EXHIBIT 10.60

EXECUTION VERSION

 

 

 

FACILITY AGREEMENT

[Virgin/NPA 2016-1]

Dated as of

October 28, 2015

among

VX 2016 LLC,

Owner,

EACH FINANCIER

IDENTIFIED ON SCHEDULE I HERETO,

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,

Senior Agent,

NOVUS TAMWEEL AVIATION FINANCE GP LIMITED,

Junior Agent,

and

BANK OF UTAH,

Security Trustee

 

 

BNP Paribas, New York Branch

Senior Arranger

Novus Tamweel Aviation Finance GP Limited

Junior Underwriter

 

 

 

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TABLE OF CONTENTS

 

         Page  

SECTION 1.

  CERTAIN DEFINITIONS      1   

SECTION 2.

  THE COMMITMENT; FUNDING PROCEDURES; CLOSING PROCEDURE      4   

(a)

  Commitment; Notes; Special Funding Elections      4   

(b)

  Funding Procedures      6   

(c)

  Registrations Upon Closing      7   

(d)

  Funding Mechanics      7   

(e)

  Closing Location      7   

SECTION 3.

  NOTE ECONOMICS      7   

(a)

  Principal Amortization      7   

(b)

  Senior Interest      8   

(c)

  Junior Interest      8   

(d)

  Interest Generally      8   

(e)

  Past Due Interest      8   

(f)

  PIK Interest      8   

(g)

  Certain Fees      9   

(h)

  Prepayments      9   

(i)

  Method of Payment      11   

(j)

  Application of Payments      11   

SECTION 4.

  CONDITIONS PRECEDENT      12   

(a)

  Conditions Precedent to the Effectiveness of the Commitments      12   

(b)

  Conditions Precedent to the Financiers’ Participation in each Designated
Aircraft      13   

(c)

  Conditions Subsequent      18   

SECTION 5.

  CLOSING PROCEDURE      19   

(a)

  Filings with FAA      19   

(b)

  Registrations by FAA Counsel      20   

(c)

  Discharges in Event of Failure to Fund      20   

(d)

  International Registry Filings      20   

SECTION 6.

  EXTENT OF INTEREST OF HOLDERS      20   

SECTION 7.

  REPRESENTATIONS AND WARRANTIES      20   

(a)

  Owner’s Representations and Warranties      20   

(b)

  Representations and Warranties of the Security Trustee and Financiers      24
  

SECTION 8.

  TAXES      26   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 9.

  COVENANTS OF THE OWNER      26   

(a)

  Notifications      26   

(b)

  Litigation      26   

(c)

  Existence, Etc.      26   

(d)

  Special Purpose      27   

(e)

  Limitation on Liens      27   

(f)

  Protection of Collateral      27   

(g)

  Separateness      28   

(h)

  Co-operation with Rating Agency      29   

(i)

  IR Registrations; IDERA      29   

(j)

  Sanctions, Etc.      29   

SECTION 10.

  EVENTS OF DEFAULT      30   

SECTION 11.

  NOTICES      30   

SECTION 12.

  GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL      30   

(a)

  Governing Law      30   

(b)

  Submission to Jurisdiction      31   

(c)

  Forum      31   

(d)

  Service of Process      31   

(e)

  Waiver of Jury Trial      31   

SECTION 13.

  INVOICES AND PAYMENT OF EXPENSES      31   

SECTION 14.

  SUCCESSORS AND ASSIGNS; NOTES      32   

(a)

  Benefits      32   

(b)

  Assignments by Owner      32   

(c)

  Assignments by Financiers      32   

(d)

  Registration, Transfer and Exchange of Notes      33   

(e)

  Mutilated, Destroyed, Lost or Stolen Notes      34   

(f)

  Payment of Expenses on Transfer      34   

SECTION 15.

  THE AGENTS; THE SECURITY TRUSTEE      34   

(a)

  Appointment, Powers and Immunities      34   

(b)

  Reliance by Agent      35   

(c)

  Non-Receipt of Funds by the Agents      35   

(d)

  Defaults      36   

(e)

  Indemnification      36   

(f)

  Non Reliance on Agents and Other Financiers      36   

(g)

  Failure to Act      37   

(h)

  Resignation or Removal of Agent      37   

(i)

  Consents under Operative Documents      37   

(j)

  The Security Trustee      38   

(k)

  Representations and Warranties of the Senior Purchasers      41   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 16.

  MISCELLANEOUS      43   

(a)

  Section 1110 Compliance      43   

(b)

  Survival of Agreements      43   

(c)

  Separate Counterparts      43   

(d)

  No Liability of Financiers      43   

(e)

  Approvals by Financiers      43   

(f)

  Non-Disclosure of Purchase Agreement      44   

(g)

  Confidentiality      44   

(h)

  Quiet Enjoyment      44   

Schedules:

    

I.

  Notice and Account Information   

II.

  Commitments in Original Amount   

III.

  Tax Provisions   

3(a)(i)

  Amortization Schedule (Senior Notes)   

3(a)(ii)

  Amortization Schedule (Junior Notes)   

 

Exhibit A   

–

  

Form of Notice of Issuance

Exhibit B   

–

  

Form of Assignment Agreement

Exhibit C   

–

  

Form of Note

Exhibit D   

–

  

Form of Pledge Agreement

Exhibit E-1   

–

  

Form of U.S. Tax Compliance Certificate

Exhibit E-2   

–

  

Form of U.S. Tax Compliance Certificate

Exhibit E-3   

–

  

Form of U.S. Tax Compliance Certificate

Exhibit E-4   

–

  

Form of U.S. Tax Compliance Certificate

Appendix A   

–

  

Definitions and Rules of Usage

 

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FACILITY AGREEMENT [Virgin/NPA 2016-1]

THIS FACILITY AGREEMENT [Virgin/NPA 2016-1] dated as of October 28, 2015 (as
modified, amended or supplemented from time to time, this “Agreement”) among VX
2016 LLC, a Delaware limited liability company (the “Owner”), each Senior
Purchaser and Junior Loan Participant identified on Schedule I hereto
(collectively, together with their successors, permitted assigns and permitted
transferees, the “Financiers”), Massachusetts Mutual Life Insurance Company, as
Senior Agent hereunder (together with its successors hereunder in such capacity,
the “Senior Agent”), Novus Tamweel Aviation Finance GP Limited, as Junior Agent
hereunder (together with its successors hereunder in such capacity, the “Junior
Agent”), and Bank of Utah, as Security Trustee hereunder (together with its
successors hereunder in such capacity, the “Security Trustee”).

W I T N E S S E T H:

WHEREAS, certain terms are used herein as defined in Section 1 hereof; and

WHEREAS, concurrently with the execution and delivery of this Agreement, the
Owner and the Security Trustee are entering into the Mortgage and Security
Agreement [Virgin/NPA 2016-1] dated as of the date hereof (as modified, amended
or supplemented from time to time, the “Mortgage”) pursuant to which the Owner
agrees, among other things, to issue one or more senior notes, and to borrow
junior loans, which loans shall be evidenced by junior notes, in respect of each
Aircraft as evidence of the Owner’s indebtedness to the Financiers, which Notes
will be issued upon the financing of such Aircraft and which Notes will be
secured by the mortgage and security interest on such Aircraft created by the
Owner in favor of the Security Trustee, and the Owner shall execute and deliver
a Mortgage Supplement covering such Aircraft, supplementing the Mortgage at the
time of such delivery and financing.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:

Section 1. Certain Definitions.

Except as otherwise defined in this Agreement, including its annexes, schedules
and exhibits, terms used herein in capitalized form shall have the meanings
attributed thereto in Appendix A hereto, and the rules of usage specified
therein shall be applicable to this Agreement. In addition, the following terms
shall have the following meanings:

“Balloon” means, in respect of any Class and Series of Senior Notes, (x) in
respect of the Tranche A-1 Notes of any Series, $6,600,000 and (y) in respect of
the Tranche A-2 Notes of any Series, Not Applicable.

“Closing Date” means, in respect of any Series of Notes, the date on which such
Series of Notes are initially issued to the Holders in accordance with the terms
of this Agreement.

“Commitment” means, as the context requires, the Senior Commitment and/or the
Junior Commitment.

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“Commitment Termination Date” means the last Business Day of December 2016;
provided that the Commitment Termination Date for any Aircraft may be extended
to a date mutually agreed by the Lessee and the Underwriters.

“Designated Aircraft” means each of the two Airbus A320-200 aircraft identified
as follows: (i) manufacturer’s serial number 7138 with FAA registration
No. N364VA, scheduled to be delivered to the Owner under the Purchase Agreement
in May 2016; and (ii) manufacturer’s serial number 7207 with FAA registration
No. N365VA, scheduled to be delivered to the Owner under the Purchase Agreement
in June 2016 (such months, in each case, being the “Scheduled Delivery Month”
for such Designated Aircraft). Such serial numbers and FAA registration numbers
are subject to change.

“Discount Rate” means, as at any date of determination, the sum of (i) the
Make-Whole Rate plus (ii) 0.40%.

“Federal Funds Rate” for any day, means the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
the day of such transactions received by the relevant Agent from three federal
funds brokers of recognized standing selected by it.

“Final Legal Maturity” means, with respect to any Senior Note, the calendar date
18 months following the Maturity Date of such Note.

“Junior Commitment” shall have the meaning ascribed thereto in Section 2(a).

“Junior Maturity Date” means, for any Series of Junior Notes, the seven year
anniversary of the Issuance Date of such Series and Class of Notes.

“Junior Note Interest Rate” means, for any Junior Notes of any Series, 6.59% per
annum.

“Junior Prepayment Fee” means, with respect to any acceleration or Voluntary
Prepayment of any Junior Note, a fee equal to 4% of the principal amount so
accelerated or prepaid.

“Make-Whole Rate” means, for any Senior Note as at any determination date, the
interest rate (the “Screen Rate”) for the fixed leg of a U.S. Dollar Interest
Rate “Swap Mid” appearing on Bloomberg Screen USSW (the “Screen”) with
maturities equal to the Remaining Weighted Average Life of such Note, or if such
a maturity is not posted on the Screen, an interpolation of such rate as
provided below based on maturities next above and below the then Remaining
Weighted Average Life of such Note at approximately 11:00 a.m. New York time on
the date one Business Day before the determination date; such interpolated rate
to be calculated by the

 

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original Senior Purchasers (or, if the Original Senior Purchaser is no longer a
Holder of any Notes, the Holder then holding the greatest principal amount of
Notes) in accordance with the following formula:

 

        WAY    =   

Y1 + (Y2-Y1)(X-X1)

(X2-X1)

where:

 

        WAY    =    weighted average yield.         X    =    Remaining Weighted
Average Life in years of such Note.         X1    =    whole integer closest to
and less than X that is a maturity available on the Screen.         X2    =   
whole integer closest to and greater than X that is a maturity available on the
Screen.         Y1    =    Screen Rate with maturities equal to X1.         Y2
   =    Screen Rate with maturities equal to X2.

“Minimum Liability Insurance Amount” means $600,000,000.

“Original Amount” means, in respect of any Aircraft, $40,000,000.

“Partial Loss Threshold” means $3,000,000.

“Past Due Rate” means, as to any Note (or amount owing in respect thereof or to
the Holder thereof), the lesser of (a) 2.00% plus the relevant Applicable Rate
or (b) the maximum interest rate permitted under applicable law.

“Prepayment Fee” means, in respect of any Note as at any date of determination,
(1) in the case of any Senior Note, the sum of (A) the excess, if any, of
(a) the present value, as of the date of the relevant prepayment of such Note,
of the installments of principal of and interest on such Note that, but for such
prepayment, would have been payable on the Interest Payment Dates after such
prepayment, over (b) the principal amount of such Note then being prepaid. Such
present value shall be determined by discounting the amounts of such
installments semi-annually (assuming a 360-day year of 12 30-day months) from
their respective Interest Payment Dates to the date of such prepayment at a rate
equal to the Discount Rate; if the Discount Rate is equal to or higher than the
Fixed Rate for any Note, the Prepayment Fee for such Note shall be zero; plus
(B) the Prepayment Premium, if applicable, and (2) in the case of any Junior
Note, the Junior Prepayment Fee, if applicable.

“Prepayment Premium” means, in respect of the Voluntary Prepayment of any Senior
Notes, (i) if such prepayment is effected within one year of the Issuance Date
of such Note, 3% of the principal amount prepaid, (ii) if such prepayment is
effected at any time thereafter but within two years of the Issuance Date of
such Note, 2% of the principal amount prepaid and (iii) if such prepayment is
effected at any time thereafter but within three years of the Issuance Date of
such Note, 1% of the principal amount prepaid.

 

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“Rate Set Date” means, for any Series of Senior Notes, the date two Business
Days prior to the Issuance Date of such Series of Notes.

“Remaining Weighted Average Life” means, in relation to any Senior Note, the
number of years obtained by dividing (i) the sum of the products obtained by
multiplying (a) the number of years elapsed since the applicable Issuance Date
and (b) the respective scheduled principal payment for each elapsed year by
(ii) the principal amount of such Senior Note.

“Senior Commitment” shall have the meaning ascribed thereto in Section 2(a).

“Senior Interest Rate” means (i) for the Senior Notes of Series 7138, in respect
of Tranche A-1 thereof, 3.924% per annum and, in respect of Tranche A-2 thereof,
Not Applicable, and (ii) for the Senior Notes of Series 7207, in respect of
Tranche A-1 thereof, 3.934% per annum and, in respect of Tranche A-2 thereof,
Not Applicable plus, in either case, if the Issuance Date for such Series falls
in a month that is two or more months after the Scheduled Delivery Month for the
Designated Aircraft relating to such Series, 0.01% for each month after such
second month.

“Senior Maturity Date” means, for any Series of Senior Notes, the 12 year
anniversary of the Closing Date of such Notes.

“Voluntary Prepayment” means a prepayment effected pursuant to Section 3(h)(i)
hereof.

Unless the context otherwise requires, any reference herein to any of the
Operative Documents refers to such document as it may be modified, amended or
supplemented from time to time in accordance with its terms and the terms of
each other agreement restricting the modification, amendment or supplement
thereof.

Section 2. The Commitment; Funding Procedures; Closing Procedure.

(a) Commitment; Notes; Special Funding Elections.

(i) The Notes. Subject to the terms and conditions of this Agreement, (i) the
Owner agrees (i) to authorize and issue the sale of senior secured notes to the
Senior Purchasers and (ii) to borrow junior secured loans from the Junior Loan
Participants, which loans will be evidenced by junior secured notes (such senior
secured notes and junior secured notes being collectively referred to as the
“Notes”), such Notes to be issued (A) in two Classes (each a “Class”), “Senior
Notes” and “Junior Notes”, with such Senior Notes to be issued in two Tranches,
“Tranche A-1 Senior Notes” and “Tranche A-2 Senior Notes”, and up to (B) in two
separate series (each, a “Series”) as relate to each Designated Aircraft and
(ii) each Senior Purchaser severally agrees to purchase Senior Notes and each
Junior Loan Participant agrees to lend a secured junior loan to be evidenced by
Junior Notes, in each case, of the applicable Series, Class and Tranche in
respect of each Designated Aircraft on a date to be designated for such Aircraft
pursuant to Section 2(b)(i) hereof, but in no event later than the Commitment
Termination Date, as provided in clause (iii) below. The Senior Class of Notes
are to be issued to the Senior Purchasers in an aggregate principal amount of
$66,000,000, not to exceed $33,000,000 per Designated Aircraft (the “Senior
Notes”). The Tranche A-1

 

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Senior Notes of any Series are to be issued to the Senior Purchasers in an
aggregate principal amount of $33,000,000 and the Tranche A-2 Senior Notes of
any Series are to be issued to the Senior Purchasers in an aggregate principal
amount of Not Applicable; provided that, prior to any Delivery Date, the Senior
Agent may elect, by a notice to the parties hereto, to reallocate a portion of
the Tranche A-1 Senior Notes of the related Series to the Tranche A-2 Senior
Notes of such Series or to reallocate a portion of the Tranche A-2 Senior Notes
of the related Series to the Tranche A-1 Senior Notes of such Series, and any
such reallocation shall be specified in the related Mortgage Supplement. The
Junior Class Notes are to be issued to the Junior Loan Participants in an
aggregate principal amount of $14,000,000, not to exceed $7,000,000 per
Designated Aircraft (the “Junior Notes”). The aggregate original principal
amount of the Notes for all Designated Aircraft shall not exceed $80,000,000
(which amount, for the avoidance of doubt, shall not be subject to any appraisal
or other test or condition precedent).

(ii) Commitment. Each Financier’s funding obligation in respect of any Class
and, if applicable, Tranche shall be its Commitment of the amount thereof
(respectively, its “Senior Commitment” and its “Junior Commitment”). Each
Financier shall receive, as evidence of the Senior Note and/or Junior Note made
by it in respect of any Designated Aircraft, a Note(s) of the applicable Class,
Tranche and Series in the amount of such Note.

(iii) Class, Series and Tranche. Notes shall be issued by reference to a
particular “Class”, “Series” and “Tranche”. The “Class” of any Note, designated
as “Senior” or “Junior”, shall indicate whether such Note is issued in respect
of a Senior Note or a Junior Note. The “Tranche” of any Senior Note shall be
designated as “Tranche A-1” or “Tranche A-2”. The “Series” of any Note,
designated by manufacturer’s serial number of the applicable Designated
Aircraft, shall indicate the Designated Aircraft relating to such Note. The
Class (and, in respect of a Senior Note, the Tranche of such Senior Note) and
Series of a Note shall be indicated on the face of such Note. Each Note and the
related Commitment may be designated as being of the Class and Series of its
related Notes.

(iv) Financiers’ Elections. Schedule 1 to Exhibit A hereto sets out the Class of
Notes (and Tranche of Senior Notes) of each Series that each Financier has
irrevocably elected to receive on behalf of itself and its successors, permitted
assigns and permitted transferees. Any Note initially issued to a Senior
Purchaser as a Tranche A-1 Senior Note shall be and remain a Tranche A-1 Senior
Note, any Note initially issued to a Senior Purchaser as a Tranche A-2 Senior
Note shall be and remain a Tranche A-2 Senior Note, and any Note initially
issued to a Junior Loan Participant shall be and remain a Junior Note, in each
case, regardless of the Holder thereof. A Note, once issued as a particular
Class, Tranche and Series, shall only be transferred, assigned and/or reissued
as such Class, Tranche and Series, as the case may be, entitling its Holder to
the rights, and subjecting such Holder to the obligations, applicable to such
Class, Tranche and Series only, as further set forth herein.

 

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(v) Notes. The Notes shall be substantially in the form set forth in Exhibit C.
On the Delivery Date of each Designated Aircraft, the Owner shall issue Notes in
respect of such Aircraft in an aggregate amount equal to the Original Amount
constituting (A) the Senior Commitment advanced by the Senior Purchasers for
such Aircraft and (B) the Junior Commitment advanced by the Junior Loan
Participants for such Aircraft.

(b) Funding Procedures.

