Exhibit 10.41

 

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FIFTH AMENDED AND RESTATED

PURCHASE AND SALE AGREEMENT

 

Dated as of September 1, 2003

 

by and among

 

GENERAL AVIATION RECEIVABLES CORPORATION,

as Seller,

 

RAYTHEON AIRCRAFT RECEIVABLES CORPORATION,

as Transferor,

 

RAYTHEON AIRCRAFT CREDIT CORPORATION,

as Originator and as Servicer,

 

RECEIVABLES CAPITAL CORPORATION,

as Conduit Purchaser,

 

BANK OF AMERICA, N.A.,

as Administrative Agent, as Administrator and as an Alternate Purchaser,

 

and

 

THE OTHER ALTERNATE PURCHASERS

FROM TIME TO TIME PARTIES HERETO

 

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TABLE OF CONTENTS

 

             Page

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ARTICLE I

  DEFINITIONS    2

SECTION 1.1

     

Certain Defined Terms

   2

SECTION 1.2

     

Other Terms

   26

SECTION 1.3

     

Computation of Time Periods

   26

ARTICLE II

  INVESTMENT AND SETTLEMENTS    26

SECTION 2.1

     

Transfer of Affected Assets; Intended Characterization

   26

SECTION 2.2

     

Request for Investment

   28

SECTION 2.3

     

Investment Procedures

   28

SECTION 2.4

     

[IS RESERVED AND IS SPECIFIED IN SCHEDULE I.]

   30

SECTION 2.5

     

Yield, Fees and Other Costs and Expenses

   30

SECTION 2.6

     

Deemed Collections

   30

SECTION 2.7

     

Payments and Computations, Etc

   30

SECTION 2.8

     

Reports

   31

SECTION 2.9

     

Blocked Accounts

   31

SECTION 2.10

     

Sharing of Payments, Etc

   33

SECTION 2.11

     

Right of Setoff

   34

SECTION 2.12

     

Settlement Procedures; Order of Application

   34

SECTION 2.13

     

[Reserved]

   36

SECTION 2.14

     

Application of Collections Distributable to the Seller; Permitted Dividends

   36

SECTION 2.15

     

Collections Held in Trust

   37

SECTION 2.16

     

Optional Repurchase by Transferor

   37

SECTION 2.17

     

Repurchase or Substitution of Receivables

   37

ARTICLE III

  ADDITIONAL ALTERNATE PURCHASER PROVISIONS    39

SECTION 3.1

     

Assignment to Alternate Purchasers

   39

SECTION 3.2

     

Downgrade of Alternate Purchaser

   40

SECTION 3.3

     

Non-Renewing Alternate Purchasers

   42

ARTICLE IV

  REPRESENTATIONS AND WARRANTIES    43

SECTION 4.1

     

Representations and Warranties of the Originator, the Transferor, the Seller and
the Servicer

   43

SECTION 4.2

     

Additional Representations and Warranties of the Originator and the Servicer

   51

ARTICLE V

  CONDITIONS PRECEDENT    52

 

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TABLE OF CONTENTS

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SECTION 5.1

     

Conditions Precedent to Closing and Investment

   52

SECTION 5.2

     

Additional Conditions Precedent to Investment

   56

ARTICLE VI

  COVENANTS    58

SECTION 6.1

     

Affirmative Covenants of the Originator, the Transferor, the Seller and the
Servicer

   58

SECTION 6.2

     

Negative Covenants of the Originator, the Transferor, the Seller and the
Servicer

   66

ARTICLE VII

  ADMINISTRATION AND COLLECTIONS    68

SECTION 7.1

     

Appointment of Servicer

   68

SECTION 7.2

     

Duties of Servicer

   70

SECTION 7.3

     

Blocked Account Arrangements

   72

SECTION 7.4

     

Enforcement Rights After Designation of New Servicer

   72

SECTION 7.5

     

Servicer Default

   73

SECTION 7.6

     

Servicing Fee

   75

SECTION 7.7

     

Protection of Ownership Interest of the Purchasers

   75

SECTION 7.8

     

Servicer Liability

   75

SECTION 7.9

     

Conflicts of Interest

   76

SECTION 7.10

     

Limitation of Servicer Authority

   76

SECTION 7.11

     

Servicer Information

   76

ARTICLE VIII

  EVENT OF DEFAULTS    77

SECTION 8.1

     

Event of Defaults

   77

SECTION 8.2

     

Remedies

   78

SECTION 8.3

     

Leased Aircraft Collateral

   79

ARTICLE IX

  INDEMNIFICATION; EXPENSES; RELATED MATTERS    79

SECTION 9.1

     

Indemnities by the Seller

   79

SECTION 9.2

     

Indemnity for Taxes, Reserves and Expenses

   82

SECTION 9.3

     

Taxes

   84

SECTION 9.4

     

Other Costs and Expenses; Breakage Costs

   84

SECTION 9.5

     

[Reserved]

   85

SECTION 9.6

     

Indemnities by the Servicer

   85

ARTICLE X

  THE ADMINISTRATIVE AGENT    86

SECTION 10.1

     

Appointment and Authorization of the Administrative Agent

   86

 

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SECTION 10.2

     

Delegation of Duties

   86

SECTION 10.3

     

Liability of the Administrative Agent

   86

SECTION 10.4

     

Reliance by the Administrative Agent

   87

SECTION 10.5

      Notice of Event of Default, Unmatured Event of Default, Servicer Default
or Unmatured Servicer Default    87

SECTION 10.6

     

Credit Decision; Disclosure of Information by the Administrative Agent

   88

SECTION 10.7

     

Indemnification of the Administrative Agent

   88

SECTION 10.8

     

Administrative Agent in Individual Capacity

   89

SECTION 10.9

     

Resignation or Removal of Administrative Agent

   89

SECTION 10.10

     

Payments by the Administrative Agent

   90

SECTION 10.11

     

Administrative Agent to Hold Letters of Credit

   90

ARTICLE XI

  MISCELLANEOUS    91

SECTION 11.1

     

Term of Agreement

   91

SECTION 11.2

     

Waivers; Amendments

   91

SECTION 11.3

     

Notices; Payment Information

   92

SECTION 11.4

     

Governing Law; Submission to Jurisdiction; Appointment of Service Agent

   93

SECTION 11.5

     

Integration

   94

SECTION 11.6

     

Severability of Provisions

   94

SECTION 11.7

     

Counterparts; Facsimile Delivery

   94

SECTION 11.8

     

Successors and Assigns; Binding Effect

   94

SECTION 11.9

     

Waiver of Confidentiality

   98

SECTION 11.10

     

Confidentiality Agreement

   98

SECTION 11.11

     

No Bankruptcy Petition Against the Conduit Purchaser

   98

SECTION 11.12

     

No Bankruptcy Petition Against the Transferor and the Seller

   98

SECTION 11.13

     

No Recourse Against Conduit Purchaser, Stockholders, Officers or Directors

   99

SECTION 11.14

     

Tax Treatment

   99

SECTION 11.15

     

Independent Nature of Purchasers’ Rights; Miscellaneous

   100

SECTION 11.16

     

Limitation of Liability

   100

SECTION 11.17

     

Third Party Beneficiary

   100

 

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SECTION 11.18

  

Certain Understandings Regarding the Originator and the Transferor

   100

SECTION 11.19

  

Representation of the Conduit Purchaser

   101

 

Schedules

 

Schedule I

  Yield and Rate Periods

Schedule II

  Obligors, Subleases and Cash Deposits, Brazilian Operating Leases,
Repossession Insurance, Subleases, Letters of Credit, Exempt Receivables and
Extended Receivables

Schedule III

  Performance Guarantor Financial Covenants

Schedule IV

  Schedule of Receivables

Schedule V

  Schedule of Sub-Servicers

Schedule 4.1(g)

  List of Actions and Suits

Schedule 4.1(i)

  Location of Certain Offices and Records

Schedule 4.1(j)

  List of Subsidiaries, Divisions and Tradenames of the Transferor, the Seller
and the Servicer; FEINs

Schedule 4.1(r)

  List of Blocked Account Banks and Blocked Accounts

Schedule 11.3

  Address and Payment Information

 

Exhibits

 

Exhibit A

  

Form of Assignment and Assumption Agreement

Exhibit B

  

Credit and Collection Policies

Exhibit C

  

Form of Monthly Servicer Report

Exhibit D

  

Form of Assignments of Rents

Exhibit E

  

Microsoft Excel Report

Exhibit F

  

Form of Certificate of Perfection

Exhibit G

  

Form of Notice of Release

 

Annexes

 

Annex A

   Minimum Capital Payments and Related Settlement Dates

Annex B

   Duties of the Servicer

 

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FIFTH AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT

 

This FIFTH AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT, dated as of
September 1, 2003 (as amended, amended and restated, supplemented or otherwise
modified from time to time, this “Agreement”), is by and among GENERAL AVIATION
RECEIVABLES CORPORATION, a Delaware corporation (in its individual capacity,
“GARC”), as the Seller (in such capacity, together with its successors and
permitted assigns, the “Seller”), RAYTHEON AIRCRAFT RECEIVABLES CORPORATION, a
Kansas corporation (in its individual capacity, “RARC”), as the Transferor (in
such capacity, together with its successors and permitted assigns in such
capacity, the “Transferor”), RAYTHEON AIRCRAFT CREDIT CORPORATION, a Kansas
corporation (in its individual capacity, “RACC”), as the Originator (in such
capacity, together with its successors and permitted assigns in such capacity,
the “Originator”), and as the initial Servicer (in such capacity, together with
its successors and permitted assigns in such capacity, the “Servicer”),
RECEIVABLES CAPITAL CORPORATION, a Delaware corporation, as the Conduit
Purchaser (the “Conduit Purchaser”), BANK OF AMERICA, N.A., a national banking
association (in its individual capacity, “Bank of America”), as the
Administrative Agent for the Purchasers (in such capacity, together with its
successors and permitted assigns in such capacity, the “Administrative Agent”),
BANK OF AMERICA, as the Administrator for the Conduit Purchaser (in such
capacity, together with its successors and permitted assigns in such capacity,
the “Administrator”) and BANK OF AMERICA, as an Alternate Purchaser (in such
capacity, together with its successors and permitted assigns in such capacity,
an “Alternate Purchaser”), and the financial institutions from time to time
parties hereto as Alternate Purchasers.

 

W I T N E S S E T H :

 

WHEREAS, RARC, RACC, the Conduit Purchaser, Bank of America, in its capacity as
managing facility agent, and the various other financial institutions from time
to time party thereto, are parties to the Fourth Amended and Restated Purchase
and Sale Agreement, dated as of March 8, 2002 (as heretofore amended, amended
and restated, supplemented or otherwise modified, the “Prior Purchase and Sale
Agreement”); and

 

WHEREAS, the Seller has succeeded to certain of the Transferor’s rights and
obligations under the Prior Purchase and Sale Agreement pursuant to the terms of
the Sale and Conveyance Agreement (as defined below); and

 

WHEREAS, the parties hereto desire to amend and restate the Prior Purchase and
Sale Agreement in its entirety; and

 

WHEREAS, the Transferor and the Seller have entered into that certain Sale and
Conveyance Agreement, dated as of September 1, 2003 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Sale and
Conveyance Agreement”), pursuant to which the Transferor has sold and conveyed
to the Seller all of its right, title and interest in, to and under the
Receivables, the Contracts and the other Affected Assets (other than title to
the Leased Aircraft) and in connection therewith has granted to the Seller a
security interest in all of its right, title and interest in, to and under the
Leased Aircraft and the other Affected Assets;

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NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto hereby agree to amend and restate the Prior
Purchase and Sale Agreement as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:

 

“Additional Capital Payments” means, on any Settlement Date, any and all
amounts, if any, remaining in the Collection Account after giving effect to the
application of Collections pursuant to clauses (i) through (viii) in Section
2.12, in accordance with the priorities for payment set forth therein, and
payable pursuant to and in accordance with the terms of clause (ix) of Section
2.12 which such amounts shall be applied toward the repayment of the Net
Investment until the Net Investment has been reduced to zero.

 

“Administrative Agent” is defined in the preamble.

 

“Administrative Agent Fee” has the meaning set forth in the Administrative Agent
Fee Letter.

 

“Administrative Agent Fee Letter” means the confidential letter agreement, dated
the Closing Date, among the Seller, the Servicer and the Administrative Agent,
as the same may be amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with its terms with the prior written
consent of the Control Party and, to the extent that any Aggregate Unpaids are
then due and owing to the Insurer, the Insurer.

 

“Administrator” means Bank of America or an Affiliate thereof, as Administrator
for the Conduit Purchaser, or Bank of America or an Affiliate thereof, as
administrator for any Conduit Assignee.

 

“Advance Payments” means each advance payment remitted by an Obligor to be
deposited into the Collection Account and to be applied to the related
Receivable as such advance payment becomes due, in accordance with the
priorities for payment set forth in Section 2.12.

 

“Adverse Claim” means a lien, security interest, charge or encumbrance, or other
right or claim in, of or on any Person’s assets or properties in favor of any
other Person (including any UCC financing statement or any similar instrument
filed against such Person’s assets or properties).

 

“Affected Assets” means, collectively, (a) each Aircraft and each Aircraft
Fractional Share, (b) the Receivables, (c) the Related Security, (d) all rights
and remedies (i) of the Transferor and the Seller under the First Tier Agreement
(including all security interests created or arising thereunder) and (ii) of the
Seller under the Sale and Conveyance Agreement (including all security interests
created or arising thereunder), (e) each Contract related to a Receivable, (f)

 

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each Security Agreement related to a Receivable and all rights in the collateral
pledged thereunder, (g) each letter of credit related to a Receivable, (h) all
financing statements filed in favor of the Transferor against the Originator or
filed in favor of the Seller against the Transferor in connection with any of
the foregoing, (i) each Blocked Account and all funds from time to time on
deposit therein and each Blocked Account Agreement, (j) with respect to any
Aircraft Fractional Share, all rights against Flight Options with respect
thereto, and (k) all proceeds of each of the foregoing. For the avoidance of
doubt, when used in this Agreement or in any other Transaction Document with
respect to any Raytheon Entity, “Affected Assets” shall include only such
Raytheon Entity’s right, title and interest in, to and under the property
described in items (a) through (k).

 

“Affected Party” means each Purchaser, the Administrative Agent, the
Administrator, each Program Support Provider and their respective agents.

 

“Affiliate” means as to any Person, any other Person which, directly or
indirectly, owns, is in control of, is controlled by, or is under common control
with, such Person, in each case whether beneficially, or as a trustee, guardian
or other fiduciary. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the other Person, whether
through the ownership of voting securities or membership interests, by contract,
or otherwise.

 

“Agent-Related Persons” means the Administrative Agent, together with its
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and their respective Affiliates.

 

“Aggregate Collateral Value” means, as of the Cut-off Date, the aggregate amount
of the sum of the Unpaid Balance of each Receivable purchased by the Seller from
RARC pursuant to the Sale and Conveyance Agreement.

 

“Aggregate Unpaids” means, at any time, an amount equal to the sum of (a) the
aggregate unpaid Yield accrued and to accrue to maturity with respect to all
Rate Periods at such time, (b) the Net Investment at such time and (c) all other
amounts owed (whether or not then due and payable) hereunder and under the other
Transaction Documents by the Originator, the Transferor, the Seller or the
Servicer to the Administrative Agent, the Administrator, any of the Purchasers,
the Insurer or any other Secured Party at such time.

 

“Agreement” is defined in the preamble.

 

“Aircraft” means each aircraft related to a Receivable and the related Contract,
together with all other property used in the operation of such Aircraft or
reflecting use or maintenance of such Aircraft, including but not limited to all
engines, propellers, instruments, avionics, equipment and accessories attached
to, connected with, located in or removed from such Aircraft together with any
replacement airframe.

 

“Aircraft Fractional Share” means an undivided interest in an Aircraft, which
undivided interest has been sold pursuant to a Flight Options Contract, together
with any replacement aircraft fractional share related to such Flight Options
Contract.

 

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“Alternate Purchaser” means Bank of America and any other financial institution
that shall become a party to this Agreement pursuant to Section 11.8.

 

“Alternate Purchaser Percentage” means, at any time, a fraction, expressed as a
percentage, the numerator of which is the portion of the Net Investment funded
by the Alternate Purchasers and the denominator of which is the Net Investment
at such time.

 

“Alternate Rate” is defined in Section 2.4.

 

“Asset Interest” is defined in Section 2.1(b).

 

“Assignment Amount” means, with respect to an Alternate Purchaser at the time of
any assignment pursuant to Section 3.1, an amount equal to the least of (a) such
Alternate Purchaser’s Pro Rata Share of the Net Investment requested by the
Conduit Purchaser to be assigned at such time; (b) such Alternate Purchaser’s
unused Commitment (minus the unrecovered principal amount of such Alternate
Purchaser’s investments in the Asset Interest pursuant to the Program Support
Agreement to which it is a party); and (c) in the case of an assignment, the sum
of such Alternate Purchaser’s Pro Rata Share of the Conduit Purchaser Percentage
of (i) the aggregate Unpaid Balance of the Receivables (other than Defaulted
Receivables), plus (ii) all Collections received by the Servicer but not yet
remitted by the Servicer to the Administrative Agent, plus (iii) any amounts in
respect of Deemed Collections required to be paid by the Seller at such time,
plus (iv) Yield to accrue through the end of the current Rate Period.

 

“Assignment and Assumption Agreement” means an Assignment and Assumption
Agreement substantially in the form of Exhibit A.

 

“Assignment Date” is defined in Section 3.1(a).

 

“Assignment of Rents” means each Aircraft Security Agreement, Assignment of
Rents and Proceeds under Aircraft Lease and Assignment, between among the
Seller, the Transferor and the Administrative Agent, substantially in the form
of Exhibit D, or such other agreement in form and substance satisfactory to the
Administrative Agent and the Control Party, together with any consent by the
related Obligor as required pursuant to the related Aviation Authority or the
related Contract, as applicable, in each case, as the same may be amended,
amended and restated, supplemented or otherwise modified through the Closing
Date, and thereafter, pursuant to and in accordance with the terms of this
Agreement.

 

“Available Funds” means, with respect to a Fiscal Month, (a) the sum of (without
duplication) (i) all interest payments received during such Fiscal Month into
the Collection Account during such Fiscal Month with respect to the Receivables,
plus (ii) any Recovery Proceeds received during such Fiscal Month, less (b) the
sum of (i) payments necessary under clauses (i), (ii), (iii), (iv) and (vi) of
Section 2.12 on the next succeeding Settlement Date, plus (ii) the Unpaid
Balance of any Receivables that became Defaulted Receivables during such Fiscal
Month.

 

“Aviation Authority” means, with respect to any Aircraft, the FAA or any other
Person or Official Body that is or shall from time to time be vested with the
control and supervision of, or have jurisdiction over, the registration,
airworthiness and operation of aircraft or other matters relating to civil
aviation in the jurisdiction of registration for aircraft.

 

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“Bank of America” is defined in the preamble.

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, 11 U.S.C. §§ 101 et
seq., as amended, and any regulations promulgated and rulings issued thereunder.

 

“Base Rate” is defined in Section 2.4.

 

“Blocked Account” means each account (including, without limitation, each
Lockbox Account and the Collection Account) in the name of the Seller and
maintained by the Servicer at a Blocked Account Bank for the purpose of
receiving Collections, as set forth in Schedule 4.1(r), or any account added as
a Blocked Account pursuant to and in accordance with Section 4.1(r) and which is
subject to a Blocked Account Agreement.

 

“Blocked Account Agreement” means an agreement among the Seller, the Servicer,
the Administrative Agent and a Blocked Account Bank, in form and substance
satisfactory to the Administrative Agent and the Control Party, as the same may
be amended, amended and restated, supplemented or otherwise modified from time
to time.

 

“Blocked Account Bank” means each of the banks set forth in Schedule 4.1(r), as
such Schedule 4.1(r) may be modified pursuant to Section 4.1(r).

 

“Blue Book Value” is defined in Section 2.14(b)(v).

 

“Business Day” means any day excluding Saturday, Sunday and any day on which
banks in New York, New York, Charlotte, North Carolina, Chicago, Illinois, San
Francisco, California, Wichita, Kansas or Boston, Massachusetts are authorized
or required by law to close, and, when used with respect to the determination of
any Offshore Rate or any notice with respect thereto, any such day which is also
a day for trading by and between banks in United States dollar deposits in the
London interbank market.

 

“Capitalized Lease” of a Person means any lease of property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.

 

“Cash Reserve Account” is defined in Section 2.9(c).

 

“Cash Reserve Account Bank” means Bank of America, N.A., solely in such
capacity.

 

“Certificate of Perfection” means a certificate, substantially in the form
attached hereto as Exhibit F or in such other form as is mutually agreed to by
the Seller, the Servicer, the Administrative Agent and the Insurer, furnished by
the Servicer pursuant to Section 2.9(c).

 

“Change of Control” means, with respect to (a) the Seller, the failure of the
Transferor to own, free and clear of any Adverse Claim and on a fully diluted
basis, one hundred percent (100%) of the outstanding shares of voting stock of
the Seller; (b) the Transferor, the failure of

 

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RACC to own, free and clear of any Adverse Claim and on a fully diluted basis,
one hundred percent (100%) of the outstanding shares of voting stock of the
Transferor; (c) RACC (if RACC is the Servicer), either (I) RACC ceases to be a
wholly-owned subsidiary of the Performance Guarantor; or (II) RACC shall
consolidate, merge, or convey or transfer its properties and assets
substantially as an entity to any Person unless either (1) (A) either (i) the
surviving Person’s performance is either guaranteed by the Performance Guarantor
or another entity having the same or higher creditworthiness than the
Performance Guarantor and in no event less than “A-” by S&P, “A3” by Moody’s and
“A-” by Fitch, or (ii) the surviving Person has the same or higher
creditworthiness than the Performance Guarantor and in no event less than “A-”
by S&P, “A3” by Moody’s and “A-” by Fitch and (B) the Person formed by such
consolidation shall be organized and existing under the laws of the United
States and shall expressly assume, in an agreement in form and substance
reasonably acceptable to each of the Administrative Agent and the Control Party,
the performance of every covenant and obligation of the Servicer under the
Transaction Documents to which it is a party or (2) each of the Administrative
Agent and the Control Party consents in writing prior to such action and (d) the
Performance Guarantor, the acquisition by any Person, or two or more Persons
acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934) of fifty percent (50%) or more of the outstanding shares of voting stock
of the Performance Guarantor.

 

“Closing Date” means September 30, 2003.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any regulations
promulgated and rulings issued thereunder.

 

“Collection Account” is defined in Section 2.9(a).

 

“Collection Account Bank” means the bank designated as such as set forth in
Schedule 4.1(r), as such Schedule 4.1(r) may be modified pursuant to Section
4.1(r).

 

“Collections” means, with respect to Receivables, all cash collections and other
cash proceeds of Receivables from and after the Cut-off Date (including, without
limitation, Advance Payments), including all finance charges, if any, and cash
proceeds of Affected Assets, Related Security and all Deemed Collections.

 

“Commercial Paper” means the promissory notes issued or to be issued by the
Conduit Purchaser (or its related commercial paper issuer if the Conduit
Purchaser does not itself issue commercial paper) in the commercial paper
market.

 

“Commitment” means, with respect to each Alternate Purchaser, as the context
requires, (a) the commitment of such Alternate Purchaser to make the Investment
and to pay Assignment Amounts in accordance herewith in an amount not to exceed
the amount described in the following clause (b), and (b) the dollar amount set
forth opposite such Alternate Purchaser’s signature on the signature pages
hereof under the heading “Commitment” (or in the case of an Alternate Purchaser
which becomes a party hereto pursuant to an Assignment and Assumption Agreement,
as set forth in such Assignment and Assumption Agreement), minus the dollar
amount of any Commitment or portion thereof assigned by such Alternate Purchaser
pursuant to

 

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an Assignment and Assumption Agreement, plus the dollar amount of any increase
to such Alternate Purchaser’s Commitment consented to by such Alternate
Purchaser prior to the time of determination; provided, however, that, except as
otherwise provided in Section 3.3(b), in the event that the Facility Limit is
reduced, the aggregate of the Commitments of all the Alternate Purchasers shall
be reduced in a like amount and the Commitment of each Alternate Purchaser shall
be reduced in proportion to such reduction.

 

“Conduit Assignee” means any special purpose entity that finances its activities
directly or indirectly through asset backed commercial paper and is administered
by Bank of America or any of its Affiliates and designated by Bank of America
from time to time to accept an assignment from the Conduit Purchaser of all or a
portion of the Net Investment.

 

“Conduit Purchaser” means Receivables Capital Corporation and any Conduit
Assignee thereof.

 

“Conduit Purchaser Percentage” means at any time, one hundred percent (100%),
minus the Alternate Purchaser Percentage at such time.

 

“Contract” means, in relation to any Receivable, the collective reference to the
promissory notes, security agreements, leases, subleases, financing and security
agreements, contracts, documents and instruments pursuant to which RACC has (i)
lent such Obligor funds to purchase an Aircraft or, in the case of an Aircraft
Fractional Share, an undivided interest in an Aircraft, and such Obligor has
agreed to make monthly or quarterly installment payments in respect of such
purchase, or (ii) leased an Aircraft to such Obligor, in each case, as amended,
amended and restated, supplemented or otherwise modified from time to time
pursuant to and in accordance with the terms thereof.

 

“Contract File” means, with respect to each Contract (which may consist of one
or more separate files) (a) in the case of (i) loans (including those relating
to each Aircraft Fractional Share), the original promissory note and a copy of
the recorded security agreement, (ii) leases, the original lease and either an
assignment of rents and proceeds of any residual interest or a copy of the
recorded Assignment of Rents, subject to the Investment Condition, and (iii)
conditional sales, if any, the original conditional sale agreement and a copy of
the recorded security agreement, and in all cases (b) the original guaranty (if
applicable), (c) copies of all amendments to any of the foregoing documents, (d)
the registration application of the related Obligor (or a legal opinion
confirming the filing thereof) with respect to the related Aircraft, (e) the
certificate of registration in favor of RARC or the related Obligor (or a legal
opinion confirming that RARC or such Obligor has title to the related Aircraft),
(f) all related account/billing information, (g) a current insurance certificate
or other evidence of insurance, (h) all related credit/customer financial
information, (i) to the extent applicable, copies of (x) all lease option
agreements, (y) the associated purchase and sale agreement and (z) any
associated assignment agreements, and (j) to the extent that such documents
exist in the Contract File, all other agreements, documents, certificates,
reports, schedules and correspondence relating thereto.

 

“Control Party” means, (i) if no Insurer Default has occurred and is continuing,
the Insurer, and (ii) if an Insurer Default has occurred and is continuing, the
Administrative Agent.

 

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“Corporate Services Provider” is defined in Section 11.13.

 

“CP Rate” is defined in Section 2.4.

 

“Credit and Collection Policy” means RACC’s credit and collection policy or
policies and practices, relating to Contracts and Receivables as in effect on
the Closing Date and set forth in Exhibit B, as modified, from time to time,
pursuant to and in accordance with Sections 6.1(a)(iv) and 6.2(c).

 

“Cut-off Date” means August 24, 2003.

 

“Deemed Collections” means any Collections on any Receivable deemed to have been
received pursuant to Section 2.6.

 

“Default Interest” is defined in Section 2.7.

 

“Defaulted Receivable” means, as determined at the end of each Fiscal Month, a
Receivable (a) as to which any payment of principal or interest, or part
thereof, remains unpaid for 180 days or more from the original due date
(excluding interest on arrears) for such Receivable; (b) as to which an Event of
Bankruptcy has occurred and is continuing with respect to the Obligor thereof;
(c) which, consistent with the Credit and Collection Policy, should be written
off as uncollectible; or (d) as to which the related Aircraft has been
repossessed or the Servicer has initiated the repossession process (it being
understood that any Receivable (i) that became a Defaulted Receivable pursuant
to clause (a) above during the previous Fiscal Month and has become less than
180 days past due by the end of such Fiscal Month, or (ii) for which an Eligible
Substitute Receivable has been substituted therefor as provided in Section 2.17
shall no longer be considered a Defaulted Receivable for the purpose of
calculating Minimum Equity under this Agreement or the other Transaction
Documents unless and until one of the events described in clauses (a) through
(d) subsequently occurs with respect thereto).

 

“Defaulting Alternate Purchaser” is defined in Section 2.3(e).

 

“Deferred Investment Amount” is defined in Section 2.9(c).

 

“Deferred Investment Return Date” is defined in Section 2.9(c).

 

“Deferred Investment Request Date” is defined in Section 2.9(c).

 

“Delinquent Receivable” means a Receivable: (a) as to which any payment of
principal or interest, or part thereof, remains unpaid for more than ninety (90)
days from the original due date (excluding interest on arrears) for such
Receivable and (b) which is not a Defaulted Receivable.

 

“Dilution” means a reduction in the Unpaid Balance of any Receivable
attributable to any non-cash items including credits, billing errors, sales or
similar taxes, volume discounts, allowances, disputes, set-offs, counterclaims,
chargebacks, returned or repossessed goods, sales and marketing discounts,
warranties, any unapplied credit memos and other adjustments that are made in
respect of Obligors, except any write-off in respect of a Defaulted Receivable.

 

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“Dollar” or “$” means the lawful currency of the United States.

 

“Downgrade Collateral Account” is defined in Section 3.2(a).

 

“Downgrade Draw” is defined in Section 3.2(a).

 

“Eligible Investments” means any of the following investments denominated and
payable solely in Dollars: (a) readily marketable debt securities issued by, or
the full and timely payment of which is guaranteed by the full faith and credit
of, the federal government of the United States, (b) insured demand deposits,
time deposits and certificates of deposit of any commercial bank rated “A-1+” by
S&P, “P-1” by Moody’s and “A-1+” by Fitch, (c) no load money market funds rated
in the highest ratings category by each of the Rating Agencies (without the “r”
symbol attached to any such rating by S&P), (d) commercial paper of any
corporation incorporated under the laws of the United States or any political
subdivision thereof, provided that such commercial paper is rated “A-1+” by S&P,
“P-1” by Moody’s and “A-1+” by Fitch (without the “r” symbol attached to any
such rating by S&P) and (e) until such time as either the Administrative Agent
or the Control Party notifies the Servicer that such investment is no longer an
“Eligible Investment”, the JPMorgan U.S. Government Money Market Fund so long as
such investments provide for daily liquidity and is rated “AAA” by S&P and “Aaa”
by Moody’s.

 

“Eligible Receivable” means, as of the Closing Date, any Receivable:

 

(a) which (i) was originated by RACC in the ordinary course of its business and
(ii) relates to an Aircraft manufactured by RAC;

 

(b) (i) which arises pursuant to a Contract and with respect to which each of
the Raytheon Entities, as applicable, has performed all obligations then
required to be performed by it thereunder, (ii) which has been billed to the
relevant Obligor and (iii) which arises pursuant to a Contract that (I) conforms
in all material respects with RACC’s standard form contracts (copies of which
have been provided, on or prior to the Closing Date, to the Administrative Agent
and the Insurer) on or prior to the Closing Date as such Contract may be
modified (solely to the extent necessary to comply with applicable Law in such
countries, or as recommended by Local Aviation Counsel so as to make such form
more favorable to RACC) and (II) contains customary remedies after default
(including, without limitation, acceleration of payments and foreclosure
rights);

 

(c) (i) with respect to which no portion has been or should have been written
off as uncollectible in accordance with the terms of the Credit and Collection
Policy and (ii) which complies in all material respects with the Credit and
Collection Policy existing on the Closing Date (including, without limitation,
policies relating to writeoffs of any Receivable and the policies and practices
maintained by the Servicer’s computer system);

 

(d) (i) which, together with the related Leased Aircraft and the other Affected
Assets, has been sold or contributed by the Originator to the Transferor
pursuant to (and in accordance with) the First Tier Agreement, (ii) which,
together with the other Affected Assets (but not including the Transferor’s
title to the related Leased Aircraft), has been sold by the Transferor to the
Seller pursuant to (and in accordance with) the Sale and

 

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Conveyance Agreement, and (iii) with respect to which the Transferor has good
and marketable title to the related Leased Aircraft and the Seller has good and
marketable title to such Receivables and the Related Security (other than title
to the related Leased Aircraft), in each case, free and clear of all Adverse
Claims (other than any Permitted Lien);

 

(e) which, together with the related Obligor, is listed on the Schedule of
Receivables;

 

(f) (I) the Obligor of which (i) is not an Affiliate or employee of any of the
Raytheon Entities, (ii) is not an Official Body, (iii) has not become the
subject of an Event of Bankruptcy and (iv) has made at least one payment under
the related Contract and (II) in the case of an Aircraft Fractional Share, the
Obligor of which and each of the other co-owners of the related Aircraft (A) is
a “Citizen of the United States” (as such term is defined in the Federal
Aviation Act) and (B) has executed and filed with the FAA an “AC Form 8050-1
Aircraft Registration Application” covering such Aircraft showing each such
Person’s undivided interest in the applicable Aircraft;

 

(g) [Reserved];

 

(h) which under the related Contract and applicable Law is freely assignable for
the purposes of the transactions contemplated by this Agreement and the other
Transaction Documents without the consent of, or notice to, the Obligor
thereunder unless such consent has been obtained and is in effect or such notice
has been given;

 

(i) which, together with the related Contract, is in full force and effect and
constitutes the legal, valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms and is not subject
to (i) to the knowledge of the Seller and the Servicer after due inquiry, any
litigation to which any Raytheon Entity or Flight Options is a party or as to
which any Raytheon Entity or Flight Options has received notice or (ii) any
dispute (other than litigation), offset, counterclaim, rescission or other
defense;

 

(j) which is denominated and payable only in Dollars in the United States;

 

(k) which is not a Defaulted Receivable;

 

(l) which is not a Delinquent Receivable;

 

(m) which, together with the related Contract, has not been, to the knowledge of
the Seller and the Servicer after due inquiry, compromised, adjusted, released
or modified (including by the extension of time for payment or the granting of
any discounts, allowances or credits), except as any such amendment, compromise,
adjustment, release or modification is contained in the Contract File related
thereto (other than Receivables in respect of Aircraft Fractional Shares);

 

(n) which is either an “account”, “chattel paper” or a “general intangible”
within the meaning of Article 9 of the UCC of all applicable jurisdictions; and,
if the

 

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related Contract constitutes “chattel paper”, with respect to which (i) there is
an original executed counterpart thereof in the related Contract File and (ii)
all other items in the related Contract File with respect thereto have been
delivered to and are at all times, in the possession of the Servicer;

 

(o) which is an “eligible asset” as defined in Rule 3a-7 under the Investment
Company Act of 1940;

 

(p) which, together with the Contract related thereto, does not, to the
knowledge of the Seller and the Servicer, conflict with any Laws applicable
thereto (including, Laws relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of the Contract related thereto is in
violation of any Law;

 

(q) the assignment of which under the First Tier Agreement by the Originator to
the Transferor, under the Sale and Conveyance Agreement by the Transferor to the
Seller, and hereunder by the Seller to the Administrative Agent, does not
violate, conflict or contravene any applicable Law or any contractual or other
restriction, limitation or encumbrance;

 

(r) which (together with the Related Security and the Affected Assets related
thereto) has been the subject of either a valid transfer and assignment from, or
the grant of a first priority perfected security interest therein, by the Seller
to the Administrative Agent, subject to the Investment Condition, on behalf of
the Secured Parties, of all of the Seller’s right, title and interest therein,
effective until the Final Payout Date (unless repurchased or substituted at an
earlier date pursuant to and in accordance with the terms of this Agreement);

 

(s) with respect to which the Servicer is in possession of each item contained
in the related Contract File;

 

(t) with respect to which (i) the related Obligor has insurance coverage in full
force and effect, as required under the related Contract, (ii) the Seller (or an
Affiliate thereof) has insurance coverage in full force and effect with respect
to contingent hull and liability and contingent war and liability and (iii) if
so noted in Schedule II, the Seller (or an Affiliate thereof) has repossession
insurance in full force and effect;

 

(u) with respect to which, to the knowledge of the Seller and the Servicer, (i)
the related Obligor has not violated or failed to comply with any Law and (ii)
the Aircraft related thereto complies with all applicable governmental aviation
laws, regulations and rules;

 

(v) which, together with the related Contract, is in compliance with all
applicable FAA laws and regulations and any other applicable Law;

 

(w) with respect to which each document, certificate, instrument and other
agreement required to be on file with any Aviation Authority, subject to the
Investment Condition, has been filed and recorded (i) in order to transfer to
and perfect the Seller’s

 

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interest in such Receivable and the other Affected Assets related thereto and
(ii) in order to perfect the Administrative Agent’s interest in such Receivable
and the other Affected Assets related thereto;

 

(x) with respect to which the Seller (or the Servicer on behalf of the Seller)
has, on or prior to the Closing Date, delivered to the Administrative Agent and
the Insurer a true and accurate schedule of payments (based on current interest
rates);

 

(y) which, if such Receivable arises under a Contract which is a lease, such
lease (i) is a “triple net lease”, pursuant to which the related Obligor is
responsible for the maintenance, taxes and insurance with respect to the related
Aircraft in accordance with the Credit and Collection Policy, (ii) contains a
“hell or high water” or other similar clause, which such clause unconditionally
obligates the related Obligor to make all payments thereunder, without deduction
or setoff of any kind, and (iii) is a non-cancelable contract and no portion of
which has been or is (pursuant to the terms of such lease) subject to rejection,
voluntary prepayment, early termination or non-assumption, prior to the original
term of such lease (other than in the case of voluntary prepayments, solely in
accordance with the terms of such lease);

 

(z) as to which, to the knowledge of the Seller and the Servicer, no scheduled
maintenance with respect to the Aircraft related thereto has failed to be
performed and completed in a timely fashion;

 

(aa) with respect to which, together with the related Contract thereto, any and
all payments and deposits required to be made hereunder or under any other
Transaction Document by the related Obligor are made free and clear of, and
without deduction for, any and all present or future taxes (including, without
limitation, withholding taxes), levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto;

 

(bb) which arises under a Contract that requires payments to be made on a
monthly or quarterly basis;

 

(cc) with respect to which, if the related Contract is a lease, the related
Obligor has accepted the Aircraft and is in possession of the related Aircraft
subject to the related lease and is not subleasing such Aircraft to any other
Person, except as set forth in Schedule II;

 

(dd) which, if the related Contract is a lease, arises under a lease that
(pursuant to its terms) is not a “consumer contract” (as such term is used in
the applicable UCC);

 

(ee) with respect to which none of RACC, the Transferor nor the Seller has used
any selection procedures that identified such Receivable as being less desirable
or valuable than other receivables arising under comparable leases or contracts
originated by RACC with respect to selection of the Receivables to be purchased
hereunder and under any of the other Transaction Documents;

 

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(ff) with respect to which the related Aircraft has not suffered a total loss
and, any damage that is less than a total loss with respect to such Aircraft has
been repaired and, to the knowledge of the Seller and the Servicer, such
Aircraft is in good working condition;

 

(gg) which is secured by the applicable Obligor’s entire interest in the related
Aircraft or Aircraft Fractional Share, as applicable;

 

(hh) with respect to which (i) no cash deposit exists (other than cash deposits
by those Obligors set forth in Schedule II, in the amounts set forth therein)
and (ii) no letter of credit exists (other than the letters of credit set forth
in Schedule II and, on the Closing Date, which are in the possession of the
Servicer, for the benefit of the Secured Parties);

 

(ii) with respect to which, together with the related Affected Assets, all
written information provided by the Seller or the Servicer (or any Affiliate
thereof) to the Administrative Agent or the Insurer is true and correct in all
material respects (it being understood that to the extent any such information
was provided by an Obligor to the Seller or the Servicer (or any Affiliate
thereof), such information, to the knowledge of the Seller and the Servicer, has
no inaccuracies); and

 

(jj) with respect to which the master data processing records of the Servicer
contain codes which indicate the conveyances of such Receivable from the
Originator to the Transferor, from the Transferor to the Seller and from the
Seller to the Administrative Agent, in each case as contemplated by the
Transaction Documents.

