AIRCRAFT SALE AGREEMENT

dated ___ June 2007

between

Pembroke Capital Aircraft (Shannon) Limited

as

Seller

and

AeroCentury Corp.

as

Purchaser

in respect of
 
One FOKKER model F.28 MK 0100 Aircraft
 
Also described:
In the FAA records as - F.28 MK 0100
In the International Registry drop down menu as - FOKKER model F100
and
In the International Registry by free text entry as - model F28MK0100
and
In the Type Certificate Data Sheet as - FOKKER model F.28 Mark 0100

MSN 11310

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CONTENTS

   Clause 
 Page
 1.
Definitions and Interpretation
 3
 2.
Sale and Purchase
 7
 3.
Payments
 7
 4.
Delivery and Acceptance
 9
 5.
Conditions Precedent - Seller
 11
 6.
Conditions Precedent - Purchaser
 12
 7.
Representations and Warranties of Seller
 14
 8.
Representations and Warranties of Purchaser
 15
 9.
Taxes 
 17
 10.
Warranties and Disclaimers
 17
 11.
Indemnification
 18
 12.
Insurance 
 20
 13.
Assignment/Transfer
 21
 14.
Confidentiality
 21
 15.
Miscellaneous
 21
 16.
Notices
 22
 17.
Governing Law and Jurisdiction   
 23

  

 

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THIS AIRCRAFT SALE AGREEMENT is made on ___ June 2007

between

(1)
Pembroke Capital Aircraft (Shannon) Limited, a limited liability company
incorporated under the laws of Ireland and having its principal place of
business at Shannon Airport House, Shannon, Co. Clare, Ireland (the "Seller");
and

(2)
Aero Century Corp., a corporation incorporated under the laws of the State of
Delaware, United States and having its principal place of business at 1440
Chapin Ave, Suite 310, Burlingame, California 94010, USA (the "Purchaser").

RECITAL

The Seller has agreed to sell and the Purchaser has agreed to purchase the
Aircraft on the terms and conditions set out below.

NOW IT IS AGREED as follows:

1. Definitions and Interpretation
 
1.1 In this Agreement capitalized terms shall have the following meanings unless
the context requires otherwise:
 
"Aircraft" means the FOKKER model F.28 MK 0100 Aircraft (also described: in the
FAA records as - F.28 MK 0100, in the International Registry drop down menu as -
FOKKER model F100, and in the International Registry by free text entry as -
model F28MK0100 and in the Type Certificate Data Sheet as - FOKKER model F.28
Mark 0100) more particularly described in Schedule 1 and includes the Engines,
Parts and any other items of equipment installed in, or furnished with, the
Aircraft at delivery of the Aircraft to Lessee under the Lease (excluding those
items of equipment, furnishings and parts which have, or will have been
installed on the Aircraft by Lessee on or prior to the Delivery Date and
ownership of which is not required, pursuant to the provisions of the Lease, to
vest in or be transferred to the Seller but including those items of equipment,
furnishings and parts which have, or will have been removed from the Aircraft by
Lessee on or prior to the Delivery Date and ownership of which is, pursuant to
the provisions of the Lease, vested in or required to be vested in the Seller)
and, where the context permits, references to the Aircraft shall include the
Aircraft Documents;
 
"Aircraft Documents" has the meaning given to it in the Lease and all records,
manual and documentation relating to the Aircraft that are in the possession of
Lessor;
 
"APU Maintenance Reserve Rate Compensation" means the compensation for loss of
revenue during the term of the Lease as a result of Amendment No.1 to the Lease;
 
"Bill of Sale" means a bill of sale from the Seller to the Purchaser
substantially in the form of Schedule 2; 
 
"Business Day" means a day, other than a Saturday or a Sunday, on which banks
are open for business in Dublin, Ireland and San Francisco, California, USA;
 
"Cape Town Convention" means, collectively, 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 dated 16 November 2001;
 
"Claims" has the meaning given to it in Clause 11.1 of this Agreement;
 
"Default" has the meaning given to it in the Lease;
 
"Delivery" means the time at which the Purchaser shall obtain title to the
Aircraft from the Seller in accordance with this Agreement;
 
"Delivery Date" means the date on which Delivery shall occur;
 
"Delivery Location" means a location as agreed between Seller and Purchaser in
accordance with Clause 9;
 
"Deposit" the sum of the First Instalment and the Second Instalment;
 
"Dollars" and "US$" means the lawful currency for the time being of the United
States of America;
 
"Effective Time" has the meaning ascribed to it in the Lease Novation;
 
"Effective Time Notice" has the meaning ascribed to it in the Lease Novation;
 
"Engines" means the engines described in Schedule 1;
 
"Expected Delivery Date" means on or about 27 or 28 June 2007 provided Lessee
fully cooperates or such other date as the parties may agree but in no event
later than 04 July  2007;
 
"First Instalment" means the sum of US$ 150,000.-;
 
"Governmental Entity" includes (i) any national government, political
subdivision thereof or local jurisdiction therein; (ii) any board, commission,
department, division, organ, instrumentality, court or agency of any thereof,
however constituted; and (iii) any association, organisation or institution of
which any thereof is a member or to whose jurisdiction any thereof is subject or
in whose activities any thereof is a participant;
 
"Inspection Notice" means the notice received on 30 April, 2007 by Seller from
Purchaser stating that the results of its inspection of the Aircraft are
acceptable;
 
"International Interest" has the meaning set forth in the Cape Town Convention;
 
"International Registry" means the international registry established pursuant
to the Cape Town Convention;

"Law" includes (i) any statute, decree, constitution, regulation, order or other
directive of any Governmental Entity; (ii) any treaty, pact, compact or other
agreement to which any Governmental Entity is a signatory or party; (iii) any
judicial or administrative interpretation or application of any thereof; and
(iv) any amendment or revision of any thereof;
 
"Lease" means the aircraft lease agreement dated 23 January 2007 between the
Lessor, the Lessee and the Lease Guarantor as amended from time to time;
 
"Lease Documents" has the meaning given to it in the Lease Novation;
 
"Lease Guarantor" means Bon Air Beleggings en Participatie Maatschappij N.V.
(BBPM), a company incorporated and existing under the laws of the Netherlands
Antilles and having its principal place of business at Kaya L.D. Gerhardts # 8,
Bonaire, Netherlands Antilles;
 
"Lease Novation" means the Aircraft Lease Amendment and Novation Agreement to be
entered into on or prior to the Delivery Date between the Lessor, the Purchaser,
the Lessee and the Lease Guarantor in respect of the Lease and the Lessee
Certificate of Acceptance;
 
"Lessee" means Dutch Antilles Express B.V., a company incorporated and existing
under the laws of the Netherlands Antilles and having its principal place of
business at Plasa Medardo S.V. Thielmann Z/N, Bonaire, Netherlands Antilles;
 
"Lessee Certificate of Acceptance" means the Certificate of Acceptance dated
24 January 2007 delivered by the Lessee to the Lessor under the Lease;
 
"Lessor" means Germania Fluggesellschaft mbH a company incorporated under the
laws of the Federal Republic of Germany and having its principal place of
business at Riedemannweg 58, 13627 Berlin, Germany;
 
"Lessor Lien" has the meaning given to it in the Lease;
 
"Maintenance Reserves" has the meaning given to it in the Lease;
 
"Material Damage" means damage to the Aircraft, the cost of repair of which
shall, in the reasonable opinion of Fokker Services B.V. exceed US$ 500,000.-;
 
"Nationality Registry" means the nationality registry in the Netherlands
Antilles (as such registry is established under The National Decree Supervision
Aviation, as amended (Landsbeluit Toezicht Luchtvaart, PB 2003, 56))
(Nationaliteitsregister van de Nederlandse Antillen);
 
"Novated Lease" means the Lease as novated and amended by the Lease Novation;
 
"Other Aircraft" means the Fokker 100 aircraft with the manufacturer's serial
number 11331;
 
"Part" has the meaning given to it in the Lease;
 
"Permitted Lien" has the meaning given to it under the Lease.
 
