilities of Lessee to New Lessor as “Lessor” under the Novated Lease Documents;

3

CHICAGO/#3363457.8 

		
	2.2.6.
	Lessee agrees that New Lessor shall have no responsibility for, and Lessee will not assert against New Lessor or exercise any right of set-off or counterclaim or other right in respect of, any claim or defence that it may have or have had against Existing Lessor under the Lease and the other Lease Documents in respect of the period prior to the Effective Time; and 

		
	2.2.7.
	the leasing of the Aircraft by Existing Lessor to Lessee terminates, and Lessee accepts the leasing of the Aircraft from New Lessor, on the terms and conditions of the Novated Lease Documents.

		
	2.2.8.
	Each of the foregoing events and agreements is conditional upon the happening of the others and shall occur simultaneously at the Effective Time.

		
	2.3.
	Lessee acknowledges that the Aircraft was delivered by Existing Lessor to Lessee on the Lease Delivery Date under the Lease Documents and that Lessee is in possession of the Aircraft pursuant to the Lease and that New Lessor may rely on the Lease Supplement No. 1 dated 10 May, 2017 issued to Existing Lessor as though it had been issued to New Lessor; and it is acknowledged by all parties hereto that no further physical delivery of the Aircraft by New Lessor is required or contemplated as a result of this Deed of Lease Novation and that the right of possession of Lessee in respect to the Aircraft shall be continuing and uninterrupted as of the Effective Time.  New Lessor shall have the benefit of the disclaimers, waivers and representations set forth in the Lease.

		
	2.4.
	As of the Effective Time, the following interests (the “Relevant Interests”) will exist in relation to the Aircraft:

		
	2.4.1.
	New Lessor is the legal and beneficial owner of the Aircraft;

		
	2.4.2.
	New Lessor is leasing the Aircraft to Lessee pursuant to the Novated Lease Documents;

		
	2.4.3.
	Existing Lessor is the previous owner of the Aircraft; and

		
	2.4.4.
	Existing Lessor is the previous lessor of the Aircraft. 

		
	3.
	Amendments

As of and with effect from the Effective Time, all references to Lessor in the Lease Documents shall be deemed to refer to New Lessor, all references to “this Agreement” in the Lease shall be deemed to refer to the Novated Lease and all other provisions in the Lease Documents shall be construed mutatis mutandis to have such effect. In addition, as of and with effect from the Effective Time, the Lease Documents shall be more particularly amended as provided in ‎Schedule 3 (Amendments to Lease Documents) and all references to clauses, sections, articles and schedules in that Schedule 3 shall be construed as references to clauses, sections, articles and schedules of the Lease.  Except as set out in this Deed of Lease Novation, the Lease Documents shall remain unmodified and in full force and effect and as of and with effect from the Effective Time shall constitute the Novated Lease Documents between New Lessor and Lessee.

		
	4.
	Representations and Warranties

		
	4.1.
	New Lessor hereby represents to each other party to this Deed of Lease Novation that:

		
	4.1.1.
	it is a designated activity company limited by shares duly incorporated and validly existing under the laws of Ireland; 

		
	4.1.2.
	it has the power to enter into and perform this Deed of Lease Novation and the transactions contemplated by this Deed of Lease Novation and has taken all necessary action to authorise the entry into, performance and delivery of this Deed of Lease Novation and the transactions contemplated by this Deed of Lease Novation and has duly executed this Deed of Lease Novation;

		
	4.1.3.
	its obligations under this Deed of Lease Novation are legal, valid, binding and enforceable against it (except as enforcement may be limited by applicable bankruptcy, insolvency, liquidation, 

4

CHICAGO/#3363457.8 

reorganization, examinership and similar laws affecting creditors’ rights generally or general principles of equity); and
		
	4.1.4.
	all authorizations required in connection with the entry into, performance, validity and enforceability of this Deed of Lease Novation and the transactions contemplated hereby have been obtained or effected and are in full force and effect.

		
	4.2.
	Existing Lessor hereby represents to each other party to this Deed of Lease Novation that:

		
	4.2.1.
	it is a designated activity company limited by shares duly incorporated and validly existing under the laws of Ireland;

		
	4.2.2.
	it has the power to enter into and perform this Deed of Lease Novation and the transactions contemplated by this Deed of Lease Novation and has taken all necessary action to authorise the entry into, performance and delivery of this Deed of Lease Novation and the transactions contemplated by this Deed of Lease Novation and has duly executed this Deed of Lease Novation; 

		
	4.2.3.
	its obligations under this Deed of Lease Novation are legal, valid, binding and enforceable against it (except as enforcement may be limited by applicable bankruptcy, insolvency, liquidation, reorganization, examinership and similar laws affecting creditors’ rights generally or general principles of equity); 

		
	4.2.4.
	all authorizations required in connection with the entry into, performance, validity and enforceability of this Deed of Lease Novation and the transactions contemplated hereby have been obtained or effected and are in full force and effect; 

		
	4.2.5.
	the Existing Lessor is not in breach of its obligations under the Lease Documents;

		
	4.2.6.
	there are no claims pending or threatened or disputes existing by Existing Lessor against Lessee under or in respect of the Lease Documents or the Aircraft (including, with respect to any due and outstanding Rent or Maintenance Reserves); and 

		
	4.2.7.
	the execution, delivery and performance by Existing Lessor of this Deed of Lease Novation will not (i) conflict with, or result in any material breach of, any terms of, or constitute a default under any agreement or document to which it is a party or by which it or any of its property or assets may be bound, nor result in the creation or imposition of any security interest on any of its assets under the provisions of any such agreement or document, (ii) contravene or conflict with the provisions of its constitutional documents or (iii) conflict with any law or regulation or any official or judicial order applicable to it.

