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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

DATED __

INESAIR LIMITED AS LESSOR

AND

INAER AVIATION SPAIN AS LESSEE

LEASE AGREEMENT RELATING TO ONE (1) AW109SP "GRANDNEW" HELICOPTER BEARING MANUFACTURER'S SERIAL NUMBER 22248 AND ITALIAN REGISTRATION MARK I-LCCO

Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

CONTENTS Clause 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. Page Interpretation and Definitions ........................................................................................ 1 Representations and Warranties ..................................................................................... 1 Conditions Precedent ..................................................................................................... 3 Term of Lease ................................................................................................................ 6 Commencement ............................................................................................................. 7 Lease Payments .............................................................................................................. 9 Payments ...................................................................... Error! Bookmark not defined. Lessor's Covenants ....................................................................................................... 10 Lessee's Covenants ...................................................................................................... 10 Sub-Leasing and Wet Leasing ..................................................................................... 17 Liens ............................................................................................................................. 21 Maintenance and Repair .............................................................................................. 21 Interchange and Replacement of Engines and Parts .................................................... 22 Technical Records ........................................................................................................ 26 Indemnity ..................................................................... Error! Bookmark not defined. Insurance ...................................................................................................................... 27 Loss and Damage ......................................................................................................... 28 Requisition ................................................................... Error! Bookmark not defined. Redelivery .................................................................................................................... 28 Events of Default; Termination Events........................................................................ 29 Lessor's Rights following an Event of Default ............................................................ 32 Rights following a Termination Event ......................... Error! Bookmark not defined. Early Repayment and Transfer of Title ....................................................................... 33 Assignment and Transfer ............................................. Error! Bookmark not defined. Miscellaneous Provisions............................................. Error! Bookmark not defined. Notices ......................................................................... Error! Bookmark not defined. Law and Jurisdiction .................................................................................................... 33

Schedule 1 Description of The Aircraft ................................................................................... 34 Schedule 2 Acceptance Certificate .......................................................................................... 35 Schedule 3 Insurance Requirements ........................................ Error! Bookmark not defined. Schedule 4 Form of Report ...................................................... Error! Bookmark not defined. Schedule 5 Form of Irrecovable Power of Attorney ................ Error! Bookmark not defined. Schedule 6 Return Condition ................................................................................................... 37

Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

Schedule 7 Financial Covenants .............................................. Error! Bookmark not defined. Schedule 8 Form of Permitted Sub-Lease Agreement ............................................................. 41 Schedule 9 Form of Subordination Letter ................................ Error! Bookmark not defined. Schedule 10 Form of Air Traffic Control Letter ...................... Error! Bookmark not defined.

Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

THIS LEASE AGREEMENT (this "Agreement" or "Lease Agreement") is made on __ BETWEEN: (1) INESAIR LTD., a company duly incorporated and validly existing under the laws of Malta with its registered office at 85, St. John's Street, Valletta VLT 1165, Malta (the "Lessor"); and INAER AVIATION SPAI, a company duly incorporated and validly existing under the laws of Spain with its registered office at Aerdromo Mutxamel, Partida La Alamaina, 92, 03110, Mutxamel (Alicante), Spain (the "Lessee").

(2)

IT IS AGREED as follows: 1. INTERPRETATION AND DEFINITIONS [omisis] 1.1 Lessee Documents For the purposes of this Agreement and each other Transaction Document, each of the parties hereto agrees that each Transaction Document to which the Lessee is a party is a "Lessee Document" and the Lessee's obligations shall be and be construed accordingly thereunder. 1.2 Lessor Documents For the purposes of this Agreement and each other Transaction Document, each of the parties hereto agrees that each Transaction Document to which the Lessor is party is a "Lessor Document" and the Lessor's obligations shall be and be construed accordingly thereunder. 1.3 Title Where any reference is made in this Agreement to the Aircraft, the Airframe, any Engine or any Part being the property of the Lessor or to title to the Aircraft, the Airframe, any Engine or any Part vesting in the Lessor or remaining with the Lessor, the parties hereto acknowledge and agree that such reference shall also include a reference to the fact that the Aircraft, Airframe, Engine or Part is the property of the Lessor subject to the Aircraft Mortgage or, as the context may require, to title to the Aircraft, Airframe, Engine or Part vesting in the Lessor or remaining with the Lessor subject to the Aircraft Mortgage. 2. 2.1 REPRESENTATIONS AND WARRANTIES Lessee's Representations and Warranties The Lessee represents and warrants to the Lessor that as at the date hereof:
2.1.1 2.1.2

Status: [omisis]; Power and authority: [omisis];

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Sample Aircraft Lease Agreement Legal validity: [omisis]; Non-conflict: [omisis]; Authorisation: [omisis]; No Immunity: [omisis]; Registrations: [omisis]; Pari Passu: [omisis]; Taxes: [omisis]; Accounts: [omisis];

FOR ILLUSTRATION PURPOSES ONLY

2.1.3 2.1.4 2.1.5 2.1.6 2.1.7 2.1.8 2.1.9 2.1.10 2.1.11 2.1.12 2.1.13 2.1.14 2.1.15 2.1.16

Material Adverse Change: [omisis]; Charges: [omisis]; Litigation: [omisis]; No Default: [omisis]; Full Disclosure: [omisis]; Governing Law and Judgments: in any proceedings taken in the State of Incorporation in relation to the Lessee Documents, the choice of English, Spanish, Italian or Maltese law (as the case may be) as the governing law of any such documents, and any judgment obtained in England, Spain, Italy or Malta (as the case may be), will be recognised and enforced; No Winding-up: [omisis]; Security: [omisis]; No Prohibited Payment: [omisis]; No Prohibited Payment Judgment: [omisis]; No Illicit Origin: [omisis]; [omisis]; Purchase Agreement: [omisis];

2.1.17 2.1.18 2.1.19 2.1.20 2.1.21 2.1.22 2.1.23

2.2

Repetition [omisis]

2.3

Lessor's Representations and Warranties The Lessor represents and warrants to the Lessee that as at the date hereof:

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Sample Aircraft Lease Agreement Status: [omisis]; Power and authority: [omisis]; No Immunity: [omisis]; Litigation: [omisis]; No Winding-up: [omisis]; Legal validity

FOR ILLUSTRATION PURPOSES ONLY

2.3.1 2.3.2 2.3.3 2.3.4 2.3.5 2.3.6

2.4

Repetition [omisis]

3. 3.1

CONDITIONS PRECEDENT Lessor's Conditions Precedent The Lessor's obligation to lease the Aircraft to the Lessee under this Agreement is subject to satisfaction of each of the following conditions in respect of the Aircraft:
3.1.1

receipt by the Lessor from the Lessee on or before the Delivery Date of the following, each in form and substance reasonably satisfactory to the Lessor: (a) (b) Constitutional Documents: [omisis]; Power of Attorney: a copy certified by the relevant directors to be a true copy and in full force and effect on the date of this Agreement of a notarial deed (escritura pblica) of power of attorney by granted by the relevant managing body and authorising the execution of the Lessee Documents and the doing of any other acts or things that may be necessary or desirable in connection with the Lessee Documents; Certificates: a certificate executed by a duly authorised officer of the Lessee and/or Permitted Sub-Lessee, if applicable with respect to the air operator's certificate and airline operation licence, dated on the Delivery Date (A) setting out a specimen of each signature of the authorised person or persons referred to in Clause 3.1.1(b) above; (B) certifying that each copy of each document specified in Clause 3.1.1(a), (b), (e) (but with respect to the air operator's certificate and airline operation licence only) and (n) is correct, complete and in full force and effect; (C) certifying that the Lessee's representations and warranties in Clause 2.1 (Lessee's Representations and Warranties) are true and correct on such Delivery Date as if given on such date; and (D) certifying that the undertakings and covenants on the part of the Lessee set out in Error! Reference source not found. (Financial Covenants) have been satisfied; Opinions: opinions issued by: (a) legal counsel acceptable to the Lessor in the State of Registration in relation to (amongst other things)

(c)

(d)

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

due execution by the Lessee of the Lessee Documents and as to all required filings (if applicable) under the Cape Town Agreements, including recordation and registration of the Lease, as applicable and the perfection of any security interest therein and over the Aircraft, and as to such matters as may reasonably be requested by the Lessor; (b) legal counsel acceptable to Lessor in respect of the lex situs of the Aircraft at Delivery; (c) legal counsel acceptable to Lessor in England in relation to (amongst other things) the security arrangements in respect of the Aircraft; and (d) by in-house legal counsel to the Manufacturer; (e) Licences: copies certified by one of its officers to be a true copy of the Lessee's or Permitted Sub-Lessee, as applicable, air operator's certificate and airline operation licence and any other licences, certificates and permits required by the Lessee or the Permitted SubLessee, as applicable, in relation to, or in connection with, the operation of the Aircraft; Process Agent: a letter from the process agent appointed by the Lessee in respect of this Agreement and the other Lessee Documents accepting that appointment; Deregistration Power: an original of the executed and notarised Irrevocable Power of Attorney; Acceptance Certificate: the Acceptance Certificate, dated and fully completed, and executed by the Lessor and the Lessee; Lessee Documents: each Lessee Document not otherwise dealt with in this Clause 3.1 executed and delivered by the Lessee with evidence satisfactory to the Lessor that originals will follow as soon as reasonably practicable; Insurance: (a) certificates of insurance (and, if required by Clause Error! Reference source not found. (Brokers and Insurers), reinsurance) and (b) an undertaking from the insurance broker (and reinsurance broker), each in accordance with Clause 14 (Insurance) and Error! Reference source not found. (Insurance Requirements); Accounts: [omisis]; Formalities, Consents and Approvals: evidence that any required import licence, and all customs formalities, relating to the importation of the Aircraft into Italy as contemplated by this Agreement, have been obtained or complied with, and that such importation is exempt from Taxes or, if subject to any Taxes, that the same have been duly paid (or will be paid once they have become due and payable); General: such other documents as the Lessor and/or the Security Trustee may reasonably request upon giving the Lessee reasonable notice.

(f)

(g) (h) (i)

(j)

(k) (l)

(m)

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

3.1.2

receipt by the Lessor of all sums due to the Lessor under this Agreement or any other Lessee Document then in effect on or before the Delivery Date, including, without limitation, Initial Rent; evidence 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 this Agreement and the other Lessee Documents and to protect the rights and interests of the Lessor in the Aircraft; the representations and warranties of the Lessee under Clause 2.1 (Lessee's Representations and Warranties) shall be correct as at such Delivery Date, by reference to facts and circumstances existing on such Delivery Date; no Relevant Event shall have occurred and be continuing from the leasing of the Aircraft to the Lessee under this Agreement; no Total Loss (and no event or circumstance which, with the passing of time, the giving of notice or the making of any determination could be a Total Loss) has occurred; evidence that all Taxes (if any) due and payable in respect of the Aircraft have been paid; evidence that the Spain-Malta Tax Treaty is in full force and effect insofar as it relates to payments pursuant to the Transaction Documents; evidence that all "know your customer" obligations have been met, including, inter alia, the assignment of the Italian Tax Code; [omisis]; and receipt by the Lessor of the Eurocontrol Letter and the Air Traffic Control Letter, in each case, executed by the Lessee.

