Exhibit 10.14

 

EXECUTION VERSION

 

TERM LOAN SECURITY AGREEMENT

 

Dated as of February 23, 2012

 

among

 

FLYING FORTRESS FINANCING INC.,

 

FLYING FORTRESS INC.,

 

FLYING FORTRESS IRELAND LEASING LIMITED,

 

FLYING FORTRESS US LEASING INC.,

 

and

 

THE ADDITIONAL GRANTORS REFERRED TO HEREIN
as the Grantors

 

and

 

BANK OF AMERICA, N.A.,
as the Collateral Agent

 

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T A B L E   O F   C O N T E N T S

 

 

 

PAGE

 

 

ARTICLE I DEFINITIONS

2

 

 

Section 1.01

Definitions

2

Section 1.02

Construction and Usage

6

 

 

 

ARTICLE II SECURITY

7

 

 

Section 2.01

Grant of Security

7

Section 2.02

Security for Obligations

9

Section 2.03

Representations and Warranties of the Grantors

10

Section 2.04

Grantors Remain Liable

12

Section 2.05

Delivery of Collateral

12

Section 2.06

As to the Pool Aircraft Collateral

12

Section 2.07

As to the Equity Collateral and Investment Collateral

13

Section 2.08

Further Assurances

14

Section 2.09

Place of Perfection; Records

15

Section 2.10

Voting Rights; Dividends; Etc.

15

Section 2.11

Transfers and Other Liens; Additional Shares or Interests

16

Section 2.12

Collateral Agent Appointed Attorney-in-Fact

16

Section 2.13

Collateral Agent May Perform

17

Section 2.14

Covenant to Pay

17

Section 2.15

Delivery of Collateral Supplements

17

Section 2.16

Insurance

17

Section 2.17

Covenant Regarding Control

17

Section 2.18

Covenant Regarding Collateral Account

18

Section 2.19

As to Irish Law

18

Section 2.20

Additional Charges Over Shares

18

 

 

 

ARTICLE III REMEDIES

18

 

 

Section 3.01

Remedies

18

Section 3.02

Priority of Payments

19

 

 

ARTICLE IV SECURITY INTEREST ABSOLUTE

19

 

 

Section 4.01

Security Interest Absolute

19

 

 

 

ARTICLE V THE COLLATERAL AGENT

20

 

 

Section 5.01

Authorization and Action

20

Section 5.02

Absence of Duties

20

Section 5.03

Representations or Warranties

21

Section 5.04

Reliance; Agents; Advice of Counsel

21

 

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Section 5.05

No Individual Liability

22

 

 

 

ARTICLE VI SUCCESSOR COLLATERAL AGENT

22

 

 

 

Section 6.01

Resignation and Removal of the Collateral Agent

22

Section 6.02

Appointment of Successor

23

 

 

 

ARTICLE VII INDEMNITY AND EXPENSES

24

 

 

Section 7.01

Indemnity

24

Section 7.02

Secured Parties’ Indemnity

24

Section 7.03

No Compensation from Secured Parties

25

Section 7.04

Collateral Agent Fees

25

 

 

 

ARTICLE VIII MISCELLANEOUS

26

 

 

Section 8.01

Amendments; Waivers; Etc.

26

Section 8.02

Addresses for Notices; Delivery of Documents

26

Section 8.03

Remedies

27

Section 8.04

Severability

27

Section 8.05

Continuing Security Interest

27

Section 8.06

Release and Termination

28

Section 8.07

Currency Conversion

28

Section 8.08

Governing Law

29

Section 8.09

Jurisdiction; Consent to Service of Process

29

Section 8.10

Counterparts; Integration; Effectiveness

29

Section 8.11

Table of Contents, Headings, Etc.

30

Section 8.12

Non-Invasive Provisions

30

Section 8.13

Limited Recourse

31

 

SCHEDULES

 

 

 

 

 

Schedule I

 

Aircraft Objects

Schedule II

 

Pledged Equity Interests; Pledged Debt

Schedule III

 

Trade Names

Schedule IV

 

Chief Place of Business and Chief Executive or Registered Office

Schedule V

 

Insurance

 

 

 

EXHIBITS

 

 

 

 

 

Exhibit A-1

 

Form of Collateral Supplement

Exhibit A-2

 

Form of Grantor Supplement

Exhibit B

 

Form of Charge Over Shares of Irish Subsidiary Holdco

Exhibit C

 

Form of Account Control Agreement

 

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This TERM LOAN SECURITY AGREEMENT (this “Agreement”), dated as of February 23,
2012, is made among FLYING FORTRESS FINANCING INC., a California corporation
(“Parent Holdco”), FLYING FORTRESS INC., a California corporation (the
“Borrower”), FLYING FORTRESS IRELAND LEASING LIMITED, a private limited
liability company incorporated under the laws of Ireland (the “Irish Subsidiary
Holdco”), FLYING FORTRESS US LEASING INC., a California corporation (the “CA
Subsidiary Holdco”) and the ADDITIONAL GRANTORS who from time to time become
grantors under this Agreement (together with Parent Holdco, the Borrower, the
Irish Subsidiary Holdco and the CA Subsidiary Holdco, the “Grantors”), and BANK
OF AMERICA, N.A., a national banking association (“Bank of America”), as the
collateral agent (in such capacity, and together with any permitted successor or
assign thereto or any permitted replacement thereof, the “Collateral Agent”).

 

PRELIMINARY STATEMENTS:

 

(1)                                 International Lease Finance Corporation
(“ILFC”), the Borrower, Parent Holdco, the Irish Subsidiary Holdco, the CA
Subsidiary Holdco, the lenders identified therein, Bank of America, N.A. as the
administrative agent (in such capacity, the “Administrative Agent”) and the
Collateral Agent have entered into the Term Loan Credit Agreement, dated as of
the date hereof (the “Credit Agreement”), pursuant to which the Lenders have
made the Loans to the Borrower.

 

(2)                                 ILFC is the direct or indirect owner of
certain Aircraft and ILFC and certain of its Affiliates are parties to lease and
sub-lease contracts with respect to such Aircraft.

 

(3)                                 (a) Parent Holdco owns 100% of the
outstanding capital stock of the Borrower, (b) the Borrower owns 100% of the
outstanding capital stock of the CA Subsidiary Holdco and 100% of the Equity
Interests of the Irish Subsidiary Holdco, (c) the Irish Subsidiary Holdco and
the CA Subsidiary Holdco directly or indirectly (and subject to the Local
Requirements Exception)  hold or will acquire from time to time, 100% of the
Equity Interests in Owner Subsidiaries that may in turn hold or acquire from
time to time 100% of the Equity Interests in other Owner Subsidiaries, and each
Owner Subsidiary has acquired Pool Aircraft or will from time to time on or
after the Effective Date acquire Pool Aircraft from ILFC or its Affiliates and
(d) CA Subsidiary Holdco, Irish Subsidiary Holdco or an Owner Subsidiary will
acquire directly or indirectly (and subject to the Local Requirements Exception)
100% of the Equity Interests of any Intermediate Lessee that will, from time to
time after the Effective Date, act as leasing intermediary with respect to
certain Pool Aircraft.

 

(4)                                 The Grantors in each case party thereto have
agreed pursuant to the Credit Agreement, and it is a condition precedent to the
making and release of the Loans by the Lenders under the Credit Agreement, that
the Grantors grant the security interests required by this Agreement.

 

(5)                                 Each Grantor will derive substantial direct
and indirect benefit from the transactions described above.

 

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(6)                                 Bank of America is willing to act as the
Collateral Agent under this Agreement.

 

NOW, THEREFORE, in consideration of the premises, each Grantor hereby agrees
with the Collateral Agent for its respective benefit and the benefit of the
other Secured Parties as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.01     Definitions.  (a)  Certain Defined Terms.  For the purposes of
this Agreement, the following terms have the meanings indicated below:

 

“1881 Act” has the meaning set forth in Section 2.20.

 

“Account Collateral” has the meaning specified in Section 2.01(d).

 

“Account Control Agreement” means the collateral account control agreement in
the form attached hereto as Exhibit C in respect of the Collateral Account dated
on or about the Effective Date among the Securities Intermediary, the Borrower
and the Collateral Agent.

 

“Additional Grantor” has the meaning specified in Section 8.01(b).

 

“Agreed Currency” has the meaning specified in Section 8.07.

 

“Agreement” has the meaning specified in the recital of parties to this
Agreement.

 

“Aircraft Objects” means, collectively, the “aircraft objects” (as defined in
the Protocol) described on Schedule I hereto, as supplemented by each Collateral
Supplement and Grantor Supplement.

 

“Airframe” means, individually, each of the airframes described on Schedule I
hereto, as supplemented by any Collateral Supplement or Grantor Supplement.

 

“Bank of America” has the meaning specified in the recital of parties to this
Agreement.

 

“Beneficial Interest Collateral” has the meaning specified in Section 2.01(c).

 

“Borrower” has the meaning specified in the preliminary statements of this
Agreement.

 

“Cape Town Lease” means any Lease (including any Lease between Grantors) that
has been entered into, extended, assigned or novated after March 1, 2006 (or
such later date as the Cape Town Convention may be given effect under the law of
any applicable jurisdiction) (A) with a Cape Town Lessee or (B) where the
related Aircraft Object is registered in a “Contracting State”.

 

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“Cape Town Lessee” means a lessee under a Lease that is “situated in” a
“Contracting State”.

 

“Certificated Security” means a certificated security (as defined in Section
8-102(a)(4) of the UCC) other than a Government Security.

 

“Collateral” has the meaning specified in Section 2.01.

 

“Collateral Agent” has the meaning specified in the recital of parties to this
Agreement.

 

“Collateral Supplement” means a supplement to this Agreement in substantially
the form attached as Exhibit A-1 executed and delivered by a Grantor.

 

“Credit Agreement” has the meaning specified in the preliminary statements to
this Agreement.

 

“Eligible Institution” means (a) Bank of America in its capacity as the
Collateral Agent under this Agreement; (b) any bank not organized under the laws
of the United States of America so long as it has either (i) a long-term
unsecured debt rating of A or better by Standard & Poor’s and A2 or better by
Moody’s or (ii) a short-term unsecured debt rating of A-1+ by Standard & Poor’s
and P-1 or better by Moody’s; or (c) any bank organized under the laws of the
United States of America or any state thereof, or the District of Columbia (or
any branch of a foreign bank licensed under any such laws), so long as it (i)
has either (A) a long-term unsecured debt rating of A (or the equivalent) or
better by each of Standard & Poor’s and Moody’s or (B) a short-term unsecured
debt rating of A-l+ by Standard & Poor’s and P-1 by Moody’s and (ii) can act as
a securities intermediary under the New York Uniform Commercial Code.

 

“Enforcement Event” means, with respect to each section or provision of the Loan
Documents where the term “Enforcement Event” is used, the occurrence and
continuance of an Event of Default together with, except in the case of an Event
of Default described in clauses (g), (h) or (i) of Article 6 of the Credit
Agreement or if such notice is otherwise not permitted by applicable law, notice
from the Collateral Agent to the Borrower and ILFC that such Event of Default
shall constitute an Enforcement Event with respect to such section or provision
(it being agreed that (a) the failure to include any such section or provision
in any such notice shall not prejudice the Collateral Agent’s right to send a
subsequent notice specifying such section or provision and (b) it shall be
sufficient for any such notice to state that it applies to all such sections and
provisions (without specifying the sections or provisions) or that it applies to
all such sections and provisions except certain specified sections or
provisions), unless revoked or rescinded pursuant to a notice to such effect
from the Collateral Agent, for so long as such Event of Default is continuing.

 

“Engine” means, individually, each of the aircraft engines described on Schedule
I hereto, as supplemented by each Collateral Supplement and Grantor Supplement.

 

“Equity Collateral” has the meaning specified in Section 2.07(a).

 

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“Event of Default” means any Event of Default (as defined in the Credit
Agreement).

 

“FAA” means the Federal Aviation Administration of the United States of America.

 

“Government Security” means any security issued or guaranteed by the United
States of America or an agency or instrumentality thereof that is maintained in
book-entry on the records of the FRBNY and is subject to Revised Book-Entry
Rules.

 

“Grantor Supplement” means a supplement to this Agreement in substantially the
form attached as Exhibit A-2 executed and delivered by a Grantor.

 

“Grantors” has the meaning specified in the recital of parties to this
Agreement.

 

“ILFC” has the meaning specified in the recital of parties in to Agreement.

 

“Instrument” means any “instrument” as defined in Section 9-102(a)(47) of the
UCC.

 

“Insurances” means, in relation to each Pool Aircraft, any and all contracts or
policies of insurance and reinsurance complying with the provisions of Schedule
V hereto or an indemnity from a Governmental Authority as indemnitor, as
appropriate, and required to be effected and maintained in accordance with this
Agreement.

 

“International Registry” means the International Registry under the Cape Town
Convention.

 

“Investment Collateral” has the meaning set forth in Section 2.01(d).

 

“Membership Interest Collateral” has the meaning specified in Section 2.01(b).

 

“Parent Holdco” has the meaning specified in the recital of parties in to
Agreement.

 

“Parts” means all appliances, parts, components, instruments, appurtenances,
accessories, furnishings, seats and other equipment of whatever nature (other
than (a) Engines or engines, and (b) any appliance, part, component, instrument,
appurtenance, accessory, furnishing, seat or other equipment that would qualify
as a removable part and is leased by a Lessee from a third party or is subject
to a security interest granted to a third party), that may from time to time be
installed or incorporated in or attached or appurtenant to any Airframe or any
Engine or removed therefrom and, if the applicable Pool Aircraft or Engine is
subject to a Lease, is owned by a Grantor hereunder during the term of such
Lease under the provisions of such Lease.

 

“Pledged Beneficial Interests” means all of the beneficial interest in the
Pledged Equity Parties described in the attached Schedule II, as supplemented by
any Collateral Supplement or Grantor Supplement.

 

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“Pledged Borrower Debt” means any and all Indebtedness from time to time owing
by the Borrower to any Borrower Party.

 

“Pledged CA Subsidiary Holdco Debt” means any and all Indebtedness from time to
time owing by the CA Subsidiary Holdco to any Borrower Party.

 

“Pledged Debt” means the Pledged Parent Holdco Debt, the Pledged Borrower Debt,
the Pledged Irish Subsidiary Holdco Debt, the Pledged CA Subsidiary Holdco Debt,
the Pledged Owner Subsidiary Debt and the Pledged Intermediate Lessee Debt.

 

“Pledged Debt Collateral” has the meaning assigned to such term in Section
2.01(a)(iii).

 

“Pledged Equity Interests” means the Pledged Beneficial Interests, the Pledged
Membership Interests and the Pledged Stock.

 

“Pledged Equity Party” means the Borrower, the Irish Subsidiary Holdco, the CA
Subsidiary Holdco, each Owner Subsidiary and each Intermediate Lessee.

 

“Pledged Intermediate Lessee Debt” means any and all Indebtedness from time to
time owing by any Intermediate Lessee to any Borrower Party.

 

“Pledged Irish Subsidiary Holdco Debt” means any and all Indebtedness from time
to time owing by the Irish Subsidiary Holdco to any Borrower Party.

 

“Pledged Owner Subsidiary Debt” means any and all Indebtedness from time to time
owing by any Owner Subsidiary to any Borrower Party.

 

“Pledged Membership Interests” means all of the membership interests in the
Pledged Equity Parties described in the attached Schedule II, as supplemented by
any Collateral Supplement or Grantor Supplement.

 

“Pledged Parent Holdco Debt” means any and all Indebtedness from time to time
owing by Parent Holdco to any Borrower Party.

 

“Pledged Stock” means the outstanding shares of capital stock and/or issued
share capital of the Pledged Equity Parties described in the attached Schedule
II, as supplemented by any Collateral Supplement or Grantor Supplement.

 

“Received Currency” has the meaning specified in Section 8.07.

 

“Relevant Collateral” has the meaning specified in Section 2.07(a).

 

“Required Cape Town Registrations” has the meaning set forth in Section 2.08(c).

 

“Revised Book-Entry Rules” means 31 C.F.R. § 357 (Treasury bills, notes and
bonds); 12 C.F.R. § 615 (book-entry securities of the Farm Credit
Administration); 12 C.F.R. §§ 910 and 912 (book-entry securities of the Federal
Home Loan Banks); 24 C.F.R. § 81 (book-

 

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entry securities of the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation); 12 C.F.R. § 1511 (book-entry securities of the
Resolution Funding Corporation); 31 C.F.R. § 354 (book-entry securities of the
Student Loan Marketing Association); and any substantially comparable book-entry
rules of any other Federal agency or instrumentality.

 

“Secured Obligations” has the meaning assigned to the term “Obligations” in the
Credit Agreement.

 

“Secured Party” means any of or, in the plural form, all of the Collateral
Agent, the Lenders, the Administrative Agent and the Syndication Agent.

 

“Securities Account” means a securities account as defined in Section 8-501(a)
of the UCC maintained in the name of the Collateral Agent as “entitlement
holder” (as defined in Section 8-102(a)(7) of the UCC) on the books and records
of a Securities Intermediary whose “securities intermediary’s jurisdiction”
(within the meaning of Section 8-110(e) of the UCC) is the State of New York.

 

“Securities Intermediary” means any “securities intermediary” with respect to
the Collateral Agent as defined in 31 C.F.R. Section 357.2 or Section
8-102(a)(14) of the UCC.

 

“Security Collateral” has the meaning specified in Section 2.01(a).

 

“Uncertificated Security” means an uncertificated security (as defined in
Section 8-102(a)(18) of the UCC) other than a Government Security.

 

(b)                                 Terms Defined in the Cape Town Convention. 
The following terms shall have the respective meanings ascribed thereto in, or
as otherwise used in, the Cape Town Convention: “Contracting State”, “contract
of sale”, “international interest” and “situated in”.

 

(c)                                  Terms Defined in the Credit Agreement.  For
all purposes of this Agreement, all capitalized terms used but not defined in
this Agreement shall have the respective meanings assigned to such terms in the
Credit Agreement.

 

(d)                                 Certain Terms Used in the Account Control
Agreement.  As between the parties hereto, it is agreed that references in the
Account Control Agreement to “enforcement event” and “loan documents” shall be
construed respectively as references to “Enforcement Event” and “Loan Documents”
as such terms are defined herein and in the Credit Agreement.

 

Section 1.02     Construction and Usage.  Unless the context otherwise requires:

 

(a)                                 A term has the meaning assigned to it and an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP.

 

(b)                                 The terms “herein”, “hereof” and other words
of similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.

 

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(c)                                  Unless otherwise indicated in context, all
references to Articles, Sections, Schedules or Exhibits refer to an Article or
Section of, or a Schedule or Exhibit to, this Agreement.

 

(d)                                 Words of the masculine, feminine or neuter
gender shall mean and include the correlative words of other genders, and words
in the singular shall include the plural, and vice versa.

 

(e)                                  The terms “include”, “including” and
similar terms shall be construed as if followed by the phrase “without
limitation”.

 

(f)                                   References in this Agreement to an
agreement or other document (including this Agreement) include references to
such agreement or document, as supplemented, amended, replaced or otherwise
modified (without, however, limiting the effect of the provisions of this
Agreement with regard to any such supplement, amendment, replacement or
modification), and the provisions of this Agreement apply to successive events
and transactions.  References to any Person shall include such Person’s
successors in interest and permitted assigns.

 

(g)                                  References in this Agreement to any statute
or other legislative provision shall include any statutory or legislative
modification or re-enactment thereof, or any substitution therefor, and
references to any governmental Person shall include reference to any
governmental Person succeeding to the relevant functions of such Person.

 

(h)                                 References in this Agreement to any action,
remedy or method of judicial proceeding for the enforcement of the rights of
creditors or of security shall be deemed to include, in respect of any
jurisdiction other than the State of New York, references to such action, remedy
or method of judicial proceeding for the enforcement of the rights of creditors
or of security available or appropriate in such jurisdiction as shall most
nearly approximate such action, remedy or method of judicial proceeding
described or referred to in this Agreement.