		
	4.3.
	Lessee hereby represents and warrants to New Lessor, as of the date of this Deed of Lease Novation and, save as otherwise disclosed in writing, as of the Effective Time, as follows:

		
	4.3.1.
	it is a legal entity organised and existing under the laws of Estonia;

		
	4.3.2.
	it has the power to enter into and perform this Deed of Lease Novation and the transactions contemplated by this Deed of Lease Novation and has taken all necessary action to authorise the entry into, performance and delivery of this Deed of Lease Novation and the transactions contemplated by this Deed of Lease Novation and has duly executed this Deed of Lease Novation; 

		
	4.3.3.
	its obligations under this Deed of Lease Novation are legal, valid, binding and enforceable against it (except as enforcement may be limited by applicable bankruptcy, insolvency, liquidation, reorganization, examinership and similar laws affecting creditors’ rights generally or general principles of equity); 

		
	4.3.4.
	all authorizations required in connection with the entry into, performance, validity and enforceability of this Deed of Lease Novation and the transactions contemplated hereby have been obtained or effected and are in full force and effect;

		
	4.3.5.
	the Lease Documents constitute the entire agreement between Existing Lessor and Lessee in respect of the leasing of the Aircraft and, other than as contemplated by this Deed of Lease 

5

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Novation, there have been no amendments, modifications, waivers or consents entered into with respect to the Lease Documents;
		
	4.3.6.
	the execution, delivery and performance by Lessee of this Deed of Lease Novation will not (i) conflict with, or result in any material breach of, any terms of, or constitute a default under any agreement or document to which it is a party or by which it or any of its property or assets may be bound, nor result in the creation or imposition of any security interest on any of its assets under the provisions of any such agreement ro document, (ii) contravene or conflict with the provisions of its constitutional documents or (iii) conflict with any law or regulation or any official or judicial order applicable to it;

		
	4.3.7.
	the Lease Documents are in full force and effect and have not been terminated;

		
	4.3.8.
	no notice of assignment or transfer of the Lease Documents has been received by Lessee;

		
	4.3.9.
	there are no claims or disputes between Lessee and Existing Lessor outstanding, pending and/or threatened under or in respect of the Lease Documents and no claims or disputes are known by Lessee to exist against Existing Lessor under or in respect of the Lease Documents or the Aircraft; 

		
	4.3.10.
	the Aircraft is not on requisition nor subject to any existing sublease or charter, and Lessee has not entered into any agreement to sublease, charter, hire or otherwise part with possession of the Aircraft, any Engine or any Part, except as is permitted under the Lease; 

		
	4.3.11.
	no Casualty Occurrence has occurred with respect to the Aircraft or any Engine nor has the Aircraft or any Engine suffered any other material damage which with the passage of time would constitute a Casualty Occurrence or the potential cost of which would exceed [                          ] United States Dollars (US [          ]); 

		
	4.3.12.
	no claims have been made by Lessee under any of the warranties in respect of the Aircraft which are outstanding; 

		
	4.3.13.
	no Default or Event of Default has occurred and is continuing under the Lease; 

		
	4.3.14.
	no Default will result from the entry into or the compliance by the Lessee with any of the terms and provisions hereof; 

		
	4.3.15.
	Lessee has not paid any Rent or any other amount under the Lease Documents which is not due and payable prior to the Effective Time;

		
	4.3.16.
	the Aircraft is and has been in possession of Lessee since the Lease Delivery Date and has been properly imported into Estonia by Lessee under the temporary importation regime contemplated by applicable customs laws and regulations of Estonia;

		
	4.3.17.
	there are no set-offs, defences or counterclaims available against amounts owed to New Lessor under the Lease Documents;

		
	4.3.18.
	neither Lessee nor its assets is entitled to any immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement);

		
	4.3.19.
	the details set forth in Schedule 5 (the Schedule of Certain Terms), are correct as of the date hereof and (as supplemented in the Effective Time Notice) as of the Effective Time;

		
	4.3.20.
	the Engines identified in Schedule 5 (the Schedule of Certain Terms) are installed on the Airframe;

		
	4.3.21.
	No Airworthiness Directives have been performed with respect to the Aircraft for which Lessee is entitled to reimbursement from “Lessor” under the Lease;

		
	4.3.22.
	Other than as set forth in paragraph (2) of the Certificate of Technical Acceptance and Appendix 1 to the Technical Acceptance Certificate and Appendix 2 to the Technical Acceptance Certificate, the Aircraft was in compliacne with the delivery conditions set forth in Exhibit E to the Lease on the Lease Delivery Date;

6

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	4.3.23.
	The Aircraft is in airworthy condition and the certificate of airworthiness (through the continuous maintenance of the current and valid airworthiness review certificates) for the Aircraft remains in full force and effect; 

		
	4.3.24.
	As of the date hereof and at the Effective Time, except as set forth in a written notice to New Lessor which is acceptable to New Lessor (i) Lessee has not submitted to Existing Lessor any requests for reimbursement from Supplemental Rent that are unsatisfied and (ii) Existing Lessor does not owe Lessee any reimbursement from Supplemental Rent which has not yet been paid;

		
	4.3.25.
	Existing Lessor has not waived or deferred any of its rights under the Lease with respect to claims for reimbursement from Supplemental Rent; and 

		
	4.3.26.
	Lessee has not created, or permitted to exist, any Liens on the Aircraft other than Permitted Liens. 

		
	5.
	Lessee’s Undertakings

		
	5.1.
	Lessee shall, promptly after the Effective Time and, in any event, no later than thirty (30) days after the Effective Time, procure, at New Lessor's cost, that the Lease Identification displayed on the Aircraft and on each Engine are amended to reflect the text set out in Exhibit C (12) to the Novated Lease and shall, as soon as practicable after the Effective Time (but in any event no later than ten (10) Business Days after the Effective Time) and, at New Lessor’s cost, assist the New Lessor and the Existing Lessor to procure that the registration of the Aircraft with the Aviation Authority is amended to reflect the interests of New Lessor as owner and as lessor.

		
	5.2.
	In satisfaction of the obligations under Section 12 of the Lease, Lessee agrees with the Existing Lessor and the New Lessor to effect on or before the Effective Time such revised insurances evidencing compliance with Section 12 of the Novated Lease and in particular will ensure that:

		
	5.2.1.
	all persons with a Relevant Interest and each Indemnitee (as defined under the Novated Lease Documents) are named as additional insureds in respect of all liability insurances warranted each as to itself no operational interest;

		
	5.2.2.
	New Lessor is named as sole loss payee; and

		
	5.2.3.
	it maintains aircraft third party, property damage, passenger, baggage, cargo and mail and airline general third party (including premises, hangars and products liability) insurance for a combined single limit (bodily injury/property damage) of an amount not less than the amount specified in the Novated Lease Documents with the Indemnitees (as defined in the Lease prior to the amendment and novation of the Lease under this Deed of Lease Novation) and Heston Services Ltd. each named as additional insured for a period of two (2) years after the Effective Time in respect of the Aircraft.

		
	5.3.
	Lessee undertakes to use commercially reasonable efforts to procure, at New Lessor’s cost, the receipt by New Lessor within ten (10) days of the Effective Time of evidence that any filing (including, without limitation, filing with the Aviation Authority a notification for amending the registration of the Aircraft in the aircraft register maintained by the Aviation Authority and the Bill of Sale (as defined in the Sale Agreement) to reflect the interest of New Lessor as owner of the Aircraft) or registration, and any governmental or other license, approval, consent, exemption or certificate, which was not effected or issued prior to the Effective Time has been duly effected or issued.