3.1.3

3.1.4

3.1.5

3.1.6

3.1.7

3.1.8

3.1.9

3.1.10 3.1.11

3.2

Conditions Subsequent The Lessee shall satisfy the following conditions subsequent within the time periods specified herein, and failure to do so will constitute an Event of Default:
3.2.1

Cape Town Registrations: registration within one (1) Business Day of the international interest which is contemplated by Clause 16.11.2 of the DAPP; Lease Registration: registration of this Agreement and any Permitted SubLease Agreement within one (1) Business Day from the Delivery Date, under the aircraft registry of the Aviation Authority, in the State of Registration; Maintenance: providing to the Agent, within eight (8) Business Days from the Delivery Date a copy of the Approved Maintenance Programme; Certificate of Registration: obtaining, within two (2) Business Days from the Delivery Date, the certificate of registration in relation to the Aircraft with the Aviation Authority; and

3.2.2

3.2.3

3.2.4

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

3.2.5

Certificate of Airworthiness: obtaining, within ten (10) Business Days from the Delivery Date, the certificate of airworthiness for the Aircraft issued by the Aviation Authority.

3.3

Waiver [omisis]

4. 4.1

TERM OF LEASE Lease Period The Lessor hereby agrees to lease the Aircraft to the Lessee and the Lessee hereby agrees to take on lease the Aircraft from the Lessor in accordance with this Agreement with effect from the commencement of and for the duration of the Lease Period.

4.2

Expiry Date The Expiry Date in relation to the Aircraft shall be the final Payment Date specified in Annex 1 to the Acceptance Certificate (unless otherwise agreed in writing between the Lessor and the Lessee), subject to the following provisions:
4.2.1

if the Lessor, acting in accordance with the provisions of this Agreement, terminates the leasing of an Aircraft, the date of such termination shall be the Expiry Date, and Clause 18 (Lessor's Rights Following an Event of Default) or Clause Error! Reference source not found. (Rights following a Termination Event) as appropriate shall apply; or if the Aircraft or the Airframe suffers an Event of Loss, the Expiry Date shall be the date when the party designated as loss payee in respect of the Insurances receives the Agreed Value together with any other amounts related to the Aircraft then due and unpaid under this Agreement and the other Lessee Documents.

4.2.2

4.3

Risk
4.3.1

Throughout the Lease Period and until redelivery of the Aircraft in accordance with Clause 16 (Redelivery), the Lessee shall bear all risks of loss, theft, damage and destruction of or to the Aircraft and every Part or part thereof from any cause whatsoever. If the Aircraft is lost, confiscated, damaged, destroyed or otherwise rendered unfit and unavailable for use, the Lessor shall not be liable to repair the same or supply any equipment in substitution therefor.

4.3.2

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Sample Aircraft Lease Agreement 5. 5.1 COMMENCEMENT Acceptance and Delivery

FOR ILLUSTRATION PURPOSES ONLY

The Lessee will give to the Lessor five (5) Business Days notice of the expected delivery date for the Aircraft. Upon the execution and delivery of the Acceptance Certificate, the Lease Period shall be deemed to have commenced. 5.2 Lease Acceptance Certificate The Lessee will evidence its acceptance of the Aircraft hereunder by execution and delivery to the Lessor of a duly completed Acceptance Certificate (with a copy to the Agent and the Security Trustee) which shall be conclusive proof that the Lessee has accepted the Aircraft for lease under this Agreement and that the Lessee's technical experts have examined and investigated the Aircraft and each part thereof and that the Aircraft and each part thereof is airworthy and in good working order and repair and in every way satisfactory to the Lessee. The Lessor shall acknowledge the Lessee's acceptance of the Aircraft by countersigning the Acceptance Certificate. The Lessee shall execute the Acceptance Certificate and accept delivery of the Aircraft in the Delivery Location. 5.3 Delayed Delivery If owing to:
5.3.1

the Manufacturer delaying in the delivery of, or failing to deliver, the Aircraft to the Lessor under the Purchase Agreement and the applicable Purchase Agreement Assignment for any reason and whether or not in circumstances entitling the Manufacturer to terminate the Purchase Agreement (as assigned pursuant to the applicable Purchase Agreement Assignment) in respect of the Aircraft, or entitling the Lessee to terminate this Agreement; or the Purchase Agreement (as assigned pursuant to the applicable Purchase Agreement Assignment) terminating before delivery of the Aircraft,

5.3.2

delivery of the Aircraft is delayed beyond the Scheduled Delivery Date or such later date as may be agreed by the Lessor and the Lessee then the Lessor will not be responsible for any losses, including loss of profit, costs or expenses arising from or in connection with the delay or failure suffered or incurred by the Lessee or any other person; and, in the case of termination of the the Purchase Agreement (as assigned pursuant to the applicable Purchase Agreement Assignment) the Lessor will be entitled to terminate this Agreement. 5.4 Consequences of Delayed Delivery If the Aircraft or is not delivered on the Scheduled Delivery Date then the Lessor and the Lessee may agree a revised scheduled delivery date which, in any event, shall be no later than the Commitment Termination Date, or such later date as may be agreed by the Lessor, the Lessee and the Security Trustee.

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Sample Aircraft Lease Agreement 5.5 Lessee Acknowledgements


5.5.1

FOR ILLUSTRATION PURPOSES ONLY

THE LESSEE ACKNOWLEDGES THAT THE AIRCRAFT ARE SATISFACTORY TO THE LESSEE IN ALL RESPECTS AND THAT THE CONDITION OF THE AIRCRAFT AT DELIVERY IS THE SOLE RESPONSIBILITY OF THE LESSEE AND THAT THE LESSEE'S EXECUTION AND DELIVERY OF THE ACCEPTANCE CERTIFICATE IN RELATION TO THE AIRCRAFT SHALL BE IRREVOCABLE, FINAL AND CONCLUSIVE PROOF THEREOF PROVIDED THAT THIS ACKNOWLEDGMENT IS WITHOUT PREJUDICE TO ANY RIGHTS WHICH THE LESSEE MAY HAVE AGAINST THE MANUFACTURER IN RESPECT OF ANY DEFECTS OR ITEMS OF NON CONFORMITY. THE LESSEE FURTHER ACKNOWLEDGES THAT THE AIRCRAFT SHALL BE IN AN "AS IS WHERE IS" CONDITION ON DELIVERY TO THE LESSEE AND THAT THE SPECIFICATIONS SET OUT IN Schedule 1 (DESCRIPTION OF THE AIRCRAFT) ARE FOR THE PURPOSES OF IDENTIFICATION ONLY. ACCORDINGLY, ONCE TITLE TO THE AIRCRAFT HAS BEEN TRANSFERRED TO THE LESSOR BY THE MANUFACTURER UNDER THE PURCHASE AGREEMENT (AS ASSIGNED BY THE PURCHASE AGREEMENT ASSIGNMENT) AND THE AIRCRAFT HAS BEEN ACCEPTED BY THE LESSOR, THE LESSEE SHALL NOT BE ENTITLED, FOR ANY REASON WHATSOEVER TO REFUSE EITHER TO ACCEPT DELIVERY PURSUANT TO CLAUSE 5.1 (ACCEPTANCE AND DELIVERY) OR TO EXECUTE AND/OR DELIVER THE ACCEPTANCE CERTIFICATE PURSUANT TO CLAUSE 5.2 (LEASE ACCEPTANCE CERTIFICATE) AND THE LESSOR AND THE FINANCE PARTIES SHALL NOT BE LIABLE TO ANY PERSON FOR ANY LOSS (WHETHER LOSS OF PROFIT OR OTHERWISE) RESULTING, DIRECTLY OR INDIRECTLY, FROM ANY DEFECT IN THE AIRCRAFT OR FROM ANY DELAY IN DELIVERY. THE LESSEE FURTHER ACKNOWLEDGES AND CONFIRMS THAT THE LESSOR AND THE FINANCE PARTIES ARE NOT THE MANUFACTURER OF THE AIRCRAFT AND THAT SAVE AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR ANY OTHER LESSEE DOCUMENT, NO CONDITION, WARRANTY, REPRESENTATION OR GUARANTEE WHATSOEVER, EXPRESS OR IMPLIED, IS OR HAS BEEN GIVEN OR SHALL BE DEEMED TO HAVE BEEN MADE BY, OR ON BEHALF OF, THE LESSOR OR THE FINANCE PARTIES IN RESPECT OF THE AIRCRAFT AND THAT THE LESSEE IN ENTERING INTO THIS AGREEMENT, HAS RELIED ON ITS INDEPENDENT INSPECTION AND ADVICE AND NOT ON ANY CONDITION, WARRANTY, REPRESENTATION OR GUARANTEE BY OR ON BEHALF OF THE LESSOR OR THE FINANCE PARTIES, EXPRESS OR IMPLIED, WHETHER ARISING BY LAW OR OTHERWISE, IN RELATION TO THE AIRCRAFT INCLUDING, WITHOUT LIMITATION, CONDITIONS, WARRANTIES, REPRESENTATIONS OR GUARANTEES AS TO ITS DESCRIPTION,

5.5.2

5.5.3

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

SERVICEABILITY, SATISFACTORY QUALITY, FITNESS FOR PURPOSE, VALUE, CONDITION, DESIGN, DURABILITY, SUITABILITY, PERFORMANCE OR OPERATION OR CONDITIONS, WARRANTIES, REPRESENTATIONS OR GUARANTEES ARISING OUT OF CUSTOMARY TRADE USAGE OR PRIOR COURSE OF DEALING AND WHETHER ARISING IN CONTRACT, OR TORT AND THE BENEFIT OF ANY SUCH CONDITIONS, WARRANTIES, REPRESENTATIONS OR GUARANTEES AND ANY CLAIMS OR ACTIONS IT MIGHT HAVE BUT FOR THIS CLAUSE 5.5 AGAINST THE LESSOR OR THE FINANCE PARTIES IN RELATION TO ANY OF THE MATTERS REFERRED TO HEREIN IS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVED BY THE LESSEE; PROVIDED THAT NOTHING IN THIS CLAUSE 5.5 SHALL CONSTITUTE A WAIVER BY THE LESSEE OF ANY RIGHT TO MAKE A CLAIM FOR DAMAGES OR OTHERWISE AGAINST THE MANUFACTURER OR ANY OTHER PERSON PURSUANT TO THE PURCHASE AGREEMENT OR THE WARRANTY AGREEMENTS.
5.5.4

THE LESSOR AND THE FINANCE PARTIES MAKE NO REPRESENTATION AS TO WHETHER THE AIRCRAFT, THE AIRFRAME, ANY ENGINE OR ANY PART COMPLIES WITH OR IS CAPABLE OF BEING MODIFIED SO AS TO COMPLY WITH ANY PRESENT OR FUTURE ENVIRONMENTAL RESTRICTIONS OR REQUIREMENTS IMPOSED BY ANY GOVERNMENT ENTITY OR AVIATION AUTHORITY INCLUDING, BUT WITHOUT LIMITATION, RESTRICTIONS OR REQUIREMENTS IN RELATION TO NOISE AND EMISSIONS. THE LESSEE ACKNOWLEDGES AND AGREES THAT THIS CLAUSE 5.5 HAS BEEN THE SUBJECT OF DISCUSSION AND NEGOTIATION AND IS FULLY UNDERSTOOD BY IT AND THAT THE LEASE PAYMENTS AND THE OTHER PAYMENTS AND ITS AGREEMENTS HEREIN WERE ARRIVED AT HAVING TAKEN INTO CONSIDERATION THE ACKNOWLEDGEMENTS, AGREEMENTS AND WAIVERS BY THE LESSEE SET FORTH IN THIS CLAUSE 5.5.