 

“Eligible Substitute Receivable” is defined in Section 2.17(a).

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Originator, the Transferor or the Seller, is treated as
a single employer under Section 414(b) or (c) of the Code, or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Pension Plan; (b)
the adoption of any amendment to a Pension Plan that would require the provision
of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA;
(c) the existence with respect to any Pension Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Pension Plan; (e) the incurrence of any liability
under Title IV of ERISA with respect to the termination of any Pension Plan or
the withdrawal or partial withdrawal of the Originator, the Transferor or the
Seller or any of their ERISA Affiliates from any Pension Plan or Multiemployer
Plan; (f) the receipt by the Originator, the Transferor or the

 

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Seller or any of their ERISA Affiliates from the Pension Benefit Guaranty
Corporation (as defined in ERISA) or a plan administrator of any notice relating
to the intention to termination any Pension Plan or Pension Plans or to appoint
a trustee to administer any Pension Plan; (g) the receipt by the Originator, the
Transferor or the Seller or any of their ERISA Affiliates of any notice that
Withdrawal Liability is being imposed or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA; and (h) the occurrence of a non-exempt “prohibited
transaction” with respect to which the Originator, the Transferor or the Seller
or any of their respective ERISA Affiliates or any of their respective
Subsidiaries is a “disqualified person” (within the meaning of Section 4975) of
the Code, or with respect to which the Originator, the Transferor or the Seller
or any such Subsidiary could otherwise be liable.

 

“Event of Bankruptcy” means, with respect to any Person, (a) that such Person or
any Subsidiary of such Person (i) shall generally not pay its debts as such
debts become due or (ii) shall admit in writing its inability to pay its debts
generally or (iii) shall make a general assignment for the benefit of creditors;
(b) any proceeding shall be instituted by or against such Person or any
Subsidiary of such Person declaring or seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
receivership, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency, liquidation, receivership,
rehabilitation or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a custodian, agent, receiver, trustee
or other similar official for it or any substantial part of its property and, in
the case of any such proceeding instituted against it (but not instituted by
it), either such proceeding shall remain undismissed or unstayed for a period of
sixty (60) days, or one of the actions sought in such proceeding (including,
without limitation, the entry of an order) for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or for any substantial part of its property) shall occur; or (c) such Person or
any Subsidiary of such Person shall take any corporate, partnership or other
similar action to authorize any of the actions set forth in the preceding
clauses (a) or (b).

 

“Event of Default” is defined in Section 8.1.

 

“Excluded Taxes” is defined in Section 9.3.

 

“Facility Limit” means two hundred eighty-six million forty thousand one hundred
three dollars and fifty-three cents ($286,040,103.53), as such amount may be
reduced in accordance with Section 3.3; provided, that such amount may not at
any time exceed the aggregate Commitments then in effect.

 

“FAA” means the Federal Aviation Administration of the United States, or any
successor agency performing the duties thereof.

 

“FASB” is defined in Section 9.2.

 

“Federal Aviation Act” means Subtitle VII of Title 49 of the United States Code,
and the rules and regulations promulgated thereunder, as in effect on the
Closing Date, and as modified or amended hereafter, or any subsequent
legislation that supplements or supersedes such Subtitle.

 

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“Federal Funds Rate” is defined in Section 2.4.

 

“Fee Letter” means a collective reference to the Administrative Agent Fee
Letter, the Purchaser Fee Letter and the Insurance Premium Letter.

 

“Final Payout Date” means the date on which the Net Investment has been reduced
to zero, all accrued Servicing Fees have been paid in full and all other
Aggregate Unpaids have been paid in full in cash.

 

“First Tier Agreement” means the Amended and Restated Intercompany Purchase and
Contribution Agreement, dated as of September 1, 2003, between RACC and the
Transferor, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with the provisions of the
Transaction Documents.

 

“Fiscal Month” means (i) so long as RACC (or an Affiliate of RACC) is acting as
the Servicer, a fiscal month determined in accordance with the Performance
Guarantor’s accounting policies or (ii) if RACC (or an Affiliate of RACC) is not
the Servicer, a calendar month.

 

“Fitch” means Fitch, Inc., or any successor that is a nationally recognized
statistical rating organization.

 

“Flight Options” means Flight Options, LLC, a Delaware limited liability
company.

 

“Flight Options Contract” means those purchase, management and other agreements,
pursuant to which Flight Options (or Raytheon Travel Air, as its predecessor in
interest) has sold to an Obligor an Aircraft Fractional Share and agreed to the
management (including interchange arrangements) with respect thereto.

 

“Flight Options Management Agreements” means (i) each management agreement
constituting a Flight Options Contract and (ii) each other management agreement
relating to an aircraft fractional share financed by RACC, pursuant to which
Flight Options (or Raytheon Travel Air, as its predecessor in interest) has
agreed to the management of such aircraft fractional share.

 

“Flight Options Trigger Event” means, at any time, that either (i) an Event of
Bankruptcy has occurred and is continuing with respect to Flight Options, or
(ii) obligors of five percent (5%) or more (by number) of receivables relating
to the Flight Options Management Agreements have asserted or claimed in writing
a default or an event of default (regardless of how described or named) by
Flight Options with respect to the management obligations of Flight Options
under the related Flight Options Management Agreement and in each case such
assertion or claim is continuing at such time.

 

“Fluctuation Factor” is defined in Section 2.4.

 

“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the FASB or
in such other statements by such accounting profession, in effect from time to
time.

 

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“GARC” is defined in the preamble.

 

“Guaranty” means, with respect to any Person, any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assures any other creditor
of such other Person against loss, including any comfort letter, operating
agreement or take-or-pay contract and shall include the contingent liability of
such Person in connection with any application for a letter of credit.

 

“Indebtedness” means, without duplication, with respect to any Person, such
Person’s (a) obligations for borrowed money, (b) obligations representing the
deferred purchase price of property other than accounts payable arising in the
ordinary course of such Person’s business on terms customary in the trade, (c)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or products of property now or hereafter owned or acquired by such
Person, (d) obligations which are evidenced by notes, acceptances (including
bankers acceptances), or other instruments, (e) Capitalized Lease obligations,
(f) obligations for which such Person is obligated pursuant to a Guaranty, (g)
reimbursement obligations with respect to any letters of credit and (h) any
other liabilities which would be treated as indebtedness in accordance with
GAAP.

 

“Indemnified Amounts” is defined in Section 9.1.

 

“Indemnified Parties” is defined in Section 9.1.

 

“Insurance and Reimbursement Agreement” means that certain Insurance and
Reimbursement Agreement, dated as of the Closing Date, among the Insurer, the
Transferor, the Seller, RACC, the Performance Guarantor and the Administrative
Agent, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with the provisions thereof.

 

“Insurance Policy” means that certain financial guaranty insurance policy number
42457, dated the Closing Date, by the Insurer in favor of the Administrative
Agent, for the benefit of the Purchasers, without giving effect to any
amendment, amendment and restatement, supplement or other modification or
replacement thereof that has not been consented to in writing by the
Administrative Agent.

 

“Insurance Premium Letter” means that certain Premium Letter Agreement, dated as
of the Closing Date, between the Seller and the Insurer, without giving effect
to any amendment, amendment and restatement, supplement or other modification or
replacement thereof that has not been consented to in writing by the
Administrative Agent.

 

“Insurer” means (i) MBIA Insurance Corporation, a New York stock insurance
company; and (ii) any other replacement Insurer, acceptable to the
Administrative Agent, subject only to the conditions for replacement set forth
in the Insurance and Reimbursement Agreement.

 

“Insurer Default” means (a) a default by the Insurer of its obligations to pay
any amount payable under the Insurance Policy by the second (2nd) Business Day
after such amount is due

 

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and payable, (b) the occurrence of an Event of Bankruptcy with respect to the
Insurer or (c) the New York State Superintendent of Insurance shall have applied
for an order to rehabilitate, liquidate or dissolve the Insurer, or shall have
determined that the Insurer is insolvent, or that the Insurer shall have become
subject to any of the actions set forth in the definition “Event of Bankruptcy”.

 

“Interest Component” means, at any time of determination, the aggregate Yield
accrued and to accrue through the end of the current Rate Period for the Portion
of Investment accruing Yield calculated by reference to the CP Rate at such time
(determined for such purpose using the CP Rate most recently determined by the
Administrator, multiplied by the Fluctuation Factor).

 

“Investment” is defined in Section 2.2.

 

“Investment Condition” means that Security Agreements in favor of the Seller and
the Administrative Agent have been fully signed and properly filed with the FAA
and other applicable Aviation Authorities with respect to Aircraft and Aircraft
Fractional Shares constituting not less than ninety percent (90%) of the
Aggregate Collateral Value.

 

“Investment Deficit” is defined in Section 2.3(e).

 

“knowledge” means, with respect to a Person, the actual knowledge of any
responsible officer of such Person without any requirement of investigation or
inquiry by such officer.

 

“Law” means any law (including, but not limited to, common law), the Federal
Aviation Act, constitution, statute, treaty, regulation, rule, ordinance, order,
injunction, writ, decree, judgment or award of any Official Body.

 

“Leased Aircraft” means each Aircraft subject to a Contract which is a lease and
title with respect to which is held or is purported to be held by the
Transferor.

 

“Leased Aircraft Collateral” is defined in Section 8.3.

 

“Local Aviation Counsel” means (a) with respect to each Aircraft which is
registered with the FAA, Crowe & Dunlevy or, in certain cases, Harper Meyer, and
(b) with respect to each Aircraft which is registered with an Aviation Authority
(other than the FAA), special counsel in respect of local law applicable to
general aviation matters, which counsel shall be reasonably acceptable to each
of the Administrative Agent and the Control Party.

 

“Lockbox Account” is defined in Section 2.9(b).

 

“Majority Purchasers” means, at any time, the Administrative Agent and those
Alternate Purchasers which hold Commitments aggregating in excess of sixty-six
and two-thirds percent (66 2/3%) of the Facility Limit as of such date (or, if
the Commitments shall have been terminated, the Administrative Agent and one or
more Alternate Purchasers whose aggregate pro rata shares of the Net Investment
exceed sixty-six and two-thirds percent (66 2/3%) of the Alternate Purchaser
Percentage of the Net Investment).

 

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“Material Adverse Effect” means any event or condition which would have a
material adverse effect on (a) the collectibility of the Receivables, (b) the
condition (financial or otherwise), businesses or properties of the Transferor,
the Seller, the Servicer or the Performance Guarantor, (c) the ability of the
Originator, the Transferor, the Seller, the Servicer or the Performance
Guarantor to perform its respective obligations under the Transaction Documents
to which it is a party, or (d) the interests of any of the Secured Parties under
any Transaction Document.

 

“Maximum Permitted Dividend Amount” means, at any time prior to the Final Payout
Date, twenty-three million five hundred seventy-eight thousand one dollars and
seventeen cents ($23,578,001.17).

 

“Minimum Capital Payment” means, as of any Settlement Date, the amount (if any)
necessary to cause the aggregate cumulative reductions in the Investment to be
equal to the corresponding amount set forth on Annex A with respect to such
Settlement Date and all prior Settlement Dates.

 

“Minimum Equity” means, as of the end of any Fiscal Month, a fraction (expressed
as a percentage) (a) the numerator of which is the aggregate Unpaid Balance of
the Receivables in which the Administrative Agent has an interest which are not
Defaulted Receivables minus the Net Investment and (b) the denominator of which
is the aggregate Unpaid Balance of the Receivables in which the Administrative
Agent has an interest which are not Defaulted Receivables.

 

“Monthly Servicer Report” means a report, substantially in the form attached
hereto as Exhibit C or in such other form as is mutually agreed to by the
Seller, the Servicer, the Administrative Agent and the Insurer, furnished by the
Servicer pursuant to Section 2.8 for each Fiscal Month.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor that is a
nationally recognized statistical rating organization.

 

“Multiemployer Plan” is defined in Section 4001(a)(3) of ERISA.

 

“Net Investment” at any time means (a) the sum of the cash amount paid to the
Seller pursuant to Sections 2.2 and 2.3 less (b) the aggregate amount of
Collections theretofore received and applied by the Administrative Agent to
reduce such Net Investment pursuant to Section 2.12; provided that the Net
Investment shall be restored and reinstated in the amount of any Collections so
received and applied if at any time the distribution of such Collections is
rescinded or must otherwise be returned for any reason.

 

“Non-Defaulting Alternate Purchaser” is defined in Section 2.3(e).

 

“Notice of Release” means a notice, substantially in the form attached hereto as
Exhibit G or in such other form as is mutually agreed to by the Seller, the
Servicer, the Administrative Agent and the Insurer, furnished by the Control
Party pursuant to Section 2.9(c).

 

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“Obligor” means, with respect to any Receivable, the Person primarily obligated
to make payments in respect of such Receivable pursuant to a Contract.

 

“Official Body” means any government or political subdivision or any agency,
authority, bureau, central bank, commission, department or instrumentality of
any such government or political subdivision, or any court, tribunal, grand jury
or arbitrator; or any accounting board or authority (whether or not a part of
government) which is responsible for the establishment or interpretation of
national or international accounting principles, in each case whether foreign or
domestic.

 

“Offshore Rate” is defined in Section 2.4.

 

“Originator” is defined in the preamble.

 

“Originator Obligations” is defined in Section 11.18.

 

“Overdue Rate” is defined in Section 2.7.

 

“Payee” is defined in Section 9.3.

 

“Payor” is defined in Section 9.3.

 

“Pension Plan” means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Performance
Guarantor or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section
3(5) of ERISA.

 

“Performance Guarantor” means Raytheon Company, a Delaware corporation.

 

“Performance Guaranty” means that certain Amended and Restated Guarantee, dated
as of September 1, 2003, made by the Performance Guarantor in favor of the
Administrative Agent, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the
provisions of the Transaction Documents.

 

“Permissible Servicer Expenses” means commercially reasonable out of pocket fees
and expenses incurred by the Servicer in connection with the repossession,
refurbishment and re-marketing of the Aircraft securing any Defaulted
Receivable, including, without limitation, all such amounts paid by the Servicer
to its Affiliates and other third parties for such services, but specifically
excluding costs associated with the Servicer’s infrastructure, including costs
associated with its physical offices and employee salaries.

 

“Permitted Aircraft Lien” means, with respect to any Aircraft:

 

(A) any materialman’s, mechanic’s, workman’s, repairman’s or other similar
Adverse Claim which (i) arises in favor of a Person contracted by and on behalf
of the Obligor on the related Contract, (ii) arises in the ordinary course of
business and (iii) (X) has been released or bonded against (or other credit
assurances provided) in favor of the Administrative Agent and the

 

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Purchasers in an amount at least equal to the obligations secured by such
Adverse Claim and otherwise in a manner reasonably satisfactory to each of the
Administrative Agent and the Control Party not more than sixty (60) days after
the earliest date on which the Transferor, the Seller or the Servicer knew of
such Adverse Claim or (Y) secures obligations which are being contested in good
faith by appropriate proceedings, so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of such Aircraft or any interest
therein, or

 

(B) any Adverse Claim which (i) is involuntary in nature, (ii) secures either
(X) state taxes not yet due by the Obligor on the related Contract or which are
being contested in good faith by appropriate proceedings by the Obligor or (Y)
any judgment or decree entered against such Obligor, (iii) secures obligations
which are immaterial in amount in relation to such Receivable and (iv) does not
involve any material danger of the sale, forfeiture or loss of such Aircraft; or

 

(C) any Adverse Claim arising under the related Contract or under the
Transaction Documents in favor of the Originator, the Transferor, the Seller
and/or the Administrative Agent, as applicable; or

 

(D) solely with respect to any Aircraft as to which the Originator’s, the
Transferor’s and/or the Seller’s interest is limited to an Aircraft Fractional
Share, Adverse Claims on the undivided interest(s) in the related Aircraft which
are not owned by the related Obligor.

 

“Permitted Dividends” means, distributions from the Seller to its stockholders,
which at all times shall be subject to the provisions of Section 2.14, and which
distributions shall be payable from Available Funds and in accordance with and
subject to the priorities for payment set forth in Section 2.12 (it being
understood that at no time shall the aggregate amount of Permitted Dividends so
distributed exceed the Maximum Permitted Dividend Amount).

 

“Permitted Lien” means a Permitted Aircraft Lien or a Permitted Receivable Lien,
as applicable.

 

“Permitted Receivable Lien” means, with respect to any Receivable:

 

(A) if for any reason the Receivables are held to be the property of the Seller
or if for any other reason the Transaction Documents are held or deemed not to
effect an absolute sale of the Receivables to the Administrative Agent for the
benefit of the Purchasers, any Adverse Claim which (i) is involuntary in nature,
(ii) secures state taxes not yet due by the Seller or which are being contested
in good faith by appropriate proceedings by the Seller or any of its Affiliates
(so long as adequate reserves with respect thereto are maintained on the books
of the Seller or such Affiliate in conformity with GAAP), (iii) secures
obligations which are immaterial in amount in relation to the Receivables taken
as a whole, (iv) does not involve any material danger of the sale, forfeiture or
loss of any Receivable, the Collections with respect thereto and the related
Contract, and Aircraft or any other Material Adverse Effect and (v) does not
have priority over the lien of the Administrative Agent in such Receivable; or

 

(B) any Adverse Claim created under the Transaction Documents in favor of the
Transferor, the Seller and/or the Administrative Agent, as applicable.

 

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“Person” means an individual, partnership, limited liability company,
corporation, joint stock company, trust (including a business trust),
unincorporated association, joint venture, firm, enterprise, Official Body or
any other entity.

 

“Portion of Investment” is defined in Section 2.4(a).

 

“Program Fee Rate” means a rate per annum specified as such in the Purchaser Fee
Letter.

 

“Program Support Agreement” means and includes any agreement entered into by any
Program Support Provider providing for the issuance of one or more letters of
credit for the account of the Conduit Purchaser (or any related commercial paper
issuer that finances the Conduit Purchaser), the issuance of one or more surety
bonds for which the Conduit Purchaser (or such related issuer) is obligated to
reimburse the applicable Program Support Provider for any drawings thereunder,
the sale by the Conduit Purchaser (or such related issuer) to any Program
Support Provider of the Asset Interest (or portions thereof or participations
therein) and/or the making of loans and/or other extensions of credit to the
Conduit Purchaser (or such related issuer) in connection with its commercial
paper program, together with any letter of credit, surety bond or other
instrument issued thereunder.

 

“Program Support Provider” means and includes any Person now or hereafter
extending credit or having a commitment to extend credit to or for the account
of, or to make purchases from, the Conduit Purchaser (or any related commercial
paper issuer that finances the Conduit Purchaser) or issuing a letter of credit,
surety bond or other instrument to support any obligations arising under or in
connection with the Conduit Purchaser’s (or such related issuer’s) commercial
paper program.

 

“Pro Rata Share” means, for an Alternate Purchaser, (a) the Commitment of such
Alternate Purchaser, divided by (b) the sum of the Commitments of all Alternate
Purchasers (or, if the Commitments shall have been terminated, its pro rata
share of the Alternate Purchaser Percentage of the Net Investment).

 

“Purchaser Fee Letter” means the confidential letter agreement, dated the
Closing Date, among the Seller, the Servicer, the Conduit Purchaser and the
Administrative Agent, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms and with written notice of each such modification from the Servicer to the
Insurer and each of the Rating Agencies (and, solely to the extent that such
amendment, amendment and restatement, supplement or modification causes the per
annum rate at which Yield is calculated to exceed the equivalent of the Offshore
Rate plus seventy-five basis points (0.75%) per annum, with the prior written
consent of the Insurer).

 

“Purchaser(s)” means the Conduit Purchaser and/or the Alternate Purchasers, as
the context may require.

 

“RAC” means Raytheon Aircraft Company, a Kansas corporation.

 

“RAH” means Raytheon Aircraft Holdings, Inc., a Kansas corporation.

 

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“RACC” is defined in the preamble.

 

“RACC Intrust Bank Account” means, collectively, that certain lockbox account,
in the name of RACC and maintained at Intrust Bank, N.A., and any successor
account thereto where collections in respect of RACC’s or RARC’s receivables are
sent.

 

“RARC” is defined in the preamble.

 

“Rate Period” is defined in Section 2.4.

 

“Rate Type” is defined in Section 2.4.

 

“Rating Agencies” means Fitch, Moody’s and S&P.

 

“Raytheon Aircraft and Affiliated Companies Account” means, collectively, that
certain account (bearing account number 0053321112) in the name of RAC and
maintained at Fleet Bank, N.A, and any successor account thereto where
collections in respect of RACC’s or RARC’s receivables are sent.

 

“Raytheon Entities” means each of the Performance Guarantor, RACC, RARC and the
Seller.

 

“Raytheon Revolver” means the Five-Year Competitive Advance and Revolving Credit
Facility Agreement, dated as of November 28, 2001, among the Performance
Guarantor, as borrower, Raytheon Technical Services Company and RAC, as
guarantors, the lenders party thereto, JPMorgan Chase Bank, as administrative
agent, and the other agents party thereto, as in effect on the Closing Date and
as the same may be amended, amended and restated, supplemented or otherwise
modified, subject to the terms and provisions set forth in Schedule III of this
Agreement.

 

“Raytheon Travel Air” means Raytheon Travel Air Company, a Kansas corporation.

 

“Receivable” means any indebtedness and other obligations owed to the Originator
or to the Transferor or the Seller or any right of the Originator or the
Transferor or the Seller to payment from or on behalf of an Obligor, in respect
of any scheduled payment of interest, principal or otherwise under a Contract
related to a Receivable listed on the Schedule of Receivables, or any right to
reimbursement for funds paid or advanced by the Originator or the Transferor or
the Seller on behalf of an Obligor under such Contract, whether constituting an
account, chattel paper, payment intangible, instrument or general intangible
(whether or not earned by performance), together with all supplemental or
additional payments required by the terms of such Contract with respect to
insurance, maintenance, ancillary products and services and any other specific
charges (including, without limitation, the obligation to pay any finance
charges, fees and other charges with respect thereto).

 

“Recipient” is defined in Section 2.10.

 

“Records” means all Contracts and other documents, purchase orders, invoices,
agreements, books, records and any other media, materials or devices for the
storage of

 

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information (including tapes, disks, punch cards, computer programs and
databases and related property) maintained by the Originator, the Transferor,
the Seller or the Servicer with respect to the Receivables, any other Affected
Assets or the Obligors.

 

“Recovery Proceeds” means, for each Defaulted Receivable at the end of each
Fiscal Month, any payments received into the Collection Account with respect to
such Receivable following its classification and during its continuation as a
Defaulted Receivable and after deduction of Permissible Servicer Expenses with
respect to such Receivable which have not been previously paid to the Servicer
pursuant to Section 2.12 (including, but not limited to, any further
installments paid, any payments in relation to past due amounts, any proceeds
resulting from the trade-in of the related Aircraft or otherwise and any sales
proceeds following either the negotiated sale or repossession of the related
Aircraft).

 

“Related Commercial Paper” means, at any time of determination, Commercial
Paper, the proceeds of which are then allocated by the Administrator as the
source of funding for the acquisition or maintenance of, the Asset Interest.

 

“Related Security” means with respect to any Receivable, as applicable, all of
RACC’s (without giving effect to any transfer under the First Tier Agreement),
the Transferor’s (without giving effect to any transfer under the Sale and
Conveyance Agreement) or the Seller’s (without giving effect to any transfer
under this Agreement) right, title and interest in, to and under:

 

(a) any Aircraft or any Aircraft Fractional Share (including returned or
repossessed Aircraft) and documentation or title evidencing the shipment or
storage of any Aircraft relating to any sale giving rise to such Receivable;

 

(b) all other security interests or liens and property subject thereto from time
to time, if any, purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together with
all financing statements and other filings authorized or signed, as applicable,
by an Obligor relating thereto;

 

(c) the Contract and all letters of credit, guarantees, indemnities, warranties,
insurance (and proceeds and premium refunds thereof) or other agreements or
arrangements of any kind from time to time supporting or securing payment of
such Receivable, whether pursuant to the Contract related to such Receivable or
otherwise;

 

(d) all Records related to such Receivable; and

 

(e) all Collections on and other proceeds of any of the foregoing.

 

“Reporting Date” is defined in Section 2.8.

 

“Required Downgrade Assignment Period” is defined in Section 3.2(a).

 

“Restricted Payments” is defined in Section 6.2(k).

 

“Sale and Conveyance Agreement” is defined in the recitals.

 

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“Schedule of Receivables” means the listing of all Receivables and the Unpaid
Balance and accrued interest with respect thereto as of the Cut-off Date, as
initially set forth in Schedule IV (or, in the case of an Eligible Substitute
Receivable, as of the date such Eligible Substitute Receivable is substituted
pursuant to the terms of this Agreement) acquired by the Seller on or prior to
the Closing Date, pursuant to the Sale and Conveyance Agreement, certified by
the Transferor, the Seller and the Servicer, which list is, at all times,
maintained by the Servicer for the benefit of the Administrative Agent on behalf
of the Secured Parties, as such list shall be amended, amended and restated,
supplemented or otherwise updated or modified by the Servicer from time to time
in connection with any repurchase or substitution of any Receivable by the
Seller or the Servicer, as applicable, pursuant to this Agreement and the other
Transaction Documents (it being understood that if the Servicer fails to
correctly update such Schedule of Receivables, such Schedule of Receivables may
be updated by the Control Party).

 

“Secured Parties” means a collective reference to the Administrative Agent, the
Administrator, each Purchaser, the Insurer, each Indemnified Party and each
Affected Party.

 

“Security Agreement” means each Uniform Commercial Code financing statement and
each other document, mortgage, charge, instrument, agreement or certificate
(including, without limitation, any power of attorney granted by the
Administrative Agent) which is or has been entered into pursuant to the terms of
this Agreement or otherwise to establish and/or perfect the security interest of
the Administrative Agent on behalf of the Secured Parties (including the
underlying security interests of the Originator, the Transferor and the Seller)
in any Aircraft or other Affected Asset or to otherwise protect the interests of
the Administrative Agent, the Purchasers and the Insurer in any Aircraft or
other Affected Asset.

 

“Seller” is defined in the preamble.

 

“Servicer” is defined in Section 7.1.

 

“Servicer Default” is defined in Section 7.5.

 

“Services” is defined in Section 7.2.

 

“Servicing Fee” means the fees payable to the Servicer from Collections, in an
amount equal to either (i) at any time when the Servicer is RACC or any of its
Affiliates, eighty-five basis points (0.85%) per annum on the aggregate Unpaid
Balances of the Receivables at the end of the immediately preceding Fiscal
Month, or (ii) at any time when the Servicer is not RACC or any of its
Affiliates, the amount determined upon the written agreement of such Person, the
Administrative Agent and the Control Party in accordance with the provisions of
Section 7.6, in each case payable in arrears on each Settlement Date from
Collections in accordance with and subject to the priorities for payment set
forth in Section 2.12.

 

“Settlement Date” means the second (2nd) Business Day following the related
Reporting Date or such other day as the Seller, the Servicer, the Administrative
Agent and the Control Party may from time to time mutually agree in writing.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor that is a nationally recognized statistical
rating organization.

 

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“Standard of Care” is defined in Section 7.2.

 

“Sub-Servicer” is defined in Section 7.1(d).

 

“Subsidiary” means, with respect to any Person, any corporation or other Person
(a) of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned by such Person or
(b) that is directly or indirectly controlled by such Person within the meaning
of control under Section 15 of the Securities Act of 1933.

 

“Taxes” shall have the meaning specified in Section 9.3.

 

“Termination Date” means the earlier of (a) unless the Administrator elects
otherwise, the date of termination of the related commitment of any Program
Support Provider under a Program Support Agreement and (b) the Final Payout
Date.

 

“Transaction Costs” is defined in Section 9.4(a).

 

“Transaction Documents” means, collectively, this Agreement, the First Tier
Agreement, the Sale and Conveyance Agreement, the Administrative Agent Fee
Letter, the Purchaser Fee Letter, the Insurance Premium Letter, each Blocked
Account Agreement, the Performance Guaranty, the Insurance and Reimbursement
Agreement, the Insurance Policy, each Assignment of Rents, each Security
Agreement, and all of the other instruments, documents and other agreements
executed and delivered by the Originator, the Transferor, the Seller, the
Servicer or the Performance Guarantor in connection with any of the foregoing.

 

“Transferor” is defined in the preamble.

 

“Transferor Obligations” is defined in Section 11.18.

 

“UCC” means the Uniform Commercial Code as in effect in the applicable
jurisdiction or jurisdictions.

 

“Unmatured Event of Default” means an event which but for the lapse of time or
the giving of notice, or both, would constitute an Event of Default.

 

“Unmatured Servicer Default” means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Servicer Default.

 

“Unpaid Balance” of any Receivable means, at any time, the unpaid principal
amount thereof, as calculated at the end of the most recent Fiscal Month by the
Servicer and as identified by the Servicer’s loan management system after giving
effect to amortization and prepayment, as applicable.

 

“U.S.” or “United States” means the United States of America.

 

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“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

“Yield” is defined in Section 2.4.

 

SECTION 1.2 Other Terms. All terms defined directly or by incorporation herein
shall have the defined meanings when used in any certificate or other document
delivered pursuant thereto unless otherwise defined therein. For purposes of
this Agreement and all such certificates and other documents, unless the context
otherwise requires: (a) accounting terms not otherwise defined herein, and
accounting terms partly defined herein to the extent not defined, shall have the
respective meanings given to them under, and shall be construed in accordance
with, GAAP; (b) terms used in Article 9 of the UCC in the State of New York, and
not specifically defined herein, are used herein as defined in such Article 9;
(c) references to any amount as on deposit or outstanding on any particular date
means such amount at the close of business on such day; (d) the words “hereof,”
“herein” and “hereunder” and words of similar import refer to this Agreement (or
the certificate or other document in which they are used) as a whole and not to
any particular provision of this Agreement (or such certificate or document);
(e) references to any Section, Schedule, Exhibit and Annex are references to
Sections, Schedules, Exhibits and Annexes in or to this Agreement (or the
certificate or other document in which the reference is made) and references to
any paragraph, subsection, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (f) the term “including” means “including without
limitation”; (g) references to any Law refer to that Law as amended from time to
time and include any successor Law; (h) references to any agreement refer to
that agreement as from time to time amended or supplemented or as the terms of
such agreement are waived or modified in accordance with its terms; (i)
references to any Person include that Person’s successors and permitted assigns;
and (j) headings are for purposes of reference only and shall not otherwise
affect the meaning or interpretation of any provision hereof.

 

SECTION 1.3 Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word “from” means “from and including”, the words “to”
and “until” each means “to but excluding”, and the word “within” means “from and
excluding a specified date and to and including a later specified date”.

 

ARTICLE II

 

INVESTMENT AND SETTLEMENTS

 

SECTION 2.1 Transfer of Affected Assets; Intended Characterization. (a) Sale of
Asset Interest. In consideration of the payment by the Administrative Agent (on
behalf of either the Conduit Purchaser or the Alternate Purchasers as determined
pursuant to Section 2.3) of the amount of the Investment on the Closing Date and
the Administrative Agent’s agreement (on behalf of either the Conduit Purchaser
or the Alternate Purchasers as determined below) to make the payment to the
Seller in accordance with Section 2.2, effective upon the Seller’s receipt of
payment for the Investment on the Closing Date, the Seller hereby sells,
conveys, transfers and

 

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assigns to the Administrative Agent, on behalf of the Secured Parties, all of
the Seller’s right, title and interest in, to and under (i) all Receivables
existing on the Cut-off Date and listed on the Schedule of Receivables (as such
schedule may be amended, amended and restated, modified or supplemented from
time to time in accordance with the terms of this Agreement), and (ii) all other
Affected Assets, whether existing on the Cut-off Date or thereafter arising at
any time.