 

(i)                                     Where any payment is to be made, funds
applied or any calculation is to be made hereunder on a day which is not a
Business Day, unless any Loan Document otherwise provides, such payment shall be
made, funds applied and calculation made on the next succeeding Business Day,
and payments shall be adjusted accordingly; provided, however, that no
additional interest shall be due in respect of such delay.

 

ARTICLE II
SECURITY

 

Section 2.01     Grant of Security.

 

To secure the Secured Obligations, each Grantor hereby assigns and pledges to
the Collateral Agent, for its benefit and the benefit of the other Secured
Parties, and hereby grants to the Collateral Agent for its benefit and the
benefit of the other Secured Parties a security interest in, all of such
Grantor’s right, title and interest in and to the following, whether now owned
or hereafter acquired (collectively, the “Collateral”):

 

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(a)                                  with respect to each Grantor, all of the
following (the “Security Collateral”):

 

(i)                                     the Pledged Stock and the certificates
representing such Pledged Stock, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Stock;

 

(ii)                                  all additional shares of the capital stock
of any other Pledged Equity Party from time to time acquired by such Grantor in
any manner, including the capital stock of any other Pledged Equity Party that
may be formed from time to time, and all certificates, if any, representing such
additional shares of the capital stock and all dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all such additional shares; and

 

(iii)                               the Pledged Debt and all instruments
evidencing the Pledged Debt, and all interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Debt (the “Pledged Debt
Collateral”);

 

(b)                                 with respect to each Grantor, all of the
following (the “Membership Interest Collateral”):

 

(i)                                     the Pledged Membership Interests, all
certificates, if any, from time to time representing all of such Grantor’s
right, title and interest in the Pledged Membership Interests, any contracts and
instruments pursuant to which any such Pledged Membership Interests are created
or issued and all distributions, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Membership Interests; and

 

(ii)                                  all of such Grantor’s right, title and
interest in all additional membership interests in any other Pledged Equity
Party from time to time acquired by such Grantor in any manner, including the
membership interests in any other Pledged Equity Party that may be formed from
time to time, and all certificates, if any, from time to time representing such
additional membership interests and all distributions, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all such additional membership
interests;

 

(c)                                  with respect to each Grantor, all of the
following (the “Beneficial Interest Collateral”):

 

(i)                                     the Pledged Beneficial Interest, all
certificates, if any, from time to time representing all of such Grantor’s
right, title and interest in the Pledged Beneficial Interest, any contracts and
instruments pursuant to which any such Pledged Beneficial Interest are created
or issued and all distributions, cash, instruments and other property

 

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from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Beneficial Interest; and

 

(ii)                                  all of such Grantor’s right, title and
interest in all additional beneficial interests in any other Pledged Equity
Party from time to time acquired by such Grantor in any manner, including the
beneficial interests in any other Pledged Equity Party that may be formed from
time to time, the trust agreements and any other contracts and instruments
pursuant to which any such Pledged Equity Party is created or issued, and all
certificates, if any, from time to time representing such additional beneficial
interests and all distributions, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all such additional beneficial interests;

 

(d)                                 all other “investment property” (as defined
in Section 9-102(a)(49) of the UCC) of such Grantor (the “Investment
Collateral”) including written notification of all interest, dividends,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the then
existing Investment Collateral, but excluding any loans or advances made, or
dividends, contributions or distributions or other amounts paid, by any Pledged
Equity Party to any Transaction Party;

 

(e)                                  with respect to each Grantor, all right of
such Grantor in and to the Collateral Account and all funds, cash, investment
property, investments, securities, instruments or other property (including all
“financial assets” within the meaning of Section 8-102(a)(9) of the UCC) at any
time or from time to time credited to any such account (collectively, the
“Account Collateral”); and

 

(f)                                    all proceeds of any and all of the
foregoing Collateral (including proceeds that constitute property of the types
described in subsections (a), (b), (c), (d) and (e) of this Section 2.01);

 

provided, however, that notwithstanding any of the foregoing provisions, so long
as no Enforcement Event shall have occurred and be continuing, each Grantor
shall have the right, to the exclusion of the Collateral Agent, to (i) all
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Security Collateral (other than the Pledged Debt), (ii) all interest,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Debt, and (iii) the Investment Collateral (subject to the exclusion in Section
2.01(d), and once paid by a Grantor to a non-Grantor shall be free and clear of
the Lien hereof and shall not constitute Collateral), and if an Enforcement
Event shall have occurred and be continuing, no Grantor shall make any such
payment to a non-Grantor without the Collateral Agent’s consent The foregoing
proviso shall in no event give rise to any right on behalf of any Transaction
Party to cause the release of amounts from the Collateral Account other than in
accordance with the Loan Documents; provided further that the Collateral shall
not include any Non-Collateral Assets.

 

Section 2.02        Security for Obligations.  This Agreement secures the
payment and performance of all Secured Obligations of the Grantors to each
Secured Party (subject to the

 

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subordination provisions of this Agreement) and shall be held by the Collateral
Agent in trust for the Secured Parties.  Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts that constitute
part of the Secured Obligations and would be owed by any Grantor to any Secured
Party but for the fact that Secured Obligations are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Grantor.

 

Section 2.03        Representations and Warranties of the Grantors.  Each
Grantor represents and warrants as of the date of this Agreement, the Effective
Date, each Release Date in respect of which such Grantor is a Relevant Release
Party and as of each date on which such Grantor executes and delivers a Grantor
Supplement or a Collateral Supplement, as follows:

 

(a)                                  Each Pool Aircraft is legally and
beneficially Owned by the Owner Subsidiary identified as the Owner of such Pool
Aircraft in the applicable Release Request or legally Owned by the Owner
Subsidiary and beneficially Owned by a Subsidiary Holdco or another Owner
Subsidiary, except to the extent of the Local Requirements Exception and as
provided in the definition of “Own”.  None of the Pool Aircraft Assets has been
sold in violation of the provisions of the Loan Documents, or is currently
pledged, assigned or otherwise encumbered except for Permitted Liens, and no
Pool Aircraft Assets are described in (i) any UCC financing statements filed
against any Transaction Party other than UCC financing statements which have
been (or have been agreed by the secured parties referenced therein to be)
terminated and UCC Financing Statements filed in connection with Permitted Liens
or (ii) any other mortgage registries, including the International Registry
(which for the avoidance of doubt, shall not include any contract of sale) or
filing records that may be applicable to the Pool Aircraft or Collateral in any
other relevant jurisdiction, other than such filings or registrations that have
been (or have been agreed by the secured parties referenced therein to be)
terminated or that have been made in connection with Permitted Liens. Except to
the extent of the Local Requirements Exception and as provided in the definition
of “Own”, the Grantors are the legal and beneficial owners of the Collateral.
None of the Collateral has been sold in violation of the provisions of the Loan
Documents, or is currently pledged, assigned or otherwise encumbered other than
pursuant to the terms of the Loan Documents and except for Permitted Liens.  No
Collateral is described in (i) any UCC financing statements filed against any
Pledged Equity Party other than UCC financing statements which have been (or
have been agreed by the secured parties referenced therein to be) terminated and
the UCC financing statements filed in connection with Permitted Liens or (ii)
any other mortgage registries, including the International Registry (which for
the avoidance of doubt, shall not include any contract of sale), or filing
records that may be applicable to the Collateral in any other relevant
jurisdiction, other than such filings or registrations that have been (or have
been agreed by the secured parties referenced therein to be) terminated or that
have been made in connection with Permitted Liens, this Agreement or any other
security document in favor of the Collateral Agent for the benefit of the
Secured Parties, or, with respect to any Lease, in favor of the applicable
Lessor Subsidiary or the Lessee thereunder.

 

(b)                                 In each case as and to the extent required
under the Express Perfection Requirements, this Agreement creates a valid and
(upon the taking of the actions required hereby) perfected security interest in
favor of the Collateral Agent in the Collateral as security for the Secured
Obligations, subject in priority to no other Liens (other than Permitted Liens),
and all filings and other actions necessary to perfect and protect such security
interest as a first

 

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priority security interest of the Collateral Agent have been (or to the extent
permitted hereby or in the case of future Collateral, will be) duly taken,
enforceable against the applicable Grantors and creditors of and purchasers from
such Grantors.

 

(c)                                  No Grantor has any trade names except as
set forth on Schedule III hereto.

 

(d)                                 No consent of any other Person and no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other third party (including, for
the avoidance of doubt, the International Registry) is required under any
applicable law that is necessary to comply with the Express Perfection
Requirements (i) for the grant by such Grantor of the assignment and security
interest granted hereby, (ii) for the execution, delivery or performance of this
Agreement by such Grantor or (iii) for the perfection or maintenance of the
pledge, assignment and security interest created hereby, except for (A) the
filing of financing and continuation statements under the UCC, (B) the Required
Cape Town Registrations, (C) the applicable Irish filings pursuant to Section
2.08(e) and (D) such other filings as are required under relevant local law in
the case of Grantors that are not domiciled in the United States or a state
thereof.

 

(e)                                  The chief place of business, organizational
identification number (if applicable) and chief executive or registered office
of such Grantor and the office where such Grantor keeps records of the
Collateral are located at the address specified opposite the name of such
Grantor on the attached Schedule IV or, in the case of records, at ILFC.

 

(f)                                    The Pledged Stock constitutes the
percentage of the issued and outstanding shares of capital stock of the issuers
thereof indicated on the attached Schedule II.  The Pledged Membership Interests
constitute the percentage of the membership interest of the issuer thereof, as
indicated on Schedule II hereto.  The Pledged Beneficial Interests constitute
the percentage of the beneficial interest of the issuer thereof indicated on
Schedule II hereto.

 

(g)                                 The Pledged Stock, the Pledged Membership
Interests and the Pledged Beneficial Interests have been duly authorized and
validly issued and are fully paid up and nonassessable.  The Pledged Debt has
been duly authorized or issued and delivered and is the legal, valid and binding
obligation of each applicable Borrower Party thereunder.

 

(h)                                 The Pledged Stock and the Pledged Membership
Interests constitute “certificated securities” within the meaning of Section
8-102(4) of the UCC. If the issuer thereof is organized under the laws of the
United States or a state thereof, the terms of any Pledged Equity Interest
expressly provide that such Pledged Equity Interest shall be governed by Article
8 of the Uniform Commercial Code as in effect in the jurisdiction of the issuer
of such Pledged Membership Interest or such Article 8 shall be applicable
thereto under applicable Laws.  Any Certificated Security or Instrument
evidencing the Pledged Stock, the Pledged Debt, the Pledged Beneficial
Interests, the Pledged Membership Interests and any Investment Collateral have
been delivered to the Collateral Agent in accordance with Section 2.05 and 2.07.
The Pledged Stock and the Pledged Membership Interest either (i) are in bearer
form, (ii) have been indorsed, by an effective indorsement, to the Collateral
Agent or in blank or (iii) have been registered in the name of the Collateral
Agent.  None of the Pledged Stock, the Pledged Beneficial Interests and the
Pledged Membership Interest that constitute or evidence the Collateral have any
marks or

 

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notations indicating that they have been pledged, assigned or otherwise conveyed
to any person other than the Collateral Agent (other than those agreed by the
secured parties referenced therein to be terminated or released).  Any Pledged
Beneficial Interests either (i) constitute “certificated securities” within the
meaning of Section 8-102(a)(4) of the UCC, have been delivered to the Collateral
Agent and (1) are in bearer form, (2) have been indorsed, by an effective
indorsement, to the Collateral Agent or in blank or (3) have been registered in
the name of the Collateral Agent or (ii) a fully executed “control agreement”
has been delivered to the Collateral Agent with respect to such Pledged
Beneficial Interests.

 

Section 2.04        Grantors Remain Liable.  Anything contained herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Agent of any of its rights hereunder shall not release any Grantor
from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) in each case, unless the Collateral Agent or
any other Secured Party, expressly in writing or by operation of law, assumes or
succeeds to the interests of any Grantor hereunder, no Secured Party shall have
any obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor under the contracts
and agreements included in the Collateral or to take any action to collect or
enforce any claim for payment assigned under this Agreement.

 

Section 2.05        Delivery of Collateral.  All certificates or instruments
representing or evidencing any Collateral, if deliverable, shall be delivered to
and held by or on behalf of the Collateral Agent and shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance satisfactory to
evidence the security interests granted thereby.  The Collateral Agent shall
have the right, upon the occurrence and during the continuance of an Enforcement
Event, to transfer to or to register in the name of the Collateral Agent or any
of its nominees any or all of the Pledged Equity Interests, subject only to the
revocable rights specified in Section 2.10(a).  In addition, the Collateral
Agent shall have the right at any time, upon the occurrence and during the
continuance of an Enforcement Event, to exchange certificates or instruments
representing or evidencing any Collateral for certificates or instruments of
smaller or larger denominations.

 

Section 2.06        As to the Pool Aircraft Collateral.  (a)  The Grantors shall
provide a true and complete copy of all documents or instruments constituting
Pool Aircraft Collateral to the Collateral Agent on or prior to the Release Date
in respect of such Pool Aircraft.  Subsequent to a Release Date in respect of a
Pool Aircraft, upon (i) the inclusion of any additional such document or
instrument in the Pool Aircraft Collateral in respect of such Pool Aircraft or
(ii) the amendment or replacement thereof, the Grantors will deliver, or cause
to be delivered, a copy thereof to the Collateral Agent.  Each such document or
instrument will have been duly authorized, executed and delivered by the
relevant Transaction Party, will be in full force and effect and will be binding
upon and enforceable against all parties thereto in accordance with its terms
subject to customary exceptions.

 

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(b)                                 The Grantors shall, at their expense, use
reasonable commercial efforts, in accordance with Leasing Company Practice to
(A) perform and observe, or cause to be performed and observed, all the terms
and provisions of the documents and instruments constituting Pool Aircraft
Collateral to be performed or observed by a Transaction Party and (B) after an
Enforcement Event has occurred and is continuing take all such action to such
end as may be from time to time reasonably requested by the Collateral Agent.

 

Section 2.07        As to the Equity Collateral and Investment Collateral.  (a)
 All Security Collateral, Membership Interest Collateral and Beneficial Interest
Collateral (collectively, the “Equity Collateral”) and all Investment Collateral
(together with the Equity Collateral, the “Relevant Collateral”) shall be
delivered to the Collateral Agent as follows:

 

(i)                                     in the case of each Certificated
Security or Instrument, by (A) causing the delivery of such Certificated
Security or Instrument to the Collateral Agent, registered in the name of the
Collateral Agent or duly endorsed by an appropriate person to the Collateral
Agent or in blank and, in each case, held by the Collateral Agent, or (B) if
such Certificated Security or Instrument is registered in the name of any
Securities Intermediary on the books of the issuer thereof or on the books of
any Securities Intermediary, by causing such Securities Intermediary to
continuously credit by book entry such Certificated Security or Instrument to a
Securities Account maintained by such Securities Intermediary in the name of the
Collateral Agent and confirming in writing to the Collateral Agent that it has
been so credited;

 

(ii)                                  in the case of each Uncertificated
Security, by (A) causing such Uncertificated Security to be continuously
registered on the books of the issuer thereof in the name of the Collateral
Agent or (B) if such Uncertificated Security is registered in the name of a
Securities Intermediary on the books of the issuer thereof or on the books of
any securities intermediary of a Securities Intermediary, by causing such
Securities Intermediary to continuously credit by book entry such Uncertificated
Security to a Securities Account maintained by such Securities Intermediary in
the name of the Collateral Agent and confirming in writing to the Collateral
Agent that it has been so credited; and

 

(iii)                               in the case of each Government Security
registered in the name of any Securities Intermediary on the books of the FRBNY
or on the books of any securities intermediary of such Securities Intermediary,
by causing such Securities Intermediary to continuously credit by book entry
such security to the collateral account maintained by such Securities
Intermediary in the name of the Collateral Agent and confirming in writing to
the Collateral Agent that it has been so credited.

 

(b)                                 Each Grantor and the Collateral Agent hereby
represents, with respect to the Account Collateral, that it has not entered
into, and hereby agrees that it will not enter into, any currently effective
agreement (i) with any of the other parties hereto or any Securities
Intermediary specifying any jurisdiction other than the State of New York as the
“securities intermediary’s jurisdiction” within the meaning of Section 8-110(e)
of the UCC in connection with any Securities Account with any Securities
Intermediary referred to in Section 2.07(a) for purposes of 31 C.F.R. Section
357.11(b), Section 8-110(e) of the UCC or any similar state or

 

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Federal law, or (ii) with any other person relating to such account pursuant to
which it has agreed that any Securities Intermediary may comply with entitlement
orders made by such person.  The Collateral Agent represents that it will, by
express agreement with each Securities Intermediary, provide for each item of
property constituting Account Collateral held in and credited to the Securities
Account, including cash, to be treated as a “financial asset” within the meaning
of Section 8-102(a)(9)(iii) of the UCC for the purposes of Article 8 of the UCC.

 

(c)                                  Without limiting the foregoing, each
Grantor and the Collateral Agent agree, and the Collateral Agent shall cause
each Securities Intermediary, to take such different or additional action as may
be required in order to maintain the perfection and priority of the security
interest of the Collateral Agent in the Equity Collateral in the event of any
change in applicable law or regulation, including Articles 8 and 9 of the UCC
and regulations of the U.S. Department of the Treasury governing transfers of
interests in Government Securities.

 

Section 2.08        Further Assurances.  (a)  In each case to the extent
required pursuant to the Express Perfection Requirements, each Grantor agrees
that from time to time, at the expense of such Grantor, such Grantor shall
promptly execute and deliver all further instruments and documents, and take all
further action (including under the laws of any foreign jurisdiction), that may
be necessary, or that the Collateral Agent may reasonably request, in order to
perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral. 
Without limiting the generality of the foregoing but subject to the
qualification that the following are required only to the extent of the Express
Perfection Requirements, each Grantor shall:  (i) execute and file such
financing or continuation statements, or amendments thereto, under the UCC and
such other instruments or notices, that may be necessary, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the pledge,
assignment and security interest granted or purported to be granted hereby and
(ii) execute, file, record, or register such additional documents and
supplements to this Agreement, including any further assignments, security
agreements, pledges, grants and transfers, as may be required under the laws of
any foreign jurisdiction of organization or domicile of the relevant Grantor
hereunder or as the Collateral Agent may reasonably request, to create, attach,
perfect, validate, render enforceable, protect or establish the priority of the
security interest and lien of this Agreement.

 

(b)                                 Each Grantor hereby authorizes the
Collateral Agent to file one or more financing or continuation statements, and
amendments thereto, under the UCC relating to all or any part of the Collateral
without the signature of such Grantor where permitted by law.  A photocopy or
other reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.

 

(c)                                  Each Grantor shall ensure that at all times
an individual shall be appointed as administrator with respect to each Owner
Subsidiary and each Intermediate Lessee for purposes of the International
Registry and shall cause each such Owner Subsidiary and each such Intermediate
Lessee to register or cause to be registered with the International Registry
(collectively, the “Required Cape Town Registrations”) (i) the international
interest provided for in any Cape Town Lease to which such Owner Subsidiary or
Intermediate Lessee is a lessor or lessee; and (ii) the contract of sale with
respect to any Pool Aircraft by which title to such Pool

 

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Aircraft is conveyed by or to such Owner Subsidiary, but only if the seller
under such contract of sale is situated in a Contracting State or if such
Aircraft Object is registered in a Contracting State and if such seller agrees
to such registration.

 

(d)                                 With respect to each Grantor holding an
Equity Interest in a Pledged Equity Party incorporated under the laws of
Ireland, such Grantor shall cause each Security Document executed by it and an
Additional Charge Over Shares or, in each case, its relevant particulars to be
filed in the Irish Companies Registration Office and, where applicable, the
Irish Revenue Commissioners within 21 days of execution thereof.

 

Section 2.09        Place of Perfection; Records.  Each Grantor shall keep its
chief place of business and chief executive office at the location therefor
specified in Schedule IV and shall keep its records concerning the Collateral at
such location or at ILFC’s chief executive office or, upon 30 days’ prior
written notice to the Collateral Agent, at such other locations in a
jurisdiction where all actions required by Section 2.03(e) shall have been taken
with respect to the Collateral.  Subject to applicable confidentiality
restrictions, each Grantor shall hold and preserve such records and, if an
Enforcement Event shall have occurred and be continuing, shall permit
representatives of the Collateral Agent upon reasonable prior notice at any time
during normal business hours reasonably to inspect and make abstracts from such
records, all at the sole cost and expense of such Grantor.