		
	5.4.
	Lessee shall refrain from taking any action which might affect the ability of New Lessor to exercise or enforce its rights under the Novated Lease or to recover in full all amounts owed by the Lessee to the New Lessor or otherwise limit, affect or prejudice the rights of the New Lessor under the Novated Lease.

		
	5.5.
	Lessee shall provide to New Lessor an updated certificate of registration and an updated station license for the radio stations on board the Aircraft for the Aircraft promptly upon amending the 

7

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registration of the Aircraft and station license to reflect the interest of New Lessor as owner and lessor of the Aircraft.
		
	5.6.
	Lessee expressly consents to New Lessor’s exercise of its rights (including, without limitation, the right to repossess the Aircraft) under Section 18 of the Novated Lease in accordance with the terms thereof.

		
	5.7.
	Lessee shall 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 New Lessor may reasonably require, and at New Lessor’s cost, to reflect the change to the identity of the owner and lessor of the Aircraft recited in this Deed of Lease Novation and to perfect or protect the interests of New Lessor and any other person having a Relevant Interest, and for the purpose of carrying out the intent of and giving New Lessor benefit of the novation effected by this Deed of Lease Novation.

		
	5.8.
	Lessee shall provide New Lessor with an Incident/Accident Clearance Statement on or before the Effective Date, in form and substance acceptable to New Lessor (the “Non-Incident Statement“).

		
	6.
	Lessee’s confirmations

Lessee hereby confirms to New Lessor, as of the date of this Deed of Lease Novation and as of the Effective Time, that the Lessee is an airline that operates for reward primarily on international routes, and the Aircraft subject to the Lease is primarily used for commercial passenger operations on international flights and more than fifty percent (50%) of Lessee’s income is generated by such operations.

		
	7.
	Miscellaneous

		
	7.1.
	Continuing Effect: All representations and warranties made by Existing Lessor, New Lessor and Lessee in this Deed of Lease Novation shall survive the occurrence of the Effective Time.

		
	7.2.
	Variation: The terms of this Deed of Lease Novation shall not be varied otherwise than in writing and duly executed by or on behalf of all the parties; provided that New Lessor and Lessee shall be entitled to amend, modify or vary the terms of the Novated Lease Documents after the Effective Time without reference to or the signature of Existing Lessor (provided that no such amendment shall affect Existing Lessor’s rights with respect to the period prior to the Effective Time).

		
	7.3.
	Termination: If the Effective Time does not occur by 13 December 2019 (or such later date as may be agreed between Existing Lessor and New Lessor), Existing Lessor and New Lessor may serve a written notice on Lessee that this Deed of Lease Novation shall be terminated and cease to have any further force and effect, and upon service of such notice, this Deed of Lease Novation shall terminate and be of no further force and effect and the rights and obligations of the parties hereto (other than pursuant to Section 7.10 (Costs)) shall be as if this Deed of Lease Novation had never been executed.

		
	7.4.
	Notices: Notices and other communications under this Deed of Lease Novation shall be made in accordance with the notice provisions of the Lease Documents and, for such purposes, New Lessor’s and Lessee's contact details shall be: 

New Lessor: 
Contrail Aviation Leasing Ireland DAC 
Attn.: The Directors
32 Molesworth Street
Dublin 2

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Ireland
Tel. 697 3200
Fax. 697 3300

With a copy to:

CONTRAIL AVIATION SUPPORT, LLC
435 Investment Court
Verona, Wisconosin  53593
United States of America
Attn: Josepgh G. Kuhn, CEO
Tel: 1 608 848-8100
Fax: 608 848-8101 
Email:  joe@contrail.com

Lessee:
SmartLynx Airlines Estonia OÜ
Lennujaama tee 13, Tallinn 11101, Estonia 
Attn: CEO
Tel:  + 371 67207392
Fax:  + 371 67207750
E-mail:  Zygimantas.Surintas@smart-lynx.com

Existing Lessor:

MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY
Attn.: The Directors
32 Molesworth Street
Dublin 2, D02Y512,
Ireland
Tel. +353 1 697 3200
Fax. +353 1 697 3300
E-mail. mfdublin@maplesfs.com

With a copy to:

MARATHON STRUCTURED PRODUCT STRATEGIES FUND, LP 
c/o Marathon Asset Management, LP 
One Bryant Park, 38th Floor 
New York, New York  10036 
Attention:  Craig Thaler & Joe Thorstenson 
Facsimile: +1 212 205 8735 and +1 212 205-8796

With a copy to:

Seldon Partners 
1636 3rd Avenue, Suite 135
New York, NY 10128
Attention:  Daniel Simons 
Tel:  +1 (646) 397-6982
Email:  dsimons@seldonpartners.com

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	7.5.
	Counterparts: This Deed of Lease Novation may be executed in any number of counterparts and each counterpart shall constitute an original.  All such counterparts, when taken together, shall constitute one single instrument.

		
	7.6.
	Governing Law: This Deed of Lease Novation, including all non-contractual obligations arising hereunder or related hereto, shall be governed by, and construed in accordance with, English law.  The terms of Section 20(b) (Governing Law, Jurisdiction) of the Lease shall apply to this Deed of Lease Novation, mutatis mutandis, as though they were set out in full in this Deed of Lease Novation.

		
	7.7.
	Assignment: No party may assign any of its respective rights or obligations under, or the benefit of, this Deed of Lease Novation other than on the same terms as, and at the same time as, any assignment of its respective rights or obligations under, or the benefit of, the Lease Documents as assigned, amended and supplemented by this Deed of Lease Novation.

		
	7.8.
	Third Parties: A person who is not a party to this Deed of Lease Novation may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999, save for the Indemnitees (as defined in the Lease Documents prior to the assignment under this Deed of Lease Novation and as defined in the Novated Lease Documents) and their successors and assigns in relation to the rights expressed in their favour under this Deed of Lease Novation. The consent of any third party is not required for any variation or termination of this Deed of Lease Novation.

		
	7.9.
	New Lessor Bank Account:  Following the occurrence of the Effective Time, Lessee shall make all payments under the Lease to such account as New Lessor may from time to time designate by written notice given at least ten (10) Business days prior to the date on which the required payment is due. 

		
	7.10.
	Costs: Subject to receipt of an invoice therefor in reasonable detail, New Lessor shall pay (i) all reasonable costs and expenses of Lessee incurred in connection with the preparation, negotiation and completion of this Deed of Lease Novation and any other document required or contemplated under this Deed of Lease Novation, including costs in connection with submission of the legal opinions as per Section 2 (o) and (p) of the Schedule 2 herein and (ii) all reasonable costs of Lessee incurred in connection with any filings in the state of registration of the Aircraft as are necessary or appropriate to evidence the change in ownership and lessor of the Aircraft.

