Exhibit 10.2
EXECUTION COPY
Dated l0 August 2005
CITY LEASING (CREEKSIDE) LIMITED
as Borrower
and
DEUTSCHE BANK AG, LONDON BRANCH
as Bank
LOAN FACILITY AGREEMENT
for a facility of up to £18,348,132.33
relating to the leasing of four Boeing 747-400 aircraft
Manufacturer’s Serial Numbers: 23908, 24047, 24056 and 27092
UK Registration Marks: G-BNLA, G-BNLE, G-BNLN and G-CIVA
Linklaters
One Silk Street
London EC2Y 8HQ
Telephone (44-20) 7456 2000
Facsimile (4420) 7456 2222

 

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Contents

              Clause   Heading   Page
1.
  Purpose and definitions     1  
 
           
2.
  The Commitment and the Loan     5  
 
           
3.
  Interest     6  
 
           
4.
  Repayment and prepayment     6  
 
           
5.
  Payments: accounts and calculations     7  
 
           
6.
  Representations and warranties     8  
 
           
7.
  Undertakings     10  
 
           
8.
  Conditions     12  
 
           
9.
  Events of Default     12  
 
           
10.
  Indemnities     15  
 
           
11.
  Security and set-off     16  
 
           
12.
  Assignment and transfer     18  
 
           
13.
  Notices and other matters     19  
 
           
14.
  Governing law and jurisdiction     21  
 
            Schedule 1 Form of Drawdown Notice     22  
 
            Schedule 2 Documents and evidence required as conditions precedent  
  23  
 
            Schedule 3 Aircraft Specification     24  
 
            Schedule 4 Repayment Schedule     25  

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THIS AGREEMENT is dated 10 August 2005 and made BETWEEN:

(1)   CITY LEASING (CREEKSIDE) LIMITED, a company incorporated and existing
under the applicable laws of England and Wales with registered number 0213288
and having it’s registered office at 23 Great Winchester Street, London EC2P 2AX
(“the “Borrower”); and   (2)   DEUTSCHE BANK AG, acting by its London branch,
having its principal place of business at Winchester House, 1 Great Winchester
Street, London EC2N 2DB (the “Bank”).

IT IS AGREED as follows:

1.   Purpose and definitions

  1.1   Purpose         This Agreement sets out the terms and conditions upon
and subject to which the Bank agrees to make available to the Borrower a loan of
£18,348,132.33 (eighteen million three hundred and forty-eight thousand one
hundred and thirty-two Pounds Sterling and thirty-three pence) to be used by the
Borrower for purpose of the repayment in full of all amounts outstanding under a
loan dated 12 April 2005 and entered into between the Borrower as borrower and
City Leasing (Donside) Limited as lender.     1.2   Definitions         In this
Agreement, unless the context otherwise requires:         “Administration
Agreement” means the administration agreement dated on or about the date of this
Agreement and entered into between the Borrower, the Bank and City Leasing
Limited;         “Aircraft” means the aircraft described in Schedule 3 (Aircraft
specification);         “Banking Day” means a day on which dealings in deposits
in Sterling are carried on in the London Interbank Market and (other than
Saturday or Sunday) on which banks are open for business in London (or any other
relevant place of payment under Clause 5 (Payments));         “Closing Date”
means the date on which the whole issued share capital of the Borrower is sold
by London Industrial Leasing Limited to Bookham Technology plc;        
“Commitment” means the amount which the Bank has agreed to lend to the Borrower
under Clause 2.1 (Agreement to lend);

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      “Deeds of Application” means the four deeds of application of proceeds and
priorities each dated 3 December 2003 and entered into between the Security
Trustee, the Borrower as lessor, the Head Lessor as owner and the Original Owner
(as defined therein) in respect of each Aircraft;         “Default” means any
Event of Default or any event or circumstance which with the giving of notice or
lapse of time or the satisfaction of any other condition (or any combination
thereof) would constitute an Event of Default;         “Drawdown Date” means the
date, being a Banking Day, on which the Loan is, or is to be, drawndown;        
“Drawdown Notice” means a notice substantially in the terms of Schedule 1 (Form
of Drawdown Notice);         “Encumbrance” means any mortgage, charge (whether
fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement
or security interest or other encumbrance of any kind securing any obligation of
any person or any type of preferential arrangement (including without limitation
title transfer effected in connection with any of the aforementioned and/or
retention arrangements having a similar effect);         “Event of Default”
means any of the events or circumstances described in Clause 9.1 (Events);      
  “Fixed Rate” means 5.54 % per annum;         “Head Leases” means the four head
lease agreements each dated 3 December 2003 and entered into between the Head
Lessor and the Borrower as head lessee in respect of each Aircraft, as amended
from time to time;         “Head Lessor” means Phoebus Leasing Limited;        
“Indebtedness” means any obligation for the payment or repayment of money,
whether as principal or as surety and whether present or future, actual or
contingent;         “Leases” means the four lease agreements each dated 3
December 2003 and entered into between the Borrower as lessor and British
Airways plc as lessee in respect of each Aircraft, as amended from time to time;
        “Loan” means the principal amount of £18,348,132.33 (eighteen million
three hundred and forty-eight thousand one hundred and thirty-two Pounds
Sterling and thirty-three pence) advanced or, as the case may be, to be advanced
by the Bank hereunder or (as the context may require) the principal amount owing
to the Bank under this Agreement at any relevant time;