(i) Issuance Date. In connection with the financing of any Designated Aircraft
hereunder, the Owner agrees to give each Financier, each Agent and the Security
Trustee at least (i) in the case of the Senior Financiers, three Business Days’
and (ii) in the case of the Junior Financiers, 10 Business Days’ prior written
notice of the anticipated Delivery Date of such Aircraft (for any Designated
Aircraft, its “Issuance Date”), which date shall be a Business Day not later
than the Commitment Termination Date, and which notice shall be
(A) countersigned by the Lessee and in substantially the form of the Notice of
Issuance attached hereto as Exhibit A (a “Notice of Issuance”) and
(B) irrevocable if not revoked within three Business Days of such Issuance Date.

(ii) Account. In order to facilitate the timely closing of the transactions
contemplated hereby on any Issuance Date, the Owner, by delivery of the Notice
of Issuance to the Financiers and each Agent, irrevocably instructs such
Financiers to wire transfer (for receipt by no later than 10:00 a.m. New York
City time) on such Issuance Date its Commitment by the wiring of immediately
available funds (reference: Virgin/NPA 2016-1) to the account of the Security
Trustee at the Payment Office (the “Account”).

(iii) Deposit. The funds so paid by each Financier (the “Deposit”) into the
Account are to be held by the Security Trustee for account of such Financier.
Subject to paragraph (vi) below, upon the satisfaction (as determined by each
Financier) or waiver of the conditions precedent set forth in Section 4(b)
hereof in respect of the applicable Designated Aircraft, such Financier (or its
special counsel acting on its behalf) shall instruct the Security Trustee to
disburse the Deposit for application of its Commitment for such Aircraft as
instructed by the Owner.

(iv) Investment of Deposit. If, for any reason, the applicable Designated
Aircraft to be financed hereunder on its Issuance Date shall not be so financed
on such date, the Deposit, and earnings thereon, will be invested and reinvested
by the Security Trustee at the sole direction, for the account, and at the risk
of the Lessee in an overnight investment selected by the Lessee and acceptable
to the Security Trustee having consulted with the Financiers. Upon the Lessee’s
oral (to be confirmed in writing) instructions, earnings on any such investments
shall be applied to the Owner’s payment obligations to each Financier under this
Section 2(b) or released to the Lessee to the extent of such earnings.

(v) Interest After Issuance Date. If the actual Delivery Date for the applicable
Designated Aircraft is a date falling after its Issuance Date, the Owner shall
pay interest hereunder to each Financier on the amount of its Commitment
transferred to the Security Trustee for each Note as indicated on Schedule 1 to
the Notice of Issuance

 

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for the period from and including such Issuance Date to but excluding the
earlier of (A) the Delivery Date for such Aircraft or (B) the Cutoff Date (as
defined below). For each Financier, such interest shall accrue on the amount of
such Financier’s Commitment transferred to the Security Trustee at the
Applicable Rate. Interest on the Commitments accrued pursuant to the preceding
sentence shall (I) if accrued to the Delivery Date for such Aircraft, be paid on
the first Interest Payment Date and (II) if accrued to the Cutoff Date, be due
and payable to each Financier within three Business Days of such date.

(vi) Cutoff Date. If for any reason, other than the failure of any Financier to
comply with the terms hereof, the Delivery Date for the applicable Designated
Aircraft shall not have occurred on or prior to seven Business Days (or such
longer period as mutually agreed by the Owner and the Underwriters) after the
Issuance Date for such Aircraft (the “Cutoff Date”), the Security Trustee shall
return each Financier’s Commitment to it, subject, however, to such Financier’s
continuing commitment to fund as provided herein.

(c) Registrations Upon Closing. Subject to the terms and conditions of this
Agreement, and simultaneously with receipt by the Owner of the proceeds of the
Notes made in connection with any Designated Aircraft pursuant to this
Section 2, the Owner shall authorize (i) the delivery and filing for record at
the FAA of the Mortgage and the Mortgage Supplement and the Lease and the Lease
Supplement for such Aircraft and (ii) the registration at the International
Registry of the Security Trustee’s international interest in the related
Airframe and each Engine installed thereon and in the Lease and such Lease
Supplement.

(d) Funding Mechanics. On the Delivery Date for the Designated Aircraft
specified in the Owner’s notice referred to in Section 2(b)(i) hereof, subject
to the terms and conditions of this Agreement, each Financier, through the
Security Trustee, agrees to pay the amount of its Commitment to the Owner by
wire transferring such amounts to the account of the Owner as set forth on
Schedule I hereto or to such other account as the Owner shall direct the
Security Trustee in writing, upon closing.

(e) Closing Location. The closing with respect to the financing of each Aircraft
shall take place at the offices of Vedder Price P.C., 1633 Broadway, New York,
New York 10019.

Section 3. Note Economics.

(a) Principal Amortization.

(i) Senior Notes. The aggregate principal amount of each Tranche of the Senior
Notes of each Series shall amortize in 48 quarterly installments on each
Interest Payment Date (the first of which being the first Interest Payment Date
following the Delivery Date of the related Designated Aircraft and the last of
which shall be the Senior Maturity Date of the Senior Notes of such Series) on a
mortgage-style basis (the discount rate shall be 4% per annum) amortizing to the
Balloon for such Tranche payable on the 48th such date (being its Maturity Date)
as provided in Schedule 3(a)(i) hereto. The Senior Agent shall determine and
prepare the amortization schedules for the Senior Notes of each Series and
Tranche, which determination shall be conclusive absent manifest error.

 

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(ii) Junior Notes. The aggregate principal amount of the Junior Notes of each
Series shall amortize quarterly on each Interest Payment Date (the first of
which being the first Interest Payment Date following the Delivery Date of the
related Designated Aircraft) as provided in Schedule 3(a)(ii) hereto.

(iii) Amortization Schedules. The aggregate amortization schedules for the Notes
of each Series, Class and Tranche shall, based on the foregoing, be appended to
the Mortgage Supplement delivered in connection with such Series or Tranche (as
applicable).

(b) Senior Interest. (i) The Senior Notes of each Tranche and Series shall bear
interest at a fixed rate equal to the Senior Interest Rate for such Series and
Tranche.

(c) Junior Interest. The Junior Notes of each Series shall bear interest at the
Junior Note Interest Rate.

(d) Interest Generally. Interest on the Notes shall be payable quarterly in
arrears on each Interest Payment Date and shall be calculated on the basis of a
year of 360 days consisting of 12 30-day months.

(e) Past Due Interest. Overdue payments of principal of any Class of Note (and
to the extent permitted by applicable law, overdue payments of interest and
other amounts overdue under the Operative Documents) shall bear interest at the
Past Due Rate, payable on demand, for any period during which the same shall be
overdue.

(f) PIK Interest. Notwithstanding anything to the contrary in Section 3(b) or
3(c) above, if interest on any Note is not paid on the date such payment becomes
due, such amount shall be converted automatically to principal as of the date
such interest fell due unless, at the time of such conversion, a cumulative
18 months of interest on such Note shall have been converted to principal
pursuant to this Section 3(f). Interest so converted to principal (“PIK
Interest”) shall be treated for all purposes hereof and the Operative Documents
as principal, provided that interest shall accrue on the amount of the PIK
Interest until paid at the Past Due Rate (and such default interest shall
likewise “PIK” as and when it shall become due and payable). PIK Interest shall
be payable on demand.

(g) Certain Fees.

(i) Upfront Fees. The Owner agrees to pay to the Security Trustee for account of
each Underwriter as and when due the upfront fee specified for such Underwriter
in its Fee Letter.

(ii) Commitment Fees. With respect to each Designated Aircraft, the Owner agrees
to pay to the Security Trustee for account of each Financier a commitment fee
accrued for the period from and including the date hereof to the earlier of
(i) the Delivery Date of the second Designated Aircraft and (ii) the Commitment
Termination

 

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Date, equal to the Commitment Fee Rate calculated on the average daily amount of
such Financier’s unutilized Commitment during the period for which payment of
the commitment fee is made (calculated on the basis of a year of 360 days and
actual days elapsed), payable quarterly in arrears on each three monthly
anniversary dates of the Effective Date and on the date the commitment fee
ceases to accrue in accordance with the foregoing. As used herein, “Commitment
Fee Rate” means (A) for any Senior Commitment, 0.75% per annum and (B) for any
Junior Commitment, 1.00% per annum.

(iii) Agency Fees. The Owner agrees to pay to the Senior Agent an agency fee of
$3,000 per year payable annually in advance beginning on and including the date
hereof. Such agency fee shall not be refundable.

(h) Prepayments.

(i) Generally. On at least (A) in the case of the Senior Financiers, five
Business Days’, and (B) in the case of the Junior Financiers, 15 days’, prior
written notice to the Security Trustee, the Owner (acting on instructions of the
Lessee) may prepay on the date specified in its notice of prepayment delivered
pursuant to paragraph (iv) below in whole, or in part, any or all Notes in
respect of any Class or any Series then outstanding at the principal amount
thereof (or portion thereof to be repaid), together with accrued interest
thereon to the date of prepayment plus all Prepayment Fee (if any) and all other
amounts due to the Holders of such Notes hereunder, thereunder and under the
other Operative Documents; provided that any partial prepayment of Senior Notes
shall be in an aggregate original principal amount of at least $5,000,000 and in
$1,000,000 multiples thereafter (or such lesser amount as shall equal the entire
outstanding principal amount of such Notes), and the amount thereof shall be
specified in such written notice. Any partial prepayment shall be applied
ratably among the Senior Notes and the Junior Notes (and, as among the Senior
Notes, ratably among the Tranche A-1 Senior Notes and the Tranche A-2 Senior
Notes). The Security Trustee will give prompt notice of the Owner’s notice to
prepay to the Holders.

(ii) Prepayment upon Event of Loss. On at least five Business Days’ prior
written notice to the Security Trustee, the Owner shall prepay, without any
Prepayment Fee, on the date specified in its notice of prepayment delivered
pursuant to paragraph (iv) below all Notes of the Series issued in respect of an
Aircraft in full, but not in part, together with accrued interest thereon to the
date of prepayment and all other amounts due thereunder and hereunder and under
the other Operative Documents to the Holders upon the occurrence of an Event of
Loss with respect to such Aircraft; such prepayment shall, in any event, be the
last day permitted for such payment under Section 9(a) of the Lease; provided
that if, pursuant to the terms of the Lease, a Replacement Airframe, together
with the same number of Replacement Engines as the Engines, if any, subject to
such Event of Loss, shall have been substituted for such Airframe and the
Engines, if any, subject to such Event of Loss, then no such prepayment shall be
required. The Security Trustee will give notice of prepayment to the Holders
under this Section 3(h)(ii) promptly.

 

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(iii) Special Junior Notes Prepayments. (A) On at least five Business Days’
prior written notice to the Security Trustee, the Owner (acting on instructions
of the Lessee) may prepay, without any Prepayment Fee, on the date specified in
its notice of prepayment delivered pursuant to paragraph (iv) below, all Junior
Notes held by any Holder claiming compensation pursuant to Schedule III (a) or
(b) of this Agreement for a withholding Tax indemnity or a withholding Tax
gross-up, so that after making all required withholdings or deductions for
withholding Taxes from any payment, such Holder receives the same amount it
would have received had no such withholdings or deductions been made, together
with accrued interest thereon to the date of prepayment plus all other amounts
due to such Holder hereunder and under the other Operative Documents. The
Security Trustee will give notice of prepayment to the Junior Agent under this
Section 3(h)(iii) promptly.

(B) Following notice to the Owner by the Junior Agent of the occurrence of an
Illegality Event and demand therefor, the Owner shall prepay, without any
Prepayment Fee, on the date specified in such notice all Junior Notes in full,
but not in part, together with accrued interest thereon to the date of
prepayment and all other amounts due thereunder and hereunder and under the
Operative Documents to the Junior Agent.

(C) The Security Trustee will give notice of prepayment to the Junior Agent
under this Section 3(h)(iii) promptly.

(iv) Notice Irrevocable. Any notice of prepayment delivered pursuant to
paragraph (i), (ii) or (iii) above shall be irrevocable if not revoked at least
five Business Days prior to the specified date of payment and shall identify the
amount to be prepaid.

(v) Amounts to Be Prepaid. Notice of prepayment having been given and not
revoked as aforesaid, the principal amount of the Notes so to be prepaid, plus
accrued interest thereon to the date of prepayment, together with Prepayment Fee
(if any) to the extent herein provided, shall become due and payable on the
prepayment date specified in the notice.

(vi) Prepayment Date. On the date fixed for prepayment under this Section 3(h),
immediately available funds in Dollars shall be deposited by the Owner in the
account of the Security Trustee at the place and by the time and otherwise in
the manner provided in Section 3(i), in an amount equal to the principal amount
of Notes to be prepaid together with accrued and unpaid interest thereon to the
date fixed for such prepayment, all Prepayment Fee (if any) and all other
amounts due to the Holders of the Notes hereunder, thereunder and under the
other Operative Documents.

(vii) No Amounts to Be Re-Borrowed. Any amount prepaid pursuant to this
Section 3(h) hereof may not be re-borrowed by the issuance of Notes or
otherwise.

 

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(viii) Supplemental Mandatory Prepayments.

(1) Default Events or Lease Events of Default. The Owner shall prepay the Notes
in accordance with paragraph (2) below in full following notice to the Owner of
a Default Event or a Lease Event of Default and demand therefor (which notice
and demand shall not be required if such Lease Event of Default is a Special
Default).

(2) Manner of Payment. Any prepayment required by the preceding paragraph (1)
shall be due and payable on the date of demand therefor without presentment,
demand, protest or other notice of any kind, all of which are hereby waived. Any
prepayment of principal on the Notes required by the preceding paragraph
(1) shall be accompanied by interest on the amount prepaid through the date of
prepayment, together with any Prepayment Fee and all other amounts then due and
payable.

(i) Method of Payment. Principal and interest and other amounts due hereunder or
under the Notes or in respect hereof or thereof shall be payable in Dollars in
immediately available funds prior to 1:00 p.m., New York time, on the due date
thereof, to the Security Trustee at the Payment Office and the Security Trustee
shall, subject to the terms and conditions hereof, remit all such amounts so
received by it to (i) in the case of the Senior Notes, to the Holders thereof
and (ii) in the case of the Junior Notes, to the Junior Agent, which, in turn,
will remit all such amounts received by it to the Junior Loan Participants in
each case at such account or accounts at such financial institution or
institutions as the Holders and the Junior Agent shall have designated to the
Security Trustee or the Junior Agent, as the case may be, in writing, in
immediately available funds for distribution to the relevant Holders or the
Junior Agent, as the case may be, such payment by the Senior Purchasers and the
Junior Agent to be made, in the case of any such designated account in the
United States, prior to 3:00 p.m., New York time, on the due date thereof. In
the event the Security Trustee shall fail to make any such payment as provided
in the immediately foregoing sentence after its receipt of funds at the place
and prior to the time specified above, the Security Trustee, without right of
reimbursement from the Owner or the Lessee, agrees to compensate the Senior
Purchasers or Junior Agent for loss of use of funds in a commercially reasonable
manner. All such payments by the Owner, the Security Trustee and the Junior
Agent shall be made free and clear of and without reduction on account of all
wire and other like charges, and without setoff or deduction (except as required
by applicable law). Prior to the due presentment for registration of transfer of
any Note, the Owner, the Security Trustee and the Junior Agent shall deem and
treat the Person in whose name any Note is registered on the Certificate
Register as the absolute owner of such Note for the purpose of receiving payment
of all amounts payable with respect to such Note and for all other purposes
whether or not such Note shall be overdue, and none of the Owner, the Security
Trustee nor the Junior Agent shall be affected by any notice to the contrary.

(j) Application of Payments. Except as otherwise expressly provided herein or in
the Intercreditor Agreement, each payment of principal and interest or other
amounts due in respect of each Note shall be distributed to the Holders thereof
ratably, without priority of any one Note over any other Note in the proportion
that the amount of such payment or payments then due under each Note bears to
the aggregate amount of the payments then due under all Notes. Each such payment
shall, except as otherwise expressly provided herein, be applied, first, to the
payment of any amount (other than the principal of or interest on such Note) due
in respect of such Note, second, to the payment of interest on such Note (as
well as any interest on overdue principal and, to the extent permitted by law,
interest and other amounts payable thereunder) due

 

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thereunder, third, to the payment of the principal of such Note then due and
fourth, the balance, if any, remaining thereafter, to the payment of the
principal of such Note remaining unpaid (provided that such Note shall not be
subject to prepayment without the consent of the affected Holder except as
permitted by Section 3(h)). The amounts paid pursuant to clause fourth above
shall be applied to the installments of principal of such Note in inverse order
of maturity.

Section 4. Conditions Precedent.

(a) Conditions Precedent to the Effectiveness of the Commitments. It is agreed
by each of the parties hereto that the respective Commitments of each Financier
in respect of each Designated Aircraft and the effectiveness of this Agreement
is subject to the satisfaction of the following conditions precedent:

(i) Effectiveness Documents. The following documents shall have been duly
authorized, executed and delivered by the respective party or parties thereto,
shall each be satisfactory in form and substance to each Financier and shall be
in full force and effect and executed counterparts shall have been delivered to
each Financier and its counsel:

(1) this Agreement;

(2) the Mortgage;

(3) the Lease; and

(4) the Intercreditor Agreement.

(ii) Corporate Documents. Each Financier shall have received the following, in
each case in form and substance satisfactory to it:

(1) Constitutional Documents of Obligors. A certified copy of the certificate of
incorporation and bylaws of each Obligor and a copy of resolutions of the board
of directors of such Obligor or the executive committee thereof, certified by
the Secretary, an Assistant Secretary or other officer of such Obligor, duly
authorizing the execution, delivery and performance by such Obligor of this
Agreement and each other document required to be executed and delivered by such
Obligor on the Delivery Date for a Designated Aircraft in accordance with the
provisions hereof and thereof;

(2) Signatories of Obligors. A certificate of each Obligor as to the person or
persons authorized to execute and deliver this Agreement (in the case of the
Owner), the other Operative Documents to which they are a party, and any other
documents to be executed on behalf of such Obligor in connection with the
transactions contemplated hereby and as to the signature of such person or
persons;

 

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(3) Incumbency Certificate of Security Trustee. An incumbency certificate of the
Security Trustee as to the person or persons authorized to execute and deliver
this Agreement, the Mortgage, and any other documents to be executed on behalf
of the Security Trustee in connection with the transactions contemplated hereby
and as to the signatures of such person or persons (which may be in the form of
a general “authorized signatories” certificate);

(4) Security Trustee’s Resolutions. Copy of the resolutions of the board of
directors of the Security Trustee, certified by the Secretary or an Assistant
Secretary of the Security Trustee, duly authorizing the transactions
contemplated hereby and the execution and delivery of each of the documents
required to be executed and delivered on behalf of the Security Trustee in
connection with the transactions contemplated hereby (which may be in the form
of general standing resolutions to carry out its business in the manner
contemplated by this Agreement); and

(5) Constitutional Documents of Security Trustee. A copy of the articles of
association and by-laws of the Security Trustee, each certified by the
Secretary, an Assistant Secretary or other officer of the Security Trustee.