 

Section 2.10        Voting Rights; Dividends; Etc.  (a)  So long as no
Enforcement Event shall have occurred and be continuing:

 

(i)                                     Each Grantor shall be entitled to
exercise any and all voting and other consensual rights pertaining to all or any
part of the Equity Collateral pledged by such Grantor for any purpose not
inconsistent with the terms of this Agreement, the charter documents of such
Grantor, or the Loan Documents; provided that such Grantor shall not exercise or
shall refrain from exercising any such right if such action would constitute a
breach of its obligations under the Loan Documents; and

 

(ii)                                  The Collateral Agent shall execute and
deliver (or cause to be executed and delivered) to such Grantor all such proxies
and other instruments as such Grantor may reasonably request in writing and
provide for the purpose of enabling such Grantor to exercise the voting and
other rights that it is entitled to exercise pursuant to Section 2.10(a)(i).

 

(b)                                 After an Enforcement Event shall have
occurred and be continuing, any and all distributions, dividends and interest
paid in respect of the Equity Collateral pledged by such Grantor, including any
and all (i) distributions, dividends and interest paid or payable other than in
cash in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, such Security
Collateral, Membership Interest Collateral or Beneficial Interest Collateral;
(ii) distributions, dividends and other distributions paid or payable in cash in
respect of such Security Collateral, Membership Interest Collateral or
Beneficial Interest Collateral in connection with a partial or total liquidation
or dissolution or in connection with a reduction of capital, capital surplus or
paid-in surplus; and (iii) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange

 

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for, such Security Collateral, Membership Interest Collateral or Beneficial
Interest Collateral shall be forthwith delivered to the Collateral Agent and, if
received by such Grantor, shall be received in trust for the benefit of the
Collateral Agent, be segregated from the other property or funds of such Grantor
and be forthwith delivered to the Collateral Agent in the same form as so
received (with any necessary endorsement).

 

(c)                                  During the continuance of an Enforcement
Event, all rights of each Grantor to exercise or refrain from exercising the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 2.10(a)(i) and 2.10(a)(ii) shall cease, and all
such rights shall thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise or refrain from exercising such voting
and other consensual rights.

 

Section 2.11        Transfers and Other Liens; Additional Shares or Interests. 
(a) No Grantor shall (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the Collateral
or (ii) create or suffer to exist any Lien upon or with respect to any of the
Collateral, in the case of clause (i) or (ii) other than a Permitted Lien or as
otherwise provided for or permitted in any Loan Document.

 

(b)                                 Except as otherwise provided pursuant to the
Loan Documents, the Grantors (other than Parent Holdco) shall not issue, deliver
or sell any shares, interests, participations or other equivalents except those
pledged hereunder and except to the extent of the Local Requirements Exception. 
Any beneficial interests, membership interests or capital stock or other
securities or interests issued in respect of or in substitution for the Pledged
Stock, the Pledged Membership Interests or the Pledged Beneficial Interest shall
be issued or delivered (with any necessary endorsement) to the Collateral Agent
in accordance with Section 2.07.

 

Section 2.12        Collateral Agent Appointed Attorney-in-Fact.  Each Grantor
hereby irrevocably appoints, as security for the Secured Obligations, the
Collateral Agent as such Grantor’s attorney-in-fact, with full authority in the
place and stead of such Grantor and in the name of such Grantor or otherwise,
from time to time in the Collateral Agent’s discretion during the occurrence and
continuance of an Enforcement Event, to take any action and to execute any
instrument that the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including:

 

(a)                                  to ask for, demand, collect, sue for,
recover, compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral;

 

(b)                                 to receive, indorse and collect any drafts
or other instruments and documents in connection included in the Collateral;

 

(c)                                  to file any claims or take any action or
institute any proceedings that the Collateral Agent may deem necessary for the
collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral; and

 

(d)                                 to execute and file any financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, in order to perfect (except in the case of the
Beneficial Interest Collateral provided pursuant to Section

 

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2.01(c)) and preserve the pledge, assignment and security interest granted
hereby; provided, that the Collateral Agent’s exercise of any such power in this
clause (d) shall be subject to the Express Perfection Requirements.

 

Section 2.13        Collateral Agent May Perform.  If any Grantor fails to
perform any agreement contained in this Agreement, the Collateral Agent may (but
shall not be obligated to) after such prior notice as may be reasonable under
the circumstances, itself perform, or cause performance of, such agreement, and
the expenses of the Collateral Agent incurred in connection with doing so shall
be payable by the Grantors.

 

Section 2.14        Covenant to Pay.  Each Grantor covenants with the Collateral
Agent (for the benefit of the Secured Parties) that it will pay or discharge any
monies and liabilities whatsoever that are now, or at any time hereafter may be,
due, owing or payable by such Grantor in any currency, actually or contingently,
solely and/or jointly, and/or severally with another or others, as principal or
surety on any account whatsoever pursuant to the Loan Documents in accordance
with their terms.  Each Grantor agrees that (except as provided in Article 7 of
the Credit Agreement) no payment or distribution by such Grantor pursuant to the
preceding sentence shall entitle such Grantor to exercise any rights of
subrogation in respect thereof until the related Secured Obligations shall have
been paid in full.

 

Section 2.15        Delivery of Collateral Supplements; Delivery of Grantor
Supplements.  (a)  Upon the acquisition by any Grantor of any Security
Collateral, Membership Interest Collateral or Beneficial Interest Collateral,
such Grantor shall concurrently execute and deliver to the Collateral Agent a
Collateral Supplement duly completed with respect to such Collateral and shall
take such steps with respect to the perfection of such Collateral as are called
for by this Agreement for Collateral of the same type; provided that the
foregoing shall not be construed to provide for any action with respect to
perfection not required by the Express Perfection Requirements; and provided
further that the failure of any Grantor to deliver any Collateral Supplement as
to any such Collateral shall not impair the lien of this Agreement as to such
Collateral.  Upon the acquisition by any Owner Subsidiary of an Aircraft Object
not previously described in Schedule I hereto as supplemented by Annex I to each
Grantor Supplement and Collateral Supplement, the Grantor that directly Owns the
Equity Interest in such Owner Subsidiary shall provide an updated Collateral
Supplement describing such Aircraft Object.

 

(b)                                 Each Grantor shall, prior to or
simultaneously with such Person Owning the Equity Interests in any Subsidiary
(other than a Non-Collateral Subsidiary), cause any Subsidiary Obligor that was
not a signatory hereto on the date of this Agreement to enter into a Grantor
Supplement and become a Grantor hereunder.

 

Section 2.16        Insurance.  The Grantors shall cause to be maintained, or
procure that the relevant Lessee maintains, hull and third party liability
insurance policies in respect of each Pool Aircraft in accordance with the terms
of Schedule V hereto.

 

Section 2.17        Covenant Regarding Control.  No Grantor shall cause nor
permit any Person other than the Collateral Agent to have “control” (as defined
in Section 8-106 of the

 

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UCC) of the Collateral Account pursuant to the terms of the Credit Agreement and
the Account Control Agreement.

 

Section 2.18        Covenant Regarding Account Collateral.  Borrower shall enter
into the Account Control Agreement as of the date hereof.

 

Section 2.19        As to Irish Law.  Notwithstanding anything to the contrary
contained in this Agreement and in addition to and without prejudice to any
other rights or power of the Collateral Agent under this Agreement or under
general law in any relevant jurisdiction, at any time that the Collateral shall
become enforceable as provided in Section 3.01, the Collateral Agent shall be
entitled to appoint a receiver under this Agreement or under the Land and
Conveyancing Law Reform Act 2009 (as amended and as the same may be amended,
modified or replaced from time to time, the “2009 Act”) without the need for the
occurrence of any of the events specified in (a) to (c) of section 108(1)
(Appointment of Receiver) of the 2009 Act, such receiver shall have all such
powers, rights and authority conferred under the 2009 Act, this Agreement and
otherwise under the laws of Ireland without any limitation or restriction
imposed by the 2009 Act or otherwise under the laws of Ireland which may be
excluded or removed. The statutory power of sale conferred by section 100 (Power
of sale) of the 2009 Act shall apply to the Collateral free from restrictions
contained in section 100(1), (2), (3) and (4) and without the requirement to
serve notice (as provided for in section 100(1)) and section 108 (7)
(Remuneration of a receiver) of the 2009 Act shall not apply to the Collateral
or to any receiver appointed under this Agreement.

 

Section 2.20        Additional Charges Over Shares.  Each Grantor undertakes
with the Collateral Agent to enter into an Additional Charge Over Shares in
respect of the Equity Interests held by it of any Subsidiary of a Grantor which
is incorporated under the laws of Ireland and in respect of any other Subsidiary
of a Grantor, in each case to the extent such Additional Charge Over Shares is
necessary to perfect or protect the Collateral Agent’s interests in such Equity
Interests under applicable Law and to the extent required under the Express
Perfection Requirements.

 

ARTICLE III
REMEDIES

 

Section 3.01        Remedies.  Notwithstanding anything herein or in any other
Loan Document to the contrary, if any Enforcement Event shall have occurred and
be continuing, and in each case subject to the quiet enjoyment rights of the
applicable Lessee of any Pool Aircraft:

 

(a)                                  The Collateral Agent may exercise in
respect of the Collateral, in addition to other rights and remedies provided for
herein (including, for the avoidance of doubt, the rights and remedies of the
Collateral Agent provided for in Section 2.10(c)), all of the rights and
remedies of a secured party upon default under the UCC (whether or not the UCC
applies to the affected Collateral) and all of the rights and remedies under
applicable law and also may (i) require any Grantor to, and such Grantor hereby
agrees that it shall at its expense and upon written request of the Collateral
Agent forthwith, assemble all or any part of the Collateral as directed by the
Collateral Agent and make it available to the Collateral Agent at a place to be
designated by the Collateral Agent that is reasonably convenient to both parties
and (ii) without

 

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notice except as specified below, sell or cause the sale of the Collateral or
any part thereof in one or more parcels at public or private sale, at any of the
Collateral Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. Each Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days’ prior notice to such Grantor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification.  The Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given.  The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned.

 

(b)                                 All cash proceeds received by the Collateral
Agent in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral shall be applied in accordance with Section 3.02. 
Any sale or sales conducted in accordance with the terms of this Section 3.01
shall be deemed conclusive and binding on each Grantor and the Secured Parties.

 

Section 3.02        Priority of Payments.  The Collateral Agent hereby agrees
that all cash proceeds received by the Collateral Agent in respect of any
Collateral pursuant to Section 3.01 hereof and any payments by any Grantor to
the Collateral Agent following an Enforcement Event shall be paid by the
Collateral Agent in the order of priority set forth below:

 

(a)                                  first, to the Collateral Agent for the
benefit of the Secured Parties, until payment in full in cash of the Secured
Obligations then outstanding; and

 

(b)                                 second, all remaining amounts to the
relevant Grantors or whomsoever may be lawfully entitled to receive such amounts
as directed by a court of competent jurisdiction.

 

ARTICLE IV
SECURITY INTEREST ABSOLUTE

 

Section 4.01        Security Interest Absolute.  A separate action or actions
may be brought and prosecuted against each Grantor to enforce this Agreement,
irrespective of whether any action is brought against any other Grantor or
whether any other Grantor is joined in any such action or actions.  Except as
otherwise provided in the Loan Documents, all rights of the Collateral Agent and
the security interests and Liens granted under, and all obligations of each
Grantor under, until the Secured Obligations then outstanding are paid in full,
this Agreement and each other Loan Document shall be absolute and unconditional,
irrespective of:

 

(a)                                  any lack of validity or enforceability of
any Loan Document, Assigned Document or any other agreement or instrument
relating thereto;

 

(b)                                 any change in the time, manner or place of
payment of, the security for, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any consent to any departure
from any Loan Document or any other agreement or instrument relating thereto;

 

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(c)           any taking, exchange, release or non-perfection of the Collateral
or any other collateral or taking, release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the Secured Obligations;

 

(d)           any manner of application of Collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Secured Obligations or any
other assets of the Grantors;

 

(e)           any change, restructuring or termination of the corporate
structure or existence of any Grantor; or

 

(f)            any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor or a third-party grantor of a
security interest or a Person deemed to be a surety.

 

ARTICLE V
THE COLLATERAL AGENT

 

The Collateral Agent and the Secured Parties agree among themselves as follows:

 

Section 5.01  Authorization and Action.  (a)  Each Secured Party by its
acceptance of the benefits of this Agreement hereby appoints and authorizes Bank
of America as the initial Collateral Agent to take such action as trustee on
behalf of the Secured Parties and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are specifically delegated to the
Collateral Agent by the terms of this Agreement and of the Loan Documents, and
no implied duties and covenants shall be deemed to arise against the Collateral
Agent.

 

(b)           The Collateral Agent accepts such appointment and agrees to
perform the same but only upon the terms of this Agreement (including any quiet
enjoyment covenants given to the Lessees) and agrees to receive and disburse all
moneys received by it in accordance with the terms of this Agreement.  The
Collateral Agent in its individual capacity shall not be answerable or
accountable under any circumstances, except for its own willful misconduct or
gross negligence (or simple negligence in the handling of funds or breach of any
of its representations or warranties set forth in this Agreement) and the
Collateral Agent shall not be liable for any action or inaction of any Grantor
or any other parties to any of the Loan Documents.

 

Section 5.02  Absence of Duties.  The powers conferred on the Collateral Agent
under this Agreement with respect to the Collateral are solely to protect its
interests in this Agreement and shall not impose any duty upon it, except as
explicitly set forth herein, to exercise any such powers.  Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it under this Agreement, the Collateral Agent shall not
have any duty as to any Collateral, as to ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not any Secured Party has or is deemed to
have knowledge of such matters, or as to the taking of any necessary steps to
preserve or perfect rights against any parties or any other rights pertaining to
any Collateral.  The Collateral Agent shall not have any duty to ascertain or
inquire as to the

 

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performance or observance of any covenants, conditions or agreements on the part
of any Grantor or Lessee.

 

Section 5.03  Representations or Warranties.  The Collateral Agent shall not
make nor shall it be deemed to have made any representations or warranties as to
the validity, legality or enforceability of this Agreement, any other Loan
Document or any other document or instrument or as to the correctness of any
statement contained in any thereof, or as to the validity or sufficiency of any
of the pledge and security interests granted hereby, except that the Collateral
Agent in its individual capacity hereby represents and warrants (a) that each
such specified document to which it is a party has been or will be duly executed
and delivered by one of its officers who is and will at such time be duly
authorized to execute and deliver such document on its behalf, and (b) this
Agreement is or will be the legal, valid and binding obligation of the
Collateral Agent in its individual capacity, enforceable against the Collateral
Agent in its individual capacity in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors’ rights generally.

 

Section 5.04  Reliance; Agents; Advice of Counsel.  (a)  The Collateral Agent
shall not incur any liability to anyone as a result of acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties.  The Collateral
Agent may accept a copy of a resolution of the board or other governing body of
any party to this Agreement or any Loan Document, certified by the Secretary or
an Assistant Secretary thereof or other duly authorized Person of such party as
duly adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted by said board or other governing body and that
the same is in full force and effect.  As to any fact or matter the manner of
ascertainment of which is not specifically described in this Agreement, the
Collateral Agent shall be entitled to receive and may for all purposes hereof
conclusively rely, and shall be fully protected in acting or refraining from
acting, on a certificate, signed by an officer of any duly authorized Person, as
to such fact or matter, and such certificate shall constitute full protection to
the Collateral Agent for any action taken or omitted to be taken by them in good
faith in reliance thereon.  The Collateral Agent shall assume, and shall be
fully protected in assuming, that each other party to this Agreement is
authorized by its constitutional documents to enter into this Agreement and to
take all action permitted to be taken by it pursuant to the provisions of this
Agreement, and shall not inquire into the authorization of such party with
respect thereto.

 

(b)           The Collateral Agent may execute any of its powers hereunder or
perform any duties under this Agreement either directly or by or through agents,
including financial advisors, or attorneys or a custodian or nominee, provided,
however, that the appointment of any agent shall not relieve the Collateral
Agent of its responsibilities or liabilities hereunder.

 

(c)           The Collateral Agent may consult with counsel and any opinion of
counsel or any advice of such counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it under
this Agreement in good faith and in accordance with such advice or opinion of
counsel.

 

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(d)           The Collateral Agent shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation under this Agreement or in relation hereto, at the
request, order or direction of any of the Secured Parties, pursuant to the
provisions of this Agreement, unless such Secured Party shall have offered to
the Collateral Agent reasonable security or indemnity reasonably satisfactory to
it against the costs, expenses and liabilities which may be incurred therein or
thereby.

 

(e)           The Collateral Agent shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of such funds or
indemnity reasonably satisfactory to it against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Collateral Agent to perform, or be responsible or
liable for the manner of performance of, any obligations of any Grantor under
any of the Loan Documents.

 

(f)            If the Collateral Agent incurs expenses or renders services in
connection with an exercise of remedies specified in Section 3.01, such expenses
(including the fees and expenses of its counsel) and the compensation for such
services are intended to constitute expenses of administration under any
bankruptcy law or law relating to creditors’ rights generally.

 

(g)           The Collateral Agent shall not be charged with knowledge of an
Event of Default unless the Collateral Agent obtains actual knowledge of such
event or the Collateral Agent receives written notice of such event from any of
the Secured Parties.

 

(h)           The Collateral Agent shall not have any duty to monitor the
performance of any Grantor or any other party to the Loan Documents, nor shall
the Collateral Agent have any liability in connection with the malfeasance or
nonfeasance by such parties.  The Collateral Agent shall not have any liability
in connection with compliance by any Grantor or any Lessee under a Lease with
statutory or regulatory requirements related to the Collateral, any Pool
Aircraft or any Lease.  The Collateral Agent shall not make or be deemed to have
made any representations or warranties with respect to the Collateral, any Pool
Aircraft or any Lease or the validity or sufficiency of any assignment or other
disposition of the Collateral, any Pool Aircraft or any Lease.

 

Section 5.05  No Individual Liability.  The Collateral Agent shall not have any
individual liability in respect of all or any part of the Secured Obligations,
and all shall look, subject to the lien and priorities of payment provided
herein and in the Loan Documents, only to the property of the Grantors (to the
extent provided in the Loan Documents) for payment or satisfaction of the
Secured Obligations pursuant to this Agreement and the other Loan Documents.

 

ARTICLE VI
SUCCESSOR COLLATERAL AGENT

 

Section 6.01  Resignation and Removal of the Collateral Agent.  The Collateral
Agent may resign at any time without cause by giving at least 30 days’ prior
written notice to the

 

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Borrower and the Lenders.  The Required Lenders may at any time remove the
Collateral Agent without cause by an instrument in writing delivered to the
Borrower, the Lenders and the Collateral Agent.  No resignation by or removal of
the Collateral Agent pursuant to this Section 6.01 shall become effective prior
to the date of appointment by the Required Lenders of a successor Collateral
Agent and the acceptance of such appointment by such successor Collateral Agent.

 

Section 6.02  Appointment of Successor.  (a)  In the case of the resignation or
removal of the Collateral Agent, the Required Lenders shall promptly appoint a
successor Collateral Agent.  So long as no Event of Default shall have occurred
and be continuing, any such successor Collateral Agent shall as a condition to
its appointment be reasonably acceptable to the Borrower.  If a successor
Collateral Agent shall not have been appointed and accepted its appointment
hereunder within 60 days after the Collateral Agent gives notice of resignation,
the retiring Collateral Agent, the Administrative Agent or the Required Lenders
may petition any court of competent jurisdiction for the appointment of a
successor Collateral Agent.  Any successor Collateral Agent so appointed by such
court shall immediately and without further act be superseded by any successor
Collateral Agent appointed as provided in the first sentence of this paragraph
within one year from the date of the appointment by such court.