5.5.5

6. 6.1

LEASE PAYMENTS Payment of Lease Payments


6.1.1

The Lessee shall, on each Payment Date, make a Lease Payment to the Lessor. Each Lease Payment shall be in an amount equal to the Basic Rent due on such Payment Date.

[omisis]

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Sample Aircraft Lease Agreement 7. 7.1 LESSOR'S COVENANTS Quiet Enjoyment

FOR ILLUSTRATION PURPOSES ONLY

For so long as no Lease Termination Event has occurred and is continuing, the Lessor agrees it shall not disturb or interfere with the quiet use, possession and enjoyment of the Aircraft by the Lessee or Permitted Sub-Lessee, as applicable. The exercise by the Lessor of its rights in accordance with this Agreement will not constitute such an interference. 7.2 Assistance to the Lessee The Lessor will, at the request, cost and expense of the Lessee (and subject to the prior written consent of the Security Trustee), take such steps as may be necessary or desirable and, in either case, reasonably required by the Lessee:
7.2.1

in connection with the preservation of (if such is possible) such title as may have been passed to the Lessor in respect of the Aircraft under, inter alia, the Purchase Agreement (as assigned pursuant to the applicable Purchase Agreement Assignment); and in assisting the Lessee to comply with the requirements of Clauses 8.5.2(a) and 8.5.2(b),

7.2.2

save that the Lessee agrees that, where it is possible for the Lessee to do so, the Lessee will discharge or procure the discharge of the Lessor's obligations under this Clause 7.2 on the Lessor's behalf, for which purpose the Lessor agrees, at the cost and request of the Lessee, to do such things and to take such steps as may be necessary or desirable and, in either case, reasonably required by the Lessee or any Permitted SubLessee to enable the Lessee or any Permitted Sub-Lessee to perform such obligation (in each case subject to the prior written consent of the Security Trustee). The Lessor and the Lessee each agree to inform the other forthwith if it shall come to the knowledge of the relevant party that the Lessor's title in the Aircraft is or will be prejudiced or imperilled. 8. 8.1 LESSEE'S COVENANTS Duration The Lessee shall perform and comply with its undertakings and covenants in this Agreement at all times during the Lease Period and up to and including the Compliance Date. All such undertakings and covenants shall, except where expressly otherwise stated, be performed at the expense of the Lessee. 8.2 Information The Lessee shall:
8.2.1

upon becoming aware of the occurrence of any Relevant Event or Total Loss, notify the Security Trustee, the Finance Parties and the Lessor and provide the Security Trustee, the Finance Parties and the Lessor with full details of any

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

steps which the Lessee is taking or proposes to take, in order to remedy or mitigate the effect of such Relevant Event;
8.2.2

furnish to the Security Trustee, the Finance Parties and the Lessor: (a) as soon as available, but not in any event later than one hundred and twenty (120) days after the last day of each financial year of the Lessee, its audited cash flow statement, its consolidated audited balance sheet as of such day and its audited profit and loss statement and income statement for the financial year ending on such day, in each case prepared in accordance with GAAP of Spain and IFRS; as soon as available, but not in any event later than sixty (60) days after the last day of each of its financial half-years, its unaudited consolidated cash flow statement, its unaudited consolidated balance sheet and profit and loss account and its unaudited consolidated profit and loss statement and income statement for the financial half-year (prepared in accordance with GAAP of Spain and IFRS) together with management reports, if any; and at any other time upon reasonable request of the Lessor or either Agent, such financial statement for such period as the Lessor and/or ether Agent shall require.

(b)

(c)

Such financial statements will fairly and accurately present the financial position of the Lessee as at the end of such financial period and the results of its operations for such financial period and will disclose all material liabilities (contingent or otherwise) of the Lessee;
8.2.3

inform the Security Trustee, the Finance Parties and the Lessor of any Change in Law; provide such financial or other information concerning itself as the Security Trustee, the Finance Parties or the Lessor may from time to time reasonably request (including, without limitation, copies of such (if any) audited or unaudited financial statements as have then been prepared and which have not previously been provided by it to such party); promptly furnish to the Security Trustee, the Finance Parties and the Lessor all information which the Security Trustee, the Finance Parties and the Lessor may from time to time reasonably request (having regard to the frequency and contents of any such requests) regarding the Aircraft, the Airframe, any Engine, any engine installed on any the Airframe, or any Part, and the use, location and condition of the Aircraft, including, without limitation, the hours remaining on the Aircraft and, any Engine until the next scheduled check, inspection, overhaul or shop visit, as the case may be; give the Security Trustee, the Finance Parties and the Lessor at least sixty (60) days' written notice as to the time and location of all Major Checks in relation to the Aircraft;

8.2.4

8.2.5

8.2.6

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

8.2.7

on request, acting reasonably, furnish to the Security Trustee, the Finance Parties and the Lessor evidence satisfactory to the Security Trustee, the Finance Parties and the Lessor that all Taxes and charges incurred by the Lessee and any Permitted Sub-Lessee, as applicable, with respect to the Aircraft, including without limitation, all payments due to the relevant air traffic control authorities and any Air Navigation Charges due and payable in relation to the transaction contemplated by this Agreement and the other Lessee Documents have been paid and discharged in full; at the end of each twelve (12) month period during the Lease Period (the first such twelve (12) month period to commence on the Delivery Date of Aircraft) or any shorter period notified by the Lessor if a Relevant Event has occurred and is continuing, provide to the Security Trustee, the Finance Parties and the Lessor the Report relating to the Aircraft and each Engine in respect of such twelve (12) month period or such shorter period (as applicable); promptly notify the Security Trustee, the Finance Parties and the Lessor of: (a) any loss, theft, damage or destruction to the Aircraft, the Airframe, any Engine or any Part, or any modification to the Aircraft if the potential cost of repair or of such modification would exceed the Damage Notification Threshold; and any claim or other occurrence likely to give rise to a claim under the Insurances in excess of the Damage Notification Threshold and (where the Lessee is able to, having regard to any confidentiality undertakings given by the Lessee to the relevant insurance brokers in the ordinary course of business and in accordance with insurance industry practice) details of any negotiations with the insurance brokers over any such claim;

8.2.8

8.2.9

(b)

8.2.10

promptly notify the Security Trustee, the Finance Parties and the Lessor from time to time of any change in the identity of any insurance broker or reinsurance broker in relation to the Insurances and/or the Reinsurances; furnish to the Security Trustee, the Finance Parties and the Lessor: (a) as promptly as practicable any reorganization process, change of ownership, any changes to the shareholders of the Lessee (as the case may be) and such information as any Lease Indemnitee may reasonably require with regard thereto to ensure the conduct and completion of any "know your customer/KYC" accomplishments, and, without prejudice to the foregoing, details of any change of control in respect of the Lessee; information about any litigation, which might have a material adverse effect on the ability of the Lessee to perform its obligations under this Agreement and the other Transaction Documents;

8.2.11

(b)

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Sample Aircraft Lease Agreement (c)

FOR ILLUSTRATION PURPOSES ONLY

without limiting Clause Error! Reference source not found. (No Disposal Covenant), information about any disposals in excess of ten per cent (10%) of its total fixed assets at the time of the disposal; information and documents dispatched and distributed to its creditors; and such other information and documents regarding the Lessee, its respective business, affairs and financial position (actual and projected) and the Aircraft as the Lessor or Agent or Security Trustee or Finance Parties may from time to time reasonably request.

(d) (e)

8.3

Operation of the Aircraft The Lessee shall and shall procure that any Permitted Sub-Lessee shall:
8.3.1

comply with the law for the time being in force in any country or jurisdiction which may for the time being be applicable to the Aircraft or, so far as concerns the use and operation of the Aircraft, an owner or operator thereof, and take all reasonable steps to ensure that the Aircraft are not used for any illegal purpose; not use the Aircraft in any manner contrary to any recommendation of the manufacturers of the Aircraft, any Engine or any Part or any recommendation or regulation of the Aviation Authority or for any purpose for which the Aircraft are not designed or reasonably suitable; ensure that the crew and engineers employed by the Lessee or any Permitted Sub-Lessee, as applicable, in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licences required by the Aviation Authority and applicable law; use the Aircraft solely in commercial or other operations for which the Lessee or any Permitted Sub-Lessee, as applicable, is duly authorised by the Aviation Authority and applicable law; not use the Aircraft for the carriage of any goods, materials or items of cargo which could reasonably be expected to cause damage to the Aircraft or which would not be adequately covered by the Insurances, or any item or substance whose possession or carriage is illegal under any applicable law; and the Lessee or any Permitted Sub-Lessee, as applicable, shall comply with any carriage regulations or restrictions from time to time issued by IATA; not use the Aircraft for purposes of training, qualifying or re-confirming the status of flight personnel except for the benefit of the Lessee's or any Permitted Sub-Lessee's flight personnel or sub-contractors (provided that any sub-contractor remains at all times under the operational control of the Lessee or any Permitted Sub-Lessee), and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by the Lessee or any Permitted Sub-Lessee;

8.3.2

8.3.3

8.3.4

8.3.5

8.3.6

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

8.3.7

not cause or permit the Aircraft to proceed to, or remain at, any location which is for the time being the subject of a prohibition order (or any similar order or directive) or sanctions or restrictions by: (a) (b) (c) (d) any Government Entity of the State of Registration or the Habitual Base; or any Government Entity of the country in which such location is situated; the United Nations Security Council; or the United States of America or the European Union;

8.3.8

obtain and maintain in full force all certificates, licences, permits and authorisations for the time being required for the use and operation of the Aircraft on the routes from time to time operated by the Lessee or Permitted Sub-Lessee, as applicable (including, without limitation, all necessary licences required in connection with the use and operation of the Aircraft to any jurisdiction (whether domestic or international) prior to commencing operations to such jurisdiction and for the making of payments required by, and the compliance by the Lessee or the Permitted Sub-Lessee with its other obligations under, this Agreement and the other Lessee Documents; not use, operate, or locate the Aircraft or suffer or permit the Aircraft to be used, operated or located in any manner (i) not covered by the Insurances, (ii) in any area excluded from coverage by the Insurances or (iii) which would prejudice the interests of the Lease Indemnitees or the Finance Parties in the Insurances, the Aircraft, any Engine or any part or would subject any such person to any risk of criminal liability; not operate, maintain, insure or deal with the Aircraft or any Engine or any Part in a manner which discriminates against the Aircraft or such Engine or Part, when compared with the manner in which the Lessee or any Permitted Sub-Lessee, as applicable, operates, maintains, insures or deals with any other aircraft, and their respective engines or parts, in the Lessee's fleet (whether owned or leased by the Lessee); and

8.3.9

8.3.10

subject to Clause 9 (Sub-Leasing and Wet Leasing), base the Aircraft and operate the Aircraft only from the Habitual Base.