"Purchase Price" means US$ 6,320,000.-;
 
"Purchaser Indemnitees" means the Purchaser and JetFleet Management Corp. and
each Lender and including any of their respective affiliates, successors and
assigns, shareholders, directors, officers, servants, agents and employees;
 
"Rent" has the meaning given to it in the Lease;
 
"Second Instalment" means the sum of US$ 300,000.-;
 
"Security Deposit" has the meaning given to it in the Lease;
 
"Security Interest" means any mortgage, charge, lien, pledge, encumbrance,
hypothecation, lease, sublease, security interest, judgment, writ, order,
national or international interest, or right of possession of any kind
whatsoever, however and wherever created or arising and whether or not
consensual (including any arrangement or agreement to give or effect any of the
foregoing and any conditional sale or other title retention agreement);
 
"Seller Indemnitees" means the Seller, Germania Express GmbH, Lessor, Deutsche
Leasing AG, Deutsche Sparkassen Leasing AG & Co. KG, Pembroke Capital Shannon
Limited, and including any of their respective affiliates, successors and
assigns, shareholders, directors, officers, servants, agents and employees;
 
"Taxes" means any and all present and future sales, use, personal property,
customs, ad valorem, value added, consumption, turnover, stamp, interest
equalisation, income, gross receipts or other taxes, fees, withholdings,
imposts, duties, deductions, levies or other charges of any nature together with
any penalties, fines or interest thereon, imposed, levied or assessed by, or
otherwise payable to, any Government Entity;
 
"Total Loss" has the meaning given to it in the Lease; and
 
"Transaction Documents" means this Agreement, the Lease Novation, the Effective
Time Notice, the Bill of Sale and all notices, consents, confirmations and
certificates and other documents related thereto and, in relation to a
particular person, means such documents as that party has executed or is to
execute.
 
1.2 
(a) Clause headings are for ease of reference only.
 
(b) References in this Agreement to Clauses, paragraphs or Schedules are, unless
otherwise specified, to be construed as references to clauses, paragraphs of and
Schedules to this Agreement.
 
(c) References in this Agreement to any statute or other legislative provision
shall include any statutory or legislative modification or re-enactment thereof,
or any substitution therefore and all regulations relating thereto, issued or
promulgated by a Government Entity.
 
(d) References in this Agreement to "relevant statutory provision" shall include
references to any provision of the laws of any jurisdiction which may from time
to time be applicable.
 
(e) References in this Agreement to any agreement, document or instrument,
except in clause 7.2 hereof, shall include such agreement, document or
instrument as the same may from time to time be varied, amended, supplemented,
novated or substituted.
 
(f) References in this Agreement to the word "person" or "persons" include,
without limitation, individuals, firms, corporations, government agencies,
authorities and other bodies, incorporated or unincorporated and whether having
distinct legal personality or not.
 
(g) References in this Agreement to any party hereto or any person include
references to any successor or permitted assign of such party or person.
 
(h) References in this Agreement to the Aircraft include any part of the
Aircraft, and, where the context so admits, any of the Aircraft Documents, and
references to any part of the Aircraft include any part of any Engine.
 
(i) Unless the context otherwise requires, words denoting the singular number
shall include the plural and vice versa.
 
(j) Reference in this Agreement to the word "written" or "in writing" shall
include any means of visible reproduction.

2. Sale and Purchase
 
2.1 The Seller agrees to sell to the Purchaser, and the Purchaser agrees to
purchase from the Seller, the Aircraft for the Purchase Price at the Delivery
Location on the terms and conditions contained herein.
 
2.2 The Seller agrees to cause Lessor to transfer the actual balance of the
Security Deposit and the Maintenance Reserves held by Lessor at Delivery and the
Rent received in respect of any period falling after Delivery to the Purchaser
on the Delivery Date. Such transfer may be made by way of a set-off against the
Purchase Price.

3. Payments
 
3.1 The Purchase Price shall be paid by the Purchaser to the Seller as follows:
(a) the First Instalment prior to the date of this Agreement;
 
(b) the Second Instalment upon execution of this Agreement; and
 

 
(c)
the Purchase Price minus the Deposit and the APU Maintenance Reserve Rate
Compensation amounting to US$ 44,587.39 on the Delivery Date (also subject to
Clause 2.2 above)

 
to the following bank account of Seller:
 
Correspondent Bank:     Bank of New York
Swift Code:          IRVTUS3N
ABA No.:      021000018
Account No.:      8900338067

For Account of:     Ulster Bank Limited, Dublin
Swift Code:      ULSBIE2D
Account Name:     Pembroke Capital Aircraft (Shannon) Limited
Account No.:  1113316102
Reference:  Aerocentury MSN 11310

or such other bank account as Seller may advise in writing.

3.2 All payments hereunder shall be made in Dollars and in immediately available
funds so that the recipient receives credit for the full amount of such payment
on the due date. All such payments shall be made in full without any deduction
or withholding (whether in respect of setoff (except as set forth in clause
2.2), counterclaim, duties, Taxes imposed by any Governmental Entity, charges or
otherwise howsoever), unless the payer is prohibited by law from doing so, in
which event the payer shall (i) ensure that the deduction or withholding does
not exceed the minimum amount legally required; (ii) forthwith pay to the
recipient such additional amount as shall result in the net amount received by
the recipient being equal to the amount which would have been received by the
recipient had such a deduction or withholding not been made; (iii) pay to the
relevant taxation or other authorities, within the period for payment permitted
by applicable law, the full amount of the deduction or withholding; and (iv)
upon request in writing from the recipient to the payer deliver to the recipient
receipts (if any) paid or payable in respect of any deduction or withholding as
aforesaid.
 
3.3 

 
(a)
Seller and Purchaser acknowledge and agree that the Deposit (without any
interest) shall be refundable to Purchaser in the following instances:

 

 
(i)
in the event of termination of this Agreement under Clauses 4.1, 4.2 or 4.3
below;

 

 
(ii)
in the event that any of the Conditions Precedent to Purchaser's obligations (as
set forth in Clause 6 below) are not met prior to the Expected Delivery Date
Purchaser may terminate this Agreement by written notice to Seller and upon
receipt of such notice Seller shall refund the Deposit to Purchaser;

 

 
(iii)
in the event that all conditions precedent to Seller's obligations have been met
and Purchaser is ready, willing and able to proceed with sale hereunder and
Seller breaches its obligations to sell and deliver the Aircraft to Purchaser
pursuant to the terms and conditions contained in this Agreement, Purchaser may
terminate this Agreement by written notice to Seller and upon receipt of such
notice Seller shall refund the Deposit to Purchaser.