 

(b)           Any successor Collateral Agent shall execute and deliver to the
relevant Secured Parties an instrument accepting such appointment.  Upon the
acceptance of any appointment as Collateral Agent hereunder, a successor
Collateral Agent, upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to this
Agreement, and, subject to the Express Perfection Requirements, such other
instruments or notices, as may be necessary, or as the Administrative Agent may
request in order to continue the perfection (if any) of the Liens granted or
purported to be granted hereby, shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Collateral
Agent, and the retiring Collateral Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents.  The retiring
Collateral Agent shall take all steps necessary to transfer all Collateral in
its possession and all its control over the Collateral to the successor
Collateral Agent.  All actions under this paragraph (b) shall be at the expense
of the Borrower; provided that if a successor Collateral Agent has been
appointed as a result of the circumstances described in Section 6.02(d), any
actions under this paragraph (b) as relating to such appointment shall be at the
expense of the successor Collateral Agent.

 

(c)           The Collateral Agent shall be an Eligible Institution, if there be
such an institution willing, able and legally qualified to perform the duties of
the Collateral Agent hereunder and, unless such institution is an Affiliate of a
Secured Party or an Event of Default has occurred and is continuing, reasonably
acceptable to the Borrower.

 

(d)           Any corporation or other entity into which the Collateral Agent
may be merged or converted or with which it may be consolidated, or any
corporation or other entity resulting from any merger, conversion or
consolidation to which the Collateral Agent shall be a party, or any corporation
or other entity to which substantially all the business of the Collateral Agent
may be transferred, shall be the Collateral Agent under this Agreement without
further act.

 

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ARTICLE VII
INDEMNITY AND EXPENSES

 

Section 7.01  Indemnity.  (a)  Each of the Grantors shall indemnify, defend and
hold harmless the Collateral Agent (and its officers, directors, employees,
representatives and agents) from and against, any loss, liability or expense
(including reasonable legal fees and expenses) incurred by it without negligence
or bad faith on its part in connection with the acceptance or administration of
this Agreement and its duties hereunder, including the costs and expenses of
defending itself against any claim or liability and of complying with any
process served upon it or any of its officers in connection with the exercise or
performance of any of its powers or duties hereunder.  The Collateral Agent (i)
must provide reasonably prompt notice to the applicable Grantor of any claim for
which indemnification is sought, provided that the failure to provide notice
shall only limit the indemnification provided hereby to the extent of any
incremental expense or actual prejudice as a result of such failure; and (ii)
must not make any admissions of liability or incur any significant expenses
after receiving actual notice of the claim or agree to any settlement without
the written consent of the applicable Grantor, which consent shall not be
unreasonably withheld.  No Grantor shall be required to reimburse any expense or
indemnity against any loss or liability incurred by the Collateral Agent through
negligence or bad faith.

 

Each Grantor, as applicable, may, in its sole discretion, and at its expense,
control the defense of the claim including, without limitation, designating
counsel for the Collateral Agent and controlling all negotiations, litigation,
arbitration, settlements, compromises and appeals of any claim; provided that
(i) the applicable Grantor may not agree to any settlement involving any
indemnified person that contains any element other than the payment of money and
complete indemnification of the indemnified person without the prior written
consent of the affected indemnified person, (ii) the applicable Grantor shall
engage and pay the expenses of separate counsel for the indemnified person to
the extent that the interests of the Collateral Agent are in conflict with those
of such Grantor and (iii) the indemnified person shall have the right to approve
the counsel designated by such Grantor which consent shall not be unreasonably
withheld.

 

(b)           Each Grantor shall within ten (10) Business Days after demand pay
to the Collateral Agent the amount of any and all reasonable expenses, including
the reasonable fees and expenses of its counsel and of any experts and agents,
that the Collateral Agent may incur in connection with (i) the administration of
this Agreement (in accordance with fee arrangements agreed between the
Collateral Agent and ILFC), (ii) the custody, preservation, use or operation of,
or the sale of, collection from or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or any other Secured Party against such Grantor hereunder or
(iv) the failure by any Grantor to perform or observe any of the provisions
hereof.

 

Section 7.02  Secured Parties’ Indemnity.  (a)  The Collateral Agent shall be
entitled to be indemnified (subject to the limitations and requirements
described in Section 7.01 mutatis mutandis) by the Lenders to the sole
satisfaction of the Collateral Agent before proceeding to exercise any right or
power under this Agreement at the request or direction of the Administrative
Agent, provided that such indemnity by the Lenders shall not be required to the

 

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extent the Collateral Agent is indemnified with respect to such exercise by the
Grantors and no Default or Event of Default has occurred and is continuing.

 

(b)           In order to recover under clause (a) above, the Collateral Agent:
(i) must provide reasonably prompt notice to the Administrative Agent of any
claim for which indemnification is sought, provided that the failure to provide
notice shall only limit the indemnification provided hereby to the extent of any
incremental expense or actual prejudice as a result of such failure; and (ii)
must not make any admissions of liability or incur any significant expenses
after receiving actual notice of the claim or agree to any settlement without
the written consent of the Administrative Agent which consent shall not be
unreasonably withheld.

 

(c)           The Administrative Agent may, in its sole discretion, and at its
expense, control the defense of the claim including, without limitation,
designating counsel for the Collateral Agent and controlling all negotiations,
litigation, arbitration, settlements, compromises and appeals of any claim;
provided that (i) the Administrative Agent may not agree to any settlement
involving any indemnified person that contains any element other than the
payment of money and complete indemnification of the indemnified person without
the prior written consent of the affected indemnified person, (ii) the
Administrative Agent shall engage and pay the expenses of separate counsel for
the indemnified person to the extent that the interests of the Collateral Agent
are in conflict with those of the Administrative Agent and (iii) the indemnified
person shall have the right to approve the counsel designated by the
Administrative Agent which consent shall not be unreasonably withheld.

 

(d)           The provisions of Section 7.01 and this Section 7.02 shall survive
the termination of this Agreement or the earlier resignation or removal of the
Collateral Agent.

 

Section 7.03  No Compensation from Secured Parties.  The Collateral Agent agrees
that it shall have no right against the Secured Parties for any fee as
compensation for its services in such capacity.

 

Section 7.04  Collateral Agent Fees.  In consideration of the Collateral Agent’s
performance of the services provided for under this Agreement, the Grantors
shall pay to the Collateral Agent an annual fee set forth under a separate
agreement between the Borrower and the Collateral Agent and shall reimburse the
Collateral Agent for expenses incurred including those associated with the
International Registry.

 

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ARTICLE VIII
MISCELLANEOUS

 

Section 8.01  Amendments; Waivers; Etc.  (a)  No amendment or waiver of any
provision of this Agreement, and no consent to any departure by any party from
the provisions of this Agreement, shall in any event be effective unless the
same shall be in writing and signed by the Collateral Agent and each party
hereto.  No failure on the part of the Collateral Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.  The Collateral
Agent may, but shall have no obligation to, execute and deliver any amendment or
modification which would affect its duties, powers, rights, immunities or
indemnities hereunder.

 

(b)           Upon the execution and delivery by any Person of a Grantor
Supplement, (i) such Person shall be referred to as an “Additional Grantor” and
shall be and become a Grantor hereunder, and each reference in this Agreement to
“Grantor” shall also mean and be a reference to such Additional Grantor,
(ii) Annexes I, II, III and IV attached to each Grantor Supplement shall be
incorporated into, become a part of and supplement Schedules I, II, III and IV,
respectively, and the Collateral Agent may attach such Annexes as supplements to
such Schedules; and each reference to such Schedules shall be a reference to
such Schedules as so supplemented and (iii) such Additional Grantor shall be a
Grantor for all purposes under this Agreement and shall be bound by the
obligations of the Grantors hereunder.

 

(c)           Upon the execution and delivery by a Grantor of a Collateral
Supplement, Annexes I and II to such Collateral Supplement shall be incorporated
into, become a part of and supplement Schedules I and II, respectively, and the
Collateral Agent may attach such Annexes as supplements to such Schedules; and
each reference to such Schedules shall be a reference to such Schedules as so
supplemented.

 

Section 8.02  Addresses for Notices; Delivery of Documents.  (a)  Except in the
case of notices and other communications expressly permitted to be given by
telephone, all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier or electronic mail as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

 

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For each Grantor:

 

International Lease Finance Corporation

10250 Constellation Blvd.
Suite 3400
Los Angeles, CA  90067

Attention:  Treasurer with a copy to the General Counsel

Facsimile:  (310) 788-1990

Telephone:  (310) 788-1999

Electronic mail: legalnotices@ilfc.com

 

For the Collateral Agent:

 

Bank of America, N.A.

1455 Market Street, 5th Floor

CA5-701-05-19

San Francisco, CA 94103

Attention: Robert Rittelmeyer

Facsimile No. (415) 503-5099

Electronic mail: robert.j.rittelmeyer@baml.com

 

or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section 8.02.  Notices and other communications sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices and other communications sent
by telecopier or electronic mail shall be deemed to have been given when sent
(except that, if not given during normal business hours for the recipient, shall
be deemed to have been given at the opening of business on the next business day
for the recipient).

 

(b)           All documents required to be delivered to the Collateral Agent
shall be delivered in accordance with the provisions of Section 5.09(c) of the
Credit Agreement.

 

Section 8.03  Remedies.  The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

 

Section 8.04  Severability.  If any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof shall not in any way be affected or impaired.

 

Section 8.05  Continuing Security Interest.  Subject to Section 8.06, this
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the earlier of the payment in
full in cash of the Secured Obligations then outstanding to the Secured Parties,
(b) be binding upon each Grantor, its successors and assigns and (c) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Secured Parties and their respective successors, permitted
transferees and permitted assigns.

 

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Section 8.06  Release and Termination.  (a)  Upon any sale, transfer or other
disposition or removal from the Designated Pool of any Pool Aircraft (or Owner
Subsidiary or Intermediate Lessee) or other item of Collateral in accordance
with the terms of the Loan Documents, including the Pledged Equity Interest in
each Owner Subsidiary or Intermediate Lessee that owns or leases such Pool
Aircraft, or if applicable, Irish Subsidiary Holdco or CA Subsidiary Holdco (in
each case, upon a removal of such Transaction Party in accordance with Sections
2.10 or 5.04 of the Credit Agreement), such Collateral will be deemed released
from the Lien hereof (and related guarantees will be deemed released in
accordance with Section 7.11 of the Credit Agreement), and the Collateral Agent
will, at the relevant Grantor’s expense, execute and deliver to the Grantor of
such item of Collateral such documents as such Grantor shall reasonably request
and provide to the Collateral Agent to evidence the release of such item of
Collateral from the assignment and security interest granted hereby and to
evidence the release of any related guaranty, and to the extent that (A) the
Collateral Agent’s consent is required for any deregistration of the interests
in such released Collateral from the International Registry or any other
registry or (B) the Collateral Agent is required to initiate any such
deregistration, the Collateral Agent shall ensure that such consent or such
initiation of such deregistration is effected.

 

Any amounts released from the Collateral Account by the Collateral Agent in
accordance with the terms of the Loan Documents shall be deemed released from
the Lien hereof.

 

(b)           Upon the payment in full in cash of the Secured Obligations then
outstanding, the pledge, assignment and security interest granted by
Section 2.01 hereof shall terminate, the Collateral Agent shall cease to be a
party to this agreement, and all provisions of this Agreement (except for this
Section 8.06(b)) relating to the Secured Obligations, the Secured Parties or the
Collateral Agent shall cease to be of any effect insofar as they relate to the
Secured Obligations, the Secured Parties or the Collateral Agent.  Upon any such
termination, the Collateral Agent will, at the relevant Grantor’s expense,
execute and deliver to each relevant Grantor such documents as such Grantor
shall prepare and reasonably request to evidence such termination.

 

(c)           If, prior to the termination of this Agreement, the Collateral
Agent ceases to be the Collateral Agent in accordance with the definition of
“Collateral Agent” in Section 1.01, all certificates, instruments or other
documents being held by the Collateral Agent at such time shall, within five
(5) Business Days from the date on which it ceases to be the Collateral Agent,
be delivered to the successor Collateral Agent.

 

Section 8.07  Currency Conversion.  If any amount is received or recovered by
the Collateral Agent in a currency (the “Received Currency”) other than the
currency in which such amount was expressed to be payable (the “Agreed
Currency”), then the amount in the Received Currency actually received or
recovered by the Collateral Agent, to the extent permitted by law, shall only
constitute a discharge of the relevant Grantor to the extent of the amount of
the Agreed Currency which the Collateral Agent was or would have been able in
accordance with its or his normal procedures to purchase on the date of actual
receipt or recovery (or, if that is not practicable, on the next date on which
it is so practicable), and, if the amount of the Agreed Currency which the
Collateral Agent is or would have been so able to purchase is

 

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less than the amount of the Agreed Currency which was originally payable by the
relevant Grantor, such Grantor shall pay to the Collateral Agent for the benefit
of the Secured Parties such amount as it shall determine to be necessary to
indemnify the Collateral Agent and the Secured Parties against any loss
sustained by it as a result (including the cost of making any such purchase and
any premiums, commissions or other charges paid or incurred in connection
therewith) and so that, to the extent permitted by law, (i) such indemnity shall
constitute a separate and independent obligation of each Grantor distinct from
its obligation to discharge the amount which was originally payable by such
Grantor and (ii) shall give rise to a separate and independent cause of action
and apply irrespective of any indulgence granted by the Collateral Agent and
continue in full force and effect notwithstanding any judgment, order, claim or
proof for a liquidated amount in respect of the amount originally payable by any
Grantor or any judgment or order and no proof or evidence of any actual loss
shall be required.

 

Section 8.08  Governing Law.  THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF
NEW YORK AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.

 

Section 8.09  Jurisdiction; Consent to Service of Process.  (a)  To the extent
permitted by applicable law, each party hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in New York County, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
federal court.  Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. 
Nothing in this Agreement shall affect any right that any Secured Party may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against any Borrower Party or its properties in the
courts of any jurisdiction.

 

(b)           Each party hereto hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or federal court described above.  Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(c)           Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.02.  Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

Section 8.10  Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single

 

29

--------------------------------------------------------------------------------

 

contract.  This Agreement and the other Loan Documents constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof.  This Agreement (i) will become effective when the
Collateral Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto and
(ii) thereafter will be binding upon and inure to the benefit of the parties
hereto and their respective permitted successors and assigns.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or
electronic mail will be effective as delivery of a manually executed counterpart
of this Agreement.

 

Section 8.11  Table of Contents, Headings, Etc.  The Table of Contents and
headings of the Articles and Sections of this Agreement have been inserted for
convenience of reference only, are not to be considered a part hereof and shall
in no way modify or restrict any of the terms and provisions hereof.

 

Section 8.12  Non-Invasive Provisions.  (a)  Notwithstanding any other provision
of the Loan Documents, the Collateral Agent (for and on behalf of itself and the
Secured Parties) agrees that, so long as no Enforcement Event shall have
occurred and be continuing, not to take any action or cause to be taken any
action, or permit any Person claiming by, through or on behalf of it to take any
action or cause any action, that would interfere with the possession, use,
operation and quiet enjoyment of and other rights with respect to any Pool
Aircraft or Collateral related thereto and all rents, revenues, profits and
income therefrom, including, the right to enforce manufacturers’ warranties, the
right to apply or obtain insurance proceeds for damage to the Pool Aircraft to
the repair or replacement of the Pool Aircraft or otherwise to the extent not
required to be deposited as Account Collateral under the Loan Documents and the
right to engage in pooling, leasing and similar actions, in each case in
accordance with the terms of this Agreement or the other applicable Loan
Documents.

 

(b)           Notwithstanding any other provision of the Loan Documents, the
Collateral Agent agrees (for and on behalf of itself and the Secured Parties)
that, so long as no “Event of Default” (or similar term) under a Lease (as
defined in such Lease) shall have occurred and be continuing and as otherwise
provided in any Lease, not to take any action or cause to be taken any action,
or permit any person claiming by, through or on behalf of it to take any action
or cause any action, that would interfere with the possession, use, operation
and quiet enjoyment of and other rights of the Lessee with respect to any Pool
Aircraft or Collateral related thereto and all rents, revenues, profits and
income therefrom, including, the right to enforce manufacturers’ warranties, the
right to apply or obtain insurance proceeds for damage to the Pool Aircraft to
the repair of the Pool Aircraft or otherwise as provided in such Lease and the
right to engage in pooling, leasing and similar actions, in each case in
accordance with the terms of such Lease.

 

(c)           For the avoidance of doubt, the Collateral Agent (for and on
behalf of itself and the Secured Parties) agrees that a Transaction Party may
from time to time lease out an engine that is part of a Pool Aircraft or lease
in an engine that is not part of a Pool Aircraft as it determines in accordance
with Leasing Company Practice.

 

30

--------------------------------------------------------------------------------

 

Section 8.13  Limited Recourse.  (a)  In the event that the direct or indirect
assets of the Grantors are insufficient, after payment of all other claims, if
any, ranking in priority to the claims of the Collateral Agent or any Secured
Party hereunder, to pay in full such claims of the Collateral Agent or such
Secured Party (as the case may be), then the Collateral Agent or the Secured
Party shall have no further claim against the Grantors (other than the Borrower)
in respect of any such unpaid amounts; provided that the foregoing limitation on
recourse shall in no way limit the right of any Secured Party to enforce the
obligations of ILFC set forth in Article 7 of the Credit Agreement.

 

(b)           To the extent permitted by applicable law, no recourse under any
obligation, covenant or agreement of any party contained in this Agreement shall
be had against any equityholder (not including any Grantor as an equityholder of
any Pledged Equity Party hereunder), officer or director of the relevant party
as such, by the enforcement of any assessment or by any proceeding, by virtue of
any statute or otherwise; it being expressly agreed and understood that this
Agreement is a corporate obligation of the relevant party and no personal
liability shall attach to or be incurred by the equityholders (not including any
Grantor as an equityholder of any other Grantor hereunder), officers or
directors of the relevant party as such, or any of them under or by reason of
any of the obligations, covenants or agreements of such relevant party contained
in this Agreement, or implied therefrom, and that any and all personal liability
for breaches by such party of any of such obligations, covenants or agreements,
either at law or at equity or by statute or constitution, of every such
equityholder (not including any Grantor as an equityholder of any Pledged Equity
Party hereunder), officer or director is hereby expressly waived by the other
parties as a condition of and consideration for the execution of this Agreement.

 

(c)           The guarantees, obligations, liabilities and undertakings granted
by any Pledged Equity Party organized under the laws of France under this
Agreement and the other Loan Documents shall, for each relevant financial year,
be, in any and all cases, strictly limited to 90% of the annual net margin
generated by such Pledged Equity Party or Pledged Equity Parties in connection
with back-to-back leasing activities between it and any other Pledged Equity
Party with respect to the lease of Pool Aircraft.

 

[The Remainder of this Page is Intentionally Left Blank]

 

31

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by its representative or officer thereunto duly
authorized as of the date first above written.

 

 

 

FLYING FORTRESS INC.

 

 

 

 

 

By:

/s/ Pamela S. Hendry

 

 

 

Name: Pamela S. Hendry

 

 

 

Title: Treasurer

 

 

 

 

 

INTERNATIONAL LEASE FINANCE CORPORATION

 

 

 

 

 

By:

/s/ Pamela S. Hendry

 

 

 

Name: Pamela S. Hendry

 

 

 

Title: Senior Vice President & Treasurer

 

 

 

 

 

FLYING FORTRESS FINANCING INC.

 

 

 

 

 

By:

/s/ Pamela S. Hendry

 

 

 

Name: Pamela S. Hendry

 

 

 

Title: Treasurer

 

 

 

 

 

FLYING FORTRESS US LEASING INC.

