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aviation_agreements

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agreement_5.md

| | | | --- | --- | | 12.1 | **Return** |   On the Expiry Date or redelivery of the Aircraft pursuant to Section 13.2 or termination of the leasing of the Aircraft under the Lease, Lessee will, unless an Event of Loss has occurred, redeliver the Aircraft and the Aircraft Documents and Records at Lessee’s expense to Lessor at the Redelivery Location, in accordance with the procedures and in   - 51 -

1900

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compliance with the conditions set forth in Schedule 6, free and clear of all Security Interests (other than Lessor Liens), in a condition suitable for immediate operation under FAR Part 121 or as otherwise agreed by Lessor and Lessee and, in any case, qualifying for and having a valid and fully effective certificate of airworthiness issued by the Air Authority.   | | | | --- | --- | | 12.2 | **Non-Compliance** |   If at the time of Final Inspection Lessee has not fully complied with any of its obligations under the Lease (including Schedule 6), or Lessee fails to make the Aircraft available to Lessor on a timely basis for inspection and redelivery pursuant to Section 12.1 and Schedule 6 (whether such failure is due to any act or omission of Lessee or any other circumstance whatsoever), the Term shall be extended until the time when the Aircraft has been redelivered to Lessor in full compliance with the Lease, for the sole purpose of enabling such non-compliance or failure to be promptly rectified, and during such extension period:   | | | | | --- | --- | --- | |   | (a) | Lessee shall not use the Aircraft in flight operations except those related directly to the redelivery of the Aircraft to Lessor; |   | | | | | --- | --- | --- | |   | (b) | all Lessee’s obligations and covenants under the Lease will remain in full force until Lessee so redelivers the Aircraft; and |

1901

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| | | | | --- | --- | --- | |   | (c) | Lessee shall pay Rent to Lessor at a rate per month equal to the amount of Rent payable in respect of the last scheduled Rental Period, calculated on a per diem basis. |   Any such extension shall not prejudice Lessor’s right to treat such non-compliance or failure as an Event of Default at any time, and to enforce such rights and remedies as may be available to Lessor in respect thereof under the terms of the Lease or applicable Law. Without limiting the generality of the foregoing, Lessee’s Rent obligation under paragraph (c) above shall be without prejudice to Lessor’s rights to terminate the letting of the Aircraft and to indemnification pursuant to Section 10.1(a)(ii).   Lessor may elect (either on first tender of the Aircraft by Lessee or at any time during the said extension period) to accept redelivery of the Aircraft notwithstanding non-compliance with Section 12.1 or Schedule 6, in which case Lessee will indemnify Lessor in respect of the out-of-pocket cost to Lessor, acting reasonably and in good faith, of putting the Aircraft into the condition required by the Lease.   | | | | --- | --- | | 12.3 | **Redelivery** |   Upon redelivery Lessee will, if the Habitual Base and the State of Registry is then a country other than the United States, provide to Lessor all documents necessary to export the Aircraft from the Habitual Base and the State of Registry (including, without limitation, a valid and subsisting export certificate of airworthiness for the Aircraft) to the United States or required in relation to the deregistration of the Aircraft with the Air Authority.

1902

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- 52 -

1903

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| | | | --- | --- | | 12.4 | **Acknowledgement** |   Upon redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor will deliver to Lessee an acknowledgement confirming that Lessee has redelivered the Aircraft to Lessor in the condition required by the Lease or specify in what respect the Aircraft is not in the condition so required.   | | | | --- | --- | | 12.5 | **Storage** |   If Lessor or Owner so requests, Lessee shall endeavor to arrange, to the extent available, up to sixty (60) days storage for the Aircraft following the last day of the Term at the requesting party’s risk and expense.   | | | | --- | --- | | 13. | DEFAULT |   | | | | --- | --- | | 13.1 | **Events** |   The occurrence of any of the Events of Default will constitute a repudiation (but not a termination) of the Lease by Lessee (whether the occurrence of any such Event of Default is voluntary or involuntary or occurs by operation of Law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any Government Entity).   | | | | --- | --- | | 13.2 | **Rights and Remedies** |   If an Event of Default occurs and is continuing, Lessor may at its option (and without prejudice to any of its other rights under the Lease), at any time thereafter (without notice to Lessee except as required under applicable Law):

1904

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| | | | | --- | --- | --- | |   | (a) | accept such event as a repudiation by Lessee and by notice to Lessee and with immediate effect cancel the leasing of the Aircraft (but without prejudice to the continuing obligations of Lessee under the Lease), whereupon all rights of Lessee under the Lease shall cease; and/or |   | | | | | --- | --- | --- | |   | (b) | demand that Lessee pay (and Lessee shall be liable for and shall pay on demand) and/or proceed by appropriate court action or actions to enforce performance when due of the Lease including the payment when due of all Rent and all other amounts payable to Lessor or any Indemnitee pursuant to the terms of the Lease; and/or |   | | | | | --- | --- | --- | |   | (c) | proceed by appropriate court action or actions to recover damages for the breach of the Lease which shall include: |   | | | | | --- | --- | --- | |   | (i) | all Rent and other amounts which are or become due and payable under the Lease prior to the earlier to occur of the date Lessor sells or re-leases the Aircraft or receives payment of the amount calculated pursuant to section (ii) below; |   - 53 -

1905

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| | | | | --- | --- | --- | |   | (ii) | an amount (the “Mitigated Rent Amount”) equal to the aggregate Rent for the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee to Lessor, less the applicable amount set forth below: |   | | | | | --- | --- | --- | |   | (A) | in the event that Lessor has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor reasonably regards as being substantially similar to the terms of the Lease, an amount equal to the aggregate basic rental payments to become due under such re-lease for the period coinciding with the remainder of the Term (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; or |

1906

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| | | | | --- | --- | --- | |   | (B) | in the event that Lessor has not re-let the Aircraft or has sold the Aircraft or has re-let the Aircraft on terms (other than rental payment terms) which, taken as a whole, Lessor does not reasonably regard as being substantially similar to the terms of the Lease, an amount equal to the fair market rental value (determined pursuant to the Appraisal Procedure) of the Aircraft for the period commencing with the date that Lessor reasonably anticipates that the Aircraft could be re-let at such rental rate and ending with the date that the Term was scheduled to expire (determined without reference to any right of Lessor to cancel the leasing of the Aircraft, whether or not such right is exercised), discounted periodically (equal to installment frequency) to present worth at the Discount Rate to the date of payment by Lessee; |

1907

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| | | | | --- | --- | --- | |   | (iii) | all costs, expenses and other incidental damages associated with Lessor’s exercise of its remedies under the Lease or otherwise incurred by Lessor as a result of an Event of Default or the exercise of rights or remedies with respect thereto, including repossession costs, legal fees, Aircraft storage, preservation, shipment, repair, refurbishment, modification, maintenance and insurance costs, Aircraft re-lease or sale costs (including, any costs incurred to prepare the Aircraft for sale or lease, advertising costs, sale or lease costs (including commissions) and any costs to transition the Aircraft to the next operator’s maintenance program) in any way related to the Aircraft, any Engine or any Part, including to put the Aircraft in the condition provided for in Section 12 or Schedule 6 or in the location provided for in this Section 13.2, or otherwise, and Lessor’s internal costs and expenses (including the cost of personnel time calculated based upon the compensation paid to the individuals involved on an annual basis and a general Lessor overhead allocation), all such costs and incidental damages being referred to herein collectively as “Enforcement and Remarketing Costs”; |   - 54 -

1908

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| | | | | --- | --- | --- | |   | (iv) | any loss, premium, penalty or expense which may be incurred in repaying funds raised to finance the Aircraft or in unwinding any financial instrument relating in whole or in part to Lessor’s financing of the Aircraft, all such amounts being referred to herein collectively as “Unwind Expenses”; |   | | | | | --- | --- | --- | |   | (v) | any loss, cost, expense or liability, or damage to Lessor’s residual interest in the Aircraft, sustained by Lessor due to Lessee’s failure to maintain the Aircraft in accordance with the terms of the Lease or Lessee’s failure to redeliver the Aircraft in the condition required by the Lease, including any consequential loss of revenues or profits, all such amounts being referred to herein collectively as “Aircraft Condition Damages”; and |   | | | | | --- | --- | --- | |   | (vi) | such additional amount, if any, as may be necessary to place Lessor in the same economic position as Lessor would have been in if Lessee had timely performed each of its obligations under the Lease; and/or |   | | | | | --- | --- | --- | |   | (d) | either: |

1909

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| | | | | --- | --- | --- | |   | (d) | either: |   | | | | | --- | --- | --- | |   | (i) | enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor’s sole option, remove the same (and/or any engine which is not an Engine but which is installed on the Airframe, subject to the rights of the lessor or secured party thereof), all without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, conversion or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct; or |   | | | | | --- | --- | --- | |   | (ii) | by delivering notice to Lessee, require Lessee to redeliver the Aircraft to Lessor at the Redelivery Location (or such other location as Lessor may require) on the date specified in such notice and in all respects in the condition required by the Lease upon the Return Occasion (it being understood that Lessee shall not delay any such return for the purpose of placing the Aircraft in such condition, but shall nevertheless be liable to Lessor for the failure of the Aircraft to be in such condition); and/or |

1910

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| | | | | --- | --- | --- | |   | (e) | sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others, or otherwise deal with, the Aircraft as Lessor in its sole and absolute discretion may determine, all free and clear of any rights or interests of Lessee as if the Lease had not been entered into. Lessor shall have no obligation or duty to sell the Aircraft and Lessor shall be obligated to attempt to re-lease the Aircraft only to the extent, if any, that it is required to do so under Article 2A of the UCC; and/or |   | | | | | --- | --- | --- | |   | (f) | by written notice to Lessee specifying a payment date (which shall be a date not earlier than five (5) Business Days following the date of such notice), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor on the payment |   - 55 -

1911

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| | | | | --- | --- | --- | |   |    | date specified in such notice (in lieu of the Rent due for the period commencing after the date specified for payment in such notice) the sum of the following amounts: |   | | | | | --- | --- | --- | |   | (i) | all Rent and other amounts which are or are expected to become due and payable under the Lease prior to the payment date specified by Lessor; and |   | | | | | --- | --- | --- | |   | (ii) | an amount equal to the Mitigated Rent Amount; and |   | | | | | --- | --- | --- | |   | (iii) | an amount equal to Lessor’s reasonably anticipated Enforcement and Remarketing Costs, Unwind Expenses and Aircraft Condition Damages; and |   | | | | | --- | --- | --- | |   | (iv) | such additional amount, if any, as may be necessary to place Lessor in the same economic position as Lessor would have been in if Lessee had timely performed each of its obligations under the Lease; |

1912

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it being understood that, to the extent that any of the foregoing amounts represents an estimate by Lessor of losses, damages, costs or expenses which Lessor expects to incur, (y) Lessor shall adjust the amount thereof as needed to reflect the actual amount of such losses, damages, costs or expenses incurred by Lessor when substantially all of such amounts become known to Lessor, but Lessee shall nevertheless be obligated to pay the amount demanded by Lessor (subject to such subsequent adjustment), and (z) notwithstanding the amount specified in such demand, Lessor shall be entitled to claim such other (and greater) amount in any action against Lessee under the Lease; and/or   | | | | | --- | --- | --- | |   | (g) | draw upon the Deposit or the Letter of Credit and apply such amounts to any amounts owing to Lessor under the Lease and/or make demand against any Guarantor for any or all of the foregoing. |   In addition to the foregoing, Lessor shall be entitled to exercise such other rights and remedies as may be available under applicable Law and Lessee shall be liable for, and shall pay Lessor on demand interest on all unpaid amounts at the Interest Rate, from the due date until the date of payment in full.   Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) in respect thereof previously assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable.