 

 
(b)
In the event all conditions precedent to Purchaser's obligations have been met
and Seller is ready, willing and able to proceed with the sale hereunder and
Purchaser breaches its obligations to purchase the Aircraft and pay the Purchase
Price pursuant to the terms and conditions contained in this Agreement, Seller
may terminate this Agreement by written notice to Purchaser and the Deposit may
be retained by Seller.

 

4. Delivery and Acceptance
 
4.1 Immediately prior to Delivery, Purchaser shall be entitled to a final
inspection of the Aircraft (the "Final Inspection") for the purposes of
verifying that no Material Damage or Total Loss of the Aircraft has occurred
since the issuance of the Inspection Notice. The Seller and the Purchaser shall
use all reasonable endeavours to procure that Delivery occurs on the Expected
Delivery Date while the Aircraft is at the Delivery Location and at such time as
the parties may reasonably agree, or as soon after the Expected Delivery Date as
is reasonably possible and always subject to the terms and conditions of this
Agreement and in no event shall the Expected Delivery Date extend beyond 04 July
2007.
 
For the avoidance of doubt, if Delivery does not occur on or prior to the
Expected Delivery Date (and the parties have not agreed to amend such date to a
later date) each party shall have the right and option to terminate this
Agreement upon notice to the other, whereupon the Seller shall refund the
Deposit (without any interest) to Purchaser and thereafter, this Agreement shall
terminate and neither party shall have any further rights or obligations
hereunder other than survival of the parties' respective obligations under
Clause 14 hereof. Further, the provisions of Clause 4.4 shall not entitle the
Seller to delay Delivery until the date after the Expected Delivery Date.
 
4.2 If the Aircraft, prior to the sale and Delivery thereof to Purchaser,
suffers a Total Loss, Seller shall notify the Purchaser thereof as soon as
practicable and refund the Deposit (without interest) to Purchaser. After
receipt of such notice and refund of the Deposit to Purchaser, this Agreement
shall terminate and thereafter, neither party shall have any further rights or
obligations (other than the parties’ respective obligations under Clause14)
hereunder.
 
4.3 If, prior to Delivery, the Aircraft suffers any damage for which the costs
of the repair exceeds $50,000.-, Seller will notify Purchaser thereof as soon as
practicable (after having been notified by Lessee in respect thereof) and
Purchaser may request the immediate evaluation of such damage by Fokker Services
B.V. in order to determine whether or not Material Damage to the Aircraft has
occurred. If it is determined by Fokker Services B.V. that Material Damage has
occurred, then the cost of the evaluation shall be for the account of the
Seller, and Purchaser shall have the right to either, proceed with sale and
delivery hereunder (relying on the Lessee to effect repair in accordance with
the Lease) or, notify Seller of Purchaser’s termination of this Agreement, and
upon receipt of Purchaser’s termination notice, Seller shall refund the Deposit
(without interest) to Purchaser and upon such refund and notice by Purchaser of
such termination, this Agreement shall terminate and thereafter, neither party
shall have any further rights or obligations (other than the parties’ respective
obligations under Clause 14) hereunder. If the damage is determined not to be
Material Damage, Purchaser, notwithstanding such damage, will accept and
purchase the Aircraft in accordance with the terms hereunder and the cost of the
evaluation by Fokker Services B.V. shall be for the account of the Purchaser.
 
4.4 The Seller shall not be liable for or be deemed to be in breach of this
Agreement in respect of any delay or failure in tendering the Aircraft on the
Expected Delivery Date if such delay or failure results from any occurrence that
is beyond the reasonable control of the Seller.
 
4.5 On the Delivery Date, subject to satisfaction or explicit waiver of the
conditions precedent set out in Clauses 5 and 6, the Purchaser shall pay to the
Seller the Purchase Price and upon receipt by the Seller of the Purchase Price,
the Seller and the Purchaser shall execute and deliver to the other party, the
Bill of Sale and the parties shall make the Lease Novation effective. Effective
as and from the Delivery, the Seller hereby consents to the Purchaser's
registering the sale of the Aircraft as and International Interest, as described
and defined in the Cape Town Convention, to be validly registered with, and
searchable at, the International Registry (including using all airframe model
numbers noted herein in connection with such registration) and shall take such
actions (including without limitation becoming (or causing its counsel) to
become a "transaction user entity" with the International Registry and supplying
its consent) as is reasonably required for such International Interest to be
noted on the International Registry.
 
4.6 As between the Seller and the Purchaser, the risk of loss of, or damage to,
the Aircraft shall pass from the Seller to the Purchaser upon delivery of the
Bill of Sale by the Seller to the Purchaser.
 
4.7 The Aircraft to be sold hereunder shall be delivered to the Purchaser "AS IS
WHERE IS WITH ALL FAULTS" at the Delivery Location and SUBJECT TO EACH AND EVERY
DISCLAIMER OF WARRANTY AND REPRESENTATION AS SET FORTH IN CLAUSE 10. Subject to
the foregoing provisions of Clause 4 and the due fulfilment or explicit waiver
of all the conditions precedent referred to in Clauses 5 and 6, the Purchaser
shall unconditionally accept the Aircraft for all purposes hereunder at Delivery
in the condition in which it exists at Delivery and shall execute and deliver to
Seller the countersigned Bill of Sale. Acceptance of the Aircraft by the
Purchaser at Delivery and execution by the Purchaser of the Bill of Sale shall
constitute an acknowledgement by the Purchaser that the Aircraft is in the
condition required by the provisions of this Agreement.
 
4.8 As soon as practicable after Delivery, Seller shall procure that Lessor, at
Purchaser’s risk, cost and expense, shall ship to a United States location to be
specified by Purchaser, all Aircraft Documents not in the possession of the
Lessee but in the possession of Lessor at time of Delivery. Seller shall
reimburse Purchaser's reasonable costs and expenses of transportation in respect
of such shipment within 30 days after Seller's receipt of Purchaser's supported
invoice.