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      “Month” means a period beginning in one calendar month and ending in the
next calendar month on the day numerically corresponding to the day of the
calendar month on which it started, provided that (i) if the period started on
the last Banking Day in a calendar month or if there is no such numerically
corresponding day, it shall end on the last Banking Day in such next calendar
month and (ii) if such numerically corresponding day is not a Banking Day, the
period shall end on the next following Banking Day in the same calendar month
but if there is no such Banking Day it shall end on the preceding Banking Day
and “months” and “monthly” shall be construed accordingly;         “Permitted
Encumbrance” means:

  (a)   any Encumbrance in favour of the Security Trustee as trustee for the
Secured Parties created pursuant to the Security Documents and existing under
the Relevant Documents;     (b)   Permitted Liens; and     (c)   any Encumbrance
existing under the Relevant Documents;

      “Permitted Liens” means any lien of a repairer, mechanic, carrier, hangar
keeper or other similar lien arising in the ordinary course of business by
operation of law in respect of obligations which are not overdue or are being
contested in good faith by appropriate proceedings, but only if such proceedings
or the continued existence of the lien, do not give rise to any likelihood of
the sale, forfeiture or other loss of the Aircraft or any interest therein;    
    “Pounds Sterling” and “£” means the lawful currency of the United Kingdom
for the time being;         “Rental” means the rental amounts due and payable by
the Borrower as head lessee to the Head Lessor under each Head Lease;        
“Rental Sale Agreements” means each of four rental sale and purchase agreements
dated 12 April 2005 and entered into between the Borrower as seller and the Bank
as buyer, one such agreement in respect of each of the four Aircraft;        
“Repayment Date” means a repayment date referred to in Schedule 4 (Repayment
schedule);         “Secured Parties” has the meaning given to it in the Deeds of
Application;         “Security Documents” has the meaning given to it in the
Deeds of Application;         “Security Trustee” has the meaning given to it in
the Deeds of Application;         “Subsidiary” of (a) a person incorporated
outside England and Wales means any company or entity directly or indirectly
controlled by such person, and for this

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      purpose “control” means either the ownership of more than 50 per cent of
the voting share capital (or equivalent rights or ownership) of such company or
entity or the power to direct its policies and management, whether by contract
or otherwise and (b) a person incorporated in England and Wales means a
subsidiary within the meaning of section 736 Companies Act 1985;

      “Termination Date” means the Closing Date or such later date as the Bank
may in its absolute discretion agree in writing; and         “United Kingdom”
means Great Britain and Northern Ireland.     1.3   Headings         Clause
headings and the table of contents are inserted for convenience of reference
only and shall be ignored in the interpretation of this Agreement.     1.4  
Construction of certain terms         In this Agreement, unless the context
otherwise requires:

  (a)   references to Clauses and Schedules are to be construed as references to
clauses of, and schedules to, this Agreement and references to this Agreement
include its schedules;     (b)   references to (or to any specified provision
of) this Agreement or any other document shall be construed as references to
this Agreement, that provision or that document as in force for the time being
and as amended in accordance with terms thereof, or, as the case may be, with
the agreement of the relevant parties;     (c)   references to a “regulation”
include any present or future regulation, rule, directive, requirement, request
or guideline (whether or not having the force of law) of any agency , authority,
central bank or government department or any self-regulatory or other national
or supra-national authority;     (d)   words importing the plural shall include
the singular and vice versa;     (e)   references to a time of day are to London
time;     (f)   references to a person shall be construed as references to an
individual, firm, company, corporation or unincorporated body of persons;    
(g)   references to a “guarantee” include references to an indemnity or other
assurance against financial loss including, without limitation, an obligation to
purchase assets or services as a consequence of a default by any other person to
pay any Indebtedness and “guaranteed” shall be construed accordingly; and

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  (h)   references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended.

2.   The Commitment and the Loan

  2.1   Agreement to lend         The Bank, relying upon each of the
representations and warranties in Clause 6 (Representations and warranties),
agrees to lend to the Borrower, upon and subject to the terms of this Agreement,
the principal sum of £18,348,132.33 (eighteen million three hundred and
forty-eight thousand one hundred and thirty-two Pounds Sterling and thirty-three
pence).     2.2   Drawdown         Subject to the terms and conditions of this
Agreement, the Loan shall be made in one single drawing following receipt by the
Bank from the Borrower of a Drawdown Notice not later than 10.00 am on the
Drawdown Date specified in that Drawdown Notice (or such lesser period as the
Bank may agree) and shall be made on that Drawdown Date. A Drawdown Notice shall
be effective on actual receipt by the Bank and, once given, shall be
irrevocable.     2.3   Amount         The principal amount of the Loan specified
in the Drawdown Notice for the borrowing on the Drawdown Date shall be
£18,348,132.33 (eighteen million three hundred and forty-eight thousand one
hundred and thirty-two Pounds Sterling and thirty-three pence).     2.4  
Availability and payment

  2.4.1   Upon receipt of a Drawdown Notice complying with the terms of this
Agreement, the Bank shall, subject to the provisions of Clause 8 (Conditions),
on the relevant Drawdown Date make the amount of the Loan specified in the
Drawdown Notice available to the Borrower in accordance with Clause 5.2 (Payment
by the Bank).     2.4.2   The Borrower acknowledges that payment by the Bank to
City Leasing (Donside) Limited of £18,348,132.33 (eighteen million three hundred
and forty-eight thousand one hundred and thirty-two Pounds Sterling and
thirty-three pence) shall satisfy the obligations of the Bank to lend the
Commitment to the Borrower under this Agreement.