1913

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No remedy referred to in this Section 13 is intended to be exclusive, but, to the extent permissible under the Lease or under applicable Law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at Law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies; provided, however, that nothing in this Section 13 shall be construed to permit Lessor to obtain a duplicate recovery of any element of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Default or Event of Default.   - 56 -

1914

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| | | | --- | --- | | 13.3 | **[Intentionally Omitted]** |   | | | | --- | --- | | 13.4 | **[Intentionally Omitted]** |   | | | | --- | --- | | 13.5 | **Power of Attorney** |   Lessee hereby appoints Lessor as the attorney-in-fact of Lessee, with full authority in the place and stead of Lessee and in the name of Lessee or otherwise, for the purpose of carrying out the provisions of the Lease and taking any action and executing any instrument that Lessor may deem necessary or advisable to accomplish the purposes of the Lease; provided, however, that Lessor may only take action or execute instruments under this Section 13 after an Event of Default has occurred and is continuing. Lessee hereby declares that the foregoing powers are granted for valuable consideration, constitute powers granted as security for the performance of the obligations of Lessee under the Lease and are coupled with an interest and shall be irrevocable. Without limiting the generality of the foregoing or any other rights of Lessor under the Lease, upon the occurrence and during the continuation of an Event of Default, Lessor shall have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to or pertaining to the Aircraft, Airframe or any Engine, or the Lease and (ii) make proof of loss, appear in and prosecute any action arising from any policy or policies of insurance maintained pursuant to the Lease, and settle, adjust or compromise any claims for loss, damage or destruction under, or take any other action in respect of, any such policy or policies.

1915

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| | | | --- | --- | | 14. | ASSIGNMENT |   | | | | --- | --- | | 14.1 | **Lessee** |   OTHER THAN IN CONNECTION WITH A TRANSFER OR DISPOSITION IN COMPLIANCE WITH SECTION 8.7(H), LESSEE, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THE LEASE (INCLUDING THE AIRCRAFT LEASE AGREEMENT OR THIS CTA), OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST (OTHER THAN PERMITTED LIENS) OVER ANY OF ITS RIGHTS UNDER THE LEASE (INCLUDING THE AIRCRAFT LEASE AGREEMENT OR THIS CTA), AND ANY ATTEMPT TO DO SO SHALL BE NULL AND VOID. The foregoing shall not be construed to prohibit a Permitted Sub-Lease to a Permitted Sub-Lessee.   - 57 -

1916

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| | | | --- | --- | | 14.2 | **Lessor** |   Lessee acknowledges and agrees that Lessor may, if applicable under the Financing Documents, assign as security Lessor’s interest in the Lease and/or the Aircraft (herein, a “Security Assignment”), provided that such Security Assignment complies with the conditions set forth in Sections 14.3(a), 14.3(b), 14.3(c)(z), and 14.3(d).   Provided that Lessor complies with each condition set forth in Section 14.3 hereof, Lessor may assign, novate, delegate or otherwise transfer all or any of its rights or obligations under the Lease or all or any of its right, title or interest in and to the Aircraft (each a “Transfer”), including pursuant to:   | | | | | --- | --- | --- | |   | (a) | a sale and leaseback; or |   | | | | | --- | --- | --- | |   | (b) | a novation or assignment of the Lease and/or a sale of the Aircraft (including to a special purpose or securitization or monetization trust, fund, limited liability company, corporation, partnership or other vehicle or in connection with any other direct or indirect raising of capital). |

1917

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In connection with any Transfer, Lessor and its assignee will enter into an Assignment. Lessor will promptly notify Lessee in writing of any such Transfer using a notice substantially in the form of Annex II to the Assignment, and shall promptly notify Lessee of any Security Assignment. Lessee agrees, at Lessor’s cost and expense, to execute and deliver as promptly as practicable in connection with any such Transfer or Security Assignment such documents and assurances (including in the case of a Transfer an acknowledgement of the Transfer and representations as to the matters set forth in Annex II to the Assignment) and to take such further action as Lessor may reasonably request to establish or protect the rights and remedies created or intended to be created in favor of the assignee in connection with any such Transfer or Security Assignment. After any such Transfer or Security Assignment, the assignee shall be entitled to be an Indemnitee and to such other rights under the Lease as specified herein, and in the case of a Transfer, in the Assignment. Upon an assignment or novation described in subsection (b) above, Lessor shall be released from all obligations and liabilities under the Lease arising from and after the effective time of such Transfer to the extent such obligations and liabilities are expressly assumed in writing by such assignee, and the Lease, including this CTA as in effect at that time and as incorporated in the Aircraft Lease Agreement, shall be deemed applicable as between Lessee and such assignee of the Lease and may be amended, supplemented or otherwise modified without the consent of the transferor (if this CTA is applicable to any Transaction Agreements or Other Agreements not so transferred, it shall remain in full force and effect and may be amended, supplemented or otherwise modified without the consent of the assignee).

1918

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Notwithstanding any such Transfer, Lessor, Owner, Financing Parties’ Representative and each other Indemnitee shall continue to be entitled to indemnification under Section 10, and shall as and to the extent otherwise provided herein continue to be named as an additional insured under all Insurance referred to in Section 9 for a period of not less than two years after such Transfer. The agreements, covenants, obligations and liabilities contained in the Lease, including all obligations to pay Rent and indemnify each Indemnitee, are made for the benefit of Lessor (and, in the case of Section 10, each other Indemnitee) and its or their

1919

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- 58 -

1920

agreement_5.md

respective successors and assigns, notwithstanding the possibility that any such Person was not originally a party to the Lease or may, at the time such enforcement is sought, not be a party to the Lease.   | | | | --- | --- | | 14.3 | **Conditions** |   In connection with any Transfer or Security Assignment by Lessor:   | | | | | --- | --- | --- | |   | (a) | Quiet Enjoyment: as a condition precedent to such Transfer or Security Assignment becoming effective, Lessor will procure that the transferee or any new owner of the Aircraft (except where such new owner is also the “Lessor” under the Lease) or any new holder of a mortgage over the Aircraft or any holder of an interest in the Aircraft or the Lease (by way of security or otherwise), as the case may be, shall execute and deliver to Lessee a letter of quiet enjoyment in respect of Lessee’s use and possession of the Aircraft in a form substantially the same as to Section 7.1; |   | | | | | --- | --- | --- | |   | (b) | Costs: Lessor shall reimburse to Lessee its reasonable out-of-pocket expenses (including reasonable legal fees and expenses) actually incurred in connection with co-operating with Lessor, and otherwise performing its obligations and exercising its rights, in relation to any such Transfer or Security Assignment referred to in this Section 14, provided that such Transfer or Security Assignment was not consummated in connection with the lawful exercise by Lessor of its remedies hereunder after the occurrence and during the continuance of an Event of Default; |

1921

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| | | | | --- | --- | --- | |   | (c) | Qualifications: Any transferee of Lessor’s interest in the Lease pursuant to a transfer described in subsection (b) of Section 14.2, the effect of which is to result in a release of Lessor from its obligations under the Lease, shall meet each of the requirements set forth in the following clauses (x), (y) and (z), and any assignee pursuant to a Security Assignment shall meet the requirement set forth in the following clause (z): (x)(i) at the time of the transfer have a tangible net worth (determined in accordance with GAAP) of at least Fifteen Million Dollars ($15,000,000), or (ii) at the time of the transfer be a Person with debt obligations having an investment grade rating of BBB- or better by an equivalent rating of Standard & Poor’s Corporation or an equivalent rating by Moody’s Investors Services, Inc. and Lessor’s payment obligations owed to Lessee under the Lease (including Lessor’s payment obligations to other Persons required to perform obligations owed to Lessee under the Lease) shall rank at least *pari passu* with Lessor’s rated, unsecured debt obligations or, in the absence of such rated obligations, all of Lessor’s unsecured, unsubordinated debt obligations, or (iii) have its payment obligations under the Lease absolutely and unconditionally guaranteed by such a Person described in the foregoing section (i) or (ii), (y) be organized under the Laws of the United States or any state thereof, or hold its interest through an owner trust or other entity that qualifies for FAA registration of the Aircraft, and (z) not be an airline or an Affiliate of an airline; and |

1922

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| | | | | --- | --- | --- | |   | (d) | No Increase In Lessee’s Indemnity or Payment Obligations: As a condition to such Transfer or Security Assignment, the Transfer or Security Assignment shall not in any material respect increase Lessee’s indemnity or other payment obligations under |   - 59 -

1923

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| | | | | --- | --- | --- | |   |    | the Lease or diminish Lessee’s rights under the Lease (to be determined in each case at the time of such Transfer or Security Assignment by applying all applicable Laws as are in effect on the effective date of the Transfer or Security Assignment or as have been enacted on or prior to the effective date of the Transfer or Security Assignment and will take effect thereafter). |   | | | | --- | --- | | 15. | MISCELLANEOUS |   | | | | --- | --- | | 15.1 | **Illegality** |

1924

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| | | | --- | --- | | 15.1 | **Illegality** |   If it is or becomes unlawful in any applicable jurisdiction within the United States, or any jurisdiction outside the United States, the Laws of which are applicable to Lessor or the Aircraft due to the operations or business of Lessee or any sublessee of the Aircraft, for Lessor to give effect to any of its obligations as contemplated by the Lease or to continue the Lease, Lessor may by notice in writing to Lessee terminate the leasing of the Aircraft, such termination to take effect on the latest date (the “Effective Date”) on which Lessor may continue such leasing and such obligations without being in breach of applicable Laws or regulations, and Lessee will forthwith redeliver the Aircraft to Lessor in accordance with Section 12. Without prejudice to the foregoing, Lessor acting reasonably and in good faith will consult with Lessee up to the Effective Date as to any steps that may be taken to restructure the transaction to avoid such unlawfulness, but will be under no obligation to take any such steps if doing so would diminish, in Lessor’s opinion (acting reasonably and in good faith), any material right it may have under the Lease or incur any unreimbursed or unindemnified additional obligation. Lessee shall reimburse Lessor for Lessor’s reasonable out-of-pocket expenses incurred in connection with entering into any such restructuring, including reasonable attorney’s fees, unless the Law giving rise to the relevant illegality is a Law that would not be generally applicable to a Person formed and based in the United States, but is applicable to Lessor due to some status or activity of Lessor which is unrelated to Lessee or the Lease.