5. Conditions Precedent - Seller
 
5.1 The Seller’s obligation to sell the Aircraft hereunder is subject to the
following express conditions precedent on the Delivery Date:
 
(a) receipt by the Seller of the Purchase Price, as provided for in Clause 4.5;
 
(b) receipt by the Seller of a copy certified by an officer of the Purchaser to
be a true, complete and up-to-date copy of the constitutive documents of the
Purchaser;
 
(c) receipt by the Seller of a copy certified by an officer of the Purchaser, to
be a true, complete and up-to-date copy of resolutions of the board of directors
(or other appropriate governing body) of the Purchaser, which are in full force
and effect and not amended or rescinded:
 
(i) approving the terms of, and the transactions contemplated by the Transaction
Documents; and
 
(ii) authorising a specified person or persons to sign and deliver on behalf of
the Purchaser, the Transaction Documents and any notices or other documents to
be given or entered into
pursuant thereto, and
 
(iii) a specimen signature of each such person;
 
(d) the representations and warranties of the Purchaser in Clause 8 of this
Agreement being true and correct on the Delivery Date as though such
representations and warranties have been made as of the Delivery Date;
 
(e) the Purchaser having complied with its material obligations under the
Transaction Documents required to have been performed at or before Delivery;
 
(f) receipt by the Seller of the conditions precedent which it is entitled to
receive pursuant to Clause 5.4 of the Lease Novation;
 
(g) receipt by the Seller of a letter from the Purchaser’s process agent in
Germany addressed to the Purchaser agreeing to act as the Purchaser’s process
agent in connection with the Transaction Documents;
 
(h) receipt by the Seller of evidence reasonably satisfactory to the Seller
demonstrating that the insurances required to be effected pursuant to Clause 12
of this Agreement have been effected;
 
(i) no change having occurred after the date of this Agreement in any applicable
law which would make it illegal for the Seller to perform any of its obligations
under this Agreement (and any other documents or agreements to be entered into
pursuant hereto), provided that if any such change has occurred, the parties
shall use all reasonable cooperative endeavours to restructure the transaction
contemplated by such documents so as to avoid the aforementioned illegality;
 
(j) the receipt by the Seller of the Lease Novation duly executed by the Lessor,
the Lessee, the Lease Guarantor and the Purchaser and of the Effective Time
Notice (as defined in the Lease Novation) executed by the Purchaser, Lessee,
Lease Guarantor and the Lessor, held in escrow to the order of the Purchaser;
 
(k) subject always to Clause 4.2 and 4.3, no Total Loss or Material Damage
having occurred;
 
(l) the receipt by the Seller of a tax opinion from Seller’s own tax counsel in
respect of the transaction set forth hereunder reasonably satisfactory by
Seller; and
 
(m) no action, suits or proceedings or any governmental action shall have been
instituted or be threatened before any court or before or by any Governmental
Entity, nor shall any order, judgment or decree have been issued or proposed to
be issued by any court or Governmental Entity, as of the Delivery Date,
questioning the validity or legality of this Agreement or the other Transaction
Documents or the transactions contemplated hereby or thereby or the ability of
the parties hereto to consummate the transactions contemplated hereby or
thereby.
 
5.2 The conditions precedent in Clause 5.1 are for the Seller’s benefit and may
be waived in writing, in whole or in part by the Seller.

6. Conditions Precedent - Purchaser
 
6.1 The Purchaser’s obligation to purchase the Aircraft hereunder is subject to
the following express conditions precedent on the Delivery Date:
 
(a) receipt by the Purchaser of a copy certified by an officer of the Seller to
be a true, complete and up-to-date copy of the constitutive documents of the
Seller;
 
(b) a copy certified by an officer of the Seller, to be a true, complete and
up-to-date copy of resolutions of the board of directors (or other appropriate
governing body) of the Seller, which are in full force and effect and not
amended or rescinded:
 
(i) approving the terms of, and the transactions contemplated by the Transaction
Documents; and
 
(ii) authorising a specified person or persons to sign and deliver on behalf of
the Seller, the Transaction Documents and any notices or other documents to be
given or entered into
pursuant thereto, and
 
(iii) a specimen signature of each such person;
 
(c) the representations and warranties of the Seller in Clause 7 of this
Agreement being true and complete on the Delivery Date as though such
representations and warranties have been made as of the Delivery Date;
 
(d) the Seller having complied with its material obligations under the
Transaction Documents required to have been performed at or before Delivery;
 
(e) the confirmation on or before 30 April 2007 that Purchaser has completed the
First Inspection of the Aircraft to its satisfaction;
 
(f) receipt by the Purchaser of the conditions precedent set out in Clause 5.1
of the Lease Novation;
 
(g) receipt by the Purchaser of a letter from the Seller’s process agent in
Germany addressed to the Seller agreeing to act as the Seller’s process agent in
connection with the
Transaction Documents;
 
(h) no change having occurred after the date of this Agreement in any applicable
law which would make it illegal for the Purchaser to perform any of its
obligations under this Agreement (and any other documents or agreements to be
entered into pursuant hereto), provided that if any such change has occurred the
parties shall use all reasonable cooperative endeavours to restructure the
transaction contemplated by such documents so as to avoid the aforementioned
illegality;
 
(i) receipt by the Purchaser of the Lease Novation duly executed by the Lessee,
Lease Guarantor and the Lessor and of the Effective Time Notice (as defined in
the Lease Novation) executed by the Lessor, Lease Guarantor and Lessee, held in
escrow to the order of the Purchaser;
 
(j) receipt by the Purchaser of tax and enforceability opinions from its own
counsel in respect of the Transaction Documents and the transactions
contemplated thereby reasonably satisfactory by Purchaser;
 
(k) receipt by the Purchaser of certified copies of the original Lease
Documents;
 
(l) subject always to Clause 4.2 and Clause 4.3, no Total Loss or Material
Damage having occurred;
 
(m) no action, suits or proceedings or any governmental action shall have been
instituted or be threatened before any court or before or by any governmental
agency, nor shall any order, judgment or decree have been issued or proposed to
be issued by any court or governmental agency, as of the Delivery Date,
questioning the validity or legality of this Agreement or the other Transaction
Documents or the transactions contemplated hereby or thereby or the ability of
the parties hereto to consummate the transactions contemplated hereby or
thereby;
 
(n) the Lease shall be in full force and effect and no Default shall have
occurred and be continuing and no event shall have occurred and no condition
shall be existing which could reasonably be expected to materially adversely
affect the Lessee’s financial or business prospects, Lessee’s performance under
the Lease and/or the Purchaser's and its lender’s security position in the
Aircraft;
 
(o) Prior to Delivery, Seller shall have established a valid and subsisting
account with the International Registry as a transacting user entity and have
appointed an administrator and/or have consented to the appointment of a
professional user reasonably acceptable to Purchaser;
 
(p) receipt by the Purchaser of evidence of termination of any headlease
existing prior the Effective Day; and
 
(q) receipt by the Purchaser of copies of the bills of sale (from US Airways and
through any intermediate owners) evidencing Seller's title to the Aircraft.
 
6.2 The conditions precedent specified in Clause 6.1 are for the Purchaser’s
benefit and may be waived in writing, in whole or in part by the Purchaser.