 

 

 

 

 

By:

/s/ Pamela S. Hendry

 

 

 

Name: Pamela S. Hendry

 

 

 

Title: Treasurer

 

 

 

 

 

SIGNED and DELIVERED as a DEED

 

 

for and on behalf of

 

 

FLYING FORTRESS IRELAND

 

 

LEASING LIMITED

 

 

by its duly authorized attorney

 

 

 

 

 

/s/ Niall C. Sommerville

 

 

Niall C. Sommerville

 

 

Attorney

 

 

 

 

 

in the presence of

 

 

 

 

 

 

 

 

/s/ Sarah Caprani

 

 

Name: Sarah Caprani

 

 

Address: 30 North Wall Quay, Dublin 1

 

 

Occupation: Trainee Solicitor

 

Signature Page — Term Loan
Security Agreement

 

--------------------------------------------------------------------------------

 

 

 

BANK OF AMERICA, N.A. not in its individual capacity but solely as the
Collateral Agent

 

 

 

 

 

By:

/s/ Robert Rittelmeyer

 

 

 

Name: Robert Rittelmeyer

 

 

 

Title: Vice President

 

Signature Page — Term Loan
Security Agreement

 

--------------------------------------------------------------------------------

 

SCHEDULE I

SECURITY AGREEMENT

 

AIRCRAFT OBJECTS

 

 

 

Airframe Manufacturer and Model

 

Airframe MSN

 

Engine Manufacturer and
Engine Model

1

 

None

 

N/A

 

N/A

 

Schedule I-1

 

--------------------------------------------------------------------------------

 

SCHEDULE II

SECURITY AGREEMENT

 

PLEDGED EQUITY INTERESTS

 

PLEDGED STOCK

 

Pledged Equity
Party

 

Par Value

 

Certificate No(s).

 

Number of
Shares

 

Percentage of
Outstanding
Shares

 

FLYING FORTRESS INC.

 

N/A

 

1

 

100

 

100

%

FLYING FORTRESS US LEASING INC.

 

N/A

 

1

 

100

 

100

%

FLYING FORTRESS IRELAND LEASING LIMITED

 

N/A

 

1

 

2

 

100

%

 

PLEDGED BENEFICIAL INTERESTS

 

Pledged Equity Party

 

Certificate No./Date

 

Percentage of
Beneficial Interest

 

N/A

 

N/A

 

N/A

 

 

PLEDGED MEMBERSHIP INTERESTS

 

Pledged Equity Party

 

Certificate No.

 

Percentage of
Membership Interest

 

N/A

 

N/A

 

N/A

 

 

PLEDGED DEBT

 

Intercompany Lender

 

Intercompany Borrower

 

Description of Instrument of
Pledged Debt

 

N/A

 

N/A

 

N/A

 

 

Schedule II-1

 

--------------------------------------------------------------------------------

 

SCHEDULE III

SECURITY AGREEMENT

 

TRADE NAMES

 

1.

 

Grantor: Flying Fortress Financing Inc.

 

 

Trade Name: Flying Fortress Financing Inc.

 

 

 

2.

 

Grantor: Flying Fortress Inc.

 

 

Trade Name: Flying Fortress Inc.

 

 

 

3.

 

Grantor: Flying Fortress Ireland Leasing Limited

 

 

Trade Name: Flying Fortress Ireland Leasing Limited

 

 

 

4.

 

Grantor: Flying Fortress US Leasing Inc.

 

 

Trade Name: Flying Fortress US Leasing Inc.

 

Schedule III-1

 

--------------------------------------------------------------------------------

 

SCHEDULE IV

SECURITY AGREEMENT

 

CHIEF PLACE OF BUSINESS AND CHIEF EXECUTIVE OR REGISTERED OFFICE

 

Name of Grantor

 

Chief Executive Office, Chief Place of
Business or Registered Office
and Organizational ID (if applicable)

 

 

 

Flying Fortress Financing Inc.

 

10250 Constellation Blvd.
Suite 3400
Los Angeles, CA 90067
Facsimile: (310) 788-1990
Telephone: (310) 788-1999
Organizational ID: 45-4482409

 

 

 

Flying Fortress Inc.

 

10250 Constellation Blvd.
Suite 3400
Los Angeles, CA 90067
Facsimile: (310) 788-1990
Telephone: (310) 788-1999
Organizational ID: C 3285904

 

 

 

Flying Fortress US Leasing Inc.

 

10250 Constellation Blvd.
Suite 3400
Los Angeles, CA 90067
Facsimile: (310) 788-1990
Telephone: (310) 788-1999
Organizational ID: C 3285903

 

 

 

Flying Fortress Ireland Leasing Limited

 

30 North Wall Quay
Dublin 1, Ireland
Facsimile: 353-1-672-0270
Telephone: 353-1-802-8901
Organizational ID: 483084

 

Schedule IV-1

 

--------------------------------------------------------------------------------

 

SCHEDULE V

SECURITY AGREEMENT

 

INSURANCE

 

1.                           Obligation to Insure

 

So long as this Agreement shall remain in effect, the Grantors will ensure that
there is effected and maintained appropriate insurances, maintained with
insurers or reinsured with reinsurers of recognized responsibility or pursuant
to governmental indemnities, in respect of each Pool Aircraft and the Collateral
Agent and the Administrative Agent and its operation including insurance for:

 

(a)                        loss or damage to each Pool Aircraft and each part
thereof; and

 

(b)                       any liability for injury to or death of persons and
damage to or the destruction of public or private property arising out of or in
connection with the operation, storage, maintenance or use of (in each case to
the extent available) the Pool Aircraft and of any other part thereof not
belonging to the Grantors but from time to time installed on the airframe.

 

2.                           Specific Insurances

 

The Grantors will maintain or will cause to be maintained the following specific
insurances with respect to each Pool Aircraft (subject to paragraph 3):

 

(a)                        All Risks Hull Insurance - All risks hull insurance
policy on the Pool Aircraft in an amount at least equal to 110% of the
outstanding principal of the Loans allocable to such Pool Aircraft, calculated
based on the most recent appraised value (the “Required Insured Value”) on an
agreed value basis and naming the Collateral Agent (for and on behalf of itself
and the Secured Parties) as a loss payee for the Required Insured Value
(provided, however, that, if the applicable insurance program uses AVN67B or a
successor London market endorsement similar thereto, the Grantor shall procure
that the Collateral Agent is named as a “Contract Party” in respect of such hull
insurance and shall ensure that the Collateral Agent is also named as such a
“Contract Party” in respect of any new Lease entered into);

 

(b)                       Hull War Risk Insurance - Hull war risk and allied
perils insurance, including hijacking, (excluding, however, confiscation by
government of registry or country of domicile to the extent coverage of such
risk is not generally available to the applicable Lessee in the relevant
insurance market at a commercially reasonable cost or is not customarily
obtained by operators in such jurisdiction at such time in accordance with
Leasing Company Practice) on the Pool Aircraft where the custom in the industry
is to carry war risk for aircraft operating on routes or kept in locations
similar to the Pool Aircraft in an amount not less than the Required Insured
Value on an agreed value basis and naming the Collateral Agent (for and on
behalf of itself and the Secured Parties) as a loss payee for the Required
Insured Value (provided, however, that, if the applicable insurance program uses
AVN67B or a successor

 

Schedule V-1

 

--------------------------------------------------------------------------------

 

London market endorsement similar thereto, the Grantors shall procure that the
Collateral Agent is named as a “Contract Party” in respect of such insurance and
shall ensure that the Collateral Agent is also named as such a “Contract Party”
in respect of any new Lease entered into);

 

(c)                        Legal Liability Insurance - Third party legal
liability insurance (including war and allied perils) for a combined single
limit (bodily injured and property damage) of not less than $500,000,000 for a
Narrowbody Aircraft, and not less than $750,000,000 for Widebody Aircraft.  The
Collateral Agent and the Administrative Agent (for and on behalf of themselves
and the Secured Parties) shall be named as additional insureds on such policies;
provided that if the applicable insurance program uses AVN 67B or a successor
London market endorsement similar thereto, the Grantors shall procure that the
Collateral Agent and the Administrative Agent are named as “Contract Parties” in
respect of such insurance and the Grantors shall ensure that the Collateral
Agent and the Administrative Agent are also named as such a “Contract Party” in
respect of any new Lease.

 

(d)                       Aircraft Spares Insurance - Insurance for the engines
and the parts while not installed on the airframe for their replacement cost or
an agreed value basis.

 

Proceeds of insurance paid to the Collateral Agent shall be disbursed to the
Borrower unless an Enforcement Event has occurred and is continuing, in which
case such proceeds will be held in the Collateral Account until applied as
provided in the Credit Agreement or herein; provided, however, that if, pursuant
to a Lease, such insurance proceeds are payable to a Lessee, such insurance
proceeds shall in all circumstances be paid to such Lessee in accordance with
such Lease.

 

3.                           Variations on Specific Insurance Requirements

 

In certain circumstances, it is customary that not all of the insurances
described in paragraph 2 be carried for the Pool Aircraft.  For example, when a
Pool Aircraft is not on lease to a passenger air carrier or is in storage or is
being repaired or maintained, ferry or ground rather than passenger flight
coverage for the Pool Aircraft are applicable.  Similarly, indemnities may be
provided by a Governmental Authority in lieu of particular insurances; provided,
however, that the Grantors shall not, without the prior written consent of the
Collateral Agent, be entitled to accept any new such governmental indemnities
other than when such indemnities are granted by a Governmental Authority of a
country or jurisdiction that is not a Prohibited Country.  The relevant Grantor
will determine the necessary coverage for the Pool Aircraft in such situations
consistent with Leasing Company Practice with respect to similar aircraft.

 

4.                           Hull Insurances in Excess of Required Insurance
Value

 

For the avoidance of doubt, any Grantor and/or any Lessee may carry hull risks
and hull war and allied perils insurance on the Pool Aircraft in excess of the
Required Insured Value which (subject in the case of the Grantors with respect
to the insurance not required to be carried by the Lessee under the Lease to no
Enforcement Event having occurred and

 

Schedule V-2

 

--------------------------------------------------------------------------------

 

being continuing) will not be payable to the Collateral Agent.  Such excess
insurance proceeds, if paid under the insurances required to be carried by the
Lessee under the Lease, will be payable to (i) if payable to the Grantors, to
the relevant Grantor, unless an Enforcement Event has occurred and is continuing
in which case the excess shall be payable to the Collateral Agent or (ii) if
payable to the Lessee to the Lessee in all circumstances.

 

5.                           Currency

 

All insurance and reinsurances effected pursuant to this Schedule V shall be
payable in Dollars, save that in the case of the insurances referred to in
paragraph 2(c) (if such denomination is (a) required by the law of the state of
registration of the Pool Aircraft; or (b) the normal practice of airlines in the
relevant country that operate aircraft leased from lessors located outside such
country; or (c) otherwise accepted in accordance with Leasing Company Practice)
or paragraph 2(d).

 

6.                           Specific Terms of Insurances

 

Insurance policies which are underwritten in the London and/or other non-US
insurance market and which pertain to financed or leased aircraft equipment
contain the coverage and endorsements described in AVN67B or a successor London
market endorsement as it may be amended or revised or its equivalent.  Each of
the Grantors agrees that, so long as this Agreement shall remain in effect, the
Pool Aircraft will be insured and the applicable insurance policies endorsed
either (i) in a manner consistent with AVN67B or a successor London market
endorsement, as it may be amended or revised or its equivalent or (ii) as may
then be customary in the airline industry for aircraft of the same type as the
Pool Aircraft utilised by operators in the same country and whose operational
network for such Pool Aircraft and credit status is similar to the type of
business as the Lessee (if any) and at the time commonly available in the
insurance market.  In all cases, the relevant Grantor will set the standards,
review and manage the insurances on the Pool Aircraft consistent with Leasing
Company Practice with respect to similar aircraft.

 

7.                           Insurance Brokers and Insurers

 

In reviewing and accepting the insurance brokers (if any) and reinsurance
brokers (if any) and insurers and reinsurers (if any) providing coverage with
respect to the Pool Aircraft, the relevant Grantor will utilize standards
consistent with Leasing Company Practice with respect to similar aircraft.  It
is recognized that airlines in certain countries are required to utilize brokers
(and sometimes even no brokers) or carry insurance with local insurance brokers
and insurers.  If at any time any Pool Aircraft is not subject to a Lease, the
relevant Grantor will cause its insurance brokers to provide the Collateral
Agent with evidence that the insurances described in this Schedule V are in full
force and effect.

 

8.                           Deductible Amounts, Self-Insurance and Reinsurance

 

With respect to the type of aircraft concerned, the nationality and
creditworthiness of the airline operator, the airline operator’s use and
operation thereof and to the scope of and the amount covered by the insurances
carried by the Lessee, the relevant Grantor will apply

 

Schedule V-3

 

--------------------------------------------------------------------------------

 

standards consistent with Leasing Company Practice with respect to similar
aircraft in reviewing and accepting the amount of any insurance deductibles,
whether the Lessee may self-insure any of the risks covered by the insurances
and the scope and terms of reinsurance, if any, including a cut-through and
assignment clause.

 

9.                           Renewals

 

The Grantors will monitor the insurances on the Pool Aircraft and their
expiration dates.  The relevant Grantor shall, when requested by the Collateral
Agent, promptly inform the Collateral Agent as to whether or not it has been
advised that renewal instructions for any of the insurances have been given by
the airline operator or its broker prior to or on the scheduled expiry date of
the relevant insurance.  The relevant Grantor shall promptly notify the
Collateral Agent in writing if it receives notice that any of the insurances
have in fact expired without renewal.  Promptly after receipt, the relevant
Grantor will provide to the Collateral Agent evidence of renewal of the
insurances and reinsurance (if any).

 

10.                     Information

 

Subject to applicable confidentiality restrictions, each of the Grantors shall
provide the Collateral Agent or shall ensure that the Collateral Agent is
provided with any information reasonably requested by it from time to time
concerning the insurances maintained with respect to the Pool Aircraft or, if
reasonably available to the Grantors, in connection with any claim being made or
proposed to be made thereunder.

 

Schedule V-4

 

--------------------------------------------------------------------------------

 

EXHIBIT A-1

SECURITY AGREEMENT

 

FORM OF COLLATERAL SUPPLEMENT

 

Bank of America, N.A., as the Collateral Agent

1455 Market Street, 5th Floor

CA5-701-05-19

San Francisco, CA 94103

Attention: Robert Rittelmeyer

Facsimile No. (415) 503-5099

 

 

[Date]

 

Re:  Term Loan Security Agreement, dated as of February 23, 2012

 

Ladies and Gentlemen:

 

Reference is made to the Term Loan Security Agreement, dated as of February 23,
2012 (the “Security Agreement”), among Flying Fortress Financing Inc., a
California corporation (“Parent Holdco”), Flying Fortress Inc., a California
corporation (the “Borrower”), Flying Fortress Ireland Leasing Limited, a private
limited liability company incorporated under the laws of Ireland (the “Irish
Subsidiary Holdco”), Flying Fortress US Leasing Inc., a California corporation
(the “CA Subsidiary Holdco”), and the ADDITIONAL GRANTORS who from time to time
become grantors under the Security Agreement (together with Parent Holdco, the
Borrower, the Irish Subsidiary Holdco and the CA Subsidiary Holdco, the
“Grantors”), and BANK OF AMERICA, N.A., a national banking association, as the
collateral agent (in such capacity, and together with any permitted successor or
assign thereto or any permitted replacement thereof, the “Collateral Agent”). 
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Security Agreement.

 

The undersigned hereby delivers, as of the date first above written, the
attached Annexes I and II pursuant to Section 2.15 of the Security Agreement.

 

The undersigned Grantor hereby confirms that the property included in the
attached Annex II constitutes part of the Collateral and hereby makes each
representation and warranty set forth in Section 2.03 of the Security Agreement
(as supplemented by the attached Annexes).

 

Attached are duly completed copies of Annexes I and II hereto.

 

Exhibit A-1-1

--------------------------------------------------------------------------------

 

This Collateral Supplement is delivered in and shall in all respects be governed
by, and construed in accordance with, the laws of the State of New York,
including all matters of construction, validity and performance.

 

Very truly yours,

 

 

[                                  ]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Acknowledged and agreed to as of the date first above written:

 

 

BANK OF AMERICA, N.A.,
not in its individual capacity, but
solely as the Collateral Agent

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Collateral Supplement Signature Page

 

--------------------------------------------------------------------------------

 

ANNEX I

COLLATERAL SUPPLEMENT

 

AIRCRAFT OBJECTS

 

Airframe MSN

 

Airframe Manufacturer
and Model

 

Engine MSNs

 

Engine Manufacturer and
Model

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex I-1

--------------------------------------------------------------------------------

 

ANNEX II

COLLATERAL SUPPLEMENT

 

PLEDGED EQUITY INTERESTS

 

PLEDGED BENEFICIAL INTERESTS

 

Pledged Equity Party

 

Certificate No.

 

Percentage of
Beneficial Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLEDGED MEMBERSHIP INTERESTS

 

Pledged Equity Party

 

Certificate No.

 

Percentage of
Membership Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLEDGED STOCK

 

Pledged Equity Party

 

Certificate No.

 

Percentage Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLEDGED DEBT

 

Intercompany Lender

 

Intercompany Borrower

 

Description of Instrument of

Pledged Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex II-1

--------------------------------------------------------------------------------

 

EXHIBIT A-2

SECURITY AGREEMENT

 

FORM OF GRANTOR SUPPLEMENT

 

Bank of America, N.A., as the Collateral Agent

1455 Market Street, 5th Floor

CA5-701-05-19

San Francisco, CA 94103

Attention: Robert Rittelmeyer

Facsimile No. (415) 503-5099

 

[Date]

 

Re: Term Loan Security Agreement, dated as of February 23, 2012

 

Ladies and Gentlemen:

 

Reference is made to the Term Loan Security Agreement, dated as of February 23,
2012 (the “Security Agreement”), among Flying Fortress Financing Inc., a
California corporation (“Parent Holdco”), Flying Fortress Inc., a California
corporation (the “Borrower”), Flying Fortress Ireland Leasing Limited, a private
limited liability company incorporated under the laws of Ireland (the “Irish
Subsidiary Holdco”), Flying Fortress US Leasing Inc., a California corporation
(the “CA Subsidiary Holdco”), and the ADDITIONAL GRANTORS who from time to time
become grantors under the Security Agreement (together with Parent Holdco, the
Borrower, the Irish Subsidiary Holdco and the CA Subsidiary Holdco, the
“Grantors”), and BANK OF AMERICA, N.A., a national banking association, as the
collateral agent (in such capacity, and together with any permitted successor or
assign thereto or any permitted replacement thereof, the “Collateral Agent”). 
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Security Agreement.

 

The undersigned hereby agrees, as of the date first above written, to become a
Grantor under the Security Agreement as if it were an original party thereto and
agrees that each reference in the Security Agreement to “Grantor” shall also
mean and be a reference to the undersigned.

 

Grant of Security Interest. To secure the Secured Obligations, the undersigned
Grantor hereby assigns and pledges to the Collateral Agent for its benefit and
the benefit of the other Secured Parties and hereby grants to the Collateral
Agent for its benefit and the benefit of the other Secured Parties a first
priority security interest in, all of its right, title and interest in and to
the following (collectively, the “Supplementary Collateral”):

 

(a)           all of the following:

 

Exhibit A-2-1

 

--------------------------------------------------------------------------------

 

(i)            the Pledged Stock and the certificates representing such Pledged
Stock, and all dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Stock;

 

(ii)           all additional shares of the capital stock of any other Pledged
Equity Party from time to time acquired by such Grantor in any manner, including
the capital stock of any other Pledged Equity Party that may be formed from time
to time, and all certificates, if any, representing such additional shares of
the capital stock and all dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all such additional shares; and

 

(iii)          the Pledged Debt and all instruments evidencing the Pledged Debt,
and all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Debt;

 

(b)           all of the following:

 

(i)            the Pledged Membership Interests, all certificates, if any, from
time to time representing all of such Grantor’s right, title and interest in the
Pledged Membership Interests, any contracts and instruments pursuant to which
any such Pledged Membership Interests are created or issued and all
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Membership Interests; and

 

(ii)           all of such Grantor’s right, title and interest in all additional
membership interests in any other Pledged Equity Party from time to time
acquired by such Grantor in any manner, including the membership interests in
any other Pledged Equity Party that may be formed from time to time, and all
certificates, if any, from time to time representing such additional membership
interests and all distributions, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all such additional membership interests;

 

(c)           all of the following:

 

(i)            the Pledged Beneficial Interest, all certificates, if any, from
time to time representing all of such Grantor’s right, title and interest in the
Pledged Beneficial Interest, any contracts and instruments pursuant to which any
such Pledged Beneficial Interest are created or issued and all distributions,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Beneficial Interest; and

 

(ii)           all of such Grantor’s right, title and interest in all additional
beneficial interests in any other Pledged Equity Party from time to time
acquired by such

 

Exhibit A-2-2

 

--------------------------------------------------------------------------------

 

Grantor in any manner, including the beneficial interests in any other Pledged
Equity Party that may be formed from time to time, the trust agreements and any
other contracts and instruments pursuant to which any such Pledged Equity Party
is created or issued, and all certificates, if any, from time to time
representing such additional beneficial interests and all distributions, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all such
additional beneficial interests;

 

(d)           all other “investment property” (as defined in
Section 9-102(a)(49) of the UCC) of such Grantor including written notification
of all interest, dividends, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the then existing Investment Collateral, but excluding any loans
or advances made, or dividends, contributions or distributions or other amounts
paid, by any Pledged Equity Party to any Transaction Party;

 

(e)           with respect to each Grantor, all right of such Grantor in and to
the Collateral Account and all funds, cash, investment property, investments,
securities, instruments or other property (including all “financial assets”
within the meaning of Section 8-102(a)(9) of the UCC) at any time or from time
to time credited to any such account; and

 

(f)            all proceeds of any and all of the foregoing Collateral
(including proceeds that constitute property of the types described in
subsections (a), (b), (c), (d) and (e) above.