1925

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| | | | --- | --- | | 15.2 | **Waivers, Remedies Cumulative** |   The rights of Lessor under the Lease may be exercised as often as necessary, are cumulative and not exclusive of its rights under any Law; and may be waived only in writing and specifically. The rights of Lessee under the Lease may be exercised as often as necessary under the Lease. Lessee’s rights are exclusive of Lessee’s rights under applicable Law as and to the extent provided in the Lease, but are cumulative and not exclusive of any rights under applicable Law that Lessee has not waived under the Lease. Lessee’s rights may be waived only in writing and specifically. Delay by Lessor or Lessee in exercising, or non-exercise of, any of their respective rights will not constitute a waiver of that right.   - 60 -

1926

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| | | | --- | --- | | 15.3 | **Delegation** |   Lessor may delegate to any Person (other than another airline which is a competitor of Lessee or an Affiliate of such an airline) all or any of the rights, powers or discretions vested in it by the Lease, and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as Lessor in its absolute discretion thinks fit subject to such Person being subject to the limitations and obligations of Lessor in the exercise of any such rights, powers or discretions.   | | | | --- | --- | | 15.4 | **Severability** |   If a provision of the Lease is or becomes illegal, invalid or unenforceable in any jurisdiction, that will not affect:   | | | | | --- | --- | --- | |   | (a) | the legality, validity or enforceability in that jurisdiction of any other provision of the Lease; or |   | | | | | --- | --- | --- | |   | (b) | the legality, validity or enforceability in any other jurisdiction of that or any other provision of the Lease. |   | | | | --- | --- | | 15.5 | **Remedy** |

1927

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| | | | --- | --- | | 15.5 | **Remedy** |   If Lessee fails to comply with any provision of the Lease, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such non-compliance as a Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all reasonable out-of-pocket costs and expenses (including reasonable legal fees and expenses) in connection with the non-compliance.   | | | | --- | --- | | 15.6 | **Time of Essence** |   The time stipulated in the Lease for performance by the Lessor of its obligations under the Lease, for payments payable by Lessee and performance of Lessee’s other obligations under the Lease, in each case, are of the essence of the Lease.   | | | | --- | --- | | 15.7 | **Notices** |   All notices and other communications under, or in connection with, the Lease will, unless otherwise stated, be given in writing by hand delivery, mail, overnight courier service, facsimile or email. Any such notice or other communication is deemed effectively given when received by the recipient (or if receipt is refused by the intended recipient, when so refused).   The addresses, facsimile and telephone numbers and email addresses of Lessee and Lessor are as set forth in the Aircraft Lease Agreement.   - 61 -

1928

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| | | | --- | --- | | 15.8 | **Governing Law; Jurisdiction; WAIVER OF JURY TRIAL** |   | | | | | --- | --- | --- | |   | (a) | PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THE LEASE IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE GOVERNING LAW AS APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THE LEASE). THE PARTIES AGREE THAT THE LEASE WAS DELIVERED IN THE STATE OF NEW YORK. |   Pursuant to and in accordance with Section 5-1402 of the New York General Obligations Law, Lessee and Lessor each agree that the United States District Court for the Southern District of New York and, subject to the right to remove to the aforesaid United States District Court, any New York State court sitting in the County of New York, New York, and all related appellate courts, are to have non-exclusive jurisdiction to settle any disputes arising out of or relating to the Lease and submits itself and its property to the non-exclusive jurisdiction of the foregoing courts with respect to such dispute.   | | | | | --- | --- | --- | |   | (b) | Each of Lessee and Lessor: |

1929

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| | | | | --- | --- | --- | |   | (i) | waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the courts referred to in Section 15.8(a) above on grounds of inconvenient forum or otherwise as regards proceedings in connection with the Lease; |   | | | | | --- | --- | --- | |   | (ii) | waives to the fullest extent permitted by Law any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to the Lease brought in the courts referred to in Section 15.8(a); and |   | | | | | --- | --- | --- | |   | (iii) | agrees that a judgment or order of any court referred to in Section 15.8(a) in connection with the Lease is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction. |   | | | | | --- | --- | --- | |   | (c) | Nothing in this Section 15.8 limits the right of either party to bring proceedings against the other in connection with the Lease: |   | | | | | --- | --- | --- | |   | (i) | in any other court of competent jurisdiction; or |   | | | | | --- | --- | --- | |   | (ii) | concurrently in more than one jurisdiction. |

1930

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| | | | | --- | --- | --- | |   | (d) | Each of Lessee and Lessor irrevocably and unconditionally: |   | | | | | --- | --- | --- | |   | (i) | agrees that if the other brings legal proceedings against it or its assets in relation to the Lease no sovereign or other immunity from such legal |   - 62 -

1931

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| | | | | --- | --- | --- | |   |    | proceedings (which will be deemed to include suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, other attachment, the obtaining of judgment, execution of a judgment or other enforcement or legal process or remedy) will be claimed by or on behalf of itself or with respect to its assets; and |   | | | | | --- | --- | --- | |   | (ii) | waives any such right of immunity which it or its assets now has or may in the future acquire and agrees that the foregoing waiver shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States and is intended to be irrevocable for the purposes of such Act. |

1932

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| | | | | --- | --- | --- | |   | (e) | EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE LEASE OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED THEREBY OR THE LESSOR/LESSEE RELATIONSHIP BEING ESTABLISHED, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF LESSOR AND LESSEE REPRESENTS AND WARRANTS THAT EACH HAS REVIEWED AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH ITS LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THE LEASE. IN THE EVENT OF LITIGATION, THIS SECTION MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. |   | | | | --- | --- | | 15.9 | **Sole and Entire Agreement; True Lease; Section 1110** |   | | | | | --- | --- | --- | |   | (a) | Entire Agreement: The Lease is the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft, and supersedes all previous agreements in relation to that leasing. Any amendments to the Lease must be made in writing and signed on behalf of Lessor and Lessee. |

1933

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| | | | | --- | --- | --- | |   | (b) | True Lease: The parties: |   | | | | | --- | --- | --- | |   | (i) | intend that the Lease constitute a “true lease”, and not a “security interest” as defined in Section 1-201(37) of the UCC; |   | | | | | --- | --- | --- | |   | (ii) | intend that the Lease constitute a “true lease” for United States Federal income tax purposes; and |   | | | | | --- | --- | --- | |   | (iii) | agree that the Lease confers only a leasehold interest on Lessee in and to the Aircraft on and subject to the terms of the Lease, and no ownership or other interest with respect to the Aircraft is provided to Lessee under the Lease. |   - 63 -

1934

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| | | | | --- | --- | --- | |   |      | Lessee shall not file a tax return that is inconsistent with the provisions of this Section 15.9(b). |   | | | | | --- | --- | --- | |   | (c) | Section 1110: Lessee acknowledges that Lessor would not have entered into the Lease unless it had available to it the benefits of a lessor under Section 1110 of Title 11 of the U.S.C. Lessee covenants and agrees with Lessor that to better ensure the availability of such benefits, Lessee shall support any motion, petition or application filed by Lessor with any bankruptcy court having jurisdiction over Lessee whereby Lessor seeks recovery of possession of the Aircraft under and in accordance with said Section 1110 and shall not in any way oppose such action by Lessor unless Lessee shall have complied with the requirements of said Section 1110 to be fulfilled in order to entitle Lessee to continued use and possession of the Aircraft under the Lease. In the event said Section 1110 is amended, or if it is repealed and another statute is enacted in lieu thereof, Lessor and Lessee agree to amend the Lease and take such other action not inconsistent with the Lease as Lessor reasonably requests so as to afford to Lessor the rights and benefits as such amended or substituted statute confers upon owners and lessors of aircraft similarly situated to Lessor. |   | | | | --- | --- | | 15.10 | **Beneficiaries** |

1935

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| | | | --- | --- | | 15.10 | **Beneficiaries** |   | | | | --- | --- | |    | The Lease shall be binding upon and inure to the benefit of Lessor, Lessee and their permitted successors and assigns. All rights expressed to be granted to each Indemnitee (other than Lessor) under the Lease are given to Lessor on behalf of that Indemnitee, and each Indemnitee is an express third party beneficiary thereof. Except for Lessor, GECAS, Financing Parties’ Representative, each Indemnitee and each Tax Indemnitee, no other Person shall be a third party beneficiary of the Lease. |   | | | | --- | --- | | 15.11 | **Counterparts** |   | | | | --- | --- | |    | The Lease (including the Aircraft Lease Agreement and this CTA) may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. To the extent, if any, that the Lease constitutes chattel paper (as such term is defined in the UCC as in effect in any applicable jurisdiction), no security interest in the Lease may be created through the transfer or possession of any counterpart other than the original counterpart, which shall be identified as the counterpart designated as the “original” on the signature page of the Aircraft Lease Agreement by Lessor. |   | | | | --- | --- | | 15.12 | **Language** |

1936

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| | | | --- | --- | | 15.12 | **Language** |   | | | | --- | --- | |    | All notices to be given under the Lease will be in English. All documents delivered to Lessor pursuant to the Lease (including without limitation any documents to be delivered pursuant to the Conditions Precedent) will be in English, or if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version of the Lease and any version in any other language, the English version will prevail. |   - 64 -

1937

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| | | | --- | --- | | 15.13 | **Survival** |   Lessee’s obligations under Section 3 of the applicable Part of Schedule 4, under Sections 5.6, 5.7, 5.10, 5.11, 5.17, 5.21, 9.5, 10, 12, 13.2 and 15 and under any other provision of the Lease providing for an obligation on the part of Lessee to indemnify Lessor or any other Indemnitee shall survive the expiration or any termination of the Lease and continue in full force and effect.   | | | | --- | --- | | 16. | DISCLAIMERS AND WAIVERS |

1938

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| | | | --- | --- | | 16. | DISCLAIMERS AND WAIVERS |   LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN SECTIONS 16.1 THROUGH 16.4 BELOW SHALL APPLY AT ALL TIMES DURING THE TERM. LESSEE’S ACCEPTANCE OF THE AIRCRAFT IN ACCORDANCE WITH SECTION 4.3 SHALL BE CONCLUSIVE EVIDENCE, AS BETWEEN LESSOR AND LESSEE, THAT LESSEE HAS INSPECTED AND ABSOLUTELY, UNCONDITIONALLY AND IRREVOCABLY ACCEPTED THE AIRCRAFT, THE ENGINES AND EVERY PART THEREOF FOR ALL PURPOSES UNDER THE LEASE, BUT SUCH ACCEPTANCE SHALL BE WITHOUT PREJUDICE TO LESSEE’S RIGHT TO ENFORCE LESSOR’S PERFORMANCE OF ANY WRITTEN UNDERTAKING THAT LESSOR MAY MAKE CONTEMPORANEOUSLY WITH SUCH ACCEPTANCE OR ANY RIGHT LESSEE MAY HAVE TO PURSUE AGAINST ANY THIRD PARTY ANY CLAIM LESSEE MAY HAVE WITH RESPECT TO THE CONDITION OF THE AIRCRAFT, THE ENGINES, ANY PART OR THE AIRCRAFT DOCUMENTS AND RECORDS.   | | | | --- | --- | | 16.1 | **Exclusion** |   THE AIRCRAFT IS LEASED AND DELIVERED UNDER THE LEASE “AS-IS, WHERE- IS,” AND LESSEE AGREES AND ACKNOWLEDGES THAT:

1939

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| | | | | --- | --- | --- | |   | (a) | LESSOR WILL HAVE NO LIABILITY IN RELATION TO, AND LESSOR HAS NOT AND WILL NOT BE DEEMED TO HAVE ACCEPTED, MADE OR GIVEN (WHETHER BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THE LEASE OR OTHERWISE), ANY GUARANTEES, COVENANTS, WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE AIRCRAFT OR ANY ENGINE OR PART OR ANY SERVICES PROVIDED BY LESSOR UNDER THE LEASE, INCLUDING (BUT NOT LIMITED TO) THE TITLE, DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS, OPERATION, MERCHANTABILITY, QUALITY, FREEDOM FROM INFRINGEMENT OF PATENT, COPYRIGHT, TRADEMARK OR OTHER PROPRIETARY RIGHTS, FITNESS FOR ANY PARTICULAR USE OR PURPOSE, VALUE, |   - 65 -