7. Representations and Warranties of Seller
 
7.1 The Seller hereby represents and warrants, all such representations and
warranties being continuing, to the Purchaser, in each case in relation to
itself only and in relation to the Transaction Documents to which it is a party
only, that:
 
(a) it is a limited liability company duly organised and legally existing under
the laws of Ireland and has the power and authority to carry on its business as
presently conducted and to perform its obligations under, and execute and
deliver, each of the Transaction Documents and each of the Transaction Documents
has been duly authorised by all necessary corporate action on its part, and does
not require any approval, direct or indirect, of its shareholders or any
approval or consent of any trustee or holder or holders of any of its
indebtedness (or if such approval is required, such approval has been obtained);
 
(b) each of the Transaction Documents has been duly entered into and delivered
by it and upon due authorisation, execution and delivery by the other parties
thereto will constitute its legal, valid and binding obligation enforceable
against it in accordance with its terms except as enforcement may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganisation,
moratorium or other similar laws affecting creditors’ rights generally, or by
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law);
 
(c) neither the execution and delivery of the Transaction Documents nor the
consummation of the transactions contemplated thereby, nor the compliance by it
with any of the terms and provisions thereof will contravene any law applicable
to it or any order, writ, injunction or decree of any court or governmental
agency or instrumentality binding on it or result in any breach of, or
constitute a default under, or result in the creation of any lien, charge or
encumbrance upon the Aircraft under any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit agreement,
corporate charter or by-laws, or other agreement, instrument or other
undertaking to which it is a party or by which it or its properties or assets
may be bound or affected;
 
(d) the execution, delivery and performance by it of the Transaction Documents
and any of the transactions contemplated thereby do not require any consent,
approval, order, or
authorisation of, or registration with, or the giving of prior notice to, any
Governmental Entity having jurisdiction with respect to the execution, delivery
and performance by it of the Transaction Documents or the validity and
enforceability thereof or the satisfaction of all monetary and other obligations
thereunder;
 
(e) it is subject to private commercial law and suit under the laws of its
jurisdiction of incorporation, it is not entitled to sovereign immunity under
the laws of its jurisdiction of incorporation, and neither it nor its properties
or assets have any right of immunity from suit or execution on the grounds of
sovereignty in its jurisdiction of incorporation;
 
(f) no provision of the Transaction Documents is prohibited, unlawful or
unenforceable under the laws of its jurisdiction of incorporation except as
enforcement may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganisation, moratorium or other similar laws affecting
creditors’ rights generally, or by equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law);
 
(g) there is no investigation by any governmental agency or any action, suit,
proceeding, or claim pending or, to its knowledge, threatened against it with
respect to the Aircraft or any of the Transaction Documents which, if adversely
determined, would be likely to have a material adverse effect on its ability to
comply with its obligations under any of the Transaction Documents, and it knows
of no basis or ground for any such investigation, action, suit, proceeding or
claim;
 
(h) there is no outstanding order, lien, levy, distraint, writ, injunction or
decree of any court, government or governmental agency against or affecting it
directly relating to the Aircraft or any of the Transaction Documents which is
likely to have a material adverse effect on its ability to perform its
obligations under any of the Transaction Documents; and
 
(i) at Delivery, the Seller shall be the sole legal and beneficial owner of the
Aircraft and shall have good and marketable title to the Aircraft free and clear
of any Security Interests whatsoever except for Permitted Liens, which term,
"Permitted Liens" shall not, in this context, include Lessor Liens; provided,
however, Seller shall have no responsibility for and does not warrant that the
Aircraft is free of Lessor Liens created by Purchaser.
 
7.2 As regards any of the Transaction Documents which have not been executed and
delivered on the date of this Agreement, the representations and warranties set
out in Clause 7.1 shall apply with respect thereto once they have been executed
and delivered.

8. Representations and Warranties of Purchaser
 
8.1 The Purchaser represents and warrants, all such representations and
warranties being continuing, to the Seller, in each case in relation to itself
only and in relation to the Transaction Documents to which it is a party only,
that:
 
(a) Purchaser is a corporation duly organised and legally existing under the
laws of Delaware, United States of America and has the power and authority to
carry on its business as presently conducted and to perform its obligations
under and execute and deliver each of the Transaction Documents and each of the
Transaction Documents has been duly authorised by all necessary corporate action
on its part, and do not require any approval, direct or indirect, of its
shareholders or any approval or consent of any trustee or holder or holders of
any of its indebtedness (or if such approval is required, such approval has been
obtained);
 
(b) each of the Transaction Documents has been duly entered into and delivered
by it and upon due authorisation, execution and delivery by the other parties
thereto will constitute its legal, valid and binding obligation enforceable
against it in accordance with its terms except as enforcement may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganisation,
moratorium or other similar laws affecting creditors’ rights generally, or by
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law);
 
(c) neither the execution and delivery of the Transaction Documents nor the
consummation of the transactions as contemplated thereby, nor compliance by it
with any of the terms and provisions thereof will contravene any law applicable
to it or any order, writ, injunction or decree of any court or governmental
agency or instrumentality binding on it or result in any breach of, or
constitute a default under any indenture, mortgage, chattel mortgage, deed of
trust, conditional sales contract, bank loan or credit agreement, corporate
charter or bylaws or other agreement, instrument or other undertaking to which
it is a party or by which it or its properties or assets may be bound or
affected;
 
(d) the execution, delivery and performance by it of the Transaction Documents
and any of the transactions contemplated thereby do not require any consent,
approval, order or authorisation of, or registration with, or the giving of
prior notice to any Governmental Entity having jurisdiction with respect to the
execution, delivery and performance by it of the Transaction Documents or the
validity and enforceability thereof or the satisfaction of all monetary and
other obligations thereunder;
 
(e) it is subject to private commercial law and suit under the laws of the
jurisdiction of its incorporation, it is not entitled to sovereign immunity
under the laws of the jurisdiction of its incorporation and neither it nor its
properties or assets have the right of immunity from suit or execution on the
grounds of sovereignty in the jurisdiction of its incorporation;
 
(f) no provision of the Transaction Documents is prohibited, unlawful or
unenforceable under the laws of the jurisdiction of its incorporation except as
enforcement may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganisation, moratorium or other similar laws affecting
creditors’ rights generally, or by equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law);
 
(g) there is no investigation by any governmental agency or any action, suit,
proceeding, or claim pending or, to its knowledge, threatened against it with
respect to the Aircraft or any of the Transaction Documents which, if adversely
determined, would be likely to have a material adverse effect on its ability to
comply with its obligations under any of the Transaction Documents, and it knows
of no basis or ground for any such investigation, action, suit, proceeding or
claim;
 
(h) there is no outstanding order, writ, injunction or decree of any court,
government or governmental agency against or affecting it directly relating to
the Aircraft or any of the Transaction Documents which is likely to have a
material adverse effect on its ability to perform its obligations under any of
the Transaction Documents; and
 
(i) Purchaser has a net worth of at least $5,000,000.-.
 
8.2 As regards any of the Transaction Documents which have not been executed and
delivered on the date of this Agreement, the representations and warranties set
out in Clause 8.1 shall apply with respect thereto once they have been executed
and delivered.

9. Taxes
The Delivery Location shall be at a location to be mutually agreed upon by
Purchaser and Seller having due regard to any tax implications to which such
location may give rise in connection with the transactions contemplated by this
Agreement, it being the intention that neither Purchaser nor Seller should
suffer any sales, VAT or similar taxes in relation to the sale and purchase of
the Aircraft.