		
	7.11.
	Further Assurance: Each party agrees from time to time to do and perform such other and further acts and execute and deliver any and all such other instruments as may be reasonably requested by a party (at the cost and expense of the requesting party) to carry out and effect the intent and purpose of this Deed of Lease Novation or to establish, maintain, perfect and protect the rights and, with respect to Existing Lessor and New Lessor, the remedies created or intended to be created under this Deed of Lease Novation.  Lessee will cooperate with Existing Lessor and New Lessor to close the transfer of title to the Aircraft and the novation contemplated by this Deed of Lease Novation at such convenient time, in accordance with the Lessee’s flight operational planning, when the Aircraft and, if different, the Engines, are in a jurisdiction acceptable to Existing Lessor and New Lessor.

		
	7.12.
	After the Effective Time, New Lessor shall, on Lessee’s reasonable request, provide Lessee with any information, documents, signatures and invoices which are reasonably requested by the competent institutions of Estonia to fulfil Lessee’s tax requirements and to respond to any audit information request arising from such filing.  New Lessor shall use commercially reasonalbe efforts to provide such documents to Lessee within thirty (30) days from the date of such request by Lessee.

		
	7.13.
	For the purpose of any suit, action, proceeding or settlement of dispute in the English courts in connection with this Deed of Lease Novation, Lessee hereby designates, appoints and empowers Redmonton Aviation Services Ltd., Dept 2307A, 196 High Road, Wood Green, London, N22 8HH, England (www.redmonton.aero), as its agent to accept service of process in respect of any such suit, action, proceeding or settlement of dispute in England for the time being.  If, for any 

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reason, such agent no longer serves as agent for Lessee to receive service of process in England, Lessee shall promptly appoint another such agent and advise the other parties hereof.
		
	7.14.
	For the purpose of any suit, action, proceeding or settlement of dispute in the English courts in connection with this Deed of Lease Novation, Existing Lessor hereby designates, appoints and empowers MCAP Global Finance (UK) LLP, 16 Palace St, Westminster, London SW1E 5JD, United Kingdom, as its agent to accept service of process in respect of any such suit, action, proceeding or settlement of dispute in England for the time being.  If, for any reason, such agent no longer serves as agent for Existing Lessor to receive service of process in England, Existing Lessor shall promptly appoint another such agent and advise the other parties hereof.

		
	7.15.
	For the purpose of any suit, action, proceeding or settlement of dispute in the English courts in connection with this Deed of Lease Novation, New Lessor hereby designates, appoints and empowers Law Debenture Corporate Services Limited, Fifth Floor, 100 Wood Street, London EC2V 7EX, United Kingdom, as its agent to accept service of process in respect of any such suit, action, proceeding or settlement of dispute in England for the time being.  If, for any reason, such agent no longer serves as agent for New Lessor to receive service of process in England, New Lessor shall promptly appoint another such agent and advise the other parties hereof.

		
	7.16.
	Maintenance Reserves and Security Deposit.  Existing Lessor and New Lessor agree that the Maintenance Reserve balance and the Security Deposit held by Existing Lessor will be transferred to New Lessor at the Effective Time.  The Maintenance Reserve balance and the Security Deposit will be transferred by way of a credit against New Lessor’s obligation to deliver the purchase price under the Sale Agreement on the date that the Effective Time occurs.

		
	7.17.
	Quiet Enjoyment and No Increased Obligations.  New Lessor covenants that (i) so long as no Default or Event of Default has occurred and is continuing, Lessee shall have the right to quietly enjoy the use and possession of the Aircraft without interference by New Lessor or by any Person lawfully claiming by or through Lessor (in accordance with Sections 8(s) and 19 of the Novated Lease) and (ii) this Deed of Lease Novation shall be read as creating no increased obligations (including, with respect to the indemnities, without prejudice to Lesse‘s obligations under Sections 2.2.4 and 5.2.3 of this Deed of Lease Novation) or decreasing any of the Lessee‘s rights and/or remedies (in accordance with Section 19 of the Novated Lease).

[Signature page follows]

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Execution Version

IN WITNESS whereof the parties hereto have executed this Deed of Lease Novation this 20th day of December, 2019.

SIGNED and DELIVERED as a DEED by
Jarlath Canning 
as duly appointed attorney for and on behalf of 

MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY, Existing Lessor
	
			
	 
	 
	Attorney:  /s/ Jarlath Canning
Name:       Jarlath Canning

In the presence of: 
Witness signature: /s/ Donna Cooney    
Witness name: Donna Cooney    
Witness address: 32 Molesworth Street,
    Dublin 2, D02 Y512
    Ireland

SIGNED and DELIVERED as a DEED by
Jonathan Reynolds 
as duly appointed attorney for and on behalf of
CONTRAIL AVIATION LEASING IRELAND DAC, New Lessor
	
			
	 
	 
	Attorney:  /s/ Jonathan Reynolds 
Name:       Jonathan Reynolds

In the presence of:
Witness signature: /s/ Ciaran Madigan    
Witness name: Ciaran Madigan    
Witness address: 32 Molesworth Street
                            Dublin 2    

SIGNED and DELIVERED as a DEED by

SmartLynx Airlines Estonia OÜ, Lessee 
By: /s/Zygimantas Surintas
Name: Zygimantas Surintas
Title:  Board member/CEO

CHICAGO/#3389682.3 

SCHEDULE 1
THE LEASE DOCUMENTS

		
	1.
	Aircraft Lease Agreement MSN 1183, dated as of 05 January 2017 between Original Lessor and Lessee.

		
	2.
	Lease Supplement No. 1 dated 10 May, 2017 between Original Lessor and Lessee.

		
	3.
	Side Letter No 1 to the Aircraft Lease Agreement (MSN 1183) dated as of 5 January 2017 between Original Lessor and Lessee.

		
	4.
	Side Letter No 2 to the Aircraft Lease Agreement (MSN 1183) dated as of 9 May 2017 between Original Lessor and Lessee.

		
	5.
	Parent Guarantee, dated 24 April 2017 between SmartLynx Airlines SIA and Original Lessor.

		
	6.
	Certificate of Technical Acceptance (Delivery Date) dated 10 May 2017 between Original Lessor and Lessee (and its Annex 1 and Annex 2).