(iii) Opinions of Counsel. Such Financier shall have received an opinion
addressed to such Financier, each Agent and the Security Trustee from
(A) Milbank, Tweed, Hadley & McCloy, special New York counsel to the Lessee and
(B) the Associate General Counsel or other duly authorized in-house counsel for
the Lessee, in each case, in form and substance reasonably satisfactory to the
addressees thereof.

(iv) Know Your Customer for Owner and Lessee. Such Financier shall have received
any document reasonably requested from the Owner or Lessee (not less than five
Business Days prior to the Effective Date) by such Financier in order for such
Financier to satisfy any “know your customer” requirements with respect to the
Owner and Lessee.

(v) Internal Approvals. Each Finance Party shall have received all necessary
internal approvals and satisfactory tax advice, such satisfaction to be
reasonably adjudged in the sole discretion of each Finance Party; each Finance
Party hereby confirms that such condition has been satisfied as to itself.

(b) Conditions Precedent to the Financiers’ Participation in each Designated
Aircraft. It is agreed by each of the parties hereto that the respective
obligations of each Financier to purchase its Notes in respect of any Designated
Aircraft is subject to the satisfaction prior to or on the Delivery Date for
such Aircraft of the following conditions precedent:

(i) Notice of Delivery Date. Such Financier shall have received due notice with
respect to such Delivery Date pursuant to Section 2 hereof.

 

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(ii) International Interests. International interests in the related Airframe
and Engines shall have been duly registered by FAA Counsel (which shall be the
“professional user entity” (as defined in the Cape Town Convention) with respect
to such Aircraft) (or any other professional user entity agreed to by the
Security Trustee and the Lessee), on the International Registry with respect to
(A) the international interests with respect to the related Airframe and each
Engine constituted by the Mortgage and related Mortgage Supplement
(incorporating the terms of the Mortgage) with the Security Trustee as creditor
and the Owner as debtor, (B) the international interest with respect to the
related Airframe and each Engine under the Lease and the related Lease
Supplement (incorporating the terms of the Lease) with the Owner as creditor and
the Lessee as debtor, (C) the assignment of international interest with respect
to the related Airframe and each Engine constituted by the Mortgage and the
related Mortgage Supplement (incorporating the terms of the Mortgage) (assigning
the international interest under the Lease and related Lease Supplement,
including an assignment of the right to discharge such international interest)
with the Security Trustee as assignee and the Owner as assignor and (D) the
transfer of the right to discharge with respect to Airframe and each Engine
under the Lease and the related Lease Supplement with the Owner as transferor
and the Security Trustee as transferee.

(iii) No Change in Law. No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or regulations
thereunder or interpretations thereof by appropriate regulatory authorities
which, in the reasonable opinion of such Financier would make it a violation of
law or regulations for such Financier to make its Commitment available to
acquire its Note(s) or to realize the benefits of the security afforded by the
Mortgage.

(iv) No Material Adverse Change. No material adverse change in the financial
condition of the Lessee shall have occurred since December 31, 2014 that would
materially and adversely affect the Lessee’s ability to perform its obligations
under the Operative Documents.

(v) Fees and other Payments. Each Underwriter shall have received its upfront
fee specified in Section 3(g)(i) and the Lessee shall have made the Initial Rent
payment to the Manufacturer.

(vi) Certain Documents. The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto, shall each be
satisfactory in form and substance to each Financier (acting reasonably) and
shall be in full force and effect and executed counterparts shall have been
delivered to such Financier and its counsel, provided that only such Financier
shall receive an executed original of its Note(s) to be issued to it:

(1) the Mortgage Supplement covering such Aircraft and dated the Delivery Date
for such Aircraft;

(2) the Notes of each Class of the Series relating to such Aircraft, with
Annex A for each Class of Note duly completed as provided in Section 3(a) hereof
(with a CUSIP Number);

 

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(3) the Airframe Warranties Agreement, the Consent and Agreement and the Engine
Consent and Agreement, in each case, in respect of such Aircraft;

(4) the Warranty Bill of Sale and FAA Bill of Sale for such Aircraft;

(5) the Purchase Agreement Assignment for such Aircraft;

(6) the Pledge Agreement (to be delivered on the initial Delivery Date);

(7) the Lease Supplement for such Aircraft (the chattel paper original to be
delivered to the Security Trustee); and

(8) if necessary, a copy of that portion of the Purchase Agreement and Engine
Agreement relating to such Aircraft certified by the Secretary or an Assistant
Secretary or other officer of the Owner as being a true and accurate copy of the
same that relates to the Assigned Warranties and the related obligations of the
Owner or a successor in interest to the Owner which has the right to exercise
any such warranty.

(vii) Financing Statements. Uniform Commercial Code financing statements
covering all the security interests created by or pursuant to the Lease and
pursuant to the granting clause of the Mortgage that are not covered by the
recording system established by the Federal Aviation Act shall have been duly
prepositioned for filing on closing in all places deemed necessary or advisable
in the reasonable opinion of counsel for the Financiers, and any additional
Uniform Commercial Code financing statements deemed advisable by such Financier
shall have been duly prepositioned for filing on closing and all other action
shall have been taken as is deemed necessary or advisable, in the reasonable
opinion of counsel for the Financiers, to establish and perfect the Security
Trustee’s security interest in such Aircraft.

(viii) FAA Actions. All appropriate action required to have been taken by the
Federal Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, on or prior to such
Delivery Date in connection with the transaction contemplated by this Agreement
shall have been taken, and all orders, permits, waivers, authorizations,
exemptions and approvals of such entities required to be in effect on such
Delivery Date in connection with the transaction contemplated by this Agreement
shall have been issued, and all such orders, permits, waivers, authorizations,
exemptions and approvals shall be in full force and effect on such Delivery
Date.

 

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(ix) Evidence of Title and Security Interests. On such Delivery Date, the
following statements shall be true, and such Financier shall have received
evidence satisfactory to it (including a printout of the “priority search
certificates” (as defined under the Cape Town Convention) from the International
Registry relating to such Aircraft (and the constituent Airframe and Engines))
to the effect that:

(1) the Owner has good title to such Aircraft and the Lessee is the registered
owner of such Aircraft, free and clear of Liens other than (subject to filing
and recording of the FAA Bill of Sale with the Federal Aviation Administration
and the registration of a contract of sale on the International Registry between
the Manufacturer as seller and the Owner as buyer with respect to the Airframe
and Engines of such Aircraft) the mortgage and security and international
interests created by the Mortgage and the Mortgage Supplement for such Aircraft
and the lease and international interest created by the Lease and the Lease
Supplement for such Aircraft;

(2) the FAA Bill of Sale, the Mortgage (if not previously filed), the Mortgage
Supplement for such Aircraft, the Lease (if not previously filed) and the Lease
Supplement for such Aircraft have been duly filed with the FAA for recordation
(or are in form suitable for recordation and are in the process of being so
filed for recordation) and there exist no Liens of record on such Aircraft;

(3) (A) the international interests with respect to the related Airframe and
each Engine constituted by the Mortgage and related Mortgage Supplement
(incorporating the terms of the Mortgage) shall have been (or shall be
concurrently) registered with the International Registry with the Security
Trustee as creditor and the Owner as debtor, (B) the international interest with
respect to the related Airframe and each Engine under the Lease and the related
Lease Supplement (incorporating the terms of the Lease) shall have been (or
shall be concurrently) registered with the International Registry with the Owner
as creditor and the Lessee as debtor, (C) the assignment of international
interest with respect to the related Airframe and each Engine constituted by the
Mortgage and the related Mortgage Supplement (incorporating the terms of the
Mortgage) (assigning the international interest under the Lease and related
Lease Supplement, including an assignment of the right to discharge such
international interest) shall have been (or shall be concurrently) registered
with the International Registry with the Security Trustee as assignee and the
Owner as assignor and (D) the transfer of the right to discharge with respect to
Airframe and each Engine under the Lease and the related Lease Supplement shall
have been (or shall be concurrently) registered with the International Registry
with the Owner as transferor and the Security Trustee as transferee; and there
shall exist no other undischarged registered international interest with respect
to the related Airframe or any Engine on the International Registry;

(4) the Security Trustee shall have a perfected first priority Lien on the
Pledged Interests;

(5) such Aircraft has a valid certificate of airworthiness or a valid export
certificate of airworthiness;

(6) the Lessee is a U.S. Air Carrier (and such Financier shall have received a
copy of the Lessee’s air carrier operating certificate); and

 

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(7) the Security Trustee, as assignee of the Owner’s rights under the Lease, is
entitled to the protection of Section 1110 of the United States Bankruptcy Code
in connection with its right to take possession of such Aircraft in the event of
a case under Chapter 11 of the United States Bankruptcy Code in which the Lessee
is a debtor.

(x) Representations and Warranties. On such Delivery Date, (A) the
representations and warranties of the Owner contained in Section 7 of this
Agreement and the representations and warranties of the Lessee contained in
Section 6(a) of the Lease shall be true and accurate as though made on and as of
such date except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and warranties
shall be true and accurate on and as of such earlier date), and (B) no event
shall have occurred and be continuing which constitutes (or would, with the
passage of time or the giving of notice or both, constitute) a Default Event.

(xi) Ratings Requirement. The Senior Purchasers shall have received evidence
satisfactory to them that the Ratings Requirement has been satisfied.

(xii) Opinions of Counsel. Such Financier shall have received an opinion
addressed to such Financier, each Agent and the Security Trustee from
(A) Milbank, Tweed, Hadley & McCloy, special New York counsel to the Lessee,
confirming, among other things, the statement set forth in Section 4(b)(ix)(6)
hereof and (B) Morris James LLP, special counsel to the Owner and the Trust, in
each case in form and substance reasonably satisfactory to the addressees
thereof.

(xiii) Opinion of FAA Counsel. Such Financier shall have received an opinion
addressed to such Financier, each Agent and the Security Trustee, the Lessee and
the Owner from FAA Counsel, in form and substance reasonably satisfactory to the
addressees thereof.

(xiv) Opinion of Airbus. Such Financier shall have received an opinion addressed
to such Financier, each Agent and the Security Trustee from counsel to Airbus
S.A.S., in respect of the Bills of Sale, in form and substance reasonably
satisfactory to the addressees thereof.

(xv) Pledged Interest. If the Pledged Interests are certificated, the Security
Trustee or its nominee shall have received the Pledged Instruments (as defined
in the Pledge Agreement) in respect of the Pledged Interest, together with
originals of the executed transfer form(s) in respect thereof.

(xvi) Certificate of Lessee. Such Financier shall have received a certificate
signed by the President, a Vice President, the Chief Financial Officer, the
General Counsel or the Treasurer of the Lessee, dated the Delivery Date for such
Aircraft, addressed to such Financier and certifying as to the matters stated in
paragraphs (x), (xvii) and (xix) of this Section 4(b).

 

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(xvii) Insurance Certificate and Report. Such Financier shall have received an
independent insurance brokers’ report and certificate(s) of insurance, in form
and substance reasonably satisfactory to such Financier as to the due compliance
with the terms of Section 10 of the Lease relating to insurance with respect to
such Aircraft and, if applicable, a certificate, in form and substance
reasonably acceptable to such Financier, signed by the Treasurer, Chief
Financial Officer, the President, a Vice President or General Counsel of the
Lessee confirming indemnification or insurance provided by the United States and
evidence of such indemnification or insurance, if any.

(xviii) No Event of Loss. On such Delivery Date it shall be true that no Event
of Loss (or event which with the passage of time would become an Event of Loss)
with respect to such Aircraft (or constituent Airframe) or any associated Engine
has occurred.

(xix) No Governmental Action. No action or proceeding shall have been instituted
nor shall governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or proposed to
be issued by any court or governmental agency at the time of such Delivery Date
to set aside, restrain, enjoin or prevent the completion and consummation of
this Agreement or the transaction contemplated hereby.

(xx) Know Your Customer for the Security Trustee. Such Financier shall have
received any document reasonably requested from the Security Trustee (not less
than five Business Days prior to the initial Issuance Date) by such Financier in
order for such Financier to satisfy any “know your customer” requirements with
respect to the Security Trustee; provided that, should the Security Trustee fail
to provide any such document, or the Security Trustee fails to pass a “know your
customer” test of a Financier, the Financiers shall appoint a successor Security
Trustee pursuant to Section 15(h).

Promptly upon the recording of the Mortgage and the Mortgage Supplement and the
Lease and the Lease Supplement at the FAA covering such Aircraft pursuant to the
Federal Aviation Act, the Owner will cause FAA Counsel to deliver to each
Financier, the Lessee and the Owner an opinion as to the due and valid
registration of such Aircraft in the name of the Lessee, the due recording of
the FAA Bill of Sale, the Mortgage and the Mortgage Supplement covering such
Aircraft and the Lease and Lease Supplement covering such Aircraft and the lack
of filing of any intervening documents with respect to such Aircraft. Following
the Delivery Date for such Aircraft, the Financiers may, if required by
applicable law to perfect the security interest granted in any Assigned
Warranties, cause a huissier to serve a copy of a notice delivered on such
Delivery Date to the Aircraft Manufacturer in accordance with Article 1690 of
the French Civil Code.

(c) Conditions Subsequent. The following conditions shall be conditions
subsequent to the issuance of any Notes Allocated To a Designated Aircraft on
its Delivery Date:

(i) Airworthiness. Within two Business Days of such Delivery Date, each
Financier shall have received evidence that such Aircraft has been duly
certified as to type and airworthiness by the FAA, and the Lessee has authority
to operate such Aircraft (and each Financier shall have received a copy of the
airworthiness certificate for such Aircraft); and

 

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(ii) Registration. Within 10 days of such Delivery Date, each Financier shall
have received evidence that such Aircraft has been duly registered in the name
of the Lessee under the Federal Aviation Act, and such Financier shall have
received a copy of the FAA certificate of registration for such Aircraft.

Failure to satisfy these conditions subsequent within such time frame shall, on
notice of the Security Trustee, constitute an automatic Event of Default.

Section 5. Closing Procedure.

(a) Filings with FAA. Following the Owner’s notice of the Delivery Date for any
Designated Aircraft as provided in Section 2 hereof, the parties will
pre-position each of the executed Mortgage and/or Mortgage Supplement and the
Lease and/or Lease Supplement with FAA Counsel in Oklahoma City, Oklahoma,
together with the FAA Bill of Sale (and photocopy of the Warranty Bill of Sale)
for such Aircraft, the AC Form 8050-1 Aircraft Registration Application for such
Aircraft in the name of the Lessee and AC Form 8050-135 FAA Entry Point Filing
Form (which the parties agree shall be prepared by FAA Counsel). On the Delivery
Date for a Designated Aircraft and in sufficient time to permit the closing to
occur during business hours of the FAA in Oklahoma City, Oklahoma, each
Financier will wire transfer its Commitment prior to 10:00 a.m. New York time
for such Aircraft to the Security Trustee. On such Delivery Date, by conference
telephone call among the Manufacturer, the Owner, the Lessee, the Financiers
(and/or their counsel acting on their behalf), each Agent, the Security Trustee
and FAA Counsel, the Manufacturer will authorize the filing of the FAA Bill of
Sale for such Aircraft to be delivered on such Delivery Date and the Owner will
cause the ownership interest of the Airframe and each Engine associated with
such Aircraft to be duly registered with the International Registry as a
contract of sale and Owner will authorize the filing of each of the AC Form
8050-135 FAA Entry Point Filing Form, the AC Form 8050-1 Aircraft Registration
Application, the Mortgage and/or the Mortgage Supplement and the Lease and/or
Lease Supplement for such Aircraft upon receipt by the Manufacturer of the
purchase price for such Aircraft and receipt by the Owner (or its order) of the
proceeds from the issuance of the Notes for such Aircraft. The irrevocable
authorization to FAA Counsel to date and file the FAA Bill of Sale, the AC Form
8050-135 FAA Entry Point Filing Form, the AC Form 8050-1 Aircraft Registration
Application, the Mortgage and/or Mortgage Supplement and the Lease and/or Lease
Supplement for such Aircraft will occur prior to the transfer of the Note for
such Aircraft to or for account of the Owner, but the filing will not occur
until the Owner’s (or its order) receipt of the funds at the designated account
and the Manufacturer has released the Warranty Bill of Sale. The Note(s) will be
delivered to the Financiers and legal opinions delivered to all parties
immediately following the transfer of the proceeds from the issuance of the
related Notes as provided in Section 2(c).

 

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(b) Registrations by FAA Counsel. The Owner irrevocably authorizes FAA Counsel
to file with the FAA the Mortgage and/or Mortgage Supplement and the Lease
and/or Lease Supplement and register the appropriate international interests and
other interests described herein with the International Registry for each
Designated Aircraft following the closing of the financing for such Aircraft.
FAA Counsel may rely, without any further investigation, on any statement or
certification by the Security Trustee that the closing of the financing for such
Aircraft has occurred.

(c) Discharges in Event of Failure to Fund. If the financing for any Designated
Aircraft shall fail to occur utilizing the Commitments hereunder, the Security
Trustee agrees to register, at the Owner’s cost, a discharge at the
International Registry of any international interest in favor of the Security
Trustee in respect of the related Airframe and the Engines.

(d) International Registry Filings. Each of the parties hereto consents to the
registration with the International Registry of the international interests and
other interests described herein with respect to the Mortgage and each Mortgage
Supplement and the Lease and each Lease Supplement, and each party hereto
covenants and agrees that it will take all such action reasonably requested by
the Lessee, the Owner or the Security Trustee in order to make any registrations
with the International Registry, including becoming a transacting user entity
with the International Registry and providing consents to any registration as
may be contemplated by the Operative Documents.

Section 6. Extent of Interest of Holders.

No Holder shall have any further interest in, or other right with respect to,
the mortgage and security interests created by the Mortgage when and if the
Original Amount of and interest on all Notes in respect of all Aircraft held by
such Holder and all other sums payable to such Holder hereunder, under the
Mortgage and under such Notes shall have been paid in full, provided, however,
to the extent, for any reason, any such sums paid to a Holder are rescinded or
must otherwise be restored by such Holder, the obligations of the Owner and the
security interests created by the Mortgage shall be automatically reinstated
with respect to such Holder and the Security Trustee, as applicable.

Section 7. Representations and Warranties.

(a) Owner’s Representations and Warranties. The Owner represents and warrants
that on the date hereof and on the Delivery Date for each Designated Aircraft:

(i) Existence. The Owner is a limited liability company duly organized and
validly existing in good standing pursuant to the laws of the State of Delaware
and has the power and authority to enter into and perform its obligations under
this Agreement and the other Operative Documents.

(ii) No Conflict. The execution, delivery and performance of this Agreement,
each of the other Operative Documents to which Owner is a party, and the
execution, delivery and payment of the Notes, does not and will not:
(i) contravene any provision of its constitutional documents, (ii) contravene,
conflict with or violate any Applicable Law, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority; or
(iii) violate or result in the breach of, or constitute a default under any
indenture or other loan or credit agreement, or other agreement or

 

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instrument to which it is a party or by which it, or its property and assets,
may be bound or affected. It is not in violation or breach of or default under
any Applicable Law, order, writ, judgment, injunction, decree, determination or
award or any contract, agreement, lease, license, indenture or other instrument
to which it is a party.