[omisis] 8.4 Inspection The Lessee shall ensure that the Lessor or its nominees or agents (which may include representative(s) of the Finance Parties) will, upon reasonable request, be entitled to inspect the Aircraft, any Engine, any Part and the Technical Records during the normal business hours of the Lessee or such Permitted Sub-Lessee on giving

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

reasonable prior written notice to the Lessee and the Permitted Sub-Lessee (or at any time and for any period, following an Event of Default). The Lessor shall not be entitled to inspect the Aircraft, any Engine, any Part and the Technical Records more than once in any twelve (12) month period unless a Default shall have occurred and be continuing. Provided that no Default is continuing, the Lessor's (or its nominees' or agents') inspection rights shall not interfere with the use, maintenance, operation and quiet enjoyment of the Aircraft by the Lessee or any Permitted Sub-Lessee. Subject to the foregoing sentence, the Lessee at the Lessor's request shall open panels, bays or other apertures at the time of the inspection. The Lessee will bear the costs of the Lessor's inspection of the Aircraft (a) once in each twelve (12) month period, or (b) if the Lessor initiates its inspection right following a Default or the inspection reveals a Default, the documented costs of the Lessor employing an expert party to assess the condition of the Aircraft). If non-compliance with the maintenance and operation requirements of this Agreement is discovered as a result of an inspection the Lessor may re-inspect the Aircraft in order to verify that the circumstance giving rise to such non-compliance has been rectified (or steps to rectify the circumstance giving rise to the Event of Default are being taken to the satisfaction of the Lessor) at the cost and expense of the Lessee. The fact that the Lessee may have granted to any other person similar or other inspection rights shall in no way fetter or otherwise affect the above provisions of this Clause 8.4. No liability or obligations will be incurred by the Lessor solely by reason of the exercise or non-exercise by it of the inspection rights referred to in this Clause 8.4. 8.5 Title
8.5.1

The Lessee shall have no right, title or interest in or to any part of any of the Aircraft except the rights expressly set out in this Agreement and the Transaction Documents, it being expressly agreed and acknowledged by the Lessee that title to the Aircraft during the Lease Period shall remain vested in the Lessor subject to any Liens arising under the Aircraft Mortgage. The Lessee shall: (a) do or procure that all such acts and things as are necessary to register and maintain the registration of the Aircraft with the Aviation Authority and of this Agreement with the aircraft registry of the Aviation Authority reflecting (so far as permitted by applicable law) the interests of the Lessor as owner and as lessor and the Security Trustee as mortgagee (or, if such registration cannot be maintained in the name of the Lessor or the Security Trustee, on a basis which reflects the interests of the Lessor and the Security Trustee to the greatest extent permitted by applicable law), and not do or suffer to be done anything which might adversely affect such registration; do or procure that all acts and things (including, without limitation, making any filing or registration with the Aviation Authority or any other Government Entity) and execute and deliver all documents (including, without limitation, any amendment of this Agreement) as may from time to time be required by the Lessor:

8.5.2

(b)

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Sample Aircraft Lease Agreement (i)

FOR ILLUSTRATION PURPOSES ONLY

following any change in the ownership or financing of the Aircraft as permitted by the Lessee Documents or in the manner of securing the Lessor's obligations under the Lessor Documents as a result of a change in applicable law; or following any modification of the Aircraft, the Airframe, any Engine or any Part or the permanent replacement of any Engine or Part in accordance with this Agreement, so as to ensure that the rights of the Lessor as Lessor of the Aircraft and under this Agreement and the other Lessee Documents and Lessor Documents apply with the equivalent effect as before; or to establish, maintain, preserve, perfect and protect the rights of the Lessor under this Agreement and the other Lessee Documents and Lessor Documents and in the Aircraft;

(ii)

(iii)

(c)

not do or knowingly permit to be done or omit or knowingly permit to be omitted to be done any act or thing which might reasonably be expected to jeopardise the rights of the Lessor as owner and lessor of the Aircraft or the rights and interests of the Security Trustee as mortgagee of the Aircraft, or the rights of the Lessor or the Finance Parties as additional insureds, or contract parties under the Insurances or the validity, enforceability or priority of any of the Lessee Documents or Lessor Documents; on all occasions when the ownership of the Aircraft, the Airframe, any Engine or any Part is relevant, make clear to third parties that title is held by the Lessor as owner of the Aircraft subject to the Aircraft Mortgage; not at any time: (i) represent or hold out the Lessor or any Finance Party as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation or carriage (whether for lease or reward or gratuitously) which may be undertaken by the Lessee or any Permitted Sub-Lessee; or (ii) inform any person that the Lessor or any Finance Party is responsible for any costs associated with the Aircraft; ensure that on and as of the Delivery Date and at all times during the Lease Period thereafter, there is always affixed, and not removed or in any way obscured, a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a reasonably prominent position in the cockpit of the Aircraft adjacent to the certificate of airworthiness and on each Engine stating: "THIS [AIRCRAFT/ENGINE] IS OWNED BY INESAIR LTD. AND IS SUBJECT TO A FIRST PRIORITY MORTGAGE IN FAVOUR OF UNICREDIT S.P.A. AS SECURITY TRUSTEE AND IS SUBJECT TO A LEASE AGREEMENT WITH INAER AVIATION SPAIN ";

(d)

(e)

(f)

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Sample Aircraft Lease Agreement (g)

FOR ILLUSTRATION PURPOSES ONLY

not do or permit to be done anything which may reasonably be expected to expose the Aircraft, the Airframe, any Engine or any Part to penalty, forfeiture, impounding, detention, appropriation, damage or destruction and (without prejudice to the foregoing), if any such penalty, forfeiture, impounding, detention or appropriation, damage or destruction occurs, give the Lessor prompt notice thereof and use best endeavours to procure the immediate release of the Aircraft, the Airframe, any Engine or the Part, as the case may be; not abandon the Aircraft, the Airframe, any Engine or any Part, except in the case of any Engine or Part, where such Engine or Part has been replaced in accordance with the requirements of Clause 12 (Interchange and Replacement of Engines and Parts); not attempt, or hold itself out as having any power, to sell, lease (other than as expressly permitted in this Agreement) or otherwise dispose of the Aircraft, the Airframe, any Engine or any Part; subject as provided in Clause 9.3 (Permitted Sub-Lease) not change the jurisdiction of registration of the Aircraft without the prior written consent of the Lessor and the Security Trustee in their respective sole discretion.

(h)

(i)

(j)

8.5.3

The Lessee agrees that all Parts at any time installed on the Airframe or any Engine shall be the property of the Lessor and that, subject to Clause 12.5.1, all replacements, renewals or substitutions thereof or therefore shall be made with Parts which comply with the requirements of Clause 12.1 (Replacement of Engines and Parts) and title to any such replacement or substitute Part shall vest in the Lessor and, subject thereto, title to the Part replaced or substituted shall, without any further act, vest in the Lessee free from any Lien created by the Lessor.

[omisis]

9. 9.1

SUB-LEASING AND WET LEASING Sub-Leasing


9.1.1

The Lessee shall not, without the prior written consent of the Lessor and the Security Trustee, lease, sub-lease or otherwise in any manner deliver, transfer or relinquish possession of the Aircraft to any other person provided that notwithstanding the foregoing, the Lessee may deliver or cause to be delivered possession of the Aircraft to the Manufacturer or any other manufacturer or supplier of the Aircraft, the Aviation Authority, or to any appropriate organisation for testing, service, repair, maintenance or overhaul work on the Aircraft or any part thereof or for alterations or modifications in or additions to the Aircraft to the extent required or permitted by the terms of this Agreement.

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

9.1.2

The prior written consent of the Lessor and the Security Trustee shall not be required where the Lessee wishes to enter into a Permitted Sub-Lease Agreement with a Permitted Sub-Lessee specified in paragraph (a) of the definition thereof, provided that the Lessee has complied with all the requirements of Clause 9.3 (Permitted Sublease). The Lessee shall deliver a copy of any Permitted Sub-Lease Agreement entered into by the Lessee with respect to the Aircraft to the Lessor and the Security Trustee as soon as possible and in any event with ten (10) Business Days of it entering into the same.

9.1.3

9.2

Sub-Leasing requests Upon a written request from the Lessee to the Lessor, containing details of any proposed sub-lease and sub-lessee, the Lessor shall use all reasonable efforts to seek a response from the Lenders (through the Agent) and the Security Trustee to such sublease.

9.3

Permitted Sublease Subject to the prior written consent of the Lessor and the Security Trustee (in their respective sole discretion, but subject to Clause 9.1.2) being given, and in any case subject to the Lessor and the Security Trustee being satisfied that each of the conditions specified in Clauses 9.3.1 through to 9.3.12 have been fulfilled in relation to such leasing, the Lessee shall be entitled, so long as no Relevant Event is continuing, to sub-lease the Aircraft to a Permitted Sub-Lessee. Any proposed sublease arrangements shall satisfy each of the following conditions:
9.3.1

the Lessee shall, as soon as reasonably practicable having regard to the proposed commencement date of the proposed sub-lease and, in any event, with not less than thirty (30) days' prior written notice, notify the Lessor and the Security Trustee of its intention to enter into any sub-lease agreement (which notice shall include the name of the proposed sub lessee, the provisions of the proposed sub-lease, if applicable the name of any proposed new State of Registration and summary information regarding the proposed arrangements); prior to delivery of the Aircraft under such sub-lease, the Lessor and the Security Trustee shall have received evidence satisfactory to themselves which evidence may be provided by way of legal opinion(s) provided pursuant to Clause 9.3.10 that the rights and interests of the Lessor, the Finance Parties and SACE under and in respect of the transactions contemplated by the Transaction Documents will not be prejudiced or impaired or adversely affected in any way and that rights and interests in the Aircraft and under the Transaction Documents will be recognised, perfected and protected in connection with such sub-lease; such sub-lease shall include provisions that provide that an Event of Default or Termination Event hereunder shall constitute an event of default or termination event under the sub-lease and such sub-lease shall be expressly stated to be and shall remain subject to and subordinate to the Lessor's and Finance Parties' rights under this Agreement and/or the Aircraft Mortgage and

9.3.2

9.3.3

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

such sub-lease will terminate immediately upon any termination of the leasing of the Aircraft under this Agreement, which may be satisfied by the Permitted Sub-Lessee delivering a Subordination Letter to the Security Trustee;
9.3.4

prior to delivery of the Aircraft under such sub-lease (and as a condition precedent thereof) the Permitted Sub-Lessee shall provide an acknowledgement to the Lessor and the Security Trustee in a form reasonably satisfactory to the Lessor and the Security Trustee confirming such subjection and subordination and confirming that the Permitted Sub-Lessee's rights to possession of the Aircraft under such sub-lease will terminate immediately on written notice from the Lessor and/or the Security Trustee stating that the leasing of the Aircraft under this Agreement has terminated and that the Permitted Sub-Lessee will redeliver the Aircraft (together with all Engines, Parts and Technical Records) to the Lessor upon receipt of such written notice or, at the Lessor's option and with the Security Trustee's written consent, such Permitted Sub-Lessee shall enter into an agreement with the Lessor concerning the sub-leasing of the Aircraft on terms no more onerous than those of the sub-lease agreement; such sub-lease shall require the Permitted Sub-Lessee to operate the Aircraft on the same terms as those set out in this Agreement, maintain the Aircraft in accordance with applicable standards and otherwise on the same terms as those set out in Clause 11 (Maintenance and Repair) (and the Permitted SubLessee's maintenance programme shall be in accordance with the Approved Maintenance Programme) and insure the Aircraft on the same basis as set out in Clause 14 (Insurance) and Error! Reference source not found. (Insurance Requirements) and shall contain equivalent restrictions on interchange and replacement of Engines and Parts as those contained in Clause 12 (Interchange and Replacement of Engines and Parts); such sub-lease shall not permit any further sub-leasing of the Aircraft, the Engines or any Part without the prior written consent of the Security Trustee; such sub-lease shall not have a term (including any automatic renewals or extensions or renewals or extensions at the Lessee's option) in excess of two (2) years, unless otherwise agreed by the Lessor and the Security Trustee, which extends or is capable of extending beyond the term of the relevant Lease Period; on or prior to the commencement of the sub-lease the Lessee shall provide or procure that the Permitted Sub-Lessee provides the Lessor and the Security Trustee with evidence satisfactory to the Lessor and the Security Trustee confirming that the Aircraft will continue to be insured in accordance with or on terms equivalent to this Agreement (and, if applicable, shall provide new assignments of insurances and reinsurances satisfactory to the Lessor and the Security Trustee); the Permitted Sub-Lessee under the sub-lease shall hold all authorisations and relevant certifications required for the use and operation of the Aircraft;