		
	7.
	Deed of Lease Novation dated as of November 7, 2017 among the Original Lessor, the Seller and the Lessee. 

		
	8.
	Effective Time Notice dated November 7, 2017 the Original Lessor, the Seller and the Lessee.

		
	9.
	First Demand Guarantee Agreement dated November 9, 2017 between SmartLynx Airlines SIA and Existing Lessor.

CHICAGO/#3389682.3 

SCHEDULE 2
CONDITIONS PRECEDENT
		
	1.
	Existing Lessor Conditions Precedent.

On or before the Effective Time, Existing Lessor shall have received evidence of the following in form and substance satisfactory to Existing Lessor:
		
	(a)
	a counterpart of this Deed of Lease Novation executed by Lessee and New Lessor;

		
	(b)
	a certificate from a duly authorised officer of Lessee (together with attachments) in the form of Schedule 6, (i) confirming that approval of the terms of and the transactions contemplated by this Deed of Lease Novation has been granted, (ii) attaching a shareholder’s resolution approving the transactions contemplated by this Deed of Lease Novation and confirming the authority of the management board to enter into this Deed of Lease Novation and all documents to be entered into by Lessee hereunder and a power of attorney of Lessee authorising a specified person or persons to execute this Deed of Lease Novation and all other documents to be delivered by Lessee under this Deed of Lease Novation, (iii) confirming the representations and warranties made by Lessee in the Lease are true and correct on the date of the certificate and (iv) attaching Lessee’s current articles of association, constitutional documents, registry card, operating license, noise certificate, station license for the radio stations on board the Aircraft and air operator certificate issued by the Aviation Authority;

		
	(c)
	a copy of the certificates of insurance and reinsurance and brokers' undertakings relating to the insurances and the reinsurances in compliance with the provisions of this Deed of Lease Novation and the Novated Lease Documents; 

		
	(d)
	completion of the sale of the Aircraft pursuant to the Sale Agreement, or Existing Lessor being satisfied that such sale will be completed simultaneously with the assignment of the Lease Documents pursuant to this Deed of Lease Novation;

		
	(e)
	a copy of the Effective Time Notice executed by Lessee and New Lessor (delivered in escrow); 

		
	(f)
	all conditions precedent in favor of Existing Lessor, as seller, under the Sale Agreement have been satisfied or waived by Existing Lessor;

		
	(g)
	a certificate from a duly authorised officer of New Lessor (together with attachments) (i) confirming that approval of the terms of and the transactions contemplated by this Deed of Lease Novation has been granted, (ii) attaching New Lessor’s constitutional documents and (iii) attaching a certificate of incumbency or power of attorney of New Lessor authorising a specified person or persons to execute this Deed of Lease Novation and all documents to be delivered by New Lessor under this Deed of Lease Novation; and

		
	(h)
	the representations and warranties of Lessee under Clause 4.3 and of New Lessor under Clause 4.1 of this Deed of Lease Novation shall be correct and would be correct if repeated at the Effective Time.

		
	2.
	New Lessor Conditions Precedent.

On or before the Effective Time, New Lessor shall have received evidence of the following in form and substance satisfactory to New Lessor:
		
	(a)
	a counterpart of this Deed of Lease Novation executed by Lessee and Existing Lessor;

		
	(b)
	a certificate from a duly authorised officer of Lessee (together with attachments) in the form of Schedule 6, (i) confirming that approval of the terms of and the transactions contemplated by this Deed of Lease Novation has been granted, (ii) attaching a shareholder’s resolution approving the transactions contemplated by this Deed of Lease Novation and confirming the authority of 

CHICAGO/#3389682.3 

the management board to enter into this Deed of Lease Novation and all documents to be entered into by Lessee hereunder and a power of attorney of Lessee authorising a specified person or persons to execute this Deed of Lease Novation and all other documents to be delivered by Lessee under this Deed of Lease Novation, (iii) confirming the representations and warranties made by Lessee in the Lease are true and correct on the date of the certificate and (iv) attaching Lessee’s current articles of association, constitutional documents, registry card, operating license, noise certificate, station license for the radio stations on board the Aircraft and air operator certificate issued by the Aviation Authority;
		
	(c)
	a copy of the certificates of insurance and reinsurance and brokers' undertakings relating to the insurances and the reinsurances in compliance with the provisions of this Deed of Lease Novation and the Novated Lease Documents; 

		
	(d)
	completion of the sale of the Aircraft pursuant to the Sale Agreement, or New Lessor being satisfied that such sale will be completed simultaneously with the assignment of the Lease Documents pursuant to this Deed of Lease Novation;

		
	(e)
	certified copies of the current and valid certificate of airworthiness and certificate of registration for the Aircraft issued by the Aviation Authority; 

		
	(f)
	evidence that an application for the withdrawal of the existing station license for the radio stations onboard the Aircraft has been signed by the Existing Lessor for prompt filing with the Aviation Authority following the Effective Date;  

		
	(g)
	a copy of the Effective Time Notice executed by Lessee and Existing Lessor (delivered in escrow); 

		
	(h)
	a letter from Lessee addressed to the Air Navigation (EUROCONTROL) issued in the form of Schedule 7, or such other form as may be satisfactory to New Lessor (acting reasonably);

		
	(i)
	deregistration power of attorney issued by Lessee in favour of New Lessor in the form of Schedule 8, or such other form as may be satisfactory to New Lessor (acting reasonably);

		
	(j)
	a duly executed guarantee from SIA Smartlynx Airlines in favor of New Lessor in respect of Lessee’s obligations under the Novated Lease Documents in form and substance satisfactory to New Lessor;

		
	(k)
	a copy of Lessee’s and SIA Smartlynx Airlines’ most recent audited financial statements;

		
	(l)
	all conditions precedent in favor of New Lessor, as purchaser, under the Sale Agreement have been satisfied or waived by New Lessor;

		
	(m)
	copies of each Lease Document and each Operative Agreement;

		
	(n)
	a copy of the Maintenance Program;

		
	(o)
	a legal opinion from counsel in Estonia in form and substance acceptable to New Lessor;

		
	(p)
	a legal opinion from counsel in Latvia in form and substance acceptable to New Lessor;

		
	(q)
	a certificate from a duly authorised officer of Existing Lessor (together with attachments) (i) confirming that approval of the terms of and the transactions contemplated by this Deed of Lease Novation has been granted, (ii) attaching Existing Lessor’s constitutional documents and (iii) attaching a certificate of incumbency or power of attorney of Existing Lessor authorising a specified person or persons to execute this Deed of Lease Novation and all documents to be delivered by Existing Lessor under this Deed of Lease Novaiton; 

		
	(r)
	the representations and warranties of Lessee under Clause 4.3 and of Existing Lessor under Clause 4.2 of this Deed of Lease Novation shall be correct and would be correct if repeated at the Effective Time;

		
	(s)
	evidence of the issue of each approval (including the Aviation Authority’s approval of the Novated Lease prior to the entry into this Deed of Lease Novation) and any other approval or consent 

CHICAGO/#3389682.3 

which may be required in relation to, or in connection with, the performance by Lessee of any of its obligations under this Deed of Lease Novation; and
		
	(t)
	a copy of the Non-Incident Statement executed by the Lessee.