 

(b) Purchase of Asset Interest. Subject to the terms and conditions hereof, the
Administrative Agent (on behalf of the applicable Secured Parties) hereby
purchases and accepts from the Seller, all of the Seller’s right, title and
interest in, to and under the Receivables and all other Affected Assets sold,
conveyed, transferred and assigned pursuant to Section 2.1(a). The
Administrative Agent’s right, title and interest in and to the Receivables and
all other Affected Assets is herein called the “Asset Interest”. The
Administrative Agent shall hold the Asset Interest (i) on behalf of the Conduit
Purchasers and/or the Alternate Purchasers, as applicable, in accordance with
the Conduit Purchaser Percentage and the Alternate Purchaser Percentage,
respectively, from time to time and (ii) on behalf of the Insurer and any other
Secured Parties, in each case, to secure payment of all amounts owed from time
to time to the Secured Parties under the Transaction Documents and each Raytheon
Entity’s performance of its obligations under the Transaction Documents. To the
extent the Administrative Agent holds the Asset Interest on behalf of the
Alternate Purchasers, except as otherwise provided in Section 3.3(b), the
Administrative Agent shall hold the Alternate Purchaser Percentage of the Asset
Interest on behalf of each Alternate Purchaser pro rata in accordance with its
respective outstanding portion of the Net Investment funded by such Alternate
Purchaser.

 

(c) Obligations Not Assumed. The foregoing sale, conveyance, transfer and
assignment does not constitute and is not intended to result in the creation, or
an assumption by the Administrative Agent, the Administrator, any Purchaser or
the Insurer, of any obligation of the Originator, the Transferor or the Seller,
or any other Person under or in connection with the Receivables or any other
Affected Asset, all of which shall remain the obligations and liabilities of the
Originator pursuant to the First Tier Agreement.

 

(d) Intended Characterization; Grant of Security Interest.

 

(i) The Seller, the Administrative Agent and the Purchasers intend that the
sale, conveyance, transfer and assignment of all of the Seller’s right, title
and interest in, to and under the Receivables and the other Affected Assets to
the Administrative Agent (on behalf of the Secured Parties) hereunder shall be
treated as a sale for all purposes, other than federal and state income tax
purposes. If notwithstanding the intent of the parties, the sale, conveyance,
transfer and assignment of the Seller’s right, title and interest in, to and
under the Receivables and the other Affected Assets to the Administrative Agent
(on behalf of the Secured Parties) is not treated as a sale for all purposes,
other than federal and state income tax purposes, the sale, conveyance, transfer
and assignment of the Seller’s right, title and interests in, to and under the
Receivables and the other Affected Assets shall be treated as the grant of, and
the Seller hereby does grant, a security interest in all of its right, title and
interest in, to and under the Receivables and the other Affected Assets to the
Administrative Agent (on behalf of the Secured Parties) to secure the payment
and performance of the Seller’s obligations to the Secured Parties hereunder and
under the other Transaction Documents or as may be determined in connection
herewith or therewith by applicable Law.

 

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(ii) Each of the parties hereto further expressly acknowledges and agrees that
the Commitments of the Alternate Purchasers hereunder, regardless of the
intended true sale nature of the overall transaction, are financial
accommodations (within the meaning of Section 365(c)(2) of the Bankruptcy Code)
to or for the benefit of the Seller. The parties acknowledge that the foregoing
sentence is not intended to have any effect on the intended true sale nature of
the transfers pursuant to the each of the First Tier Agreement and the Sale and
Conveyance Agreement.

 

(iii) Each of the parties hereto acknowledges that the Transferor and the Seller
intend that the sale, conveyance, transfer and assignment of all of the
Transferor’s right title and interest in, to and under the Receivables and the
other Affected Assets to the Seller under the Sale and Conveyance Agreement to
be true sales of the Affected Assets by the Transferor to the Seller for all
purposes, and it is not the intention of the parties to the Assignments of Rents
that the Leased Aircraft Collateral include any of the applicable Affected
Assets to the extent that the Sale and Conveyance Agreement effects a true sale
thereof from the Transferor to the Seller.

 

SECTION 2.2 Request for Investment. Subject to the terms and conditions hereof,
including Section 2.9(c) and Article V, in consideration for the sale,
conveyance, transfer and assignment of the Seller’s right, title and interest
in, to and under the Receivables and the other Affected Assets to the
Administrative Agent (on behalf of the Secured Parties) hereunder, the Seller
shall, by written request to the Administrative Agent and the Insurer, given by
facsimile at least two (2) Business Days prior to the Closing Date, request the
Administrative Agent (on behalf of the Conduit Purchaser or the Alternate
Purchasers as determined pursuant to Section 2.3) pay to the Seller an amount
equal to two hundred eighty million four hundred thirty-one thousand four
hundred seventy-four dollars and five cents ($280,431,474.05) (the “Investment”)
on the Closing Date.

 

SECTION 2.3 Investment Procedures.

 

(a) Upon the Administrative Agent’s receipt of the request referred to in
Section 2.2, the Administrative Agent will promptly notify the Conduit
Purchaser, and the Conduit Purchaser shall instruct the Administrative Agent to
accept or reject such request by notice given to the Seller and the
Administrative Agent by telephone or facsimile by no later than the close of its
business on the Business Day following its receipt of such request. The request
by the Seller referred to in Section 2.2 shall be irrevocable and binding on the
Seller, and the Seller shall indemnify the Administrative Agent and each
Purchaser against any loss or expense incurred by such Purchaser, either
directly or indirectly (including, in the case of the Conduit Purchaser, through
a Program Support Agreement) as a result of any failure by the Seller to
satisfy, on or prior to the Closing Date, any of the terms or conditions set
forth herein (including, but not limited to, the conditions set forth in Article
V), including any loss (including loss of profit) or expense incurred by the
Administrative Agent or any Purchaser, either directly or indirectly (including,
in the case of the Conduit Purchaser, pursuant to a Program Support Agreement)
by reason of the liquidation or reemployment of funds acquired by such Purchaser
(or the applicable

 

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Program Support Provider(s)) (including funds obtained by issuing commercial
paper or promissory notes or obtaining deposits or loans from third parties) in
order to fund the Investment.

 

(b) Alternate Purchaser’s Commitment. The Conduit Purchaser shall not have any
obligation to fund the Investment. If the Conduit Purchaser has rejected the
request for the Investment, the Administrative Agent shall so notify the
Alternate Purchasers and the Alternate Purchasers shall make the Investment, on
a pro rata basis, in accordance with their respective Pro Rata Shares, subject
to the terms and conditions of this Agreement. Notwithstanding anything
contained in this Section 2.3(b) or elsewhere in this Agreement to the contrary,
no Alternate Purchaser shall be obligated to provide the Administrative Agent or
the Seller with funds in connection with the Investment in an amount that would
result in the portion of the Net Investment then funded by it exceeding its
Commitment then in effect (minus the unrecovered principal amount of such
Alternate Purchaser’s investments in the Asset Interest pursuant to the Program
Support Agreement to which it is a party). The obligation of each Alternate
Purchaser to remit its Pro Rata Share of the Investment shall be several from
that of each other Alternate Purchaser, and the failure of any Alternate
Purchaser to so make such amount available to the Administrative Agent shall not
relieve any other Alternate Purchaser of its obligation hereunder.

 

(c) Payment of Investment. On the Closing Date, the Conduit Purchaser or each
Alternate Purchaser, as the case may be, shall remit its share of the aggregate
amount of the Investment (as set forth in Section 2.2) to the account of the
Administrative Agent specified therefor from time to time by the Administrative
Agent by notice to such Persons by wire transfer of same day funds. Following
the Administrative Agent’s receipt of funds from the applicable Purchasers as
aforesaid, the Administrative Agent shall remit such funds received to the
Seller’s account at the location indicated in Section 11.3, by wire transfer of
same day funds.

 

(d) [Reserved].

 

(e) Defaulting Alternate Purchaser. If, by 2:00 p.m. (New York City time),
whether or not the Administrative Agent has advanced the amount of the
Investment, one or more Alternate Purchasers (each, a “Defaulting Alternate
Purchaser”, and each Alternate Purchaser other than any Defaulting Alternate
Purchaser being referred to as a “Non-Defaulting Alternate Purchaser”) fails to
make its Pro Rata Share of the Investment available to the Administrative Agent
pursuant to Section 2.3(c) or any Assignment Amount payable by it pursuant to
Section 3.1 (the aggregate amount not so made available to the Administrative
Agent being herein called in either case the “Investment Deficit”), then the
Administrative Agent shall, by no later than 2:30 p.m. (New York City time) on
the Closing Date or the applicable Assignment Date, as the case may be, instruct
each Non-Defaulting Alternate Purchaser to pay, by no later than 3:00 p.m. (New
York City time), in immediately available funds, to the account designated by
the Administrative Agent, an amount equal to the lesser of (i) such
Non-Defaulting Alternate Purchaser’s proportionate share (based upon the
relative Commitments of the Non-Defaulting Alternate Purchasers) of the
Investment Deficit and (ii) its unused Commitment. Each Defaulting Alternate
Purchaser shall forthwith, upon demand, pay to the Administrative Agent for the
ratable benefit of the Non-Defaulting Alternate Purchasers all amounts paid by
each Non-Defaulting Alternate Purchaser on behalf of such Defaulting Alternate
Purchaser, together with interest thereon, for each day from the date a payment
was made by a Non-Defaulting Alternate

 

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Purchaser until the date such Non-Defaulting Alternate Purchaser has been paid
such amounts in full, at the Overdue Rate. In addition, if, after giving effect
to the provisions of the immediately preceding sentence, any Investment Deficit
with respect to any Assignment Amount continues to exist, each such Defaulting
Alternate Purchaser shall pay interest to the Administrative Agent, for the
account of the Conduit Purchaser, on such Defaulting Alternate Purchaser’s
portion of such remaining Investment Deficit, at the Overdue Rate, for each day
from the applicable Assignment Date until the date such Defaulting Alternate
Purchaser shall pay its portion of such remaining Investment Deficit in full to
the Conduit Purchaser.

 

SECTION 2.4 [IS RESERVED AND IS SPECIFIED IN SCHEDULE I.]

 

SECTION 2.5 Yield, Fees and Other Costs and Expenses. All amounts due and
payable by the Seller hereunder as Yield, or under any Fee Letter or the
Servicer Fees, shall be paid in accordance with and subject to the payment of
priorities set forth in Section 2.12. Notwithstanding any limitation on recourse
herein, the Seller shall pay, as and when due in accordance with this Agreement,
all amounts payable pursuant to Article IX. Nothing in this Agreement shall
limit in any way the obligations of the Seller and the Performance Guarantor to
pay the amounts set forth in this Section 2.5 or in Article IX. The
Administrative Agent agrees to notify the Servicer, no later than two (2)
Business Days prior to the related Reporting Date, of the fees due and payable
to the Administrative Agent and each Purchaser on the related Settlement Date;
provided, that the failure of the Administrative Agent to so notify the Servicer
shall in no manner whatsoever, impact, affect or impair the Administrative
Agent’s or any Purchaser’s right to receive any such amounts as calculated by
the Servicer in good faith on such Settlement Date.

 

SECTION 2.6 Deemed Collections. If on any day the Unpaid Balance of a Receivable
is reduced or such Receivable is canceled as a result of any Dilution, the
Seller shall be deemed to have received on such day a Collection of such
Receivable in the amount of such Dilution (as determined immediately prior to
such Dilution) of such Receivable (if such Receivable is canceled) or, otherwise
in the amount of such reduction, and the Seller shall pay to the Collection
Account an amount equal to such Deemed Collection and such amount shall be
allocated by the Servicer and distributed as a Collection in accordance with and
subject to the priorities for payment set forth in Section 2.12.

 

SECTION 2.7 Payments and Computations, Etc. All amounts to be paid or deposited
by the Seller, the Servicer or any other Raytheon Entity hereunder shall be paid
or deposited in immediately available funds by wire transfer in accordance with
the terms hereof no later than 11:00 a.m. (New York City time) on the day when
due; if such amounts are payable to the Administrative Agent (whether on behalf
of any Purchaser or otherwise) or the Insurer they shall be paid or deposited in
the account indicated under the heading “Payment Information” in Section 11.3,
until otherwise notified by the Administrative Agent or the Insurer, as
applicable. The Seller shall, to the extent permitted by Law, pay to the
Administrative Agent, in accordance with the immediately preceding sentence,
upon demand, interest on all amounts not paid or deposited when due hereunder
(such interest, the “Default Interest”) at a rate (such rate, the “Overdue
Rate”) equal to the sum of two percent (2.00%) per annum plus the Base Rate.
Such Default Interest shall be distributed by the Administrative Agent (i)
following the date and to the extent the Insurer paid such amounts not so paid
or deposited when due hereunder to the

 

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Administrative Agent (for the benefit of the Purchasers or other applicable
Secured Party) pursuant to the Insurance Policy, to the Insurer pursuant to
Section 2.12 or (ii) otherwise, to the Purchasers. All computations of Yield and
all per annum fees hereunder shall be made on the basis of a year of 360 days
for the actual number of days (including the first but excluding the last day)
elapsed. Any computations by the Administrative Agent or the Insurer of amounts
payable by the Seller or the Servicer hereunder shall be binding upon the
Seller, the Servicer and each other Raytheon Entity, as applicable, absent
manifest error.

 

SECTION 2.8 Reports. By no later than 4:00 p.m. (New York City time) on the
tenth (10th) Business Day after the end of each Fiscal Month, or if such day is
not a Business Day then on the next succeeding Business Day (each, a “Reporting
Date”), the Servicer shall prepare and forward to the Administrative Agent, the
Insurer and each of S&P and Moody’s a Monthly Servicer Report, certified as to
accuracy, by the Servicer.

 

SECTION 2.9 Blocked Accounts. (a) The Seller shall establish on or prior to the
Closing Date and shall maintain a segregated account (the “Collection Account”),
with a Blocked Account Bank pursuant to a Blocked Account Agreement, which
account shall bear a designation clearly indicating that the funds deposited
therein are held for the benefit of the Administrative Agent, on behalf of the
Secured Parties. The Administrative Agent shall have exclusive dominion and
control over the Collection Account and all monies, instruments and other
property from time to time on deposit in the Collection Account; provided,
however, that the Administrative Agent hereby agrees that it will not terminate,
assert its control, or give any notices with respect to the Collection Account
without the prior written consent of the Insurer if at such time the Insurer is
the Control Party (it being understood that the Administrative Agent shall,
prior to taking any of the foregoing actions at the direction of the Insurer, if
the Insurer is the Control Party, be first indemnified, in accordance with
Section 10.4, to its satisfaction by the Control Party for any such action
taken). The Servicer shall remit (or cause to be remitted) daily to the
Collection Account, all Collections within five (5) Business Days (i) after
deposit thereof into either of the Raytheon Aircraft and Affiliated Companies
Account or the RACC Intrust Bank Account and (ii) in the case of Collections
otherwise received by any Raytheon Entity or any Affiliate of a Raytheon Entity,
after identification by the Servicer of such funds as Collections. The Servicer
shall cause the applicable Blocked Account Bank to invest funds on deposit in
the Collection Account in Eligible Investments maturing not later than the
Business Day preceding the next Settlement Date. Earnings on such Eligible
Investments shall be held in the Collection Account until such amounts are to be
paid and applied in accordance with and subject to the priorities for payment
set forth in Section 2.12. On each Settlement Date, all funds on deposit in the
Collection Account (other than Advance Payments not then due and payable as
identified in the related Monthly Servicer Report) shall be applied as
Collections in accordance with and subject to the priorities for payment set
forth in Section 2.12. On the Final Payout Date, any funds remaining on deposit
in the Collection Account shall be distributed in accordance with and subject to
the priorities for payment set forth in Section 2.12.

 

(b) The Seller shall establish on or prior to the Closing Date and shall
maintain segregated Lockbox Accounts (each, a “Lockbox Account”), with a Blocked
Account Bank pursuant to a Blocked Account Agreement, which accounts shall bear
a designation clearly indicating that the funds deposited therein are held for
the benefit of the Administrative Agent, on behalf of the Secured Parties. The
Administrative Agent shall have exclusive dominion and

 

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control over each Lockbox Account and all monies, instruments and other property
from time to time on deposit therein; provided, however, that the Administrative
Agent hereby agrees that it will not terminate, assert its control, or give any
notices with respect to any Lockbox Account without the prior written consent of
the Insurer if at such time the Insurer is the Control Party. The Servicer shall
remit (or cause to be remitted) daily to the Collection Account all Collections
received in any Lockbox Account. Funds on deposit in a Lockbox Account shall not
be invested by the applicable Blocked Account Bank, but rather shall be held in
the Lockbox Account until such amounts are deposited into the Collection
Account.

 

(c) The Seller shall establish on or prior to the Closing Date and the
Administrative Agent shall maintain a segregated account (the “Cash Reserve
Account”), with the Cash Reserve Account Bank, which account shall be in the
name of the Administrative Agent and shall bear a designation clearly indicating
that the funds deposited therein are held in trust by the Administrative Agent,
for the benefit of the Secured Parties and the Seller. The Administrative Agent
shall have exclusive dominion and control over the Cash Reserve Account and all
monies, instruments and other property from time to time on deposit in the Cash
Reserve Account. On the date of the Investment hereunder, proceeds from the
Investment in an amount equal to $19,756,076 (the “Deferred Investment Amount”)
will be deposited into the Cash Reserve Account. The Cash Reserve Account Bank,
at the direction of the Administrative Agent, shall invest funds on deposit in
the Cash Reserve Account in Eligible Investments maturing not later than the
next Business Day. Earnings on such Eligible Investments shall be held in the
Cash Reserve Account until such amounts are to be paid in accordance with this
Agreement. On any date after the date of the Investment hereunder that the
Servicer delivers to the Control Party and the Administrative Agent (each such
date, a “Deferred Investment Request Date”), a Certificate of Perfection (i) if
the Control Party (in its sole discretion) determines (such determination to be
made within two (2) Business Days after the Deferred Investment Request Date),
that the Receivables and the other Affected Assets set forth in such Certificate
of Perfection have satisfied each of the requirements set forth in this
Agreement, the Control Party shall, within two (2) Business Days of its
determination, issue a Notice of Release to the Administrative Agent and, the
Administrative Agent shall, within two (2) Business Days of its receipt of a
Notice of Release, withdraw funds in the amount set forth in such Notice of
Release (to the extent then on deposit in the Cash Reserve Account) and remit
such funds to the Seller (at the account set forth in Schedule 11.3 and (ii) if
the Control Party determines that any of the Receivables or any other Affected
Asset set forth in such Certificate of Perfection have not satisfied the
requirements set forth in this Agreement, the Control Party shall, within two
(2) Business Days, so notify the Seller, the Servicer and the Administrative
Agent as to which specific requirements have not been met, stating the reasons
for such failure to satisfy the requirements or that insufficient time was given
to review the applicable documentation. If on the date that is six (6) months
after the date of the Investment hereunder (the “Deferred Investment Return
Date”), the Investment Condition shall not have been satisfied (as determined by
the Control Party in accordance with the terms of this Agreement), the Control
Party shall notify the Administrative Agent, and the Administrative Agent shall
withdraw all amounts then on deposit in the Cash Reserve Account and remit such
funds pro rata to the Purchasers, as their interests may appear for distribution
in accordance with, and to be applied towards, clauses (v) and (ix) of Section
2.12 (without giving effect to the parenthetical in clause (ix)) (it being
understood that in the event that the entire Deferred Investment Amount is not
paid to the Seller prior to the Deferred Investment Return Date, the amount of
the “Investment” as set forth in Section 2.2 shall be reduced by the amount of
funds distributed to the Purchasers from the Cash Reserve Account).

 

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(d) Notwithstanding anything in this Agreement or any of the other Transaction
Documents to the contrary, each of the parties hereto, the Performance Guarantor
and the Insurer hereby agree that the Cash Reserve Account Bank shall (i) not be
liable to any such Person for any expense, claim, loss, damage or cost arising
out of or relating to its performance as Cash Reserve Account Bank other than
those arising out of the Cash Reserve Account Bank’s gross negligence or willful
misconduct or failure to comply with its obligations under this Agreement, (ii)
in no event be liable for any special, indirect, exemplary or consequential
damages, including but not limited to lost profits, (iii) be excused from
failing to act or delay in acting, and no such failure or delay shall give rise
to any liability of the Cash Reserve Account Bank, if: (a) such failure or delay
is caused by circumstances beyond the Cash Reserve Account Bank’s reasonable
control, including but not limited to, legal constraint, emergency conditions,
action or inaction of governmental, civil or military authority, fire, strike,
lockout or other labor difficulties, war, riot, terrorism, flood, earthquake or
other natural disaster, breakdown of public or private or common carrier
communications or transmission facilities, equipment failure, force majeure,
court order or decree, the commencement of bankruptcy or other similar
proceedings with respect to any Raytheon Entity or the Insurer or (b) such
failure or delay resulted from Cash Reserve Account Bank’s reasonable belief
that the action would have violated any guideline, rule or regulation of any
governmental authority, (iv) have no duty to inquire or determine whether any
obligations of any party hereto have been satisfied or whether any of the
parties hereto are in default or whether the Control Party or the Administrative
Agent are entitled to take any action or provide any notice hereunder or under
any of the other Transaction Documents, and (v) be entitled to rely on notices
and communications it believes in good faith to be genuine and given by the
appropriate party. The Servicer shall indemnify the Cash Reserve Account Bank
against, and each of the parties hereto shall hold the Cash Reserve Account Bank
harmless from, any and all liabilities, claims, costs, expenses and damages of
any nature in any way arising out of or relating to disputes or legal actions
concerning this Agreement other than those arising out of the Cash Reserve
Account Bank’s gross negligence or willful misconduct.

 

SECTION 2.10 Sharing of Payments, Etc. If any Purchaser (for purposes of this
Section 2.10 only, being a “Recipient”) shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of the portion of the Asset Interest owned by it (other
than pursuant to the Purchaser Fee Letter, Section 3.3(b) or Article IX and
other than as a result of the differences in the timing of the applications of
Collections in accordance with and subject to the priorities for payment set
forth in Section 2.12 and other than a result of the different methods for
calculating Yield) in excess of its ratable share of payments on account of the
Asset Interest obtained by the Purchasers entitled thereto, such Recipient shall
forthwith purchase from the Purchasers entitled to a share of such amount
participations in the portions of the Asset Interest owned by such Persons as
shall be necessary to cause such Recipient to share the excess payment ratably
with each such other Person entitled thereto; provided, however, that if all or
any portion of such excess payment is thereafter recovered from such Recipient,
such purchase from each such other Person shall be rescinded and each such other
Person shall repay to the Recipient the purchase price paid by such Recipient
for such participation to the extent of such recovery, together with an amount
equal to such other Person’s ratable share (according to the proportion of (a)
the amount of such other Person’s required payment to (b) the total amount so
recovered from the Recipient) of any interest or other amount paid or payable by
the Recipient in respect of the total amount so recovered.

 

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SECTION 2.11 Right of Setoff. Without in any way limiting the provisions of
Section 2.10, each of the Administrative Agent, each Purchaser and the Insurer
is hereby authorized (in addition to any other rights it may have) at any time
after the occurrence of the Termination Date due to the occurrence of an Event
of Default or during the continuance of an Unmatured Event of Default to
set-off, appropriate and apply (without presentment, demand, protest or other
notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by the Administrative Agent, such Purchaser or the
Insurer to, or for the account of, the Seller against the amount of the
Aggregate Unpaids owing by the Seller to such Person or to the Administrative
Agent on behalf of such Person (even if contingent or unmatured).

 

SECTION 2.12 Settlement Procedures; Order of Application. On each Settlement
Date, funds then on deposit in the Collection Account (other than Advance
Payments not yet then due and payable as identified on the related Monthly
Servicer Report or in such other instructions referred to below) shall be
released by the Collection Account Bank based on (i) prior to the delivery by
the Administrative Agent of a “notice of control” (in accordance with the
related Blocked Account Agreement) to the Collection Account Bank, the written
instructions of the Servicer received on the Reporting Date and (ii) on or after
the delivery by the Administrative Agent of a “notice of control” to the
Collection Account Bank, the written instructions of the Administrative Agent
(which shall be based upon written instructions provided to the Administrative
Agent by the Control Party no later than the Business Day immediately preceding
such Settlement Date), on such Settlement Date from the Collection Account for
the following purposes and in the following order of priorities,

 

(i) to the Servicer, unreimbursed Servicing Fees, if any;

 

(ii) to the Servicer, the Servicing Fee (to the extent not in excess of
eighty-five basis points (0.85%) per annum on the aggregate Unpaid Balances of
the Receivables at the end of the immediately preceding Fiscal Month), and if
the Servicer is not RACC or an Affiliate of RACC, Permissible Servicer Expenses
(to the extent not previously reimbursed);

 

(iii) to the Insurer, if no Insurer Default has occurred and is continuing, the
premium payable under the Insurance Premium Letter and all amounts owed to the
Insurer in connection with any transitioning of servicing to a successor
Servicer (such amounts, in the aggregate, not to exceed one hundred fifty
thousand dollars ($150,000));

 

(iv) first, to the Purchasers, Yield accrued and unpaid through the end of the
immediately preceding Fiscal Month; provided, however, that in the event at any
time on any Settlement Date the accrued and unpaid Yield shall exceed the amount
which would have accrued at a per annum rate equal to the Offshore Rate plus
seventy-five basis points (0.75%) per annum, such excess shall be payable
pursuant to clause (xi) of Section 2.12, and second, to the Insurer (to the
extent previously paid by the Insurer to the Administrative Agent on behalf of
the Conduit Purchaser or the Alternate Purchaser) or

 

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to the Purchasers (to the extent not previously paid by the Insurer) all accrued
and unpaid Yield (solely to the extent such Yield did not exceed a per annum
rate equal to the Offshore Rate plus seventy-five basis points (0.75%) per annum
on such Settlement Date) due on previous Settlement Dates;

 

(v) first, to the Purchasers the Minimum Capital Payment if any Minimum Capital
Payment is due on such Settlement Date; and second, to the Insurer (to the
extent previously paid by the Insurer to the Administrative Agent on behalf of
the Conduit Purchaser or the Alternate Purchaser) or to the Purchasers (to the
extent not previously paid by the Insurer) all accrued and unpaid Minimum
Capital Payments due on previous Settlement Dates;

 

(vi) to the Administrative Agent, the Administrative Agent Fee;

 

(vii) to the Insurer, amounts in or towards the reimbursement of claims paid
under the Insurance Policy and, if there is no Insurer Default then outstanding
related to failure to pay amounts due under the Insurance Policy, any other
unpaid amounts due to the Insurer;

 

(viii) to the Servicer, (A) Permissible Servicer Expenses to the extent not
previously reimbursed and (B) any Servicing Fee in excess of the Servicing Fee
paid pursuant to clause (ii) above;

 

(ix) to the Purchasers, Additional Capital Payments, to be applied toward the
Minimum Capital Payments set forth on Annex A in the order of maturity until the
Net Investment has been reduced to zero (it being understood that the amount
available for Additional Capital Payments pursuant to this clause (ix) shall be
determined taking into account and after deduction for the amount of Permitted
Dividends that would be payable pursuant to the following clause (x) if no
Additional Capital Payments were paid pursuant to this clause (ix));

 

(x) subject to the satisfaction of each of the provisions of Section 2.14(b), to
the Seller for distribution to its stockholders on or after the first
anniversary of the Closing Date, Permitted Dividends, if any, in an aggregate
amount (including all other amounts, if any, previously paid to the Seller as
Permitted Dividends) not to exceed the Maximum Permitted Dividend Amount (it
being understood that any amounts available as Permitted Dividends pursuant to
this clause (x) shall be determined taking into account and after deduction for
the amounts that would be payable pursuant to the following clause (xi) if no
Permitted Dividends were paid pursuant to this clause (x));

 

(xi) first, any other amounts payable to the Purchasers, including, without
limitation, any Indemnified Amounts and any Yield in excess of a rate per annum
equivalent of the Offshore Rate plus seventy-five basis points (0.75%) per
annum, second, any other amounts payable to the Administrative Agent, and third,
any other amounts payable, to the extent not previously paid, to the Insurer;

 

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(xii) any amounts payable to the holders of any permitted subordinated interest
in the Receivables consented to by each of the Administrative Agent and, if
applicable, the Insurer pursuant to Section 11.8; and

 

(xiii) any remaining amounts to the Seller.

 

SECTION 2.13 [Reserved].

 

SECTION 2.14 Application of Collections Distributable to the Seller; Permitted
Dividends. (a) The Servicer shall allocate and apply, on behalf of the Seller,
Collections distributable to the Seller hereunder first, to the payment or
provision for payment of the Seller’s operating expenses and, thereafter, for
the general corporate purposes of the Seller.

 

(b) Notwithstanding anything in this Agreement or in any of the other
Transaction Documents to the contrary, no amount of Collections shall be payable
to the Seller as Permitted Dividends on any Settlement Date unless each of the
following criteria are satisfied:

 

(i) such Settlement Date shall be a date occurring on or after September 27,
2004;

 

(ii) the Minimum Equity, calculated as of the end of the immediately preceding
Fiscal Month, shall exceed thirteen percent (13%);

 

(iii) the Performance Guarantor shall have a controlling interest in Flight
Options, unless each of the Administrative Agent and the Control Party has
previously given its written consent to a transfer of such controlling interest
in Flight Options (it being understood that any decision made by such Person
shall be made in good faith and in a commercially reasonable manner) and the
Servicer shall have provided each of the Rating Agencies with written notice of
any transfer of such controlling interest;

 

(iv) as of the end of the immediately preceding Fiscal Month, the aggregate
Unpaid Balance of all Receivables between 101 and 180 days past due (excluding
any past due interest on arrears) shall not exceed four percent (4%) of the
aggregate of the Unpaid Balances of all Receivables;

 

(v) on such Settlement Date, the Net Investment shall represent no more than one
hundred percent (100%) of the total value of (i) the Aircraft as calculated with
reference to the “Retail Value” of equivalent assets listed in the latest
edition of the Aircraft Blue Book Price Digest published by PRIMEDIA Business
Managers and Media (the “Blue Book Value”) and (ii) Aircraft Fractional Shares
as calculated with reference to the relevant share percentage applied to the
Blue Book Value (it being understood that, in the event that either the
Administrative Agent or the Control Party reasonably determines that there is a
material adverse change in the value of the Aircraft relative to the current
Blue Book Value, such Person may request that desktop appraisals prepared by
Back Aviation Solutions or another appraiser reasonably acceptable to each of
the Administrative Agent and the Control Party be obtained for such Aircraft, in
which event such appraised value shall replace the Blue Book Value for purposes
of making a determination pursuant to this clause (v); provided that (y) the
same Person shall not

 

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make such request more frequently than once per calendar year and (z) the
aggregate annual cost of such appraisals for which the Seller is responsible
shall not exceed twenty thousand dollars ($20,000));

 

(vi) on such Settlement Date (after giving effect to the payment of Permitted
Dividends on such date) the aggregate amount of Collections distributed to the
Seller as Permitted Dividends shall not exceed the Maximum Permitted Dividend
Amount; and

 

(vii) immediately prior to and immediately after giving effect to the
application of Collections on such Settlement Date, no Event of Default,
Unmatured Event of Default or Servicer Default shall have occurred and be
continuing.

 

(c) Notwithstanding anything in this Agreement or any other Transaction Document
to the contrary, each of the parties hereto, the Performance Guarantor and the
Insurer hereby expressly agree that any distributions of the “Deferred
Investment Amount” made directly from the Cash Reserve Account (as opposed to
distributions made from Collections on deposit in the Collection Account) shall
not be subject to the limitations on “Permitted Dividends” set forth in this
Section 2.14.

 

SECTION 2.15 Collections Held in Trust. So long as the Seller or the Servicer
shall hold any Collections or Deemed Collections then or thereafter required to
be paid by the Seller to the Servicer or the Collection Account or by the Seller
or the Servicer to the Administrative Agent or the Collection Account, it shall
hold such Collections in trust, and, shall deposit (or cause to be deposited)
such Collections or Deemed Collections within five (5) Business Days after its
receipt thereof into the Collection Account (or such other account as designated
by the Administrative Agent at such time). The Net Investment shall not be
deemed reduced by any amount held in trust or in the Collection Account unless
and until, and then only to the extent that, such amount is finally distributed
to the Administrative Agent in accordance with and subject to the priorities for
payment set forth in Section 2.12.

 

SECTION 2.16 Optional Repurchase by Transferor. As an administrative
convenience, by providing the Administrative Agent and the Insurer with ten (10)
days’ prior written notice, the Transferor may on any Settlement Date on or
after the date on which the aggregate Unpaid Balance of all Receivables (as
calculated at the end of the immediately preceding Fiscal Month) first becomes
less than ten percent (10%) of the Investment and, so long as the repurchase
price to be paid for the Receivables and all Affected Assets at such time is
sufficient to pay in full the Net Investment at such time plus accrued Yield and
all other amounts owing to the Purchasers, the Administrative Agent, the Insurer
(including in respect of the reimbursement of claims, if any, paid pursuant to
the Insurance Policy) and the other Secured Parties, purchase, in whole and not
in part, all Receivables and other Affected Assets purchased (or substituted)
for the benefit of the Secured Parties pursuant to this Agreement.

 

SECTION 2.17 Repurchase or Substitution of Receivables. (a) In the event that
any representation or warranty relating to any Receivable made as of the Closing
Date was not true and correct in any material respect when made, which, at any
time after the Closing Date, has a materially adverse impact on the
collectibility of such Receivable or on the value of such Receivable or the
related Affected Assets taken as a whole, the Administrative Agent (with the

 

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prior written consent of the Control Party) may have the right at such time to,
and at the written direction of the Control Party at such time shall, require
that: (i) the Seller repurchase the Purchasers’ interest in such Receivable by
depositing into the Collection Account an amount equal to the Unpaid Balance of
such Receivable plus accrued interest thereon; or (ii) the Seller substitute
another Eligible Receivable for such Receivable (an “Eligible Substitute
Receivable”), which Eligible Substitute Receivable shall (A) have an Unpaid
Balance (calculated as of the date of substitution) equal to or greater than
that of the then Unpaid Balance of the replaced Receivable and a remaining
average life not more than ten percent (10%) greater than the remaining average
life of such replaced Receivable, (B) be approved by each of the Administrative
Agent and the Control Party (in their respective reasonable credit judgment) as
a Receivable acceptable for substitution hereunder, (C) satisfy the definition
of “Eligible Receivable” at the time of such substitution without regard to the
Investment Condition and without regard to the reference to the Closing Date set
forth at the beginning of the definition of Eligible Receivable, and (D) if (x)
the Aircraft relating to the Receivable being replaced is U.S. registered, the
Aircraft relating to the substituted Receivable is also U.S. registered, (y) the
Contract File for the Receivable being replaced contains recorded Security
Agreements in favor of the Administrative Agent, then the Contract File for the
substituted Receivable will contain substantially equivalent recorded Security
Agreements and (z) the Contract File for the Receivable being replaced does not
contain any recorded Security Agreements in favor of the Administrative Agent,
then the Contract File for the substituted Receivable will not be required, on
the date of substitution, to contain recorded Security Agreements (it being
understood that (I) with respect to any Eligible Substitute Receivable and the
related Contract File referred to in clause (z), the Servicer shall, within six
(6) months of the date of substitution and subject to terms set forth in Section
6.1(q), perform all actions with respect to such Receivable, as would be
required with respect to such Receivable if such Receivable were included on the
Schedule of Receivables on the Closing Date, and (II) the Servicer shall direct
the Obligor of each Eligible Substitute Receivable, not later than the date of
the substitution thereof, to make all payments on such Eligible Substitute
Receivable to a Blocked Account or to the Collection Account). For the avoidance
of doubt, a breach of the representation and warranty in Section 4.1(z) with
respect to any Receivable will be deemed to have a material adverse effect on
the value of such Receivable.