9.3.5

9.3.6

9.3.7

9.3.8

9.3.9

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

9.3.10

prior to the delivery of the Aircraft under such sub-lease, the Lessor and the Security Trustee shall have received legal opinion(s) from counsel satisfactory to the Security Trustee and Lessor in the jurisdiction in which the Permitted Sub-Lessee has its principal place of business and in which the Aircraft is to be habitually based (and registered if there is to be a change in the State of Registration of the Aircraft by reason of the proposed sub-lease) in form and content satisfactory to the Lessor and the Security Trustee. Such opinion would be required to confirm or otherwise satisfy the Lessor and the Security Trustee as to the following matters: (a) that the rights and interests of the Lessor and the Finance Parties in respect of the Lease and the Aircraft are not adversely affected and that the Aircraft Mortgage constitutes a legal, valid and binding Lien over the Aircraft having priority over all other claims subsequently affecting the Aircraft or if the sub-lease does not involve a change in the State of Registration and the rights of the Lessor and the Finance Parties are not adversely affected by the sub-lease, the legal opinion(s) need only confirm that the position is unchanged; the legal, valid, binding and enforceable nature of the obligations of the Permitted Sub-Lessee in connection with the sub-lease (including but not limited to the direct obligation to the Lessor to return the Aircraft on the termination of the leasing of the Aircraft under this Agreement for any reason and the fact that the sub-lease will be subject and subordinate as provided in Clause 9.3.3 and 9.3.4 above); the proper compliance with registration and filings as required under the laws of the State of Registration to ensure that the rights and interests of the Lessor and Finance Parties in the Aircraft have been or will be recognised, perfected and protected in accordance with the laws of the State of Registration; and that the application laws of any new State of Registration and the jurisdiction in which the Permitted Sub-Lessee is established or has its principal place of business (if not Spain) do not apply any theory or doctrine of strict or absolute liability (whether in tort, delict or otherwise) to owners, lessors and/or financiers of aircraft;

(b)

(c)

(d)

9.3.11

if the Lessor and the Security Trustee (in their respective sole discretion) agree to the changing of the State of Registration in connection with such subleasing, the Lessor and the Security Trustee shall (if necessary in connection with such sub-leasing and at no cost to the Lessor and the Security Trustee) de-register the Aircraft in Spain and co-operate with the Lessee (also at no cost to the Lessor or the Security Trustee) to assist the Lessee and/or the relevant Permitted Sub-Lessee, as the case may be, in promptly making any filings, recordings and registrations in the State of Registration which, to the extent applicable, are necessary or desirable in order to (i) protect the interests of the Lessor as owner and lessor under this Agreement and the Security Trustee as mortgage; or (ii) ensure the validity, enforcement or priority thereof; or (iii) protect the rights of the Finance Parties and the Lessee shall pay all costs,

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

expense and liabilities incurred in connection with any re-registration of the Aircraft and such filings, recordings and registrations; and
9.3.12

any such sub-lease shall not permit the Aircraft to be based or registered in or operated within or to or from an Excluded Country.

9.4

Continuing Liability of the Lessee The Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if such Permitted Sub-Lease had not occurred (provided that performance in full by a Permitted Sub-Lessee of any provision hereof shall be deemed to be performance by the Lessee of such provision). No lease or other relinquishment of possession of the Aircraft shall in any way discharge or diminish any of the Lessee's obligations to the Lessor hereunder or under any other Lessee Document.

10. 10.1

LIENS Lessee Obligations The Lessee shall at all times during the Lease Period:
10.1.1

not create or permit the creation of any Lien (other than Permitted Liens) upon the Aircraft, the Airframe, any Engine or any Part; promptly at the Lessee's expense take or procure the taking of such action as may be necessary to discharge any Lien which is not a Permitted Lien if the same shall exist at any time; and pay and discharge or cause to be paid and discharged when due and payable all debts, damages, claims and liabilities which give or might give rise to a Lien (other than Permitted Liens) over or affecting the Aircraft, the Airframe, any Engine or any Part.

10.1.2

10.1.3

11.

MAINTENANCE AND REPAIR The Lessee shall and shall procure that any Permitted Sub-Lessee shall, at all times during the Lease Period:
11.1.1

keep the Aircraft safe for operation and airworthy in all respects and in as good an operating condition and state of repair as at Delivery, save for ordinary wear and tear; maintain the Aircraft in accordance with the Approved Maintenance Programme through the Approved Maintenance Performer and perform (at the respective intervals provided in the Approved Maintenance Programme) all Major Checks; maintain the Aircraft without discriminating against the Aircraft as compared with any other aircraft in the Lessees fleet;

11.1.2

11.1.3

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

11.1.4

comply on a terminating action basis with all Aviation Authority mandatory inspection and modification requirements, Airworthiness Directives and Mandatory Service Bulletins applicable to the Aircraft, any Engine or Part having a compliance date during the Lease Period; comply with all applicable laws and the regulations of the Aviation Authority and other aviation authorities with jurisdiction over the Lessee or the Aircraft, the Airframe, any Engine or Part, and which relate to the maintenance, condition, use or operation of the Aircraft or require any modification or alteration to the Aircraft, the Airframe, any Engine or Part; maintain in good standing, after issuance of the initial certificate of airworthiness, a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) for the Aircraft issued by the Aviation Authority except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and will from time to time provide to the Lessor a copy on written request of the Lessor; and if required by the Aviation Authority, maintain a current certification as to maintenance issued by or on behalf of the Aviation Authority in respect of the Aircraft and will from time to time provide to the Lessor a copy on written request of the Lessor.

11.1.5

11.1.6

11.1.7

12. 12.1

INTERCHANGE AND REPLACEMENT OF ENGINES AND PARTS Replacement of Engines and Parts The Lessee undertakes that for the duration of the Lease Period, it will without prejudice to the terms of Clause Error! Reference source not found., promptly replace any Engine or Part installed in the Airframe or any Engine which has become worn out, lost, destroyed, confiscated, unserviceable, time expired, or otherwise unfit for use with, in the case of an Engine, another engine which meets the requirements for a Replacement Engine, and in the case of a Part, an item which is suitable for installation and use on the Aircraft and which is of the same make, specification, modification status or an improved or advanced version thereof and of at least equivalent value, marketability and utility of the replaced Part. If any Part shall become worn out, lost, destroyed, confiscated, unserviceable or otherwise unfit for use before the expiration of its permitted time between overhauls, the Lessee shall ensure that, subject to the terms of any pooling agreement approved by the Lessor and the Security Trustee, the replacement Part has substantially similar or more hours available to next overhaul than the replaced Part had immediately before the replacement becoming necessary. Save with the approval of the Lessor, the hours and cycles remaining on all of the life limited Parts installed in a Replacement Engine shall be substantially similar or more than the hours and cycles which were remaining on the life limited Parts installed in the replaced Engine at the time the replaced Engine was removed. Any Replacement Engine installed on the Aircraft at the time of redelivery to the Lessor shall meet all of the requirements set forth in Clause 16 (Redelivery).

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Sample Aircraft Lease Agreement 12.2 Removal of Engines and Parts

FOR ILLUSTRATION PURPOSES ONLY

The Lessee undertakes that for the duration of the Lease Period, it will subject to the rights of installation allowed to the Lessee under Clause 12.5 (Temporary Installation of Engines and Parts) ensure that any Engine or any Part installed in or on the Airframe or any Engine is not at any time removed therefrom otherwise than during the course of maintaining, servicing, repairing, upgrading, overhauling or testing the Airframe or the Engines or Parts, or making such modifications, changes or alterations to the Airframe or the Engines as are permitted under this Agreement, and then only if it is promptly reinstalled, or as soon as practicable replaced or substituted by an item complying with the provisions of Clause 12.3 (Installation of Engine and Parts). 12.3 Installation of Engines and Parts The Lessee undertakes that for the duration of the Lease Period, it will ensure that, save in accordance with Clauses 12.5 (Temporary Installation of Engines and Parts), 12.8 (Engine Fleet Management), no engine is installed on the Airframe, and no Part is installed in the Airframe or any Engine, whether by way of substitution, replacement, renewal, mandatory improvement or addition unless it is (a) then the property of the Lessor or (b) such that on installation in or on the Airframe or on such Engine, title thereto shall vest in the Lessor but be free from Liens (other than Permitted Liens), in which case the Lessee shall ensure that there is promptly recorded in the Technical Records an acknowledgement that title thereto does so vest in the Lessor, which acknowledgement shall specify the manufacturer's serial number of the substitute or Replacement Engine, and the Lessee shall ensure that as soon as practicable thereafter a notification that title to such Engine does so vest in the Lessor is delivered to the Lessor. 12.4 Non-Installed Engines The Lessee undertakes that for the duration of the Lease Period, it will subject to Clauses 12.5 (Temporary Installation of Engines and Parts) and 12.8 (Engine Fleet Management), ensure that any Engine which is not installed on an Aircraft is properly and safely stored and insured in accordance with the requirements of this Agreement, and kept free from Liens other than Permitted Liens. 12.5 Temporary Installation of Engines and Parts
12.5.1

Temporary Installation of other engines and parts The Lessee shall be entitled, unless and until a Default has occurred and is continuing or the Insurance for the Aircraft would be adversely affected thereby, to install any engine on the Airframe or any part on or in the Airframe or on or in any Engine by way of substitution or replacement notwithstanding that such installation is not in accordance with Clause 12.3 (Installation of Engines and Parts) if: (a) there shall not have been available to the Lessee at the time and in the place that such engine or part was required to be installed on the Airframe or on such Engine a substitute or replacement engine or part

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

complying with the requirements of Clause 12.3 (Installation of Engines and Parts); and (b) it would have resulted in an unreasonable disruption of the operation of the Aircraft and/or the business of the Lessee to have grounded the Aircraft until such time as an engine or part complying with the requirements of Clause 12.3 (Installation of Engines and Parts) became available for installation in the Airframe or on such Engine,

provided that as soon as practicable and, in any event, within the shorter of ninety (90) days and the following scheduled maintenance as set out in the Approved Maintenance Programme, (or such longer period as the Lessor may agree having regard to all relevant circumstances, including availability of replacement engines or parts) after installation of the same on the Airframe or on such Engine, or if earlier, the Expiry Date, the Lessee shall remove any such engine or part and replace or substitute the same by an engine or part complying with the requirements of Clause 12.3 (Installation of Engines and Parts).
12.5.2

Temporary Installation of Engines on other airframes Notwithstanding the foregoing provisions of this Clause 12, provided no Default has occurred and is continuing, the Lessee shall be entitled to permit the temporary installation of any Engine on any AW109SP "GRANDNEW" airframe operated by the Lessee provided that (i) as soon as practicable and, in any event, within ninety (90) days (or such longer period as the Lessor may agree having regard to all relevant circumstances, including availability of replacement engines) after installation of such Engine on such airframe, or if earlier, the Expiry Date, the Lessee shall procure the removal of such Engine from such airframe and recover possession and control of such Engine and (ii) title to such Engine remains at all times with the Lessor and such Engine does not become subject to a Lien (other than a Permitted Lien).