(iii) Authorization. The Owner has all power necessary, and has been duly
authorized, to execute and deliver this Agreement and the other Operative
Documents to which it is a party. The Owner is and will continue to be duly
authorized to issue notes hereunder, and Owner is and will continue to have the
organizational authority to perform its obligations under this Agreement and
under the other Operative Documents to which it is a party. The execution,
delivery and performance by Owner of this Agreement and the other Operative
Documents to which Owner is a party and the issuances hereunder do not and will
not require any consent or approval of any Governmental Authority or any other
Person which has not already been obtained.

(iv) Enforceability. The Operative Documents to which the Owner is a party
delivered on or prior to the date hereof or such Delivery Date, as the case may
be, each constitute legal, valid and binding obligations of the Owner
enforceable against the Owner in accordance with the terms thereof except as
such may be limited by equitable principles or applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors’ rights generally.

(v) No Pending Actions. There are no pending or threatened actions or
proceedings before any court, arbitrator or administrative agency which
individually (or in the aggregate in the case of any group of related lawsuits)
is expected to have a material and adverse effect on the financial condition of
the Owner or the ability of the Owner to perform its obligations under the
Operative Documents.

(vi) Ownership of the Owner. The Trust is the legal and beneficial owner of all
Pledged Interests (as defined in the Pledge Agreement) issued by the Owner.

(vii) Validity of Security Interests.

(1) Security Interest in the Collateral. On the relevant Delivery Date, the
security interest in the Collateral created pursuant to the Mortgage and any
applicable Mortgage Supplement shall have been validly created, and no action
(other than the filings and actions referred to in Section 7(a)(vii)(2) and the
related continuation statements) is required to be taken by any person in order
for the full benefit of the security interest created thereby to vest in the
Security Trustee on behalf of the Financiers or in order to ensure the first
priority perfected security interests of the Security Trustee for the benefit of
the Financiers in such Collateral will be maintained. The security interest in
the Pledged Interest created pursuant to the Pledge Agreement has been validly
created, and no action (other than the filings and actions referred to in
Section 7(a)(vii)(2) and the related continuation statements) is required to be
taken by any person in order for the full benefit of the security interests
created thereby to vest in the Security Trustee on behalf of the Financiers or
in order to ensure the first priority perfected security interests of the
Security Trustee for the benefit of the Financiers in such Collateral will be
maintained.

 

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(2) Filings, Registrations, Etc. It is not necessary to ensure the legality,
validity, enforceability or admissibility in evidence in the United States of
the Operative Documents that any of them or any other instrument be filed,
recorded, registered or enrolled in any court, public office or elsewhere in the
United States, except as expressly provided herein, or that any stamp,
registration or similar tax be paid in the United States on or in relation to
any of the Operative Documents, and no further action in the United States,
including any filing or recording of any document, is necessary or permissible
to establish and/or perfect Owner’s title to and interest in, and the Security
Trustee’s security interests pursuant to the Operative Documents in, any
Aircraft, the Lease and the other Collateral as against any Obligor and any
third parties, except for (i) the filing of financing statements (and
continuation statements at regular intervals) under the Uniform Commercial Code
in the State of Delaware, (ii) the taking and retaining of possession by the
Security Trustee of the chattel paper original of the Lease, (iii) the taking of
the actions specified in Section 4(b)(ix)(3) in respect of each Aircraft (and
associated Airframe and Engines) with the International Registry and (iv) the
affixation of nameplates to each Airframe and each Engine.

(viii) No Defaults. There has not occurred any event which constitutes a
Default, a Lease Event of Default or an Event of Default under the Mortgage
which is presently continuing.

(ix) Liens on Aircraft. On the Delivery Date for a Designated Aircraft, the
Owner will have good title to such Aircraft free and clear of all Liens, except
the Lien of the Mortgage and the Lease. On the Delivery Date for a Designated
Aircraft, such Aircraft (A) shall have a valid export certificate of
airworthiness issued by the French Direction générale de l’aviation civile,
(B) will have been insured by the Lessee in accordance with the terms of the
Lease, will have suffered no Event of Loss and will be in the condition and
state of repair required under the terms of the Mortgage and (C) will have been
duly registered in the name of the Lessee under the Federal Aviation Act.

(x) Securities Compliance. Assuming the Financiers are acquiring their Notes in
the ordinary course of their commercial banking business, none of the
transactions contemplated by this Agreement will violate or result in a
violation of the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, or any regulations issued pursuant thereto.

(xi) No Public Offering. Neither the Owner nor anyone acting on behalf of the
Owner has directly or indirectly offered any interest in the Notes for sale to,
or solicited any offer to acquire any of the same from, anyone other than the
Financiers and not more than 35 other institutions believed capable of
evaluating and bearing the risks of investment in the transactions contemplated
hereby.

 

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(xii) No ERISA Violation. (v) The Owner has not engaged in any transaction in
connection with which the Owner could be subjected to either a material civil
penalty assessed pursuant to Section 502(i) of ERISA, or a material tax imposed
by Section 4975 of the Code; (w) no material liability to the Pension Benefit
Guaranty Corporation (other than liability for premiums) has been incurred by
the Owner with respect to any Plan; (x) there has been no event or condition
which presents a material risk of termination of any Plan by the Pension Benefit
Guaranty Corporation; (y) the Owner and any affiliate (as defined below) has not
committed, or does not expect to commit, a failure described in ERISA
Section 303(k)(1) or Section 430(k)(1) of the Code (whether or not waived) with
respect to any Plan; and (z) no material amount of “withdrawal liability,” as
that term is used in Section 4201 of ERISA, has been or is expected to be
incurred by the Owner nor has the Owner or any affiliate of the Owner been
notified by any multi-employer plan (within the meaning of Section 3(37)(A) of
ERISA) that such multi-employer plan is in reorganization or insolvency within
the meaning of Section 4241 or Section 4245 of ERISA or that such multi-employer
plan intends to terminate or has been terminated under Section 4041A of ERISA
(for purposes of subclauses (y) and (z), the term “affiliate” shall mean any
corporation or person (within the meaning of ERISA Section 3(9)) which together
with the Owner and any other related entity would be deemed to be a “single
employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

(xiii) No “Prohibited Transactions”. Assuming the accuracy of the
representations set forth in Section 7(b)(ii) (and Section 5(ii) of each
Assignment and Assumption Agreement, if any), the purchase and holding of the
Notes will not result in a “prohibited transaction,” within the meaning of
Section 406 of ERISA or Section 4975 of the Code with respect to the
transactions contemplated hereby which could subject the Owner to any tax or
penalty pursuant to Section 4975 of the Code or Section 502(i) of ERISA.

(xiv) Investment Company. The Owner is not an “investment company” as defined
in, or subject to regulation under, the Investment Company Act of 1940.

(xv) No Material Misstatement or Omission. None of the reports, financial
statements, certificates or other information furnished by or on behalf of the
Owner to the Security Trustee, any Agent or any Financier in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

(xvi) Federal Reserve Regulations. No part of the proceeds of any Note hereunder
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board of Governors of the Federal
Reserve, including Regulations U and X.

 

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(xvii) Cape Town Matters. (A) The Lessee is, and the Owner will be prior to the
first Delivery Date, a “transacting user entity” (as such term is defined in the
Regulations of the International Registry); and each is “situated”, for the
purposes of the Cape Town Convention, in the United States; (B) the Airframe and
related Engines financed on such Delivery Date are “aircraft objects” (as
defined in the Cape Town Convention); (C) the United States is a Contracting
State under the Cape Town Convention; (D) the FAA Bill of Sale for the Airframe
and/or the Warranty Bill of Sale for such Airframe and related Engines
constitutes a “contract of sale” (as defined in the Cape Town Convention) and
the Mortgage and the Mortgage Supplement for such Airframe and related Engines
conveys an international interest in such Airframe and related Engines and
assigns an international interest in the Lease and Lease Supplement with respect
to such Aircraft, and the Lease and the Lease Supplement for such Aircraft
constitutes an international interest in such Airframe and related Engines;
(E) the obligations of the Lessee under the Lease in respect of such Airframe
and related Engines are “associated rights” (as defined in the Cape Town
Convention); and (F) the Owner on each Delivery Date will have the power to
“dispose” (as such term is used in the Cape Town Convention) of the Airframe and
related Engines financed on the Delivery Date for an Aircraft.

(xviii) AML Laws; Anti-Corruption Laws and Sanctions. None of (a) the Owner, any
subsidiary or any of their respective directors or officers, or, to the
knowledge of the Owner, any of their respective employees or Affiliates, or
(b) to the knowledge of the Owner, any agent of the Owner or any subsidiary or
other Affiliate that will act in any capacity in connection with or benefit from
the credit facility established hereby, (i) is a Sanctioned Person, or (ii) is
in violation of AML Laws, Anti-Corruption Laws, or Sanctions. No Notes, use of
proceeds or other transaction contemplated by this Agreement will cause a
violation of AML Laws, Anti-Corruption Laws or applicable Sanctions by any
person participating in the transactions contemplated by this Agreement, whether
as Financier, issuer, agent, or otherwise. The Owner represents that, except as
disclosed to each Agent and the Financiers prior to the date hereof, neither it
nor any of its subsidiaries, nor its parent company, or, to the knowledge of the
Owner, any other Affiliate has engaged in or intends to engage in any dealings
or transactions with, or for the benefit of, any Sanctioned Person or with or in
any Sanctioned Country.

(xix) Special Purpose. The Owner has been formed for the sole purpose of
negotiating, entering into and performing the transactions contemplated by the
Operative Documents to which it is a party and matters reasonably incidental
thereto, and since its formation, it has not entered into any transaction or
conducted any business except as required or contemplated by the Operative
Documents.

(b) Representations and Warranties of the Security Trustee and Financiers.

(i) The Security Trustee represents and warrants that:

(1) Authorization. It has all power, authority, and legal right to execute,
deliver, and carry out the terms of each of the Operative Documents to which the
Security Trustee is a party.

 

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(2) Execution. It has duly authorized the execution and delivery of this
Agreement and the other Operative Documents to which it is a party.

(3) No Violation. The Security Trustee’s execution and delivery of each
Operative Document to which it is a party will not result in any violation of,
or be in conflict with, or constitute a default under, any of the provisions of
its organizational documents, or of any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, lease, note or bond purchase
agreement, license, bank loan, credit agreement, or other agreement to which it
is a party or by which it is bound, and will not contravene any existing law,
governmental rule or regulation of the State of Utah, any existing law,
governmental rule or regulation of the United States of America which governs
the Security Trustee’s banking and trust powers, judgment or order applicable to
or binding on the Security Trustee.

(4) No Approvals. Neither the Security Trustee’s execution and delivery of the
Operative Documents to which it is a party, nor the Security Trustee’s
consummation of any of the transactions contemplated thereby, requires the
consent or approval of, giving of notice to, or registration with any
governmental authority.

(5) Transaction User Entity. The Security Trustee is a transacting user entity.

(ii) Financiers’ Representations and Warranties. Each Financier severally
represents and warrants on the date hereof and on the Delivery Date for each
Designated Aircraft that:

(1) it is acquiring its interest in its Notes either (A) in the ordinary course
of its general banking business or (B) for investment and not with a view to any
distribution thereof that would require registration under the Securities Act of
1933, as amended, subject, however, to the disposition of its property being at
all times within its control;

(2) the Operative Documents to which it is a party delivered on or prior to the
date hereof or such Delivery Date, as the case may be, each constitute legal,
valid and binding obligations of such Financier enforceable against such
Financier in accordance with the terms thereof except as such may be limited by
equitable principles or applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally; and

(3) either (i) no part of the funds to be used by it for the purchase of the
Notes shall constitute “plan assets” as defined in Section 3(42) of ERISA or
otherwise, nor shall its interest become “plan assets” during the period it
holds the Notes or (ii) its purchase and holding of the Notes shall be covered
by a prohibited transaction class exemption issued by the U.S. Department of
Labor.

 

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Section 8. Taxes. Tax matters are as provided in Schedule III hereto which is
incorporated herein by reference.

Section 9. Covenants of the Owner.

(a) Notifications. The Owner shall deliver or cause to be delivered to each
Financier such information regarding the financial condition, operations, or
business of the Owner as any Financier may reasonably request.

(b) Litigation. The Owner will promptly give each Financier notice of all legal
or arbitral proceedings, and of all proceedings by or before any governmental or
regulatory authority or agency, and any material development in respect of such
legal or other proceedings, involving the Owner or Lessee if, in the case of the
Lessee, the determination of those proceedings in a manner adverse to the Lessee
would have a material adverse effect on the Lessee’s ability to meet its
obligations under the Operative Documents to which it is a party.

(c) Existence, Etc. The Owner shall:

(i) Status. Keep in full effect its existence as a limited liability company
organized under the laws of the State of Delaware (and shall not change its
jurisdiction of formation) and all of its licenses, permits, governmental
approvals, rights, privileges and franchises necessary in the normal conduct of
its business as now conducted or presently proposed to be conducted.

(ii) Qualification. Obtain and preserve its qualification to do business as a
company or other entity in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of the rights of
the Financiers under this Agreement or the other Operative Documents.

(iii) Compliance with Applicable Laws. Comply with (A) the provisions of its
organization documents, and not amend the same without the prior written consent
of the Security Trustee and (B) the requirements of all Applicable Laws to the
extent that the failure to comply therewith would, in the aggregate, have a
material adverse effect on the Owner’s ability to meet its obligations under the
Operative Documents to which it is a party.

(iv) Records. Keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting principles
consistently applied.

(v) Business Discussions. Permit representatives of any Financier to discuss its
business and affairs with its officers, all to the extent reasonably requested
by such Financier.

 

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(d) Special Purpose. The Owner will not:

(i) have any employees earning compensation;

(ii) except for Notes and as expressly contemplated by the Operative Documents,
incur or contract to incur any Indebtedness;

(iii) engage in any activity other than the execution, delivery and performance
of the Operative Documents to which it is a party and activities incidental
thereto, as well as ordinary housekeeping activities;

(iv) except for the acquisition of any Aircraft by the Owner, make or agree to
make any capital expenditure;

(v) create or own any subsidiary;

(vi) except as provided in the Mortgage, make any investments;

(vii) declare or make any dividend payment or distribution to any owner of its
Ownership Interests (as defined in the Pledge Agreement) or other equity
interests, other than in respect of (A) Excluded Payments or (B) any other
payments which the Owner is entitled to receive under the Mortgage; or

(viii) incur any material obligation to any third party (excluding any payment
or other obligation incurred pursuant to or in the performance of the
obligations under the Operative Documents).

(e) Limitation on Liens. The Owner will not create, incur, assume or suffer to
exist any Lien upon the Collateral except Permitted Liens.

(f) Protection of Collateral. The Owner agrees that from time to time, at the
expense of the Lessee (and the Lessee hereby agrees to pay such expenses), it
will promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary and as may be reasonably
requested by any Financier in order to perfect and protect any security interest
granted or purported to be granted pursuant to the Security Documents
(including, without limitation, to the extent applicable registrations of
international interests in respect of each Airframe and Engine with the
International Registry), or to enable the Security Trustee to exercise and
enforce its rights and remedies under and in accordance with the provisions
hereof or of the Security Documents. The Owner hereby authorizes, and will cause
Lessee to authorize, each Financier and/or the Security Trustee to file one or
more UCC financing or continuation statements, and amendments thereto, or any
similar document, with respect to all or any part of the Collateral granted by
the Owner or the Lessee without the signature of the Owner where permitted by
Applicable Law. The Security Trustee shall prepare and file on behalf of the
Owner all necessary continuation statements (or such other similar documents) in
order to maintain the perfection of the Security Trustee’s security interest in
the Collateral (taking into account whether a Mortgage Filing for any particular
item was required). Without limiting the foregoing, the Owner will, upon the
reasonable request of the

 

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Security Trustee or any Financier, take at the Lessee’s cost and expense (and
the Lessee hereby agrees to pay such costs and expenses) such other reasonable
action necessary or advisable to:

(i) grant more effectively the security interest in all or any portion of the
Collateral;

(ii) maintain or preserve the first perfected security interest of the Security
Trustee in the Collateral or carry out more effectively the purposes hereof;

(iii) perfect, publish notice of or protect the validity of the security
interest in the Collateral created by the Security Documents;

(iv) perfect the Security Trustee’s interest in the applicable Aircraft and
Lease under the Cape Town Convention to the extent applicable and under any
international perfection standards that may be adopted after the date of this
Agreement to the extent practicable and without unreasonable cost;

(v) preserve and defend its right, title and interest to the Collateral and the
rights of the Financiers and the Security Trustee in such Collateral against the
claims of all Persons (other than the Financiers or any Person claiming through
any Financier); and

(vi) cause the Lessee to pay any and all fees, taxes and other charges payable
in connection with any financing statements which are required to be filed with
any applicable Governmental Authority pursuant to this Agreement or any other
Operative Document.

(g) Separateness. The Owner does and will continue to do the following:

(i) prepare and maintain its own full and complete books and records separately
from those of any other entity;

(ii) in all dealings with third parties and the public, identify itself by its
own name as a separate and distinct entity and not identify itself as being a
division or part of any other entity whatsoever;

(iii) ensure that all decisions with respect to its business and daily
operations are and will be independently made by it and will not be directed or
dictated by any other entity and shall maintain an arms-length relationship with
all other entities;

(iv) act solely in its own name and through its own authorized officers and
agents and shall ensure that all communications including invoices, purchase
orders, contracts, statements, stationery, checks and applications will be made
solely in its name;

(v) ensure that its assets are and will remain separate from those of any other
entity and are and will be maintained in a manner which facilitates the
identification and segregation of those assets from those of any other entity
whatsoever;

(vi) observe all corporate formalities and governmental requirements and make
all required filings to all applicable authorities;

 

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(vii) discharge all expenses incurred and liabilities incurred by it only out of
its own funds;

(viii) ensure that its bank accounts or other accounts are kept separate from
the accounts of any other person or entity;

(ix) not acquire any shares or interest in any entity; and

(x) correct any known misunderstanding regarding its separate identity.

(h) Co-operation with Rating Agency. The Owner agrees to provide to any Rating
Agency whose rating is being sought by such Financier on the Notes such
information as such Rating Agency (acting through such Financier) may reasonably
request, and otherwise cooperate with such Financier to procure such a rating.
The fees, costs and expenses (including any annual rating monitoring fee)
associated with the foregoing, and of any rating, shall be for account of the
Lessee up to $110,000; any such fees, costs and expenses in excess of $110,000
shall not be for the account of the Owner or the Lessee, but shall be borne by
BNP Paribas.

(i) IR Registrations; IDERA. The Owner shall not consent to any registrations
made in respect of the Aircraft on the International Registry except those made
pursuant to the Operative Documents. Owner shall not issue any irrevocable
deregistration and export request authorization in favor of any Person other
than the Security Trustee.