 

(b) With respect to each substitution pursuant to Section 2.17(a) above, the
Servicer shall deliver (or cause to be delivered) to the Administrative Agent
and the Insurer, an updated Schedule of Receivables reflecting such substitution
and the Servicer shall, subject to Section 2.17(a) above, have possession of
each item required to be included in the related Contract File with respect to
such Eligible Substitute Receivable (and each such Eligible Substitute
Receivable and all Affected Assets related thereto shall, subject to Section
2.17(a) above, be subject to the Administrative Agent’s security interest for
the benefit of the Secured Parties). The Administrative Agent shall authorize
the filing of and/or execute such documents reasonably requested by the Servicer
on behalf of the Seller in order to effect the reassignment and release of the
Receivable being repurchased or substituted pursuant to Section 2.17(a) above at
such time and the Seller and the Servicer shall, subject to Section 2.17(a)
above, take or cause to be taken all action (including delivery of the related
Contract File to a custodian pursuant to the terms of this Agreement and the
authorization of the filing of financing statements in all applicable UCC
jurisdictions with respect to any such Eligible Substitute Receivable) as may be
reasonably requested by either the Administrative Agent or the Control Party
from time to time, to evidence, perfect and protect the Administrative Agent’s
security interest (for the benefit of the Secured Parties) in any such Eligible
Substitute Receivable and all Affected Assets related thereto.

 

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ARTICLE III

 

ADDITIONAL ALTERNATE PURCHASER PROVISIONS

 

SECTION 3.1 Assignment to Alternate Purchasers.

 

(a) Assignment Amounts. At any time, if the Administrator on behalf of the
Conduit Purchaser so elects, by written notice to the Administrative Agent and
the Servicer, the Servicer on behalf of the Seller hereby irrevocably requests
and directs that the Conduit Purchaser assign, and the Conduit Purchaser does
hereby assign, effective on the Assignment Date referred to below all or such
portions as may be elected by the Conduit Purchaser of its interest in the Net
Investment and the Asset Interest at such time to the Alternate Purchasers
pursuant to this Section 3.1; provided, however, that no such assignment shall
take place pursuant to this Section 3.1 at a time when an Event of Bankruptcy
with respect to the Conduit Purchaser exists. No further documentation or action
on the part of the Conduit Purchaser or the Seller shall be required to exercise
the rights set forth in the immediately preceding sentence, other than the
giving of the notice by the Administrator on behalf of the Conduit Purchaser
referred to in such sentence and the delivery by the Administrative Agent of a
copy of such notice to each Alternate Purchaser (the date of the receipt by the
Administrative Agent of any such notice being the “Assignment Date”). Each
Alternate Purchaser hereby agrees, unconditionally and irrevocably and under all
circumstances, without setoff, counterclaim or defense of any kind, to pay the
full amount of its Assignment Amount on such Assignment Date to the Conduit
Purchaser in immediately available funds to an account designated by the
Administrative Agent. Upon payment of its Assignment Amount, each Alternate
Purchaser shall acquire an interest in the Asset Interest and the Net Investment
equal to its pro rata share (based on the outstanding portions of the Net
Investment funded by it) of the Alternate Purchaser Percentage thereof.

 

(b) [Reserved].

 

(c) Administration of Agreement after Assignment from Conduit Purchaser to
Alternate Purchasers following the Termination Date. After any assignment in
whole by the Conduit Purchaser to the Alternate Purchasers pursuant to this
Section 3.1 (and the payment of all amounts owing to the Conduit Purchaser in
connection therewith), all rights of the Administrator set forth herein shall be
given to the Administrative Agent on behalf of the Alternate Purchasers instead
of the Administrator.

 

(d) Payments to Administrative Agent’s Account. After any assignment in whole by
the Conduit Purchaser to the Alternate Purchasers pursuant to this Section 3.1,
all payments to be made pursuant to this Agreement to the Conduit Purchaser
shall be made to the Administrative Agent’s account as such account shall have
been notified to the Seller and the Servicer.

 

(e) Recovery of Net Investment. In the event that the aggregate of the
Assignment Amounts paid by the Alternate Purchasers pursuant to this Section 3.1
on any Assignment Date occurring on or after the Termination Date is less than
the Net Investment of the Conduit

 

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Purchaser on such Assignment Date, then to the extent Collections thereafter
received by the Administrative Agent hereunder in respect of the Net Investment
exceed the aggregate of the unrecovered Assignment Amounts and Net Investment
funded by the Alternate Purchasers, such excess shall be remitted by the
Administrative Agent to the Conduit Purchaser (or to the Administrator on its
behalf) for the account of the Conduit Purchaser.

 

SECTION 3.2 Downgrade of Alternate Purchaser. (a) Downgrades Generally. If at
any time on or prior to the Termination Date, the short term debt rating of any
Alternate Purchaser shall be “A-2” or “P-2” from S&P or Moody’s, respectively,
with negative credit implications, such Alternate Purchaser, upon request of the
Administrative Agent, shall, within thirty (30) days of such request, assign its
rights and obligations hereunder to another financial institution (which
institution’s short term debt rating shall be at least “A-2” or “P-2” from S&P
or Moody’s, respectively, and which shall not be so rated with negative credit
implications and which is acceptable to the Conduit Purchaser and the
Administrative Agent). If the short term debt rating of an Alternate Purchaser
shall be “A-3” or “P-3”, or lower, from S&P or Moody’s, respectively (or such
rating shall have been withdrawn by S&P or Moody’s), such Alternate Purchaser,
upon request of the Administrative Agent, shall, within five (5) Business Days
of such request, assign its rights and obligations hereunder to another
financial institution (which institution’s short term debt rating shall be at
least “A-2” or “P-2”, from S&P or Moody’s, respectively, and which shall not be
so rated with negative credit implications and which is acceptable to the
Conduit Purchaser and the Administrative Agent). In either such case, if any
such Alternate Purchaser shall not have assigned its rights and obligations
under this Agreement within the applicable time period described above (in
either such case, the “Required Downgrade Assignment Period”), the Administrator
on behalf of the Conduit Purchaser shall have the right to require such
Alternate Purchaser to pay upon one (1) Business Day’s notice at any time after
the Required Downgrade Assignment Period (and each such Alternate Purchaser
hereby agrees in such event to pay within such time) to the Administrative Agent
an amount equal to such Alternate Purchaser’s unused Commitment (a “Downgrade
Draw”) for deposit by the Administrative Agent into an account, in the name of
the Administrative Agent (a “Downgrade Collateral Account”), which shall be in
satisfaction of such Alternate Purchaser’s obligations to make the Investment
and to pay its Assignment Amount upon an assignment from the Conduit Purchaser
in accordance with Section 3.1; provided, however, that if, during the Required
Downgrade Assignment Period, such Alternate Purchaser delivers a written notice
to the Administrative Agent of its intent to deliver a direct pay irrevocable
letter of credit pursuant to this proviso in lieu of the payment required to
fund the Downgrade Draw, then such Alternate Purchaser will not be required to
fund such Downgrade Draw. If any Alternate Purchaser gives the Administrative
Agent such notice, then such Alternate Purchaser shall, within one (1) Business
Day after the Required Downgrade Assignment Period, deliver to the
Administrative Agent a direct pay irrevocable letter of credit in favor of the
Administrative Agent in an amount equal to the unused portion of such Alternate
Purchaser’s Commitment, which letter of credit shall be issued through an United
States office of a bank or other financial institution (i) whose short term debt
ratings by S&P and Moody’s are at least equal to the ratings assigned by such
statistical rating organization to the Commercial Paper and (ii) that is
acceptable to the Conduit Purchaser and the Administrative Agent. Such letter of
credit shall provide that the Administrative Agent may draw thereon for payment
of the Investment or Assignment Amount payable by such Alternate Purchaser which
is not paid hereunder when required, shall expire no earlier than the
Termination Date and shall otherwise be in form and substance acceptable to the
Administrative Agent.

 

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(b) Application of Funds in Downgrade Collateral Account. If any Alternate
Purchaser shall be required pursuant to Section 3.2(a) to fund a Downgrade Draw,
then the Administrative Agent shall apply the monies in the Downgrade Collateral
Account applicable to such Alternate Purchaser’s Pro Rata Share of Investments
required to be made by the Alternate Purchasers, to any Assignment Amount
payable by such Alternate Purchaser pursuant to Section 3.1 and to any purchase
price payable by such Alternate Purchaser pursuant to Section 3.3(b) at the
times, in the manner and subject to the conditions precedent set forth in this
Agreement. The deposit of monies in such Downgrade Collateral Account by any
Alternate Purchaser shall not constitute an Investment or the payment of any
Assignment Amount (and such Alternate Purchaser shall not be entitled to
interest on such monies except as provided below in this Section 3.2(b), unless
and until (and then only to the extent that) such monies are used to fund
Investments or to pay any Assignment Amount or purchase price pursuant to
Section 3.3(b) pursuant to the first sentence of this Section 3.2(b). The amount
on deposit in such Downgrade Collateral Account shall be invested by the
Administrative Agent in Eligible Investments and such Eligible Investments shall
be selected by the Administrative Agent in its sole discretion. The
Administrative Agent shall remit to such Alternate Purchaser, on the last
Business Day of each month, the income actually received thereon. Unless
required to be released as provided below in this Section 3.2(b), Collections
received by the Administrative Agent in respect of such Alternate Purchaser’s
portion of the Net Investment shall be deposited in the Downgrade Collateral
Account for such Alternate Purchaser. Amounts on deposit in such Downgrade
Collateral Account shall be released to such Alternate Purchaser (or the stated
amount of the letter of credit delivered by such Alternate Purchaser pursuant to
Section 3.2(a) above may be reduced) within one (1) Business Day after each
Settlement Date following the Termination Date to the extent that, after giving
effect to the distributions made and received by the Purchasers on such
Settlement Date, the amount on deposit in such Downgrade Collateral Account
would exceed such Alternate Purchaser’s Pro Rata Share (determined as of the day
prior to the Termination Date) of the sum of all Portion of Investment then
funded by the Conduit Purchaser, plus the Interest Component. All amounts
remaining in such Downgrade Collateral Account shall be released to such
Alternate Purchaser no later than the Business Day immediately following the
earliest of (i) the effective date of any replacement of such Alternate
Purchaser or removal of such Alternate Purchaser as a party to this Agreement,
(ii) the date on which such Alternate Purchaser shall furnish the Administrative
Agent with confirmation that such Alternate Purchaser shall have short term debt
ratings of at least “A-2” or “P-2” from S&P and Moody’s, respectively, without
negative credit implications, and (iii) the Termination Date (or if earlier, the
Termination Date in effect prior to any renewal pursuant to Section 3.3 to which
such Alternate Purchaser does not consent, but only after giving effect to any
required purchase pursuant to Section 3.3(b)). Nothing in this Section 3.2 shall
affect or diminish in any way any such downgraded Alternate Purchaser’s
Commitment to the Seller or the Conduit Purchaser or such downgraded Alternate
Purchaser’s other obligations and liabilities hereunder and under the other
Transaction Documents.

 

(c) Program Support Agreement Downgrade Provisions. Notwithstanding the other
provisions of this Section 3.2, an Alternate Purchaser shall not be required to
make a Downgrade Draw (or provide for the issuance of a letter of credit in lieu
thereof) pursuant to Section 3.2(a) at a time when such Alternate Purchaser has
a downgrade collateral account (or letter of credit in lieu thereof) established
pursuant to the Program Support Agreement relating to the transactions
contemplated by this Agreement to which it is a party in an amount at least
equal to its unused

 

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Commitment, and the Administrative Agent may apply monies in such downgrade
collateral account in the manner described in Section 3.2(b) as if such
downgrade collateral account were a Downgrade Collateral Account.

 

SECTION 3.3 Non-Renewing Alternate Purchasers. (a) If at any time the
Administrator requests that the Alternate Purchasers renew their Commitments
hereunder and some but less than all the Alternate Purchasers consent to such
renewal within thirty (30) days of the Administrator’s request, the
Administrator may arrange for an assignment to one or more financial
institutions of all the rights and obligations hereunder of each such
non-consenting Alternate Purchaser in accordance with Section 11.8. Any such
assignment shall become effective on the then-current Termination Date. Each
Alternate Purchaser which does not so consent to any renewal shall cooperate
fully with the Administrator in effectuating any such assignment.

 

(b) If at any time the Administrator requests that the Alternate Purchasers
extend the Termination Date hereunder and some but less than all the Alternate
Purchasers consent to such extension within thirty (30) days after the
Administrator’s request, and if none or less than all the Commitments of the
non-renewing Alternate Purchasers are assigned as provided in Section 3.3(a),
then (without limiting the obligations of all the Alternate Purchasers to make
Investments and pay any Assignment Amount prior to the Termination Date in
accordance with the terms hereof) the Conduit Purchaser may sell an interest in
the Net Investment and the Asset Interest hereunder for an aggregate purchase
price equal to the lesser of (i) the maximum aggregate Assignment Amounts which
would be payable if the Conduit Purchaser assigned its entire interest in the
Asset Interest at that time under Section 3.1, and (ii) the aggregate available
Commitments of the non-renewing Alternate Purchasers, which purchase price shall
be paid solely by the non-renewing Alternate Purchasers, pro rata according to
their respective Commitments. Following the payment of such purchase price, (x)
the extended Termination Date shall be effective with respect to the renewing
Alternate Purchasers, (y) the Facility Limit shall automatically be reduced by
the aggregate of the Commitments of all non-renewing Alternate Purchasers, and
(z) this Agreement and the Commitments of the renewing Alternate Purchasers
shall remain in effect in accordance with their terms notwithstanding the
expiration of the Commitments of the non-renewing Alternate Purchasers. Prior to
the Termination Date, all amounts which, under Section 2.12 are to be applied in
reduction of the Net Investment, up to the aggregate Net Investment sold to the
non-renewing Alternate Purchasers as described above in this Section 3.3(b),
shall be distributed to the non-renewing Alternate Purchasers ratably according
to the aggregate Investments held by them, in reduction of such Investments. On
and after the Termination Date, each non-renewing Alternate Purchaser shall be
entitled to receive distributions as otherwise provided in Section 2.12, such
that all distributions of Collections in accordance with and subject to the
priorities for payment set forth in Section 2.12 thereafter shall be allocated
among the non-renewing Alternate Purchasers and the other Alternate Purchasers
in accordance with each such Alternate Purchaser’s pro rata share (based on its
Investments as of the Termination Date) of the Alternate Purchaser Percentage of
the Net Investment. When (after the expiration of the Commitments of the
non-renewing Alternate Purchasers) the aggregate of the Investments described
above in this Section 3.3(b) shall have been reduced to zero and all accrued
Yield allocable thereto and all other Aggregate Unpaids owing to such Alternate
Purchasers shall have been paid to such Alternate Purchasers in full, then such
Purchasers shall cease to be parties to this Agreement for any purpose.

 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.1 Representations and Warranties of the Originator, the Transferor,
the Seller and the Servicer. Each of the Originator, the Transferor, the Seller
and the Servicer severally represents and warrants to the Secured Parties, that,
on the Closing Date:

 

(a) Corporate Existence and Power. It (i) is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, (ii) has all corporate power and all licenses, authorizations,
consents and approvals of all Official Bodies required to carry on its business
in each jurisdiction in which its business is now and proposed to be conducted
(except where the failure to have any such licenses, authorizations, consents
and approvals would not individually or in the aggregate have a Material Adverse
Effect) and (iii) is duly qualified to do business and is in good standing in
every other jurisdiction in which the nature of its business requires it to be
so qualified, except where the failure to be so qualified or in good standing
would not have a Material Adverse Effect.

 

(b) Corporate and Governmental Authorization; Contravention. The execution,
delivery and performance by it of this Agreement and the other Transaction
Documents to which it is a party (i) are within its corporate powers, (ii) have
been duly authorized by all necessary corporate and shareholder action, (iii)
require no action by or in respect of, or filing with, any Official Body or
official thereof (except as contemplated by Sections 5.1(f), 5.1(g) and 7.7, all
of which have been (or as of the Closing Date will have been) duly made and in
full force and effect), (iv) do not contravene or constitute a default under (A)
its articles of incorporation or by-laws, (B) any Law applicable to it, (C) any
contractual restriction binding on or affecting it or its property or (D) any
order, writ, judgment, award, injunction, decree or other instrument binding on
or affecting it or its property, and (v) do not result in the creation or
imposition of any Adverse Claim upon or with respect to its property or the
property of any of its Subsidiaries (except as expressly provided by the
Transaction Documents).

 

(c) Binding Effect. Each of this Agreement and the other Transaction Documents
to which it is a party has been duly executed and delivered and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

 

(d) Perfection. In the case of (i) the Transferor, it is the owner of each
Leased Aircraft and, immediately prior to the transactions contemplated under
the Sale and Conveyance Agreement, it is the owner of all of the Receivables and
the Related Security (other than with respect to Aircraft or Aircraft Fractional
Shares related to Receivables the Contract with respect to which is a loan), and
it holds a valid, perfected first priority security interest in all Aircraft or
Aircraft Fractional Shares related to Receivables the Contract with respect to
which is a loan, in each case, free and clear of all Adverse Claims (other than
any Permitted Lien) and upon the making of the Investment on the Closing Date,
all financing statements and other documents required to be recorded or filed in
order to perfect and protect the interest of the Seller against all

 

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creditors of and purchasers from the Originator and the Transferor will have
been duly filed in each filing office necessary for such purpose and all filing
fees and taxes, if any, payable in connection with such filings shall have been
paid in full and (ii) the Seller, immediately after giving effect to the
transactions contemplated under the Sale and Conveyance Agreement, it is the
owner of all of the Receivables and the Related Security, free and clear of all
Adverse Claims (other than any Permitted Lien) and upon the making of the
Investment on the Closing Date all financing statements and other documents
required to be recorded or filed in order to perfect and protect the interest of
the Administrative Agent on behalf of the Secured Parties in the Receivables and
other Affected Assets in connection therewith against all creditors of and
purchasers from the Originator, the Transferor and the Seller will have been
duly filed in each filing office necessary for such purpose and all filing fees
and taxes, if any, payable in connection with such filings shall have been paid
in full.

 

(e) Accuracy of Information. All information heretofore furnished by it
(including the Monthly Servicer Reports, any other reports delivered pursuant to
Section 2.8 and its financial statements) to the Administrative Agent, the
Administrator, any Purchaser or the Insurer for purposes of or in connection
with this Agreement, the other Transaction Documents, or any transaction
contemplated hereby or thereby is, and all such information hereafter furnished
by it to the Administrative Agent, the Administrator, any Purchaser or the
Insurer will be, true, complete and correct in every material respect, on the
date such information is stated or certified, and no such item contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that with respect to any information received by the Seller or
the Servicer from an Obligor and furnished to the Administrative Agent, the
Administrator, any Purchaser or the Insurer, the Seller and the Servicer, as
applicable, represents that any such information, to its knowledge is true,
complete and correct in every material respect, on the date such information is
stated or certified, and no such item contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading).

 

(f) Tax Status. It has (i) timely filed all federal, state and local tax returns
or permitted extensions thereof in the United States and all other tax returns
or permitted extensions thereof in foreign jurisdictions required to be filed,
(ii) paid or made adequate provision in accordance with GAAP for the payment of
all taxes, assessments and other governmental charges and (iii) in the case of
the Seller, accounted for the sale of the Asset Interest hereunder, in its books
and financial statements as sales, consistent with GAAP.

 

(g) Action, Suits. It is not in violation of any order of Official Body or
arbitrator. Except as set forth in Schedule 4.1(g), there are no actions, suits,
litigation or proceedings pending, or to its knowledge, threatened, against or
affecting it or any of its Affiliates or their respective properties, in or
before any Official Body or arbitrator which could reasonably be expected to
have a Material Adverse Effect.

 

(h) Use of Proceeds. In the case of the Seller, no proceeds of the Investment
will be used by it (i) to acquire any security in any transaction which is
subject to Section 13 or 14 of the

 

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Securities Exchange Act of 1934, (ii) to acquire any equity security of a class
which is registered pursuant to Section 12 of such act or (iii) for any other
purpose that violates applicable Law, including Regulations T, U or X of the
Federal Reserve Board.

 

(i) Principal Place of Business; Chief Executive Office; Location of Records.
Its jurisdiction of incorporation (which is the only jurisdiction in which it is
incorporated), principal place of business, chief executive office and the
offices where it keeps all its Records, are located at the address(es) described
in Schedule 4.1(i) (and (a) with respect to the Originator and the Transferor,
it has been located at such locations at all times during the five-year period
ending on the Closing Date and (b) with respect to the Seller, it has been
located at such locations at all times since its incorporation) or such other
locations notified to the Administrative Agent and the Insurer in accordance
with Section 7.7 in jurisdictions where all actions required by Section 7.7 have
been taken and completed.

 

(j) Subsidiaries; Tradenames, Etc. With respect to the Transferor and the
Seller, as of the Closing Date: (i) it has no Subsidiaries (other than, with
respect to the Transferor only, the Seller); (ii) it has operated only under its
name set forth in the preamble to this Agreement, and has not changed its name,
merged with or into or consolidated with any other Person or been the subject of
any proceeding under the Bankruptcy Code and (iii) Schedule 4.1(j) lists the
correct federal employer identification number of the Transferor and the Seller.
With respect to the Servicer, as of the Closing Date: (i) has operated only
under its name set forth in the preamble to this Agreement, and has not within
five (5) years prior to the Closing Date, changed its name, merged with or into
or consolidated with any other Person or been the subject of any proceeding
under the Bankruptcy Code, and (ii) Schedule 4.1(j) lists the correct federal
employer identification number of the Servicer.

 

(k) Good Title. The Originator, the Transferor and the Seller intend that (i)
the sale, conveyance, transfer and assignment of all of the Originator’s right,
title and interest in, to and under the Receivables and the other Affected
Assets to the Transferor under the First Tier Agreement to be true sales of the
Affected Assets by the Originator to the Transferor for all purposes, providing
the Transferor with the full risks and benefits of ownership of the Affected
Assets (such that the Affected Assets would not be property of the Originator’s
estate in the event of an Event of Bankruptcy with respect to the Originator)
and (ii) the sale, conveyance, transfer and assignment of all of the
Transferor’s right, title and interest in, to and under the Receivables and the
other Affected Assets to the Seller under the Sale and Conveyance Agreement to
be true sales of the Affected Assets by the Transferor to the Seller for all
purposes, providing the Seller with the full risks and benefits of ownership of
the Affected Assets (such that the Affected Assets would not be property of the
Transferor’s estate in the event of an Event of Bankruptcy with respect to the
Transferor). Solely to the extent that (i) the First Tier Agreement does not
effect a true sale of the Affected Assets from RACC to the Transferor for all
purposes and (ii) the Sale and Conveyance Agreement does not effect a true sale
of the Affected Assets from the Transferor to the Seller for all purposes, as
applicable, (A) the First Tier Agreement creates in favor of the Transferor a
legal, valid and enforceable security interest in the Affected Assets which
security interest has been assigned by the Transferor to the Seller in
accordance with the terms of the Sale and Conveyance Agreement and further
assigned by the Seller to the Administrative Agent (on behalf of the Secured
Parties) in accordance with the terms of this Agreement; and the Sale and
Conveyance Agreement creates in favor of the Seller a

 

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legal, valid and enforceable security interest in the Affected Assets which
security interest has been assigned by the Seller to the Administrative Agent
(on behalf of the Secured Parties) in accordance with the terms of this
Agreement. The Seller, the Administrative Agent and the Purchasers intend that
the sale, conveyance, transfer and assignment of all of the Seller’s right,
title and interest in, to and under the Receivables and the other Affected
Assets to the Administrative Agent (on behalf of the Secured Parties) hereunder
shall be treated as a sale for all purposes, other than federal and state income
tax purposes. Solely to the extent that this Agreement does not affect a true
sale of the Affected Assets from the Seller to the Administrative Agent (on
behalf of the Secured Parties), this Agreement creates in favor of the
Administrative Agent (on behalf of the Secured Parties) a legal, valid and
enforceable security interest in the Affected Assets, together with a security
interest in any Affected Assets that were the subject of a true sale from the
Originator to the Transferor under the First-Tier Agreement or from the
Transferor to the Seller under the Sale and Conveyance Agreement. No
authorization, approval or other action by, and no notice to or filing with, any
Official Body that has not already been taken or made and which is in full force
and effect, is required for the grants of security interest described in the
immediately preceding sentence. Upon the Investment, the Administrative Agent
(on behalf of the Secured Parties) shall acquire a legal, valid and enforceable
perfected first priority ownership interest in each Receivable and all other
Affected Assets, that exist on the Closing Date, free and clear of any Adverse
Claim (other than any Permitted Lien) or, if the Administrative Agent (on behalf
of the Secured Parties) does not acquire such a first priority ownership
interest, then, upon the Investment, the Administrative Agent (on behalf of the
Secured Parties) shall acquire a first priority perfected security interest in
each Receivable and all other Affected Assets, that exist on the Closing Date,
free and clear of any Adverse Claim (other than any Permitted Lien).

 

(l) Nature of Receivables. Each Receivable listed on the Schedule of Receivables
satisfies the definition of “Eligible Receivable” set forth herein on the
Closing Date. It has no knowledge of any fact (including any defaults by the
Obligor thereunder on any other Receivable) that would cause it or should have
caused it to expect any payments on such Receivable not to be paid in full when
due or that is reasonably likely to cause or result in any other Material
Adverse Effect with respect to such Receivable.

 

(m) Credit and Collection Policy. Since August 31, 2003, there have been no
material changes in the Credit and Collection Policy other than in accordance
with this Agreement. Since such date, no material adverse change has occurred in
the overall rate of collection of the Receivables. In the case of the
Transferor, the Seller and the Servicer, it has at all times materially complied
with the Credit and Collection Policy with regard to each Receivable and each
Contract, and in the case of the Originator, it has at all times materially
complied with each Receivable and each Contract, as applicable.

 

(n) Material Adverse Effect. With respect to the Originator, the Transferor and
the Servicer, since December 31, 2002, there has been no Material Adverse
Effect, and with respect to the Seller, since its formation, there has been no
Material Adverse Effect.

 

(o) No Event of Default. No event has occurred and is continuing and no
condition exists, or would result from the Investment or from the application of
the proceeds therefrom, which constitutes an Event of Default or an Unmatured
Event of Default.

 

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(p) Not an Investment Company or Holding Company. It is not, and is not
controlled by, an “investment company” within the meaning of the Investment
Company Act of 1940, or is exempt from all provisions of such act. It is not a
“holding company,” or a subsidiary or affiliate of a “holding company,” within
the meaning of the Public Utility Holding Company Act of 1935.

 

(q) ERISA. Each of the Originator, the Transferor and the Seller and their ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in a Material Adverse Effect. The present
value of all benefit liabilities under all Pension Plans (based on those
assumptions used to fund each such Pension Plan) did not, as of the last
certified annual valuation date of January 1, 2002, exceed the fair market value
of the assets of all Pension Plans as of such date, and the present value of all
benefit liabilities of all underfunded Pension Plans (based on those assumptions
used to fund each such Pension Plan) did not, as of the last certified annual
valuation dates applicable thereto before the Closing Date, exceed by more than
two hundred eighty million dollars ($280,000,000) the fair market value of the
assets of all such underfunded Pension Plans as of such dates. However, it is
anticipated that as of the next annual certification date of January 1, 2003,
the present value of all benefit liabilities under all Pension Plans will exceed
the fair market value of the assets of all Pension Plans and that there will be
a material increase in the levels of underfundings.

 

(r) Blocked Accounts. The names and addresses of all the Blocked Account Banks,
together with the account numbers of the Blocked Accounts at such Blocked
Account Banks, are as specified in Schedule 4.1(r) (or at such other Blocked
Account Banks and/or with such other Blocked Accounts as have been approved by
the Administrative Agent and the Control Party in writing and for which Blocked
Account Agreements have been executed in accordance with Section 7.3 and copies
of which have been delivered to the Servicer, the Administrative Agent and the
Control Party). All Blocked Accounts are subject to Blocked Account Agreements.
Within five (5) Business Days after the Closing Date, the Servicer will instruct
all Obligors to make payments with respect to Receivables directly to a Blocked
Account or to the Collection Account or to post office boxes or lock-boxes to
which only Blocked Account Banks have access. No funds other than Collections
will be deposited into the Blocked Accounts, and, with respect to the
Receivables, all amounts received by any of the Originator, the Transferor, the
Seller or the Servicer representing interest accrued thereon from the period on
and after the Cut-Off Date through the Closing Date shall be deposited into the
Collection Account within five (5) Business Days after the Closing Date.

 

(s) Bulk Sales. In the case of the Originator, the Transferor and the Seller, no
transaction contemplated by this Agreement or the other Transaction Documents
requires compliance with any bulk sales act or similar law.

 

(t) Transfers Under First Tier Agreement and Sale and Conveyance Agreement. In
the case of the Originator and the Transferor, each Receivable, the related
Leased Aircraft and all other Affected Assets (other than Aircraft and Aircraft
Fractional Shares related to a Receivable which arises under a Contract which is
a loan) have been purchased or the prior purchase has

 

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been reaffirmed, by it pursuant to, and in accordance with, the terms of the
First Tier Agreement, and the Originator has no further right, title or interest
therein. In the case of the Transferor and the Seller, each Receivable and all
Affected Assets (other than the Aircraft) have been sold or purchased, as
applicable, by it pursuant to, and in accordance with, the terms of the Sale and
Conveyance Agreement, and the Transferor has no further right, title or interest
therein (other than title with respect to the Leased Aircraft).

 

(u) Preference; Voidability. In the case of the Originator and the Transferor,
the Transferor has given reasonably equivalent value to the Originator, in
consideration for the transfer to it by the Originator of the Originator’s
interest in the Affected Assets, and such transfer has not been made for or on
account of an antecedent debt owed by the Originator to the Transferor and no
such transfer is or may be voidable under any section of the Bankruptcy Code. In
the case of the Transferor and the Seller, the Seller has given reasonably
equivalent value to the Transferor, in consideration for the transfer to it by
the Transferor of the Transferor’s interest in the Affected Assets (other than
title to the Leased Aircraft), and such transfer was not made for or on account
of an antecedent debt owed by the Transferor to the Seller and no such transfer
is or may be voidable under any section of the Bankruptcy Code.

 

(v) Nonconsolidation. Each of the Transferor and the Seller is operated in such
a manner that the separate corporate existence of each of the Transferor and the
Seller, on the one hand, and the Originator or any Affiliate thereof, on the
other, would not be disregarded in the event of the bankruptcy or insolvency of
any of the Originator or any Affiliate thereof, the Transferor or the Seller
and, without limiting the generality of the foregoing:

 

(i) each of the Transferor and the Seller is a limited purpose corporation whose
activities are restricted in its certificate of incorporation to activities
related to purchasing or otherwise acquiring receivables (including the
Receivables) and related assets and rights and conducting any related or
incidental business or activities it deems necessary or appropriate to carry out
its primary purpose, including entering into agreements like the Transaction
Documents;

 

(ii) neither the Transferor nor the Seller has engaged, or presently engages, in
any activity other than those activities expressly permitted hereunder and under
the other Transaction Documents, nor has the Transferor or the Seller entered
into any agreement other than this Agreement, the other Transaction Documents to
which it is a party, and with the prior written consent of each of the
Administrative Agent and the Control Party, any other agreement necessary to
carry out more effectively the provisions and purposes hereof or thereof;

 

(iii) (A) each of the Transferor and the Seller maintains its own deposit
account or accounts, separate from those of any of its Affiliates, with
commercial banking institutions, (B) the funds of the Transferor and the Seller
are not and have not been diverted to any other Person for any use other than
the corporate use of the Transferor or the Seller, as applicable and (C), except
as may be expressly permitted by this Agreement and except, in the case of the
Transferor only, in connection with the Performance Guarantor’s integrated cash
management system, the funds of the Transferor and the Seller are not and have
not been commingled with those of any other Person;

 

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(iv) to the extent that the Transferor or the Seller contracts or does business
with vendors or service providers where the goods and services provided are
partially for the benefit of any other Person, the costs incurred in so doing
are fairly allocated to or among the Transferor or the Seller, as the case may
be, and such entities for whose benefit the goods and services are provided, and
the Transferor and the Seller, as the case may be, and each such entity bears
its fair share of such costs; and all material transactions between the
Transferor or the Seller, as applicable, and any of their respective Affiliates
shall be only on an arm’s-length basis;

 

(v) each of the Transferor and the Seller maintains a principal executive and
administrative office through which its business is conducted and a telephone
number and stationery through which all business correspondence and
communication are conducted, in each case separate from those of its Affiliates;

 

(vi) each of the Transferor and the Seller conducts its affairs strictly in
accordance with its certificate of incorporation and observes all necessary,
appropriate and customary corporate formalities, including (A) holding all
regular and special stockholders’ and directors’ meetings appropriate to
authorize all corporate action (which, in the case of regular stockholders’ and
directors’ meetings, are held at least annually), (B) keeping separate and
accurate minutes of such meetings, (C) passing all resolutions or consents
necessary to authorize actions taken or to be taken, and (D) maintaining
accurate and separate books, records and accounts, including intercompany
transaction accounts;

 

(vii) all decisions with respect to its business and daily operations are
independently made by the Transferor or the Seller, as applicable (although the
officer making any particular decision may also be an employee, officer or
director of an Affiliate of the Transferor or the Seller, as applicable) and are
not dictated by any Affiliate of the Transferor or the Seller (it being
understood that the Servicer, which is an Affiliate of the Transferor and the
Seller, will undertake and perform all of the operations, functions and
obligations of it set forth herein and it may appoint Sub-Servicers, which may
be Affiliates of the Transferor and the Seller, to perform certain of such
operations, functions and obligations);

 

(viii) each of the Transferor and the Seller acts solely in its own corporate
name and through its own authorized officers and agents, has not held itself out
as a “division” or “part” of any other Person, and no Affiliate of such Person
shall be appointed to act as its agent, except as expressly permitted by this
Agreement and the other Transaction Documents;

 

(ix) no Affiliate of the Transferor or the Seller advances funds to the
Transferor or the Seller, other than as is otherwise expressly provided herein
or in the other Transaction Documents, and no Affiliate of the Transferor or the
Seller otherwise supplies funds to, or guaranties debts of, the Transferor or
the Seller; provided, however, that the Transferor, as an Affiliate of the
Seller, may provide funds to the Seller in connection with the capitalization of
the Seller;

 

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(x) other than organizational expenses and as expressly provided herein, each of
the Transferor and the Seller pays all expenses, indebtedness and other
obligations incurred by it;

 

(xi) neither the Transferor nor the Seller guarantees, or is otherwise liable
for, any obligation of any of their respective Affiliates;

 

(xii) any financial reports required of the Transferor and the Seller comply
with generally accepted accounting principles and are issued separately from,
but may be consolidated with, any reports prepared for any of their respective
Affiliates;

 

(xiii) each of the Transferor and the Seller is adequately capitalized to engage
in the transactions contemplated in its certificate of incorporation;

 

(xiv) neither the Transferor nor the Seller acts as agent for the other or any
Affiliate thereof, but instead presents itself to the public as a corporation
separate from each such member and independently engaged in the business of
purchasing and financing Receivables;

 

(xv) each of the Transferor and the Seller maintains a five person board of
directors, including at least one independent director who has never been, and
shall at no time be, a stockholder, director, officer, employee or associate, or
any relative of the foregoing, of any Affiliate of the Transferor or the Seller
(other than the Seller and any other bankruptcy-remote special purpose entity
formed for the sole purpose of securitizing, or facilitating the securitization
of, financial assets of the Transferor or any Affiliate thereof), all as
provided in its certificate of incorporation, and is otherwise reasonably
acceptable to the Administrative Agent and the Insurer;

 

(xvi) the bylaws or the certificate of incorporation of each of the Transferor
and the Seller require (A) the affirmative vote of an independent director
before a voluntary petition under Section 301 of the Bankruptcy Code may be
filed by such Person, and (B) such Person to maintain correct and complete books
and records of account and minutes of the meetings and other proceedings of its
stockholders and board of directors; and

 

(xvii) RACC hereby agrees that it will retain all ERISA liabilities related to
its employees who provide services to GARC or RARC, and GARC or RARC,
respectively, will pay to RACC its pro rata share of ERISA contributions for
RACC’s employees who provide services to GARC or RARC, respectively.