1940

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| | | | --- | --- | |   | DURABILITY, DATE PROCESSING, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE) WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR ANY PART OR ANY SERVICES PROVIDED BY LESSOR UNDER THE LEASE; AND |   | | | | | --- | --- | --- | |   | (b) | LESSOR SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE, MISREPRESENTATION OR STRICT LIABILITY OF LESSOR OR OTHERWISE) FOR: |   | | | | | --- | --- | --- | |   | (i) | ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH (EXCEPT FOR DIRECT DAMAGES DUE TO LESSOR’S BREACH AS AND TO THE EXTENT EXPRESSLY PROVIDED IN SECTION 4.4 OR 7.1 HEREOF); |   | | | | | --- | --- | --- | |   | (ii) | THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO; |

1941

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| | | | | --- | --- | --- | |   | (iii) | ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR ANY OTHER DIRECT (EXCEPT FOR DIRECT DAMAGES DUE TO LESSOR’S BREACH AS AND TO THE EXTENT EXPRESSLY PROVIDED IN SECTION 4.4 OR 7.1 HEREOF), INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE; OR |   | | | | | --- | --- | --- | |   | (iv) | THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT, ANY ENGINE OR ANY PART. |   | | | | --- | --- | | 16.2 | **Waiver** |   EXCEPT FOR CONDITIONS, WARRANTIES OR RIGHTS EXPRESSLY PROVIDED IN THE LEASE, LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND LESSOR, ALL ITS RIGHTS IN RESPECT OF ANY CONDITION, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF LESSOR AND ALL CLAIMS AGAINST LESSOR HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF ANY OF THE MATTERS REFERRED TO IN SECTION 16.1.   - 66 -

1942

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| | | | --- | --- | | 16.3 | **Disclaimer of Consequential Damages** |   LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER, FOR INTERRUPTION OF SERVICE, LOSS OF BUSINESS, LOST PROFITS OR REVENUES OR CONSEQUENTIAL DAMAGES (AS DEFINED IN SECTION 2A-520 OF THE UCC OR OTHERWISE) OR ANY SPECIAL OR INCIDENTAL OR INDIRECT DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY LESSOR OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF LESSOR CONTAINED IN THE LEASE (INCLUDING A BREACH BY LESSOR UNDER SECTION 4.4 OR SECTION 7.1).   | | | | --- | --- | | 16.4 | **Confirmation** |   LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS SECTION 16 AND ACKNOWLEDGES THAT RENT AND OTHER AMOUNTS PAYABLE UNDER THE LEASE HAVE BEEN CALCULATED BASED ON ITS PROVISIONS.   | | | | --- | --- | | 17. | BROKERS AND OTHER THIRD PARTIES |   | | | | --- | --- | | 17.1 | **No Brokers** |   Each of the parties hereby represents and warrants to the other that it has not paid, agreed to pay or caused to be paid directly or indirectly in any form, any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of the Lease, to any Person (other than fees payable to legal advisers or portfolio services).

1943

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| | | | --- | --- | | 17.2 | **Indemnity** |   Each party agrees to indemnify and hold the other harmless from and against any and all claims, suits, damages, costs and expenses (including, reasonable legal fees and expenses) asserted by any agent, broker or other third party for any commission or compensation of any nature whatsoever based upon the Lease or the Aircraft, if such claim, suit, damage, cost or expense arises out of any breach by the indemnifying party, its employees or agents of Section 17.1.   - 67 -

1944

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IN WITNESS WHEREOF, the parties hereto have executed this Common Terms Agreement on the date shown at the beginning of the document.   LESSOR:   | | | --- | | AVIATION FINANCIAL SERVICES INC. | | | | | By: |   | /s/ Charles H. Meyer | |   | --- | | Name: |   | Charles H. Meyer | | Title: |   | Vice President |   LESSEE:   | | | --- | | AIRTRAN AIRWAYS, INC. | | | | | By: |   | /s/ Richard P. Magurno | |   | --- | | Name: |   | Richard P. Magurno | | Title: |   | Sr. Vice President, General Counsel & Secretary |   - S -

1945

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**SCHEDULE 1** **DEFINITIONS**   The following words and expressions have the respective meanings set forth below:   **Act** means the Federal Aviation Act of 1958, as amended, and as recodified in Title 49 of the U.S.C. pursuant to Public Law 103-272, or any similar legislation of the United States as enacted in substitution or replacement thereof.   **AD Compliance Period** has the meaning given in the Aircraft Lease Agreement.   **Affiliate** means as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 50% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

1946

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**After-Tax Basis** means in the case of any amount payable on an “After-Tax Basis” to or for the benefit of any Person (including any amount payable pursuant to this definition), that the total amount otherwise payable will be increased so that, after deduction of the net amount of all Taxes required to be paid by such Person with respect to the receipt or accrual by it of such amount (whether such Taxes are payable in the year in which such amount is received or accrued or in one or more subsequent years), taking into account all related Tax credits and deductions (whether such Tax credits and deductions are used in the year in which such amount is received or accrued or in one or more subsequent years), the Person entitled to the payment will actually receive the amount otherwise required to be paid.   **Agreed Value** has the meaning given in the Aircraft Lease Agreement.   **Air Authority** means the FAA.   **Aircraft** has the meaning given in the Aircraft Lease Agreement   **Aircraft Documents and Records** means the documents, data and records identified in the list attached to the Certificate of Acceptance, and any other documents and records required to be maintained by Lessee in connection with Lessee’s obligations under Section 8.8, and all additions, renewals, revisions and replacements from time to time made to any of the foregoing in accordance with the Lease.   **Aircraft Lease Agreement** means an aircraft lease agreement entered or to be entered into between Lessor and Lessee.   **Airframe** means the Aircraft, excluding the Engines and Aircraft Documents and Records.   **Airframe Structural Check** has the meaning given in the Aircraft Lease Agreement.   1-1

1947

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**Airframe Supplemental Rent** has the meaning given in the Aircraft Lease Agreement.   **Airworthiness Directive** means an airworthiness directive issued by the Air Authority and any service bulletin designated by the State of Design or the Air Authority as “mandatory”.   **Annual Supplemental Rent Adjustment** has the meaning given in the Aircraft Lease Agreement.   **Appraisal Procedure** means the following procedure for determining the “fair market rental value” of the Aircraft pursuant to Section 13 of the CTA: (a) Lessor shall select an independent, qualified aircraft appraiser in its sole and absolute discretion who shall make a determination of “fair market rental value” of the Aircraft; and (b) the reasonable fees and expenses of such appraiser shall be paid by Lessee. “Fair market rental value” shall mean the value determined by an appraisal completed on an “as-is” and “where-is” basis.   **APU** means the auxiliary power unit installed on the Aircraft on the Delivery Date and any replacement auxiliary power unit installed on the Aircraft and title to which is transferred to Owner in accordance with the Lease.   **APU Supplemental Rent** has the meaning given in the Aircraft Lease Agreement.   **Assumed Ratio** has the meaning given in the Aircraft Lease Agreement.   **Assumed Utilization** has the meaning given in the Aircraft Lease Agreement.   **Assumed Utilization Adjustment Threshold** has the meaning given in the Aircraft Lease Agreement.   **Assignment** means the Assignment, Assumption and Release Agreement to be entered into between Lessor and the assignee named therein in connection with a Transfer in compliance with Section 14.2 of the CTA, in substantially the form of Schedule 13.

1948

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**Business Day** means any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York or Orlando, Florida are authorized or required by Law to be closed.   **“C” Check** means a “C” check in accordance with the Lessee’s Maintenance Program (and the Manufacturer’s Maintenance Planning Document, to the extent Lessee’s Maintenance Program does not conform to the requirements of the Manufacturer’s Maintenance Planning Document) in effect on the relevant date.   **Certificate of Acceptance** means a certificate of acceptance in the form of Schedule 5.   **Certificated Air Carrier** means any Person (except the United States Government) that is a “citizen of the United States of America” (as defined in Section 40102 of Title 49 of the U.S.C.) and holding a Certificate of Public Convenience and Necessity issued under Section 41102 of   1-2

1949

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Title 49 of U.S.C. by the Department of Transportation or any predecessor or successor agency thereto, and an air carrier operating certificate issued pursuant to Chapter 447 of Title 49 of U.S.C. or, in the event such certificates shall no longer be applicable, any Person (except the United States Government) that is a citizen of the United States (as defined in Section 40102 of Title 49 of the U.S.C.) and legally engaged in the business of transporting for hire passengers or cargo by air predominantly to, from or between points within the United States of America, and, in either event, operating commercial jet aircraft capable of carrying ten or more individuals or 6,000 pounds or more of cargo, which also is certificated so as to entitle Lessor, as a lessor, to the benefits of Section 1110 of Title 11 of U.S.C. with respect to the Aircraft assuming such benefits are then available to lessors under Law.   **Common Terms Agreement or CTA** has the meaning given in the heading hereof.   **Conditions Precedent** means the conditions specified in Schedule 3.   **CSO** means Cycles since overhaul.   **Cycle** means one take-off and landing of the Aircraft.   **Damage Notification Threshold** has the meaning given in the Aircraft Lease Agreement.   **Deductible Amount** has the meaning given in the Aircraft Lease Agreement.   **Default** means any Event of Default or any event or circumstance that, with the giving of notice and/or lapse of time and/or determination of materiality and/or fulfillment of any other condition, would constitute an Event of Default.

1950

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**Defect** means any defect, discrepancy or non-conformity with the Delivery Condition Requirements notified by Lessee to Lessor during the Pre-Delivery Procedure.   **Delivery** means delivery of the Aircraft by Lessor to Lessee under the Lease.   **Delivery Condition Requirements** has the meaning given in the Aircraft Lease Agreement.   **Delivery Date** means the date on which Delivery occurs.   **Delivery Location** has the meaning given in the Aircraft Lease Agreement.   **Deposit** has the meaning given in the Aircraft Lease Agreement.   **Discount Rate** has the meaning given in the Aircraft Lease Agreement.   **Dollars and $** means the lawful currency of the United States of America.   **Early Termination Date**, if applicable, has the meaning given in the Aircraft Lease Agreement.   1-3

1951

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**Engine** means, whether or not installed on the Aircraft:   | | | | --- | --- | | (a) | each engine of the manufacture and model specified in the Aircraft Lease Agreement for the Aircraft which Lessor offers to Lessee for delivery with the Airframe on the Delivery Date, such engines being described as to serial numbers on the Certificate of Acceptance; and |   | | | | --- | --- | | (b) | any Replacement Engine, with effect from the time when title thereto has passed to Owner in accordance with the Lease; |   and in each case includes all modules and Parts from time to time belonging to or installed in that engine but excludes any properly replaced engine, title to which should have passed to Lessee pursuant to the Lease.   **Engine Agreed Value** has the meaning given in the Aircraft Lease Agreement.   **Engine Cycle** means operation of an engine on an aircraft from and including a take-off to and including the landing of that aircraft.   **Engine Event of Loss** means the occurrence, with respect to the Engine only, whether or not installed on the Airframe, of any of those events described in the definition of Event of Loss.   **Engine Flight Hour** means each hour or part thereof an Engine is operated, elapsing from the moment the wheels of an aircraft on which such Engine is installed leave the ground until the wheels of such aircraft next touch the ground.   **Engine LLP Replacement** has the meaning given in Section 7.2(b).   **Engine LLP Supplemental Rent** has the meaning given in the Aircraft Lease Agreement.   **Engine Refurbishment** has the meaning given in the Aircraft Lease Agreement.