  2.5   Termination of Commitment         If the Loan is not drawn down by the
Termination Date, the Commitment shall thereupon be automatically cancelled.

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3.   Interest

  3.1   Normal interest rate         The Borrower shall pay interest on the Loan
on the Repayment Date. The rate of interest on the Loan shall be the Fixed Rate
which shall accrue and shall be paid on the Repayment Dates (as set out in
Schedule 4 (Repayment schedule)).     3.2   Default interest         If the
Borrower fails to pay any sum (including without limitation, any sum due and
payable pursuant to this Clause 3.2) on its due date for payment under this
Agreement, the Borrower shall pay interest on such sum on demand from the due
date up to the date of actual payment (as well after as before judgment) at a
rate determined by the Bank pursuant to this Clause 3.2. The period beginning on
such due date and ending on such date of payment shall be divided into
successive periods of not more than three months as selected by the Bank each of
which (other than the first, which shall commence on such due date) shall
commence on the last day of the preceding such period. The rate of interest
applicable to each such period shall be the aggregate of two per cent per annum
above the rate of interest referred to in Clause 3.1. Such interest shall be due
and payable on the last day of each such period as determined by the Bank.

4.   Repayment and prepayment

  4.1   Repayment         The Borrower shall repay the Loan on the Repayment
Dates as set out in Schedule 4 (Repayment schedule).     4.2   Voluntary
prepayment         Subject always to the provisions of Clause 10 (Indemnities),
the Borrower may prepay the Loan in whole on any date provided notice is given
in accordance with Clause 4.4 (Notice of prepayment) below.     4.3   Amounts
payable on prepayment         Any prepayment of all or part of the Loan under
this Agreement shall be made together with (a) accrued interest on the amount to
be prepaid to the date of such prepayment and (b) all others sums payable by the
Borrower to the Bank under this Agreement including, without limitation, any
amounts payable under Clause 10 (Indemnities).     4.4   Notice of prepayment:
reduction of repayment installments         No prepayment may be effected under
Clause 4.2 unless the Borrower shall have given the Bank at least 30 days’
written notice of its intention to make such

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      prepayment. The notice of prepayment shall be effective only on actual
receipt of the same by the Bank, shall be irrevocable and shall oblige the
Borrower to make such prepayment on the date specified. No amount prepaid may be
reborrowed. The Borrower may not prepay the Loan or any part thereof save as
expressly provided in this Agreement.

5.   Payments: accounts and calculations

  5.1   No set-off or counterclaim         Subject to Clause 11.2, all payments
to be made by the Borrower under this Agreement shall, save as otherwise
expressly provided therein, be made in full, without any set-off or counterclaim
whatsoever and free and clear of any deductions or withholdings, in Pounds
Sterling on the due date to the account of the Bank (with Deutsche Bank AG for
the account of Deutsche Bank AG London, Swift Code: DEUTGB2L, Sort Code:
40-50-81) or to such other account at such other bank in such place as the Bank
may from time to time notify in writing to the Borrower.     5.2   Payment by
the Bank         All sums to be advanced by the Bank to the Borrower under this
Agreement in respect of the Loan shall be remitted in Pounds Sterling on the
Drawdown Date to the account of City Leasing (Donside) Limited as specified in
the Drawdown Notice.     5.3   Non-Banking Days         When any payment under
this Agreement would otherwise be due on a day which is not a Banking Day, the
due date for payment shall be extended to the next following Banking Day unless
such Banking Day falls in the next calendar month in which case payment shall be
made on the immediately preceding Banking Day.     5.4   Calculations        
All interest and other payments of an annual nature under this Agreement shall
accrue from day to day and be calculated on the basis of actual days elapsed and
a 365 day year.     5.5   Loan account         The Bank shall maintain, in
accordance with its usual practice, an account evidencing the amounts from time
to time lent by, owing to and paid to it under the this Agreement. Such account
shall, in the absence of manifest error, be conclusive as to the amount from
time to time owing by the Borrower under this Agreement.