 

Without limiting the foregoing, all of the factual statements and assumptions
relating to the Transferor and the Seller that are set forth in each of the
“true sale” and “non-consolidation” opinions of Bingham McCutchen LLP, delivered
pursuant to Section 5.1, are true and correct.

 

(w) Representations and Warranties in other Transaction Documents. Each of the
representations and warranties made by it contained in any of the Transaction
Documents (other

 

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than this Agreement) to which it is a party is true, complete and correct in all
respects and it hereby makes each such representation and warranty to, and for
the benefit of, the Administrative Agent, the Administrator, the Purchasers and
the Insurer, as if the same were set forth in full herein and each of the
Originator and the Transferor hereby ratifies all of the Transaction Documents
previously executed by it and confirms that except as modified hereby, each such
Transaction Document remains in full force and effect.

 

(x) No Servicer Default. No event has occurred and is continuing and no
condition exists, or would result from the Investment or from the application of
the proceeds therefrom, which constitutes a Servicer Default or an Unmatured
Servicer Default.

 

(y) Parties Necessary to Amend Prior Purchase and Sale Agreement. Each of the
Originator and the Transferor hereby represents and warrants that all parties
necessary to amend and restate the Prior Purchase and Sale Agreement are parties
to this Agreement.

 

(z) No Extension. The Originator, the Transferor, the Seller and the Servicer
have not granted any payment extension of the terms of any Receivable or any
Contract related to any Receivable, nor any right on the part of the related
Obligor to implement any extension, other than (i) extensions granted prior to
the Cut-off Date which have been paid in full prior to the Cut-off Date or (ii)
as disclosed in the “Extended Receivables” section in Schedule II to a date no
later than the maturity date for such Receivable set forth in Schedule IV.

 

(aa) No Defaults. The Originator, the Transferor, the Seller and the Servicer
are not in default under any material contract, lease agreement, instrument or
commitment to which such Person is a party which has or would have a Material
Adverse Effect.

 

(bb) Indonesian Aircraft. With respect to the Originator, the Transferor and the
Servicer, title to the two (2) Indonesian Aircraft listed on Schedule IV was
transferred by Raytheon Aircraft Credit Special Purpose Company, a Kansas
corporation (“RACSPC”), to RACC pursuant to bills of sale executed by RACSPC,
subject to the assignment and novation in favor of RACC of the underlying lease
Receivables pursuant to novation agreements executed by RACSPC, RACC, RARC and
the related lessees, in consideration for RACC’s repayment in full of the
mortgage loans made by RACC, in the case of one Indonesian Aircraft, and by
RARC, in the case of the other, that were secured by the respective Indonesian
Aircraft, which consideration was determined by RACSPC, RACC and RARC in good
faith to be the fair market value of such Indonesian Aircraft.

 

SECTION 4.2 Additional Representations and Warranties of the Originator and the
Servicer. The Originator and the Servicer each for itself only represents and
warrants on the Closing Date to the Administrative Agent, the Administrator, the
Purchasers and the Insurer, which representation and warranty shall survive the
execution and delivery of this Agreement, that (a) each of the representations
and warranties of the Originator and the Servicer (whether made in its
individual capacity or as the Originator or the Servicer, as applicable)
contained in any Transaction Document to which it is a party is true, complete
and correct and, if made by the Originator or the Servicer in its individual
capacity, applies with equal force to the Originator or the Servicer, as
applicable, in its capacity as the Originator or the Servicer, as applicable,
and the Originator and the Servicer each hereby makes each such representation
and warranty to, and for

 

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the benefit of, the Administrative Agent, the Administrator, the Purchasers and
the Insurer, as if the same were set forth in full herein, and (b) without
limiting the foregoing, all of the factual statements and assumptions relating
to the Originator and the Servicer that are set forth in each of the “true sale”
and “non-consolidation” opinions of Bingham McCutchen LLP, delivered pursuant to
Section 5.1, are true and correct.

 

ARTICLE V

 

CONDITIONS PRECEDENT

 

SECTION 5.1 Conditions Precedent to Closing and Investment. The occurrence of
the Closing Date, the effectiveness of the Commitments hereunder and the
Investment shall be subject to the conditions precedent that (i) the Transferor
and the Seller shall have paid in full (A) all amounts required to be paid by
either of them on or prior to the Closing Date pursuant to each of the Fee
Letters and (B) the fees and expenses described in clause (a)(i) of Section 9.4
and invoiced prior to the Closing Date, and (ii) each of (A) the Administrative
Agent shall have received, for itself and each of the Purchasers and the
Administrative Agent’s counsel, and (B) the Insurer shall have received, for
itself and its counsel, an original (unless otherwise indicated) of each of the
following, each dated (if applicable) the Closing Date (unless otherwise
indicated) and each in form and substance satisfactory to the Administrative
Agent and the Insurer and each of their respective counsel (unless otherwise
indicated).

 

(a) A duly executed counterpart of this Agreement, the First Tier Agreement, the
Sale and Conveyance Agreement, the Administrative Agent Fee Letter, the
Purchaser Fee Letter, the Insurance Premium Letter, the Performance Guaranty,
the Insurance and Reimbursement Agreement, the Insurance Policy and each of the
other Transaction Documents to which each of the Originator, the Transferor, the
Seller, the Servicer and the Performance Guarantor, as applicable, is a party
(other than the Security Agreements, in which case the Investment Condition
shall have been satisfied with respect to such Security Agreements).

 

(b) A certificate of the secretary or assistant secretary of the Seller,
certifying and (in the case of clauses (i) through (iii)) attaching as exhibits
thereto, among other things:

 

(i) the articles of incorporation, charter or other organizing document of the
Seller (certified by the Secretary of State or other similar official of the
Seller’s jurisdiction of incorporation or organization, as applicable, as of a
recent date);

 

(ii) the by-laws of the Seller;

 

(iii) the resolutions of the board of directors or other governing body of the
Seller authorizing the execution, delivery and performance by the Seller of this
Agreement, the Sale and Conveyance Agreement and the other Transaction Documents
to be delivered by the Seller hereunder or thereunder and all other documents
evidencing necessary corporate action (including shareholder consents, if
required) and government approvals, if any; and

 

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(iv) the incumbency, authority and signature of each officer of the Seller
executing the Transaction Documents or any certificates or other documents
delivered hereunder or thereunder on behalf of the Seller.

 

(c) A certificate of the secretary or assistant secretary of each of the
Originator, the Transferor and the Servicer certifying and (in the case of
clauses (i) through (iii)) attaching as exhibits thereto, among other things:

 

(i) the articles of incorporation, charter or other organizing document of each
of the Originator, the Transferor and the Servicer (certified by the Secretary
of State or other similar official of its jurisdiction of incorporation or
organization, as applicable, as of a recent date);

 

(ii) the by-laws of each of the Originator, the Transferor and the Servicer;

 

(iii) resolutions of the board of directors or other governing body of each of
the Originator, the Transferor and the Servicer authorizing the execution,
delivery and performance by it of this Agreement, the Sale and Conveyance
Agreement, the First Tier Agreement and the other Transaction Documents to be
delivered by it hereunder or thereunder and all other documents evidencing
necessary corporate action (including shareholder consents, if required) and
government approvals, if any; and

 

(iv) the incumbency, authority and signature of each officer of the Originator,
the Transferor and the Servicer executing the Transaction Documents or any
certificates or other documents delivered hereunder or thereunder on its behalf.

 

(d) A good standing certificate for the Seller issued by the Secretary of State
or a similar official of the Seller’s jurisdiction of incorporation or
organization, as applicable, and certificates of qualification as a foreign
corporation issued by the Secretaries of State or other similar officials of
each jurisdiction where such qualification is material to the transactions
contemplated by this Agreement and the other Transaction Documents, in each
case, dated as of a recent date.

 

(e) A good standing certificate for each of the Originator, the Transferor and
the Servicer issued by the Secretary of State or a similar official of its
jurisdiction of incorporation or organization, as applicable, and certificates
of qualification as a foreign corporation issued by the Secretaries of State or
other similar officials of each jurisdiction where such qualification is
material to the transactions contemplated by this Agreement and the other
Transaction Documents, in each case, dated as of a recent date.

 

(f) Evidence of filing, acceptable to the Administrative Agent and the Insurer,
of proper financing statements (Form UCC-1), filed on or before the Closing Date
naming the Seller, as debtor, in favor of the Administrative Agent, as secured
party, for the benefit of the Secured Parties, or, subject to the Investment
Condition, other similar instruments or documents as may be necessary or in the
reasonable opinion of the Administrative Agent or the Insurer desirable under
the UCC of all appropriate jurisdictions or any comparable law to perfect the
Administrative Agent’s ownership or security interest in all Receivables and the
other Affected Assets.

 

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(g) Evidence of filing, acceptable to the Administrative Agent and the Insurer,
of proper financing statements (Form UCC-1), filed on or before the Closing Date
naming the Transferor, as debtor, the Seller, as secured party and the
Administrative Agent, as assignee of secured party, or, subject to the
Investment Condition, other similar instruments or documents as may be necessary
or in the reasonable opinion of the Administrative Agent or the Insurer
desirable under the UCC of all appropriate jurisdictions or any comparable law
to perfect the Seller’s ownership or security interest in all Receivables and
the other Affected Assets (other than with respect to any ownership interest in
the related Aircraft or Aircraft Fractional Shares) and to perfect the
Administrative Agent’s security interest in all Receivables and the other
Affected Assets.

 

(h) Evidence of filing, acceptable to the Administrative Agent and the Insurer,
of proper financing statements (Form UCC-1), filed on or before the Closing Date
naming the Originator, as debtor, the Transferor, as secured party and the
Administrative Agent, as assignee of secured party, or, subject to the
Investment Condition, other similar instruments or documents as may be necessary
or in the reasonable opinion of the Administrative Agent or the Insurer
desirable under the UCC of all appropriate jurisdictions or any comparable law
to perfect the Transferor’s ownership interest in the Affected Assets and to
perfect the Administrative Agent’s security interest in the Affected Assets.

 

(i) Evidence of filing, acceptable to the Administrative Agent and the Insurer,
of proper financing statements (Form UCC-3), if applicable, filed on or before
the Closing Date necessary to terminate all security interests and other rights
of any Person (other than title to the Aircraft or Aircraft Fractional Shares,
which shall remain in favor of the Transferor in the case of Leased Aircraft or
the Obligor in the case of loans) in Receivables and the other Affected Assets
previously granted by the Seller.

 

(j) Evidence of filing, acceptable to the Administrative Agent and the Insurer,
of proper financing statements (Form UCC-3), if applicable, filed on or before
the Closing Date necessary to terminate all security interests (other than any
Permitted Lien) and other rights of any Person (other than Obligors) in
Receivables or the other Affected Assets previously granted by the Transferor
(other than those filed in favor of Bank of America in connection with the Prior
Purchase and Sale Agreement).

 

(k) Evidence of filing, acceptable to the Administrative Agent and the Insurer,
of proper financing statements (Form UCC-3), if applicable, filed on or before
the Closing Date necessary to terminate all security interests (other than any
Permitted Lien) and other rights of any Person (other than Obligors) in
Receivables or the other Affected Assets previously granted by the Originator
(other than those filed in favor of Bank of America in connection with the Prior
Purchase and Sale Agreement).

 

(l) Search reports from a third-party search company acceptable to the
Administrative Agent and the Insurer, dated a date reasonably near the Closing
Date, listing all effective financing statements which name the Originator, the
Transferor or the Seller (under

 

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their respective present names and any previous names) as debtor and which are
filed in jurisdictions in which the filings were made pursuant to clauses (f),
(g) or (h) above and such other jurisdictions where the Administrative Agent or
the Insurer may reasonably request, together with copies of such financing
statements (none of which shall cover any Receivables other Affected Assets),
and similar search reports with respect to judgments, state tax liens, federal
tax liens and liens of the Pension Benefit Guaranty Corporation in such
jurisdictions, showing no such liens (other than any Permitted Lien) on any of
the Receivables or on the other Affected Assets.

 

(m) Evidence that each Blocked Account required to be established pursuant to
this Agreement (including the Collection Account) has been established in
accordance with the terms hereof, and executed copies of each of the Blocked
Account Agreements relating to each of the Blocked Accounts, and the Servicer
shall have the processes in place to insure that all Collections from and after
the Cut-off Date have been deposited in the Collection Account within five (5)
Business Days after the Seller’s or the Servicer’s receipt thereof.

 

(n) A favorable opinion, dated the Closing Date and addressed to the
Administrative Agent, each Purchaser, the Insurer and each of the Rating
Agencies, of Martin, Pringle, Oliver, Wallace & Bauer L.L.P., special counsel to
the Originator and the Transferor, covering certain UCC perfection and priority
matters and such other matters as the Administrative Agent or Insurer may
reasonably request.

 

(o) Favorable opinion(s), dated the Closing Date and addressed to the
Administrative Agent, each Purchaser, the Insurer and each of the Rating
Agencies, of Bingham McCutchen LLP, special counsel to the Raytheon Entities,
covering (i) certain UCC perfection and priority matters (based on UCC search
reports) and certain corporate matters of the Seller including, but not limited
to, non-contravention, (ii) “true sale” and “non-consolidation” matters, (iii)
enforceability matters and (iv) such other matters as the Administrative Agent
or the Insurer may reasonably request.

 

(p) A favorable opinion, dated the Closing Date and addressed to the
Administrative Agent, each Purchaser, the Insurer and each of the Rating
Agencies, of in-house counsel to each Raytheon Entity (other than the Seller)
which is party to a Transaction Document, covering certain corporate matters,
including, but not limited to, non-contravention and such other matters as the
Administrative Agent or the Insurer may reasonably request.

 

(q) A favorable opinion, dated the Closing Date and addressed to the
Administrative Agent, each Purchaser and each of the Rating Agencies, of
in-house counsel to the Insurer, covering such matters as the Administrative
Agent may reasonably request, in form and substance satisfactory to the
Administrative Agent and its counsel.

 

(r) A Schedule of Receivables identifying all Receivables and the respective
Unpaid Balance and accrued interest with respect thereto as of the Cut-off Date,
and such other information as the Administrative Agent or the Insurer may
reasonably request.

 

(s) Satisfactory results of a review and audit of the Servicer’s collection,
operating and reporting systems, the Credit and Collection Policy, historical
receivables data and accounts,

 

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including satisfactory results of a review of the Servicer’s operating
location(s) and satisfactory review and approval by the Administrative Agent and
the Control Party of the Eligible Receivables in existence on the Cut-off Date
and a written outside audit report of Ernst & Young or another
nationally-recognized accounting firm satisfactory to the Administrative Agent
and the Insurer as to such matters.

 

(t) Evidence of the appointment of CT Corporation System as agent for service of
process as required by Section 11.4.

 

(u) Evidence from each of the Rating Agencies that (i) prior to giving effect to
the issuance of the Insurance Policy, the transactions contemplated by this
Agreement have been rated to a level satisfactory to each of the Administrative
Agent and the Insurer, and (ii) after giving effect to the issuance of the
Insurance Policy, the transactions contemplated by this Agreement, have been
rated “AAA” (or its equivalent) by such Rating Agency.

 

(v) A schedule (i) specifying the days on which Fiscal Months for the period
from the Closing Date through December 31, 2003 will begin and end, and (ii)
listing all days that are not Business Days during such period.

 

(w) Evidence that each of the parties to the Prior Purchase and Sale Agreement
shall have received all amounts owing to such Person immediately prior to giving
effect to this Agreement.

 

(x) Such other approvals, documents, instruments, certificates and opinions as
the Administrative Agent, the Administrator, any Purchaser or the Insurer may
reasonably request.

 

SECTION 5.2 Additional Conditions Precedent to Investment. The Investment shall
be subject to the additional conditions precedent that on the Closing Date the
following statements shall be true, complete and correct (and the Seller by
accepting any amount of the Investment shall be deemed to have certified that):

 

(a) The representations and warranties contained in Sections 4.1 and 4.2 are
true, complete and correct on and as of such date.

 

(b) Each of (I) the Administrative Agent shall have received, for itself and
each of the Purchasers and the Administrative Agent’s counsel, and (II) the
Insurer shall have received for itself and its counsel, each of the following
documents or such other evidence thereof, as applicable, each in form and
substance satisfactory to the Administrative Agent and the Insurer:

 

(i) evidence, in the form of a certificate from an authorized officer of the
Servicer, that (A) in the case of Receivables, the related Contract with respect
to which is not a lease, an executed copy of such Contract and each related
Security Agreement with respect thereto is in the possession of the Servicer,
(B) the Servicer is in possession of every other Security Agreement subject to
clause (C) of this clause (i), and (C) notwithstanding clauses (B) and (C) of
this clause (i), in the case of leases, each Assignment of Rents in favor of the
Administrative Agent is in possession of the Administrative Agent;

 

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(ii) evidence, in the form of a certificate from an authorized officer of the
Servicer, that, in the case of each Receivable related to a lease, an executed
copy of an Assignment of Rents, covering any proceeds of any residual interest
in such Aircraft, is in the possession of the Administrative Agent, and, if
applicable, has been filed with the FAA, or in the case of Aircraft registered
under the laws of a jurisdiction other than the United States, the appropriate
Aviation Authority or Official Body, subject to the satisfaction of the
Investment Condition;

 

(iii) evidence, in the form of a certificate from an authorized officer of the
Servicer, that, in the case of each Receivable related to a loan, an executed
original security agreement, made by the Obligor and assigned in favor of the
Seller and the Administrative Agent, has been filed with the FAA, or in the case
of Aircraft registered under the laws of a jurisdiction other than the United
States, the appropriate Aviation Authority or Official Body, subject to the
satisfaction of the Investment Condition;

 

(iv) evidence in the form of a certificate from an authorized officer of the
Servicer that, with respect to each Receivable related to an Aircraft Fractional
Share, (A) the Originator has assigned to the Transferor all of the Originator’s
rights to require Flight Options to repurchase such Aircraft Fractional Share
upon the occurrence of a default under the related Contract by the related
Obligor, (B) the Transferor has assigned such rights to the Seller and (C) the
Seller has assigned such rights to the Administrative Agent; and

 

(v) in the case of:

 

(A) each Aircraft with respect to which the related Receivable arises under a
loan, evidence of lien search results and a favorable opinion from Local
Aviation Counsel, as special counsel to the Transferor and the Seller, dated on
or prior to the Closing Date, addressed to the Administrative Agent, each
Purchaser and the Insurer, covering (i) certain perfection and priority matters
under local law with respect to each Aircraft and (ii) such other matters as the
Administrative Agent or the Insurer may reasonably request, in each case in form
and substance satisfactory to each of the Administrative Agent and the Control
Party;

 

(B) (i) each Aircraft Fractional Share, evidence, in the form of an opinion from
in-house counsel to the Transferor and the Seller, dated the Closing Date,
addressed to the Administrative Agent, each Purchaser and the Insurer, that the
FAA bill of sale and the Transferor’s form documents which are required to
properly evidence title in the Obligor’s name and reflect the security interest
therein, are in the related Contract File and contain accurate conveyance
numbers, (ii) one Aircraft Fractional Share designated by the in-house counsel
referred to in clause (i) above as having related documentation filed with the
FAA that is representative of those for other Aircraft Fractional Shares,
evidence, in the form of an opinion from Local Aviation Counsel, as special
counsel to the Transferor and the Seller, dated the Closing Date, addressed to
the Administrative Agent, each Purchaser and the Insurer that such
representative documentation is in proper form for filing and recording with the
FAA, and that no renewal or other filing

 

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will be required in order to maintain the perfection of such security interest
(or if any such renewal or filing is required, such opinion shall so specify),
(iii) each Aircraft Fractional Share, searches from a third-party search company
listing the liens of record, including the related security agreement, with
respect to such Aircraft Fractional Share, and (iv) one Aircraft Fractional
share per Aircraft, evidence in the form of an opinion from in-house counsel to
the Transferor and the Seller, dated the Closing Date, addressed to the
Administrative Agent, each Purchaser and the Insurer that, based on the results
in clause (iii) of this Section 5.2(b)(v)(B), no liens on the related Aircraft
Fractional Share are prior to the lien in favor of the Administrative Agent (on
behalf of the Secured Parties), in each case, in form and substance satisfactory
to the Administrative Agent and the Control Party; and

 

(C) each Aircraft with respect to which the related Receivable arises under a
lease, subject to the Investment Condition, evidence, in the form of an opinion
from Local Aviation Counsel, as special counsel to the Transferor and the
Seller, dated the Closing Date, addressed to the Administrative Agent, each
Purchaser and the Insurer, that (i) title to each related Aircraft as reflected
in the records of the FAA is vested in the Transferor and (ii) the related
Assignment of Rents is in proper form for filing and recording with the FAA or
applicable Aviation Authority or Official Body, and covering such other matters
as the Administrative Agent or the Control Party may reasonably request in each
case, in form and substance satisfactory to the Administrative Agent and the
Control Party.

 

(c) The Termination Date has not occurred.

 

ARTICLE VI

 

COVENANTS

 

SECTION 6.1 Affirmative Covenants of the Originator, the Transferor, the Seller
and the Servicer. At all times from the date hereof to the Final Payout Date,
unless the Administrative Agent and the Control Party shall otherwise consent in
writing:

 

(a) Reporting Requirements. Each of the Originator, the Transferor, the Seller
and the Servicer shall maintain, for itself and each of its Subsidiaries, a
system of accounting established and administered in accordance with GAAP, and
each of the Seller and the Servicer shall furnish (or cause to be furnished) to
the Administrative Agent and the Insurer:

 

(i) Annual Reporting. As soon as available and in any event within ninety (90)
days after the end of each fiscal year of the Seller, an unaudited balance sheet
of the Seller as of the end of such fiscal year and the related unaudited
consolidated statements of income and retained earnings for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on and certified by an authorized officer of the
Seller.

 

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(ii) Notice of an Event of Default or an Unmatured Event of Default or a
Servicer Default; Etc. (A) As soon as possible and in any event within two (2)
Business Days after the Servicer knows or should have known of the occurrence of
an Event of Default or an Unmatured Event of Default or a Servicer Default, a
statement of the chief financial officer or chief accounting officer of the
Servicer setting forth details of such Event of Default, Unmatured Event of
Default or Servicer Default and the action which the Servicer proposes to take
(or cause to be taken) with respect thereto, which information shall be updated
promptly from time to time; (B) promptly after the Servicer obtains knowledge
thereof, notice of any litigation, investigation or proceeding that may exist at
any time that could reasonably be expected to result in a Material Adverse
Effect or any litigation or proceeding relating to any Transaction Document; and
(C) promptly after the occurrence thereof, notice of a Material Adverse Effect.

 

(iii) Change in Credit and Collection Policy and Debt Ratings. Within ten (10)
Business Days after the date any material change in or amendment to the Credit
and Collection Policy is made, a copy of the Credit and Collection Policy then
in effect indicating such change or amendment. Within five (5) Business Days
after the date of any change in the Performance Guarantor’s public or private
debt ratings, if any, a written certification of such public or private debt
ratings after giving effect to any such change.

 

(iv) Credit and Collection Policy. Within ninety (90) days after the close of
each of the Servicer’s fiscal years, a complete copy of the Credit and
Collection Policy then in effect, if requested by the Administrative Agent or
the Insurer.

 

(v) ERISA. Promptly upon the occurrence thereof, written notice of any
contribution failure with respect to any Pension Plan sufficient to give rise to
a lien under Section 302(f) of ERISA.

 

(vi) Change in Accountants or Accounting Policy. Promptly, notice of any change
in the accountants or accounting policy of the Originator, the Transferor, the
Seller or the Servicer.

 

(vii) Documents Provided to the Insurer. Any document, notice, certificate,
report or information (including non-financial information) provided from time
to time by any Raytheon Entity to the Insurer, at the same time that the same is
being provided to the Insurer.

 

(viii) Other Information. Such other information (including non-financial
information) as the Administrative Agent, the Administrator or the Insurer may
from time to time reasonably request with respect to any Raytheon Entity or any
of their respective Subsidiaries or Affiliates.

 

(ix) Annual UCC Opinions of Counsel. Within ninety (90) days after the beginning
of each calendar year, beginning with the calendar year 2004, the Servicer on
behalf of the Seller shall furnish to the Administrative Agent (for the benefit
of the Secured Parties) an opinion of counsel (which counsel shall not be
in-house counsel to

 

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the Seller or any of its Affiliates) addressed to the Administrative Agent, each
Purchaser and the Insurer, either stating that, in the opinion of such counsel,
such action has been taken with respect to the recording, filing, re-recording
or re-filing of any financing statements and continuation statements under
Article 9 of the UCC as are necessary to maintain the security interests created
by the First Tier Agreement, the Sale and Conveyance Agreement and this
Agreement and reciting the details of such action or stating that, in the
opinion of such counsel, no such action is necessary to maintain such security
interest, in all cases in form and substance satisfactory to each of the
Administrative Agent and the Control Party. Such opinion of counsel shall also
describe the recording, filing, re-recording and re-filing of any financing
statements and continuation statements that, in the opinion of such counsel, are
required under Article 9 of the UCC to maintain such security interests.

 

(b) Conduct of Business; Ownership. Each of the Originator, the Transferor, the
Seller and the Servicer shall, and the Servicer shall cause each of its
Subsidiaries to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly organized, validly existing
and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted. Each of the Transferor and
the Seller shall at all times be (either directly or indirectly) a wholly-owned
Subsidiary of RACC, and the Seller shall at all times be (either directly or
indirectly) a wholly-owned Subsidiary of the Transferor.

 

(c) Compliance with Laws, Etc. Each of the Originator, the Transferor, the
Seller and the Servicer shall, and the Servicer shall cause each of its
Subsidiaries to, comply with all Laws to which it or its respective properties
may be subject and preserve and maintain its corporate existence, rights,
franchises, qualifications and privileges, except where any such noncompliance
could not reasonably be expected to have a Material Adverse Effect.

 

(d) Furnishing of Information and Inspection of Records. Each of the Originator,
the Transferor, the Seller and the Servicer (including each Sub-Servicer) shall
furnish to the Administrative Agent and the Insurer from time to time such
information with respect to the Affected Assets as the Administrative Agent or
the Insurer may reasonably request. Each of the Transferor, the Seller and the
Servicer shall, at any time and from time to time (and, if no Event of Default
or Servicer Default has occurred, upon reasonable prior written notice from the
Administrative Agent, the Administrator or the Insurer to the Servicer), permit
each of the Administrative Agent, the Administrator and the Insurer (or any of
their respective agents), during regular business hours (i) to examine and make
copies of and take abstracts from all books, records and documents (including
computer tapes and disks) relating to the Receivables or other Affected Assets,
including the related Contracts and (ii) to visit the offices and properties of
the Originator, the Transferor, the Seller or the Servicer, as applicable, for
the purpose of examining such materials described in clause (i), and to discuss
matters relating to the Affected Assets or the Originator’s, the Transferor’s,
the Seller’s, or the Servicer’s performance hereunder or under the Contracts and
under the other Transaction Documents to which such Person is a party with any
of the officers, directors, employees or independent public accountants of the
Originator, the Transferor, the Seller, or the Servicer, as applicable, having
knowledge of such matters. The costs and expenses of the first such audit in any
calendar year incurred by the

 

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Control Party or, if an Insurer Default shall have occurred and be continuing,
each of the Insurer and the Administrative Agent, and all such audits after the
occurrence of an Event of Default or a Servicer Default shall be paid by the
Servicer. Notwithstanding anything to the contrary in this Agreement or any
other Transaction Document, prior to the occurrence of a Servicer Default the
Servicer shall provide “read only” access to the data in the Servicer’s
management information systems; provided that the Servicer shall not be required
to provide access to such data to any of the Administrative Agent’s and the
Insurer’s employees who are not U.S. citizens.

 

(e) Keeping of Records and Books of Account. Each of the Originator, the
Transferor, the Seller and the Servicer shall maintain and implement
administrative and operating procedures (including an ability to recreate
records evidencing Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain, all documents,
books, computer tapes, disks, records and other information reasonably necessary
or advisable for the collection of all Receivables (including records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable). Each of the Originator, the
Transferor, the Seller and the Servicer shall give the Administrative Agent and
the Insurer prompt notice of any material change in its administrative and
operating procedures referred to in the previous sentence. All such records will
be maintained at the offices set forth in Schedule 4.1(i).

 

(f) Performance and Compliance with Receivables and Contracts and Credit and
Collection Policy. (i) The Originator shall, at its own expense, timely and
fully perform and comply with all material provisions, covenants and other
promises required to be observed by it, if any, under the Contracts related to
the Receivables; and (ii) each of the Transferor, the Seller and the Servicer
shall timely and fully comply in all material respects with the Credit and
Collection Policy in regard to each Receivable and the related Contract.

 

(g) Notice of the Administrative Agent’s Interest. In the event that the
Originator, the Transferor or the Seller shall sell or otherwise transfer any
interest in accounts receivable or any other financial assets (other than as
contemplated by any of the Transaction Documents), any computer tapes or files
or other documents or instruments provided by the Servicer in connection with
any such sale or transfer shall disclose the Transferor’s ownership interest in
the Leased Aircraft, the Seller’s ownership of the Receivables and the other
Affected Assets (other than with respect to title to any Aircraft or Aircraft
Fractional Shares) and the Administrative Agent’s security interest in the
Affected Assets.

 

(h) Collections. The Servicer shall, within five (5) Business Days after the
Closing Date, instruct all Obligors to make payments with respect to Receivables
directly to a Blocked Account or the Collection Account or to post office boxes
or lock-boxes to which only Blocked Account Banks have access, and shall cause
all items and amounts relating to such Collections received in such post office
boxes or lock-boxes to be removed and deposited into a Blocked Account on a
daily basis.

 

(i) Collections Received. Each of the Originator, the Transferor, the Seller and
the Servicer shall hold in trust for the benefit of the Administrative Agent on
behalf of the Secured Parties, and the Servicer shall remit (or cause to be
remitted) daily to the Collection Account, all Collections within five (5)
Business Days (i) after deposit thereof into either of the Raytheon

 

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Aircraft and Affiliated Companies Account or the RACC Intrust Bank Account and
(ii) in the case of Collections otherwise received by any Raytheon Entity or any
Affiliate of a Raytheon Entity, after identification by the Servicer of such
funds as Collections. Notwithstanding anything to the contrary in this Agreement
or in any other Transaction Document, the Servicer shall, as soon as practicable
following the Servicer’s receipt and identification of any cash collections or
other cash proceeds deposited in the Collection Account not constituting
Collections, and in any event within two (2) Business Days after its
identification thereof, notify the Administrative Agent and the Control Party in
writing, and the Administrative Agent shall, within two (2) Business Days after
its receipt of such notice, instruct the Blocked Account Bank maintaining the
Collection Account, to turn over to the Servicer such cash collections or other
cash proceeds on deposit in the Collection Account not constituting Collections.
Within five (5) Business Days after the Closing Date, the Servicer will instruct
all Obligors to make payments with respect to Receivables directly to a Blocked
Account or to the Collection Account or to post office boxes or lock-boxes to
which only Blocked Account Banks have access. With respect to the Receivables,
all amounts received by the Originator, the Transferor, the Seller and the
Servicer representing interest accrued thereon from the period on and after the
Cut-off Date shall be deposited into the Collection Account within five (5)
Business Days after the later of (i) the Closing Date and (ii) receipt thereof.

 

(j) Blocked Accounts. Each Blocked Account shall at all times be subject to a
Blocked Account Agreement.

 

(k) Sale Treatment. None of the Originator, the Transferor nor the Seller shall
(i) account for (including for accounting and tax purposes), or otherwise treat,
the transactions contemplated by the First Tier Agreement or the Sale and
Conveyance Agreement, as applicable, in any manner other than as a sale by the
Originator of its right, title and interest in, to and under the Affected Assets
to the Transferor, or as a sale by the Transferor of its right, title and
interest in, to and under the Receivables and its right, title and interest in,
to and under the Affected Assets (other than the related Leased Aircraft) to the
Seller, as the case may be, or (ii) account for (other than for tax purposes) or
otherwise treat the transactions contemplated hereby in any manner other than as
a sale of the Asset Interest by the Seller to the Administrative Agent on behalf
of the Secured Parties. In addition, each of the Originator, the Transferor and
the Seller shall disclose (in a footnote or otherwise) in all of its financial
statements (including any such financial statements consolidated with any other
Person’s financial statements) the existence and nature of the transactions
contemplated by the First Tier Agreement, the Sale and Conveyance Agreement and
this Agreement and the ownership interest of the Seller and the security
interest of the Administrative Agent, on behalf of the Secured Parties, in the
Affected Assets (it being understood that such financial statements shall not
show the Seller as owner of any Aircraft or Aircraft Fractional Shares unless
the Seller properly obtains title to such Aircraft or Aircraft Fractional
Shares).

 

(l) Separate Business; Nonconsolidation. Neither the Transferor nor the Seller
shall (i) engage in any business not permitted by its articles of incorporation
or by-laws as in effect on the Closing Date or (ii) conduct its business or act
in any other manner which is inconsistent with Section 4.1(v). The officers and
directors of the Transferor and the Seller (as appropriate) shall make decisions
with respect to the business and daily operations of the Transferor and the
Seller independent of and not dictated by any other controlling Person. Each of
the Originator, the

 

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Transferor, the Seller and the Servicer shall comply with the factual statements
and assumptions applicable to it set forth in each of the “true sale” and
“non-consolidation” opinions of Bingham McCutchen LLP delivered pursuant to
Section 5.1.

 

(m) Corporate Documents. Neither the Originator, the Transferor nor the Seller
shall amend, alter, change or repeal its respective articles of incorporation
except with the prior written consent of each of the Administrative Agent and
the Control Party.

 

(n) Ownership Interest, Etc. Each of the Transferor, the Seller and the Servicer
shall, at its own expense, take all action necessary or desirable to establish
and maintain a valid and enforceable ownership interest in or, to the extent
that the First-Tier Agreement, the Sale and Conveyance Agreement or this
Agreement, as applicable, does not effect a true sale of the Affected Assets by
such Person, as the case may be, a valid and enforceable security interest in,
the Receivables, the Related Security (other than the related Aircraft) and
proceeds with respect thereto, and a first priority perfected security interest
in the Affected Assets to the extent a valid and enforceable ownership interest
was not established in favor of the Transferor, the Seller and the
Administrative Agent (on behalf of the Secured Parties), as applicable, in each
case free and clear of any Adverse Claim (other than any Permitted Lien), in
favor of the Administrative Agent for the benefit of the Secured Parties,
including taking such action to perfect, protect or more fully evidence the
interest of the Administrative Agent, for the benefit of the Secured Parties, as
the Administrative Agent or the Insurer may reasonably request. If the
Transferor or the Servicer fails to take any action required to establish,
protect, or maintain the rights of the Administrative Agent in any Affected
Asset, subject to the Investment Condition, the Administrative Agent may (with
the prior written consent of the Control Party) and at the written direction of
the Control Party, shall, perform the same and all of the expenses of the
Administrative Agent shall be payable in accordance with Section 9.4(ii)(B). In
addition, each of the Originator, the Transferor and the Seller hereby
irrevocably authorizes the Administrative Agent at any time and from time to
time to file in any filing office in any Uniform Commercial Code jurisdiction
any initial financing statements and amendments thereto covering the applicable
Affected Assets.

 

(o) Enforcement of First Tier Agreement and Sale and Conveyance Agreement. The
Transferor, on its own behalf and on behalf of the Administrative Agent, each
Purchaser and the Insurer, shall promptly enforce all covenants and obligations
of the Originator contained in the First Tier Agreement, as may be directed from
time to time by the Administrative Agent (with the prior written consent of the
Control Party) or by the Control Party (with prior written notice to the
Administrative Agent). The Seller, on its own behalf and on behalf of the
Administrative Agent, each Purchaser and the Insurer, shall promptly enforce all
covenants and obligations of the Transferor contained in the Sale and Conveyance
Agreement as may be directed from time to time by the Administrative Agent (with
the prior written consent of the Control Party) or by the Control Party (with
prior written notice to the Administrative Agent). The Transferor shall deliver
to the Administrative Agent and the Insurer all consents, approvals, directions,
notices, waivers and take other actions under the First Tier Agreement, as may
be directed from time to time by the Administrative Agent (with the prior
written consent of the Control Party) or by the Control Party (with simultaneous
written notice to the Administrative Agent). The Servicer (on behalf of the
Seller but, for the avoidance of doubt, not RACC in its individual capacity)
shall deliver to the Administrative Agent and the Insurer all consents,
approvals, directions, notices, waivers and take other actions under the First
Tier Agreement and the Sale and Conveyance

 

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Agreement, as may be directed from time to time by the Administrative Agent
(with the prior written consent of the Control Party) or by the Control Party
(with simultaneous written notice to the Administrative Agent).