12.6

Modifications and Alterations


12.6.1

Modifications (a) Notwithstanding the foregoing provisions of this Clause 12, the Lessee may not make other modifications in or alterations and additions (including in connection with any reconfiguration) to the Aircraft ("Equipment Modification") without the consent of the Lessor and the Security Trustee which shall not be unreasonably withheld (provided that (i) no Event of Default has occurred and is continuing and (ii) such Equipment Modification does not diminish the value or marketability of the Aircraft). The Lessee shall bear all costs relating to Equipment Modifications or structural repairs to the Aircraft. The Lessee shall be permitted to effect Equipment Modifications which are required by the Aviation Authority or pursuant to any Mandatory Service Bulletin or Airworthiness Directive regardless of whether a Default has occurred or is continuing.

(b)

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Sample Aircraft Lease Agreement (c)

FOR ILLUSTRATION PURPOSES ONLY

Any structural repairs allowed under this Clause 12.6.1 will be carried out in accordance with the provisions of the Manufacturer's structural repair manual and, unless otherwise agreed by the Lessor in writing, will be permanent in nature. The Lessee will keep all records and any test pieces relating to such repairs.

12.6.2

Title to Parts The Lessee shall procure that title to all Parts incorporated or installed in or attached or added to the Aircraft as a result of any such Equipment Modification shall vest in the Lessor but free of all Liens (other than Permitted Liens) provided that where, as a result of any such Equipment Modification (other than a modification, alteration or addition required by any other provision of this Agreement), the Lessee has installed a Part on the Aircraft, then the Lessee shall be entitled to remove such Part from the Aircraft, free from any claim to title on the part of the Lessor, if at the time of such removal each of the following conditions is fulfilled: (a) either: (i) such Part when so removed is replaced by the original Part, which complies with the terms of this Agreement, and title to the original Part is vested in the Lessor or by a Part complying with the terms of Clauses 12.1 (Replacement of Engines and Parts) and 12.3 (Installation of Engines and Parts); or such Part is in addition to and not in replacement of or in substitution for any Part previously installed on or attached to the Aircraft;

(ii)

(b) (c)

such Part is not required to be installed on or attached or added to the Aircraft to comply with any other provision of this Agreement; such Part can be removed from the Aircraft without diminishing or impairing the marketability, value, utility or airworthiness which the Aircraft would have had at such time if the original modification, alteration or addition had not been made; and no Event of Default shall have occurred and be continuing unless removal is required by the Aviation Authority or pursuant to any Airworthiness Directive or Mandatory Services Bulletin.

(d)

12.7

Parts So long as no Default shall have occurred and be continuing, the Lessee may install in the ordinary course of its business any Part in any other aircraft operated by the Lessee, provided no transfer of title to any Part shall be effected in connection therewith and the interests of the Lessor and the Finance Parties in any such Part shall not be prejudiced thereby unless such Part has been replaced on the Aircraft by another part which has been incorporated or installed in or attached to the Aircraft and

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

title to which has vested in the Lessor in accordance with the provisions of this Agreement. 12.8 Engine Fleet Management [omisis]

13. 13.1

TECHNICAL RECORDS Undertakings Throughout the relevant Lease Period and up to and including the Compliance Date, the Lessee shall keep accurate, complete and current records of all flights made by the Aircraft, and of all maintenance and repairs carried out to the Airframe and each Engine, and shall maintain all other records, logs and documents which are required to be maintained in respect of the Aircraft by the Aviation Authority (including, without limitation, the records and documents set out in Part 5 of Schedule 1), and shall allow the Lessor and/or its agents or representatives to examine and take copies of such records in accordance with Clause 8.4 (Inspection).

13.2

Conformity The records, logs and documents so kept or maintained shall be maintained in English and shall conform with the Approved Maintenance Programme, and the regulations from time to time in force of the Aviation Authority, and with the normal practices of public air transport operators (provided that such practices are not contrary to the regulations of the Aviation Authority), and shall disclose the whereabouts of all Engines and Parts not installed on the Airframe.

13.3

Ownership The records logs and documents so kept and maintained shall be part of the Technical Records (and the definitions of "Aircraft" and "Technical Records" in Appendix A shall be construed accordingly), and shall be the property of the Lessor and, at the end of the relevant Lease Period (unless at such time, title in the Aircraft has been transferred to the Lessee) the Lessee shall deliver the same to the Lessor (or to such other party nominated by the Lessor) provided that the Lessee shall be entitled to take and retain copies thereof.

13.4

Possession The Lessee shall (save as hereinafter provided) keep all the Technical Records on the Aircraft or in the secure possession of an agent reasonably acceptable and notified to the Lessor or at such other permanent base as may be reasonably approved by the Lessor and (if necessary) the Aviation Authority or (if at any time exceptional circumstances are affecting the State of Registration which, in the reasonable opinion of the Lessor, materially and adversely affect the interests of the Lessor in the Technical Records and subject to the requirements of the Aviation Authority)

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

requested by the Lessor, and shall not (save as necessary for the exercise of the Lessee's rights and in the performance of its obligations under this Agreement or any lease permitted pursuant to the terms of this Agreement) permit any other person (other than a person entitled to have possession or control of the Aircraft under the terms of this Agreement or any lease permitted pursuant to the terms of this Agreement) to have possession of or control over the Technical Records or any of them, except with the prior written consent of the Lessor.

[omisis]

14. 14.1

INSURANCE Insurance
14.1.1

The Lessee shall, at its own expense, maintain in full force and effect during the Lease Period the types of insurance and amounts of insurance (including deductibles) in respect of the Aircraft which are reasonably available in the international aviation insurance market and customarily carried by carriers of similar size, fleet makeup and geographic reach as the Lessee and such insurances shall be in form and substance satisfactory to the Lessor and the Security Trustee (the "Insurances", which expression includes, where the context so admits, any relevant Reinsurances). The Lessor's current requirements as to the Insurances are as specified in this Clause 14 and in Error! Reference source not found. (Insurance Requirements). The Lessee agrees (a) to include each of the Finance Parties as additional assured pursuant to the insurances required under Clause Error! Reference source not found. of Error! Reference source not found. (Insurance Requirements) and (b) to include each Lease Indemnitee as additional named assured pursuant to the policies required under Clause Error! Reference source not found. of Error! Reference source not found. (Insurance Requirements). Each of the parties hereto agrees that the Security Trustee is the loss payee and accordingly is the party to whom any Event of Loss Proceeds are payable. The Lessee agrees to procure that this Agreement and any other agreements notified to it by the Lessor or the Security Trustee for this purpose are listed as a "Contract" on each certificate of insurance and/or reinsurance from time to time.

14.1.2

14.1.3

[omisis]

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Sample Aircraft Lease Agreement 15. 15.1 LOSS AND DAMAGE Risk

FOR ILLUSTRATION PURPOSES ONLY

Throughout the Lease Period and until redelivery of the Aircraft in accordance with Clause 16 (Redelivery), the Lessee shall bear the full risk of any loss, destruction, hijacking, theft, condemnation, confiscation, seizure or requisition of or damage to the Aircraft and of any other occurrence of whatever kind. If the Aircraft suffers an Event of Loss prior to Delivery under this Agreement then this Agreement shall automatically terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement. [omisis] 16. 16.1 REDELIVERY Redelivery On the Expiry Date the Lessee shall, unless (i) an Event of Loss has occurred or (ii) the Lessee shall have made all payments due by it at the Expiry Date under this Agreement and any other Lessee Documents with respect to the Aircraft whereupon Clause Error! Reference source not found. shall be operative, redeliver the Aircraft and the related Technical Records to the Lessor at the Lessee's expense to the Redelivery Location and in the Return Condition and shall otherwise comply with its obligations under 0 (Return Condition) and the Lessee shall thereupon cause the Aircraft to be deregistered by the Aviation Authority. If at the time of redelivery of the Aircraft under this Clause 16 (or as a result of any such redelivery) an Event of Default exists or occurs and is continuing or subsisting, the Lessee shall not be released from its obligations hereunder and the Lessor shall continue to be entitled to exercise its rights and remedies under the Lessee Documents. 16.2 Maintenance Programme [omisis]

16.3

Remedy of Defects If on redelivery the Aircraft shall not be in the condition specified in Clause 16.1 (Redelivery), the Lessor shall be entitled to require the Lessee at the Lessee's expense to remedy any non-compliance with Clause 16.1 (Redelivery), and the Lessee shall promptly comply with any such requirement. If the Lessee fails so to comply, the Lessor shall be entitled to remedy such defects and deficiencies and to recover on demand from the Lessee the costs so incurred, together with interest at the Relevant Rate of Interest from the date of expenditure by the Lessor of the relevant cost until the date of recovery thereof from the Lessee (both before and after any relevant judgment).

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Sample Aircraft Lease Agreement 17. 17.1

FOR ILLUSTRATION PURPOSES ONLY

EVENTS OF DEFAULT; TERMINATION EVENTS Events of Default Each of the following events will constitute an Event of Default and a repudiation of this Agreement by the Lessee:
17.1.1

the Lessee fails to make: (a) (b) any payment of any scheduled amount due under this Agreement or the Lessee Documents within five (5) Business Days of its due date; or any other sum that is payable by the Lessee on demand within five (5) Business Days of its due date; or

17.1.2

the Lessee fails to obtain and maintain the required Insurances or the Insurances cease to be in full force and effect for any reason whatsoever; or the Lessee fails to observe or performs its obligations under Clause 3.2 (Conditions Subsequent), Clause 9.8 (Financial Covenants) or Clause Error! Reference source not found. (Funding Covenants) or fails to satisfy any deferred conditions precedent by the time for compliance specified therefor by the Lessor (with the written consent of the Security Trustee) or to comply in full with any obligation assumed by it in connection with such deferral; or the Lessee fails to observe or perform any other obligation in a Lessee Document other than those referred to in Clauses 17.1.1 or 17.1.2 or 17.1.3 and, but only if such failure is capable of remedy, such failure shall continue for more than fourteen (14) days after the occurrence thereof without being remedied to the satisfaction of the Lessor and the Agent; or any representation or warranty made or deemed to be made or repeated by the Lessee in or pursuant to any Lessee Document proves to have been false or incorrect in any material respect on the date as of which it was made unless corrected (if the same is possible) within fourteen (14) days of the making of such misrepresentation; or the Lessee repudiates a Lessee Document or evidences an intention to repudiate a Lessee Document; or the Lessee purports or agrees to sell or otherwise transfer the Aircraft or any interest in it other than as permitted under this Agreement, or parts with possession of the Aircraft except as permitted by this Agreement (other than as a consequence of an Event of Loss), or permits the Aircraft, or any interest of the Lessor or of any Finance Party in it, or any party's rights under this Agreement, to become subject to any Lien created by or owing through the Lessee (other than any Permitted Lien); or any consent, authorisation, exchange control approval, licence or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by the Lessee to authorise the execution,