10. Warranties and Disclaimers
 
10.1 THE AIRCRAFT WILL BE DELIVERED IN "AS IS WHERE IS WITH ALL FAULTS"
CONDITION. THE SELLER MAKES NO WARRANTIES, GUARANTEES OR REPRESENTATIONS (EXCEPT
AS STATED IN CLAUSE 7 OF THIS AGREEMENT AND THE BILL OF SALE, WHICH EXCEPTION
APPLIES TO THE ENTIRETY HEREOF) NOR UNDERTAKES ANY OBLIGATION OR LIABILITY,
EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, IN EACH CASE WITH RESPECT TO
THE AIRCRAFT INCLUDING BUT NOT LIMITED TO (1) ANY IMPLIED WARRANTY (A) AS TO THE
DESCRIPTION, AIRWORTHINESS, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, VALUE,
CONDITION, DESIGN, USE OR OPERATION OF THE AIRCRAFT OR (B) ARISING FROM ANY PART
PERFORMANCE, COURSE OF DEALING, USAGE OR TRADE OR OTHERWISE, (2) ANY SUCH
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, AND (3) ANY SUCH
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO THE
AIRCRAFT, (A) FOR ANY LIABILITY OF ANY LESSEE OR ANY LESSOR TO ANY THIRD PARTY,
(B) FOR ANY LIABILITY OF THE PURCHASER TO ANY THIRD PARTY, OR (C) FOR ANY OTHER
DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES; AND ALL SUCH WARRANTIES,
GUARANTEES, REPRESENTATIONS, OBLIGATIONS, LIABILITIES, RIGHTS, CLAIMS OR
REMEDIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
DELIVERY BY THE PURCHASER TO THE SELLER OF THE COUNTERSIGNED BILL OF SALE SHALL
CONSTITUTE CONFIRMATION BY THE PURCHASER THAT THE AIRCRAFT IS IN EVERY WAY
SATISFACTORY TO THE PURCHASER. EXCEPT AS EXPRESSLY PROVIDED IN THE TRANSACTION
DOCUMENTS, NEITHER THE SELLER NOR THE PURCHASER SHALL HAVE ANY LIABILITY TO EACH
OTHER FOR ANY OBLIGATIONS OR LIABILITIES OF THE LESSEE OR ANY OTHER THIRD PARTY.
 
10.2
Seller and Purchaser acknowledge and agree that Seller has conditionally
assigned to Lessee under the Lease all effective warranties from manufacturers,
service providers or suppliers and that Purchaser shall be entitled to the
rights of the "Lessor" under the Novated Lease.

 

11. Indemnification
 
11.1 The Purchaser agrees to indemnify, reimburse and hold harmless each of the
Seller Indemnitees from and against any and all claims, including without
limitation claims made by Lessee under Clause 7.3 of the Lease proceedings,
losses, liabilities, suits, judgments, penalties or fines and any costs and
expenses in connection therewith, including reasonable attorneys’ fees and
expenses (any and all of which are hereafter referred to as "Claims") imposed
on, incurred by or asserted against a Seller Indemnitee to the extent arising
out of the possession, delivery, performance, management, ownership,
registration, control, maintenance, condition, service, repair, overhaul,
leasing, use, operation or return of the Aircraft (collectively, the "Use" of
the Aircraft), subsequent to Delivery; provided, however, that the Purchaser
shall be subrogated to all rights and remedies which such Seller Indemnitee may
have against any third party, including manufacturer(s) of the Aircraft or
previous owner of the Aircraft or part thereof (other than such Seller
Indemnitee) or any vendor, maintenance or modification facility which has done
any work on the Aircraft or part thereof.
 
11.2 The Seller agrees to indemnify, reimburse and hold harmless each of the
Purchaser Indemnitees from and against any and all Claims imposed on, incurred
by or asserted against such Purchaser Indemnitee to the extent arising out of
the Use of the Aircraft prior to Delivery, including, without limitation, (i)
any lien, levy, distraint or encumbrance (including Eurocontrol charges) on,
over or relating to the Aircraft which were created, or existed prior to
delivery of the Aircraft to Lessee under the Lease and with respect to which
Lessee makes any claim against Lessor pursuant to Clause 7.3 of the Lease, and
(ii) any Claim made by Lessee against Purchaser arising out of Lessee’s rights
under Clause 7.3 of the Lease.
 
11.3 Without prejudice to the Purchaser’s liability under this Clause 11, the
Purchaser hereby agrees to indemnify, reimburse and hold the Seller Indemnitees
harmless from any Claims in any manner imposed upon, incurred by or asserted
against such Seller Indemnitee to the extent arising out of facts or
circumstances subsequent to Delivery and made on the grounds that any design,
article or material in the Aircraft or any part thereof or the manufacture,
operation or use thereof constitutes an infringement of patent, copyright,
design, trademark or other proprietary right or any other right whatsoever, save
where such losses shall have resulted from the actions of such Seller
Indemnitee.
 
11.4 The Purchaser shall have the right to assume and conduct promptly and
diligently, at its sole cost and expense, the entire defence of any Seller
Indemnitee against any such Claim as is referred to in Clauses 11.1 or 11.3
without prejudice to the provisions of Clauses 11.1 or 11.3 and subject to the
Seller Indemnitee being indemnified and secured for the costs of any such action
to its reasonable satisfaction.  The Seller shall have the right to assume and
conduct promptly and diligently, at its sole cost and expense, the entire
defence of any Purchaser Indemnitee against any such Claim as is referred to in
Clauses 11.2 without prejudice to the provisions of Clauses 11.2 and 11.5 and
subject to such Purchaser Indemnitee being indemnified and secured for the costs
of any such action to its reasonable satisfaction.
 
11.5 Without prejudice to the Seller's liability under this Clause 11, the
Seller hereby agrees to indemnify, reimburse and hold the Purchaser Indemnitees
harmless from any Claims in any manner imposed upon, incurred by or asserted
against such Purchaser Indemnitee to the extent arising out of facts or
circumstances prior to Delivery and made on the grounds that any design, article
or material in the Aircraft or any part thereof or the manufacture, operation or
use thereof constitutes an infringement of patent, copyright, design, trademark
or other proprietary right or any other right whatsoever, save where such losses
shall have resulted from the actions of the Purchaser.
 
11.6 The indemnities given by the Purchaser in this Clause 11 shall not extend
to Claims relating to any Seller Indemnitee:
 
(a) arising solely as a result of (or solely attributable to) the wilful
misconduct, recklessness or gross negligence of any of such Seller Indemnitee;
 
(b) arising out of (or attributable to) a breach by the Seller (or Seller
Indemnitee which is a party) of any of its material obligations (including its
representations and warranties not being true and correct in any material
respect) under the Transaction Documents;
 
(c) arising out of or attributable to an act, event, circumstance or omission
that existed or occurred prior to Delivery;
 
(d) arising out of (or attributable to) Taxes or the imposition of Taxes; or,
 
(e) arising out of (or attributable to) such Seller Indemnitee’s liability as a
manufacturer, service provider, or vendor (of maintenance or repair services) of
or to the Aircraft or any part thereof.
 
11.7 The indemnities given by the Seller in this Clause 11 shall not extend to
Claims relating to any Purchaser Indemnitee:
 
(a) arising solely as a result of (or solely attributable to) the wilful
misconduct, recklessness or gross negligence of any Purchaser Indemnitee;
 
(b) arising out of (or attributable to) a breach by the Purchaser (or Purchaser
Indemnitee which is a party) of any of its material obligations (including its
representations and warranties not being true and correct in any material
respect) under the Transaction Documents;
 
(c) arising out of or attributable to an act, event, circumstance or omission
that exists or occurs subsequent to Delivery; or
 
(d) arising out of (or attributable to) Taxes or the imposition of Taxes.
 