1952

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**Engine Refurbishment** has the meaning given in the Aircraft Lease Agreement.   **Engine Supplemental Rent** has the meaning given in the Aircraft Lease Agreement.   **Engine Thrust Setting** has the meaning given in the Aircraft Lease Agreement.   **Equipment Change** has the meaning given in Section 8.12.   **ERISA** means the Employee Retirement Income Security Act of 1974, as amended.   **Event of Default** means any event or condition specified in Schedule 9.   **Event of Loss** means with respect to the Aircraft (including for the purposes of this definition the Airframe):   | | | | --- | --- | | (a) | the actual or constructive, compromised, arranged or agreed total loss of the Aircraft; or |   1-4

1953

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| | | | --- | --- | | (b) | the Aircraft being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use by Lessee; or |   | | | | --- | --- | | (c) | the Aircraft being condemned, confiscated or requisitioned for title, or title to the Aircraft being otherwise compulsorily acquired by the government of the State of Registry or any other Government Entity, in each case for more than ninety (90) days; or |   | | | | --- | --- | | (d) | the Aircraft disappearing, being hijacked, stolen, detained, seized or requisitioned for use or hire for the lesser of (i) a period of more than ninety (90) days or (ii) a period equal to or exceeding the remaining balance of the Term; or |   | | | | --- | --- | | (e) | as a result of any rule, regulation, order or other action by the Air Authority, the use of the Aircraft by Lessee or any sublessee or Permitted Sub-Lessee shall have been prohibited for a period of one hundred eighty (180) days, unless Lessee or a sublessee or Permitted Sub-Lessee is diligently attempting to remove the cause of such prohibition, in which case the period shall be extended to three hundred sixty-five (365) days. Notwithstanding the preceding clause (d), requisition for use by the United States government shall not be deemed an Event of Loss unless it extends beyond the Expiry Date. |

1954

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**Expiry Date** means the Scheduled Expiry Date or, if extended pursuant to the Lease, the Extended Expiry Date, or, if reduced pursuant to the Lease, the Early Termination Date, or, if earlier than any of the foregoing, (i) the date when Lessor acting in accordance with the provisions of the Lease, terminates the leasing of the Aircraft to Lessee under the Lease, or (ii) subject to the provisions of Section 11.1 and 11.2, the date when Lessor receives the Agreed Value together with any other amounts then due and unpaid under the Lease and the Other Agreements following an Event of Loss; provided that if the Term is extended pursuant to Section 12.2, the Expiry Date shall be extended to the date to which the Term is extended pursuant to Section 12.2.   **Extended Expiry Date**, if applicable, has the meaning given in the Aircraft Lease Agreement.   **FAA** means the Federal Aviation Administration of the United States of America and any successor thereof.   **FAR** means the Federal Aviation Regulations set forth in Title 14 of the United States Code of Federal Regulations, as amended and modified from time to time.   **Final Delivery Date** has the meaning given in the Aircraft Lease Agreement.   **Final Inspection** has the meaning given in Section 1.1 of Schedule 6.   **Financial Indebtedness** means any indebtedness in respect of:   | | | | --- | --- | | (a) | moneys borrowed or raised; |

1955

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| | | | --- | --- | | (a) | moneys borrowed or raised; |   | | | | --- | --- | | (b) | any liability under any debenture, bond, note, loan stock, acceptance, documentary credit or other security; |   | | | | --- | --- | | (c) | the acquisition cost of any asset to the extent payable before or after the time of acquisition or possession (exclusive of trade payables); or |     1-5

1956

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| | | | --- | --- | | (d) | any guarantee, indemnity or similar assurance against financial loss of any Person in respect of amounts referenced in clauses (a), (b) and (c) above. |   **Financial Information means**:   | | | | --- | --- | | (a) | if requested by Lessor, the consolidated management accounts of each of Lessee and Guarantor (in Dollars, and comprising a balance sheet and profit and loss statement and cash flow statements, as well as operational statistics for available seat miles, revenue passenger miles and total passengers) in English prepared for the most recent previous fiscal quarter certified by a qualified financial officer of each of Lessee and Guarantor as fairly presenting its financial condition and results of operation in accordance with GAAP (subject to year-end adjustments); and |   | | | | --- | --- | | (b) | as soon as published but not in any event later than 120 days after the last day of each fiscal year of each of Lessee and Guarantor, the audited consolidated financial statements of each of Lessee and Guarantor (consisting of a balance sheet and statements of operations and of retained earnings and cash flows), prepared for the fiscal year then most recently ended certified by the independent auditors of each of Lessee and Guarantor without qualification. |   **Financing Documents** means any mortgage, lease assignment, loan agreement, conditional sale agreement, head lease or any other documents entered into by Lessor or Owner with any Financing Party in connection with Lessor’s or Owner’s financing of the Aircraft.

1957

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**Financing Parties** means any Person or Persons from time to time notified by Lessor to Lessee as providing finance, or participating in a transaction providing finance, to Lessor or Owner in respect of its acquisition, ownership or leasing of the Aircraft, whether by way of loan, superior lease or otherwise.   **Financing Parties’ Representative** means any one or more Financing Parties from time to time notified to Lessee as being the Financing Parties’ Representative.   **Financing Statements** means Uniform Commercial Code Financing Statements in respect of the Lease and the Aircraft and Engines leased thereunder prepared in a form acceptable for filing with the applicable Government Entities in the State of Incorporation.   **Flight Hour** means each hour or part thereof elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground.   **FOD** means foreign object damage.   **GAAP** means generally accepted accounting principles in the United States.   **GE Capital** means General Electric Capital Corporation.   **GECAS** means either or both of GE Capital Aviation Services, Limited and GE Capital Aviation Services, Inc.   1-6

1958

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**Geneva Convention** means the Convention for the International Recognition of Rights in Aircraft, signed (ad referendum) at Geneva, Switzerland, on June 19, 1948, and amended from time to time, but excluding the terms of any adhesion thereto or ratification thereof containing reservations to which the United States of America does not accede.   **Governing Law** means the Laws of the State of New York, United States of America, as applied to contracts to be performed wholly within the State of New York (exclusive of Section 7-101 of the New York General Obligations Law which is inapplicable to this CTA).   Government Entity means:   | | | | --- | --- | | (a) | any national government, political subdivision thereof, or local jurisdiction therein; |   | | | | --- | --- | | (b) | any instrumentality, board, commission, court, or agency of any of the above, however constituted; and |   | | | | --- | --- | | (c) | any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject or in whose activities any of the above is a participant. |   **Guarantee** means, if applicable, a guarantee in the form of Schedule 10 from Guarantor if such guarantee is required by the Aircraft Lease Agreement; and references to the Guarantee include references to any replacement or re-issued guarantee.   **Guarantor** means, if applicable, the Person identified as such in the Aircraft Lease Agreement.   **Habitual Base** has the meaning given in the Aircraft Lease Agreement.

1959

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**Habitual Base** has the meaning given in the Aircraft Lease Agreement.   **Indemnitee** has the meaning given in the Aircraft Lease Agreement.   **Insurance** means insurance in respect of the Aircraft required by Section 9 and Schedule 7.   **Interest Rate** has the meaning given in the Aircraft Lease Agreement.   **Landing Gear** means the landing gear assembly of the Aircraft excluding any rotable components.   **Landing Gear Supplemental Rent** has the meaning given in the Aircraft Lease Agreement.   **Law** means and includes (a) any statute, decree, constitution, regulation, order, judgment or other legally binding directive of any Government Entity; (b) any treaty, pact, compact or other agreement to which any Government Entity is a signatory or party; (c) any legally binding judicial or administrative interpretation or application of any Law described in (a) or (b) above by a court or administrative agency of competent jurisdiction; and (d) any amendment or revision of any Law described in (a), (b) or (c) above.   **LC Amount** has the meaning given in the Aircraft Lease Agreement.   **Lease** has the meaning given in the Aircraft Lease Agreement.   1-7

1960

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**Lease Supplement** means any Lease Supplement executed and delivered with respect to the Lease.   **Lease Supplement No. 1** means a Lease Supplement No. 1 substantially in the form of Schedule 14.   **Lessee** means the Person named as Lessee in the applicable Aircraft Lease Agreement.   **Lessee Affiliate** means any Subsidiary or other Affiliate for the time being of Lessee*.*   **Lessee Conditions Precedent** means the conditions specified in Part B of Schedule 3.   **Lessee’s Maintenance Program** means the Maintenance Program, as at the date of the Aircraft Lease Agreement, specifically approved by the Air Authority for Lessee’s maintenance of the Aircraft and as the same may thereafter be modified from time to time by Lessee in accordance with the rules and regulations of the Air Authority.   **Lessor** means the Person named as Lessor in the Aircraft Lease Agreement.   **Lessor Conditions Precedent** means the conditions specified in Part A of Schedule 3.   **Lessor Lien** means any Security Interest whatsoever from time to time created by Lessor or Owner in connection with the financing of the Aircraft and any other Security Interest in the Aircraft which results from acts of or claims against Lessor or Owner (or any Person claiming by, through or under Lessor) not related to the transactions contemplated by or permitted under the Lease.   **Lessor/Owner Tax Jurisdiction** has the meaning given in the Aircraft Lease Agreement.   **Lessor Taxes** means Taxes for which Lessee is not obligated to indemnify Lessor and/or Owner and/or a Financing Party as provided in Section 5.7(c).

1961

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**Letter of Credit** means any letter of credit issued in relation to the Lease pursuant to Section 5.14 and any replacement or renewal of that letter of credit.   **Losses** means any and all reasonable costs and expenses (including any and all reasonable legal fees and expenses and the fees and expenses of other professional advisers), claims, proceedings, losses, liabilities, obligations, damages (whether direct, indirect, special, incidental or consequential), suits, judgments, fees, penalties or fines (whether criminal or civil) of any kind or nature whatsoever, including any of the foregoing arising or imposed with or without any Indemnitee’s fault or negligence, whether passive or active or under the doctrine of strict liability.   **Maintenance Contributions** means, as and if applicable, all amounts payable by Lessor pursuant to Section 7.2.   1-8

1962

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**Maintenance Performer** means such Person as is approved by the FAA to perform maintenance and/or modification services on commercial aircraft and/or commercial aircraft engines, which Person shall have recognized standing and experience, suitable facilities and equipment to perform such services on aircraft and/or engines of the same or improved model as the Aircraft or, in the case of engines, the Engines.   **Maintenance Program** means an Air Authority approved maintenance program for the Aircraft in accordance with the Manufacturer’s and/or the OEM’s specifications, requirements, service bulletins, planning documents, maintenance manuals and documents and encompassing scheduled maintenance (including block maintenance), condition-monitored maintenance, and/or on-condition maintenance of Airframe, Engines and Parts, including servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control, inspections and treatments.   **Major Checks** means any C check, multiple C check or heavier check (including structural inspections and CPCP) recommended for commercial aircraft of the same model as the Aircraft by its manufacturer (however denominated) as set out in the Lessee’s Maintenance Program.   **Major Maintenance Program Revision** means a change from an MSG-2 to an MSG-3 program, a change from a block to a phased program and any other major change to Lessee’s Maintenance Program of a similar nature.   **Manufacturer** has the meaning given in the Aircraft Lease Agreement.   **Manufacturer’s Maintenance Planning Document** means the recommended maintenance program for the Aircraft issued by the Manufacturer as in effect at the time of any applicable determination.   **Minimum APU Limit** has the meaning given in the Aircraft Lease Agreement.   **Minimum Component Calendar Life** has the meaning given in the Aircraft Lease Agreement.