 

(p) Insurance Requirements. The Originator, the Transferor, the Seller and the
Servicer shall maintain or cause to be maintained (i) contingent hull and
liability and contingent war and liability gap insurance coverage, to include
terrorism coverage so long as it is commercially available, for Aircraft in the
possession of the related Obligors and Aircraft Fractional Shares and (ii) hull
and liability insurance coverage, to include terrorism coverage so long as it is
commercially available, for Aircraft in the possession of the Servicer or its
Affiliates, and, shall, on or prior to the first renewal of each such type of
insurance after the Closing Date, cause all such insurance coverage (and the
insurance coverage required to be maintained by each Obligor) to provide that
each of the Administrative Agent and the Insurer are named as an additional
insured under all such insurance coverage and the Administrative Agent is the
loss payee (on behalf of the Secured Parties) under all such insurance coverage;
provided, that upon the occurrence of an Event of Default, the Servicer shall
cause (including by causing Obligors to cause) the Administrative Agent and the
Insurer to be named as an additional insured and the Administrative Agent to be
named as loss payee (on behalf of the Secured Parties) under all such insurance
coverage as soon as commercially possible after the request of either the
Administrative Agent or the Insurer. Without limiting the foregoing, the
Servicer shall provide all notices and obtain all consents necessary to cause
the insurance contemplated by clauses (i) and (ii) of this paragraph to remain
in full force and effect.

 

(q) Certain Post-Closing Agreements. The Originator, the Transferor, the Seller
and the Servicer shall use commercially reasonable efforts for a period of six
(6) months after the date of the Investment (or, in the case of an Eligible
Substitute Receivable, the date of substitution) to deliver evidence
satisfactory to the Administrative Agent and the Control Party that all items
related to Receivables (other than those exempt Receivables set forth in the
“Exempt Receivables” section in Schedule II), which as of the date of the
Investment or, the date of substitution, as applicable, did not satisfy the
requirements of perfection referred to in the definition of “Investment
Condition”, have been executed, recorded and delivered so that, with respect to
such items all documents required to be recorded or filed in order to perfect
and protect the interest of (i) the Seller against all creditors of and
purchasers from the Originator and the Transferor and (ii) the Administrative
Agent of behalf of the Secured Parties against all creditors of and purchasers
from the Originator, the Transferor and the Seller, will have been duly filed in
each filing office necessary for such purpose and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full;
provided, that none of the Originator, the Transferor, the Seller or the
Servicer shall be required to incur related costs in respect of any such
remaining items in an amount materially greater than the average cost per
Aircraft incurred by any of the Originator, the Transferor, the Seller or the
Servicer with respect to the items satisfying the Investment Condition as of the
date of the Investment. Notwithstanding the foregoing, if the long-term senior
unsecured debt of the Performance Guarantor fails to be rated at least “BB+” by
S&P, “Ba1” by Moody’s or “BB+” by Fitch, the Originator, the Transferor, the
Seller and the Servicer shall promptly cause Security Agreements in favor of the
Seller and the Administrative Agent to have been fully signed and properly filed
with the FAA and other applicable Aviation Authorities with respect to all
Aircraft and Aircraft Fractional Shares except for those Aircraft that are
registered in a jurisdiction which does not

 

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provide for the filing of liens on aircraft similar to the lien to be created
pursuant to the related Assignment of Rents. Notwithstanding anything to the
contrary contained in this Agreement or in any other Transaction Document, any
term, provision or condition with respect to any requirement for a security
interest or the perfection thereof with respect to any Affected Asset, shall be
deemed to be satisfied in all respects if the Investment Condition with respect
thereto is satisfied as of the Closing Date, or the date of substitution, as
applicable, and thereafter, the Originator, the Transferor, the Seller and the
Servicer are in compliance with their obligations pursuant to this Section
6.1(q) and Section 2.17(a)(ii)(D).

 

(r) FAA Requirements. The Transferor shall, so long as any Leased Aircraft is
registered with the FAA, remain a “Citizen of the United States” (as such term
is defined in the Federal Aviation Act).

 

(s) Taxes. The Originator, the Transferor, the Seller and the Servicer, shall
file all tax returns and permitted extensions thereof and reports required by
Law to be filed by such Person and will promptly pay all taxes and governmental
charges at any time owing, except such as are being contested by it in good
faith by appropriate proceedings and for which appropriate reserves have been
established in accordance with GAAP. Each of the Originator, the Transferor, the
Seller and the Servicer, shall pay when due any taxes payable by it in
connection with the Receivables and the other Affected Assets (other than any
tax with respect to any Aircraft for which the related Obligor is responsible
under the related Contract).

 

(t) ERISA Matters. (a) Each of the Originator, the Transferor, the Seller and
the Servicer shall comply in all material respects with the applicable
provisions of ERISA and the Code and (b) furnish to the Administrative Agent and
Insurer as soon as possible after, and in any event within thirty (30) days
after any responsible officer of such Person or any ERISA Affiliate knows that,
any ERISA Event has occurred that, alone or together with any other ERISA Event
known to have occurred, could reasonably be expected to result in liability of
such Person in an aggregate amount exceeding seventy-five million dollars
($75,000,000) in any year, a statement of a financial officer of such Person
setting forth details as to such ERISA Event and the action, if any, that such
Person proposes to take with respect thereto.

 

(u) List of Business Days. The Servicer shall provide to the Administrator, the
Administrative Agent and the Insurer, not later than December 1 of each calendar
year beginning in 2003, a schedule specifying the days on which Fiscal Months
during the next calendar year will begin and end, and listing all days that are
not Business Days during the next calendar year.

 

(v) Evidence of UCC Filings. Not later than sixty (60) days after the Closing
Date, the Servicer shall provide to the Administrative Agent and the Insurer
search reports from a third-party search company (A) which reflect the filing in
the applicable filing offices of the UCC financing statements filed pursuant to
Article V and (B) attached to which are copies of such UCC financing statements
bearing the file-stamps of such filing offices.

 

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SECTION 6.2 Negative Covenants of the Originator, the Transferor, the Seller and
the Servicer. At all times from the date hereof to the Final Payout Date, unless
each of the Administrative Agent and the Control Party shall otherwise consent
in writing:

 

(a) No Sales, Liens, Etc. Except as expressly provided in the First Tier
Agreement, the Sale and Conveyance Agreement and in this Agreement, (i) none of
the Originator, the Transferor, the Seller nor the Servicer shall, nor shall it
permit any of its respective Subsidiaries to, sell, assign (by operation of law
or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim (other than any Permitted Lien) upon (or the filing of any financing
statement) or with respect to any of the Affected Assets, or assign any right to
receive income in respect thereof (other than in the case of the Transferor, the
sales and assignments expressly permitted pursuant to the Sale and Conveyance
Agreement), and (ii) neither the Transferor nor the Seller shall issue any note,
bond or similar security to, or sell, transfer or otherwise dispose of any of
its property or other assets to any other Person.

 

(b) No Extension or Amendment of Receivables. Except as otherwise permitted in
Section 7.2 and Annex B, none of the Originator, the Transferor, the Seller nor
the Servicer shall extend, amend or otherwise modify the terms of any
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto.

 

(c) No Change in Business or Credit and Collection Policy. Unless otherwise
approved in accordance with Section 11.2, none of the Originator, the
Transferor, the Seller nor the Servicer shall make any change in the character
of its business or in the Credit and Collection Policy, which change would, in
either case, impair the collectibility of any Receivable or otherwise have a
Material Adverse Effect.

 

(d) No Mergers; Subsidiaries, Etc. None of the Originator, the Transferor, the
Seller or the Servicer shall consolidate or merge with or into, or sell, lease
or transfer all or substantially all of its assets to, any other Person, except
as expressly provided or permitted by the terms of this Agreement, and in the
case of any such action by the Servicer, prior to any such consolidation or
merger, the Servicer shall deliver to the Administrative Agent, each Purchaser,
the Insurer and each of the Rating Agencies, (i) a certificate from its
President and an opinion of counsel (who shall be reasonably acceptable to each
of the Administrative Agent and the Insurer) stating, inter alia, that all
conditions and requirements under this Agreement and each other Transaction
Document have been complied with and the agreement pursuant to which such new
entity expressly assumes the duties and obligations as Servicer hereunder is
legal, binding and enforceable against such Person and all actions in respect of
perfection and priority under the applicable UCC (including authorizing the
filing of UCC-3 financing statements) have been taken or will be taken prior to
such consolidation or merger or that no such actions are required and (ii) other
agreements, certificates and/or opinions of counsel as the Administrative Agent
or the Control Party may reasonably request. The Transferor shall not form or
create any Subsidiary other than the Seller. The Seller shall not form or create
any Subsidiary.

 

(e) Change in Payment Instructions to Obligors. None of the Originator, the
Transferor, the Seller nor the Servicer shall add or terminate any bank as a
Blocked Account Bank or any account as a Blocked Account to or from those listed
in Schedule 4.1(r) or make any change in its instructions to Obligors regarding
payments to be made in respect of the Receivables, unless (i) such instructions
are to deposit such payments to an existing Blocked Account or to the Collection
Account (or to a post office box or a lock-box covered by a Blocked Account
Agreement) or (ii) each of the Administrative Agent and the Control Party shall
have provided their prior written consent to such addition, termination or
change at least fifteen (15)

 

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days prior thereto and each of the Administrative Agent and the Control Party
shall have received a Blocked Account Agreement in form and substance reasonably
satisfactory to each of the Administrative Agent and the Control Party executed
by each new Blocked Account Bank or an existing Blocked Account Bank with
respect to each new Blocked Account, post office box or lock-box, as applicable.

 

(f) Deposits to Blocked Accounts. None of the Originator, the Transferor, the
Seller nor the Servicer shall deposit or otherwise credit, or cause or permit to
be so deposited or credited, to any Blocked Account or the Collection Account or
to post office boxes or lock-boxes to which only Blocked Account Banks have
access, cash or cash proceeds other than Collections.

 

(g) Change of Name, Etc. None of the Originator, the Transferor nor the Seller
shall change its name, identity or structure (including a merger), its form of
organization or its jurisdiction of incorporation, unless at least thirty (30)
days prior to the effective date of any such change such Person delivers to the
Administrative Agent and the Insurer (i) such documents, instruments or
agreements, executed by such Person as are necessary to reflect such change and
to continue the perfection and priority of the Administrative Agent’s ownership
interests or security interests in the Affected Assets and (ii) new or revised
Blocked Account Agreements executed by the Blocked Account Banks which reflect
such change and enable the Administrative Agent to continue to exercise its
rights contained in Section 7.3.

 

(h) Amendment to Transaction Documents. None of the Originator, the Transferor,
the Seller nor the Servicer shall amend, modify, or supplement any Transaction
Document or waive any provision thereof, except in any case with the prior
written consent of each of the Administrative Agent and the Control Party; nor
shall the Originator, the Transferor, the Seller or the Servicer take, or permit
the Transferor or the Seller to take, any other action under any Transaction
Document that could have a Material Adverse Effect or which is inconsistent with
the terms of this Agreement or any other Transaction Document.

 

(i) Other Debt. Except as provided herein, neither the Transferor nor the Seller
shall create, incur, assume or suffer to exist any indebtedness whether current
or funded, or any other liability other than (i) in the case of the Transferor,
indebtedness of the Transferor representing the purchase price under the First
Tier Agreement and fees, expenses and indemnities arising under the First Tier
Agreement, the Sale and Conveyance Agreement and this Agreement, (ii) in the
case of the Seller, indebtedness of the Seller representing the purchase price
under the Sale and Conveyance Agreement and fees, expenses and indemnities
arising under the Sale and Conveyance Agreement and this Agreement and (iii) in
the case of each of the Transferor and the Seller, other indebtedness incurred
in the ordinary course of its business in an amount not to exceed nine thousand
five hundred dollars ($9,500) at any time outstanding.

 

(j) Payment to the Transferor. The Seller shall not acquire any Receivable other
than through, under, and pursuant to the terms of, the Sale and Conveyance
Agreement, either as a capital contribution from the Transferor or in exchange
for the payment by the Seller in cash, or a combination of the two of an amount
equal to the purchase price for such Receivable as required by the terms of the
Sale and Conveyance Agreement.

 

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(k) Restricted Payments. Neither the Transferor nor the Seller shall (A)
purchase or redeem any shares of its capital stock, (B) prepay, purchase or
redeem any Indebtedness, (C) lend or advance any funds or (D) repay any loans or
advances to, for or from any of its Affiliates (the amounts described in clauses
(A) through (D) being referred to as “Restricted Payments”), except that the
Seller may (1) make Restricted Payments out of funds received pursuant to
Section 2.2 and Section 2.9(c) and (2) may make other Restricted Payments
(including the payment of Permitted Dividends) if, (i) each of the requirements
set forth in Section 2.14 have been satisfied and (ii) after giving effect
thereto, no Event of Default shall have occurred and be continuing.

 

ARTICLE VII

 

ADMINISTRATION AND COLLECTIONS

 

SECTION 7.1 Appointment of Servicer.

 

(a) The servicing, administering and collection of the Receivables and the
Affected Assets shall be conducted by the Person (the “Servicer”) so designated
from time to time as Servicer in accordance with this Section 7.1. Each of the
Originator, the Transferor, the Seller, the Administrative Agent, the Insurer
and the Purchasers hereby appoints as its agent the Servicer, from time to time
designated pursuant to this Section 7.1, to enforce its respective rights and
interests in and under the Affected Assets. To the extent permitted by
applicable law, each of the Originator, the Transferor and the Seller (to the
extent such Person is not then acting as Servicer hereunder) hereby grants to
any Servicer appointed hereunder an irrevocable power of attorney to take any
and all steps in the Originator’s, the Transferor’s and/or the Seller’s name and
on behalf of the Originator, Transferor or the Seller as necessary or desirable,
in the reasonable determination of the Servicer, to collect all amounts due
under any and all Receivables and the Affected Assets, including endorsing the
Originator’s, the Transferor’s and/or the Seller’s name on checks and other
instruments representing Collections and enforcing such Receivables and the
related Contracts and to take all such other actions set forth in this Article
VII. Subject to the immediately following sentence, RACC is hereby designated
as, and hereby agrees to perform the duties and obligations of, the Servicer,
pursuant to the terms of this Agreement. RACC shall act as Servicer until the
date which is one year and one day after the Final Payout Date, unless the
Administrative Agent (with the prior written consent of the Control Party), or
the Control Party (with prior written notice to the Administrative Agent and
each of the Rating Agencies), gives notice to RACC and the Transferor (in
accordance with this Section 7.1) of the designation of a new Servicer following
the occurrence of a Servicer Default. Upon the occurrence of a Servicer Default,
the Administrative Agent (with the prior written consent of the Control Party),
or the Control Party (with prior written notice to the Administrative Agent and
each of the Rating Agencies), may designate as Servicer any Person (including
itself) to succeed RACC or any successor Servicer, on the condition in each case
that any such Person so designated shall agree to perform the duties and
obligations of the Servicer pursuant to the terms hereof.

 

(b) Upon the designation of a successor Servicer following the occurrence of a
Servicer Default as set forth above, the Servicer agrees that it will terminate
its activities as Servicer hereunder in a manner which the Administrative Agent
(with the prior written consent

 

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of the Control Party), or the Control Party (with prior written notice to the
Administrative Agent), determines will facilitate the transition of the
performance of such activities to the successor Servicer, and the Servicer shall
cooperate with and assist such successor Servicer. Such cooperation shall
include providing all computer tapes and disks, documents, instruments and other
records relating to the Receivables and access to information technology
personnel and transferring to any successor Servicer all cash amounts and
documents or instruments relating to the Receivables held by the Servicer at the
time of the acceptance by such successor Servicer of the obligation to perform
the Services and access to and transfer of records and use by the successor
Servicer of all records necessary or desirable to collect the Receivables and
the Related Security. The Servicer shall be responsible for all costs incurred
in connection with transitioning servicing to a successor Servicer as a result
of a Servicer Default.

 

(c) The Servicer acknowledges that each of the Transferor, the Seller, the
Administrative Agent, the Purchasers and the Insurer have relied on the
Servicer’s agreement to act as Servicer hereunder in making their decision to
execute and deliver this Agreement and the other Transaction Documents to which
it is a party. Accordingly, the Servicer agrees that it will not voluntarily
resign as Servicer.

 

(d) The Servicer may delegate its duties and obligations hereunder to any
Affiliate of RAH or any other third party sub-servicer, including, but not
limited to, Flight Options (with respect to Aircraft Fractional Shares) and to
each other sub-servicer listed (together with the general servicing functions
performed by such Person) in Schedule V (each, a “Sub-Servicer”), as such
schedule shall be amended, amended and restated, supplemented or otherwise
modified by the Servicer, and provided to the Administrative Agent and the
Control Party in connection with the addition of any new Sub-Servicer (together
with the servicing function to be performed by such Sub-Servicer) or any change
to the servicing functions provided by a Sub-Servicer on such Schedule V,
provided that, in each such delegation, (i) the Servicer shall remain primarily
liable to the Transferor, the Seller, the Administrative Agent, the Purchasers
and the Insurer for the performance of the duties and obligations so delegated,
(ii) the Transferor, the Seller, the Administrative Agent, the Purchasers and
the Insurer shall have the right to look solely to the Servicer for such
performance and (iii) the terms of any agreement with any Sub-Servicer shall
provide that the Administrative Agent (with the prior written consent of the
Control Party) or the Control Party (with prior written notice to the
Administrative Agent) may terminate such agreement upon the termination of the
Servicer hereunder by giving notice of its desire to terminate such agreement to
the Servicer (and the Servicer shall provide appropriate notice to such
Sub-Servicer). The Servicer shall be liable for any and all fees and expenses
incurred by or through a Sub-Servicer (but shall be entitled to reimbursement
for any fees and expenses to the extent such fees and expenses constitute
Permissible Servicer Expenses from related Recovery Proceeds and in accordance
with the priorities for payment set forth in Section 2.12) and no such
Sub-Servicer shall have any rights to the Affected Assets or Collections for
payment of any amounts owing to such Sub-Servicer or any other Person. The
Servicer may appoint professional advisers, but shall immediately notify the
Administrative Agent and the Insurer of such appointment.

 

(e) If (i) a Flight Options Trigger Event has occurred, and (ii) the Insurer is
not the Control Party, then notwithstanding any term or provision of any
Transaction Document, the Control Party, with respect to the Flight Options
Contracts or with respect to any Receivable

 

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related to the Flight Options Contracts, shall have (and at its option may
exercise) rights of the type contemplated by Section 8.2(c), solely with respect
to the applicable Flight Options Contracts.

 

SECTION 7.2 Duties of Servicer. (a) The Servicer shall take or cause to be taken
all such action, including the services more specifically set forth on Annex B
(collectively, the “Services”) as may be necessary or advisable to collect each
Receivable and the Affected Assets from time to time and except as otherwise
expressly provided in Section 6.1(q), to maintain the perfection of the
Transferor’s, the Seller’s and the Administrative Agent’s respective interests
in any Aircraft or Aircraft Fractional Shares, including, without limitation,
maintenance of recordation with the FAA or other applicable Aviation Authority,
all in accordance with this Agreement and all applicable Law, and shall use such
care and diligence at all times in the performance of the Services consistent
with the care and diligence that it uses for servicing receivables for its own
account, and in no event shall use less than such care and diligence as is
customary and reasonable in the general aviation finance industry (the “Standard
of Care”). Without prejudice to the Standard of Care, the Servicer shall not (i)
be imputed with the knowledge of any Affiliate or any of such Affiliate’s
directors, officers or employees or (ii) be obligated to take or refrain from
taking any action that will violate applicable Law. The Servicer shall remit (or
cause to be remitted) daily to the Collection Account, all Collections within
five (5) Business Days (i) after deposit thereof into either of the Raytheon
Aircraft and Affiliated Companies Account or the RACC Intrust Bank Account and
(ii) in the case of Collections otherwise received by any Raytheon Entity or any
Affiliate of a Raytheon Entity, after identification by the Servicer of such
funds as Collections. The Servicer will not commingle funds collected with
respect to the Affected Assets with its own funds or the funds of any other
Person except, prior to the occurrence of a Servicer Default, for security
deposits related to Receivables. The Servicer shall hold (as trustee on behalf
of the Administrative Agent, for the benefit of the Secured Parties) all
Collections and Advance Payments, prior to the deposit of the same into the
Collection Account associated with the Receivables and the Affected Assets; upon
the occurrence of a Servicer Default, the Administrative Agent (with the prior
written consent of the Control Party), or the Control Party (with prior written
notice to the Administrative Agent), may require that the Servicer transfer all
cash collateral related to Receivables to an account controlled by the
Administrative Agent and subject to a blocked account agreement in form and
substance satisfactory to each of the Administrative Agent and the Control
Party, and the Servicer, at its own expense, hereby agrees to cause the transfer
of cash collateral to be completed within thirty (30) days after such request to
do so. In the event the Servicer shall be entitled (pursuant to the terms of the
applicable Contract) to apply any portion of such cash collateral to any
Receivable, such cash collateral shall be deposited into the Collection Account
for distribution as a “Collection” pursuant to and in accordance with Section
2.12. The Servicer may not extend, amend or otherwise modify the terms of any
Contract (other than as expressly set forth in Annex B) or adjust the Unpaid
Balance of any Receivable. The Seller shall deliver to the Servicer and the
Servicer shall hold in trust for the Seller and the Administrative Agent, on
behalf of the Secured Parties, in accordance with their respective interests,
all Contract Files and all Records which evidence or relate to any Affected
Asset, in each case in accordance with the Credit and Collection Policy and
customary and reasonable standards in the commercial aviation finance industry.
Each promissory note, security agreement and lease relating to a Receivable will
be marked with the following legend: “This document and all related
documentation are subject to a Uniform Commercial Code security agreement among
Bank of America, N.A., as

 

 

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Administrative Agent (the “Administrative Agent”), Raytheon Aircraft Credit
Corporation, Raytheon Aircraft Receivables Corporation, General Aviation
Receivables Corporation and certain of their affiliates, and financing
statements evidencing the Administrative Agent’s security interest therein have
been filed of record in the manner provided for by the Uniform Commercial Code
and other applicable law. The granting of another security interest in, or the
sale of, this document and related documentation would, without consent of the
Administrative Agent, violate the Administrative Agent’s rights under such
security agreement” (or such other legend acceptable to each of the
Administrative Agent and the Control Party). Upon the occurrence of a Servicer
Default, the Administrative Agent (with the prior written consent of the Control
Party), or the Control Party (with prior written notice to the Administrative
Agent), may require that the Servicer transfer all Contract Files to a third
party custodian acceptable to each of the Administrative Agent and the Control
Party (pursuant to a custodial agreement acceptable to each of the
Administrative Agent and the Control Party), and the Servicer, at its own
expense, hereby agrees to cause the transfer of the Contract Files to be
completed within thirty (30) days after such request to do so. The Servicer may
use any legal action necessary to enforce collection of any Receivable as
provided in this Agreement without the consent of the Administrator, the
Administrative Agent, any of the Purchasers or the Insurer; provided, that the
Servicer shall not add the Administrator, the Administrative Agent, any of the
Purchasers or the Insurer as a party to any litigation without the prior written
consent of such Person. Notwithstanding anything to the contrary contained
herein, the Control Party (with prior written notice to the Administrative
Agent), shall have the absolute and unlimited right to direct the Servicer
(whether RACC or any other Person is the Servicer) to commence or settle any
legal action to enforce collection of any Receivable or to foreclose upon or
repossess any Affected Asset. At any time when an Event of Default or a Servicer
Default exists, each of the Administrative Agent and the Control Party may
notify any Obligor of the Administrative Agent’s interest, on behalf of the
Secured Parties, in the Receivables and the other Affected Assets.

 

(b) Notwithstanding anything to the contrary contained in this Article VII, the
Servicer, if not RACC, the Seller or any Affiliate of RACC or the Seller, shall
have no obligation to collect, enforce or take any other action described in
this Article VII with respect to any indebtedness that is not included in the
Asset Interest other than to remit to the Collection Account the Collections and
to deliver any documents related to any such indebtedness as described in this
Agreement.

 

(c) (I) Prior to the occurrence of (x) a Servicer Default, or (y) an Unmatured
Servicer Default, so long as the Performance Guarantor is rated at least “BBB-”
(or its equivalent) by each of the Rating Agencies, the Servicer shall deliver
to the Administrative Agent and the Insurer (A) within 120 days after the last
day of each fiscal year, a report of internationally recognized independent
accountants to the effect that the firm has made an examination of management’s
assertion that the Servicer has maintained effective internal control over
financial reporting and that firm has performed the agreed upon procedures
relating to settlements of receivables to be mutually agreed by the Servicer,
the Administrative Agent and the Control Party and (B) within thirty (30) days
of the end of each fiscal quarter, a Microsoft Excel download containing an
extract from the Servicer’s management information system substantially in the
form of Exhibit E and (II) at all other times, the Servicer shall deliver the
items referred to in clause (I)(B) on each Reporting Date.

 

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(d) Any payment by an Obligor in respect of any indebtedness owed by it to the
Originator, the Transferor or the Seller shall, except as otherwise specified by
such Obligor (including in response to a Servicer query), required by contract
or law or clearly indicated by facts or circumstances (including by way of
example an equivalence of a payment and the amount of a particular invoice), and
unless otherwise instructed by the Administrative Agent and the Control Party,
be applied as a Collection of any Receivable of such Obligor (starting with the
oldest such Receivable) to the extent of any amounts then due and payable
thereunder before being applied to any other receivable or other indebtedness of
such Obligor.

 

SECTION 7.3 Blocked Account Arrangements. Prior to the Closing Date, the
Transferor, the Seller, the Servicer and the Administrative Agent shall enter
into a Blocked Account Agreement with each of the Blocked Account Banks,
covering each Blocked Account, and the Servicer shall deliver original
counterparts thereof to the Administrative Agent and the Insurer. Upon the
occurrence of an Event of Default or a Servicer Default, the Administrative
Agent may (or at the written direction of the Control Party, shall) at any time
thereafter give notice to any Blocked Account Bank that the Administrative Agent
is exercising its rights under the related Blocked Account Agreement to do any
or all of the following: (i) to have the exclusive ownership and control of each
related Blocked Account (and any related post office boxes or lock-boxes)
transferred to the Administrative Agent and to exercise exclusive dominion and
control over the funds deposited from time to time therein, (ii) to have the
proceeds that are sent to such Blocked Account (and any related post office
boxes or lock-boxes) be redirected pursuant to its instructions rather than
deposited in the applicable Blocked Account, without the consent of the
Transferor, the Seller or the Servicer and (iii) to take any or all other
actions permitted under the related Blocked Account Agreement, without the
consent of the Transferor, the Seller or the Servicer. Each of the Transferor,
the Seller and the Servicer hereby agrees that if the Administrative Agent, at
any time, takes any action set forth in the preceding sentence, the
Administrative Agent shall have exclusive control of the proceeds (including
Collections) of all Receivables, and each of the Transferor, the Seller and the
Servicer hereby further agrees to take any other action that the Administrative
Agent or the Control Party may reasonably request to transfer such control. Any
proceeds of Receivables received by the Transferor, the Seller or RACC, as
Servicer or otherwise, thereafter shall be sent immediately to the
Administrative Agent (or to such account as the Administrative Agent may
designate in writing from time to time). All such proceeds received by the
Administrative Agent shall be distributed pursuant to and in accordance with the
priorities for payment set forth in Section 2.12.

 

SECTION 7.4 Enforcement Rights After Designation of New Servicer. (a) At any
time following the designation of a Servicer (other than RACC or an Affiliate of
RACC) pursuant to Section 7.1(a):

 

(i) the Servicer shall, at the Control Party’s request (with prior written
notice to the Administrative Agent) and at the Servicer’s expense, give notice
of the Administrative Agent’s (on behalf of the Secured Parties), the
Servicer’s, and/or the Purchasers’ ownership of the Receivables and (in the case
of the Administrative Agent, the Administrative Agent’s) interest in the Asset
Interest to each Obligor and direct such Obligor to make payments under each
Receivable directly to the Collection Account (or to such account as the Control
Party (with the prior written consent of the Administrative Agent, such consent
not to be unreasonably withheld) may designate in writing from time

 

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to time to the Servicer and the Administrative Agent), except that if the
Servicer fails to so notify any Obligor, the Control Party (with prior written
notice to the Administrative Agent) may so notify such Obligor; and

 

(ii) the Servicer shall, at the Control Party’s request (with prior written
notice to the Administrative Agent) and at the Servicer’s expense, (A) assemble
all of the Records and shall make the same available to each of the
Administrative Agent and the Control Party or any of their respective designees
at a place selected by the Control Party (with prior written notice to the
Administrative Agent) or its related designee, and (B) segregate all cash,
checks and other instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to each of the Administrative
Agent and the Control Party and shall, promptly upon receipt, remit all such
cash, checks and other instruments, duly endorsed or with duly executed
instruments of transfer, to the Administrative Agent or the Control Party or
their respective designees.

 

(b) Each of the Originator, the Transferor, the Seller and the Servicer hereby
authorizes the Administrative Agent, and irrevocably appoints the Administrative
Agent as its attorney-in-fact with full power of substitution and with full
authority in the place and stead of the Originator, the Transferor, the Seller
or the Servicer, as applicable, which appointment is coupled with an interest,
to take any and all steps in the name of the Originator, the Transferor, the
Seller or the Servicer, as applicable, and on behalf of the Originator, the
Transferor, the Seller or the Servicer, as applicable, necessary or desirable,
in the determination of the Administrative Agent or the Control Party, to
collect any and all amounts or portions thereof due under any and all
Receivables, the other Affected Assets, the Related Security or the related
Contracts, including endorsing the name of the Originator, the Transferor, the
Seller or the Servicer on checks and other instruments representing Collections
and enforcing such Raytheon Entity’s rights with respect to the Receivables, the
other Affected Assets, the Related Security and the related Contracts, subject
to the terms and conditions of this Agreement, the other Transaction Documents
and the related Contracts. Notwithstanding anything to the contrary contained in
this Section 7.4(b), none of the powers conferred upon such attorney-in-fact
pursuant to the immediately preceding sentence shall subject such
attorney-in-fact to any liability if any action taken by it shall prove to be
inadequate or invalid, nor shall they confer any obligations upon such
attorney-in-fact in any manner whatsoever (it being understood that the
Administrative Agent, as attorney-in-fact, shall only take the actions set forth
in this Section 7.4(b) after the occurrence of a Servicer Default).

 

SECTION 7.5 Servicer Default. The occurrence of any one or more of the following
events shall constitute a “Servicer Default”:

 

(a) the Servicer (I) shall fail to remit (or cause to be remitted) to the
Collection Account any Collections within five (5) Business Days (i) after
deposit thereof into either of the Raytheon Aircraft and Affiliated Companies
Account or the RACC Intrust Bank Account and (ii) in the case of all other
Collections otherwise received by any Raytheon Entity or any Affiliate of a
Raytheon Entity, after identification by the Servicer of such funds as
Collections; provided that, in the case of any Collections deposited pursuant to
clause (i) which the related Obligor failed to provide reasonably adequate
identification of the indebtedness to which the applicable payment relates, the
Servicer shall fail to remit (or cause to be remitted) to the

 

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Collection Account such Collections within seven (7) Business Days, after such
deposit or (II) shall fail to observe or perform any term, provision, covenant
(other than as set forth in clause (a)(I) above) (whether financial or
otherwise), agreement, obligation or duty (including the Services) of the
Servicer set forth in this Agreement or in any of the other Transaction
Documents to which it is a party, which failure, if capable of cure, shall fail
to be cured (i) within the time period so specified for such term, provision,
other covenant, agreement, obligation or duty or (ii) if no such time period is
so specified, within thirty (30) days of the earlier of the Servicer’s knowledge
or notice of such failure; or

 

(b) any representation, warranty, certification or statement made or deemed made
by the Servicer in this Agreement, any other Transaction Document to which it is
a party or in any other information, report or document delivered pursuant
hereto or thereto shall prove to have been incorrect in any material respect
when made or deemed made or delivered, and, if capable of cure, shall fail to be
cured within thirty (30) days of the earlier of the Servicer’s knowledge or
notice thereof; or

 

(c) any Event of Bankruptcy shall occur (i) with respect to the Servicer or any
other Raytheon Entity or any Subsidiary of the Servicer or (ii) with respect to
any Subsidiary of any Raytheon Entity, (solely with respect to this clause (ii))
the effect of which could reasonably be expected to have a Material Adverse
Effect; or

 

(d) a Change of Control with respect to RACC shall have occurred; or

 

(e) an “Event of Default” under the Raytheon Revolver (as such term is defined
therein) shall have occurred that has not been cured within the time period
provided for therein, if any, or waived by the required parties thereto; or

 

(f) if the Servicer is not RACC (or an Affiliate thereof), the long-term senior
unsecured debt of the Servicer fails to be rated at least “BBB” by S&P, “Baa2”
by Moody’s or “BBB” by Fitch; or

 

(g) any Event of Default shall occur and be continuing; or

 

(h) the Servicer shall fail to submit a Monthly Servicer Report within ten (10)
days after the due date therefor; or

 

(i) RACC shall resign as the Servicer; or

 

(j) Either RACC or RAC shall cease to be (a) directly or indirectly majority
owned by the Performance Guarantor or (b) actively involved in the business of
financing and servicing aircraft related receivables, as applicable, in a
substantially similar manner as that conducted on the Closing Date; or

 

(k) the Servicer shall cease to maintain access to a world-wide dealer network
substantially similar to the one maintained by the Servicer and its Affiliates
on the Closing Date; or

 

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(l) any Person shall receive any indication or evidence that the Servicer has
been involved in any criminal activity that might result in the forfeiture of
any substantial portion of the Servicer’s property to any Official Body; or

 

(m) an event set forth in Schedule III with respect to the Performance Guarantor
shall have occurred and shall not have been waived in accordance with the
provisions for waiver set forth in Schedule III.

 

SECTION 7.6 Servicing Fee. The Servicer shall be paid a Servicing Fee in
accordance with and subject to the priorities for payment set forth in Section
2.12. If the Servicer is not RACC or an Affiliate thereof, the Administrative
Agent (with the prior written consent of the Control Party), or the Control
Party (with prior written notice to the Administrative Agent), by giving three
(3) Business Days’ prior written notice to the Seller, may revise the percentage
used to calculate the Servicing Fee so long as the revised percentage will not
result in a Servicing Fee that exceeds one hundred ten percent (110%) of the
reasonable and appropriate out-of-pocket costs and expenses of such Servicer
incurred in connection with the performance of its obligations hereunder as
documented to the reasonable satisfaction of each of the Administrative Agent
and the Control Party.