(j) Sanctions, Etc.

(i) Compliance with Anti-Corruption Laws and Sanctions. The Owner will comply
with all applicable Anti-Corruption Laws, applicable AML Laws and applicable
Sanctions.

(ii) Use of Proceeds. The Owner will not issue any Notes, and the Owner shall
not use, and shall procure that its subsidiaries and its or their respective
directors, officers, employees, Affiliates and agents shall not use, directly or
indirectly, the proceeds of any Notes, or lend, contribute or otherwise make
available such proceeds to any subsidiary, other Affiliate, joint venture
partner or other Person, (A) in furtherance of an offer, payment, promise to
pay, or authorization of the payment or giving of money, or anything else of
value, to any Person in violation of any Anti-Corruption Laws or AML Laws,
(B) for the purpose of funding, financing or facilitating any activities,
business or transaction of or with any Sanctioned Person, or in any Sanctioned
Country, or involving any goods originating in or with a Sanctioned Person or
Sanctioned Country, or (C) in any manner that would result in the violation of
any Sanctions by any Person (including any Person participating in the
transactions contemplated hereunder, whether as underwriter, advisor Financier,
investor or otherwise).

 

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Section 10. Events of Default. If one or more of the following events (herein
called “Events of Default”) shall occur and be continuing:

(i) the Owner shall default in the payment of any interest on any Note on the
Interest Payment Date thereof; or

(ii) the outstanding principal amount of the Notes shall not have been paid in
full by Final Legal Maturity;

THEREUPON: (A) the Security Trustee may, by notice to the Owner, terminate the
Commitments and they shall thereupon terminate, (B) the Security Trustee may
and, upon request of the Controlling Creditor shall, by notice to the Owner
demand payment of the Termination Sum, (C) declare the principal amount then
outstanding of, and the accrued interest on, the Notes and all other amounts
payable by the Owner and the Lessee (under such Operative Document to which each
is a party and without duplication) hereunder and under the Notes to be
forthwith due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Owner and (D) exercise any or
all of the remedies set forth in Article V to the Mortgage.

For the avoidance of doubt, the failure to pay interest on any Note that
converts to principal as provided in Section 3(f) hereof shall be deemed not to
be a default in payment of interest for the purposes of clause (i) of this
Section 10.

Section 11. Notices.

All notices, demands, instructions and other communications required or
permitted to be given to or made upon any party hereto shall be in writing and
shall be personally delivered or sent by registered or certified mail, postage
prepaid, or by facsimile, or by prepaid courier service, and shall be effective
upon receipt.

Unless otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 11, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective facsimile
numbers) as follows: (a) if to the Owner or the Security Trustee, to the
respective addresses set forth in Section 6.06 of the Mortgage; (b) if to a
Financier, to the address set forth on Schedule I hereto; or (c) if to any
subsequent Holder, addressed to such Holder at its address set forth in the
Certificate Register maintained pursuant to the Mortgage.

Section 12. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.

(a) Governing Law. This Agreement shall in all respects be governed by, and
construed in accordance with, the law of the State of New York, including all
matters of construction, validity and performance.

 

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(b) Submission to Jurisdiction. Each party hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Operative Document, 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 or any other
Operative Document shall affect any right that any party may otherwise have to
bring any action or proceeding relating to this Agreement or any other Operative
Document against another party or its properties in the courts of any
jurisdiction.

(c) Forum. Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. 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.

(d) Service of Process. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 11. Nothing in
this Agreement or any other Operative Document will affect the right of any
party to this Agreement or any other Operative Document to serve process in any
other manner permitted by law.

(e) Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 13. Invoices and Payment of Expenses.

The Security Trustee, each Agent and the Financiers shall promptly submit to the
Owner for its prompt approval copies of invoices of the Transaction Expenses (as
defined below) as they are received. The Owner agrees to pay Transaction
Expenses promptly upon receipt of invoices of such Transaction Expenses. For the
purposes hereof, “Transaction Expenses” means (i) with respect to the
preparation, negotiation, execution and delivery of this Agreement and the
closing or anticipated closing of a Designated Aircraft on the Delivery Date for
such Aircraft, the reasonable fees, and out-of-pocket expenses and disbursements
of FAA Counsel, of Vedder Price P.C., special counsel to the Financiers and,
subject to Section 9(h), the Rating Agency, (ii) all

 

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fees, taxes and other charges payable in connection with the recording or filing
of instruments and financing statements, or registration of any international
interest with the International Registry, (iii) the Underwriters’ and each other
Financier’s reasonable out-of-pocket travel expenses relating to the negotiation
and closing of this transaction, and (iv) the Security Trustee’s fee as
separately agreed; provided the Transaction Expenses of a Financier which
(a) fails to fund any Note notwithstanding the satisfaction of the applicable
conditions precedent or (b) fails to obtain all necessary credit approvals
required for the transactions contemplated by this Agreement, shall not be
subject to reimbursement.

Section 14. Successors and Assigns; Notes.

(a) Benefits. This Agreement shall be binding upon and shall inure to the
benefit of, and shall be enforceable by, the parties hereto and their respective
successors and permitted assigns including each successive holder of any Note(s)
issued and delivered pursuant to this Agreement or the Mortgage whether or not
an express assignment to any such holder of rights under the Agreement has been
made.

(b) Assignments by Owner. The Owner may not assign any of its rights or
obligations under this Agreement or the other Operative Documents except to the
extent expressly provided thereby or with the consent of all of the Financiers
and the Lessee.

(c) Assignments by Financiers. The Senior Purchasers may assign their Notes (but
not their Commitments) and the Junior Loan Participants may assign their Notes
(but not their Commitments) (A) without the prior written consent of the Lessee
or the Owner to any Permitted Transferee and (B) with the consent of the Lessee
(which consent shall not be unreasonably withheld or delayed) to any other
Person. Any such assignment shall be subject to the following terms:

(i) it shall be effected pursuant to an agreement substantially in the form of
the Assignment and Assumption Agreement;

(ii) it shall be in a minimum principal amount of $5,000,000 (in the case of
Senior Notes); and $2,000,000 (in the case of Junior Notes); and

(iii) there shall be no more than four Senior Purchasers per Aircraft in the
aggregate for the Senior Notes after giving effect to such assignment.

Notwithstanding anything to the contrary set forth herein, no assignment or
other transfer hereunder shall (1) other than in the case of an assignment by
the Original Junior Loan Participant to Norddeutsche Landesbank Girozentrale,
require the Owner or the Lessee as a result thereof to pay any greater amount
hereunder than the assignor or transferor Financier was entitled to hereunder or
(2) other than in the case of an assignment by the Original Junior Loan
Participant to Norddeutsche Landesbank Girozentrale, otherwise increase the
obligations of the Owner or the Lessee under any Operative Document by reference
to the laws in effect at the time of the assignment or transfer or (3) in the
case of an assignment or transfer of a Junior Commitment or a Junior Note (x) to
Norddeutsche Landesbank Girozentrale or (y) by Norddeutsche Landesbank
Girozentrale following a Default Event to the Junior Agent or any Affiliate
thereof, the minimum amount requirement specified in clause (ii) above shall not
be

 

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applicable. Subject to Section 2(a), effective upon the assignment of any
Commitment, the assigning Financier shall be relieved of its obligations in
respect of such Commitment to the extent the assignee thereof shall have become
obligated in respect thereof. Neither the Owner nor the Lessee shall be liable
for any costs, fees or expenses in connection with any assignment or transfer of
Commitments or Notes, except if a Default Event shall have occurred and be
continuing, the Owner shall be liable for any associated legal expenses
reasonably incurred.

(d) Registration, Transfer and Exchange of Notes. The Security Trustee agrees
with the Owner that the Security Trustee shall keep a register (herein sometimes
referred to as the “Certificate Register”) in which provision shall be made for
the registration of the Notes of each Class and the registration of transfers of
the Notes of such Class and Series. Prior to the due presentment for
registration of the transfer of any Note, the Owner and the Security Trustee
shall deem and treat the person in whose name such Note is registered on the
Certificate Register as the absolute owner of such Note, and the Holder for the
purpose of receiving payment of all amounts payable with respect to such Note,
and for all other purposes whether or not such Note is overdue, and neither the
Owner nor the Security Trustee shall be affected by notice to the contrary. The
Certificate Register shall be kept at the Payment Office of the Security Trustee
or at the office of any successor Security Trustee, and the Security Trustee is
hereby appointed “Certificate Registrar” for the purpose of registering Notes
and transfers of Notes as herein provided. Subject to the terms and conditions
of Section 14(c), upon surrender for registration of transfer of any Note of any
Class and Series at the Payment Office and upon delivery by the Security Trustee
to the Owner of such surrendered Note, the Owner shall execute, and the Security
Trustee shall deliver, in the name of the designated transferee or transferees,
one or more new Notes of a like aggregate principal amount, Class, Tranche and
Series. At the option of the Holder, its Notes of any Class and Series may be
exchanged for other Notes of such Class and Series of any authorized
denominations, of a like aggregate principal amount, upon surrender of the Notes
to be exchanged at the Payment Office. Each new Note issued upon transfer or
exchange shall be in a principal amount of at least (i) $5,000,000 (in the
aggregate), in the case of the Senior Notes and (ii) except as provided in
Section 14(c) above, $2,000,000 (in the aggregate), in the case of the Junior
Notes (except as may be necessary to evidence the entire outstanding principal
amount of a Note) and dated the Delivery Date. Whenever any Notes are so
surrendered for exchange, the Owner shall execute and deliver the Notes which
the Holder making the exchange is entitled to receive. Each Holder may also
assign to any assignee an interest in any Note held by it and the Security
Trustee shall, upon receipt of a written request of such assignee, accompanied
by such proof of such assignment as the Security Trustee may reasonably require,
register in the name of such assignee such interest in such Note and thereafter
such assignee shall be a Holder for all purposes of the Operative Documents
(subject to any limitations in the instrument of assignment). All Notes issued
upon any registration of transfer or exchange of Notes shall be the valid
obligations of the Owner evidencing the same respective obligations, and
entitled to the same security and benefits under this Mortgage, as the Notes
surrendered upon such registration of transfer or exchange. Every Note presented
or surrendered for registration of transfer or exchange, shall (if so required
by the Security Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Security Trustee
duly executed by the Holder thereof or his attorney duly authorized in writing,
and the Security Trustee may require evidence satisfactory to it as to the
compliance of any such transfer with the Securities Act and the securities laws
of any applicable state. The Security Trustee shall make a notation on each new
Note or Notes of the

 

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amount of all payments of principal previously made on the old Note or Notes
with respect to which such new Note is issued and the date to which interest
accrued on such old Note or Notes has been paid and the extent, if any, to which
any interest therein has been subject to a registered assignment. The Security
Trustee shall not be required to register the transfer of or exchange any
surrendered Notes as above provided during the five calendar day period
preceding the due date of any payment on such Notes. Any Holder may transfer any
or all of its Notes to any Permitted Transferee subject to the terms of
Section 14(c). The Owner and the Security Trustee shall treat the Person in
whose name each Note is registered on the Certificate Register as the Holder
with respect thereto for all purposes hereof until due presentment for
registration of transfer as provided in this Section 14(d). The Security Trustee
shall give the Owner and each Holder notice of such transfer of a Note under
this Section 14(d).

(e) Mutilated, Destroyed, Lost or Stolen Notes. If any Note shall become
mutilated, destroyed, lost or stolen, the Owner shall, upon the written request
of the affected Holder, execute and deliver in replacement thereof, a new Note
of a like Class, Tranche and Series, in the same principal amount, dated the
date of such Note and designated as issued under this Mortgage. If the Note
being replaced has become mutilated, such Note shall be surrendered to the
Security Trustee and the original thereof shall be furnished to the Owner by the
Security Trustee. If the Note being replaced has been destroyed, lost or stolen,
the affected Holder shall furnish to the Owner and the Security Trustee such
security or indemnity as may be reasonably required by them to hold the Owner
and the Security Trustee harmless and evidence satisfactory to the Owner and the
Security Trustee of the destruction, loss or theft of such Note and of the
ownership thereof; provided, however, that if the affected Holder is an original
party to the Facility Agreement or an Affiliate thereof, the written notice of
such destruction, loss or theft and such ownership and the written undertaking
of such Holder delivered to the Owner and the Security Trustee to hold harmless
the Owner and the Security Trustee in respect of the execution and delivery of
such new Note shall be sufficient evidence, security and indemnity.

(f) Payment of Expenses on Transfer. Upon the issuance of a new Note or new
Notes pursuant to Section 14(d) or 14(e), the Owner and/or the Security Trustee
may require from the party requesting such new Note or Notes payment of a sum
sufficient to reimburse the Owner and/or the Security Trustee for, or to provide
funds for, the payment of any tax or other governmental charge in connection
therewith or any charges and expenses connected with such tax or other
governmental charge paid or payable by the Owner or the Security Trustee.

Section 15. The Agents; the Security Trustee.

(a) Appointment, Powers and Immunities. Each Senior Purchaser hereby irrevocably
appoints and authorizes Massachusetts Mutual Life Insurance Company to act as
Senior Agent hereunder and under the other Operative Documents with such powers
as are specifically delegated to the Senior Agent by the terms of this Agreement
and of the other Operative Documents, together with such other powers as are
reasonably incidental thereto, and Massachusetts Mutual Life Insurance Company
accepts such appointment. Each Junior Loan Participant hereby irrevocably
appoints and authorizes Novus Tamweel Aviation Finance GP Limited to act as
Junior Agent hereunder and under the other Operative Documents with such powers
as are specifically delegated to the Junior Agent by the terms of this Agreement
and of the other Operative Documents, together with such other powers as are
reasonably incidental

 

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thereto, and Novus Tamweel Aviation Finance GP Limited accepts such appointment.
Each Agent (which term as used in this sentence and in Section 15(e) and the
first sentence of Section 15(f) hereof shall include reference to such Agent and
its affiliates and such Agent’s and its affiliates’ officers, directors,
employees and agents): (i) shall have no duties or responsibilities except those
expressly set forth in this Agreement and in the other Operative Documents, and
shall not by reason of this Agreement or any other Operative Document be a
trustee for any Financier; (ii) shall not be responsible to the Financiers for
any recitals, statements, representations or warranties contained in this
Agreement or in any other Operative Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Operative Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
Note or any other Operative Document or any other document referred to or
provided for herein or therein or for any failure by the Owner or any other
Person to perform any of its obligations hereunder or thereunder; (iii) shall
not be required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Operative Document; and (iv) shall not be
responsible for any action taken or omitted to be taken by it hereunder or under
any other Operative Document or under any other document or instrument referred
to or provided for herein or therein or in connection herewith or therewith,
except for its own gross negligence or willful misconduct. Each Agent may employ
agents and attorneys in fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys in fact selected by it in good faith.

(b) Reliance by Agent. Each Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation, any
thereof by telephone, telecopy, telex, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by such Agent. As to any
matters not expressly provided for by this Agreement or any other Operative
Document, each Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions
given by the Controlling Creditor or all of the Financiers as is required in
such circumstance, and such instructions of such Financiers and any action taken
or failure to act pursuant thereto shall be binding on all of the Financiers.

(c) Non-Receipt of Funds by the Agents. Unless an Agent shall have been notified
by a Financier or the Owner (the “Payor”) prior to the date on which the Payor
is to make payment to such Agent of (in the case of a Financier) the proceeds of
a Note to be made by it hereunder or (in the case of the Owner) a payment to
such Agent for account of one or more of the Financiers hereunder (such payment
being herein called the “Required Payment”), which notice shall be effective
upon receipt, that the Payor does not intend to make the Required Payment to
such Agent, such Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient(s) on such date and, if the
Payor has not in fact made the Required Payment to such Agent, the recipient(s)
of such payment shall, on demand, repay to such Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by such Agent
until the date such Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such day and, if such recipient(s) shall fail promptly to
make such payment, such Agent shall be entitled to recover such amount, from the
Payor, together with interest as aforesaid.

 

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(d) Defaults. Neither Agent shall be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default (other than the non-payment of
principal of or interest on Notes) unless such Agent has received notice from a
Financier or the Owner specifying such Event of Default and stating that such
notice is a “Notice of Default”. In the event that such Agent receives such a
notice of the occurrence of an Event of Default, such Agent shall give prompt
notice thereof to the Financiers (and shall give each Financier prompt notice of
each such non-payment). Each Agent shall take such action with respect to such
Event of Default as shall be directed by the Controlling Creditor, provided
that, unless and until such Agent shall have received such directions, such
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default as it shall deem
advisable in the best interest of the Financiers except to the extent that the
Mortgage expressly requires that such action be taken, or not be taken, only
with the consent or upon the authorization of the Controlling Creditor or all of
the Financiers.

(e) Indemnification. The Senior Purchasers agree to indemnify the Senior Agent
ratably in accordance with their respective Senior Notes (or, prior to the
issuance of the Senior Notes, their respective Senior Commitments), and the
Junior Loan Participants agree to indemnify the Junior Agent ratably in
accordance with their respective Junior Notes (or, prior to the issuance of the
Junior Notes, their respective Junior Commitments), in each case for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against such Agent (including by any
Financier) arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement or any other Operative Document or
any other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no
Financier shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of such Agent.

(f) Non Reliance on Agents and Other Financiers. Each Financier agrees that it
has, independently and without reliance on either Agent or any other Financier,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Owner and its own decision to enter into this
Agreement and the other Operative Documents to which it is or is to be a party
and that it will, independently and without reliance upon either Agent or any
other Financier, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. Neither Agent shall be
required to keep itself informed as to the performance or observance by the
Owner of this Agreement or any of the other Operative Documents or any other
document referred to or provided for herein or therein or to inspect the
properties or books of the Owner. Except for notices, reports and other
documents and information expressly required to be furnished to the Financiers
by such Agent hereunder, neither Agent shall have any duty or responsibility to
provide any Financier with any credit or other information concerning the
affairs, financial condition or business of Owner (or any of its affiliates)
that may come into the possession of such Agent or any of its affiliates.

 

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(g) Failure to Act. Except for action expressly required of an Agent hereunder
and under the other Operative Documents, such Agent shall in all cases be fully
justified in failing or refusing to act hereunder and thereunder unless it shall
receive further assurances to its satisfaction from the Financiers of their
indemnification obligations under Section 15(e) hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.

(h) Resignation or Removal of Agent. Subject to the appointment and acceptance
of a successor Agent as provided below, either Agent may resign at any time by
giving notice thereof to the Financiers and the Owner. Upon any such resignation
of the Senior Agent, the Majority Senior Holders shall have the right to appoint
a successor Senior Agent which shall be, so long as no Event of Default has
occurred and is continuing, reasonably acceptable to the Lessee, and upon any
such resignation of the Junior Agent, the Majority Junior Holders shall have the
right to appoint a successor Junior Agent which shall be, so long as no Event of
Default has occurred and is continuing, reasonably acceptable to the Lessee. If
no successor Agent shall have been so appointed by the Majority Senior Holders
or the Majority Junior Holders, as the case may be, and shall have accepted such
appointment within 30 days after the retiring Agent’s giving of notice of
resignation, then the retiring Agent may, on behalf of the Financiers, appoint a
successor Agent. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After the retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 15 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent. The Owner consents to any change in the identity of such Agent on the
International Registry as a result of the appointment of a successor Agent
pursuant to this Section 15(h), and if required by the International Registry to
reflect such change, will provide its further consent thereto.