 

The undersigned Grantor hereby makes each representation and warranty set forth
in Section 2.03 of the Security Agreement (as supplemented by the attached
Annexes) and hereby agrees to be bound as a Grantor by all of the terms and
provisions of the Security Agreement.  Each reference in the Security Agreement
to the Security Collateral, the Membership Interest Collateral, the Beneficial
Interest Collateral, the Investment Collateral and the Account Collateral shall
be construed to include a reference to the corresponding Collateral hereunder.

 

The undersigned hereby agrees, together with the other Grantors, jointly and
severally to indemnify the Collateral Agent and its officers, directors,
employees and agents in the manner set forth in Section 8.01 of the Security
Agreement.

 

Attached are duly completed copies of Annexes I, II, III and IV hereto.

 

 [Signature Page Follows]

 

Exhibit A-2-3

 

--------------------------------------------------------------------------------

 

This Grantor Supplement is delivered in the State of New York and shall in all
respects be governed by, and construed in accordance with, the laws of the State
of New York, including all matters of construction, validity and performance.

 

Very truly yours,

 

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

Acknowledged and agreed to as of the date first above written:

 

BANK OF AMERICA, N.A.,

not in its individual capacity, but solely as the Collateral Agent

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Grantor Supplement Signature Page

 

--------------------------------------------------------------------------------

 

ANNEX I

GRANTOR SUPPLEMENT

 

AIRCRAFT OBJECTS

 

Airframe MSN

 

Airframe Manufacturer
and Model

 

Engine MSNs

 

Engine Manufacturer
and Model

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex I-1

 

--------------------------------------------------------------------------------

 

ANNEX II

GRANTOR SUPPLEMENT

 

PLEDGED EQUITY INTERESTS

 

PLEDGED BENEFICIAL INTERESTS

 

Pledged Equity Party

 

Certificate No.

 

Percentage of 
Beneficial Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLEDGED MEMBERSHIP INTERESTS

 

Pledged Equity Party

 

Certificate No.

 

Percentage of
Membership Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLEDGED STOCK

 

Pledged Equity Party

 

Certificate No.

 

Percentage Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLEDGED DEBT

 

Intercompany Lender

 

Intercompany Borrower

 

Description of Instrument of
 Pledged Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex II-1

 

--------------------------------------------------------------------------------

 

ANNEX III

GRANTOR SUPPLEMENT

 

TRADE NAMES

 

Annex III-1

 

--------------------------------------------------------------------------------

 

ANNEX IV

GRANTOR SUPPLEMENT

 

Name of Grantor

 

Chief Executive Office, Chief Place of
Business and Registered Office and Organizational ID
 (if applicable)

 

 

 

 

 

 

 

 

 

 

Annex IV-1

 

--------------------------------------------------------------------------------

 

EXHIBIT B

SECURITY AGREEMENT

 

FORM OF CHARGE OVER SHARES OF IRISH SUBSIDIARY HOLDCO

 

Exhibit B-1

 

--------------------------------------------------------------------------------

 

       FEBRUARY 2012

 

SHARE CHARGE

 

 

between

 

FLYING FORTRESS INC.

 

as Chargor

 

and

 

BANK OF AMERICA, N.A.

 

as Chargee

 

 

in respect of shares of

 

FLYING FORTRESS IRELAND LEASING LIMITED

 

 

A & L GOODBODY

 

1

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THIS SHARE CHARGE is made on        February 2012

 

BETWEEN

 

(1)                                  FLYING FORTRESS INC., a company
incorporated under the laws of California having its office at 10250
Constellation Blvd., Suite 3400, Los Angeles, CA 90067 (the Chargor); and

 

(2)                                  BANK OF AMERICA, N.A., a national banking
association as the collateral agent under the Security Agreement (as defined
below), (the Chargee);

 

WHEREAS:

 

A.                                   By a term loan credit agreement dated as of
       February 2012 among the Chargor as Borrower, International Lease Finance
Corporation (ILFC), Flying Fortress Financing Inc., Flying Fortress US Leasing
Inc. and Flying Fortress Leasing Ireland Limited, as Obligors, the lenders party
thereto, as Lenders, Bank of America, N.A., as Administrative Agent, the Chargee
and Deutsche Bank Securities Inc., as Syndication Agent (the Credit Agreement),
the Lenders (as defined therein) have agreed to make available a term loan
facility to the Chargor.

 

B.                                     By a security agreement dated as of
       February 2012 among the Chargor, Flying Fortress Financing Inc., Flying
Fortress US Leasing Inc., Flying Fortress Ireland Leasing Limited and the
additional grantors referred to therein as Grantors and the Chargee, such
Grantors have agreed to grant certain security to the Chargee (the Security
Agreement).

 

C.                                     Pursuant to the terms of the Credit
Agreement, the Chargor has agreed to grant this charge over the shares in the
Company.

 

D.                                    The terms and conditions of this Charge
are acceptable to the Chargee.

 

NOW THIS CHARGE WITNESSETH as follows:

 

1.                                       DEFINITIONS AND INTERPRETATION

 

1.1.                              In this Charge (including the Recitals), words
and expressions defined in the Security Agreement shall (unless otherwise
defined herein or the context requires otherwise) have the same meaning herein
and the following words and expressions shall have the following meanings,
except where the context otherwise requires:

 

Act means the Land and Conveyancing Law Reform Act 2009;

 

this Charge means this share charge;

 

Company means Flying Fortress Ireland Leasing Limited (registered number
483084), a company incorporated in Ireland having its registered office at 30
North Wall Quay, Dublin 1, Ireland;

 

Charged Property means:

 

(1)                                  all the issued shares in the capital of the
Company as described in Schedule A and all other shares and share warrants in
the capital of the Company from time to time legally or beneficially owned by
the Chargor during the Security Period (together the Charged Shares); and

 

(2)                                  including in each case all proceeds of sale
thereof and all dividends, interest or other distributions hereafter declared,
made, paid or payable in respect of the same and all allotments, accretions,
offers, rights, benefits and advantages whatsoever at any time accruing, offered
or arising in respect of or incidental to the same and all stocks, shares,
rights, money or property accruing thereto or offered at any time by way of
conversion, redemption, bonus, preference, option, substitution, capital
redemption or otherwise in respect thereof;

 

2

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Charged Shares has the meaning assigned thereto in the definition of Charged
Property;

 

Loan Document has the meaning given to it in the Credit Agreement;

 

Parties mean the parties to this Charge;

 

Receiver means a receiver (whether appointed pursuant to this Charge, pursuant
to any statute, by a court or otherwise) of the Charged Property or any part of
it;

 

Secured Obligations has the meaning given to it in the Credit Agreement;

 

Secured Party has the meaning given to such term in the Security Agreement; and

 

Security Period means the period commencing on the date of execution of this
Charge and terminating upon the date on which the Secured Obligations have been
unconditionally and irrevocably paid and discharged in full.

 

1.2.                              In this Charge:

 

1.2.1.                     words and phrases the definition of which is
contained in or referred to section 2 of the Companies Act, 1963 are to be
construed as having the meaning attributed to them therein;

 

1.2.2.                     references to statutory provisions shall be construed
as references to those provisions as amended or re-enacted or as their
application is modified by other provisions from time to time and shall include
references to any provisions of which they are reenactments (whether with or
without modification);

 

1.2.3.                     references to clauses, recitals and schedules are
references to clauses hereof, recitals hereof and schedules hereto; references
to sub-clauses or paragraphs are, unless otherwise stated, references to
sub-clauses of the clause or paragraphs of the schedule in which the reference
appears;

 

1.2.4.                     references to the singular shall include the plural
and vice versa and references to the masculine shall include the feminine or
neuter and vice versa;

 

1.2.5.                     references to persons shall include natural persons,
firms, partnerships, companies, corporations, associations, organisations,
governments, states, foundations, trusts, bodies of persons whether incorporated
or unincorporated (in each case whether or not having a separate legal
personality);

 

1.2.6.                     references to assets include property, rights and
assets of every description;

 

1.2.7.                     references to any document are to be construed as
references to such document as amended, varied, assigned, novated, restated or
supplemented from time to time;

 

1.2.8.                     references to any person shall be construed so as to
include that person’s successors, assigns and transferees;

 

1.2.9.                     any reference to a legal term for any action, remedy,
method of judicial proceeding, legal document, legal status, court, official or
any legal concept or thing is, in respect of any jurisdiction other than
Ireland, shall be deemed to include a reference to what mostly nearly
approximates in that jurisdiction to the Irish legal term;

 

1.2.10.               the headings are inserted for convenience only and are not
to affect the construction of this Charge; and

 

1.2.11.               any phrase introduced by the terms “including”, “include”,
“in particular” or any similar expression is to be construed as illustrative and
shall not limit the sense of the words proceeding those terms.

 

3

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2.                                       COVENANT TO PAY AND PERFORM

 

2.1.                              The Chargor hereby covenants and undertakes
with the Chargee that it shall pay and discharge the Secured Obligations as and
when they become due to be paid or discharged as and to the extent provided in
the Credit Agreement, this Charge or any other Loan Document.

 

2.2.                              The Chargor shall pay interest on any
delinquent sum (before and after any judgment) from the date of demand until the
date of payment calculated on a daily basis in accordance with the provisions of
the Credit Agreement.

 

2.3.                              Any payment made by the Chargor under this
Charge shall be made free and clear of and without any deduction for or on
account of any set-off or counterclaim.

 

3.                                       SECURITY

 

3.1.                              As a continuing security for the payment and
performance of the Secured Obligations, the Chargor as legal and beneficial
owner hereby charges to the Chargee, by way of a first fixed charge, all of its
right, title and interest in and to the Charged Property.

 

3.2.                              The Chargor hereby agrees to deliver to the
Chargee, on the date of execution of this Charge:

 

3.2.1.                     an undated stock transfer form (executed in blank by
or on behalf of the Chargor) in respect of all the Charged Shares;

 

3.2.2.                     all share certificates, warrants and other documents
of title representing the Charged Shares together with a certified copy of the
up to date register of members of the Company;

 

3.2.3.                     an undated irrevocable proxy in respect of the
Charged Shares executed by the Chargor, in the for set out in Schedule C to this
Charge;

 

3.2.4.                     an irrevocable appointment signed by the Chargor in
respect of the Charged Shares, in the form set out in Schedule D to this Charge;
and

 

3.2.5.                     executed but undated letters of resignation and
release from each of the directors, alternate directors and secretary of the
Company appointed by the Chargor in the forms set out in Schedule B to this
Charge

 

and such documents will be held by the Chargee during the Security Period.

 

The Chargee acknowledges and agrees that if at any time the Secured Obligations
have been unconditionally and irrevocably paid and discharged in full it shall,
unless otherwise required pursuant to this Charge or the Security Agreement or
the Credit Agreement, or in accordance with the Credit Agreement or the Security
Agreement, deliver the documents referred to in this clause 3.2 to the Chargor
and thereafter such documents shall be held by the Chargor.

 

3.3.                              The Chargor will procure that, for the
duration of the Security Period, there shall be (a) no increase or reduction in
the authorised or issued share capital of the Company, (b) no variation of the
rights attaching to or conferred by the Charged Property or any part of it,
(c) no appointment of any further director or officers of the company, and
(d) no alteration to the constitutive documents of the Company, in each case,
without the prior consent in writing of the Chargee, but the foregoing shall not
be interpreted as requiring the Chargee’s consent to further capital
contribution to the Company by the Chargor.

 

3.4.                              The Chargor will deliver, or cause to be
delivered, to the Chargee immediately upon (subject to clause 3.3) the issue of
any further Charged Shares, the items listed in clauses 3.2.1 and 3.2.2 in
respect of all such further Charged Shares.

 

3.5.                              The Chargor will deliver or cause to be
delivered, to the Chargee immediately upon (subject to clause 3.3) the
appointment of any further director, alternate director or officer of the
Company an undated, signed letter of resignation from such further director,
alternate director or officer in a form acceptable to the Chargee.

 

3.6.                              The Chargor hereby covenants that, except as
otherwise provided in the Loan Documents, during the Security Period:

 

4

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3.6.1.                     it will remain the legal and beneficial owner of the
Charged Property;

 

3.6.2.                     it will not create or suffer the creation or
existence of any Liens (other than Permitted Liens) on or in respect of the
whole of any part of the Charged Property or any of its interest therein;

 

3.6.3.                     it will not sell, assign, transfer or otherwise
dispose of any of its interest in the Charged Property in any such case, without
the prior consent in writing of the Chargee;

 

3.6.4.                     it will not permit any person other than the Chargee
(or such person as may be specified for this purpose in writing by the Chargee)
to be registered as holder of the Shares or any part thereof;

 

3.6.5.                     it will duly and promptly pay all calls, instalments
or other payments which may be or become due in respect of the Charged Shares as
and when the same from time to time become due;

 

3.6.6.                     it will promptly give to the Chargee all material
notices and other documents received in respect of the Charged Shares;

 

3.6.7.                     it will ensure that the Charged Shares are, and at
all times remain, free from any restriction on transfer to the Chargee, its
nominee(s) or to any purchaser from the Chargee pursuant to the exercise of any
rights or remedies of the Chargee under or pursuant to this Charge;

 

3.6.8.                     it will notify the Chargee immediately upon receipt
of any notice issued under section 16(1) of the Companies Act, 1990 in respect
of all or any of the Charged Shares or upon becoming aware that any such notice
has been issued or that steps have been taken or are about to be taken to obtain
an order for the sale of all or any of the Charged Shares under section 16(7) of
the Companies Act 1990;

 

3.6.9.                     it will not claim any set-off or counterclaim against
the Chargee or any Secured Party;

 

3.6.10.               following the occurrence of an Enforcement Event which is
continuing, it will not claim or prove in competition with the Chargee or any
Secured Party in the bankruptcy or liquidation of the Company or have the
benefit of, or share in, any payment from or composition with, the Company for
any indebtedness of the Company provided that if so directed by the Chargee, it
will prove for the whole or any part of its claim in the liquidation or
bankruptcy of the Company on terms that the benefit of such proof and of all
money received by it in respect thereof shall be held on trust for the Chargee
and applied in or towards the discharge of the liabilities and obligations of
the Chargor to the Chargee under this Charge in such manner as the Chargee shall
deem appropriate;

 

3.6.11.               it will not exercise its rights of subrogation against the
Company;

 

3.6.12.               following the occurrence of an Enforcement Event which is
continuing, it will take such action as the Chargee may, in its absolute
discretion, direct in the event that it becomes possible (whether under the
terms of issue of the Charged Shares, a reorganisation or otherwise) to convert
or exchange the Charged Shares or have them repaid or in the event that any
offer to purchase is made in respect of the Charged Shares or any proposal is
made for varying or abrogating any rights attaching to them; and

 

3.6.13.               it will not permit any of the Charged Shares to be
redeemed and repaid.

 

3.7.                              The Chargor shall remain liable to perform all
the obligations assumed by it in relation to the Charged Property and the
Chargee shall be under no obligation of any kind whatsoever in respect thereof
or be under any liability whatsoever in the event of any failure by the Chargor
to perform its obligations in respect thereof.

 

3.8.                              For the avoidance of doubt, the Chargee shall
not in any circumstances incur and liability whatsoever in respect of any calls,
instalments or otherwise in connection with the Charged Property.

 

3.9.                              Upon the Chargee being satisfied that the
Secured Obligations have been unconditionally and irrevocably paid and
discharged in full, or as otherwise provided in the Credit Agreement or the
other Loan Documents, and following a written request therefor from the Chargor,
the Chargee will, subject to

 

5

--------------------------------------------------------------------------------

 

being indemnified to their reasonable satisfaction for the costs and expenses
incurred by the Chargee in connection therewith, release the security
constituted by this Charge.

 

4.                                       REPRESENTATIONS AND WARRANTIES OF THE
CHARGOR

 

4.1.                              The Chargor hereby represents and warrants to
the Chargee and the Secured Parties that:

 

4.1.1.                     it is not in breach of any of its obligations under
this Charge;

 

4.1.2.                     the Chargor is the sole legal and beneficial owner of
all of the Charged Property free from any Lien (other than any Permitted Lien)
and any options or rights of pre-emption;

 

4.1.3.                     the Chargor has not sold or otherwise disposed of or
agreed to sell or otherwise dispose of or granted or agreed to grant any option
in respect of the Charged Property and will not do any of the foregoing at any
time during the Security Period;

 

4.1.4.                     it is not necessary that this Charge be filed,
recorded or enrolled with any court or other authority in Ireland or any other
jurisdiction (except filing with the Irish Companies Registration Office
pursuant to Section 111 of the Companies Act 1963 and under the Uniform
Commercial Code enacted in any jurisdiction;

 

4.1.5.                     the Charged Shares constitute all of the issued share
capital of the Company;

 

4.1.6.                     the Charged Shares have been duly authorised, validly
issued and are fully paid or credited as fully paid, no calls have been made in
respect thereof and remain unpaid and no calls can be made in respect of such
Charged Shares in the future;

 

4.1.7.                     the terms of the Charged Shares and of the
constitutive documents of the Company do not restrict or otherwise limit the
Chargor’s right to transfer or charge the Charged Shares and the directors of
the Company cannot refuse to register any transfer of the Charged Shares to the
Chargee or any party nominated by the Chargee;

 

4.1.8.                     it will not be required to make any deduction or
withholding from any payment it may make under this Charge.

 

4.2.                              The Chargor acknowledges that the Chargee has
entered into this Charge in reliance on the representations and warranties set
out in Clause 4.1.

 

5.                                       DEALINGS WITH CHARGED PROPERTY

 

5.1.                              Unless and until the occurrence of an
Enforcement Event which is continuing:

 

5.1.1.                     subject always to Clause 3.3, the Chargor shall
continue to be entitled to exercise all voting and consensual powers pertaining
to the Charged Property or any part thereof for all purposes not inconsistent
with the terms of this Charge; and

 

5.1.2.                     the Chargor shall be entitled to receive and retain
any cash dividends, but not other moneys or assets accruing on or in respect of
the Charged Property or any part thereof

 

provided that the Chargor shall not exercise such voting rights in any manner
which, in the opinion of the Chargor, would, or would be reasonably likely to,
violate the Credit Agreement or the Security Agreement.

 

5.2.                              The Chargor shall pay when due all calls,
installments or other payments and shall discharge all other obligations, which
may become due in respect of any of the Charged Property and following the
occurrence of an Enforcement Event which is continuing, the Chargee may if it
thinks fit (but shall not be obliged to) make such payments or discharge such
obligations on behalf of the Chargor.  Any sums so paid by the Chargee in
respect thereof shall be repayable on demand by the Chargor with interest
thereon calculated in accordance with clause 2.2 and pending such repayment
shall constitute part of the Secured Obligations.