 

SECTION 7.7 Protection of Ownership Interest of the Purchasers. Each of the
Originator, the Transferor, the Seller and the Servicer agrees that it shall,
from time to time, at its own expense, promptly execute and deliver all
instruments and documents and take all reasonable actions as may be necessary or
as the Administrative Agent or the Control Party may reasonably request in order
to perfect or protect the Asset Interest or to enable the Administrative Agent,
any of the Purchasers or the Control Party to exercise or enforce any of their
respective rights hereunder. Without limiting the foregoing, each of the
Originator, the Transferor, the Seller and the Servicer shall, upon the request
of the Administrative Agent or the Control Party, in order to accurately reflect
this purchase and sale transaction or any other purchase and sale transaction
contemplated by any of the Transaction Documents, (i) file (and, if necessary,
execute and/or authorize) such financing or continuation statements or
amendments thereto or assignments thereof (as otherwise permitted to be filed
pursuant hereto) as may be requested by the Administrative Agent or the Control
Party or as otherwise may be required under Section 6.2(g) and (ii) mark its
respective master data processing records and other documents with a legend
describing the conveyances contemplated by the Transaction Documents. Each of
the Originator, the Transferor, the Seller and the Servicer shall, upon request
of the Administrative Agent, any of the Purchasers or the Control Party obtain
such additional search reports as the Administrative Agent, any of the
Purchasers or the Control Party shall request. To the fullest extent permitted
by applicable Law, the Administrative Agent shall be permitted to file (and, if
necessary, execute) continuation statements and amendments thereto and
assignments thereof without the Originator’s, the Transferor’s, the Seller’s or
the Servicer’s approval. Carbon, photographic or other reproduction of this
Agreement or any financing statement shall be sufficient as a financing
statement.

 

SECTION 7.8 Servicer Liability. (a) Except as otherwise expressly provided
herein (including, without limitation, pursuant to Section 6.1(p)) the Servicer
shall not be liable for (i) the failure by any Obligor or guarantor with respect
to the Receivables or any other Person (other than the Servicer or any of its
Sub-Servicer or delegates) to perform any of its obligations, (ii)

 

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the accuracy or completeness of any notices, reports or other communications
(other than those from the Servicer or any of its Sub-Servicers or delegates)
and shall be entitled to rely upon all such notices, reports and communications,
except to the extent that the Servicer has actual notice to the contrary or
reasonably should have known if the Servicer had acted in accordance with the
Standard of Care and (iii) for any action or inaction taken at the written
request or at the written direction of the Administrative Agent or the Control
Party. The Servicer shall not be subject to any obligations or liabilities other
than to those set forth in the Transaction Documents.

 

(b) The Servicer shall be liable to the Purchasers, the Administrative Agent and
Insurer for any and all direct (but not special, exemplary, punitive or
consequential) losses arising out of, in connection with or related to, the
failure of the Servicer to perform its duties (including, but not limited to,
the Services) and obligations with respect to the Services, but specifically
excluding any losses on account of any non-payment by Obligors arising from the
financial inability of such Obligors to make payments or resulting from the
gross negligence or willful misconduct of any Person seeking such payment.

 

SECTION 7.9 Conflicts of Interest. Each of the Administrative Agent, the
Purchasers and the Insurer hereby acknowledges that the Servicer may from time
to time perform services for its own separate assets and businesses and those of
the Performance Guarantor and other third parties. In the course of conducting
such activities, the Servicer may have conflicts of interest and each of the
parties hereto acknowledges that if such a conflict of interest arises, the
Servicer shall perform the Services in accordance with the Standard of Care, and
in any event will not perform the Services in a manner that discriminates
against any of the Purchasers, the Administrative Agent or the Insurer. For the
avoidance of doubt, notwithstanding the foregoing, the Servicer shall not be
required to perform the Services in a manner that prefers any of the Purchasers,
the Administrative Agent or the Insurer.

 

SECTION 7.10 Limitation of Servicer Authority. The Servicer shall have no
authority or agency to make any representations or warranties or give any
instructions on behalf of any of the Secured Parties. The Servicer shall have no
authority or agency to enter into any binding or in principle obligation on
behalf of any of the Secured Parties, except to the extent expressly provided in
this Agreement. The Servicer shall comply at all times with instructions of the
Administrative Agent (with the prior written consent of the Control Party, if
the Administrative Agent is not the Control Party, and if such Person’s consent
is required pursuant to the terms of this Agreement or any of the other
Transaction Documents) or the Control Party, if the same are communicated by a
duly authorized person. The Servicer will not propose any transaction relating
to or affecting any Receivable or any Contract, which transaction would (i) not
be an arm’s-length transaction, (ii) not comply with the Standard of Care and
the Credit and Collection Policy or (iii) impair any of the rights of the
Administrative Agent or any of the other Secured Parties under this Agreement or
any other Transaction Document.

 

SECTION 7.11 Servicer Information. Neither the Administrative Agent nor the
Insurer (nor any of their respective agents) shall have any rights to
information which is the property of the Servicer or have any right to amend the
information in the Servicer’s management systems, except, in either case, as
expressly set forth in this Agreement or any other Transaction Document. Subject
to Section 11.10, if either the Administrative Agent or the Insurer gains access
to non-public information related to the Servicer, such Person agrees to keep
such information confidential.

 

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ARTICLE VIII

 

EVENT OF DEFAULTS

 

SECTION 8.1 Event of Defaults. The occurrence of any one or more of the
following events shall constitute a “Event of Default”:

 

(a) any Raytheon Entity shall fail to observe or perform any term, provision,
covenant (whether financial or otherwise), agreement or obligation of such
Person set forth in any of the Transaction Documents to which it is a party,
which failure, if capable of cure, shall fail to be cured within thirty (30)
days of the earlier of such Person’s knowledge or notice thereof;

 

(b) any representation, warranty, certification or statement made or deemed made
by any Raytheon Entity in this Agreement, any other Transaction Document to
which it is a party or in any other information, report or document delivered
pursuant hereto or thereto shall prove to have been incorrect in any material
respect when made or deemed made or delivered, and, if capable of cure, shall
fail to be cured within thirty (30) days of the earlier of such Person’s
knowledge or notice thereof; or

 

(c) any Event of Bankruptcy shall occur (i) with respect to the Servicer or any
other Raytheon Entity or any Subsidiary of the Servicer or (ii) with respect to
any Subsidiary of any Raytheon Entity (solely with respect to this clause (ii)),
the effect of which could reasonably be expected to have a Material Adverse
Effect; or

 

(d) the Administrative Agent, on behalf of the Secured Parties, shall for any
reason fail or cease to have a valid and enforceable perfected first priority
ownership or security interest in the Affected Assets, free and clear of any
Adverse Claim (other than any Permitted Lien); or

 

(e) a Servicer Default shall have occurred and, within thirty (30) days after
the giving notice by the Administrative Agent or the Control Party to the
Servicer that the Servicer shall be replaced as a result of such Servicer
Default, no successor Servicer reasonably satisfactory to each of the
Administrative Agent and the Control Party shall have accepted the duties of
Servicer; or

 

(f) an “Event of Default” under the Raytheon Revolver (as such term is defined
therein) shall have occurred that has not been cured within the time period
provided for therein, if any, or waived by the required parties thereto; or

 

(g) the failure of any Raytheon Entity (or any Subsidiary of any Raytheon
Entity) to pay when due any amounts due under any agreement to which any such
Person is a party and under which any Indebtedness greater than fifty million
dollars ($50,000,000) is governed; or the default by any Raytheon Entity (or any
Subsidiary of any Raytheon Entity) in the performance of any term, provision or
condition contained in any agreement to which any such Person is a party and
under which any Indebtedness owing by any Raytheon Entity (or any Subsidiary of
any

 

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Raytheon Entity) greater than such amount was created or is governed, regardless
of whether such event is an “event of default” or “default” under any such
agreement if the effect of such default is to cause such Indebtedness to become
due and payable prior to its stated maturity; or any Indebtedness owing by any
Raytheon Entity (or any Subsidiary of any Raytheon Entity) greater than such
amount shall be declared to be due and payable, required to be prepaid or
accelerated (other than by a regularly scheduled payment) prior to the date of
maturity thereof; or

 

(h) the entry of any judgment (a) against the Transferor or the Seller or (b)
for money in excess of fifty million dollars ($50,000,000) against any other
Raytheon Entity, which such judgment shall not have been vacated, discharged,
satisfied, stayed or bonded pending appeal within thirty (30) days from the date
of entry thereof; or

 

(i) a Change of Control with respect to the Transferor or the Seller shall have
occurred or, without the prior written consent of each of the Administrative
Agent and the Control Party, a Change of Control with respect to any other
Raytheon Entity shall have occurred; or

 

(j) this Agreement or any other Transaction Document to which any Raytheon
Entity is a party, or any provision hereunder or thereunder, shall cease to be
the legal, valid and binding obligation of any such Person or shall cease to be
in full force and effect, enforceable as against such Person, or any Raytheon
Entity shall so state in writing; or

 

(k) the long-term, senior unsecured debt of the Performance Guarantor shall
cease to be rated by S&P, Moody’s or Fitch or shall be rated below “BB+” by S&P,
below “Bal” by Moody’s or below “BB+” by Fitch; or

 

(l) any draw shall occur under the Insurance Policy; or

 

(m) either the Transferor or the Seller becomes subject to the Investment
Company Act; or

 

(n) any Raytheon Entity shall assign any of its rights or obligations under any
of the Transaction Documents to which it is a party in violation of the terms of
this Agreement or thereof; or

 

(o) an ERISA Event shall have occurred with respect to any Raytheon Entity that,
in the reasonable opinion of the Control Party, when taken together with all
other ERISA Events that have occurred with respect to any Raytheon Entity could
reasonably be expected to have a Material Adverse Effect; or

 

(p) the Net Investment and Yield, if any, shall not have been paid in full from
Collections on or prior to the Settlement Date occurring in October 2014.

 

SECTION 8.2 Remedies. Upon the occurrence of (a) an Event of Default in clause
(b) or clause (d) of Section 8.1 above, the Administrative Agent may (with the
prior written consent of the Control Party) and at the written direction of the
Control Party, shall, by notice to the Seller and the Servicer, require that (i)
the Seller repurchase each Receivable in respect of which such Event of Default
arises by depositing into the Collection Account an amount equal to the

 

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Unpaid Balance of such Receivable and accrued interest thereon or (ii) the
Seller substitute an Eligible Substitute Receivable for such Receivable, in
accordance with Section 2.17, (b) an Event of Default in clause (c) of Section
8.1 above with respect to the Transferor or the Seller, the Termination Date
shall be deemed to have automatically occurred and all Aggregate Unpaids shall
be deemed to be immediately due and payable without presentment, demand, protest
or other notice each of which are hereby expressly waived and (c) an Event of
Default in Section 8.1 above (other than as set forth in clause (a) of this
Section 8.2), the Administrative Agent may (with the prior written consent of
the Control Party) and at the written direction of the Control Party, shall,
exercise all rights under all applicable Laws in respect of the Receivable and
the other Affected Assets related thereto, including declaring the Termination
Date to have occurred, and have the right to foreclose on or dispose of the
Affected Assets or any portion thereof or interests therein, at one or more
public or private sales called and conducted in any manner permitted by Law and
to apply all proceeds of any such foreclosure or disposition as Collections
pursuant to and in accordance with Section 2.12 (it being understood that the
Administrative Agent’s right to take any action with respect to any Aircraft
shall be subject to the terms of the related Contract); provided, however, that
the Administrative Agent shall not conduct (and the Control Party shall not
instruct) any public auction or accept any private sale contract with respect to
all or any portion of the Affected Assets unless, not less than two (2) weeks
prior thereto, the Administrative Agent (at the written direction of the Control
Party) shall have given the Seller and the Servicer written notice that the
Administrative Agent (at the direction of the Control Party) intends to conduct
a public auction or solicit or consider a private sale contract of the Affected
Assets or such portion thereof. The proceeds of such sale or liquidation shall
be delivered to the Collection Account for distribution in accordance with and
subject to the priorities for payment set forth in Section 2.12. For the
avoidance of doubt, except as may otherwise be specifically provided in Section
2.12 or Article IX of this Agreement or as provided in any other Transaction
Document there shall be no recourse to any Raytheon Entity or any Affiliate
thereof as a result of the occurrence of any Event of Default.

 

SECTION 8.3 Leased Aircraft Collateral. If an Event of Default shall have
occurred and be continuing, the Administrative Agent may (with the prior written
consent of the Control Party) and at the written direction of the Control Party,
shall, by notice to the Transferor and the Servicer, request that the Transferor
transfer any of its right, title or interest in or to the underlying collateral
set forth in any Assignment of Rents (the “Leased Aircraft Collateral”) or take
such action as may be reasonably requested to permit the Administrative Agent,
the Servicer or their respective designees to exercise any of their rights with
respect to the Leased Aircraft Collateral, all subject to any rights that the
related Obligor may have under the lease related to such Aircraft.

 

ARTICLE IX

 

INDEMNIFICATION; EXPENSES; RELATED MATTERS

 

SECTION 9.1 Indemnities by the Seller. Without limiting any other rights which
the Administrative Agent, the Administrator, any of the Purchasers, the Insurer,
the Program Support Providers and each of their respective officers, directors,
employees, counsel and other agents (collectively, “Indemnified Parties”) may
have hereunder or under applicable Law, the Seller hereby agrees to indemnify
each Indemnified Party from and against any and all damages, losses,

 

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claims, liabilities, costs and expenses, including reasonable attorneys’ fees
(which such attorneys may be an employ of any Indemnified Party) and
disbursements (all of the foregoing being collectively referred to as
“Indemnified Amounts”) awarded against or incurred by any of them in any action
or proceeding between any Raytheon Entity (including, in its capacity as the
Servicer or any Affiliate of RACC acting as Servicer) and any of the Indemnified
Parties or between any of the Indemnified Parties and any third party or
otherwise arising out of or as a result of this Agreement, the other Transaction
Documents, the ownership or maintenance, either directly or indirectly, by the
Administrative Agent, any Purchaser or the Insurer of the Asset Interest or any
of the other transactions contemplated hereby or thereby, excluding, however,
(i) Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Indemnified Party (ii) recourse (except as
otherwise specifically provided in this Agreement) for uncollectible Receivables
or (iii) any indirect, special, exemplary, punitive or consequential losses or
damages. Without limiting the generality of the foregoing, the Seller shall
indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:

 

(a) any representation or warranty made by any Raytheon Entity or any officers
of any Raytheon Entity under or in connection with this Agreement, any of the
other Transaction Documents, any Monthly Servicer Report or any other
information or report delivered by any Raytheon Entity pursuant hereto, or
pursuant to any of the other Transaction Documents which shall have been
incomplete, false, inaccurate, untrue or incorrect in any respect when made or
deemed made (without regard to any materiality or knowledge qualification set
forth in any such representation or warranty);

 

(b) the failure by the Seller or the Servicer to comply with any applicable Law
with respect to any Receivable or the related Contract or related Aircraft, or
the nonconformity of any Receivable or the related Contract or related Aircraft
with any such applicable Law (other than any noncompliance or nonconformity of
any Aircraft for which the related Obligor is responsible under the related
Contract);

 

(c) the failure (i) to vest and maintain vested in the Administrative Agent, on
behalf of the Secured Parties, a first priority, perfected ownership interest in
the Asset Interest free and clear of any Adverse Claim or (ii) to create or
maintain a valid and first priority, perfected security interest in favor of the
Administrative Agent, for the benefit of the Secured Parties, in the Affected
Assets, free and clear of any Adverse Claim;

 

(d) the failure to file, or any delay in filing, financing statements,
continuation statements, amendments or other similar instruments or documents
under the UCC or the Federal Aviation Act or any similar statute of any
applicable jurisdiction or other applicable laws with respect to any of the
Affected Assets or the failure to file, or any delay in filing, any other
Security Agreement;

 

(e) any dispute, claim, offset or defense (other than discharge in bankruptcy)
of the Obligor to the payment of any Receivable (including a defense based on
such Receivable or the related Contract not being the legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of merchandise or services related to
such Receivable or the furnishing or failure to furnish such merchandise or
services, or from any breach or alleged breach of any provision of the
Receivables or the related Contracts restricting assignment of any Receivables;

 

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(f) any failure of any Raytheon Entity to perform its duties or obligations in
accordance with the provisions hereof or any other Transaction Document which is
a party;

 

(g) any products liability claim or personal injury or property damage suit or
other similar or related claim or action of whatever sort arising out of or in
connection with Aircraft or Aircraft Fractional Shares which are the subject of
any Receivable;

 

(h) the transfer of an interest pursuant to the terms of this Agreement in any
Receivable other than an Eligible Receivable at the time of such transfer;

 

(i) the failure by any Raytheon Entity to comply with any term, provision or
covenant contained in this Agreement or any of the other Transaction Documents
to which it is a party or to perform any of its respective duties or obligations
under the Receivables or related Contracts;

 

(j) the failure of the Seller or the Servicer to pay when due any sales, excise
or personal property taxes payable in connection with any of the Receivables or
any other Affected Asset (other than any tax with respect to any Aircraft for
which the related Obligor is responsible under the related Contract);

 

(k) any repayment by any Indemnified Party of any amount previously distributed
in reduction of Net Investment which such Indemnified Party believes in good
faith is required to be made to the extent that such amount was distributed to
the Seller pursuant to Section 2.12;

 

(l) the commingling by the Seller or the Servicer of Collections at any time
with any other funds;

 

(m) any investigation, litigation or proceeding related to this Agreement, any
of the other Transaction Documents, the use of proceeds of the Investment by the
Seller or the Servicer, the ownership of the Asset Interest, or any Affected
Asset;

 

(n) any failure of any Blocked Account Bank to remit any amounts held in the
related Blocked Account or any related post office boxes or lock-boxes pursuant
to, and in accordance with, the terms hereof and of the applicable Blocked
Account Agreement, whether by reason of the exercise of set-off rights or
otherwise;

 

(o) any inability to obtain any judgment in or utilize the court or other
adjudication system of, any jurisdiction in which an Obligor may be located as a
result of the failure of the Seller or the Servicer to qualify to do business or
file any notice of business activity report or any similar report;

 

(p) any attempt by any Person to void, rescind or set-aside any transfer of the
Originator’s right, title and interest in the Affected Assets to the Transferor
or any transfer of the Transferor’s right, title and interest in the Affected
Assets to the Seller, whether under statutory provisions or common law or
equitable action, including any provision of the Bankruptcy Code or other
insolvency law;

 

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(q) any action taken by the Seller or the Servicer in the enforcement or
collection of any Receivable, subject to Section 7.8 (with the same exculpatory
language in Section 7.8 being applied to the Seller as if such Section 7.8 were
also applicable to the Seller);

 

(r) the use of the proceeds of the Investment; or

 

(s) the transactions contemplated hereby being characterized as other than debt
for the purposes of the Code; or

 

(t) any dispute or claim of any Person or third party related to or in
connection with the existence of more than one originally executed counterpart
of a Contract constituting chattel paper.

 

SECTION 9.2 Indemnity for Taxes, Reserves and Expenses. (a) If the adoption of
any Law or bank regulatory guideline or any amendment or change in the
administration, interpretation or application of any existing or future Law or
bank regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Official Body (in the case of any bank regulatory guideline, whether or not
having the force of Law) occurring after the Closing Date:

 

(i) shall subject any of the Affected Parties, or a lending office of an
Affected Party, to any tax, duty or other charge (other than Excluded Taxes)
with respect to any of the Transaction Documents, the ownership, maintenance or
financing of the Asset Interest, or payments of amounts due hereunder or
thereunder, or shall change the basis of taxation of payments to any Affected
Party of amounts payable in respect of any of the Transaction Documents, the
ownership, maintenance or financing of the Asset Interest, or payments of
amounts due hereunder or thereunder or its obligation to advance funds hereunder
or thereunder, under a Program Support Agreement or the credit or liquidity
support furnished by a Program Support Provider or otherwise in respect of any
of the Transaction Documents, the ownership, maintenance or financing of the
Asset Interest (except for changes in the rate of income tax imposed on such
Affected Party by the jurisdiction in which such Affected Party’s principal
executive office is located);

 

(ii) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement (including any such requirement imposed by the Board of
Governors of the Federal Reserve System) against assets of, deposits with or for
the account of, or credit extended by, any Affected Party or shall impose on any
Affected Party or on the United States market for certificates of deposit or the
London interbank market any other condition affecting any of the Transaction
Documents, the ownership, maintenance or financing of the Asset Interest, or
payments of amounts due hereunder or thereunder or its obligation to advance
funds hereunder or thereunder, under a Program Support Agreement or the credit
or liquidity support provided by a Program Support Provider or otherwise in
respect of any of the Transaction Documents, the ownership, maintenance or
financing of the Asset Interest; or

 

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(iii) imposes upon any Affected Party any other condition or expense (including
any loss of margin, reasonable attorneys’ fees and expenses, and expenses of
litigation or preparation therefor in contesting any of the foregoing) with
respect to any of the Transaction Documents, the ownership, maintenance or
financing of the Asset Interest, or payments of amounts due hereunder or
thereunder or its obligation to advance funds hereunder or thereunder or under a
Program Support Agreement or the credit or liquidity support furnished by a
Program Support Provider thereof or otherwise in respect of any of the
Transaction Documents, the ownership, maintenance or financing of the Asset
Interest,

 

and the result of any of the foregoing is to increase the cost to or to reduce
the amount of any sum received or receivable by such Affected Party with respect
to any of the Transaction Documents, the ownership, maintenance or financing of
the Asset Interest, the Receivables, the obligations hereunder and thereunder,
the funding of any purchases hereunder and thereunder or a Program Support
Agreement, by an amount deemed by such Affected Party to be material, then, upon
notice by such Affected Party through the Administrative Agent, the Seller shall
pay to the Collection Account, such additional amount or amounts as will
compensate such Affected Party for such increased cost or reduction.

 

(b) If any Affected Party shall have determined that, the adoption of any
applicable Law or bank regulatory guideline regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any Official Body, or any request or directive regarding capital adequacy (in
the case of any bank regulatory guideline, whether or not having the force of
law) of any such Official Body, has or would have the effect of reducing the
rate of return on capital of such Affected Party (or its parent) as a
consequence of such Affected Party’s obligations under the Transaction Documents
or with respect thereto to a level below that which such Affected Party (or its
parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Affected Party to be material, then, by such Affected
Party through the Administrative Agent, the Seller shall pay to the Collection
Account within ten (10) days, such additional amount or amounts as will
compensate such Affected Party (or its parent) for such reduction. For avoidance
of doubt, any accounting interpretation, including, without limitation.
Accounting Research Bulletin No. 41, or any other interpretation of the
Financial Accounting Standards Board (“FASB”), including FASB Interpretation No.
46: Consolidation of Variable Interest Entities, shall constitute an adoption,
change, request or directive subject to this Section 9.2(b).

 

(c) The Administrative Agent shall promptly notify the Seller of any event of
which it has knowledge, occurring after the date hereof, which will entitle an
Affected Party to compensation pursuant to this Section 9.2; provided that no
failure to give or any delay in giving such notice shall affect the Affected
Party’s right to receive such compensation. A notice by the Administrative Agent
or the applicable Affected Party claiming compensation under this Section 9.2
and setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In determining such
amount, the Administrative Agent or any applicable Affected Party may use any
reasonable averaging and attributing methods.

 

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(d) Each party hereto hereby agrees that, subject to any adjustment as provided
herein in the event of any future change in applicable Law or regulation, so
long as the transactions contemplated by this Agreement (after giving effect to
the Insurance Policy) continue to be rated “AAA” (or its equivalent) by each of
the Rating Agencies, in no event shall the Yield plus any increased costs which
are attributable to FASB Interpretation No. 46 exceed a rate per annum
equivalent to the Offshore Rate plus seventy-five basis points (0.75%) per
annum.

 

SECTION 9.3 Taxes. All payments and distributions made hereunder by the Seller
or the Servicer (each, a “Payor”) to the Insurer, any Purchaser, the
Administrative Agent or any other Secured Party (each, a “Payee”) shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and any other taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority on any
Payee (or any assignee of such parties) (such non-excluded items being called
“Taxes”), but excluding franchise taxes and taxes imposed on or measured by the
Payee’s net income or gross receipts (“Excluded Taxes”). In the event that any
withholding or deduction from any payment made by the Payor hereunder is
required in respect of any Taxes, then such Payor shall:

 

(a) pay directly to the relevant authority the full amount required to be so
withheld or deducted;

 

(b) promptly forward to the Administrative Agent and the Payee an official
receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority; and

 

(c) pay to the Collection Account for distribution to such Payee such additional
amount or amounts as is necessary to ensure that the net amount actually
received by the Payee will equal the full amount such Payee would have received
had no such withholding or deduction been required.

 

Moreover, if any Taxes are directly asserted against any Payee with respect to
any payment received by such Payee hereunder, the Payee may pay such Taxes and
the Payor will promptly pay such additional amounts (including any penalties,
interest or expenses) as shall be necessary in order that the net amount
received by the Payee after the payment of such Taxes (including any Taxes on
such additional amount) shall equal the amount such Payee would have received
had such Taxes not been asserted.

 

If the Payor fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to the Payee the required receipts or other required
documentary evidence, the Payor shall indemnify the Payee for any incremental
Taxes, interest, or penalties that may become payable by any Payee as a result
of any such failure.

 

SECTION 9.4 Other Costs and Expenses; Breakage Costs. The Seller agrees upon
receipt of a written invoice, to pay or cause to be paid (to the Collection
Account), and to save the Purchasers, the Administrative Agent and the Insurer
harmless against liability for the payment of, all reasonable out-of-pocket
expenses (including attorneys’, accountants’ and other third parties’ fees and
expenses, any filing fees and expenses (including without limitation, due
diligence expenses) incurred by officers or employees of any Purchaser and/or
the

 

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Administrative Agent and/or the Insurer) or intangible, documentary or recording
taxes incurred by or on behalf of any Purchaser or the Administrative Agent (i)
in connection with the preparation, negotiation, execution and delivery of this
Agreement, the other Transaction Documents and any documents or instruments
delivered pursuant hereto and thereto and the transactions contemplated hereby
or thereby (including the perfection or protection of the Asset Interest) and
(ii) from time to time (A) relating to any amendments, waivers or consents under
this Agreement and the other Transaction Documents, (B) arising in connection
with any of the Purchaser’s, the Administrative Agent’s or the Insurer’s
enforcement or preservation of rights (including, without limitation, the
perfection, protection or maintenance of value (after the occurrence of a
Servicer Default) of the Asset Interest and other actions described in Section
6.1(n), in each case, to the extent that the Servicer has failed to perform such
actions) or (C) arising in connection with any audit, dispute, disagreement,
litigation or preparation for litigation involving this Agreement or any of the
other Transaction Documents (all of such amounts, collectively, “Transaction
Costs”; it being understood that any Transaction Costs paid by the Seller for
the protection or maintenance of value (after the occurrence of a Servicer
Default) of the Asset Interest shall be deemed to be Permissible Servicer
Expenses for all purposes of this Agreement, and such Transaction Costs shall be
entitled to be reimbursed from any related Recovery Proceeds or pursuant to
clause (viii) of Section 2.12).

 

SECTION 9.5 [Reserved].

 

SECTION 9.6 Indemnities by the Servicer. (a) Without limiting any other rights
which the Administrative Agent, any of the Purchasers, the Insurer or the other
Indemnified Parties may have hereunder or under applicable Law, but subject to
the limitations contained in Section 7.8, the Servicer hereby agrees to
indemnify and hold harmless on an after tax basis, each of the Indemnified
Parties from and against any and all Indemnified Amounts (but not including
special, exemplary, punitive or consequential losses) arising out of or
resulting from (whether directly or indirectly) (A) the failure of any
information contained in any Monthly Servicer Report (to the extent provided by
the Servicer) to be true, complete and correct, or the failure of any other
information provided to any Indemnified Party by, or on behalf of, the Servicer
to be true, complete and correct, (B) the failure of any representation,
warranty or statement made or deemed made by the Servicer (or any of its
officers) under or in connection with this Agreement or any other Transaction
Document to which it is a party, to have been true, complete and correct as of
the date made or deemed made, (C) the failure by the Servicer to comply with any
applicable Law with respect to any Receivable or the related Contract, (D) any
dispute, claim, offset or defense of the Obligor to the payment of any
Receivable resulting from or related to the collection activities in respect of
such Receivable not performed in accordance with the Standard of Care, or (E)
any failure of the Servicer to perform its duties (including the Services) or
obligations in accordance with the Standard of Care or any other term or
provision of this Agreement. The Servicer hereby agrees to pay each Indemnified
Party such Indemnified Amounts promptly upon written demand from such Person (or
the Administrative Agent on behalf of such Person).

 

(b) Each Indemnified Party shall promptly notify the Administrative Agent and
the Insurer of any event of which it has knowledge, occurring after the date
hereof, which will entitle an Indemnified Party to compensation pursuant to this
Section 9.6; provided that no failure to give or any delay in giving such notice
shall affect the Indemnified Party’s right to receive such

 

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compensation. A notice by the Administrative Agent or the applicable Indemnified
Party claiming compensation under this Section 9.6 and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT

 

SECTION 10.1 Appointment and Authorization of the Administrative Agent. Each
Purchaser and the Insurer hereby irrevocably appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement and each other Transaction Document and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of this Agreement and any other Transaction Document,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Transaction Document, the Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth in
this Agreement, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Purchaser or the Insurer, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Transaction Document or otherwise exist
against the Administrative Agent. Without limiting the generality of the
foregoing sentence, the use of the term “agent” in this Agreement with reference
to the Administrative Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable
Law. Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.

 

SECTION 10.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Transaction Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.

 

SECTION 10.3 Liability of the Administrative Agent. No Agent-Related Person
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Transaction Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any Purchaser or
the Insurer for any recital, statement, representation, warranty or covenant
made by the Transferor, the Seller or the Servicer, or any officer thereof,
contained in this Agreement or in any other Transaction Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Transaction Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Transaction Document, or for any failure of the Transferor, the Seller, the
Servicer or any other party to any Transaction Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Purchaser or the Insurer to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Transaction Document, or to inspect the
properties, books or records of the Transferor, the Seller or the Servicer or
any of their respective Affiliates.

 

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SECTION 10.4 Reliance by the Administrative Agent. (a) The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Insurer, the
Originator, the Transferor, the Seller or the Servicer or the Performance
Guarantor), independent accountants and other experts selected by the
Administrative Agent or the Insurer. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Transaction Document unless it shall first receive such advice or
concurrence of the Insurer (in the case where the Insurer is the Control Party)
or Majority Purchasers (in the case where the Administrative Agent is the
Control Party) as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Insurer or the Purchasers, as applicable,
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Transaction Document in accordance with a request or
consent of the Insurer (in the case where the Insurer is the Control Party) and
the Majority Purchasers (in the case where the Administrative Agent is the
Control Party) or, if required hereunder, all Purchasers and such request and
any action taken or failure to act pursuant thereto shall be binding upon the
Insurer and such Purchasers, as the case may be.

 

(b) For purposes of determining compliance with the conditions specified in
Article V on the Closing Date, each Purchaser that has executed this Agreement
and the Insurer shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter either sent by the
Administrative Agent to such Purchaser or the Insurer for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to such Purchaser or the Insurer, as
applicable.

 

SECTION 10.5 Notice of Event of Default, Unmatured Event of Default, Servicer
Default or Unmatured Servicer Default. The Administrative Agent shall not be
deemed to have knowledge or notice from any Raytheon Entity, any Purchaser, the
Servicer, or the Insurer of the occurrence of an Unmatured Event of Default, an
Event of Default, an Unmatured Servicer Default or a Servicer Default, unless
the Administrative Agent has received written notice from the Insurer, a
Purchaser or the Servicer referring to this Agreement, describing such Unmatured
Event of Default, Event of Default, Unmatured Servicer Default or Servicer
Default, and stating that such notice is a “Notice of Event of Default or
Unmatured Event of Default” or “Notice of Servicer Default or Unmatured Servicer
Default,” as applicable. The Administrative Agent will notify the Purchasers and
the Insurer of its receipt of any such notice. The Administrative Agent shall
(subject to Section 10.4) take, or refrain from taking, such action with respect
to such Unmatured Event of Default, Event of Default, Unmatured Servicer Default
or Servicer Default as may be requested by the Insurer (in the case where the
Insurer is the Control Party) or the Majority Purchasers (in the case where the
Administrative Agent is the Control Party); provided, however, that, unless and
until the Administrative Agent shall have received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Unmatured Event of
Default, Event of Default, Unmatured Servicer Default or Servicer Default as it
shall deem advisable or in the best interest of the Purchasers.

 

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SECTION 10.6 Credit Decision; Disclosure of Information by the Administrative
Agent. Each Purchaser and the Insurer acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Administrative Agent hereinafter taken, including any consent to and
acceptance of any assignment or review of the affairs of the Transferor, the
Seller or the Servicer or any of their respective Affiliates, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Purchaser or the Insurer as to any matter, including whether the Agent-Related
Persons have disclosed material information in their possession. Each Purchaser,
including any Purchaser by assignment, and the Insurer represents to the
Administrative Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Transferor, the Seller or the Servicer or any of their
respective Affiliates, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Seller hereunder. Each Purchaser and the
Insurer also represents that it shall, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Transaction Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Transferor, the Seller
or the Servicer. Except for notices, reports and other documents expressly
herein required to be furnished to the Purchasers and the Insurer by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Purchaser or the Insurer with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Transferor, the Seller or the
Servicer or any of their respective Affiliates which may come into the
possession of any of the Agent-Related Persons.

 

SECTION 10.7 Indemnification of the Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Alternate Purchasers shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed by
or on behalf of the Seller and without limiting the obligation of the Seller to
do so), pro rata, and hold harmless each Agent-Related Person from and against
any and all Indemnified Amounts incurred by it; provided, however, that no
Alternate Purchaser shall be liable for the payment to any Agent-Related Person
of any portion of such Indemnified Amounts resulting from such Person’s gross
negligence or willful misconduct, as finally determined by a court of competent
jurisdiction; provided, however, that no action taken in accordance with the
directions of the Insurer (in the case where the Insurer is the Control Party)
or the Majority Purchasers (in the case where the Administrative Agent is the
Control Party) shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section 10.7. Without limitation of the
foregoing, each Alternate Purchaser shall reimburse the Administrative Agent
upon demand for its ratable share of any costs or out-of-pocket expenses
(including attorney’s fees) incurred by the Administrative Agent in connection
with the preparation, negotiation, execution, delivery, administration,

 

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modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Transaction Document, or any
document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Seller. The undertaking in this Section 10.7 shall survive payment on the Final
Payout Date and the resignation or replacement of the Administrative Agent.

 

SECTION 10.8 Administrative Agent in Individual Capacity. Bank of America (and
any successor acting as Administrative Agent) and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with any of the Originator,
the Transferor, the Seller, the Servicer and the Performance Guarantor or any of
their Subsidiaries or Affiliates as though Bank of America were not the
Administrative Agent or an Alternate Purchaser hereunder and without notice to
or consent of any of the Purchasers or the Insurer. The Purchasers and the
Insurer acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding the Originator, the Transferor, the
Seller, the Servicer and the Performance Guarantor or any of their respective
Affiliates (including information that may be subject to confidentiality
obligations in favor of such Person) and acknowledge that Bank of America (and
its Affiliates) shall be under no obligation to provide such information to
them. With respect to its Commitment, Bank of America (and any successor acting
as Administrative Agent) in its capacity as an Alternate Purchaser hereunder
shall have the same rights and powers under this Agreement as any other
Alternate Purchaser and may exercise the same as though it were not the
Administrative Agent or an Alternate Purchaser, and the term “Alternate
Purchaser” or “Alternate Purchasers” shall, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity.

 

SECTION 10.9 Resignation or Removal of Administrative Agent. (a) The
Administrative Agent may resign as Administrative Agent upon thirty (30) days’
notice to the Purchasers, the Insurer and each of the Rating Agencies. The
Administrative Agent may be removed by the Control Party “for cause” upon thirty
(30) days’ written notice from the Control Party to the Seller, the Servicer,
the Administrative Agent, each Purchaser and each of the Rating Agencies. For
purposes of this Section 10.9(a), “for cause” means the occurrence and
continuance of any of the following:

 

(i) an Event of Bankruptcy with respect to the Administrative Agent;

 

(ii) the Administrative Agent shall violate, in any material respect, any
provision of this Agreement or any other Transaction Documents to which it is a
party, which violation has not been cured (if capable of being cured) within
thirty (30) days of the Administrative Agent receiving notice from the Control
Party of such violation; or

 

(iii) the occurrence of an act by the Administrative Agent that constitutes
fraud, gross negligence, misappropriation of funds, willful misconduct, criminal
activity or other material violation of law in the performance of its
obligations under this Agreement or any other Transaction Document to which it
is a party or in any other agreement under which the Administrative Agent acts
as an agent or secured party on behalf of the Control Party.