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6.   Representations and warranties

  6.1   Representations and warranties         The Borrower represents and
warrants to the Bank as at the date of this Agreement that:

  6.1.1   Due incorporation         the Borrower is duly incorporated and
validly existing under the laws of England and Wales, as a limited liability
company, and has power to carry on its business as it is now being conducted and
to own its property and other assets;     6.1.2   Corporate Power         the
Borrower has power to execute, deliver and perform its obligations under this
Agreement and to borrow the Commitment and all necessary corporate, shareholder
and other action has been taken to authorise the execution, delivery and
performance of the same and no limitation on the powers of the Borrower to
borrow or give security will be exceeded as a result of borrowing the Loan;    
6.1.3   Binding obligations         this Agreement constitutes or will, upon
execution thereof, constitute, valid and legally binding obligations of the
Borrower;     6.1.4   No conflict with other obligations         the execution
and the delivery of, the performance of its obligations under, and compliance
with the provisions of this Agreement by the Borrower will not (i) contravene
any existing applicable law, statute, rule or regulation or any judgment, decree
or permit to which the Borrower is subject, (ii) conflict with, or result in any
breach of any of the terms of, or constitute a default under, any agreement or
other instrument to which the Borrower is a party or is subject or by which it
or any of its property is bound, (iii) contravene or conflict with any provision
of the memorandum and articles of association or (iv) result in the creation or
imposition of or oblige the Borrower to create any Encumbrance on any of the
undertakings, assets, rights or revenues of the Borrower;     6.1.5   No
litigation         no litigation, arbitration or administrative proceeding is
taking place, pending or, to the knowledge of the officers of the Borrower,
threatened against the Borrower which could have a material adverse effect on
the business, assets or financial condition of the Borrower;

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  6.1.6   No filings required         it is not necessary to ensure the
legality, validity, enforceability or admissibility in evidence of the Agreement
that it or any other instrument be notarised, flied, recorded, registered or
enrolled in any court, public office or elsewhere in England and Wales or that
any stamp, registration or similar tax or charge be paid in England and Wales on
or in relation to this Agreement for its enforcement in the courts of England
and Wales;     6.1.7   Choice of law         the choice of English law to govern
this Agreement and the submission by the parties to the non-exclusive
jurisdiction of the English courts are valid and binding;     6.1.8   No
immunity         neither the Borrower nor any of its assets is entitled to
immunity on the grounds of sovereignty or otherwise from any legal action or
proceeding (which shall include, without limitation, suit, attachment prior to
judgement, execution or other enforcement);     6.1.9   Consents obtained      
  every consent, authorisation, licence or approval of, or registration with or
declaration to, governmental or public bodies or authorities or courts required
by the Borrower to authorise, or required by the Borrower in connection with,
the execution, delivery, validity, enforceability or admissibility in evidence
of this Agreement or the performance by the Borrower of its respective
obligations under this Agreement has been obtained or made and is in full force
and effect and there has been no default in the observance of any of the
conditions or restrictions (if any) imposed in, or in connection with, any of
the same.     6.1.10   Pari passu         the obligations of the Borrower under
this Agreement are direct, general and unconditional obligations of the Borrower
and rank at least pari passu with all other present and future unsecured and
unsubordinated Indebtedness of the Borrower;     6.1.11   No default under other
indebtedness         the Borrower is not (nor would with the giving of notice or
lapse of time or the satisfaction of any other condition or combination thereof
be) in breach of or in default under any agreement relating to Indebtedness to
which it is a party or by which it may be bound;

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  6.1.12   No Default         no Default has occurred and is continuing; and    
6.1.13   Copies true and complete         the copies of the documents delivered
or to be delivered to the Bank pursuant to Clause 8.1 (Documents and evidence)
are or will when delivered be, true and complete copies of such documents; each
of such documents will when delivered constitute valid and binding obligations
of the parties thereto enforceable in accordance with its terms and there will
have been no amendments or variations thereof or defaults thereunder.

7.   Undertakings

  7.1   General         The Borrower undertakes with the Bank that, from the
date of this Agreement and so long as any moneys are owing under this Agreement
and while all or any part of the Commitment remains outstanding, it will:

  7.1.1   Notice of Default         promptly inform the Bank of any occurrence
of which it becomes aware which might adversely affect the ability of any party
to perform its obligations under this Agreement and, without limiting the
generality of the foregoing, will inform the Bank of any Default forthwith upon
becoming aware thereof and will from time to time, if so reasonably requested by
the Bank in writing that, save as otherwise stated in such confirmation, no
Default has occurred and is continuing;     7.1.2   Use of proceeds         use
the Loan exclusively for the respective purpose specified in Clause 1.1
(Purpose);     7.1.3   Pari passu         ensure that its obligations under this
Agreement shall, at all times rank at least pari passu with all its other
present and future unsecured and unsubordinated Indebtedness with the exception
of any obligations which are mandatorily preferred by law and not by contract;
and     7.1.4   Provision of further information         provide the Bank with
such financial and other information concerning the Borrower and its affairs as
the Bank may from time to time reasonably require.

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  7.2   Negative undertakings         The Borrower undertakes with the Bank
that, from the date of this Agreement and so long as any moneys are owing under
this Agreement and while all or any part of the Commitment remains outstanding,
it will not, without the prior written consent of the Bank:

  7.2.1   Negative pledge         permit any Encumbrance (other than a Permitted
Encumbrance) to subsist, arise or be created or extended over all or any part of
its present or future undertaking, assets, rights or revenues;     7.2.2   No
merger         merge or consolidate with any other person;       7.2.3   Other
business         undertake any business other than the leasing of the Aircraft;
    7.2.4   Subsidiaries         form or acquire any Subsidiaries;     7.2.5  
Disposals         assign, novate, transfer or otherwise terminate the Head
Leases or the Leases otherwise than in accordance with the provisions for
termination under the Head Leases and Leases;     7.2.6   Leasing         enter
into any other leasing arrangements other than the Head Leases and Leases and
rights arising under contracts entered into by or on behalf of the Borrower in
the ordinary course of its business of leasing the Aircraft;     7.2.7   Other
obligations         incur any material obligations except for obligations
arising under this Agreement, the Head Leases, the Leases, the Security
Documents or contracts entered into in the ordinary course of its business of
leasing the Aircraft;     7.2.8   No borrowing         incur any Indebtedness
except for Indebtedness pursuant to this Agreement and its existing Indebtedness
pursuant to the Relevant Documents (as defined in the Deeds of Application);

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  7.2.9   Guarantees         issue any guarantees or indemnities or otherwise
become directly or contingently liable for the obligations of any person, firm,
or corporation (except for guarantees or indemnities from time to time required
to procure the release of such Aircraft from any arrest, detention, attachment
or levy or guarantees or undertakings required for the salvage of the Aircraft);
    7.2.10   Loans         make any loans or grant any credit (save for normal
trade credit in the ordinary course of business) to any person or agree to do
so; or     7.2.11   Bank Account         open any bank account with any bank
other than the Bank.

8.   Conditions

  8.1   Documents and evidence         The obligation of the Bank to make the
Loan available shall be subject to the condition that the Bank, or its duly
authorised representative, shall have received the documents and evidence
specified Schedule 2 (Conditions precedent) in form and substance satisfactory
to the Bank prior to delivery of the Drawdown Notice.     8.2   General
condition precedent         The obligation of the Bank to make the Loan shall be
subject to the further condition that, at the time of the making of the Loan,
the whole of the issued share capital of the Borrower shall not be owned by
London Industrial Leasing Limited.     8.3   Waiver of conditions precedent    
    The conditions specified in this Clause 8 are inserted solely for the
benefit of the Bank and may be waived by the Bank in whole or in part and with
or without conditions.

9.   Events of Default

  9.1   Events         There shall be an Event of Default if:

  9.1.1   Non-payment: subject to Clause 11.2, the Borrower fails to pay any sum
payable by it under this Agreement at the time, in the currency and in the
manner stipulated in this Agreement; or

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  9.1.2   Breach of other obligations: the Borrower commits any material breach
of or omits to observe any of its obligations or undertakings expressed to be
assumed by it under any of the Relevant Documents (as defined in the Deeds of
Application) to which it is a party and, in respect of any such breach or
omission which in the opinion of the Bank is capable of remedy, such action as
the Bank may require shall not have been taken within 15 days of the Bank
notifying the Borrower of such default and of such required action, save where
such breach or omission is as a result of any actions of the Bank or any
subsidiary of the Bank pursuant to the Administration Agreement or otherwise; or
    9.1.3   Legal process: any judgment or order made against the Borrower is
not stayed or complied with within seven days or a creditor attaches or takes
possession of, or a distress, execution, sequestration or other process is
levied or enforced upon or sued out against, any of the undertakings, assets,
rights or revenues of the Borrower and is not discharged within seven days; or  
  9.1.4   Insolvency: the Borrower becomes insolvent or stops or suspends making
payments (whether of principal or interest) with respect to all or any class of
its debts or announces an intention do so; or     9.1.5   Winding up: any
petition is presented or other step is taken for the purpose of winding up the
Borrower or an order is made or resolution passed for the winding up of the
Borrower or a notice is issued convening a meeting for the purpose of passing
any such resolution; or     9.1.6   Administration: any petition is presented or
other step is taken for the purpose of the appointment of an administrator of
the Borrower or the Bank believes that any such petition or other step is
imminent or an administration order is made in relation to the Borrower; or    
9.1.7   Appointment of receivers and managers: any administrative or other
receiver is appointed of the Borrower or any material part of its assets and/or
undertaking or any other steps are taken to enforce any Encumbrance over all or
any part of the assets of the Borrower; or     9.1.8   Compositions: any steps
are taken, or negotiations commenced, by the Borrower or by any of its creditors
with a view to the general readjustment or rescheduling of all or part of its
indebtedness or to proposing any kind of composition, compromise or arrangement
involving such company and any of its creditors; or     9.1.9   Analogous
proceedings: there occurs, in relation to the Borrower, in any country or
territory in which it carries on business or to the jurisdiction of whose courts
any part of its assets is subject, any event which, in the reasonable opinion of
the Bank, appears in that country or territory to

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      correspond with, or have an effect equivalent or similar to, any of those
mentioned in Clauses 9.1.6 to 9.1.11 (inclusive) or the Borrower or otherwise
becomes subject, in any such country or territory, the operation of any law
relating to insolvency, bankruptcy or liquidation; or     9.1.10   Cessation of
business: the Borrower suspends or ceases or threatens to suspend or cease to
carry on its business; or     9.1.11   Seizure: all or a material part of the
undertakings, assets, rights or revenues of the Borrower are seized,
nationalised, expropriated or compulsorily acquired by or under the authority of
any government; or     9.1.12   Invalidity: this Agreement shall at any time and
for any reason become invalid or unenforceable or otherwise cease to remain in
full force and effect, or if the validity or enforceability of this Agreement
shall at any time and for any reason be contested by the Borrower which is a
party thereto; or     9.1.13   Unlawfulness: it becomes impossible or unlawful
at any time for the Borrower, to fulfil any of the covenants and obligations
expressed to be assumed by it in this Agreement or for the Bank to exercise the
rights or any of them vested in it under any of the this Agreement or otherwise;
or     9.1.14   Repudiation: the Borrower repudiates this Agreement or does or
causes or permits to be done any act or thing evidencing an intention to
repudiate this Agreement.