1963

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**Minimum Component Calendar Life** has the meaning given in the Aircraft Lease Agreement.   **Minimum Component Cycles** has the meaning given in the Aircraft Lease Agreement.   **Minimum Component Flight Hours** has the meaning given in the Aircraft Lease Agreement.   **Minimum Engine Cycles** has the meaning given in the Aircraft Lease Agreement.   **Minimum Engine LLP Cycles** has the meaning given in the Aircraft Lease Agreement.   **Minimum Engine Flight Hours**has the meaning given in the Aircraft Lease Agreement.   **Minimum Landing Gear Calendar Time** has the meaning given in the Aircraft Lease Agreement.   1-9

1964

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**Minimum Landing Gear Cycles** has the meaning given in the Aircraft Lease Agreement.   **Minimum Landing Gear Flight Hours** has the meaning given in the Aircraft Lease Agreement.   **Minimum Liability Coverage** has the meaning given in the Aircraft Lease Agreement.   **Nameplate Inscription** means the inscription to be included on the Nameplates as requested by Lessor from time to time.   **Nameplates** means the fireproof plates to be installed on the Aircraft in accordance with Section 8.6(a).   **OEM** means, in relation to any Part, the original equipment manufacturer of such Part.   **Other Agreements** means any lease, financing or purchase agreement in respect of aircraft or engines, or any maintenance cost per hour agreement or spare parts related lease or financing agreement from time to time entered into between Owner (or any Affiliate of Owner) and/or Lessor (or any Affiliate of Lessor), on the one hand, and Lessee (or any Lessee Affiliate), on the other hand.   **Owner** has the meaning given in the Aircraft Lease Agreement.   **Part** means, whether or not installed on the Aircraft:   | | | | --- | --- | | (a) | any module, component, furnishing or equipment (other than a complete Engine or engine) incorporated or installed in or attached to or furnished with the Aircraft on the Delivery Date or thereafter if paid for or otherwise provided by or on behalf of Lessor; and |

1965

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| | | | --- | --- | | (b) | any other module, component, furnishing or equipment (other than a complete Engine or engine), with effect from the time when title thereto has passed to Owner pursuant to the Lease; |   but excludes any such items title to which has passed to Lessee pursuant to the Lease.   **Part 36 or FAR Part 36** means Part 36 of the FAR, as amended or modified from time to time.   **Part 121 or FAR Part 121** means Part 121 of the FAR, as amended or modified from time to time.   Permitted Lien means:   | | | | --- | --- | | (a) | any lien for Taxes not assessed or, if assessed, not yet due and payable, or being diligently contested in good faith by appropriate proceedings; |   1-10

1966

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| | | | --- | --- | | (b) | any lien of a repairer, mechanic, hangar-keeper or other similar lien arising in the ordinary course of business by operation of Law in respect of obligations which are not overdue or are being diligently contested in good faith by appropriate proceedings; |   | | | | --- | --- | | (c) | any Lessor Lien; and |   | | | | --- | --- | | (d) | the rights of others under any sub-lease or arrangements to the extent expressly permitted under Section 8.4. |   but only if (in the case of both (a) and (b)) (i) adequate reserves have been provided by Lessee for the payment of such Taxes or obligations; and (ii) such proceedings, or the continued existence of the lien, do not give rise to any material risk of any sale, forfeiture or other loss of the Aircraft or any interest therein or any risk of criminal liability on the part of Lessor or Owner.   **Permitted Sub-Lease** means any sub-lease of the Aircraft to a Permitted Sub-Lessee which meets all of the conditions specified in Section 8.4(b).

1967

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**Permitted Sub-Lessee** means (a) a Certificated Air Carrier that (1) is paying its debts as they become due, (2) is not subject to any bankruptcy, insolvency or similar proceedings, and has not announced that any such proceedings are under consideration, and (3) is not in default in any material obligations owing to Lessor or any Lessor Affiliate, and (4) has no pending request for, and is not in discussions with Lessor or a Lessor Affiliate concerning, a rescheduling of rent or other payment obligations to Lessor or any Lessor Affiliate, and (b) any Person as to which Lessor given its prior written consent in accordance with Section 8.4(a)(i).   **Person** means any individual person, any form of corporate or business association, trust, Government Entity, or organization or association of which any of the above is a member or a participant.   **Pre-Approved Bank** has the meaning given in the Aircraft Lease Agreement.   **Pre-Delivery Procedure** means the procedure leading to Delivery as specified in Schedule 4.   **Purchase Price** has the meaning given in the Aircraft Lease Agreement.   **Redelivery Check** has the meaning given in the Aircraft Lease Agreement.   **Redelivery Location** has the meaning given in the Aircraft Lease Agreement.

1968

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**Redelivery Location** has the meaning given in the Aircraft Lease Agreement.   **Regulations** means, in the case of Lessee, any Law or regulation, or any official directive, recommendation or mandatory requirement having the force of law or any material contractual undertaking, or airworthiness requirements or limitations which applies to Lessee or the Aircraft and, in the case of Lessor, any Law or regulation, or any official directive or recommendation or mandatory requirement which applies to Lessor, Owner, Financing Parties’ Representative or GECAS.   1-11

1969

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**Rent** means all amounts payable pursuant to Section 5.3.   **Rental Period** means each period ascertained in accordance with Section 5.2.   **Rent Commencement Date** means the date on which Lessor tenders the Aircraft for Delivery to Lessee under and in accordance with Sections 3.1 and 4.3(a), or under and in accordance with Section 4.1(b)(ii).   **Rent Date** means the first day of each Rental Period.   **Replacement Engine** means an “Engine” that has duly replaced an “Engine” in accordance with the requirements of Section 8.11(b).   **Required EGT Margin** has the meaning given in the Aircraft Lease Agreement.   **Required LC Expiry Date** means the date being thirty-one (31) days after the Expiry Date.   **Return Occasion** means the date on which the Aircraft is redelivered to Lessor in accordance with Section 12.   **Scheduled Delivery Date** means the date specified therefore in the Aircraft Lease Agreement or, if no such date is specified, the date notified by Lessor pursuant to and in accordance with Section 4.1(a).   **Scheduled Delivery Month** means the month specified therefore in the Aircraft Lease Agreement, if such month is so specified.   **Scheduled Expiry Date** has the meaning given in the Aircraft Lease Agreement.   **Security Assignment** has the meaning given in Section 14.2.

1970

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**Security Assignment** has the meaning given in Section 14.2.   **Security Interest** means any mortgage, chattel mortgage, security interest, charge, pledge, lien, conditional sale agreement, title retention agreement, equipment trust agreement, encumbrance, assignment, hypothecation, right of detention or any other agreement or arrangement having the effect of conferring security.   **Significant Default** means (a) any Default which, with the giving of notice and/or lapse of time, would constitute any of the Events of Default referred to in paragraphs (a), (d), (e) or (h) or clause (i) of paragraph (j) of Schedule 9, or (b) the failure at the relevant time of any Guarantee required pursuant to Section 5.15 hereof to remain, in any material respect, in full force and effect.   **SRM** has the meaning given in the introductory paragraph to Schedule 6.   **State of Design** means the state having jurisdiction over the Person responsible for the type design of the Aircraft or any Engine or Part.   1-12

1971

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**State of Incorporation** means the state of organization of Lessee as identified in the heading of the Aircraft Lease Agreement.   **State of Registry** has the meaning given in the Aircraft Lease Agreement.   **Subsidiary means**:   | | | | --- | --- | | (a) | in relation to any reference to financial statements, any Person whose financial statements are consolidated with the accounts of Lessee in accordance with GAAP; or |   | | | | --- | --- | | (b) | for any other purpose, an entity from time to time of which another has direct or indirect control or owns directly or indirectly more than fifty percent (50%) of the voting share capital. |   **Supplemental Rent** has the meaning given in the Aircraft Lease Agreement.   **Taxes** means any and all present and future taxes, duties, withholdings, levies, assessments, imposts, fees and other governmental charges of all kinds (including without limitation any value added or similar tax and any stamp, documentary, license, registration or similar fees or tax), imposed by a Government Entity, together with any penalties, fines, surcharges and interest thereon and any additions thereto.   **Tax Indemnitee** has the meaning given in the Aircraft Lease Agreement.

1972

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**Tax Indemnitee** has the meaning given in the Aircraft Lease Agreement.   **Transaction Agreements** means each of the twenty-four (24) Aircraft Leases dated the date hereof, each Guarantee relating to one or more Aircraft Leases, each of the six (6) engine lease agreements dated the date hereof between AirTran, as lessee, and AFSI, as lessor, each guarantee dated the date hereof and issued by the Guarantor with respect to each of such engine lease agreements, that certain Master Engine Sale and Lease Agreement dated the date hereof between AirTran, as seller, and AFSI, as buyer, and each of those two (2) certain Aircraft Sale and Lease Agreements dated the date hereof between AirTran, as seller, and an Affiliate of AFSI, as buyer.   **Technical Report** means a monthly report of the Flight Hours, Cycles, Engine Flight Hours and Engine Cycles operated by the Airframe and Engines in respect of each calendar month in the form reasonably required by Lessor.   **Term** means the period commencing on the Delivery Date and ending on the Expiry Date.   **Transfer** has the meaning set forth in Section 14.2.   **TSO** means time (in Flight Hours) since overhaul.   **UCC** means the Uniform Commercial Code as in effect in the State of New York.   **Unforeseen Event means** any of the following events not occasioned by the willful misconduct or intentional breach of Lessor, Owner or an Affiliate of either (excluding for this purpose any such Affiliate in its capacity as a manufacturer or service provider) and arising from any cause   1-13

1973

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beyond the reasonable control of Lessor, Owner or an Affiliate thereof (excluding for this purpose any such Affiliate in its capacity as a manufacturer or service provider), including without limitation:   | | | | --- | --- | | (a) | war, civil disturbance or act of any Government Entity; |   | | | | --- | --- | | (b) | natural disaster or any other act of God; |   | | | | --- | --- | | (c) | any Law of, or any allocation or other action by, a Government Entity or any unexpected shortage of labor, materials or facilities affecting the Aircraft; |   | | | | --- | --- | | (d) | any damage or Defect; |   | | | | --- | --- | | (e) | labor disputes; |   | | | | --- | --- | | (f) | breach of contract by any Person (other than Lessor), or other failure to deliver or redeliver the Aircraft by any Person (whether or not a breach) with possession or control of the Aircraft (other than by Lessor, if it has possession and control of the Aircraft), any seller of the Aircraft and any breach by any seller or failure to cooperate by any seller, or any “excusable” or “inexcusable” delay under any purchase agreement for the Aircraft, or any purchase agreement for the Aircraft terminating prior to Delivery due to a party other than Lessor, Owner or an Affiliate of Lessor or Owner terminating such agreement or due to Lessor, Owner or an Affiliate of Lessor or Owner terminating such agreement in connection with the breach of such agreement by the other party thereto; |

1974

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| | | | --- | --- | | (g) | delays in obtaining the Aircraft or any equipment or services for the Aircraft; |   | | | | --- | --- | | (h) | any delay due to Air Authority certifications; or |   | | | | --- | --- | | (i) | any other cause beyond the control of Lessor. |   **United States or US** means the United States of America.   **U.S.C.** means the United States Code.   1-14