17.1.3

17.1.4

17.1.5

17.1.6

17.1.7

17.1.8

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

delivery, validity, enforceability or admissibility in evidence of any Lessee Document to which is a party, or the performance by the Lessee of its obligations under any such Lessee Document, is modified is not granted or is resolved or terminated or expires and is not renewed or otherwise ceases to be in full force and effect; or
17.1.9

any Prohibited Payment has been made or provided, directly or indirectly, by (or on behalf of) or to any the Lessee or any of its affiliates or subsidiaries or any of their officers, directors or any other person acting on its behalf in connection with any of the Lessee Documents; or any officer, director of the Lessee or any other person acting on the Lessee's behalf has been held by the judgment of a court, in a criminal or a civil matter, to have made or received a Prohibited Payment; or any judgment or order made against the Lessee for an amount in excess of 500,000 (or any equivalent amount in another currency) is not stayed or complied with as soon as practicable and in any event within thirty (30) days or, if earlier, the due date under such judgment or order, or a creditor attaches or takes possession of, or a distress, execution, sequestration or other similar process for the enforcement of creditors' rights is levied or enforced upon or against any material part of the, undertakings, assets, rights or revenues of the Lessee and is not discharged or stayed as soon as practicable and in any event within thirty (30) days; or the Lessee stops or suspends payment of, or publicly admits in writing its inability to pay, its debts generally as and when they fall due or becomes insolvent or unable to pay its debts as and when they fall due or commences negotiations with creditors with a view to the re-adjustment or re-scheduling of all or a part of its Indebtedness or proposes or enters into any composition or other arrangement for the benefit of its creditors, or proceedings are commenced in relation to the Lessee under any applicable law, regulation or procedure relating to the reconstruction or readjustment of debts (other than pursuant to a solvent merger, reconstruction or amalgamation of the Lessee, the terms of which have been approved in writing by the Lessor and the Security Trustee in advance); or any legal proceedings are started (including the presentation of petition) for (or for the consideration of) (a) the Lessee to be adjudicated or found bankrupt or insolvent, (b) the winding-up or dissolution of the Lessee or (c) the appointment of a liquidator, trustee, receiver, administrator, examiner, or similar officer of the Lessee or of the whole or any part of its undertakings, assets, rights or revenues (other than pursuant to a solvent merger, reconstruction or amalgamation of the Lessee, the terms of which have been approved in writing by the Lessor and the Security Trustee in advance); or the Lessee is adjudicated or found bankrupt or insolvent, the Lessee is wound up or dissolved, or a liquidator, trustee, receiver, administrator, examiner or similar officer is appointed to the Lessee or the whole or any part of its undertakings, assets, rights or revenues (other than pursuant to a solvent merger, reconstruction or amalgamation of the Lessee, the terms of which

17.1.10

17.1.11

17.1.12

17.1.13

17.1.14

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

have been approved in writing by the Lessor and the Security Trustee in advance); or
17.1.15 17.1.16

the value of the Lessee's assets is less than its liabilities; there occurs, in relation to the Lessee in any jurisdiction, any events analogous to any of the events specified in Clauses 17.1.8, 17.1.12, 17.1.13 or 17.1.14; or the Lessee suspends or ceases or threatens to suspend or cease to carry on its business principally as a commercial passenger airline; or the Lessee fails to maintain its corporate existence in the jurisdiction in which it is incorporated at the date of this Agreement; or the Lessee disposes of all or a material part of its assets, whether by one or a series of transactions, related or not; or any SACE Supported Debt is declared as being due and payable prior to the date on which it would otherwise have been due or is declared in default; or either (i) any amount payable under the Commercial Loan Agreement or (ii) any Indebtedness of the Lessee in excess of 2,000,000 (or any equivalent amount in another currency): (a) (b) (c) is not paid when due: becomes due or capable of being declared due prior to the date when it would otherwise have been due; or the security for which becomes enforceable; or

17.1.17

17.1.18

17.1.19

17.1.20

17.1.21

17.1.22

any default, event of default or termination event (howsoever described) occurs under any other Lease Agreement or any lease, hire purchase, conditional sale or credit sale agreement to which Lessee is party; or all or a material part of the undertakings, assets, rights or revenues of, or shares in, the Lessee are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any Government Entity where, in the reasonable opinion of the Lessor, such act or circumstance is likely to materially adversely affect compliance by the Lessee with its obligations under the Lessee Documents; or save as permitted by the Lessee Documents, the registration of the Aircraft with the Aviation Authority is cancelled and is not reinstated within ten (10) days provided that during such period of cancellation the Aircraft is grounded; or the Lessee shall lose any licence or permit permitting it to use or operate the Aircraft for the carriage for lease or reward of passengers or cargo and the Lessee shall not have the same reinstated within a period of ten (10) days; or

17.1.23

17.1.24

17.1.25

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

17.1.26

the Lessee is merged or consolidated with any of its related entities unless (i) the Security Trustee has received prior written notice of such event, together with an opinion from legal counsel acceptable in form and substance to the Security Trustee that such action or event will not prejudice the validity, priority or enforceability (including as to timing of enforcement) of the Transaction Documents or the Liens created pursuant to the Security Documents, compared to the position immediately prior to such action or event and (ii) if the Security Trustee so requests the merged entity has confirm or re-executed any Transaction Document to which any of the original entities was a party.

[omisis]

18. 18.1

LESSOR'S RIGHTS FOLLOWING AN EVENT OF DEFAULT Termination At any time after the occurrence of an Event of Default (and provided that such Event of Default is continuing) the Lessor may terminate the Lease Period whereupon:
18.1.1

the Lessee's right to possess and operate the Aircraft shall immediately terminate; and the Lessor may enter upon any premises where the Aircraft or any part thereof is then located in order to re-take possession of the Aircraft.

18.1.2

18.2

Payments Upon the termination of the Lease Period pursuant to Clause 18.1 (Termination) the Lessee shall pay to the Lessor a sum equal to the aggregate of:
18.2.1 18.2.2

the amount of the Termination Payment as at the Termination Date; and all other sums due and payable but unpaid from the Lessee under this Agreement and the other Lessee Documents as at the Termination Date.

18.3

Return of the Aircraft Without prejudice to and in addition to the obligation of the Lessee to make the payments referred to in Clause 18.2 (Payments), upon any such termination as is referred to in Clause 18.1 (Termination), the Lessor shall have the right to demand that each of the Aircraft be returned to the Lessor in Return Condition or otherwise in accordance with Clause 16 (Redelivery).

[omisis]

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Sample Aircraft Lease Agreement 19. 19.1

FOR ILLUSTRATION PURPOSES ONLY

EARLY REPAYMENT AND TRANSFER OF TITLE Payments on Expiry Date On the Expiry Date the Lessee shall have the option to purchase the Aircraft pursuant to Clause 23.5 (Transfer of Title). On the Expiry Date, the Lessee shall pay to the Lessor:
19.1.1 19.1.2

the applicable Termination Payment (if any) as at the Expiry Date; if the Lessee wishes to acquire title to the Aircraft on the Expiry Date, the sum of 1 (one Euro); and all amounts (including Basic Rent) accrued, due or payable by the Lessee to the Lessor hereunder in relation to the Aircraft.

19.1.3

[omisis]

20. 20.1

LAW AND JURISDICTION English law This Agreement and any non-contractual obligations arising from or in connection with it shall be governed by, and construed in accordance with, English law.

20.2

Exclusive English jurisdiction Subject to Clause Error! Reference source not found. (Choice of forum for the exclusive benefit of the Lessor), the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and all non contractual obligations arising from or in connection with it.

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

SCHEDULE 1 DESCRIPTION OF THE AIRCRAFT Aircraft Manufacturer: Model: Serial Number: Engines Manufacturer: Model: Serial Numbers: 1. 2. As specified in the Acceptance Certificate As specified in the Acceptance Certificate As specified in the Acceptance Certificate As specified in the Acceptance Certificate AGUSTAWESTLAND S.p.A. AW109SP "GRANDNEW" 22248

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

SCHEDULE 2 ACCEPTANCE CERTIFICATE This Acceptance Certificate is delivered, on the date set out below by Inaer Aviation Spain ("Lessee") to Inesair Ltd. (the "Lessor"), pursuant to the Lease Agreement dated ___________________________ 2011 between Lessee and the Lessor (the "Agreement"). Capitalised terms used in this Certificate shall have the meanings given to such terms in the Agreement. 1. DETAILS OF ACCEPTANCE

Lessee hereby confirms to the Lessor that Lessee has at ___ o'clock (_____ time) on this ____ day of ____________, at _____________________________, accepted the following (the "Aircraft"), in accordance with the provisions of the Agreement: 1.1 Airframe Aircraft Type: Aircraft S/N Aircraft Reg: 1.2 Engines Engine Type: Engine S/Ns: 1.3 2. PW207C turbo shaft engines PCE-BH0566 and PCE-BH0567 AW109SP "GRANDNEW" 22248 I-LCCO

Place of Acceptance: ______________________________. CONFIRMATION Lessee confirms to the Lessor that as at the time indicated above, being the Delivery Date: (a) (b) (c) (d) the representations and warranties contained in Clause 2.1 of the Agreement are hereby repeated; the Aircraft is insured as required by the Agreement; there have been affixed to the Aircraft and the Engines the fireproof notices required by the Agreement; and Lessee's authorised technical experts have inspected the Aircraft to ensure the Aircraft conforms to Lessee's requirements. Lessee is satisfied that the Aircraft is in accordance with the specifications of the Agreement and satisfactory in all respects.

3.

PAYMENTS AND PURCHASE PRICE

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Sample Aircraft Lease Agreement 3.1 3.2 3.3

FOR ILLUSTRATION PURPOSES ONLY

The C Rent and the Payment Dates in respect of the Aircraft are as specified in Annex 1 to this Certificate. The Agreed Value of the Aircraft is ____________________. Any reference in this Certificate or in the Agreement to Annex 1 is to such Annex 1 as replaced, amended or substituted from time to time.

IN WITNESS WHEREOF, Lessee has, by its duly authorised representative, executed this Certificate on the date specified in paragraph 1 above. INAER AVIATION SPAIN By: _________________________

Title: _________________________

Agreed and Accepted by: [] By: ________________________

Title: ________________________

[omisis]

- 36 -

Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

Return Condition 4. 4.1 4.2 Aircraft. The Aircraft shall be in good condition suitable for operation with all installed systems to be fully operational. The Aircraft shall comply with the specification, as modified by the incorporation of all service bulletins as required by the terms of this Agreement up to the date of redelivery. All outstanding airworthiness directives, structural inspection requirements and mandatory orders, directives and instructions affecting such model of Aircraft issued by the Manufacturer, the Engine Manufacturer and the manufacturer of any main component, or by the Aviation Authority shall have been accomplished (such accomplishment to be on a terminating action basis where it is customary for the Lessee or other operators of like aircraft to take terminating action) and all maintenance discrepancies cleared from the logbook. If the Lessee has obtained a waiver or deviation from the Aviation Authority from having to comply with any such mandatory orders, directives or instructions, the Lessee shall, irrespective of such waiver or deviation, comply with all such mandatory orders, directives and instructions covered by such waiver or deviation prior to the return of the Aircraft to the Lessor. The Aircraft shall be in airworthy condition with a fresh annual inspection, specifically correcting any structural deficiencies. Paint and interior shall be in above average condition. Components. All components shall be mid-time on average; with no component having a maximum time expired in excess of 80%, and compliance with all mandatory manufacturers and regulatory directives. "On condition" and "Condition Monitored" components shall be serviceable and shall meet the requirements of the appropriate maintenance manual. Engines. The Lessee will ensure that any discrepancies which may be discovered during the inspections performed under the Approved Maintenance Program are corrected in accordance with the Engine Manufacturers maintenance manual covering Pratt & Whitney Canada PW207C turbo-shaft engines. 7. 7.1 Fuselage, Windows, and Doors. The fuselage shall be free of major dents and abrasions, and loose, pulled or missing rivets, and minor or significant corrosion. External repairs should have been carried out only if approved by the Manufacturer or in accordance with Manufacturer documentation.