  9.2   Acceleration         The Bank may, without prejudice to any other rights
of the Bank, at any time after the happening of an Event of Default so long as
the same is continuing by notice to the Borrower declare that the Loan and all
interest accrued and all other sums payable under this Agreement have become due
and payable, whereupon the same shall, immediately or in accordance with the
terms of such notice, become due and payable.     9.3   Demand basis         If,
pursuant to Clause 9.2 (Acceleration), the Bank declares the Loan to be due and
payable on demand, the Bank may by written notice to the Borrower:

  9.3.1   call for repayment of the Loan on such date as may be specified
whereupon the Loan shall become due and payable on the date so specified
together with all interest accrued and all other sums payable under this
Agreement; or     9.3.2   without prejudice to the Bank’s rights at law, in
equity or otherwise, declare that such amounts which have become immediately due
and

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      payable under this Agreement be set off against the Bank’s obligations to
make payments of deferred consideration to the Borrower under and pursuant to
each Rental Sale Agreement, and failure by the Bank to deliver such a
declaration and notice shall not prejudice its rights under Clause 11.2 (Set
off); or     9.3.3   withdraw such declaration with effect from the date
specified in such notice.

10.   Indemnities

  10.1   Miscellaneous indemnities

  10.1.1   The Borrower shall on demand indemnify the Bank against any loss or
expense which the Bank shall certify as sustained or incurred by it as a
consequence of:

  (i)   any default in payment by the Borrower of any sum under this Agreement
when due;     (ii)   the occurrence of any other Event of Default;     (iii)  
any repayment or prepayment of the Loan or part thereof being made otherwise
than on the Repayment Date; or     (iv)   the Loan (or any part thereof) not
being made for any reason (excluding any default by the Bank) after the Drawdown
Notice for the Loan has been given,

      including, in any such case, but not limited to, any loss or expense
sustained or incurred in maintaining or funding the Loan or any part thereof (in
each case) or in liquidating or re-employing deposits from third parties
acquired to effect or maintain the Loan or any part thereof (in each case); and
    10.1.2   without prejudice to the generality of Clause 10.1.1(iii) the
Borrower shall indemnify the Bank against and pay promptly on demand to the Bank
from time to time, all amounts which the Bank certifies to be necessary to
compensate it for any broken funding costs in relation to any interest exchange
or hedging arrangements entered into in connection with its advancing the Loan
or any part thereof (including any costs incurred in liquidating deposits,
re-employing funds taken or borrowed to make or maintain the Loan or in
prepaying such funds to the source from which they were borrowed or mobilised)
which the Bank may sustain or incur as a consequence of or in connection with:

  (i)   any default in punctual payment by the Borrower of any sums payable by
it under this Agreement;

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  (ii)   the occurrence or continuance of any Event of Default; or     (iii)  
any prepayment of the Loan or any part thereof or any interest accrued thereon
other than as permitted hereunder.

  10.2   Currency indemnity         If any sum due from the Borrower under this
Agreement or any order of judgment given or made in relation thereto has to be
converted from the currency (the “first currency”) in which the same is payable
under this Agreement or under such order or judgment into another currency (the
“second currency”) for the purpose of:

  10.2.1   making or filing a claim or proof against the Borrower;     10.2.2  
obtaining an order or judgment in any court or other tribunal; or     10.2.3  
enforcing any order or judgment given or made in relation to this Agreement, the
Borrower shall indemnify and hold harmless the Bank from and against any loss
suffered as a result of any difference between: (i) the rate of exchange used
for such purpose to convert the sum in question from the first currency into the
second currency; and (ii) the rate or rates of exchange at which the Bank may in
the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof. Any amount due from the Borrower
under this Clause 10.2 shall be due as a separate debt and shall not be affected
by judgment being obtained for any other sums due under or in respect of this
Agreement and the term “rate of exchange” includes any premium and costs of
exchange payable in connection with the purchase of the first currency with the
second currency.

11.   Security and set-off

  11.1   Application of moneys         All moneys received by the Bank either
under or pursuant to this Agreement following an Event of Default after the
exercise by the Bank of its rights under Clause 9.2 (Acceleration) and expressed
to be applicable in accordance with the provisions of this Clause 11.1 shall be
applied by the Bank in the following manner:

  11.1.1   first in or towards payment of all unpaid expenses which may be owing
to the Bank under this Agreement;     11.1.2   secondly in or towards payment of
any arrears of interest owing in respect of the Loan or any part thereof;

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  11.1.3   thirdly in or towards repayment of the Loan (whether the same is due
and payable or not);     11.1.4   fourthly in or towards payment to the Bank for
any loss suffered by reason of any such payment in respect of principal not
being effected on the Repayment Date relating to the part of the Loan repaid;
and     11.1.5   fifthly in or towards payment to the Bank of any other sums
owing to it under this Agreement.