(i) Consents under Operative Documents. Subject to Section 4.01 of the Mortgage,
no Agent may, without the prior consent of the Controlling Creditor, consent to
any modification, supplement, waiver, amendment or take any other action under
any of the Operative Documents, or otherwise grant its consent, approval or
waiver of any matter hereunder or under the Mortgage, provided that, without the
prior consent of each Financier, such Agent shall not (except as provided herein
or in the Operative Documents) release any collateral or otherwise terminate any
Lien under any Operative Document providing for collateral security, or agree to
additional obligations being secured by such collateral security (unless the
Lien for such additional obligations shall be junior to the Lien in favor of the
other obligations secured by such Operative Document), except that no such
consent shall be required, and such Agent is hereby authorized, to release any
Lien covering property which is the subject of a disposition of property
permitted hereunder or under any other Document or to which the Controlling
Creditor has consented.

 

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(j) The Security Trustee.

(i) Appointment, Powers and Immunities. Each Financier hereby irrevocably
appoints and authorizes Bank of Utah, and Bank of Utah hereby accepts such
appointment, to act as its Security Trustee hereunder and under the other
Operative Documents with such powers as are specifically delegated to the
Security Trustee by the terms of this Agreement, of the other Operative
Documents, together with such other powers as are reasonably incidental thereto.
The Security Trustee (which term as used in this sentence and in
Section 15(j)(v) and the first sentence of Section 15(j)(vi) shall include
reference to its affiliates and its own and its affiliates’ officers, directors,
employees and agents): (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and in the other Operative Documents, and
shall not by reason of this Agreement or any other Operative Document be a
trustee for any Financier; (b) shall not be responsible to the Financiers for
any recitals, statements, representations or warranties contained in this
Agreement, in any other Operative Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement, any other Operative Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
Note, any other Operative Document or any other document referred to or provided
for herein or therein or for any failure by the Owner or any other Person to
perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Operative Document; and (d) shall not be
responsible for any action taken or omitted to be taken by it hereunder, under
any other Operative Document or under any other document or instrument referred
to or provided for herein or therein or in connection herewith or therewith,
except for its own gross negligence or willful misconduct. The Security Trustee
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith. The Security Trustee may deem and treat the payee of any Note as
the Holder thereof for all purposes hereof unless and until a notice of the
assignment or transfer thereof shall have been filed, together with the consent
of the Lessee to such assignment or transfer (to the extent provided in
Section 14(c)).

(ii) Reliance by Security Trustee. The Security Trustee shall be entitled to
rely upon any certification, notice or other communication (including, without
limitation, any thereof by telephone, telecopy or e-mail) reasonably believed by
it to be genuine and correct and to have been signed or sent by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Security Trustee. As
to any matters not expressly provided for by this Agreement or any other
Operative Document, the Security Trustee shall in all cases be fully protected
in acting, or in refraining from acting, hereunder or thereunder in accordance
with instructions given by the Controlling Creditor or, if provided herein, in
accordance with the instructions given by the Controlling Creditor or all of the
Financiers as is required in such circumstance, and such instructions of such
Financiers and any action taken or failure to act pursuant thereto shall be
binding on all of the Financiers.

(iii) Defaults. The Security Trustee shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default (other than the
nonpayment of principal of or interest on Notes) unless the Security Trustee has
received notice from a Financier or the Owner specifying such Default or Event
of Default and stating that such notice is a “Notice of Default.” In the event
that the Security Trustee

 

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receive such a notice of the occurrence of a Default or Event of Default, the
Security Trustee shall give prompt notice thereof to the Financiers (and shall
give each Financier prompt notice of each such nonpayment) and, if such Notice
of Default is received from a Financier, to the Owner and the Lessee, provided
that the failure to do so shall not affect the obligations of any Obligor under
any Operative Document. The Security Trustee shall (subject to
Section 15(j)(vi)) take such action with respect to such Default or Event of
Default as shall be directed by the Controlling Creditor, provided that, unless
and until the Security Trustee shall have received such directions, the Security
Trustee may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interest of the Financiers except to the extent that
this Agreement expressly requires that such action be taken, or not be taken,
only with the consent or upon the authorization of the Controlling Creditor, or
all of the Financiers.

(iv) Indemnification. The Financiers agree to indemnify the Security Trustee
ratably in accordance with their respective Commitments, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Security Trustee (including by
any Financier) arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement, any other Operative Document or
any other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no
Financier shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the party to be indemnified.

(v) Non-Reliance on Other Financiers. Each Financier agrees that it has,
independently and without reliance on the Security Trustee or any other
Financier, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Obligors and each of their
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Security Trustee or any other
Financier, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. The Security Trustee shall not
be required to keep itself informed as to the performance or observance by any
Obligor of this Agreement, any of the other Operative Documents or any other
document referred to or provided for herein or therein or to inspect the
Properties or books of the Owner or any of its Subsidiaries. Except for notices,
reports and other documents and information expressly required to be furnished
to the Financiers by the Security Trustee hereunder, the Security Trustee shall
not have any duty or responsibility to provide any Financier with any credit or
other information concerning the affairs, financial condition or business of the
Owner or any of its Subsidiaries (or any of their affiliates) that may come into
the possession of the Security Trustee or any of its affiliates.

(vi) Failure to Act. Except for action expressly required of the Security
Trustee hereunder and under the other Operative Documents, the Security Trustee
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it

 

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shall receive further assurances to its satisfaction from the Financiers of
their indemnification obligations under Section 15(j)(iv) hereof against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.

(vii) Resignation or Removal of Security Trustee. Subject to the appointment and
acceptance of a successor Security Trustee as provided below, (i) the Security
Trustee may resign at any time and (ii) the Controlling Creditor may remove the
Security Trustee, in each case by giving notice thereof to the Financiers and
the Owner. Upon any such resignation or removal, the Controlling Creditor shall
have the right to appoint a successor Security Trustee, provided that, so long
as no Event of Default has occurred and is continuing, such successor Security
Trustee is reasonably satisfactory to the Lessee. If no successor Security
Trustee shall have been so appointed by the Controlling Creditor and shall have
accepted such appointment within 30 days after the retiring Security Trustee’s
giving of notice of resignation, then, in the case of a resigning Security
Trustee, the retiring Security Trustee may, on behalf of the Financiers, appoint
a successor Security Trustee, provided that such successor Security Trustee is
reasonably satisfactory to the Owner. Upon the acceptance of any appointment as
Security Trustee hereunder by a successor Security Trustee, such successor
Security Trustee shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Security
Trustee, and the retiring or removed Security Trustee shall be discharged from
its duties and obligations hereunder. After any Security Trustee’s resignation
or removal hereunder as Security Trustee, the provisions of this Section 15(j)
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Security Trustee.

(viii) Representations and Warranties of the Security Trustee. The Security
Trustee represents and warrants on each Issuance Date as follows:

(1) it is a bank duly organized and validly existing under the laws of the State
of Utah, and it has all requisite power and authority to enter into and perform
its obligations under this Agreement and each other Operative Document to which
it is a party or will become a party and to carry out the transactions
contemplated hereby and thereby;

(2) neither the execution and delivery of this Agreement and each other
Operative Document executed or to be executed by it, the performance of its
obligations hereunder or thereunder, nor its consummation of the transactions
contemplated hereby or thereby will conflict with or result in any breach of, or
constitute a default under, or result in the creation or imposition of any Lien
upon the Aircraft or any other part of the Collateral under the laws of the
State of Utah or federal laws of the United States governing its banking or
trust powers not related to the ownership, operation or maintenance of the
Aircraft, its memorandum and articles of association or any indenture, charge,
debenture, mortgage, deed or other instrument or agreement to which it is a
party or by which it may be bound or to which any of its property or assets may
be subject;

 

40

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(3) the execution, delivery and performance of this Agreement and each other
Operative Document executed or to be executed by it have been duly authorized by
all necessary corporate action of it. Assuming due authorization, execution and
delivery by the other parties hereto and thereto, this Agreement and each other
Operative Document executed or to be executed by it constitutes, or upon
execution and delivery will constitute, its legal, valid and binding obligation,
enforceable against it in accordance with its terms;

(4) the execution and delivery by it of this Agreement and each other Operative
Document executed or to be executed by it and the performance of its obligations
hereunder and thereunder do not require any approval or consent of any
stockholder, trustee or holder of any of its indebtedness or other obligations,
other than such approvals or consents as have heretofore been obtained; and

(5) there are no pending or, to its knowledge, threatened suits or proceedings
against it or affecting it or its properties that, if determined adversely,
would materially adversely affect its ability to perform its obligations under
this Agreement and each other Operative Document executed or to be executed by
it.

(ix) Lease Obligations. The Security Trustee agrees to comply with the
obligations under the Lease stated to be for its account.

(k) Representations and Warranties of the Senior Purchasers. Each original
Senior Purchaser (and each investment advisor signing on behalf of such Senior
Purchaser) and each other Senior Purchaser (and each investment advisor signing
on behalf of each other Senior Purchaser) from time to time, by its acceptance
of a Note, represents and warrants to the Owner and the Security Trustee that:

(i) This Agreement has been duly authorized, executed and delivered by a person
who is duly authorized to execute and deliver this Agreement on its behalf. Each
Senior Purchaser (and each investment advisor signing on behalf of a Senior
Purchaser) when acting on behalf of its accounts, has been duly authorized and
empowered by its accounts to enter into and perform its obligations under this
Agreement.

(ii) It is both a QIB and an “accredited investor” within the meaning of
Regulation D under the Securities Act.

(iii) It is not purchasing the Senior Notes as a result of or subsequent to any
advertisement, article, notice or other communication published in any
newspaper, magazine, website or similar media or broadcast over television,
radio or internet, or presented at any seminar or general meeting, or any
solicitation by any person not previously known to it.

 

41

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(iv) It acknowledges that (i) the Senior Notes have not been registered under
the Securities Act or any other applicable securities law and are being offered
for sale to such Senior Purchasers in reliance upon the private offering
exemption contained in Section 4(b) of the Securities Act and Rule 506 of
Regulation D thereunder and (ii) the Owner does not have an intention or
obligation to register the Senior Notes. No person may offer, sell or otherwise
transfer the Notes except in compliance with the registration requirements of
the Securities Act or any other applicable securities law, pursuant to an
exemption therefrom, or in a transaction not subject thereto, and in each case
in compliance with the conditions for transfer set forth in Section 14(c)
hereof.

(v) It (and for each account for which it is acquiring the Senior Notes) has
carefully reviewed any disclosure documents used in the offering of the Senior
Notes and has been furnished with all other materials that it considers relevant
to an investment in the Senior Notes, has had a full opportunity to ask
questions of and receive answers from the Owner or any person or persons acting
on behalf of the Owner concerning the terms and conditions of an investment in
the Senior Notes and no statement which is contrary to the disclosure documents
has been made or given to it by or on behalf of the Owner; and that it is not
relying upon, and has not relied upon, any statement, representation or warranty
made by any other person, except for the statements, representations and
warranties contained in this Agreement.

(vi) It acknowledges that the Senior Notes will bear a legend to the following
effect unless otherwise agreed by the Owner and the Holder thereof:

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF REPRESENTS THAT IT IS AN
“ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) or (7) of
REGULATION D UNDER THE SECURITIES ACT.

(vii) It acknowledges that the preceding restrictions apply to holders of
beneficial interests in the Notes as well as to Holders of the Senior Notes.

(viii) It acknowledges that the Security Trustee will not be required to accept
for registration or transfer any Notes acquired by it, except upon presentation
of evidence satisfactory to the Owner and the Security Trustee that the
restrictions set forth in Section 14(c) hereof been complied with and it agrees
that it will give to each person to whom it transfers Notes notice of any
restrictions on transfers of such Notes.

 

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(ix) It acknowledges that the Owner, the other Obligors, the Security Trustee
and others will rely upon the truth and accuracy of the acknowledgements,
representations and agreements in this Section 15(k) and agree that if any of
the acknowledgements, representations and agreements in this Section 15(k)
deemed to have been made by its purchase of the Senior Notes are no longer
accurate, it shall promptly notify the Owner and the Security Trustee. If it is
acquiring the Senior Notes as a fiduciary or agent for one or more investor
accounts, it represents that it has sole investment discretion with respect to
each such account and it has full power to make the acknowledgements,
representations and agreements in this Section 15(k) on behalf of each account
and that each such investor account is eligible to purchase the Notes.

Section 16. Miscellaneous.

(a) Section 1110 Compliance. Notwithstanding any provision herein or elsewhere
contained to the contrary, it is understood and agreed among the parties hereto
that the transactions contemplated by this Agreement, and the other Operative
Documents are expressly intended to be, shall be and should be construed so as
to be, entitled to the full benefits of 11 U.S.C. Section 1110, as amended from
time to time, and any successor provision thereto.

(b) Survival of Agreements. The representations, warranties, indemnities and
agreements of the Owner, the Security Trustee and each Financier provided for in
this Agreement and each party’s obligations under any and all thereof, shall
survive the expiration or other termination of this Agreement or any other
Operative Document, except as expressly provided herein or therein.

(c) Separate Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and the
same instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified, except by an instrument
in writing signed by the party or parties thereto.

(d) No Liability of Financiers. No Financier shall have any obligation or duty
to the Owner, or to other Persons with respect to the transactions contemplated
hereby except those obligations or duties of such Financier expressly set forth
in this Agreement and the other Operative Documents and no Financier shall be
liable for performance by any other party hereto of such other party’s
obligations or duties hereunder. Without limitation of the generality of the
foregoing, under no circumstances whatsoever shall any Financier be liable to
the Owner for any action or inaction on the part of the Security Trustee in
connection with the transactions contemplated herein, whether or not such action
or inaction is caused by willful misconduct or gross negligence of the Security
Trustee.

(e) Approvals by Financiers. Any reference herein to an approval, consent or
waiver to be given by the Financiers shall be deemed hereunder to be an
approval, consent or waiver, as the case may be, if the Controlling Creditor
approves, consents or waives, as the case may be.

 

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(f) Non-Disclosure of Purchase Agreement. The Financiers agree that they shall
not disclose to any person (other than its legal counsel) the terms of the
Purchase Agreement or the Consent and Agreement, except (i) as required by
applicable law or governmental regulations, (ii) to their respective auditors,
counsel or bank examiners, (iii) in connection with any legal proceedings
arising from the Consent and Agreement or the Purchase Agreement, or (iv) with
the prior written consent of the Manufacturer, such consent not to be
unreasonably withheld or delayed. This paragraph is for the benefit of the
Manufacturer who is a third party beneficiary of this Section 16(f).

(g) Confidentiality. Each of the Financiers and the Security Trustee covenants
and agrees to keep confidential, and not to disclose to any third parties, all
non-public information received by it from the Owner pursuant to the Operative
Documents, including any insurance report received pursuant to Section 10 of the
Lease, provided that such information may be made available:

(1) to prospective and permitted transferees of a Financier’s Notes or the
Security Trustee’s respective interest in an Aircraft, who agree to hold such
information confidential,

(2) to any Holder’s counsel or independent certified public accountants,
independent insurance advisors, any Rating Agency from whom a rating for the
Notes is sought or is outstanding or other agents who agree to hold such
information confidential,

(3) as may be required by applicable law or by any statute, court or
administrative order or decree or governmental ruling or regulation (or, in the
case of any Holder, to any bank examiner or other regulatory personnel) or

(4) as may be necessary for purposes of enforcement of any Operative Document.

Notwithstanding the foregoing, the legal obligations of confidentiality
hereunder do not extend to the U.S. federal or state tax structure or the U.S.
federal or state tax treatment of this transaction. If any U.S. federal or state
tax analyses or materials are provided to any party, such party is free to
disclose any such analyses or materials without limitation.

(h) Quiet Enjoyment. The Security Trustee, each Agent and each Financier each
agrees that neither it nor any Person claiming by, through or under it shall
take or cause to be taken any action in violation of the Lessee’s or any
Permitted Sublessee’s right to possession, use and quiet enjoyment of each
Aircraft so long as no Event of Default shall have occurred and be continuing
under the Lease.

*    *    *

 

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IN WITNESS WHEREOF, the parties hereto have caused this Facility Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.

 

VX 2016 LLC, as Owner

By VX 2016 TRUST, its Manager,

By Delaware Trust Company, not in its individual capacity but solely as Trustee

By:   /s/ Alan R. Halpern Name:    Alan R. Halpern Title:   Vice President

BANK OF UTAH, as Security Trustee By:    /s/ Brett R. King Its:  

Brett R. King, Vice President

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, as Senior Agent By:    /s/ Andrew
T. Kleeman Its:   Andrew T. Kleeman, Managing Director By: Babson Capital
Management LLC, as its Investment Adviser

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, as a Senior Purchaser By:   /s/
Andrew T. Kleeman Its:   Andrew T. Kleeman, Managing Director By: Babson Capital
Management LLC, as its Investment Adviser

 

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C.M. LIFE INSURANCE COMPANY, as a Senior Purchaser By:   /s/ Andrew T. Kleeman
Its:   Andrew T. Kleeman, Managing Director By: Babson Capital Management LLC,
as its Investment Adviser MASSMUTUAL ASIA LIMITED, as a Senior Purchaser By:  
/s/ Andrew T. Kleeman Its:   Andrew T. Kleeman, Managing Director By: Babson
Capital Management LLC, as its Investment Adviser TAF FUNDING LIMITED, as a
Junior Loan Participant By:   /s/ Hanki Kuzbari Its:   Hani Kuzbari, Director
NOVUS TAMWEEL AVIATION FINANCE GP LIMITED, as Junior Agent By:   /s/ Mounir
Kuzbari Its:   Mounir Kuzbari, Director

 

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APPENDIX A

[VIRGIN/NPA 2016-1]

DEFINITIONS AND RULES OF USAGE

(a) Unless a contrary indication appears, a reference in this Agreement to:

(i) the “agreed form” of any Operative Document means the form of such Operative
Document which on the date hereof has been agreed by the Lessee and the Security
Trustee (acting on the instructions of the Financiers);

(ii) any “applicable law” means (a) applicable laws, statutes, decrees, decree
laws, acts, codes, regulations, legislation, treaties, conventions and similar
instruments and, in respect of any of the foregoing, unless the context
otherwise requires, any instrument passed in substitution therefor or for the
purposes of consolidation thereof with any other instrument or instruments, in
each case, unless the context otherwise requires, as amended, modified, varied
or supplemented from time to time, (b) applicable final judgments, orders,
determinations or awards of any court from which there is no right of appeal or
if there is a right of appeal such appeal is not prosecuted within the allowable
time and (c) applicable orders, guidelines, notices, guidance, rules and
regulations of any state or government or any government entity, in each case
having the force of law;

(iii) any person includes its and any subsequent successors in title, permitted
assigns and permitted transferees;

(iv) “assets” includes present and future properties, revenues and rights of
every description;

(v) “indebtedness” includes any obligation (whether incurred as principal or as
surety) for the payment or repayment of money, whether present or future, actual
or contingent;

(vi) an “Operative Document” or any other agreement or instrument is a reference
to that Operative Document or other agreement or instrument as amended,
supplemented or novated in accordance with the terms thereof and of this
Agreement or any other Operative Document, together with all exhibits, schedules
and other attachments thereto;

(vii) a “regulation” includes any regulation, rule or official directive
(whether or not having the force of law) of any governmental, intergovernmental
or supranational body, agency, department or regulatory, self-regulatory or
other authority or organization;

 

APPENDIX A

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

(viii) a reference to a “Schedule” is a reference to such Schedule as it may be
amended from time to time in accordance herewith;

(ix) unless the context shall otherwise require, a provision of law is a
reference to that provision as amended or reenacted; and

(x) a time of day is, unless stated otherwise, a reference to New York time.