		
	3.
	Lessee Conditions Precedent. 

On or before the Effective Time, Lessee shall have received the following in form and substance satisfactory to Lessee:
		
	(a)
	a counterpart of this Deed of Lease Novation duly executed by each of the parties other than the Lessee; and

		
	(b)
	a complete and up-to-date copy of the resolution(s) of the board of directors of each of Existing Lessor and New Lessor certified to be true and correct by its duly authorised representative evidencing that such party has taken all corporate action necessary to authorise the execution and delivery of this Deed of Lease Novation and the Novated Lease Documents to which it is a party and the performance of its obligations thereunder, together with incumbency certificates as to the person or persons authorised to execute and deliver each of the same on its behalf.

		
	4.
	Waiver or Deferral of Conditions Precedent. 

The conditions precedent specified in: 
		
	(a)
	paragraph 1 has been inserted for the benefit of Existing Lessor and may be waived, deferred or extended in writing in whole or in part and with or without conditions, by Existing Lessor, without prejudicing Existing Lessor's right to receive fulfilment of such conditions; 

		
	(b)
	paragraph 2 has been inserted for the benefit of New Lessor and may be waived, deferred or extended in writing in whole or in part and with or without conditions, by New Lessor, without prejudicing New Lessor's right to receive fulfilment of such conditions; and

		
	(c)
	paragraph 3 has been inserted for the benefit of the Lessee and may be waived, deferred or extended in writing in whole or in part and with or without conditions, by Lessee, without prejudicing Lessee’s right to receive fulfilment of such conditions.

CHICAGO/#3389682.3 

SCHEDULE 3
AMENDMENTS TO LEASE DOCUMENTS

		
	1.
	All references to the Lease in any documents delivered thereunder or pursuant thereto shall, where appropriate, be construed as references to the Novated Lease.

		
	2.
	All references in the Lease to the “Lessor” being “MAM SELDON AVIATION 2 DAC, a designated activity company incorporated under the laws of Ireland, having its principal place of business at 32 Molesworth Street, Dublin 2, D02Y512, Ireland” shall be deleted in its entirety and replaced with “CONTRAIL AVIATION LEASING IRELAND DAC, a designated activity company incorporated under the laws of Ireland, and having its principal place of business at 32 Molesworth Street, Dublin 2, D02Y512, Ireland”.

		
	3.
	All references in the Lease to the “Lessor” shall be treated as though they referred to New Lessor to the exclusion of the Existing Lessor. 

		
	4.
	The definition of “Indemnitees” in Section 1(a) of the Lease shall be amended and restated in its entirety to read as follows: 

“Indemnitees”shall mean, collectively, Lessor, Contrail Aviation Leasing, LLC, Contrail Aviation Support, LLC, Old National Bank, each affiliate and subsidiary thereof, each of their respective officers, directors, shareholders, members, controlling persons, agents and employees, and their respective successors and assigns.  
		
	5.
	The definition of “Owner” in Section 1(a) of the Lease shall be amended by deleting the words “Heston Services Ltd.” and replacing such words with Contrail Aviation Leasing Ireland DAC.

		
	6.
	The text of the legend for the Lease Identification set forth in Section 12 of Exhibit C to the Lease shall be deleted in its entirety and replaced with the following:

“This Aircraft/Engine is owned by Contrail Aviation Leasing Ireland DAC and is leased to SmartLynx Airlines Estonia OÜ.”
		
	7.
	Section 14 of Exhibit C to the Lease shall be amended by deleting Lessor’s address set forth therein and replacing it with the following:

““Lessor’s Address”:
CONTRAIL AVIATION LEASING IRELAND DAC 
Attn.: The Directors
32 Molesworth Street
Dublin 2 
Ireland
Tel. 697 3200
Fax. 697 3300

With a copy to:

CONTRAIL AVIATION SUPPORT, LLC
435 Investment Court
Verona, Wisconosin  53593
United States of America
Attn: Josepgh G. Kuhn, CEO
Tel: 1 608 848-8100
Fax: 608 848-8101 
Email:  joe@contrail.com

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SCHEDULE 4
EFFECTIVE TIME NOTICE
To: SmartLynx Airlines Estonia OÜ
Date: December 20, 2019 

Re: Deed of Lease Novation, dated December 20, 2019 among MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY, as existing lessor (“Existing Lessor”), SMARTLYNX AIRLINES ESTONIA OÜ, as lessee (“Lessee”), and Contrail Aviation Leasing Ireland DAC, as new lessor (“New Lessor”) (the “Deed of Lease Novation”), in respect of an Aircraft Lease Agreement MSN 1183 dated as of 05 January 2017, as novated and amended by that Deed of Lease Novation dated as of November 7, 2017 among Heston Services Ltd., the Existing Lessor and the Lessee (as more fully described in the Deed of Lease Novation, “the Lease”) between Existing Lessor and Lessee relating to one (1) Airbus model A320-200 aircraft bearing manufacturer's serial number 1183 with two (2) IAE International Aero Engines AG model V2527-A5 engines with ESN V10682 and V10683
We refer to the Deed of Lease Novation.  Terms used herein and not otherwise defined will, unless the context otherwise requires, have the respective meanings ascribed thereto in the Deed of Lease Novation.
Existing Lessor and New Lessor hereby notify Lessee that the novation and amendment contemplated by the Deed of Lease Novation has occurred and for the purposes of Section 2.2 of the Deed of Lease Novation, the Effective Time is 1:16 (ET) this 20th day of December 2019 while the Aircraft was located in German airspace.

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Execution Version

MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY, Existing Lessor
By: /s/ Julian Dunphy
Julian Dunphy
Director

CONTRAIL AVIATION LEASING IRELAND DAC, as New Lessor
By: /s/ Jonathan Reynolds
Jonathan Reynolds
Director

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By its countersignature below, Lessee hereby acknowledges receipt of the above notice and hereby acknowledges, confirms and agrees to all of the provisions of the above notice. Without prejudice to the generality of the foregoing, Lessee (i) confirms that the representations and warranties made by it in Section 4 (Representations and Warranties) of the Deed of Lease Novation are true and correct as at the Effective Time; (ii) confirms that at the Effective Time, the Aircraft was located at German airspace and (iii) confirms that at the Effective Time, the amounts of the Security Deposit and the Maintenance Reserves paid by Lessee and held by Existing Lessor are in the amounts indicated in the Appendix to this Effective Time Notice and the Maintenance Reserve rates are as set forth in the Appendix to this Effective Time Notice.