  11.2   Set-off

  11.2.1   The Borrower authorises the Bank (without prejudice to any of the
Bank’s rights at law, in equity or otherwise), at any time and without notice to
the Borrower, to set off any amounts then owing by the Bank to the Borrower in
or towards satisfaction of any sum due and payable from the Borrower to the Bank
under this Agreement. For this purpose, the Bank may effect such currency
exchange as may be necessary to effect such application. The Bank shall not be
obliged to exercise any right given to it by this Clause.     11.2.2   The Bank
authorises the Borrower (without prejudice to any of the Borrower’s rights at
law, in equity or otherwise), at any time and without notice to the Bank, to set
off any amounts then owing by the Bank under the Rental Sales Agreements to the
Borrower in or towards satisfaction of any sum due and payable from the Borrower
to the Bank under this Agreement. For this purpose, the Borrower may effect such
currency exchange as may be necessary to effect such application. The Borrower
shall not be obliged to exercise any right given to it by this Clause.

  11.3   Notification of set-off         The Bank shall notify the Borrower and
the Borrower shall notify the Bank upon the exercise or purported exercise of
any right of set-off giving full details in relation thereto provided always
that failure by the Bank or the Borrower (as the case may be) to deliver such
notice, or to delay in delivering such notice, to the other party shall not
prejudice its rights under Clause 11.2 (Set-off).     11.4   Further assurance  
      The Borrower undertakes that this Agreement shall at the date of execution
and delivery thereof and so long as any moneys are owing under this Agreement be
valid and binding obligations of the respective parties thereto and rights of
the Bank enforceable in accordance with their respective terms.

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12.   Assignment and transfer

  12.1   Benefit and burden         This Agreement shall be binding upon, and
enure for the benefit of, the Bank and the Borrower and their respective
successors.     12.2   No assignment by Borrower         The Borrower may not
assign or transfer any of its rights or obligations under this Agreement.    
12.3   Assignment by Bank         The Bank may not assign all or any part of its
rights or transfer by novation any of its rights and obligations under this
Agreement to any other person (an “Assignee”) without the prior written consent
of the Borrower.     12.4   Transfer

  12.4.1   The Bank may transfer all or any part of its rights or transfer by
novation any of its rights and obligations under this Agreement to any
Subsidiary or the holding company of the Bank (a “Transferee”) without the prior
written consent of the Borrower (the Borrower consenting to any such transfer by
its execution of this Agreement).     12.4.2   The Bank agrees to notify the
Borrower in writing of any transfer made pursuant to Clause 12.4.1.

  12.5   Documenting assignments and transfers         If the Bank assigns all
or any part of its rights or transfers all or any part of its rights, benefits
and/or obligations as provided in Clause 12.3 (Assignment by the Bank) or 12.4
(Transfer) the Borrower undertakes, immediately on being requested to do so by
the Bank and at the cost of the Bank, to enter into, such documents as may be
necessary or desirable to transfer to the Assignee or Transferee all or the
relevant part of the Bank’s interest in this Agreement and all relevant
references in this Agreement to the Bank shall thereafter be construed as a
reference to the Bank and/or its Assignee or Transferee (as the case may be) to
the extent of their respective interests.     12.6   Lending office         The
Bank shall lend through its office at the address specified above or through any
other office of the Bank selected from time to time by it through which the Bank
wishes to lend for the purposes of this Agreement. If the office through which
the Bank is lending is changed pursuant to this Clause 12.6, the Bank shall
notify the Borrower promptly of such change.

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  12.7   Disclosure of information         The Bank may disclose to a
prospective assignee or transferee who may propose entering into contractual
relations with the Bank in relation to this Agreement such information about the
Borrower as the Bank shall consider appropriate, subject always to the Bank
agreeing with such prospective assignee or transferee, in such form as the
Borrower may reasonably require, to keep all such disclosed information
confidential.

13.   Notices and other matters

  13.1   Notices         Every notice, request, demand or other communication
under this Agreement shall:

  13.1.1   be in writing delivered personally or by first-class prepaid letter
(airmail if available) or facsimile transmission or other means of
telecommunication in permanent written form;     13.1.2   be deemed to have been
received in the case of a letter, when delivered personally or two Banking Days
after posting if delivered by pre-paid first class post or five Banking Days
after posting if delivered by airmail and, in the case of a facsimile
transmission or other means of telecommunication in permanent written form, at
the time of despatch (provided that if the date of despatch is not a business
day in the country of the addressee or if the time of despatch is after the
close of business in the country of the addressee it shall be deemed to have
been received at the opening of business on the next such business day); and    
13.1.3   be sent:

  (i)   to the Borrower at:         Forthaven Limited
c/o Bookham Technology plc
Caswell
Towcester
Northamptonshire, NN12 8EQ         Attention: Chief Executive Officer
Fax no:    01327 356 775

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  (ii)   with a copy to: Bookham, Inc.         Ottawa (Kanata) Office
10 Brewer Hunt Way
Kanata, Ontario
Canada, K2K 2B5         Attention: Thomas Kelley
Fax no:     +1 613 270 4002         Bookham Technology plc Brixham Road
Paignton
Devon
TQ4 7BE         Attention: Keith Border
Fax no:     01803 662 100         Wilmer Cutler Pickering Hale and Dorr LLP
Alder Castle
10 Noble Street
London
EC2V 7QJ         Attention: Struan Penwarden
Fax no:   020 7645 2424     (iii)   to the Bank at:         Deutsche Bank AG,
London Branch
Winchester House
1 Great Winchester Street
London
EC2N 2DB         Attention: Nathalie Whybrow and Nicola Butcher
Fax no:     020 7545 4638

      or to such other address and/or numbers as is notified by one party to the
other party under this Agreement.