(b) Section and Schedule headings are for ease of reference only.

(c) Unless a contrary indication appears, a term used in any other Operative
Document or in any notice given under or in connection with any Operative
Document has the same meaning in that Operative Document or notice as in this
Agreement.

DEFINED TERMS

“Additional Insured(s)” means the Lessor, the Lessor Parent, DTC, the Security
Trustee and the Holders.

“Affected Person” means, (i) the Owner, (ii) any subsidiary of the Owner,
(iii) any Affiliate of the Owner (other than any Person that is an Affiliate of
the Owner solely by reason of its ownership of shares of the Owner), or (iv) any
officer, director, trustee or agent of the Owner or such subsidiary or such
Affiliate that will act in any capacity with respect to this Agreement.

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly controls, is controlled by, or under common control with, such
Person. The term “control” means the possession, directly or indirectly of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

“Agent” or “Agents” means either or both, as the context may require, of the
Senior Agent and the Junior Agent.

“Aircraft” means the Airframe together with the two Engines referenced in a
Mortgage Supplement delivered in connection with a Designated Aircraft,
including buyer furnished equipment, whether or not such Engines are installed
on the Airframe or any other airframe, and, where the context permits, all logs,
manuals and data and inspection, modification and overhaul records required to
be maintained with respect to the foregoing property (“Aircraft Documentation”).

“Aircraft Documentation” is defined in the definition of “Aircraft”.

“Aircraft Related Agreement” means, for any Aircraft, its Bills of Sale,
Purchase Agreement and Purchase Agreement Assignment.

 

APPENDIX A

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

“Airframe” means: (i) the Airbus A320-200 aircraft (excluding Engines or engines
from time-to-time installed thereon) specified by United States Registration
Number and Manufacturer’s Serial Number in a Mortgage Supplement; (ii) any and
all related Parts; and (iii) any Replacement Airframe which may from time to
time be substituted for the Airframe then subject to the Mortgage pursuant to
Section 9(b) of the Lease.

“Airframe Warranties Agreement” means each agreement dated a Delivery Date,
between, inter alios, the Manufacturer, the Lessee and the Security Trustee in
respect of the airframe warranties associated with the Aircraft delivered on
such date.

“Allocated To” means, with reference to any Aircraft, the portion of the Notes
relating to such Aircraft which shall be designated as a specific “Series”,
being the outstanding principal amount of the related issuance made with respect
to such Aircraft.

“AML Laws” means all laws, rules, and regulations of any jurisdiction applicable
to any Financier, the Owner or any subsidiary or Affiliate of the Owner from
time to time concerning or relating to anti-money laundering.

“Anti-Corruption Law” means all laws, rules, and regulations of any jurisdiction
applicable to the Owner or any subsidiary or Affiliate of the Owner from time to
time concerning or relating to bribery or corruption.

“Anti-Terrorism Law” means, with respect to any Person, any applicable law, rule
or regulation related to financing terrorism including (a) the Patriot Act,
(b) the Currency and Foreign Transactions Reporting Act (31 U.S.C. §§ 5311-5330)
(also known as the “Bank Secrecy Act”), (c) the Trading With the Enemy Act (50
U.S.C. § 1 et seq.), the International Economic Emergency Powers Act (15 U.S.C.
§ 1701 et seq.) and (d) Executive Order 13224 (effective September 24, 2001).

“Applicable Margin”, in respect of the Notes for any Aircraft, has the meaning
set forth in Section 1 of the Facility Agreement.

“Applicable Rate” means, for any Interest Period with respect to any Series and
Tranche of Note, the Senior Interest Rate or Junior Note Interest Rate
applicable to such Series and Tranche of Note.

“Assigned Warranties” means the warranties referenced in the Airframe Warranties
Agreement and the Engine Consent.

“Assignment and Assumption Agreement” means an agreement substantially in the
form of Exhibit B to the Facility Agreement.

“Basic Rent” means, in respect of an Aircraft, the rent payable under
Section 3(b) of the Lease.

“Bills of Sale” means, for any Aircraft, the FAA Bill of Sale and the Warranty
Bill of Sale in favor of Owner in respect of such Aircraft.

 

APPENDIX A

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

“Business Day” means any day other than a Saturday or Sunday or a day on which
commercial banks are required or authorized to close in New York, New York and,
if such day relates to payment or prepayment of principal of or interest on the
Notes, the city and state in which the Payment Office is located.

“Cape Town Convention” means the official English language texts of the
Convention on International Interests in Mobile Equipment and the Protocol to
the Convention on International Interests in Mobile Equipment on Matters
Specific to Aircraft Equipment which were signed in Cape Town, South Africa on
November 16, 2001.

“Certificate Register” has the meaning specified in Section 14(d) of the
Facility Agreement.

“Civil Reserve Air Fleet Program” or “CRAF” means the Civil Reserve Air Fleet
Program administered by the United States Government or any substantially
similar program.

“Class” means, with respect to any Note, a designation of whether such Note is a
Senior Note or Junior Note.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.

“Collateral” means, separately and collectively, the collateral described in the
Granting Clause of the Mortgage as constituting the Mortgage Estate.

“Collections” means, in respect of an Aircraft or the Lease, the “Collections”
as defined in the Granting Clause to the Mortgage, but in all cases excluding
Excluded Payments.

“Commitment” has the meaning specified in Section 2(a) of the Facility
Agreement.

“Consent and Agreement” means the Manufacturer Consent and Agreement [Virgin/NPA
2016-1], dated as of the Delivery Date, of Airbus S.A.S. in respect of the
Aircraft.

“Controlling Creditor” has the meaning specified in the Intercreditor Agreement.

“Default” means any event which with the giving of notice or the lapse of time
or both if not timely cured or remedied would become a Lease Event of Default
pursuant to Section 13 of the Lease.

“Default Event” means a Lease Event of Default or an Event of Default.

“Delivery Date” means, for any Aircraft, the date of the initial Mortgage
Supplement for such Aircraft.

“Dollars”, “Dollar” and “$” means the lawful currency of the United States of
America.

“DTC” means Delaware Trust Company, in its individual capacity.

 

APPENDIX A

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

“Effective Date” means the date the Facility Agreement becomes effective as
provided in Section 4(a) of the Facility Agreement.

“Engine” means (i) each of the two CFM International Inc. model CFM56-5B4
engines listed by Manufacturer’s Serial Numbers in the initial Mortgage
Supplement for each Aircraft, whether or not from time to time installed on an
Airframe or any other airframe; (ii) any Replacement Engine which may from time
to time be substituted for any Engine pursuant to the terms of the Lease; and
(iii) in each case, any and all related Parts.

“Engine Agreement” means General Terms Agreement CFM-04-0012B, dated June 14,
2004 between the Lessee and Engine Manufacturer.

“Engine Consent and Agreement” means the Engine Consent and Agreement
[Virgin/NPA 2016-1] dated as of the Delivery Date of the Engine Manufacturer in
respect of the Aircraft.

“Engine Manufacturer” means CFM International Inc.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“Event of Default” has the meaning specified in Section 10 of the Facility
Agreement, which, for ease of reference is also contained below:

“SECTION 10 Events of Default. If one or more of the following events (herein
called “Events of Default”) shall occur and be continuing:

(i) the Owner shall default in the payment of any interest on any Note on the
Interest Payment Date thereof; or

(ii) the outstanding principal amount of the Notes shall not have been paid in
full by Final Legal Maturity;

THEREUPON: (A) the Security Trustee may, by notice to the Owner, terminate the
Commitments and they shall thereupon terminate, (B) the Security Trustee may
and, upon request of the Controlling Creditor shall, by notice to the Owner
demand payment of the Termination Sum, (C) declare the principal amount then
outstanding of, and the accrued interest on, the Notes and all other amounts
payable by the Owner and the Lessee (under such Operative Document to which each
is a party and without duplication) hereunder and under the Notes to be
forthwith due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Owner and (D) exercise any or
all of the remedies set forth in Article V to the Mortgage.

For the avoidance of doubt, the failure to pay interest on any Note that
converts to principal as provided in Section 3.3(f) hereof shall be deemed not
to be a default in payment of interest for the purposes of clause (i) of this
Section 10.”

 

APPENDIX A

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

“Event of Loss” means, with respect to any Aircraft or any Airframe or any
Engine, any of the following events with respect to such property:

(a) the loss of such property or of the use thereof due to destruction, damage
beyond economic repair or rendition of such property permanently unfit for
normal use for any reason whatsoever;

(b) any damage to such property that results in an insurance settlement with
respect to such property on the basis of a total loss or a constructive total
loss;

(c) the requisition for use or hire of such property by any government (other
than the government of the country of registry of such Aircraft) that shall have
resulted in the loss of possession of such property by the Lessee (or any
Permitted Sublessee) for a period in excess of nine consecutive months;

(d) requisition of title or other compulsory acquisition, capture, seizure,
deprivation, confiscation or detention for any reason of such Aircraft or any
Airframe or any Engine associated with such Aircraft by any government, whether
de facto or de jure, but shall exclude requisition for use or hire not involving
requisition of title;

(e) as a result of any law, rule or regulation, order or other action by the FAA
or other government of the country of registry, the use of such Aircraft or
Airframe in the normal business of air transportation shall have been prohibited
by virtue of a condition affecting all aircraft of the same type for a period of
12 consecutive months, unless the Lessee (or Permitted Sublessee), prior to the
expiration of such 12 month period, shall be diligently carrying forward all
steps that are necessary or desirable to permit the normal use of such Aircraft
or Airframe or, in any event, if such use shall have been prohibited for a
period of 18 consecutive months; and

(f) with respect to an Engine only, any divestiture of title to or interest in
such Engine or any event with respect to such Engine that is deemed to be an
Event of Loss with respect to such Engine pursuant to Section 7(c) of the Lease.

An Event of Loss with respect to an Aircraft shall be deemed to have occurred if
an Event of Loss occurs with respect to the Airframe related to such Aircraft.

“Excluded Payments” means, with respect to any Aircraft, the Lease and the
related Aircraft Related Agreements, (i) indemnity or similar payments (whether
or not payable as supplemental rent) paid or payable by the Lessee under the
Lease or Aircraft Related Agreements or related documents to the indemnitee or
other payee entitled thereto pursuant to the Lease or Aircraft Related
Agreements, (ii) proceeds of public liability insurance in respect of such
Aircraft payable as a result of insurance claims made, or losses suffered, by
the indemnitee or payee entitled thereto, (iii) proceeds of insurance maintained
with respect to such Aircraft by the Lessee or any Affiliate of the Lessee and
not required under the Lease or under the Facility Agreement or any other
Operative Document, (iv) any interest paid or payable on any amounts described
in clauses (i) through (iii) of this definition, and (v) the proceeds from the
enforcement by the Owner or other indemnitee or payee of the payment of any
amount described in clauses (i) through (iv) of this definition, in each case
however, only to the extent such amount is in respect of a claim personal to the
applicable Person and is not necessary to restore the value of the Collateral.

 

 

APPENDIX A

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

“Excluded Taxes” has the meaning specified in Schedule III to the Facility
Agreement.

“Expense” or “Expenses” means any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, out of pocket costs, expenses and
disbursements (including reasonable legal fees and expenses) of whatever kind
and nature but excluding internal costs and expenses such as salaries and
overhead of whatsoever kind and nature.

“FAA Bill of Sale” means a bill of sale on AC Form 8050-2 or such other form as
may be approved by the FAA in favor of the Owner from the Manufacturer in
respect of an Aircraft.

“FAA Counsel” means McAfee & Taft, A Professional Corporation.

“Facility Agreement” means that certain Facility Agreement [Virgin/NPA 2016-1],
dated as of October 28, 2015, among the Owner, the Financiers, the Agents and
the Security Trustee as such Facility Agreement may be amended or supplemented
from time to time pursuant to the applicable provisions thereof.

“FATCA” has the meaning specified in Schedule III to the Facility Agreement.

“FCPA” means the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq.

“Federal Aviation Act” means subtitle VII of Title 49 of the United States Code,
or any successor provision.

“Federal Aviation Administration” and “FAA” mean the United States Federal
Aviation Administration and any successor agency or agencies thereto.

“FedWire” means the funds transfer system used to transfer reserve balances for
immediately available credit among the member banks of the United States Federal
Reserve System.

“Fee Letter” means each of (i) in the case of MassMutual, the letter agreement
between the Lessee and MassMutual, pursuant to which the Lessee has agreed to
pay certain fees and (ii) in the case of Tamweel, the letter agreement between
the Lessee and Tamweel, pursuant to which the Lessee has agreed to pay certain
fees.

“Final Legal Maturity” means, for any Series of Senior Notes, the 18 month
anniversary of the Senior Maturity Date thereof.

“Finance Parties” means, together, the Financiers, each Agent and the Security
Trustee (each, a “Finance Party”).

“Financier” means each Holder initially a party to the Facility Agreement, and
its successors and assigns.

 

APPENDIX A

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“Foreign Air Carrier” means any air carrier which is not a U.S. Air Carrier and
which performs maintenance, preventative maintenance and inspections for the
Aircraft, the Airframe and/or any Engine or engine to standards which are
approved by, or which are substantially equivalent to those required by, the
Federal Aviation Administration, the Civil Aviation Authority of the United
Kingdom, the Direction Generale de l’Aviation Civile of the French Republic, the
Luftfahrt Bundesamt of the Federal Republic of Germany, the Nederlandse
Luchtvaart Authoriteit of the Kingdom of the Netherlands, the Ministry of
Transportation of Japan or the Federal Ministry of Transport of Canada (and any
agency or instrumentality of the applicable government succeeding to the
functions of any of the foregoing entities).

“GAAP” means generally accepted accounting principles then in effect in the
United States, consistently applied.

“Governmental Authority” means (a) any federal, state or similar government, and
any body, board, department, commission, court, tribunal, authority, agency or
other instrumentality of any such government or otherwise exercising any
executive, legislative, judicial, administrative or regulatory functions of such
government or (b) any other government entity having jurisdiction over any
matter contemplated by the Operative Documents or relating to the observance or
performance of the obligations of any of the parties to the Operative Documents.

“Holder” means, at any time, any holder of any Senior Note or any Junior Note.

“Illegality Event” means the occurrence of any of the following events or
circumstances: it becomes unlawful or prohibited for holders of at least a
majority of the Junior Notes to purchase or maintain their respective interests
in the Junior Notes or to carry out their respective material obligations under
the Operative Documents.

“Indemnitee” or “Indemnitees” means the Lessor, the Lessor Parent, DTC, the
Security Trustee, the Holders, the Agents and each of their respective
successors, permitted assigns, and directors, officers, and employees.

“Initial Rent” means, in respect of an Aircraft, an amount equal to the
difference between the purchase price for such Aircraft and the sum of the
pre-delivery payments made on account of such Aircraft and the aggregate
Commitments of the Financiers therefor.

“Intercreditor Agreement” means the Intercreditor Agreement [Virgin/NPA 2016-1],
dated as of October 28, 2015, among the Owner, the Senior Purchaser, the Junior
Loan Participants, the Agents and the Security Trustee.

“Interest Payment Date” means, in respect of any Series of Notes, each of the
four quarterly anniversary dates of the Issuance Date of the related Aircraft
(or if there is no comparable day in any applicable month, the last day of such
month); provided that, (i) if any such date shall not be a Business Day, then
the relevant Interest Payment Date shall be the next succeeding Business Day
unless by virtue of such extension such date would fall in the next succeeding
calendar month, in which case the relevant Interest Payment Date shall be the
next preceding Business Day and (ii) there shall be no adjustment to period end
dates by virtue of non-Business Days for the purpose of interest accruals. The
Interest Payment Dates shall be the dates specified in the amortization schedule
relating thereto attached to the Notes of the applicable Series (subject to
modification by the above proviso).

 

APPENDIX A

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

“Interest Period” means (a) initially, the period commencing on the Issuance
Date and ending on the first Interest Payment Date thereafter and
(b) thereafter, each successive three-month (or other applicable) period
commencing on the final day of the preceding Interest Period and ending on the
next succeeding Interest Payment Date.

“international interest” is defined in the Cape Town Convention.

“International Registry” is defined in the Cape Town Convention.

“Issuance Date” has the meaning specified in Section 2(b)(i) of the Facility
Agreement.

“Junior Agent” has the meaning specified in the preamble to the Facility
Agreement.

“Junior Applicable Margin” has the meaning specified in Section 1 of the
Facility Agreement.

“Junior Note” means each Note issued by the Owner to the Junior Loan
Participants pursuant to Section 2(a)(i) of the Facility Agreement and any such
Note issued in exchange or replacement therefor pursuant to Section 14(d) or
14(e) of the Facility Agreement.

“Junior Loan Participants” means the Original Junior Loan Participants and each
successor, permitted assignee or permitted transferee thereof as a Holder of a
Junior Note.

“Lease” means the Aircraft Lease Agreement [Virgin/NPA 2016-1] dated as of
October 28, 2015 between the Owner, as lessor, and Lessee.

“Lease Event of Default” is defined in Section 13 of the Lease.

“Lease Supplement” means, in respect of an Aircraft, the lease supplement
relating to such Aircraft to be entered into between Owner and Lessee under the
Lease dated the Drawdown Date for such Aircraft, substantially in the form of
Exhibit I to the Lease

“Lender Lien” means any Lien which arises from acts or claims against a
Financier not related to the transactions contemplated by the Operative
Documents.

“Lessor” means VX 2016 LLC, a Delaware limited liability company.

“Lessor Parent” means VX 2016 Trust, a Delaware statutory trust.

“Lien” means any mortgage, pledge, lien, claim, encumbrance, lease, security
interest or other lien of any kind on property. “Lien” shall include any
interest registered on the International Registry other than the Owner’s
ownership interest registered on the International Registry as a contract of
sale with respect to the Aircraft.

“Loan Documents” means the Operative Documents.