SmartLynx Airlines Estonia OÜ, Lessee
By: /s/Žygimantas Surintas
Žygimantas Surintas
CEO/Board Member

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APPENDIX TO EFFECTIVE TIME NOTICE

	
		
	

Amount of Security Deposit paid by Lessee and held by Existing Lessor at the Effective Time

	

$ [       ]
([                           ])

	

Amount of Maintenance Reserves paid by Lessee and held by Existing Lessor at the Effective Time

	

 
Airframe 6Y Supplemental Rent:  $[          ]
Airframe 12Y Supplemental Rent:  $[          ]
Engine LLP Supplemental Rent:  $[          ]
Engine LLP Supplemental Rent:  $[          ]
Engine Hot Section Refurbishment Supplement Rent:  $[            ]
Engine Hot Section Refurbishment Supplement Rent $[            ]
Landing Gear Supplement Rent:  $[          ]
APU Supplement Rent:  $[          ]

Total: $[            ]

	Maintenance Reserves rates payable by Lessee at the Effective Time
	A/F 6Yper month: $[         ]
A/F 12Y per month: $[        ]
Engine LLP per cycle: $[      ]
Engine Hot Section Refurbishment per flight hour:
$[      ] from 1 up to 1,5 hour/cycle,
$[      ] from 1,5 up to 1,75 hours/cycle,
$[      ] from 1,75 up to 2 hours/ cycle,
$[      ] from 2 up to 2,5 hours/ cycle,
$[      ] from 2,5 up to 2,75 hours/cycle,
$[      ] from 2,75 up to 3 hour/cycle,
$[      ] more than 3 hours/cycle
Landing Gear per month: $[        ]
APU per APU Hour: $[     ]

CHICAGO/#3389682.3 

SCHEDULE 5
SCHEDULE OF CERTAIN TERMS
	
		
	1.Aircraft MSN; Registration Mark
MSN 1183; Registration Mark ES-SAP
	2.Engines Model; ESNs
V2527-A5 Engines ESNs V10682 and V10683

	3.Delivery Location on Lease Delivery Date
Tallinn Airport
	4.Aircraft Lease Agreement
Aircraft Lease Agreement MSN 1183 dated as of 05 January 2017

	5.Lease Term
Delivery Date:  May 10, 2017
Scheduled Expiry Date:  December 10, 2021
	6.Seller/Existing Lessor
MAM Seldon Aviation 2 DAC

	7.Lessee
SmartLynx Airlines Estonia OÜ
	8.New Lessor
Contrail Aviation Leasing Ireland DAC

	9.State of Registration
Estonia
	10.Aviation Authority [Official name]
Civil Aviation Administration of the Republic of Estonia

	11.Liability Insurance Amount Required by Lease
$600,000,000
	12.Monthly Basic Rent; Due Date
$[       ]; 10th day of each month

	13.Supplemental Rent/Maintenance Reserves Balance held by Existing Lessor:

Airframe 6Y Supplemental Rent:  $[          ]
Airframe 12Y Supplemental Rent:  $[          ]
Engine LLP Supplemental Rent:  $[          ]
Engine LLP Supplemental Rent:  $[          ]
Engine Hot Section Refurbishment Supplement Rent:  $[            ]
Engine Hot Section Refurbishment Supplement Rent $[            ]
Landing Gear Supplement Rent:  $[          ]
APU Supplement Rent:  $[          ]

Total: $[            ]

	14.Current Maintenance Reserve Rates: 

A/F 6Yper month: $[         ]
A/F 12Y per month: $[        ]
Engine LLP per cycle: $[      ]
Engine Hot Section Refurbishment per flight hour:
$[      ] from 1 up to 1,5 hour/cycle,
$[      ] from 1,5 up to 1,75 hours/cycle,
$[      ] from 1,75 up to 2 hours/ cycle,
$[      ] from 2 up to 2,5 hours/ cycle,
$[      ] from 2,5 up to 2,75 hours/cycle,
$[      ] from 2,75 up to 3 hour/cycle,
$[      ] more than 3 hours/cycle
Landing Gear per month: $[        ]
APU per APU Hour: $[     ]

CHICAGO/#3389682.3 

	
		
	15.Reimbursements Paid to Lessee/Maintenance Provider:
Airframe 6Y Supplemental Rent  $[ ]
Airframe 12Y Supplemental Rent  $[ ]
Engine LLP Supplemental Rent  $[ ]
Engine LLP Supplemental Rent  $[ ]
Engine Hot Section Refurbishment Supplemental Rent $[ ]
Engine Hot Section Refurbishment Supplemental Rent $[ ]
Landing Gear Supplemental Rent $[ ]
APU Supplemental Rent $[ ]
	16.Total Amount of Maintenance Reserves Paid by Lessee and Held by Existing Lessor:
$[            ]

	 
	17.Security Deposit Held by Existing Lessor:
$[       ]

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SCHEDULE 6
FORM OF LESSEE’S OFFICER’S CERTIFICATE
 
This Certificate is delivered in connection with the Aircraft Lease Agreement MSN 1183 dated as of January 5, 2017 between HESTON SERVICES LTD. (the “Original Lessor”) and SmartLynx Airlines Estonia OÜ (the “Company”), as amended and novated by the Deed of Lease Novation dated as of November 27, 2017 among the Original Lessor,  MAM SELDON AVIATION 2 DESIGNATED ACTIVITY COMPANY (the “Existing Lessor”) and the Company, and as further amended and novated by the Deed of Lease Novation, dated _________, 2019 among Existing Lessor, the Company and CONTRAIL AVIATION LEASING IRELAND DAC (the “New Lessor”) (together, the “Lease”).

I, _____________, duly appointed member of the Management Board of the Company, a company incorporated under the laws of the Republic of Estonia, hereby certify that the Company has taken all necessary corporate action to approve the entry into, performance and delivery by the Company of the Lease and the transactions contemplated thereby.

		
	a)
	The Company has duly executed the Lease and the Deed of Lease Novation.  Attached hereto as Exhibit B is a true and correct copy of the printout of the registry card of the Company from the Estonian Commercial Register obtained on ______ ___, ____, which has not been altered or amended, and which is in full force and effect as of the date hereof. 

Attached hereto as Exhibit C is a true and correct copy of a [power of attorney authorizing the person or persons appointed therein to execute the Lease and all other documents to be delivered by the Company in connection therewith, if the documents are not signed by the Director]/[certificate of incumbency dated  ______ ___, ____, which has not been altered or amended, and which is in full force and effect as of the date hereof]

		
	b)
	The representations and warranties made by the Company in Section [X] of the Lease and Section 4.3 of the Deed of Lease Novation are true and correct on and as of the date hereof.

Attached hereto as Exhibit A is a true and correct copy of the resolution of the Company’s sole shareholder [resolution of the Board of Directors] [other applicable corporate approval document] which has not been altered or amended, and which is in full force and effect as of the date hereof. 