4.3

4.4

5. 5.1

5.2 6.

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Sample Aircraft Lease Agreement 7.2 7.3 8. 8.1 8.2 9. 9.1 9.2 9.3

FOR ILLUSTRATION PURPOSES ONLY

Windows shall be free of delamination, blemishes and grazing and shall be properly sealed. Doors shall be free moving, correctly rigged and be fitted with serviceable seals. Rotors, Cowlings and Fairings. All leading edges shall be free from damage which would affect the performance and airworthiness of the Aircraft or be outside the Manufacturer's acceptable tolerances. All unpainted cowlings and fairings shall be polished to industry standards. Interior. Ceilings, side walls and bulk head panels shall be clean and free of cracks and stains. All carpets and seat covers shall be in good condition, clean and free of stains, rips and tears and shall meet Aviation Authority fire resistance regulations. All seats, including the 4-point harness restraint systems, shall be free of rips and tears and shall be serviceable, in good condition and meet Aviation Authority fire resistance regulations. All required signs and decals shall be clean, legible and in English. All emergency equipment having a calendar life shall have minimum of one year or 100% of its total approved life, whichever is less, remaining. Cockpit. All required decals shall be clean, secure, legible and in English. All fairing and instruments panels shall be free of stains and cracks, shall be clean, secure and repainted as necessary and any ineligible placards replaced. Floor coverings shall be clean and effectively sealed. Seat covers shall be in good condition, clean and shall conform to Aviation Authority fire resistance regulations. Seats, including seat belts, shall be fully serviceable and shall be repainted as necessary. Cargo Compartments. All panels shall be in good condition without cracks or brakes.

9.4 9.5 10. 10.1 10.2 10.3 10.4 10.5 11.

12. 12.1 12.2

Wheel Wells. Wheel wells shall be clean, free of leaks, repaired as necessary and coated with corrosion inhibitor. All required decals shall be clean, secure and legible.

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Sample Aircraft Lease Agreement 13. 13.1 Corrosion.

FOR ILLUSTRATION PURPOSES ONLY

On redelivery the entire Aircraft shall be substantially free from corrosion in accordance with the Corrosion Control Manual for AGUSTAWESTLAND AW109SP "GRANDNEW" helicopters. Fuel tanks shall be substantially free from contamination in accordance with Manufacturer's tolerance levels and airworthiness requirements. Test Flight/Ground Run. If required by the Lessor, the Aircraft shall prior to redelivery be test flown by the Lessee using appropriate qualified flight test personnel, for not greater than two hours, for the purpose of demonstration to the Lessor the satisfactory operation of the Aircraft and its equipment and systems. During such test flight command, care, custody and control of the Aircraft shall remain at all times with the Lessee. Two of the Lessor's representatives may participate in such flight as observers. All systems must be shown to be in good working order within the tolerances specified in the appropriate maintenance manuals. The Engines must meet all tolerances specified in the appropriate manual for a ground run. The Aircraft must be free of fuel, hydraulic, pneumatic, water or waste systems leaks, and this is to be demonstrated by topping off the tanks and reservoirs and executing a functioning check on all systems. Documents. All historical aircraft records and a full and completely amended set of technical publications related to the Aircraft shall be redelivered in the English language with the Aircraft. Any reference in this Schedule 6 to a manual or program shall refer to that manual, or, as the case may be, program as may be amended, updated or replaced from time to time in accordance with the Manufacturer's requirements or recommendations.

13.2 14. 14.1

14.2 14.3 14.4

15. 15.1

15.2

If requested by Lessor, Lessee shall obtain an export certificate of airworthiness (if available) for, and obtain or submit any applicable approval, permit, license or report for the re-export of, the Aircraft from the Aviation Authority and deregister the Aircraft from the registry maintained by the State of Registration. If Lessee fails to remove the registration or to obtain the export certificate of airworthiness or such re-export approval, permit or license as provided above, Lessor may do so at the cost and expense of Lessee and, in such event, Lessee shall upon demand reimburse Lessor for the cost thereof. Lessee hereby irrevocably appoints Lessor and the Security Trustee, upon such failure of Lessee, as its true and lawful attorney-in-fact, with full power of substitution, in Lessees name or otherwise, to carry out the provisions of this Schedule 6 and to take any action and to execute and/or file any instrument necessary to accomplish the purposes of this Schedule 6. If any other of the foregoing requirements shall not be satisfied at the time of return, Lessee shall (at Lessors

- 39 -

Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

and Security Trustees election) either promptly remedy any deficiency or make a payment fully compensating Lessor for the remedy of such deficiency.

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Sample Aircraft Lease Agreement

FOR ILLUSTRATION PURPOSES ONLY

SCHEDULE 3 FORM OF PERMITTED SUB-LEASE AGREEMENT

DRY SUBLEASE AGREEMENT. for

___________

Between

INAER []

and

INAER []

- 41 -

Sample Aircraft Lease Agreement AGREEMENT BETWEEN :

FOR ILLUSTRATION PURPOSES ONLY

made the day of .................................................................................

Mr. . with a valid .. Identity Card number .., on behalf of INAER . (hereinafter the "Sublessor") a company duly created and existing under the laws of .., with VAT number ., having its registered office at .... Acting as authorised legal representatives and proxy according to the public deed granted by ______________ of the illustrious College of ______ on __________, ______, number __________. AND Mr. . with a valid .. Identity Card number .., on behalf of INAER . (hereinafter the "Sublessee") a company duly created and existing under the laws of .., with VAT number ., having its registered office at .... Acting as authorised legal representatives and proxy according to the public deed granted by ______________ of the illustrious College of ______ on __________, ______, number __________. WHEREBY the Sublessor agrees to sublease and the Sublessee agrees to take on sublease the helicopter ________________ serial number ________ (the "Helicopter") upon the following terms and conditions. 1. TERM OF AGREEMENT The term of subleasing will be commence on the [] day of [], with a lease period of [] years (the "Lease Period"). 2. TYPE OF LEASE The type of lease will be dry lease, whereby the Sublessee shall bear all operating costs of the Helicopter (including without limitation costs of fuel and oil) and pay the expenses due to exploitation and local taxes directly attributable to the use Helicopter. 3. RENT The Sublessee shall pay the Sublessor to the Rent Account for the duration of the Lease Period. The Rent shall be .... plus VAT per calendar month. 4. TAXES The implementation of the present contract shall burden both the contractual parties with tax liability.

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Sample Aircraft Lease Agreement 5. ACCEPTANCE / RECEIPT

FOR ILLUSTRATION PURPOSES ONLY

The Sublessee shall inspect the Helicopter to ensure it conforms. The Helicopter will be delivered and returned to the termination of this Agreement, in the hangar is the Sublessor in []. 6. INSURANCE The Sublessor shall at his own cost, effect and maintain with an insurer listed on the Lloyds insurance market, a fully comprehensive insurance cover, including contractual cover in compliance with the terms of the Lease Agreement dated [] 2011 and made between Sublessor as lessee and INESAIR LIMITED as lessor (the "Lessor") (the "Lease"). 7. TERMINATION In the event that the Sublessee: (a) (b) (c) shall not pay any amount of money according this Agreement; shall fail to observe any of the provision of this Agreement; or shall fail to observe any of the provision of the framework agreement signed between the parties,

then this Agreement shall at once cease and terminate and the Sublessor may forthwith by notice in writing determine this agreement. 8. REGISTRATION The Helicopter will be on the []. 9. 9.1 MAINTENANCE The Sublessee shall during the term of this Agreement maintain the Helicopter and equipment to the airworthiness authorities and manufacturers requirements, both with respect to the standard of maintenance and the personnel authorised to conduct the maintenance, and in compliance with the terms of the Lease. The Sublessor shall have the right to inspect and if necessary fly the Helicopter at all reasonable times and the Sublessee shall make the Helicopter available to the Sublessor or its agent for this purpose providing this does not interfere with the hires operation. The Sublessee agrees to keep the Sublessor informed on all aspects of Helicopter hours usage The cost of repair, overhaul or replacement of life parts and major on condition items shall be borne by the Sublessor. The cost of shipping and transit insurance of any part from and to the Sublessee shall be borne by the Sublessor as shall all other costs relating to the maintenance and operation of the Helicopter, including fuel.

9.2

9.3

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Sample Aircraft Lease Agreement 10. 10.1 10.2 10.3 10.4 TITLE

FOR ILLUSTRATION PURPOSES ONLY

The Sublessee acknowledges that this agreement confers no right of title to the Helicopter other than the right of possession pursuant to this agreement. It is acknowledge that the Sublessee is not the agent, servant or employee of the Sublessor. The Sublessee shall not attempt to sell or pledge mortgage charge or otherwise deal with the Helicopter and shall not assign its right title or interest under this agreement. Title to the Helicopter shall remain vested in Lessor. Sublessee shall have no right, title or interest in the Helicopter except to the extent provided for in this Agreement and Sublessee shall not hold itself out as owner of the Helicopter and shall, on all occasions when the ownership of the Helicopter or any part thereof is relevant, inform all third parties that Owner holds title thereto. USE Throughout the Lease Period Sublessee shall use the Helicopter for commercial air transport operations, aerial works operations and training purposes (school). Throughout the Lease Period the Sublessee will operate the Helicopter according to the Sublessees operations manual approved by the aviation authorities in [] and in accordance with the manufacturers flight manual and relevant supplements for equipment fitted and in compliance with the Lease. Sublessee hereby expressly acknowledges and agrees that this Agreement and the rights of Sublessee under this agreement and to the use of the Helicopter as provided for in this agreement are subject and subordinate in all respects to the Lease and to the rights and interests of Lessor and Unicredit as security trustee for and behalf of certain lenders (the "Security Trustee") to the Lessor in, to and under the Lease and the mortgage granted by the Lessor to the Security Trustee in respect of the Aircraft. INCORPORATION OF LEASE TERMS The terms and conditions of the Lease are by reference, made part hereof, and incorporated into this Agreement as if set forth herein in full between Sublessor and Sublessee, and shall be applied as between Sublessor and Sublessee, mutatis mutandis. The Sublessee undertakes to comply with the covenants of the Sublessor under the Lease for the duration of the Lease Period.

11. 11.1 11.2

11.3

12.

13.

NOTICES Notices provided for herein shall be sufficient if sent by registered or certified mail or facsimile addressed as follows:

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Sample Aircraft Lease Agreement If to the Sublessee:

FOR ILLUSTRATION PURPOSES ONLY

________________________. ________________________ ________________________ ________________________ ________________________

If to the Sublessor: ________________________. ________________________ ________________________ ________________________ ________________________ 14. 14.1 14.2 14.3 LAW AND JURISDICTION This Agreement shall be governed by and construed in accordance with English law. The parties agree that the English courts shall have exclusive jurisdiction to adjudicate any dispute which arises In connection with this Agreement. No party (other than the Security Trustee) shall have any rights under this Agreement by virtue of the Contracts (Rights of Third Parties) Act 1999.

IN WITNESS WHEREOF this agreement has been executed the day and year first stated above.

SIGNED BY THE LESSOR _____________________

SIGNED BY THE LESSEE _____________________

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