    In proving service of a notice or a document it shall be sufficient to prove
that delivery was made or that the notice or document was properly addressed and
posted as a prepaid first class or airmail letter.

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  13.2   No implied waivers, remedies cumulative         No failure or delay on
the part of the Bank to exercise any power, right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise by
the Bank of any power, right or remedy preclude any other or further exercise
thereof or the exercise of any other power, right or remedy. The remedies
provided in this Agreement are cumulative and are not exclusive of any remedies
provided by law.     13.3   English language         All certificates,
instruments and other documents to be delivered under or supplied in connection
with this Agreement shall be in the English language or shall be accompanied by
a certified English translation upon which the Bank shall be entitled to rely.  
  13.4   Variation         The Parties agree that any term, provision or
condition of this Agreement may be amended and shall only be valid if evidenced
in writing and signed by or on behalf of each of the Parties to this Agreement.

14.   Governing law and jurisdiction

  14.1   Law         This Agreement is governed by and shall be construed in
accordance with English law.     14.2   Submission to jurisdiction         The
parties irrevocably agree that the courts of England are to have exclusive
jurisdiction to settle any disputes which may arise out of or in connection with
this Agreement.

The parties to this Agreement have caused this Agreement to be duly executed on
the date first above written.

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Schedule 1
Form of Drawdown Notice
(referred to in Clause 2.2)
To: Deutsche Bank AG, London Branch
We refer to the above Loan Facility Agreement (the “Loan Agreement”) and hereby
give you notice that we wish to draw down the Loan in the amount of
£18,348,132.33 on August 2005. The funds should be credited to City Leasing
(Donside) Limited, account number 0110857-0000-GBP-000-LDN with Deutsche Bank AG
London.
For the purposes of confirming the satisfaction of the condition at Clause 8.2
of the Loan Agreement, we acknowledge that the whole of the issued share capital
in City Leasing (Creekside) Limited shall be owned by Bookham Technology plc at
the time at which the above mentioned funds are credited to the above mentioned
account.
Words and expressions defined in the Loan Agreement shall have the same meanings
where used herein.
For and on behalf of
City Leasing (Creekside) Limited

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Schedule 2
Documents and evidence required as conditions precedent
(referred to in Clause 8.1)

1.   Constitutional documents       Copies, certified by an officer of the
Borrower as true, complete and up to date copies of all documents which contain
or establish or relate to the constitution of the Borrower; and   2.   Corporate
authorisations       Copies of resolutions of the directors of the Borrower
approving this Agreement to which each may be a party and authorising the
signature, delivery and performance of the Borrower’s obligations thereunder,
certified by an officer of the Borrower, as the case may be, as:

  2.1   being true and correct;     2.2   being duly passed at a meeting of the
directors of the Borrower duly convened and held;     2.3   not having been
amended, modified or revoked; and     2.4   being in full force and effect,

    together with originals or certified copies of any powers of attorney issued
by the Borrower pursuant to such resolutions; and

3.   Documents

  3.1   This Agreement, duly executed by all parties to it.     3.2   The Share
Purchase Agreement, in a form agreed by the parties to it and by the parties to
this Agreement, to be entered into between London Industrial Leasing Limited as
seller, Bookham Technology PLC as purchaser and Deutsche Bank AG, London Branch
relating to the sale and purchase of the whole of the issued share capital of
the Borrower.

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Schedule 3
Aircraft Specification

     
Aircraft 1:
  Boeing 747-400
Manufacturer’s Serial Number: 23908
UK Registration Mark: G-BNLA
 
   
Aircraft 2:
  Boeing 747-400
Manufacturer’s Serial Number: 24047
UK Registration Mark: G-BNLE
 
   
Aircraft 3:
  Boeing 747-400
Manufacturer’s Serial Number: 24056
UK Registration Mark: G-BNLN
 
   
Aircraft 4:
  Boeing 747-400
Manufacturer’s Serial Number: 27092
UK Registration Mark: G-CIVA

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Schedule 4
Repayment Schedule
Anticipated Drawdown:      £18,348,132.33

                  Repayment Date   Principal (£)   Interest (£)
14.10-2005
    18,348,132.33       181,018.15  

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FIRST DB LONDON LOAN AGREEMENT EXECUTION PAGE

         
The Borrower
       
 
       
SIGNED by
  /s/ illegible    
 
       
duly authorised for and on behalf of
       
 
       
CITY LEASING (CREEKSIDE) LIMITED
       
 
       
The Bank
       
 
       
SIGNED by
  /s/ illegible    
 
       
duly authorised for and on behalf of
       
 
       
DEUTSCHE BANK AG, acting through its
       
LONDON BRANCH
       

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