1975

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**SCHEDULE 2** **REPRESENTATIONS AND WARRANTIES**   | | | | --- | --- | | 1.1 | Lessee’s Representations and Warranties |   Lessee’s representations and warranties to Lessor are as follows:   | | | | | --- | --- | --- | |   | (a) | **Status:** It is duly organized, validly existing and in good standing in its State of Incorporation. |   | | | | | --- | --- | --- | |   | (b) | **Non-Conflict:** Execution, delivery and performance of the Lease do not contravene or breach in any material respect (i) any Regulation applicable to Lessee, (ii) the constitutional documents of Lessee, or (iii) any material agreement to which Lessee is a party or which is binding on Lessee or any of its assets. |   | | | | | --- | --- | --- | |   | (c) | **Power and Authority:** It has all corporate and other power and authority to execute, deliver and perform the Lease, and the Lease has been duly authorized, executed and delivered by Lessee. |   | | | | | --- | --- | --- | |   | (d) | **Legal Validity:** Its obligations under the Lease are legal, valid, binding and enforceable against Lessee in accordance with their terms, except as may be limited or affected by bankruptcy, insolvency and other similar laws affecting the rights of creditors or lessors generally and by general principles of equity. |

1976

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| | | | | --- | --- | --- | |   | (e) | **No Event of Default:** No Event of Default has occurred and is continuing or would occur because of Delivery. |   | | | | | --- | --- | --- | |   | (f) | **Litigation:** It is not involved in any litigation or other dispute that reasonably would be expected materially and adversely to affect its financial condition or its ability to perform its obligations under the Lease. |   | | | | | --- | --- | --- | |   | (g) | **Financial Information:** The audited consolidated financial statements most recently delivered to Lessor: |   | | | | | --- | --- | --- | |   | (i) | have been prepared in accordance with GAAP; and |   | | | | | --- | --- | --- | |   | (ii) | present fairly in accordance with GAAP the financial condition and results of operations of each of Lessee and Guarantor as at the date thereof and for the period then ending. |   | | | | | --- | --- | --- | |   | (h) | **Full Disclosure:** Neither the audited financial statements referred to in paragraph (g) nor any other financial, operational or credit related information provided in writing to Lessor by Lessee for the purposes of the Lease contains as of the date thereof any untrue statement of a material fact. |

1977

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| | | | | --- | --- | --- | |   | (i) | **Location**: Lessee is “located” (as that term is defined in Article 9 of the UCC) in the jurisdiction of its organization as set forth in the heading of the Aircraft Lease Agreement; and the records of the Lessee concerning the Aircraft are maintained at its chief executive office address which is also set forth in the heading of the Aircraft Lease Agreement or at the Habitual Base of the Aircraft. |   | | | | | --- | --- | --- | |   | (j) | **Certificated Air Carrier**: Lessee is a Certificated Air Carrier and Lessor, as lessor of the Aircraft to Lessee, is entitled to the benefits of Section 1110 of Title 11 of the U.S.C. with respect to the Aircraft. |   2-1

1978

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| | | | | --- | --- | --- | |   | (k) | **Citizen of the United States**: Lessee is a “citizen of the United States” as defined in Section 40102 of Title 49 of the U.S.C. |   | | | | | --- | --- | --- | |   | (l) | **ERISA**: Lessee is not engaged in any transaction in connection with which it could be subjected to either a civil penalty assessed pursuant to Section 502 of ERISA or any tax imposed by Section 4975 of the Internal Revenue Code; no material liability to the Pension Benefit Guaranty Corporation has been or is expected by Lessee to be incurred with respect to any employee pension benefit plan (as defined in Section 3 of ERISA) maintained by Lessee or by any trade or business (whether or not incorporated) which together with Lessee would be treated as a single employer under Section 4001 of ERISA and Section 414 of the Internal Revenue Code; there has been no reportable event (as defined in Section 4043(b) of ERISA) with respect to any such employee pension benefit plan; no notice of intent to terminate any such employee pension benefit plan has been filed or is expected to be filed, nor has any such employee pension benefit been terminated; no circumstance exists or is anticipated that constitutes or would constitute grounds under Section 4042 of ERISA for the Pension Benefit Guaranty Corporation to institute proceedings to terminate, or to appoint a trustee to manage the administration of, such an employee pension benefit plan; and no accumulated funding deficiency (as defined in Section 302 of ERISA or Section 412 of the Internal Revenue Code), whether or not waived, exists with respect to any such employee pension benefit plan. |

1979

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| | | | | --- | --- | --- | |   | (m) | **Material Adverse Change**: Since the date of the financial statements most recently provided to Lessor on or prior to the date of the Aircraft Lease Agreement, there has been no change in the financial condition or operations of Lessee or Guarantor that would materially adversely affect the ability of (x) Lessee to comply with its obligations under the Lease or (y) Guarantor to comply with its obligations under the Guarantee, and except as disclosed to Lessor in writing, there has been no material adverse change in the financial condition or operations of Lessee or Guarantor. |   | | | | | --- | --- | --- | |   | (n) | **Taxes**: Lessee has filed or delivered all necessary returns due to the tax authorities in the State of Incorporation, the State of Registry and the Habitual Base and paid all amounts shown thereon the failure of which to so file, deliver or pay would result in a Tax or other penalty that would materially adversely affect the ability of Lessee to comply with its obligations under the Lease. |   | | | | --- | --- | | 1.2. | **Lessor’s Representations and Warranties** |   Lessor’s representations and warranties to Lessee are as follows:   | | | | | --- | --- | --- | |   | (a) | **Status:** It is duly organized, validly existing and in good standing in its jurisdiction of organization. |

1980

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| | | | | --- | --- | --- | |   | (b) | **Non-Conflict:** Execution, delivery and performance of the Lease do not contravene or breach in any material respect (i) any Regulation applicable to Lessor, (ii) the constitutional documents of Lessor, or (iii) any material agreement to which Lessor is a party or which is binding on Lessor or any of its assets. |     2-2

1981

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| | | | | --- | --- | --- | |   | (c) | **Power and Authority:** It has all corporate and other power and authority to execute, deliver and perform the Lease, and the Lease has been duly authorized, executed and delivered by Lessor. |   | | | | | --- | --- | --- | |   | (d) | **Legal Validity:** Its obligations under the Lease are legal, valid, binding and enforceable against Lessor in accordance with their terms, except as may be limited or affected by bankruptcy, insolvency and other similar laws affecting the rights of creditors or lessors generally and by general principles of equity. |   | | | | | --- | --- | --- | |   | (e) | **Citizen of the United States:** Owner is a “citizen of the United States” as defined in Section 40102 of Title 49 of the U.S.C. |   | | | | | --- | --- | --- | |   | (f) | **Title; No Liens:** On the Delivery Date, Owner will have good and valid title to the Aircraft and Lessor will have such interest in the Aircraft as shall entitle it to lease the Aircraft to Lessee under, and otherwise perform the obligations of Lessor under, the Lease, and any Transfer or Security Assignment made by Lessor or Owner in relation to the Aircraft shall have been made in compliance with Sections 14.2 and 14.3 hereof. |     2-3

1982

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**SCHEDULE 3** **CONDITIONS PRECEDENT**   **Part A – Lessor Conditions Precedent**   On or before the Scheduled Delivery Date, Lessee shall comply with the Conditions Precedent set out below by ensuring that Lessor receives the following documents and by taking the actions described below, in each case in a manner reasonably satisfactory to Lessor. All documents delivered to Lessor pursuant to this Schedule 3 will be in English, or if not in English, will be accompanied by a certified English translation:   | | | | --- | --- | | 1. | **Conditions Precedent to be Satisfied by Lessee** |   | | | | | --- | --- | --- | |   | (a) | **Opinion**: an original, signed opinion substantially in the form of Schedule 8-A will be issued on the Delivery Date by Lessee’s legal counsel with respect to the Laws of the State of New York, the state of the location of Lessee’s chief executive offices and the State of Incorporation; |   | | | | | --- | --- | --- | |   | (b) | **Approvals/Filings**: all approvals, licenses and consents which may be required in relation to, or in connection with the performance by Lessee of any of its obligations under the Lease. In addition, Lessee shall satisfy Lessor that all filings, registrations, recordings and other actions have been or will be taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of the Lease and to protect the property rights of Owner in the Aircraft, any Engine or any Part; |

1983

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| | | | | --- | --- | --- | |   | (c) | [Intentionally Omitted] |   | | | | | --- | --- | --- | |   | (d) | **Process Agent**: a letter from the process agent appointed by Lessee in the Lease accepting that appointment; |   | | | | | --- | --- | --- | |   | (e) | **Licenses**: certified copies of Lessee’s air carrier operating certificate and evidence of authority to operate under FAR Part 121 and a Certificate of Public Convenience and Necessity issued under Section 40102 of Title 49 of U.S.C.; |   | | | | | --- | --- | --- | |   | (f) | **Air Traffic Control**: a letter from Lessee addressed to each relevant air traffic control authority pursuant to which Lessee authorizes the addressee to issue to GECAS, upon GECAS’s request from time to time, a statement of account of all sums due by Lessee to the authority in respect of all aircraft (including, without limitation, the Aircraft) operated by Lessee; |   | | | | | --- | --- | --- | |   | (g) | **Letter of Credit** (if applicable): the Letter of Credit; |   | | | | | --- | --- | --- | |   | (h) | **UCC:** Financing Statements with respect to the Lease and the Aircraft in a form reasonably acceptable to Lessor duly delivered by Lessee and duly filed in the State of Incorporation; |

1984

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| | | | | --- | --- | --- | |   | (i) | **Acknowledgement and Agreement re Assignment** (if applicable): an acknowledgement of and certain agreements with respect to the assignment by Lessor of the Lease to Owner and Financing Parties’ Representative, such |   3-1

1985

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| | | | | --- | --- | --- | |   |    | acknowledgment to be in form and substance reasonably acceptable to Lessor and Lessee, but in any event in conformity with the respective rights and obligations of Lessee and Lessor set forth in the Lease with respect to a Security Assignment; |   | | | | | --- | --- | --- | |   | (j) | **Payments:** all sums due to Lessor under the Lease on or before the Delivery Date including the first payment of Rent and, if applicable, the balance of the Deposit; |   | | | | | --- | --- | --- | |   | (k) | **Insurance**: certificates of insurance, an opinion and undertaking from Lessee’s insurance broker in a form that evidences due compliance with the provisions of the Lease as to Insurance with effect on and after the Delivery Date; |   | | | | | --- | --- | --- | |   | (l) | **FAA Opinion**: evidence that there will be issued an opinion of counsel reasonably acceptable to Lessor who are recognized specialists with regard to FAA registration matters in a form reasonably acceptable to Lessor as to the due filing for recordation of the Lease and, if applicable, the Financing Documents (the costs for which shall be paid by Lessee, except that any incremental cost incurred in connection with filing any Financing Document or rendering any opinion related to the Financing Documents shall be paid by Lessor); |   | | | | | --- | --- | --- | |   | (m) | [Intentionally Omitted] |