 

5.3.                              The Chargee shall not have any duty to ensure
that any dividends, interest or other moneys and assets

 

6

--------------------------------------------------------------------------------

 

receivable in respect of the Charged Property are duly and punctually paid,
received or collected as and when the same become due and payable or to ensure
that the correct amounts (if any) are paid or received on or in respect of the
Charged Property or to ensure the taking up of any (or any offer of any) stocks,
shares, rights, moneys or other property paid, distributed, accruing or offered
at any time by way of redemption, bonus, rights, preference, or otherwise on or
in respect of, any of the Charged Property.

 

5.4.                              The Chargor hereby authorises the Chargee to
arrange at any time and from time to time (after the occurrence of an
Enforcement Event which is continuing) for the Charged Property or any part
thereof to be registered in the name of the Chargee (or its nominee) thereupon
to be held, as so registered, subject to the terms of this Charge.

 

5.5.                              The Chargor may not take any action in
relation to the Charged Property or this Charge under the provisions of
Section 94 of the Act (Court order for sale).

 

6.                                       PRESERVATION OF SECURITY

 

6.1.                              It is hereby agreed and declared that:

 

6.1.1.                     the security created by this Charge shall be held by
the Chargee as a continuing security for the payment and discharge of the
Secured Obligations and the security so created shall not be satisfied by any
intermediate payment or satisfaction of any part of the Secured Obligations;

 

6.1.2.                     the security created by this Charge is in addition to
and independent of and shall not prejudice or merge with any other security (or
any right of set-off) which the Chargee may hold at any time for the Secured
Obligations or any of them;

 

6.1.3.                     the Chargee shall not be bound to seek to recover any
amounts due from the Chargor or any other person, exercise any rights against
the Chargor or any other person or enforce any other security before enforcing
the security created by this Charge;

 

6.1.4.                     no delay or omission on the part of the Chargee in
exercising any right, power or remedy under this Charge shall impair such right,
power or remedy or be construed as a waiver thereof nor shall any single or
partial exercise of any such right, power or remedy preclude any further
exercise thereof or the exercise of any other right, power or remedy.  The
rights, powers and remedies herein provided are cumulative and not exclusive of
any rights, powers and remedies provided by law and may be exercised from time
to time and as often as the Chargee may deem expedient; and

 

6.1.5.                     any waiver by the Chargee of any terms of this Charge
shall only be effective if given in writing and then only against the Chargee
and for the purpose and upon the terms for which it is given.

 

6.2.                              Where any discharge is made in whole or in
part or any arrangement is made on the faith of any payment, security or other
disposition which is avoided or must be repaid on bankruptcy, liquidation, by
virtue of Section 1001 of the Taxes Consolidation Act 1997 or otherwise without
limitation, this Charge shall continue in force as if there had been no such
discharge or arrangement.  The Chargee shall be entitled to concede or
compromise in good faith any claim that any such payment, security or other
disposition is liable to avoidance or repayment.

 

6.3.                             Until the Secured Obligations have been
unconditionally and irrevocably satisfied and discharged in full to the
satisfaction of the Chargee or as otherwise provided in the Credit Agreement or
the Security Agreement, the Chargee may at any time keep in a separate account
or accounts (without liability to pay interest thereon) in the name of the
Chargee for as long as the Chargee may think fit, any moneys received recovered
or realised under this Charge or under any other guarantee, security or
agreement relating in whole or in part to the Secured Obligations without being
under any intermediate obligation to apply the same or any part thereof in or
towards the discharge of such amount.

 

7.                                       ENFORCEMENT OF SECURITY

 

7.1.                              The security hereby constituted shall become
enforceable upon the occurrence of an Enforcement

 

7

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Event which is continuing.

 

7.2.                              At any time after the occurrence of an
Enforcement Event which is continuing, the rights conferred on the Chargee under
this Charge or by law shall be immediately exercisable upon and at any time
thereafter and, without prejudice to the generality of the foregoing, the
Chargee or any Receiver appointed hereunder without further notice to the
Chargor:

 

7.2.1.                     may solely and exclusively exercise all voting and/or
consensual powers pertaining to the Charged Property or any part thereof and may
exercise such powers in a such manner as the Chargee may think fit; and/or

 

7.2.2.                     may complete any share transfer forms then held by
the Chargee pursuant to this Charge in the name of the Chargee (or its nominee)
and the Chargor shall do whatever the Chargee requires in order to procure the
prompt registration of such transfer and the prompt issue of a new certificate
or certificates for the relevant Charged Property in the name of the Chargee;
and/or

 

7.2.3.                     date any or all, as the Chargee in its absolute
discretion may deem appropriate, of the letters of resignation of the Directors
and Secretary of the Company provided to the Chargee pursuant to clause 3.2.5,
the proxy provided to the Chargee pursuant to clause 3.2.3 and the appointment
provided to the Chargee pursuant to clause 3.2.4 and sign, seal, execute,
deliver, acknowledge, file and register all such documents, instruments,
agreements, certificates and any other document (including, but not limited to,
such letters of resignation) and do any and all such other acts or things as the
Chargee may in its absolute discretion deem necessary or desirable to remove any
or all of the Directors and/or Secretary from the office of director or, as the
case may be, secretary of the Company; and/or

 

7.2.4.                     may receive and retain all dividends, interest or
other moneys or assets accruing on or in respect of the Charged Property or any
part thereof, such dividends, interest or other moneys or assets to be held by
the Chargee, as additional security charged under and subject to the terms of
this Charge and any such dividends, interest and other moneys or assets received
by the Chargor after such time shall be held in trust by the Chargor for the
Chargee and paid or transferred to the Chargee on demand; and/or

 

7.2.5.                     may sell, transfer, grant options over or otherwise
dispose of the Charged Property or any part thereof at such place and in such
manner and at such price or prices as the Chargee may deem fit, and thereupon
the Chargee shall have the right to deliver, assign and transfer in accordance
therewith the Charged Property so sold, transferred, granted options over or
otherwise disposed of.

 

7.3.                              At any time after the security constituted by
this Charge has become enforceable:

 

7.3.1.                     the statutory power of sale conferred by section 100
(Power of sale) of the Act free from restrictions contained in section
100(1)(a), (b), (c), (2), (3) and (4) and without the requirement to serve
notice (as provided for in section 100(1)); and

 

7.3.2.                     the incidental powers of sale conferred by section
102 (Incidental powers)

 

will immediately arise and be exercisable by the Chargee and/or any Receiver (as
appropriate).

 

7.4.                              Upon any sale of the Charged Property or any
part thereof by the Chargee, the purchaser shall not be bound to see or enquire
whether the Chargee’s power of sale has become exercisable in the manner
provided in this Charge and for the purposes and benefit of such purchaser the
sale shall be deemed to be within the power of the Chargee, and the receipt of
the Chargee for the purchase money shall effectively discharge the purchaser who
shall not be concerned with the manner of application of the proceeds of sale or
be in any way answerable therefor.

 

7.5.                              The Chargee shall not be obliged to make any
enquiry as to the nature or sufficiency of any payment received by it under this
Charge or to make any claim or to take any action to collect any moneys assigned
by this Charge or to enforce any rights or benefits assigned to it by this
Charge or to which the it may at any time be entitled hereunder.

 

7.6.                              Neither the Chargee nor any of its respective
agents, managers, officers, employees, delegates and advisers shall be liable
for any claim, demand, liability, loss, damage, cost or expense incurred or

 

8

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arising in connection with the exercise or purported exercise of any rights,
powers and discretions hereunder in the absence of gross negligence, dishonesty
or willful default.

 

7.7.                              The provisions of section 97 of the Act
(Taking possession), section 99(1) (Mortgagee in possession) and section 101
(Applications under sections 97 and 100) shall not apply to this Charge.

 

7.8.                              Receivers

 

7.8.1.                     At any time after the occurrence of an Enforcement
Event, the Chargee may by a written instrument and without notice to any party
appoint a Receiver of the Charged Property or any part of it.  A Receiver so
appointed shall be the agent of the Chargor and the Chargor shall be solely
responsible for his acts, defaults and remuneration but the Chargee will have
power from time to time to fix the remuneration of any Receiver and direct
payment thereof out of the proceeds of the Charged Property.  The restrictions
contained in section 108(1) and the provisions of sub-sections 108(4) and
(7) (Appointment of a Receiver) of the Act will not apply to the appointment of
a Receiver under this clause 7.8.1;

 

7.8.2.                     The Chargee may by instrument in writing delegate to
any such Receiver all or any of the rights, powers and discretions vested in it
by this Charge pursuant to section 108(3) of the Act;

 

7.8.3.                     The Chargee may by instrument in writing delegate to
any such Receiver all or any of the rights, powers and discretions vested in it
by this Charge;

 

7.8.4.                     In addition to the powers conferred on the Chargee by
this Charge, the Receiver appointed pursuant to Clause 7.8.1 shall have in
relation to the Charged Property all the powers conferred by the Act (as
extended by this Charge) on a Receiver appointed under that Act;

 

7.8.5.                     The Chargee shall not be responsible for any
negligence on the part of a Receiver, provided that the Chargee shall have used
bona fides in the appointment of such Receiver;

 

7.8.6.                     Neither the Chargee nor any Receiver appointed under
this Charge shall be liable to account as mortgagee in possession in respect of
any of the Charged Property or be liable for any loss upon realisation or for
any neglect or default of any nature whatsoever (except to the extent that the
same results from their or his gross negligence or willful default in connection
with any of the Charged Property) for which a mortgagee in possession might as
such be liable and all costs, charges and expenses incurred by the Chargee or
any Receiver appointed hereunder (including the costs of any proceedings to
enforce the security) together with all Value Added Tax thereon shall be paid by
the Chargor on a solicitor and own client basis and shall form part of the
Secured Obligations and be charged on and paid out of the Charged Property; and

 

7.8.7.                     All amounts realized by the Chargee in connection
with the exercise of rights and remedies hereunder shall be applied by the
Chargee as provided in section 3.02 (Priority of Payments) of the Security
Agreement. To the extent relevant, the subordination arrangements set forth in
Sections 2, 5 and 6 of the Intercreditor Agreement shall apply to this Charge.

 

8.                                       FURTHER ASSURANCES

 

8.1.                              The Chargor shall from time to time at its
expense, execute and deliver any and all such further instruments and documents
and take all such actions as the Chargee in its reasonable discretion may
require for:

 

8.1.1.                     perfecting, protecting or ensuring the priority of
the security hereby created (or intended to be created);

 

8.1.2.                     preserving or protecting any of the rights of the
Chargee under this Charge;

 

8.1.3.                     ensuring that the security constituted by this Charge
and the covenants and obligations of the Chargor under this Charge shall enure
to the benefit of any assignee of the Chargee;

 

8.1.4.                     facilitating the appropriation or realisation of the
Charged Property or any part thereof; or

 

8.1.5.                     the exercise of any power, authority or discretion
vested in the Chargee under this Charge,

 

9

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in any such case, forthwith upon demand by the Chargee and at the expense of the
Chargor.

 

9.                                       INDEMNITIES

 

9.1.                              The Chargor will indemnify and save harmless
the Chargee and each of its agents or attorneys appointed under or pursuant to
this Charge from and against any and all expenses, claims, liabilities, losses,
taxes, costs, duties, fees and charges suffered, incurred or made by the Chargee
or such agent or attorney:

 

9.1.1.                     in the exercise or purported exercise of any rights,
powers or discretions vested in them pursuant to this Charge;

 

9.1.2.                     in the preservation or enforcement of the Chargee’s
rights under this Charge or the priority thereof; or

 

9.1.3.                     on the release of any part of the Charged Property
from the security created by this Charge,

 

as provided in the Security Agreement and subject to the terms thereof.

 

9.2                                 If, under any applicable law or regulation,
and whether pursuant to a judgment being made or registered against the Chargor
or the bankruptcy or liquidation of the Chargor or for any other reason any
payment under or in connection with this Charge is made or fails to be satisfied
in a currency (the Payment Currency) other than the currency in which such
payment is due under or in connection with this Charge (the Contractual
Currency), then to the extent that the amount of such payment actually received
by the Chargee when converted into the Contractual Currency at the rate of
exchange, falls short of the amount due under or in connection with this Charge,
the Chargor, as a separate and independent obligation, shall indemnify and hold
harmless the Chargee against the amount of such shortfall.  For the purposes of
this clause 9.2, rate of exchange means the rate at which the Chargee is able on
or about the date of such payment to purchase the Contractual Currency with the
Payment Currency and shall take into account any premium and other costs of
exchange with respect thereto.

 

10.                                 POWER OF ATTORNEY

 

10.1.                        The Chargor by way of security hereby irrevocably
appoints and constitutes the Chargee and any Receiver jointly and also severally
the attorney or attorneys of the Chargor on the Chargor’s behalf and in the name
of the Chargor or otherwise and to do all acts and to execute, seal or otherwise
affect any deed, assurance, agreement, instrument, document or act which the
Chargor could itself do in relation to the Charged Property or which may be
required or which may be deemed proper for any of the matters provided for in
this Charge.

 

10.2.                        The power hereby conferred shall be a general power
of attorney and the Chargor hereby ratifies and confirms and agrees to ratify
and confirm any instrument, act or thing which any such attorney may execute or
do.  In relation to the power referred to herein, the exercise by the Chargee of
such power shall be conclusive evidence of its right to exercise the same.

 

10.3.                        This power shall not become exercisable unless and
until an Enforcement Event has occurred and is continuing.

 

11.                                 EXPENSES

 

11.1.                        Subject to the terms of the Credit Agreement, the
Chargor shall pay to the Chargee within 10 Business Days of demand all costs,
fees and expenses (including, but not limited to, legal fees and expenses) and
taxes thereon incurred by the Chargee (or any Secured Party) or for which the
Chargee may become liable in connection with:

 

11.1.1.               the negotiation, preparation and execution of this Charge;

 

11.1.2.               the preserving or enforcing of, or attempting to preserve
or enforce, any of its rights under this Charge or the priority hereof;

 

10

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11.1.3.               any variation of, or amendment or supplement to, any of
the terms of this Charge; and /or

 

11.1.4.               any consent or waiver required from the Chargee in
relation to this Charge,

 

and in the case referred to in clauses 11.1.3 and 11.1.4 regardless of whether
the same is actually implemented, completed or granted, as the case may be.

 

11.2.                        The Chargor shall pay promptly all stamp,
documentary, registration and other like duties and taxes to which this Charge
may be subject or give rise and shall indemnify the Chargee on demand against
any and all liabilities with respect to or resulting from any delay or omission
on the part of the Chargor to pay any such duties or taxes.

 

11.3.                        The provisions of section 109 (Application of money
received) of the Act shall not apply to this Charge.

 

12.                                 ASSIGNMENTS

 

12.1.                        This Charge shall be binding upon and shall enure
to the benefit of the Chargor and the Chargee and each of their respective
successors and (subject as hereinafter provided) assigns and references in this
Charge to any of them shall be construed accordingly.

 

12.2.                        The Chargor may not assign or transfer all or any
part of its rights and/or obligations under this Charge.

 

12.3.                        The Chargee may assign or transfer all or any part
of its rights or obligations under this Charge as provided in the Security
Agreement.  The Chargee will be entitled to disclose any information concerning
the Chargor to any proposed assignee or transferee. The Chargee shall notify the
Chargor promptly following any such assignment or transfer.

 

12.4.                        In the event of assignment or transfer by the
Chargee as permitted by clause 12.3, the Chargor shall at the request of the
Chargee join in such assignment or transfer so as to cause the full benefit of
this Charge to be passed to the relevant assignee or transferee.

 

13.                                 MISCELLANEOUS

 

13.1.                        The Chargee, at any time and from time to time, may
delegate by power of attorney or in any other manner to any person or persons
all or any of the powers, authorities and discretions which are for the time
being exercisable by the Chargee under this Charge in relation to the Charged
Property or any part thereof.  Any such delegation may be made upon such terms
and be subject to the regulations as the Chargee may think fit.  The Chargee
shall not be in any way liable or responsible to the Chargor for any loss or
damage arising from any act, default, omission or misconduct on the part of any
such delegate provided that the Chargee has acted reasonably in selecting such
delegate.

 

13.2.                        If any of the clauses, conditions, covenants or
restrictions (the Provision) of this Charge or any deed or document emanating
from it shall be found to be void but would be valid if some part thereof were
deleted or modified, then the Provision shall apply with such deletion or
modification as may be necessary to make it valid and effective.

 

13.3.                        This Charge (together with any documents referred
to herein) constitutes the whole agreement between the Parties relating to its
subject matter and no variations hereof shall be effective unless made in
writing and signed by each of the Parties.

 

13.4.                        This Charge may be executed in counterparts each of
which when executed and delivered shall constitute an original but all such
counterparts together shall constitute one and the same instrument.

 

13.5.                        A certificate of the Chargee as to the amount of
any Secured Obligation owed to it (whether for itself or in a representative
capacity) shall, in the absence of manifest error, be conclusive evidence of the
existence and amount of such Secured Obligation.

 

13.6.                        If the Chargee causes or requires Charged Property
to be registered in the name of a nominee for the Chargee, any reference in this
Charge to the Chargee shall, if the context so permits or requires, be construed
as a reference to each of the Chargee and such nominee.

 

11

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13.7.                        The rights and remedies of the Chargee under this
Charge are cumulative and without prejudice and in addition to any rights or
remedies which the Chargee may have at law or in equity.  No exercise by the
Chargee of any right or remedy under this Charge or at law or in equity shall
(save to the extent, if any, provided expressly in this Charge, or at law or in
equity) operate so as to hinder or prevent the exercise by it of any other right
or remedy.  Each and every right and remedy may be exercised from time to time
as often and in such order as may be deemed expedient by the Chargee.

 

14.                                 LIMIT OF LIABILITY

 

The provisions of section 8.13 (Limited Recourse) of the Security Agreement
shall apply mutatis mutandis to this Charge as if written out in full herein.

 

15.                                 LAW AND JURISDICTION

 

15.1.                        This Charge, and any non-contractual obligations
arising out of or in connection with this Charge, shall be governed and
construed in accordance with Irish law.

 

15.2.                        The Chargor irrevocably agrees for the benefit of
the Chargee that the courts of Ireland shall have jurisdiction to hear and
determine any suit, action or proceeding, and to settle any disputes, whether
relating to a contractual or non-contractual obligation, which may arise out of
or in connection with this Charge and, for such purposes, irrevocably submits to
the jurisdiction of such courts.

 

15.3.                        The Chargor irrevocably waives any objection which
it might now or hereafter have to the courts referred to in Clause 15.2 being
nominated as the forum to hear and determine any suit, action or proceeding, and
to settle any disputes, which may arise out of or in connection with this Charge
and agrees not to claim that any such court is not a convenient or appropriate
forum in each case whether on the grounds of venue or forum non convenient or
any similar grounds or otherwise.

 

15.4.                        The submission to the jurisdiction of the courts
referred to in Clause 15.2 shall not (and shall not be construed so as to) limit
the right of the Chargee to take proceedings against the Chargor in any other
court of competent jurisdiction nor shall the taking of proceedings in any one
or more jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.

 

15.5.                        To the extent that the Chargor, or any of the
property of the Chargor is or becomes entitled at any time to any immunity on
the grounds of sovereignty or otherwise from any legal action, suit or
proceeding, from set-off or counterclaim, from the jurisdiction of any competent
court, from service of process, from attachment prior to judgment, from
attachment in aid of execution, or from execution prior to judgment, or other
legal process in any jurisdiction, the Chargor for itself, and its property does
hereby irrevocably and unconditionally waive, and agrees not to plead or claim,
any such immunity with respect to its or his, as the case may be, obligations,
liabilities or any other matter under or arising out of or in connection with
this Charge or the subject matter hereof or thereof.

 

16.                                 SERVICE OF PROCESS

 

The Chargor hereby irrevocably appoints ILFC Ireland Limited of 30 North Wall
Quay, Dublin 1 as its Agent with full authority to receive, accept and
acknowledge, for itself and on its behalf, service of all process issued out of
or relating to any proceedings referred to in clause 15 in the Courts of
Ireland.