 
11.8
With respect to the obligation of Purchaser (as lessor under the Novated Lease)
under Clause 11.3 of the Novated Lease, Seller hereby makes the following
covenant and assurance to Purchaser: Seller shall procure that each Previous
Party (as defined in the Novated Lease) which is an "Indemnitee" under the Lease
uses its reasonable endeavours to mitigate any Claim (as defined in the Lease)
for which such Indemnitee may claim against Lessee pursuant to Clause 11.1 (of
the Lease) or any other applicable provision of the Lease.

 
11.9
The Seller agrees to indemnify, defend and hold harmless the Purchaser and its
successors and assigns from any and all liabilities, damages, losses, expenses,
demands, claims, suits or judgements by any third party or parties, including
attorney fees, costs and expenses, which arise out of any claims or demands
contrary to the warranties of Seller set forth in 7.1 (i) hereunder.

12. Insurance
 
12.1 The Purchaser undertakes and agrees with the Seller that until the earlier
of (i) the second anniversary of the Delivery Date and (ii) completion of the
next scheduled Major Check (as defined in the Lease) to occur after the Delivery
Date, the Purchaser will (i) procure that Lessee, so long as the Lease remains
in effect, maintains liability insurance policies in respect of the Aircraft
with the limit of coverage of such policy to be at least US$500,000,000.- on
which the Seller Indemnitees shall be named as additional insureds, (ii) with
respect to any subsequent lessee of the Aircraft during such period, procure
that such lessee maintains liability insurance policies in respect of the
Aircraft on which the Seller Indemnitees shall be named as additional insureds
with the limit of coverage of such policy to be equal to that on which
Purchaser, as lessor, is named additional insured, but in no event shall any
such policy have limits less than US$350,000,000.-, and (iii) with respect to
any off-lease period during which the Aircraft is not used in flight operation,
for any reason whatsoever, during such period, maintain liability insurance
policies in respect of the Aircraft on which the Seller Indemnitees shall be
named additional insureds, with the limit of coverage and having such coverages
as Purchaser maintains with respect to its other off-lease aircraft in its
fleet, with such limit of coverage of such policy being no less than
US$100,000,000.-. In the event the Aircraft is used in flight operations in any
off-lease period the requirement for liability insurances with minimum coverage
of US$ 350,000,000.- shall apply.
 
12.2 The Purchaser further undertakes and agrees with the Seller that the
Purchaser shall, when requested by the Seller, produce to the Seller a
certificate or other evidence as the Seller may reasonably require to show that
the Purchaser has complied with the obligations set forth in Clause 12.1 above
and the certificate shall contain provisions customary in the insurance market
to protect the interests of the Seller Indemnitees and a severability of
interest provision, all in terms reasonably satisfactory to the Seller. The
Seller acknowledges that any certificate including the provisions of AVN67B (or
its equivalent) will be satisfactory to the Seller, for so long as AVN67B (or
its equivalent) represents, at the relevant time in the international insurance
markets, best aviation insurance market practice.

13. Assignment/Transfer
No party shall assign, transfer or otherwise convey this Agreement, and all or
any part of its rights or obligations hereunder to any person without the prior
written consent of the other party hereto.

14. Confidentiality
The terms and conditions of this Agreement are to be kept confidential by the
Seller and the Purchaser and each party acknowledges that this Agreement
contains commercially sensitive information (collectively, the "Confidential
Information") and agrees that such Confidential Information will not be
disclosed by it without the prior written permission of each other party except
to: (i) any permitted assignee or transferee of Purchaser or Seller, provided
such assignee agrees to be bound by the terms of this or other substantially
similar confidentiality clause, (ii) the extent necessary in connection with the
enforcement of Seller’s or Purchaser’s rights or obligations hereunder, (iii)
the extent disclosure may be required by applicable law or legal process; (iv)
the potential financiers of Purchaser and Seller’s existing financiers, provided
such potential or existing financiers agree to be bound by the terms of this or
substantially similar confidentiality clause and (v) each party’s respective
boards of directors, employees, auditors, management companies and legal or
technical advisors, in which case, the disclosing party shall cause such person
to agree to be bound by the terms of this or substantially similar
confidentiality clause.

15. Miscellaneous
 
15.1 This Agreement constitutes the entire agreement between the parties and
supersedes all previous statements, representations and agreements between the
parties relating to the subject matter of this Agreement.
 
15.2 No delay or omission by any party in exercising any right, power or remedy
under this Agreement shall impair such right, power or remedy or be construed as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any further exercise thereof or the exercise of any
other right, power or remedy. The rights, powers and remedies herein provided
are cumulative and not exclusive of any rights, powers and remedies provided by
Law.
 
15.3 No amendment to this Agreement, including but not limited to this Clause
15.3, shall be effective unless in writing and duly signed by all parties
hereto.
 
15.4 If at any time any one or more of the provisions in this Agreement is or
becomes invalid, illegal or unenforceable in any respect under any Law, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not be in any way affected or impaired thereby.
 
15.5 Each party shall pay its own legal and professional costs and expenses in
respect of the negotiation, documentation and closing of the transactions
contemplated by this Agreement, including, inter alia, the Purchaser paying its
own costs and expenses associated with the inspection of the Aircraft. All costs
and expenses of the Lessee relating to the novation of the Lease shall be borne
by Seller. Costs in connection with the registration of the Purchaser’s and its
financier’s title in and to the Aircraft and the Novated Lease shall be for the
account of the Purchaser.
 
15.6 Each party undertakes to reasonably cooperate with the other to execute and
deliver any and all such other documents as may be reasonably requested by the
other party in order
to effectuate the intent, purposes and terms of this Agreement.

16. Notices
 
16.1 Any notice or other communication to be given under or for the purposes of
this Agreement shall be in writing and shall be treated as properly served or
given if hand delivered or sent by international courier, registered post or
legible facsimile to the relevant person at the following address or facsimile
number (or such other address or facsimile number as that person may by notice
designate in writing from time to time to the person giving the notice);
 
                    Seller:         Pembroke Capital Aircraft (Shannon) Limited
Address:     Shannon Airport House
Shannon, Co. Clare
Ireland
Telephone:     +353 (61) 701-600
Facsimile No:     +353 (61) 474912
Attention:     Mr. John McKechnie
 
            Purchaser:     AeroCentury Corp.
Address:     1440 Chapin Ave, Suite 310
Burlingame, California 94010, USA
Telephone:     +1 650 340 1880
Facsimile No:     +1 650 696 3929
Attention:     Marc J. Anderson

16.2 Any notice or other communication shall be deemed to have been received by
the recipient:
 
(a) in the case of a letter which is hand delivered, when actually delivered
and, in the case of a letter which is sent by registered post, on the third day
after posting (or on actual receipt, if earlier); or
 
(b) in the case of transmission by legible facsimile, at the time of
transmission.
 
16.3 Each person making a communication hereunder by facsimile shall promptly
confirm by telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication.
 