Attached hereto as Exhibit D is a true and correct copy of the Certificate of Registration with respect to the Aircraft. 

Attached hereto as Exhibit E is a true and correct copy of the Certificate of Airworthiness with respect to the Aircraft.

Attached hereto as Exhibit F is a true and correct copy of the Company‘s Operating License, which has not been altered or amended.

Attached hereto as Exhibit G is a true and correct copy of the Company’s Air Operator’s Certificate, which has not been altered or amended.

CHICAGO/#3389682.3 

Attached hereto as Exhibit H is a true and correct copy of the Company‘s Articles of Association and Constitutional Documents, which have not been altered or amended, and which are in full force and effect as of the date hereof.

Attached hereto as Exhibit I is a true and correct copy of the Noise Certificate with respect to the Aircraft, which has not been altered or amended.

Attached hereto as Exhibit J is a true and correct copy of the Station License with respect to the Aircraft, which has not been altered or amended.

IN WITNESS WHEREOF, I have duly executed this Certificate on this ____ day of _________, 2019.
By:        

Name:        
Director of the Company

Attachments:
Exhibit A – Copy of [Board of Directors Resolution] [other applicable corporate approval document]
Exhibit B – Copy of registry card of the Company
Exhibit C – [Certificate of Incumbency] [Power of Attorney]
Exhibit D – Copy of Certificate of Registration of Aircraft
Exhibit E – Copy of Certificate of Airworthiness of Aircraft
Exhibit F –  Copy of Company’s Operating License 
Exhibit G – Copy of Company’s Air Operator’s Certificate
Exhibit H – Copy of Company’s Articles of Association and Constitutional Documents
Exhibit I – Copy of Company’s Noise Certificate
Exhibit J – Copy of Company’s Station License

CHICAGO/#3389682.3 

SCHEDULE 7
FORM OF AIR NAVIGATION AUTHORITY LETTER

[LESSEE LETTERHEAD]

Date: 

EUROCONTROL Director CRCO
Rue de la Fusée, 96
1130 Bruxelles BELGIUM

Dear Sirs

Letter of Authorisation
MSN: 1183 Reg.: EA-SAP the "Aircraft"
We have leased the above aircraft from Contrail Aviation Leasing Ireland DAC (the "Lessor"), in accordance with a lease agreement (dated as of January 5, 2017) between us and the Lessor (as amended, novated or restated from time to time).
We hereby authorise you to provide Lessor 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 SmartLynx Airlines Estonia OÜ

CHICAGO/#3389682.3 

SCHEDULE 8
FORM OF DE-REGISTRATION POWER OF ATTORNEY

WHEREAS SmartLynx Airlines Estonia OÜ, a company incorporated under the laws of the Republic of Estonia, and having its registered office at Lennujaama tee 13, Tallinn 11101, Estonia (together with its successors and assigns, referred to as “Lessee”) has entered into an Aircraft Lease Agreement dated January 5, 2017 (as amended and novated from time to time) with Contrail Aviation Leasing Ireland DAC (together with its successors and assigns, referred to as “Lessor”) (the “Lease”);

AND WHEREAS pursuant to the Lease and upon the terms and conditions mentioned therein, Lessor has leased to Lessee and Lessee leased from Lessor one (1) Airbus 320-200 Aircraft with Manufacturer’s Serial Number 1183 and Registration Mark EA-SAP (“Aircraft”).

1. Lessee hereby absolutely, unconditionally and irrevocably appoints Lessor to be the true and lawful attorney of Lessee to do all or any of the following in the name of Lessee or on behalf of Lessee which may be required to effect deregistration of the Aircraft from the register maintained by the Civil Aviation Administration of the Republic of Estonia and to export the Aircraft out of the Republic of Estonia:

a. To obtain the necessary licenses and permissions;

b. To execute, file and deliver any applications, documents, instruments, consents or certificates including amendments thereof with any statutory authority, governmental agency or department including but not limited to the Civil Aviation Administration of the Republic of Estonia and the Estonian customs authorities;

c. To represent Lessee before any statutory authority, governmental agency or department including but not limited to the Civil Aviation Administration of the Republic of Estonia and the Estonian customs authorities;

d. To collect all documents, letters, records and notices and to give an acknowledgement for or reply to the same;

e. To do all such other or further acts and things that may be required to achieve the aforesaid purpose.

2. The powers set out in this Power of Attorney shall become effective from the date hereof but shall become enforceable only upon the occurrence of an Event of Default (as defined in the Lease) or upon the expiry or termination of the lease of the Aircraft under the Lease, whichever is the earlier. 

3. Lessee hereby undertakes from time to time and at all times to indemnify Lessor 'against all costs, claims, expenses and liabilities howsoever incurred by Lessor in connection herewith provided Lessor has acted in accordance herewith and further undertakes to ratify and confirm whatsoever Lessor shall reasonably and lawfully do or cause to be done by virtue of this Power of Attorney.

4. This Power of Attorney is irrevocable and coupled with interest and Lessor may delegate the powers conferred hereby, in whole or in part, to any individual(s), including but not limited to employees of Lessor or legal counsel in the Republic of Estonia.

CHICAGO/#3389682.3 

5. Lessor and Lessee represent and acknowledge that the irrevocable nature of this Power of Attorney has been decisive for Lessor in order to give its consent to the Lease, to which this Power of Attorney is an essential part.

6. Lessee hereby represents warrants and covenants that this Power of Attorney constitutes a valid, legally and irrevocably, and binding obligation of Lessee enforceable against it to the extent permitted under the applicable law.

7. Lessor is empowered to determine in its sole discretion when to exercise the powers conferred upon Lessor pursuant to this Power of Attorney. No failure on the part of Lessor to exercise and no delay in exercising any right, power or privilege under this Power of Attorney shall operate as a waiver thereof, nor shall the exercise of any right, power or privilege under this Power of Attorney preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

8. Any person, agency or company relying upon this Power of Attorney need not and will not make any determination or require any court judgment as to whether an Event of Default has occurred under the Lease or whether the Lease has been terminated. Lessee hereby waives any claims against (a) any person acting on the instructions given by Lessor or its designee pursuant to this Power of Attorney and (b) any person designated by Lessor or an officer of Lessor to give instructions pursuant to this Power of Attorney. Lessee also agrees to indemnify and hold harmless any person, agency, or company which may act in reliance upon this Power of Attorney and pursuant to instructions given by Lessor or its designee.

9. This Power of Attorney is valid until December 10, 2022.

10. This Power of Attorney shall be subject to, governed by and construed in accordance with the laws of Estonia.

Lessee has executed and delivered this Power of Attorney on ____________, 2019 in ________

Executed as a deed by
______________________________
Name:
Title:

18455639v1

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