1986

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| | | | | --- | --- | --- | |   | (n) | **Certificate of Acceptance and Lease Supplement No. 1:** each of Lease Supplement No. 1 and the Certificate of Acceptance, dated and fully completed, and executed by Lessor and Lessee and in the case of Lease Supplement No. 1, filed for recording at the FAA together with the Lease; and |   | | | | | --- | --- | --- | |   | (o) | **General**: such other documents as Lessor may reasonably request. |   | | | | --- | --- | | 2. | **Additional Conditions Precedent to be Satisfied by Lessee** |   Lessee shall comply with the following additional conditions precedent:   | | | | | --- | --- | --- | |   | (a) | **Representations/Warranties**: the representations and warranties of Lessee in Schedule 2 shall be correct in all material respects, and would be correct in all material respects if repeated on Delivery; and |   | | | | | --- | --- | --- | |   | (b) | **No Default**: no Default shall have occurred and be continuing on Delivery or would result from the leasing at Delivery of the Aircraft to Lessee under the Lease. |   **Part B – Lessee Conditions Precedent**

1987

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**Part B – Lessee Conditions Precedent**   On or before the Scheduled Delivery Date, Lessor shall comply with the Conditions Precedent set out below by ensuring that Lessee receives the following documents and by taking the actions described below, in each case in a manner reasonably satisfactory to Lessee. All documents delivered to Lessor pursuant to this Schedule 3 will be in English:   | | | | | --- | --- | --- | |   | (a) | **Final Documents**: Lessee shall receive on or before the Delivery Date for the Aircraft each of the following: |   3-2

1988

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| | | | | --- | --- | --- | |   | (i) | **Lease Supplement No. 1:** Lease Supplement No. 1, dated and executed by Lessor and filed for recording at the FAA (together with the Lease); and |   | | | | | --- | --- | --- | |   | (ii) | **Acknowledgement re Quiet Enjoyment**: if Lessee is required to deliver an acknowledgement of or agreement with respect to the assignment by Lessor of the Lease to Owner or Financing Parties’ Representative, an agreement by each such Person (Owner, Financing Parties’ Representative or both, as the case may be) as to itself to the effect set forth in Section 7.1; |   | | | | | --- | --- | --- | |   | (b) | **Representations/Warranties**: the representations and warranties of Lessor in Schedule 2 shall be true and correct in all material respects, and would be true and correct in all material respects if repeated on Delivery; |   | | | | | --- | --- | --- | |   | (c) | **Opinion:** an original, signed opinion substantially in the form of Schedule 8-B will be issued on the Delivery Date by Lessor’s legal counsel with respect to the Laws of the State of New York and Lessor’s jurisdiction of organization; |   | | | | | --- | --- | --- | |   | (d) | **Delivery Condition Requirements**: tender by Lessor of delivery of the Aircraft when required by the Lease and in compliance with the Delivery Condition Requirements; |

1989

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| | | | | --- | --- | --- | |   | (e) | **FAA Opinion**: evidence that there will be issued an opinion of counsel reasonably acceptable to Lessee who are recognized specialists with regard to FAA registration matters in a form reasonably acceptable to Lessee as to the due filing for recordation of the Lease; and |   | | | | | --- | --- | --- | |   | (f) | **Sales Tax Exemption Certificate**: Lessor shall deliver to Lessee on or before the Delivery Date for the Aircraft a completed and signed Resale Certificate on Washington State Department of Revenue Form REV 27 (or applicable successor form) unless Lessor is not entitled to sign and deliver such form as a result of a change in Law occurring after the date of execution of the Lease. |   3-3

1990

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**SCHEDULE 4** **PRE-DELIVERY PROCEDURES AND DELIVERY CONDITION REQUIREMENTS**   **(NEW AIRCRAFT)**   | | | | --- | --- | | 1. | **Licenses** |   | | | | | --- | --- | --- | |   | (a) | It is the responsibility of Lessee to obtain all licenses, permits or approvals necessary to export or transport the Aircraft from the Delivery Location. |   | | | | | --- | --- | --- | |   | (b) | Lessor will provide Lessee with any required data and information relating to the Aircraft or Lessor as are available to Lessor for the purposes of obtaining any such licenses, permits or approvals. |   | | | | --- | --- | | 2. | **Inspection** |   Except as otherwise provided in the Aircraft Lease Agreement:   | | | | | --- | --- | --- | |   | (a) | Subject to any applicable purchase agreement, Lessee shall inspect the Aircraft (including such rights as Lessor has to be present and inspect, on an ongoing basis, the manufacture of the Aircraft and including a demonstration flight which shall be undertaken for the benefit of Lessee at no expense to Lessee with up to four (4) representatives of Lessee on the Aircraft as observers) to determine whether the Aircraft fulfills the Delivery Condition Requirements. |

1991

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| | | | | --- | --- | --- | |   | (b) | If Lessee’s inspection of the Aircraft shows that the Aircraft does not fulfill the Delivery Condition Requirements, Lessor, at its cost and expense, will correct any Defects and make the Aircraft available for re-inspection by Lessee provided that, in Lessor’s reasonable and good faith opinion, it is not commercially impracticable or prohibitively expensive to correct the Defect. |   | | | | | --- | --- | --- | |   | (c) | If Lessor notifies Lessee that it does not intend to correct the Defect, either party may terminate the Lease. |   If the Aircraft has been purchased from Lessee (or a Lessee Affiliate) by Owner and immediately leased back by Lessor to Lessee, then in respect of the leasing of the Aircraft (i) the provisions of this Section 2 shall not apply, (ii) Section 5.7(c)(iv) of the CTA shall be deleted in its entirety and replaced with the following: “(iv) a Tax imposed with respect to the period, or an event occurring, after the expiration or termination of the Lease (other than a termination by exercise of remedies in accordance with Section 13.2 after the occurrence of an Event of Default), the return or purchase of the Aircraft by Lessee and the payment by Lessee of all amounts payable by it under the Lease, except, in any case, to the extent such Tax arises from an event occurring or circumstance existing during the Term or is otherwise imposed with respect to the Term”, and (iii) Section 10.1(c)(iv) of the CTA shall be deleted in its entirety and replaced with the following: “[Intentionally Omitted]”.

1992

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| | | | --- | --- | | 3. | **Indemnity** |   Lessee is responsible for and will indemnify each Indemnitee against all Losses arising from death or injury to any observer, representative or any employee of Lessee in connection with the Lessee’s inspection of the Aircraft whether or not such Losses arise out of or are attributable to any act or omission, negligent or otherwise, of any Indemnitee, except to the extent arising from the gross negligence or willful misconduct of any Indemnitee.   4-1

1993

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**SCHEDULE 5** **CERTIFICATE OF ACCEPTANCE**   **(NEW AIRCRAFT)**   This Certificate of Acceptance is delivered on the date set out below by              (“Lessee”) to              (“Lessor”) pursuant to the Aircraft Lease Agreement dated              between Lessor and Lessee (the “Lease”). The capitalized terms used in this Certificate shall have the meaning given to such terms in the Lease unless otherwise indicated.   **DETAILS OF ACCEPTANCE**   Lessee hereby confirms to Lessor that Lessee has at [    ] o’clock on this              day of             , at              , technically accepted the following, in accordance with the provisions of the Lease:                Aircraft, Manufacturer’s Serial Number             ;                Engines:   | | | | --- | --- | | Engine Number | Manufacturer’s Serial Number |   1              ; and   2              ;   Fuel Status: Kilos/lbs              ; and   APU: Manufacturer’s Serial Number                 .   Loose Equipment Check List: in accordance with the list signed by Lessor and Lessee and attached hereto.   Aircraft Documents and Records: in accordance with the list signed by Lessor and Lessee and attached hereto.   LOPA drawing attached.   HOURS AND CYCLES DATA (as of Delivery Date)   Airframe:   Time Since New:                                 Cycles Since New:   Landing Gear (Main and Nose)

1994

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Time Since New:                                 Cycles Since New:   Landing Gear (Main and Nose)   Time Since New:                                 Cycles Since New:   5-1

1995

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| | | | --- | --- | | | | | Engines |    |   | | | | | Position Left Hand s/no. |    | Time Since New: | | | | |   |    | Cycles Since New: | | | | | Position Right Hand s/no. |    | Time Since New: | | | | |   |    | Cycles Since New: | | | | | Auxiliary Power Unit: |    |   | | | | | Number of Flight Hours/APU Hours |    |   | | | | | (as applicable) since New: |    |   |   5-2 --- **ACCEPTANCE:**   Lessee hereby confirms that the Aircraft, Engines, Parts and Aircraft Documents and Records are technically acceptable to it, satisfy all of the Delivery Condition Requirements and are in the condition for delivery and acceptance as required under the Lease. [Insert if applicable: Notwithstanding the foregoing, Lessor agrees that following Delivery, it shall perform each of the undertakings set forth on Schedule1 hereto.]   **IN WITNESS WHEREOF**, Lessee and Lessor have, by their duly authorized representative, executed this Certificate of Acceptance on the date in paragraph 1 above.   | | | | | --- | --- | --- | | **LESSEE:** |   |   --- | | By: |   |   --- | | Title: |   |   --- |   | | | | | --- | --- | --- | | **LESSOR:** |   |   --- | | By: |   |   --- | | Title: |   |

1996

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| | By: |   |   --- | | Title: |   |   --- |     5-3

1997

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**SCHEDULE 6** **PROCEDURES AND OPERATING CONDITION AT REDELIVERY**   On the Return Occasion the Aircraft, subject to ordinary wear and tear of a kind and to an extent consistent with similar aircraft engaged in commercial airline operations, will be redelivered to Lessor by Lessee in accordance with the procedures and in any event in the condition set out below. For the avoidance of doubt, any damage assessment and/or rectification criteria used in assessing the redelivery condition shall be as prescribed in the Manufacturer’s maintenance manual and/or the Manufacturer’s structural repair manual (“SRM”), as appropriate. Any damage outside the scope of the SRM shall require FAA 8110-3 certification or the equivalent certification by the civil aviation authority by the State of Design.   | | | | --- | --- | | **1.1** | **FINAL INSPECTION** |   Immediately prior to the Return Occasion, Lessee will make the Aircraft available to Lessor and Owner for inspection (“Final Inspection”) in order to verify that the condition of the Aircraft complies with the Lease. The Final Inspection will include, and be long enough to permit Lessor to:   | | | | | --- | --- | --- | |   | (a) | inspect the Aircraft Documents and Records; |   | | | | | --- | --- | --- | |   | (b) | inspect the Aircraft (including an examination of such compartments and bays, which are then open in connection with any structural check or the Redelivery Check being performed by Lessee prior to return) uninstalled Parts and the APU (including a complete video borescope inspection of the APU); |

1998

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| | | | | --- | --- | --- | |   | (c) | inspect the Engines, including (i) a complete video borescope inspection of (A) the low pressure and high pressure compressors and (B) turbine area (including combustors) and (ii) engine condition runs (including full take-off power engine run-up performed in accordance with the performance test in the Manufacturer’s maintenance manual, and the Engines shall not exceed corrected limits for all parameters using temperature corrected charts), and power assurance runs; and |   | | | | | --- | --- | --- | |   | (d) | observe a two hour demonstration flight at Lessee’s cost (with up to two (2) Lessor’s and Owner’s representatives as on-board observers). |   Lessor or Owner, as the case may be, is responsible for and will indemnify Lessee against all Losses arising from the death or injury to any observer or any employee of Lessor or Owner, as the case may be, in connection with the inspection of the Aircraft under this Section 1.1.   | | | | --- | --- | | **1.2** | **GENERAL CONDITION** |   The Aircraft will:   | | | | | --- | --- | --- | |   | (a) | be thoroughly cleaned immediately prior to redelivery and will be in the same configuration as at Delivery subject to any post-Delivery modifications, repairs or maintenance to the Aircraft which are permitted or required by the Lease; |

1999