16.4 All communications and documents delivered pursuant to or otherwise
relating to this Agreement shall either be in English or accompanied by a
certified English translation prepared by a competent translator.

17. Governing Law and Jurisdiction
 
17.1 This Agreement is governed by and shall be construed in accordance with the
laws of the Federal Republic of Germany.
 
17.2 The parties irrevocably agree that the courts of Frankfurt am Main, Federal
Republic of Germany shall have exclusive jurisdiction to settle any disputes
which may arise out of or in connection with this Agreement and that accordingly
any suit, action or proceedings arising out of or in connection with this
Agreement ("Proceedings") may be brought in such courts.
 
17.3 The parties irrevocably waive any objection which they may have now or
hereafter to the laying of any Proceedings in any such court as is referred to
in Clause 17.2 and any claim that any Proceedings have been brought in an
inconvenient forum and further irrevocably agree that a judgement in any
Proceedings brought in any court referred to in Clause 17.2 shall be conclusive
and binding upon them and may be enforced in the courts of any other
jurisdiction.
 
17.4 Each of the parties hereby consents generally in respect of any Proceedings
arising out of or in connection with this Agreement to the giving of any relief
or the issue of any process in connection with such Proceedings including,
without limitation, the making, enforcement or execution against any property
whatsoever (irrespective of its use or intended use) of any order or judgment
which may be made or given in such Proceedings.
 
17.5 In respect of any Proceedings between the parties arising out of or in
connection with this Agreement, the Purchaser hereby appoints:
Faegre & Benson LLP
Main Tower
Neue Mainzer Strasse 52-58
60311 Frankfurt am Main
Germany
Attention: Executive Partner
 
to receive notification as process agent on Purchaser’s behalf in Germany in
connection with any such Proceedings. In the event such process agent ceases to
so act, the Purchaser will promptly appoint another person as process agent and
inform Seller and Seller's process agent accordingly.
 
17.6 In respect of any Proceedings between the parties arising out of or in
connection with this Agreement, the Seller hereby appoints:
Schierk & Bechtloff
 
NeumŸhlen 23,
 
22763 Hamburg
 
Germany
 
to receive notification as process agent on Seller’s behalf in Germany in
connection with any such Proceedings. In the event such process agent ceases to
so act, the Seller will promptly appoint another person as process agent and
inform Purchaser and Purchaser's process agent accordingly.
 
17.7
The parties hereto agree that a copy of any statement of claim ("Klageschrift")
sent to the courts of Frankfurt am Main, Germany, shall be sent, on the same
day, to such other party named as defendant in that statement of claim at the
address for notification set forth in Clause 16.1 hereof.

 

 
IN WITNESS whereof the parties hereto have entered into this Agreement the day
and year first above mentioned.

Schedule 1
Description of Aircraft

    Manufacturer:         FOKKER

    Aircraft type:
One FOKKER model F.28 MK 0100 Aircraft (also described: in the FAA records as -
F.28 MK 0100, in the International Registry drop down menu as - FOKKER model
F100, and in the International Registry by free text entry as - model F28MK0100
and in the Type Certificate Data Sheet as - FOKKER model F.28 Mark 0100)

    Aircraft serial number:     11310

    Engine manufacturer:     ROLLS ROYCE

    Engine type:
Rolls Royce Tay Mark 650-15 (also identified on the International Registry drop
down menu as ROLLS ROYCE model TAY650)

    Engine serial numbers:     17346 and 17269

    Landing Gear manufacturer: Messier-Dowty

Nose: Part Number 201071001
Serial Number: XC93037
 
LH Main: Part Number 201072013
Serial Number: XC92954

RH Main: Part Number 201072014
Serial Number: DLG-0211     

    APU manufacturer:   Honeywell
                Model: GTCP 36-150RR
                Serial Number: P-253C

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

Schedule 2

Bill of Sale

Pembroke Capital Aircraft (Shannon) Limited, a company incorporated in Ireland,
having its registered office at Shannon Airport House, Shannon, Co. Clare,
Ireland (the "Seller") is the owner of the full legal and beneficial title to
the following described aircraft and engines described below (hereinafter,
collectively, referred to as the "Aircraft"):

(1) one FOKKER model F.28 MK 0100 Aircraft (also described: in the FAA records
as - F.28 MK 0100, in the International Registry drop down menu as - FOKKER
model F100, and in the International Registry by free text entry as - model
F28MK0100 and in the Type Certificate Data Sheet as - FOKKER model F.28 Mark
0100) airframe bearing manufacturer’s serial number 11310;

(2) two Rolls Royce Tay Mark 650-15 (also identified on the International
Registry drop down menu as ROLLS ROYCE model TAY650) engines bearing the
following manufacturer’s serial numbers: 17346 and 17269;
 
(3)  all appliances, parts, accessories, appurtenances, instruments, components
and other items of equipment which are installed or incorporated in or on the
aircraft and engines described in (1) and (2) above; and

(4) the Aircraft Documents.

For and in consideration of the payment of the Purchase Price under the Aircraft
Sale Agreement dated ___ June 2007 (the "Sale Agreement") between the Seller and
AeroCentury Corp., a United States, State of Delaware corporation, having its
principal place of business at 1440 Chapin Ave. Suite 310, Burlingame,
California 94010, USA (the "Purchaser"), the Seller hereby this ___________ day
of ___________ 2007 grants, conveys, transfers, assigns, bargains and sells,
delivers and sets over, all of the Seller's right, title and interest in and to
the Aircraft, unto the Purchaser.

This Bill of Sale is first executed and delivered to the Purchaser by the Seller
and then countersigned and delivered to the Seller by the Purchaser pursuant to
the terms of the Sale Agreement and capitalized terms not otherwise defined
herein shall be as defined in the Sale Agreement.

The Seller hereby warrants to the Purchaser, its successors and assigns, that
there is hereby conveyed to the Purchaser on the date hereof, all legal and
beneficial title, and good and marketable title to the Aircraft free and clear
of any Security Interests whatsoever except for Permitted Liens but including,
free and clear of any Lessor Liens; provided, however, Seller shall have no
responsibility for and does not warrant that the Aircraft is free of Lessor
Liens created by Purchaser. The Seller agrees with the Purchaser and its
successors and assigns that Seller will warrant and defend such title forever
against all claims and demands whatsoever.

Seller herewith transfers the title to the Aircraft to the Purchaser and
Purchaser accepts such transfer of title.

IN WITNESS WHEREOF, the Seller and the Purchaser have caused this instrument to
be executed by their duly authorized officers this _______ day of _________
2007.

SIGNED and DELIVERED
on behalf of
Pembroke Capital Aircraft (Shannon) Limited

By: ____________________________

Name: ____________________________

Its: ____________________________

Accepted and Agreed:

On behalf of
AeroCentury Corp.

By: ____________________________

Name: ____________________________

Its: ____________________________

 
 
 

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SIGNATURE PAGE
AIRCRAFT SALE AGREEMENT
MSN 11310

SIGNED for and on behalf of
Pembroke Capital Aircraft (Shannon) Limited

By: ____________________________

Name: ____________________________

Its: ____________________________

SIGNED for and on behalf of
AeroCentury Corp.

By: ____________________________

Name: ____________________________

Its: ____________________________