 

16.           CONFLICTS

 

In the event of a conflict between the provisions of this Charge on the one hand
and the Credit Agreement or the Security Agreement on the other hand, the
provisions of the Credit Agreement or Security Agreement shall control.

 

12

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Schedule A

 

Company

 

Number and Description of
Shares

 

Registered Holder

 

 

 

 

 

Flying Fortress Ireland Leasing Limited

 

2 Ordinary Shares of USD$1.00 each

 

Flying Fortress Inc.

 

13

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SCHEDULE B

 

Part I

 

To:

Bank of America, N.A.

 

 

 

(the Chargee)

 

 

 

 

 

 

 

 

  Date:                    2012

 

 

 

(Date of Charge)

 

Dear Sirs

 

Flying Fortress Ireland Leasing Limited (the Company)

 

I hereby unconditionally and irrevocably authorise you to date the resignation
letter in respect of the Company deposited by me with you pursuant to the share
charge dated                                  2012 (the Charge) between Flying
Fortress Inc. and yourselves, as and when you become entitled to date and
complete the same pursuant to the terms of the Charge.

 

Yours faithfully,

 

[name]

 

[Director] / [Secretary]

 

14

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SCHEDULE B

 

PART II

 

Date

 

 

 

The Board of Directors

Flying Fortress Ireland Leasing Limited (the Company)

 

Dear Sirs,

 

Resignation of Directors/Secretary

 

[I]/[We] hereby tender [my]/[our] resignation as [Director]/[Secretary] of the
Company with effect from the date hereof .

 

[I]/[We] hereby confirm that [I]/[We] have no rights to compensation or claims
against the Company for loss of office or arrears of pay [(or, in the case of
secretary, fees)].

 

This letter shall be governed by and construed in accordance with Irish law.

 

Yours faithfully,

 

Signed and Delivered

 

 

by [insert name of director/secretary]

 

 

 

 

in the presence of:

 

 

 

Witness Signature:

 

 

 

 

 

Witness Name:

 

 

 

 

 

Witness Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15

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Schedule C

 

Form of Proxy

 

We, Flying Fortress Inc., hereby irrevocably appoint Bank of America, N.A., (as
Chargee) as our proxy to vote at meetings of the shareholders of Flying Fortress
Ireland Leasing Limited (the Company) in respect of any existing or further
shares in the Company which may have been or may from time to time be issued to
us and/or registered in our name.  This proxy is irrevocable by reason of being
coupled with the interest of Bank of America, N.A., (as Chargee) as chargee of
the aforesaid shares.

 

 

 

 

 

FLYING FORTRESS INC.

 

 

Dated:

 

 

 

16

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Schedule D

 

Form of Irrevocable Appointment

 

We, Flying Fortress Inc. hereby irrevocably appoint Bank of America, N.A., (as
Chargee) as our duly authorised representative to sign resolutions in writing of
Flying Fortress Ireland Leasing Limited (the Company) in respect of any existing
or further shares in the Company which may have been or may from time to time be
issued to us and/or registered in our name.

 

 

 

 

 

FLYING FORTRESS INC.

 

Dated:

 

 

 

17

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IN WITNESS whereof the parties hereto have caused this Charge to be duly
executed on the date first written.

 

SIGNED AND DELIVERED by

 

FLYING FORTRESS INC.

 

 

 

in the presence of:

 

 

 

Witness Signature:

 

 

 

 

 

Witness Name:

 

 

 

 

 

Witness Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNED AND DELIVERED by

 

BANK OF AMERICA, N.A.,

 

 

 

in the presence of:

 

 

 

Witness Signature:

 

 

 

 

 

Witness Name:

 

 

 

 

 

Witness Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

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EXHIBIT C

SECURITY AGREEMENT

 

FORM OF ACCOUNT CONTROL AGREEMENT

 

February 23, 2012

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Mutual Fund Operations, NC1-004-03-45

200 North College Street

Charlotte, NC 28255

 

Whereas, Flying Fortress Inc. (“Pledgor”) has granted to Bank of America, N.A.,
as Collateral Agent (“Pledgee”), for the benefit of the Secured Parties, a
security interest in Account number 5X500A00 (the “Collateral Account”), held by
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Securities
Intermediary”) together with all financial funds, investments, instruments,
assets, investment property, securities, cash and other property now or
hereafter held therein, and the proceeds thereof, including without limitation
dividends payable in cash or stock and shares or other proceeds of conversions
or splits of any securities in the Collateral Account (collectively, the
“Collateral”).  Pledgor, Pledgee and the Securities Intermediary agree that the
Collateral Account is a “securities account” within the meaning of Article 8 of
the Uniform Commercial Code of the State of New York (the “UCC”) and that all
Collateral held in the Collateral Account will be treated as a “financial asset”
within the meaning of Section 8-102(a)(9) of the UCC.

 

Whereas, the grant of security interest described above is pursuant to that
certain Term Loan Security Agreement dated as of the date hereof among Flying
Fortress Financing Inc., the Pledgor, Flying Fortress Ireland Leasing Limited,
Flying Fortress US Leasing Inc., the additional grantors referred to therein,
and the Pledgee (as amended from time to time, the “Security Agreement”).

 

Whereas, the Pledgor and Pledgee, inter alia, are party to the Term Loan Credit
Agreement dated as of the date hereof (as amended from time to time, the “Credit
Agreement”).

 

In connection therewith, the parties hereto agree (which agreement by the
Pledgor will be construed as instructions to the Securities Intermediary):

 

1.                                       The Securities Intermediary is
instructed to register the pledge on its books.  Securities Intermediary shall
hold all certificated securities that comprise all or part of the Collateral
with proper endorsements to the Securities Intermediary or in blank, or will
deliver possession of such certificated securities to the Pledgee.  The
Securities Intermediary acknowledges the security interest granted by the
Pledgor in favor of the Pledgee in the Collateral.

 

2.                                       The Securities Intermediary represents,
warrants and agrees that the Collateral Account (i) has been established and is
and will be maintained with the Securities Intermediary on its books and records
and (ii) is and will be a “securities account” (as defined in
Section 8-501(a) of the UCC) in respect of which the (A) Securities Intermediary
is a “securities intermediary” (as defined in Section 8-102(a)(14) of the UCC),
(B) the Pledgor is the “entitlement holder” (as defined in
Section 8-102(a)(7) of the UCC) of the Collateral Account subject to the
“control” (as defined in Section 8-106 of the UCC) of the Pledgee, (C) the
“securities intermediary’s jurisdiction” (as defined in Section 8-110(e) of the
UCC) of the Securities Intermediary in respect of the Collateral

 

Exhibit C-1

--------------------------------------------------------------------------------

 

Account is New York and (D) all financial assets carried in the Collateral
Account will have been duly credited thereto in compliance with Section 8-501 of
the UCC.

 

3.                                       The Securities Intermediary is
instructed to deliver to the Pledgee copies of monthly statements on the
Collateral Account.

 

4.                                       The Collateral Account will be styled: 
“Flying Fortress Inc. Collateral Account for Bank of America, N.A.”

 

5.                                       All dividends, interest, gains and
other profits with respect to the Collateral Account will be reported in the
name and tax identification number of the Pledgor.

 

6.                                       (a)  The Securities Intermediary may
not, without the prior written consent of Pledgee, deliver, release or otherwise
dispose of the Collateral or any interest therein unless the proceeds thereof
are held or reinvested in the Collateral Account as part of the Collateral or
applied by Securities Intermediary to the satisfaction of an Unsubordinated
Obligation (as defined below) owed to it.  Except for such limitation and unless
and until the Securities Intermediary receives and has a reasonable period of
time to act upon written notice from the Pledgee in substantially the form of
Exhibit A hereto which states that Pledgee is exercising exclusive control over
the Collateral Account (a “Notice of Exclusive Control”), the Securities
Intermediary may comply with any investment orders or instructions from Pledgor
concerning the Collateral Account, or as set forth in Section 6(b) below.  A
Notice of Exclusive Control (Exhibit A) may be delivered by the Pledgee at any
time upon the occurrence and continuance of an enforcement event pursuant to the
Security Agreement, and shall designate the account, person or other location to
which the financial assets in the Collateral Account, and cash dividends,
interest, income, earnings and other distributions received with respect
thereto, shall thereafter be delivered.  As between Pledgor and Pledgee, Pledgee
agrees not to deliver a Notice of Exclusive Control until the occurrence of an
enforcement event pursuant to the Security Agreement that is continuing.  For
the avoidance of doubt, Securities Intermediary shall have no responsibility for
monitoring or determining whether an enforcement event has occurred or is
continuing.

 

(b)  The Pledgee shall issue “entitlement orders” to the Securities Intermediary
to distribute amounts from the Collateral Account as required pursuant to the
provisions of Sections 2.03(c) or 5.16(c) of the Credit Agreement or as
otherwise required by the loan documents.

 

(c)  Upon deposit of any insurance proceeds in the Collateral Account, the
Pledgee shall instruct the Securities Intermediary to distribute from the
Collateral Account the amount of such insurance proceeds in accordance with the
instructions of the Collateral Agent (who shall direct that such amounts be
distributed as set forth in Schedule V of the Security Agreement).

 

7.                                       The Pledgor authorizes the Securities
Intermediary, and the Securities Intermediary agrees, to comply with any order
or instruction from Pledgee concerning the Collateral Account, including an
order or instruction directing sale, transfer (to the extent that the Collateral
is transferable), release or redemption of all or part of the Collateral and the
remittance of the proceeds thereof, if any, to Pledgee or as otherwise
instructed by the Pledgee, without further consent by the Pledgor.  Securities
Intermediary shall have no responsibility or liability to Pledgor for complying
with any order or instruction, whether oral or written, concerning the
Collateral Account, the Collateral, any interest therein, or the proceeds
thereof originated by Pledgee and shall have no responsibility to investigate
the appropriateness of any such order or instruction, even if Pledgor notifies
Securities Intermediary that Pledgee is not legally entitled to originate any
such order or

 

Exhibit C-2

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instruction.  Securities Intermediary shall have no responsibility or liability
to Pledgee for complying with any order or instruction, whether oral or written,
concerning the Collateral Account, the Collateral, any interest therein, or the
proceeds thereof originated by Pledgor except to the extent such compliance
would cause Securities Intermediary to violate (i) paragraph 6 hereof or
(ii) written orders or instructions previously received from Pledgee, including
without limitation, a Notice of Exclusive Control, but only to the extent
Securities Intermediary has had reasonable opportunity to act thereon. 
Securities Intermediary shall be able to rely upon any notice, order or
instruction that it reasonably believes to be genuine.  Securities Intermediary
shall have no responsibility or liability to Pledgee with respect to the value
of the Collateral Account or any of the Collateral.  This Agreement does not
create any obligation or duty on the part of Securities Intermediary other than
those expressly set forth herein.

 

8.                                       The Pledgor agrees to indemnify and
hold the Securities Intermediary, its directors, officers, employees, and agents
harmless from and against any and all claims, causes of action, liabilities,
losses, lawsuits, demands, damages, costs and expenses, including without
limitation court costs and reasonable attorneys’ fees and expenses and allocated
costs of in house counsel, that may arise out of or in connection with this
Agreement or any action taken or not taken pursuant hereto, except to the extent
caused by Securities Intermediary’s gross negligence or willful misconduct.  The
obligations of the Pledgor set forth in this paragraph 8 shall survive the
termination of this Agreement.

 

9.                                       The Securities Intermediary is
instructed that the Collateral Account is to remain a “cash account” within the
meaning of Regulation T issued by the Board of Governors of the Federal Reserve
System.  The Securities Intermediary represents that it has not received notice
regarding any lien, encumbrance or other claim to the Collateral or the
Collateral Account from any other person and has not entered into an agreement
with any third party to act on such third party’s instructions without further
consent of the Pledgor.  The Securities Intermediary further agrees not to enter
into any such agreement with any third party.

 

10.                                 The Securities Intermediary subordinates to
the lien and security interest of the Pledgee any right of setoff, encumbrance,
security interest, lien or other claim that it may have against the Collateral,
except for any lien, claim, encumbrance or right of set off against the
Collateral Account for (i) customary commissions and fees arising from permitted
trading activity within the Collateral Account, and (ii) payment owed to
Securities Intermediary for open trade commitments for the purchase and/or sale
of financial assets in and for the Collateral Account (the “Unsubordinated
Obligations”).

 

11.                                 To the extent a conflict exists between the
terms of this Agreement and any account agreement between the Pledgor and the
Securities Intermediary, the terms of this Agreement will control, provided that
this Agreement shall not alter or affect any mandatory arbitration provision
currently in effect between Securities Intermediary and Pledgor.

 

12.                                 The terms of this Agreement may not be
modified except by a writing signed by all parties hereto.

 

13.                                 Securities Intermediary reserves the right,
unilaterally, to terminate this Agreement, such termination to be effective
thirty (30) days after written notice thereof is given to Pledgor and Pledgee. 
At the end of such thirty (30) day period, Securities Intermediary will deliver
all assets held in the Collateral Account to Pledgee unless Pledgee and Pledgor
deliver joint instructions to Securities Intermediary during such thirty (30)
day period to deliver or transfer the assets held in the Collateral Account to
another party or securities intermediary.  In the event that it is not

 

Exhibit C-3

--------------------------------------------------------------------------------

 

possible or practicable, in the judgment of the Securities Intermediary, to
transfer the Collateral or deliver the Collateral to any other party, the
Securities Intermediary will sell such assets and deliver the proceeds according
to the instructions provided by the Pledgee or the joint instructions given by
the Pledgee and Pledgor.  Nothing set forth in this provision shall be deemed to
limit the right of Pledgee to issue orders or instructions to the Securities
Intermediary pursuant to paragraph 6 hereof.  Pledgee may terminate this
Agreement by giving notice to Securities Intermediary and Pledgor.  Termination
shall not affect any of the rights or liabilities of the parties hereto incurred
before the date of termination.

 

14.                                 This Agreement sets forth the entire
agreement of the parties with respect to the subject matter hereof (provided
that this Agreement and the Loan Documents, as defined in the Credit Agreement,
set forth the entire agreement of the Pledgor and the Pledgee with respect to
the subject matter hereof), and, subject to paragraph 11 above, supersedes any
prior agreement and contemporaneous oral agreements of the parties concerning
its subject matter.

 

15.                                 Except as otherwise expressly provided
herein, any notice, order, instruction, request or other communication required
or permitted to be given under this Agreement shall be in writing and may be
delivered in person, sent by facsimile or other electronic means if electronic
confirmation of error free receipt is received, or sent by United States mail,
postage prepaid, addressed to the party at the address set forth below.

 

16.                                 The Securities Intermediary will be excused
from failing to act or delay in acting, and no such failure or delay shall
constitute a breach of this Agreement or otherwise give rise to any liability of
the Securities Intermediary, if (i) such failure or delay is caused by
circumstances beyond the reasonable control of the Securities Intermediary,
including without limitation legal constraint, emergency conditions, action or
inaction of governmental, civil or military authority, terrorism, fire, strike,
lockout or other labor dispute, war, riot, theft, flood, earthquake or other
natural disaster, breakdown of public or private or common carrier communication
or transmission facilities, equipment failure, or act, negligence or default of
Pledgor or (ii) such failure or delay resulted from Securities Intermediary’s
reasonable belief that the action would have violated any guideline, rule or
regulation of any governmental authority.

 

17.                                 Pledgor agrees to pay Securities
Intermediary, upon receipt of Securities Intermediary’s invoice, all reasonable
costs, expenses and attorneys’ fees incurred in the preparation and
administration of this Agreement (including any amendments hereto or instruments
or agreements required hereunder).  Pledgor agrees to pay Securities
Intermediary, upon receipt of Securities Intermediary’s invoice, all reasonable
costs, expenses and attorneys’ fees incurred by Securities Intermediary in
connection with the enforcement of this Agreement or any instrument or agreement
required hereunder, including without limitation any reasonable costs, expenses,
and fees arising out of the resolution of any conflict, dispute, motion
regarding entitlement to rights or rights of action, or other action to enforce
Securities Intermediary’s rights hereunder in a case arising under Title 11,
United States Code.  This paragraph 17 shall survive termination of this
Agreement.

 

18.                                 Notwithstanding any of the other provisions
of this Agreement, in the event of the commencement of a case pursuant to Title
11, United States Code, filed by or against Pledgor, or in the event of the
commencement of any similar case under then applicable federal or state law
providing for the relief of debtors or the protection of creditors by or against
Pledgor, Securities Intermediary may act as Securities Intermediary deems
necessary to comply with all applicable provisions of governing statutes and
Pledgor shall not assert any claim against Securities Intermediary for so doing.

 

Exhibit C-4

--------------------------------------------------------------------------------

 

19.                                 If any term or provision of this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or circumstances other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.

 

20.                                 This Agreement may be executed in
counterparts, each of which shall be an original, and all of which shall
constitute one and the same agreement.

 

21.                                 If any party to this Agreement is not a
natural person, the person executing this Agreement on behalf of such party
hereby represents that he or she has the proper authority to execute this
Agreement on behalf of such party.

 

22.                                 This Agreement shall be governed and
construed in accordance with the law of the State of New York excluding choice
of law principles that would require application of the laws of a jurisdiction
other than the State of New York.

 

*              *              *              *              *              *

 

Exhibit C-5

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Pledgor and the Pledgee have agreed to the terms of this
Agreement as of the date indicated above.

 

PLEDGOR:

PLEDGEE:

 

 

FLYING FORTRESS INC.

BANK OF AMERICA, N.A., as Collateral Agent

 

 

 

 

By:

 

 

By:

 

 

 

 

 

 

Name:

 

 

Name:

 

 

 

 

 

 

Title:

 

 

Title:

 

 

 

 

 

 

Telephone No.:

 

 

Telephone No.:

 

 

 

 

 

 

Address:

 

 

Address:

 

 

10250 Constellation Blvd., Suite 3400

Los Angeles, CA 90067

Attention:  Treasurer with a copy to the General Counsel

Facsimile No. (310) 788-1990

1455 Market Street, 5th Floor

CA5-701-05-19

San Francisco, CA 94103

Attention: Robert Rittelmeyer

Facsimile No. (415) 503-5099

 

 

Date:

, 2012

Date:

, 2012

 

Acknowledged and Agreed to:

 

 

 

SECURITIES INTERMEDIARY

 

 

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

 

 

By:

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

Date:

 

, 2012

 

 

  Merrill Lynch, Pierce, Fenner & Smith Incorporated

 

NC1-027-14-01

214 North Tryon Street

Charlotte, NC 28255

United States of America

Attention:  Rhonda Booker

Facsimile No. (704) 335-6727

 

Account Control Agreement Supplement Signature Page

 

--------------------------------------------------------------------------------

 

Exhibit A

 

[Letterhead of the Pledgee]

 

[Date]

 

A.                                    BY FACSIMILE TRANSMISSION

((704) 335-6727) AND CERTIFIED MAIL

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated

NC1-027-14-01

214 North Tryon Street

Charlotte, NC 28255

United States of America

Attention:  Rhonda Booker

 

Re:

Flying Fortress Inc.

 

 

Account No. [      ]

 

 

 

B.                                    NOTICE OF EXCLUSIVE CONTROL

 

Ladies and Gentlemen:

 

As referenced in the Collateral Account Control Agreement, dated as of
February 23, 2012, among Flying Fortress Inc., as Pledgor, Bank of America N.A.,
as Collateral Agent for the Secured Parties, as Pledgee, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as Securities Intermediary, we hereby give
you notice of our exclusive control over securities account number 5X500A00 (the
“Collateral Account”) and all financial assets credited thereto.  You are hereby
instructed not to accept any direction, instruction or entitlement order with
respect to the Collateral Account or the financial assets credited thereto from
any person other than the undersigned.

 

You are hereby instructed to [deliver][invest] the financial assets in the
Collateral Account and cash dividends, interest, income, earning, and other
distributions received with respect thereto, as follows:

 

 

[

 

 

 

 

 

 

 

 

 

]

 

 

 

Very truly yours,

 

 

 

BANK OF AMERICA, N.A.,

 

as Collateral Agent

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

cc:

Flying Fortress Inc.

 

 

Exhibit A-1

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