 

APPENDIX A

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

“Losses” shall mean and include all losses (including loss of profit), payments,
damages, liabilities, claims, proceedings, actions, penalties, fines, Taxes,
duties, fees, rates, levies, charges, demands, royalties or other sanctions of a
monetary nature, fees, insurance premiums, calls, judgments, costs and expenses.

“Maintenance Program” means (a) the maintenance program for the Aircraft which
is approved by the FAA or the regulatory authority having jurisdiction over the
Aircraft and (b) in respect of the Engines, the OnPoint program provided by CFM
and its affiliates.

“Majority Junior Holders” means, as of any date of the determination thereof,
(i) if no amount in respect of any Junior Note is then outstanding, a Junior
Loan Participant or Junior Loan Participants whose Junior Commitments aggregate
more than 50% of the aggregate Junior Commitments of all Junior Loan
Participants, or (ii) otherwise, the Holders of more than 50% in aggregate
outstanding principal amount of all Junior Notes. For all purposes of the
foregoing definition, in determining as of any date the then aggregate
outstanding principal amount of any Junior Notes or amount of the Junior
Commitments, there shall be excluded all Junior Notes and Junior Commitments, if
any, held by the Owner or any Affiliate thereof.

“Majority Senior Holders” means, as of any date of the determination thereof,
(i) if no amount in respect of any Senior Note is then outstanding, a Senior
Purchaser or Senior Purchasers whose Senior Commitments aggregate more than 50%
of the aggregate Senior Commitments of all Senior Purchasers, or (ii) otherwise,
the Holders of more than 50% in aggregate outstanding principal amount of all
Senior Notes. For all purposes of the foregoing definition, in determining as of
any date the then aggregate outstanding principal amount of any Senior Notes or
amount of the Senior Commitments, there shall be excluded all Senior Notes and
Senior Commitments, if any, held by the Owner or any Affiliate thereof.

“Manufacturer” means Airbus S.A.S., in its capacity as manufacturer of the
Aircraft, and its successors and assigns.

“MassMutual” means Massachusetts Mutual Life Insurance Company.

“Maturity Date” means, in respect of any Note, the date that all remaining
principal and the Balloon payable in respect of such Note shall be due and
payable.

“Mortgage” means the Mortgage and Security Agreement [Virgin/NPA 2016-1] dated
as of October 28, 2015 between the Owner and the Security Trustee, including any
Mortgage Supplement and each other supplement from time to time entered into
pursuant hereto.

“Mortgage Estate” is defined in the Granting Clause to the Mortgage.

“Mortgage Supplement” means a supplement to the Mortgage substantially in the
form of Exhibit A, which shall particularly describe the Airframe and Engines,
or any Replacement Airframe or Replacement Engine, included in the property of
the Owner covered by the Mortgage, or any other supplement hereto.

“Mortgagor” means the Owner.

 

APPENDIX A

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

“Non-U.S. Person” means any Person other than (i) a citizen or resident of the
United States of America (for purposes of this definition, the “United States”),
(ii) a corporation, partnership, limited liability company or other entity
created or organized under the laws of the United States or any political
subdivision thereof or therein or (iii) an estate or trust that is subject to
United States federal income taxation regardless of the source of its income.

“Note” means either or both, as the context may require, of a Senior Note or a
Junior Note and “Notes” means all Notes, whether a Junior Note or Senior Note,
issued pursuant to Section 2(a) of the Facility Agreement and any such
certificates issued in exchange or replacement therefor pursuant to
Section 14(d) or 14(e) of the Facility Agreement.

“Note Value” means, as of any particular date of computation, in respect of an
Aircraft, the amount required to prepay or repay the Notes of the Series
relating to such Aircraft in full, together with interest thereon accrued to
(but excluding) the date of such prepayment or repayment, Prepayment Fee and all
other amounts of whatever description in respect of such Notes due to the
Financiers and the Security Trustee under the Facility Agreement and the other
Operative Documents as of such date.

“Obligations” is defined in the Granting Clause of the Mortgage.

“Obligor” or “Obligors” means each of the Owner and the Lessee

“Obsolete Part Amount” has the meaning specified in Section 1 of the Facility
Agreement.

“Operative Documents” means the Facility Agreement, the Mortgage, the Lease, any
Mortgage Supplement, each Note, the Pledge Agreement, the Fee Letter, the
Intercreditor Agreement, the Consent and Agreement, the Engine Consent and
Agreement and any amendments or supplements of any of the foregoing.

“Original Amount” means, with respect to a Series of Notes, the stated aggregate
original principal amount of such Notes, which shall, on the Delivery Date for
an Aircraft, equal the amount of the Notes issued in respect of such Aircraft.
The Original Amount for the Notes for each Series shall be as specified in
Section 1 of the Facility Agreement.

“Original Junior Loan Participant” means TAF Funding Limited.

“Original Senior Purchasers” means the institutional investors signing the
Facility Agreement as “Senior Purchasers”.

“Other Agreement” means the Facility Agreement [Virgin/Bank [6935]], dated as of
October 27, 2015, among the Lessee, as borrower, each loan participant party
thereto, Credit Agricole Corporate & Investment Bank, as a senior agent, Novus
Tamweel Aviation Finance GP Limited, as junior agent and Bank of Utah, as
security trustee.

“Other Junior Lender” means, collectively, the Persons acting as junior loan
participants under the Other Agreement, and their successors and permitted
assigns.

 

APPENDIX A

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

“Other Junior Loans” means the “Junior Loans” under and as defined in the Other
Agreement.

“Other Junior Obligations” means the “Primary Obligations” under and as defined
in the Other Agreement to the extent distributable to the Other Junior Lenders
under clause sixth of the “Intercreditor Agreement” under and as defined in the
Other Agreement; provided that “Other Junior Obligations” shall be deemed to be
zero if the Original Junior Loan Participants are not (a) the Majority Junior
Holders under the Facility Agreement and (b) “Majority Junior Holders” under and
as defined in the Other Agreement.

“Owner” means the Lessor.

“Parts” means all appliances, parts, instruments, appurtenances, accessories,
furnishings and other equipment of whatever nature (other than (i) complete
Engines or engines or (ii) PCE), which are from time to time incorporated or
installed in or attached to the Airframe or any Engine and all such items which
are subsequently removed therefrom so long as the Lien of the Mortgage shall
cover the same pursuant to the terms of the Mortgage.

“Past Due Rate” has the meaning specified in Section 1 of the Facility
Agreement.

“Payment Office” means the Security Trustee’s office and bank account referred
to in Schedule I to the Facility Agreement.

“PCE” means passenger convenience equipment.

“Permitted Investments” means those investments described in Section 2(b)(iv) of
the Facility Agreement.

“Permitted Lien” means (i) the respective rights of each of the parties to the
Operative Documents as provided in the Operative Documents, (ii) the rights of
any Permitted Sublessee and other Persons under any subleases and other
agreements and arrangements to the extent permitted by the terms of Sections 7
and 8 of the Lease, (iii) Liens for fees or charges of any airport or air
navigation authority payable by Lessee or any Permitted Sublessee either not yet
due or being contested in good faith by appropriate proceedings that do not
involve any material likelihood of the sale, seizure, forfeiture or loss of any
Aircraft, or any part thereof, title thereto, interest therein or use thereof
and that do not involve any potential for criminal liability, (iv) Liens for
Taxes payable by Lessee or any Permitted Sublessee either not yet due or being
contested in good faith by appropriate proceedings that do not involve any
material likelihood of the sale, seizure, forfeiture or loss of any Aircraft or
any Part thereof, title thereto, interest therein or use thereof and that do not
involve either any potential for criminal liability or the imposition of any
Lien for which an adequate bond has not been posted by Lessee, and in the case
of such proceedings so long as adequate reserves are maintained in respect of
such Taxes in accordance with relevant generally accepted accounting principles,
(v) materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like
Liens on any Aircraft, any Airframe or any Engine arising in the ordinary course
of business of Lessee or any Permitted Sublessee for amounts the payment of
which is either not yet due or which are being contested in good faith by
appropriate proceedings that do not involve any material likelihood of the sale,
seizure, forfeiture or loss of any Aircraft or any Part thereof, title thereto,
interest therein or use thereof and in the

 

APPENDIX A

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

case of such proceedings so long as adequate reserves are maintained in respect
of such amounts in accordance with relevant generally accepted accounting
principles, (vi) Liens arising out of judgments or awards against Lessee with
respect to which at the time an appeal or proceeding for review is being
prosecuted in good faith by appropriate proceedings that do not involve any
material likelihood of the sale, seizure, forfeiture or loss of any Aircraft or
any Part thereof, title thereto, interest therein or use thereof and in the case
of such proceedings so long as adequate reserves are maintained in respect of
such amounts in accordance with relevant generally accepted accounting
principles or a bond in accordance with the requirements of any applicable law,
(vii) salvage or similar rights of insurers under insurance policies maintained
pursuant to and in accordance with Section 10 of the Lease and (viii) any Lien
created with the prior written consent of the Security Trustee (in its sole
discretion).

“Permitted Sublessee” means (i) any United States air carrier as to which there
is in force at the time of entering into such sublease or other transfer a
certificate issued pursuant to 49 U.S.C. 44705 or any successor provisions that
give like authority and that is not subject to bankruptcy proceedings; or
(ii) any manufacturer of airframes or engines or any air carrier that is listed
in Schedule 1 to the Lease; provided that for any entity described in
clause (ii), (x) such entity is based in a country with which the United States
maintains normal diplomatic relations, (y) such entity is not subject to
bankruptcy proceedings and (z) such transfer of possession shall not deprive the
Finance Parties of their perfected and enforceable security interest.

“Permitted Transferee” means (i) the Lessee or any of its Affiliates, (ii) any
Financier or any Affiliate of a Financier, (iii) any reputable bank or other
reputable financial institution that is regularly engaged in or established for
the purposes of making, purchasing or investing in commercial loans or secured
notes; provided that, without the prior written consent of the Lessee, no
airline or Affiliate of an airline shall be a Permitted Transferee.

“Person” means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

“Plan” means an “employee benefit plan” (as such term is defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended) or any
“plan” (as such term is defined in Section 4975(e)(1) of the Code) which has
been established or maintained or contributed to by the Lessee or an Affiliate
(other than a multiemployer plan within the meaning of Section 3(37) of ERISA)
that, together with the Lessee, is treated as a single employer under
Section 414(b), (c) or (m) of the Code.

“Pledge Agreement” means the Pledge Agreement [Virgin/NPA 2016-1] dated on or
before the first Issuance Date between the Trust and the Security Trustee with
respect to the Pledged Interest, substantially in the form of Exhibit D to the
Facility Agreement as may from time to time be supplemented, modified or amended
in accordance with the applicable provisions thereof.

“Pledged Interest” has the meaning assigned to such term in the Pledge
Agreement.

 

APPENDIX A

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

“Primary Obligations” has the meaning assigned to such term in the Granting
Clause of the Mortgage.

“Purchase Agreement” means those provisions of the Airbus A320 Family Purchase
Agreement between the Lessee and the Manufacturer dated as of December 29, 2010
relating to the purchase by the Lessee of, inter alia, the Aircraft, as
originally executed or as modified, amended or supplemented in accordance with
the terms thereof, but only insofar as the foregoing relates to the Aircraft.

“Purchase Agreement Assignment” means, in respect of an Aircraft, a purchase
agreement assignment dated as of the Delivery Date for such Aircraft, between
Owner, as assignee, and Lessee, as assignor, pursuant to which Lessee assigns to
Owner, inter alia, its right to purchase such Aircraft under the Purchase
Agreement, in form and substance reasonably satisfactory to the Security
Trustee.

“Rating Agency” means Fitch, or such other nationally recognized credit rating
agency as agreed by the Lessee and the Financiers (in their sole discretion).

“Ratings Requirement” means the obligation of the Owner to obtain a preliminary
long term credit rating (at no particular required rating level) with respect to
the Senior Notes from the Rating Agency with respect to the current payment of
interest of the Senior Notes and ultimate payment of principal of the Senior
Notes on Final Legal Maturity.

“Rent” means, collectively, Initial Rent, Basic Rent and Supplemental Rent.

“Replacement Engine” means (a) CFM International Inc. model CFM56-5B4 engines or
(b) an improved engine of the same manufacturer, which, in the case of any
engine described in clauses (a) or (b) hereof, shall be in compliance with the
requirements of Section 7(l) or 9(b) of the Lease.

“Sanctioned Country” means, at any time, a country or territory which is, or
whose government is, the subject or target of any Sanctions broadly restricting
or prohibiting dealings with such country, territory or government (currently,
Cuba, Iran, Burma, North Korea, Sudan, and Syria).

“Sanctioned Person” means, at any time, any Person with whom dealings are
restricted or prohibited under Sanctions, including (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the United States
(including by the Office of Foreign Assets Control of the U.S. Department of the
Treasury, the U.S. Department of State, or the U.S. Department of Commerce), the
United Nations Security Council, the European Union or any of its member states,
Her Majesty’s Treasury, Switzerland or any other relevant authority, (b) any
Person located, organized or resident in, or any Governmental Entity or
governmental instrumentality of, a Sanctioned Country or (c) any Person 25% or
more directly or indirectly owned by, controlled by, or acting for the benefit
or on behalf of, any Person described in clauses (a) or (b) hereof.

 

APPENDIX A

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“Sanctions” means economic or financial sanctions or trade embargoes or
restrictive measures enacted, imposed, administered or enforced from time to
time by (a) the U.S. government, including those administered by the Office of
Foreign Assets Control of the U.S. Department of the Treasury, the U.S.
Department of State, or the U.S. Department of Commerce (b) the United Nations
Security Council; (c) the European Union or any of its member states; (d) Her
Majesty’s Treasury; (e) Switzerland; or (f) any other relevant authority.

“Secured Parties” means each Financier and the Security Trustee.

“Securities Act” means the Securities Act of 1933, as amended.

“Security Trustee” means Bank of Utah in its capacity as Security Trustee
hereunder, and any successor thereto in such capacity.

“Security Trustee Lien” means any Lien which arises as a result of (A) claims
against the Security Trustee not related to its interest in the Aircraft,
(B) acts of the Security Trustee not permitted by, or failure of the Security
Trustee to take any action required by, the Operative Documents to the extent
such acts arise or such failure arises from or constitutes gross negligence or
willful misconduct, (C) claims against the Security Trustee relating to Taxes or
Expenses which are excluded from the indemnification provided by Section 8 of
the Facility Agreement, or (D) claims against the Security Trustee arising out
of the transfer by the Security Trustee of all or any portion of its interest in
the Aircraft or the Operative Documents other than a transfer of the Aircraft
pursuant to Article V of the Mortgage while an Event of Default has occurred and
is continuing and prior to the time that the Security Trustee has received all
amounts due pursuant to the Mortgage.

“Senior Agent” has the meaning specified in the preamble to the Facility
Agreement.

“Senior Discharge Date” means the date on which all Senior Secured Obligations
have been fully and indefeasibly discharged in full.

“Senior Note” means each Note issued by the Owner to the Original Senior
Purchasers pursuant to Section 2(a)(i) of the Facility Agreement and any such
Senior Note issued in exchange or replacement therefor pursuant to Section 14(d)
or 14(e) of the Facility Agreement.

“Senior Purchasers” means the Original Senior Purchasers and each successor,
permitted assignee or permitted transferee thereof as a Holder of a Senior Note.

“Senior Secured Obligations” means all obligations payable in respect of the
Senior Notes under the Facility Agreement.

“Series” has the meaning specified in Section 2(a)(iii) of the Facility
Agreement.

“Special Default” means a Default or Lease Event of Default under any of
Sections 13(a), 13(b), 13(f) and 13(g) of the Lease.

“Specified Jurisdiction” means any of France, Germany, Ireland, Luxembourg, The
Netherlands, the United Kingdom or the United States.

 

APPENDIX A

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

“Specified Transferee Jurisdiction” has the meaning specified in Schedule III to
the Facility Agreement.

“State of Registration” means, with respect to any Aircraft, the United States
or each other country in which the Aircraft is registered from time to time
pursuant to Section 7(a) of the Lease.

“Stipulated Insured Amount” means, in respect of any Aircraft and as of any date
of determination, an amount equal to 110% of the aggregate principal amount then
outstanding on all Notes in respect of such Aircraft.

“Sublease” means any sublease agreement permitted by the terms of Section 7(c)
of the Lease.

“Sublessee” means any sublessee under a Sublease.

“Supplemental Rent” means any amount that the Lessee assumes or agrees to pay to
the Owner or any other Person under the Lease or any other Operative Document
with respect to any Aircraft (excluding Basic Rent for the Aircraft) and
(without duplication) any amount payable by the Owner under the terms of the
Facility Agreement and the other Operative Documents.

“Tamweel” means Novus Tamweel Aviation Finance GP Limited.

“Tax” or “Taxes” is defined in Schedule III to the Facility Agreement.

“Taxing Authority” is defined in Schedule III to the Facility Agreement.

“Tax Indemnitee” shall mean the Lessor and each Indemnitee.

“Term” means, in respect of an Aircraft, the period commencing on the Delivery
Date for such Aircraft to and including the Maturity Date relating to such
Aircraft or such shorter period that may result from earlier termination of the
leasing of such Aircraft in accordance with the terms of the Lease.

“Termination Sum” means (i) all expenses incurred by the Financiers and the
Security Trustee, including, without limitation, those incurred in enforcing any
right, power or remedy, (ii) the Prepayment Fee, (iii) all accrued and unpaid
interest on the Notes, including interest on past due amounts at the Past Due
Rate and PIK Interest and (iv) all outstanding principal of the Notes.

“Tranche” has the meaning specified in Section 2(a)(iii) of the Facility
Agreement.

“transacting user entity” is defined in the Regulations for the International
Registry.

“Treaty Financier” has the meaning specified in Schedule III to the Facility
Agreement.

“Trust” means VX 2016 Trust.

 

APPENDIX A

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

“U.S. Air Carrier” means any United States air carrier as to which there is in
force a certificate issued pursuant to Section 41102(a) of the Federal Aviation
Act, and which is a citizen of the United States (as defined in 49 U.S.C.
§ 40102(a)(15)) holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to chapter 447 of title 49 (or the
equivalent authority issued by the Civil Aeronautics Board under the predecessor
regulatory laws, rules and regulations) for aircraft capable of carrying 10 or
more individuals or 6,000 pounds or more of cargo or which may operate as an air
carrier by certification or otherwise under any successor or substitute
provisions therefor or in the absence thereof.

“UCC” means the Uniform Commercial Code as in effect in the State of New York as
at any date of determination.

“Underwriters” means the Financiers originally party to the Facility Agreement
on the date of the Facility Agreement.

“War Risk Insurance” has the meaning assigned to such term in Section 10(b) of
the Lease.

“Warranty Bill of Sale” means a full warranty bill of sale in favor of the Owner
from the Manufacturer in respect of an Aircraft.

“Wet Lease” means any arrangement whereby the Lessee agrees to furnish the
Airframe and associated Engines or engines installed thereon to a third party
pursuant to which the Airframe and Engines or engines (i) are operated by pilots
who are regular employees of the Lessee, and (ii) such property is maintained by
the Lessee.

 

APPENDIX A