 

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(b) If the Administrative Agent resigns or is removed for cause pursuant to
Section 10.9(a), any successor Administrative Agent must be reasonably
acceptable to each of the Majority Purchasers and the Insurer (if the Insurer is
the Control Party). If the Insurer is the Control Party and the Insurer and the
Majority Purchasers cannot agree on a satisfactory successor within the thirty
(30) day after such resignation or removal, then the Insurer may designate a
successor Administrative Agent to act as secured party on behalf of the Secured
Parties, and such successor Administrative Agent shall have the rights (i) to
exercise all rights and remedies of the Administrative Agent with respect to the
Transaction Documents, including with respect to any Receivables or other
Affected Assets or other property transferred or collateral pledged under the
Transaction Documents, (ii) to receive from the Raytheon Entities all payments
required to be submitted to the Administrative Agent under the Transaction
Documents, (iii) to maintain ownership and control of and to administer the
Collection Account and the allocations of payments from the funds on deposit
therein and (iv) to possession of each letter of credit and each other
instrument, document and certificate included in the Affected Assets. Such
successor Administrative Agent shall not, however, unless the Purchasers
otherwise agree, be entitled to act as Administrator or otherwise administer the
Transaction Documents on behalf of the Conduit Purchaser or in connection with
any transfers from the Conduit Purchaser to the Alternate Purchasers under this
Agreement. The provisions of Article X shall insure to the benefit of such
successor Administrative Agent to the extent of the rights, duties and
obligations assumed by it.

 

(c) This Section 10.9 shall not limit the effect of any other Section of this
Article X.

 

SECTION 10.10 Payments by the Administrative Agent. Unless specifically
allocated to an Alternate Purchaser pursuant to the terms of this Agreement, all
amounts received by the Administrative Agent shall be paid subject to and in
accordance with the priorities for payment set forth in Section 2.12.

 

SECTION 10.11 Administrative Agent to Hold Letters of Credit. After (i) the
occurrence of a Servicer Default or (ii) such time as the Performance Guarantor
ceases to be rated at least “BBB-” (or its equivalent) by each of the Rating
Agencies, the Servicer shall deliver to the Administrative Agent and thereafter
the Administrative Agent, on behalf of the Secured Parties shall hold (or cause
to be held by a third-party bailee acceptable to each of the Administrative
Agent and the Control Party) all letters of credit associated with any
Receivables.

 

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ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.1 Term of Agreement. This Agreement shall terminate on the Final
Payout Date; provided, however, that (i) the rights and remedies of the
Administrative Agent, the Purchasers, the Administrator and the Insurer with
respect to any representation and warranty made or deemed to be made by the
Transferor or the Seller pursuant to this Agreement, (ii) the indemnification
and payment provisions of Article IX, (iii) the provisions of Section 10.7 and
(iv) the agreements set forth in Sections 11.11 and 11.12, shall be continuing
and shall survive any termination of this Agreement.

 

SECTION 11.2 Waivers; Amendments. (a) No failure or delay on the part of the
Administrative Agent, the Purchasers, the Administrator, any Alternate Purchaser
or the Insurer in exercising any power, right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude any other further exercise thereof or
the exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law.

 

(b) Any provision of this Agreement (including, without limitation, Schedule I)
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the Transferor, the Seller, the Servicer, the Administrative
Agent and the Control Party; provided, that if the Insurer is not the Control
Party, no such amendment or waiver shall, unless signed directly by the Insurer:

 

(i) amend, modify or waive any provision of the Transaction Documents in any way
which would reduce the fees, reimbursements and amounts payable to the Insurer
under the Transaction Documents (including any reimbursement obligations under
the Insurance and Reimbursement Agreement or any rights to payment the Insurer
has obtained due to the subrogation of the rights of the Purchasers and the
Administrative Agent to the Insurer) or delay the payment of any such amounts or
eliminate any indemnification claim or any recourse which the Insurer has or may
have against any party to the Transaction Documents;

 

(ii) amend, modify or waive any provisions of the Transaction Documents (A)
expressly relating to the rights of the Insurer or the representations,
warranties, covenants and agreements in favor of the Insurer under the
Transaction Documents, or (B) otherwise granting any privileges to the Insurer;

 

(iii) modify any provision of Section 2.12 or, directly or indirectly, any of
the substantive provisions of Section 2.12 (including, without limitation, the
priority for payment or the distribution amounts set forth in Section 2.12), in
any manner that adversely affects the Insurer; provided, that nothing in this
Agreement or any other Transaction Document shall require the consent of the
Insurer to any change or modification to the definition of “Administrative Agent
Fee Letter” or “Purchaser Fee Letter” except as provided in such definitions;

 

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(iv) to the extent any Aggregate Unpaids are then due and owing to the Insurer,
release the Performance Guarantor from any of its obligations under the
Performance Guaranty;

 

(v) to the extent any Aggregate Unpaids are then due and owing to the Insurer,
amend, modify or waive the provisions relating to payments of Permitted
Dividends so as to relax the restrictions on such payments; or

 

(vi) to the extent any Aggregate Unpaids are then due and owing to the Insurer,
release any Asset Interest or Affected Assets or any other pledged collateral
from the security interests and liens created under the Transaction Documents;

 

provided, further that no such amendment or waiver shall, unless signed by each
Alternate Purchaser directly affected thereby, (i) increase the Commitment of an
Alternate Purchaser, (ii) reduce the Net Investment or rate of Yield to accrue
thereon or any fees or other amounts payable hereunder, (iii) postpone any date
fixed for the payment of any scheduled distribution in respect of the Net
Investment or Yield with respect thereto or any fees or other amounts payable
hereunder or for termination of any Commitment, (iv) change the percentage of
the Commitments of Alternate Purchasers which shall be required for the
Alternate Purchasers or any of them to take any action under this Section 11.2
or any other provision of this Agreement, (v) release all or substantially all
of the property with respect to which a security or ownership interest therein
has been granted hereunder to the Administrative Agent or the Alternate
Purchasers or (vi) extend or permit the extension of the Termination Date (it
being understood that a waiver of an Event of Default shall not constitute an
extension or increase in the Commitment of any Alternate Purchaser); and
provided, further, that the signature of the Transferor, the Seller and the
Servicer shall not be required for the effectiveness of any amendment which
modifies the representations, warranties, covenants or responsibilities of the
Servicer at any time when the Servicer is not RACC or any Affiliate of RACC or a
successor Servicer is designated pursuant to Section 7.1(a). In the event the
Administrative Agent requests a Purchaser’s consent pursuant to the foregoing
provisions and the Administrative Agent does not receive a consent (either
positive or negative) from the such Purchaser within ten (10) Business Days of
such Purchaser’s receipt of such request, then such Purchaser (and its
percentage interest hereunder) shall be disregarded in determining whether the
sufficient consent hereunder has been obtained. The Servicer shall provide
promptly, and in any event within ten (10) Business Days after effectiveness,
written notice to each of the Rating Agencies of each amendment to, or waiver of
any term or provision of, this Agreement.

 

SECTION 11.3 Notices; Payment Information. Except as provided below, all
communications and notices and payments provided for hereunder shall be in
writing (including facsimile or electronic transmission or similar writing) and
shall be given to the other party at its address or facsimile number and, in the
case of payments, sent by wire transfer pursuant to the wire transfer
instructions for such party set forth in Schedule 11.3 or at such other address
or facsimile number or pursuant to such other wire transfer instructions as such
party may hereafter specify in writing for the purposes of notice or payment to
each other party hereto. Each such notice or other communication shall be
effective (i) if given by facsimile, when such facsimile is

 

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transmitted to the facsimile number specified in this Section 11.3 and
confirmation is received, (ii) if given by mail, three (3) Business Days
following such posting, if postage prepaid and sent via U.S. certified or
registered mail, (iii) if given by overnight courier, one (1) Business Day after
deposit thereof with a national overnight courier service, or (iv) if given by
any other means, when received at the address specified in this Section 11.3.

 

SECTION 11.4 Governing Law; Submission to Jurisdiction; Appointment of Service
Agent.

 

(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW). EACH OF THE ORIGINATOR, THE TRANSFEROR, THE SELLER AND THE
SERVICER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE ORIGINATOR, THE
TRANSFEROR, THE SELLER AND THE SERVICER HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS SECTION 11.4 SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT, ANY OF THE PURCHASERS OR THE INSURER TO BRING
ANY ACTION OR PROCEEDING AGAINST ANY OF THE ORIGINATOR, THE TRANSFEROR, THE
SELLER OR THE SERVICER OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF
OTHER JURISDICTIONS.

 

(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER TRANSACTION DOCUMENTS.

 

(c) The Originator, the Transferor, the Seller and the Servicer each hereby
appoint CT Corporation System located at 111 8th Avenue, New York, New York
10011 as the authorized agent upon whom process may be served in any action
arising out of or based upon this Agreement, the other Transaction Documents to
which such Person is a party or the transactions contemplated hereby or thereby
that may be instituted in the United States District Court for the Southern
District of New York and of any New York State court sitting in The City of New
York by any Purchaser, the Administrative Agent, the Administrator or any
successor or assignee of any of them.

 

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SECTION 11.5 Integration. This Agreement contains the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall (together with the other Transaction Documents)
constitute the entire agreement among the parties, hereto with respect to the
subject matter hereof superseding all prior oral or written understandings.

 

SECTION 11.6 Severability of Provisions. If any one or more of the provisions of
this Agreement shall for any reason whatsoever be held invalid, then such
provisions shall be deemed severable from the remaining provisions of this
Agreement and shall in no way affect the validity or enforceability of such
other provisions.

 

SECTION 11.7 Counterparts; Facsimile Delivery. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement. Delivery by facsimile of an executed signature page of this Agreement
shall be effective as delivery of an executed counterpart hereof.

 

SECTION 11.8 Successors and Assigns; Binding Effect. (a) This Agreement shall be
binding on the parties hereto and their respective successors and assigns;
provided, however, that none of the Raytheon Entities or any of their respective
Affiliates shall assign (or shall permit or cause the assignment of) any of
their respective rights, duties (including the Services, except duties delegated
to a Sub-Servicer in accordance with and subject to the provisions of this
Agreement) or obligations related to or in connection with this Agreement or any
of the other Transaction Documents, without the prior written consent the
Administrative Agent and, if no Insurer Default has occurred and is continuing,
the Insurer. Notwithstanding the foregoing, the Transferor shall be entitled to
sell no more than ninety-five percent (95%) of its interest in the Seller or the
cash flow distributable thereto representing the Seller’s subordinated interest
in the Receivables and the other Affected Assets constituting the difference
between the Unpaid Balance (as of the Closing Date) and the Investment (without
giving effect to any reduction therein), and shall at all times retain at least
five percent (5%) of the total of any such interest. Prior to the sale of any
such interest, the Administrative Agent and, if no Insurer Default has occurred
and is continuing, the Insurer, shall have received evidence satisfactory to
such Person that the subordinated interest so sold is the subject of a
subordination agreement and related legal opinions (including (i) an opinion to
the effect that such sale will not result in adverse tax consequences to the
Transferor, the Seller or any Purchaser and (ii) opinions affirming or
reaffirming, after giving effect to such sale, each of the “true sale” and
“non-consolidation” opinions of Bingham McCutchen LLP delivered pursuant to
Section 5.1), which subordination agreements and legal opinions in each case,
shall be in form and substance reasonably acceptable to the Administrative Agent
and, if no Insurer Default has occurred and is continuing, the Insurer. Except
as provided in Section 11.8 (b) below, no provision of this Agreement shall in
any manner restrict the ability of any Purchaser to assign, participate, grant
security interests in, or otherwise transfer any portion of the Asset Interest.

 

(b) Any Alternate Purchaser may assign all or any portion of its Commitment and
its interest in the Net Investment, the Asset Interest and its other rights and
obligations hereunder to any Person with the written approval of the
Administrator, on behalf of the Conduit Purchaser, and the Administrative Agent.
In connection with any such assignment, the assignor shall

 

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deliver to the assignee(s) an Assignment and Assumption Agreement, duly
executed, assigning to such assignee a pro rata interest in such assignor’s
Commitment and other obligations hereunder and in the Net Investment, the Asset
Interest and other rights hereunder, and such assignor shall promptly execute
and deliver all further instruments and documents, and take all further action,
that the assignee may reasonably request, in order to protect, or more fully
evidence the assignee’s right, title and interest in and to such interest and to
enable the Administrative Agent, on behalf of such assignee, to exercise or
enforce any rights hereunder and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment, was a party. Upon any
such assignment, (i) the assignee shall have all of the rights and obligations
of the assignor hereunder and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment, was a party with
respect to such assignor’s Commitment and interest in the Net Investment and the
Asset Interest for all purposes of this Agreement and under the other
Transaction Documents to which such assignor is or, immediately prior to such
assignment, was a party and (ii) the assignor shall have no further obligations
with respect to the portion of its Commitment which has been assigned and shall
relinquish its rights with respect to the portion of its interest in the Net
Investment and the Asset Interest which has been assigned for all purposes of
this Agreement and under the other Transaction Documents to which such assignor
is or, immediately prior to such assignment, was a party. No such assignment
shall be effective unless a fully executed copy of the related Assignment and
Assumption Agreement shall be delivered to the Administrative Agent, the
Servicer and the Seller. All costs and expenses of the Administrative Agent
incurred in connection with any assignment hereunder shall be borne by the
applicable assignor. No Alternate Purchaser shall assign any portion of its
Commitment hereunder without also simultaneously assigning an equal portion of
its interest in the Program Support Agreement to which it is a party or under
which it has acquired a participation.

 

(c) By executing and delivering an Assignment and Assumption Agreement, the
assignor and assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Assumption Agreement, the assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, the other
Transaction Documents or any other instrument or document furnished pursuant
hereto or thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value or this Agreement, the other Transaction
Documents or any such other instrument or document; (ii) the assignor makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Raytheon Entity or the performance or observance by
any Raytheon Entity of any of their respective obligations under this Agreement,
the other Transaction Documents or any other instrument or document furnished by
any Raytheon Entity pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, each other Transaction Document and such
other instruments, documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Assumption Agreement and to purchase such interest; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, or any of its
Affiliates, or the assignor and based on such agreements, documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Transaction Documents; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this

 

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Agreement, the other Transaction Documents and any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto and to enforce its respective rights and interests
in and under this Agreement, the other Transaction Documents and the Affected
Assets; (vi) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement and the other
Transaction Documents are required to be performed by it as the assignee of the
assignor; and (vii) such assignee agrees that it will not institute against, or
join any other Person in instituting against, or solicit or encourage any Person
to institute against, the Conduit Purchaser or the Seller any proceeding of the
type referred to in Section 11.11 prior to the later of (a) date which is one
year and one day after the payment in full of all Commercial Paper or other
rated indebtedness of the Conduit Purchaser (or its related commercial paper
issuer) and (b) the Final Payout Date.

 

(d) Without limiting the foregoing, the Conduit Purchaser may, from time to
time, with prior or concurrent notice to the Seller and Servicer, in one
transaction or a series of transactions, assign all or a portion of the Net
Investment and its rights and obligations under this Agreement and any other
Transaction Documents to which it is a party to a Conduit Assignee. Upon and to
the extent of such assignment by the Conduit Purchaser to a Conduit Assignee,
(i) such Conduit Assignee shall be the owner of the assigned portion of the Net
Investment, (ii) the related administrator for such Conduit Assignee will act as
the Administrator for such Conduit Assignee, with all corresponding rights and
powers, express or implied, granted to the Administrator hereunder or under the
other Transaction Documents, (iii) such Conduit Assignee (and any related
commercial paper issuer, if such Conduit Assignee does not itself issue
commercial paper) and their respective liquidity support provider(s) and credit
support provider(s) and other related parties shall have the benefit of all the
rights and protections provided to the Conduit Purchaser and its Program Support
Provider(s) herein and in the other Transaction Documents (including any
limitation on recourse against such Conduit Assignee or related parties, any
agreement not to file or join in the filing of a petition to commence an
insolvency proceeding against such Conduit Assignee, and the right to assign to
another Conduit Assignee as provided in this paragraph), (iv) such Conduit
Assignee shall assume all (or the assigned or assumed portion) of the Conduit
Purchaser’s obligations, if any, hereunder or any other Transaction Document,
and the Conduit Purchaser shall be released from such obligations, in each case
to the extent of such assignment, and the obligations of the Conduit Purchaser
and such Conduit Assignee shall be several and not joint, (v) all distributions
in respect of the Net Investment shall be made to the applicable agent or the
Administrator, as applicable, on behalf of the Conduit Purchaser and such
Conduit Assignee on a pro rata basis according to their respective interests,
(vi) the definition of the term “CP Rate” with respect to the portion of the Net
Investment funded with commercial paper issued by the Conduit Purchaser from
time to time shall be determined in the manner set forth in the definition of
“CP Rate” applicable to the Conduit Purchaser on the basis of the interest rate
or discount applicable to commercial paper issued by such Conduit Assignee (or
the related commercial paper issuer, if such Conduit Assignee does not itself
issue commercial paper) (rather than the Conduit Purchaser), (vii) the defined
terms and other terms and provisions of this Agreement and the other Transaction
Documents shall be interpreted in accordance with the foregoing, and (viii) if
requested by the Administrative Agent or Administrator with respect to the
Conduit Assignee, the parties will execute and deliver such further agreements
and documents and take such other actions as the Administrative Agent or such
Administrator may reasonably request to evidence and give effect

 

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to the foregoing. No assignment by the Conduit Purchaser to a Conduit Assignee
of all or any portion of the Net Investment shall in any way diminish the
related Alternate Purchasers’ obligation under Section 2.3 to fund any
Investment not funded by the Conduit Purchaser or such Conduit Assignee or to
acquire from the Conduit Purchaser or such Conduit Assignee all or any portion
of the Net Investment pursuant to Section 3.1.

 

(e) In the event that the Conduit Purchaser makes an assignment to a Conduit
Assignee in accordance with Section 11.8(d) above, the Alternate Purchasers: (i)
if requested by Bank of America, shall terminate their participation in the
applicable Program Support Agreement to the extent of such assignment, (ii) if
requested by Bank of America, shall execute (either directly or through a
participation agreement, as determined by the Administrator) the Program Support
Agreement related to such Conduit Assignee, to the extent of such assignment,
the terms of which shall be substantially similar to those of the participation
or other agreement entered into by such Alternate Purchaser with respect to the
applicable Program Support Agreement (or which shall be otherwise reasonably
satisfactory to Bank of America and the Alternate Purchasers), (iii) if
requested by the Conduit Purchaser, shall enter into such agreements as
requested by the Conduit Purchaser pursuant to which they shall be obligated to
provide funding to the Conduit Assignee on substantially the same terms and
conditions as is provided for in this Agreement in respect of the Conduit
Purchaser (or which agreements shall be otherwise reasonably satisfactory to the
Conduit Purchaser and the Alternate Purchasers), and (iv) shall take such
actions as the Administrative Agent shall reasonably request in connection
therewith.

 

(f) Each of the Originator, the Transferor, the Seller, the Servicer and the
Insurer hereby agrees and consents to the assignment by the Conduit Purchaser
from time to time of all or any part of its rights under, interest in and title
to this Agreement and the Asset Interest to any Program Support Provider.

 

(g) Notwithstanding anything to the contrary in this Section 11.8, (i) no
Purchaser may assign all or any portion of the Net Investment unless it has
demonstrated to the reasonable satisfaction of the Administrative Agent that
such assignment will not cause the aggregate number of Purchasers and other
holders of beneficial interests in the Net Investment (including any Persons
holding participations in the Asset Interest) to exceed fifty (50) (determined
in accordance with the Investment Company Act of 1940, as amended); and (ii) the
Transferor shall not be allowed to sell interests in the subordinated cash flow
as described in Section 11.8(a) unless it has demonstrated to the reasonable
satisfaction of the Administrative Agent and the Insurer that the beneficial
owners of such interests, together with all other beneficial owners of
outstanding securities of the Seller (other than the persons referred to in
clause (i) above) would not exceed fifty (50) (determined in accordance with the
Investment Company Act of 1940, as amended). For purposes of the foregoing,
beneficial ownership by a company shall be deemed to be ownership by one person
except that, if such company owns more than ten percent (10%) of the outstanding
voting securities of the Seller and is, or but for Section 3(c)(1) or 3(c)(7) of
the Investment Company Act of 1940, would be an “investment company” as defined
in such act, the beneficial ownership shall be deemed to be that of the holders
of such company’s outstanding securities (other than short-term paper).

 

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SECTION 11.9 Waiver of Confidentiality. Subject to the following sentence and
Section 11.14, the Administrative Agent, each Purchaser, the Administrator and
the Insurer agree to keep any non-public information related to the transactions
contemplated by this Agreement and the Transaction Documents, received by it
directly from any Raytheon Entity, strictly confidential. Each of the
Originator, the Transferor, the Seller and the Servicer hereby consents to the
disclosure of any information with respect to it received by the Administrative
Agent, any Purchaser, the Administrator or the Insurer (a) to any other
Purchaser or potential Purchaser, the Administrative Agent, the Insurer, any
nationally recognized statistical rating organization rating Commercial Paper,
any dealer or placement agent of or depositary for Commercial Paper, the
Administrator, any Program Support Provider or any of such Person’s counsel or
accountants in relation to this Agreement or any other Transaction Document, (b)
in connection with any litigation relating to any Transaction Document, and (c)
as may be required by applicable Law or order of a court of competent
jurisdiction.

 

SECTION 11.10 Confidentiality Agreement. Each of the Originator, the Transferor,
the Seller and the Servicer hereby agrees that during the term of this Agreement
and for two (2) years after the termination of this Agreement, it will not
disclose the contents of this Agreement (other than in accordance with the
filing requirements of the Securities and Exchange Commission, if any) or any
other Transaction Document or any other proprietary or confidential information
of or with respect to any Purchaser, the Administrative Agent, the Insurer, the
Administrator or any Program Support Provider to any other Person except (a) its
auditors, attorneys, employees or financial advisors (other than any commercial
bank) and any nationally recognized statistical rating organization, provided
such auditors, attorneys, employees, financial advisors or nationally recognized
statistical rating organizations are informed of the highly confidential nature
of such information, (b) as otherwise required by applicable law or order of a
court of competent jurisdiction, (c) in connection with any litigation relating
to any Transaction Document, or (d) pursuant to Section 11.14 or (e) an Obligor
or its advisors, as required in connection with obtaining any consent required
pursuant to the related Contract.

 

SECTION 11.11 No Bankruptcy Petition Against the Conduit Purchaser. Each of the
Originator, the Transferor, the Seller, the Servicer and the Performance
Guarantor hereby covenants and agrees (and the Insurer, by its execution of this
Agreement, expressly acknowledges) that, prior to the date which is one year and
one day after the payment in full of all outstanding Commercial Paper or other
rated indebtedness of the Conduit Purchaser (or its related commercial paper
issuer), it will not institute against, or join any other Person in instituting
against, or solicit or encourage any Person to institute against, the Conduit
Purchaser any proceeding of a type referred to in the definition of Event of
Bankruptcy.

 

SECTION 11.12 No Bankruptcy Petition Against the Transferor and the Seller. (a)
Each of the Originator, the Transferor, the Seller, the Servicer and the
Performance Guarantor (and, so long as no Insurer Default has occurred and is
continuing, each of the Administrative Agent and each Purchaser) hereby
covenants and agrees (and the Insurer, by its execution of this Agreement,
expressly acknowledges) that, prior to the date which is one year and one day
after the payment in full of all Aggregate Unpaids, it will not institute
against or join any other Person in instituting against, or solicit or encourage
any Person to institute against, the Transferor any proceeding of a type
referred to in the definition of Event of Bankruptcy.

 

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(b) Each of the Originator, the Transferor, the Seller, the Servicer and the
Performance Guarantor (and, so long as no Insurer Default has occurred and is
continuing, each of the Administrative Agent and each Purchaser) hereby
covenants and agrees (and the Insurer, by its execution of this Agreement,
expressly acknowledges) that, prior to the date which is one year and one day
after the payment in full of all outstanding Aggregate Unpaids, it will not
institute against, or join any other Person in instituting against, or solicit
or encourage any Person to institute against, the Seller any proceeding of a
type referred to in the definition of Event of Bankruptcy.

 

SECTION 11.13 No Recourse Against Conduit Purchaser, Stockholders, Officers or
Directors. Notwithstanding anything to the contrary contained in this Agreement
or any other Transaction Document, the obligations of the Conduit Purchaser
under this Agreement and all other Transaction Documents are solely the
corporate obligations of the Conduit Purchaser and shall be payable solely to
the extent of funds received from the Seller in accordance herewith or from any
party to any Transaction Document in accordance with the terms thereof in excess
of funds necessary to pay matured and maturing Commercial Paper. No recourse
under any obligation, covenant or agreement of the Conduit Purchaser contained
in this Agreement shall be had against AMACAR Group, L.L.C. (the “Corporate
Services Provider”) (or any Affiliate thereof), or any stockholder, employee,
officer, director or incorporator of the Conduit Purchaser or beneficial owner
of any of them, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that this Agreement is solely a corporate obligation of
the Conduit Purchaser, and that no personal liability whatsoever shall attach to
or be incurred by the Corporate Services Provider (or any Affiliate thereof), or
the stockholder, employee, officer, director or incorporator of the Conduit
Purchaser or beneficial owner of any of them, as such, or any of them, under or
by reason of any of the obligations, covenants or agreements of the Conduit
Purchaser contained in this Agreement, or implied therefrom, and that any and
all personal liability for breaches by the Conduit Purchaser of any of such
obligations, covenants or agreements, either at common law or at equity, or by
statute or constitution, of the Corporate Services Provider (or any Affiliate
thereof) and every such stockholder, employee, officer, director or incorporator
of the Conduit Purchaser or beneficial owner of any of them is hereby expressly
waived as a condition of and consideration for the execution of this Agreement;
provided, however, that the Conduit Purchaser shall be considered to be an
Affiliate of the Corporate Services Provider; and provided, further, that this
Section 11.13 shall not relieve any such stockholder, employee, officer,
director or incorporator of the Conduit Purchaser or beneficial owner of any of
them of any liability it might otherwise have for its own intentional
misrepresentation or willful misconduct.

 

SECTION 11.14 Tax Treatment. Notwithstanding anything herein to the contrary,
each party (and each employee, representative or other agent of each party)
hereto may disclose to any and all persons, without limitation of any kind, any
information with respect to the “tax treatment” and “tax structure” (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to any such party (or its
representatives) relating to such tax treatment and tax structure; provided that
with respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the transactions
contemplated hereby as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the transactions contemplated hereby.

 

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SECTION 11.15 Independent Nature of Purchasers’ Rights; Miscellaneous. The
obligations of the Purchasers under this Agreement and the other Transaction
Documents are several and no Purchaser shall be responsible for the obligations
or Commitments of any other Purchaser. Nothing contained in this Agreement or in
any other Transaction Document, and no action taken by any Purchaser, the
Administrative Agent, the Administrator or the Insurer, pursuant to this
Agreement or any other Transaction Document, shall be deemed to constitute any
such Person as a partnership, an association, a joint venture or any other kind
of entity. The amounts payable at any time hereunder to the Administrative
Agent, each Purchaser, the Administrator and the Insurer shall be a separate and
independent debt.

 

SECTION 11.16 Limitation of Liability. No claim may be made by any Raytheon
Entity or any other Person against any of the Administrative Agent, any
Purchaser or the Insurer or their respective Affiliates, directors, officers,
employees, attorneys or agents for any special, indirect, consequential,
exemplary or punitive damages or losses in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other Transaction Document,
or any act, omission or event occurring in connection herewith or therewith; and
each Raytheon Entity and the Servicer hereby waives, releases, and agrees not to
sue upon any claim for any such damages or losses, whether or not accrued and
whether or not known or suspected to exist in its favor.

 

SECTION 11.17 Third Party Beneficiary. Each of the parties hereby acknowledges
and agrees that the Insurer (and its successors and assigns) is an express third
party beneficiary of this Agreement and shall be entitled to rely on and
directly enforce each of the representations, warranties, covenants and
agreements contained herein as if it were party hereto as the Insurer.

 

SECTION 11.18 Certain Understandings Regarding the Originator and the
Transferor. Each of the parties hereto acknowledges and agrees that (a) pursuant
to the First Tier Agreement, the Originator incurred certain obligations and
liabilities in favor of the Transferor (collectively, the “Originator
Obligations”) which were assigned by the Transferor to the Seller pursuant to
the Sale and Conveyance Agreement and were assigned by the Seller to the
Administrative Agent for the benefit of the Secured Parties pursuant to this
Agreement, (b) pursuant to the Sale and Conveyance Agreement, the Transferor
incurred certain obligations and liabilities in favor of the Seller
(collectively, the “Transferor Obligations”) which were assigned by the Seller
to the Administrative Agent for the benefit of the Secured Parties pursuant to
this Agreement and (c) without derogating or otherwise modifying the express
obligations of the Originator and the Transferor contained in this Agreement and
the other Transaction Documents, the inclusion of the Originator and the
Transferor as parties to this Agreement is intended as an administrative
convenience in order to (i) recognize the Secured Parties as the assignees of
the Originator Obligations and Transferor Obligations, respectively, and (ii)
restate such Originator Obligations and Transferor Obligations as provided for
herein for the purpose of confirming and ratifying such obligations, without the
intent to expand such Originator Obligations and/or Transferor Obligations, as
applicable.

 

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SECTION 11.19 Representation of the Conduit Purchaser. The Conduit Purchaser
hereby represents and warrants that, on the Closing Date: (i) it is the sole
Purchaser funding the Investment and (ii) it would be deemed to constitute not
more than one (1) beneficial owner of the Seller’s securities for purposes of
Section 3(c)(1) of the Investment Company Act of 1940, as amended.

 

[Signatures Follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.

 

GENERAL AVIATION RECEIVABLES
CORPORATION, as Seller

By:

 

/s/ Andrew A. Matthews

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

Title:

 

President

RAYTHEON AIRCRAFT RECEIVABLES
CORPORATION, individually and as
Transferor

By:

 

/s/ Andrews A. Matthews

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

Title:

 

President

RAYTHEON AIRCRAFT CREDIT
CORPORATION, individually, as Originator
and as Servicer

By:

 

/s/ Andrew A. Mathews

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

Title:

 

President

 

S-1

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

RECEIVABLES CAPITAL CORPORATION,
as Conduit Purchaser

By:

 

/s/ Evelyn Echevarria

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

Title:

 

Vice President

 

S-2

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

Commitment

  BANK OF AMERICA, N.A., as
Administrative Agent, as Administrator and as
an Alternate Purchaser

$286,040,103.53

 

By:

 

/s/ Erle R.L. Archer

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

   

Title:

 

Principal

 

S-3

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

ACKNOWLEDGED AND AGREED:

 

MBIA INSURANCE CORPORATION

By:

 

/s/ Adam M. Garta

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

Title:

 

Assistant Secretary

 

S-4

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

ACKNOWLEDGED AND AGREED:

 

RAYTHEON COMPANY, as Performance
Guarantor

By:

 

/s/ Richard A. Goglia

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

Title:

 

Vice President & Treasurer

 

 

S-5

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

SCHEDULE I

 

Section 2.4 of this Agreement shall be read in its entirety as follows:

 

SECTION 2.4 Determination of Yield and Rate Periods. (a) From time to time, for
purposes of determining the Rate Periods applicable to the different portions of
the Net Investment and of calculating Yield with respect thereto, the
Administrative Agent shall allocate the Net Investment to one or more tranches
(each a “Portion of Investment”). At any time, each Portion of Investment shall
have only one Rate Period and one Rate Type. In addition, at any time when the
Net Investment is not divided into more than one portion, “Portion of
Investment” means 100% of the Net Investment.

 

(b) From time to time the Administrative Agent shall notify the Servicer and the
Seller of the number of Portions of Investment and the Rate Type of each Portion
of Investment.

 

(c) As used in this Section 2.4, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined)

 

“Alternate Rate” means, for any Rate Period for any Portion of Investment, an
interest rate per annum equal to seventy-five basis points (0.75%) per annum
above the Offshore Rate for such Rate Period; provided, however, that in the
case of:

 

(i) any Rate Period which commences on a date other than a Settlement Date or
which commences prior to the Administrative Agent receiving at least three (3)
Business Days notice thereof, or

 

(ii) any Rate Period relating to a Portion of Investment which is less than five
million dollars ($5,000,000),

 

the “Alternate Rate” for each day in such Rate Period shall be an interest rate
per annum equal to the Base Rate in effect on such day. The “Alternate Rate” for
any date on or after the declaration of Termination Date pursuant to Section 8.2
shall be an interest rate equal to two percent (2.00%) per annum above the Base
Rate in effect on such day.

 

“Base Rate” means, for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate for such day, plus 1/2 of one percent (1%) and (b)
the rate of interest in effect for such day as publicly announced from time to
time by the Administrative Agent as its “prime rate”. The “prime rate” is a rate
set by the Administrative Agent based upon various factors including the
Administrative Agent’s costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in the prime
rate announced by the Administrative Agent shall take effect at the opening of
business on the day specified in the public announcement of such change.

 

“CP Rate” means, for any Rate Period for any Portion of Investment, the per
annum rate equivalent to the weighted average cost (as determined by the
Administrator and which shall include commissions of placement agents and
dealers, incremental carrying costs incurred with

 

Schedule I-1

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

respect to Commercial Paper maturing on dates other than those on which
corresponding funds are received by the Conduit Purchaser (or the related
commercial paper issuer), other borrowings by the Conduit Purchaser (other than
under any Program Support Agreement) and any other costs associated with the
issuance of Commercial Paper) of or related to the issuance of Commercial Paper
that are allocated, in whole or in part, by the Conduit Purchaser or the
Administrator to fund or maintain such Portion of Investment (and which may be
also allocated in part to the funding of other assets of the Conduit Purchaser);
provided, however, that if any component of such rate is a discount rate, in
calculating the “CP Rate” for such Portion of Investment for such Rate Period,
the Conduit Purchaser shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum.

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of one percent (1%)) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate charged to the
Administrative Agent on such day on such transactions as determined by it.

 

“Fluctuation Factor” means 1.5.

 

“Offshore Rate” means for any Rate Period, a rate per annum determined by the
Administrative Agent pursuant to the following formula:

 

Offshore Rate =

 

Offshore Base Rate

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

        

        1.00 - Eurodollar Reserve Percentage

    

 

Where,

 

“Offshore Base Rate” means, for such Rate Period:

 

(a) the rate per annum (carried out to the fifth decimal place) equal to the
rate determined by the Administrative Agent to be the offered rate that appears
on the page of the Telerate Screen that displays an average British Bankers
Association Interest Settlement Rate (such page currently being page number
3750) for deposits in Dollars (for delivery on the first day of such Rate
Period) with a term equivalent to such Rate Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Rate Period, or

 

(b) in the event the rate referenced in the preceding Section 2.4(a) does not
appear on such page or service or such page or service shall cease to be
available, the rate per annum (carried to the fifth decimal place) equal to the
rate determined by the Administrative Agent to be the offered rate on such other
page or other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in

 

Schedule I-2

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

Dollars (for delivery on the first day of such Rate Period) with a term
equivalent to such Rate Period, determined as of approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such Rate Period,
or

 

(c) in the event the rates referenced in the preceding Sections 2.4(a) and (b)
are not available, the rate per annum determined by the Administrative Agent as
the rate of interest at which Dollar deposits (for delivery on the first day of
such Rate Period) in same day funds in the approximate amount of the applicable
Portion of Investment to be funded by reference to the Offshore Rate and with a
term equivalent to such Rate Period would be offered by its London Branch to
major banks in the offshore dollar market at their request at approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of such
Rate Period; and

 

“Eurodollar Reserve Percentage” means, for any day during any Rate Period, the
reserve percentage (expressed as a decimal, rounded upward to the next 1/100th
of one percent (1%)) in effect on such day, whether or not applicable to any
Purchaser, under regulations issued from time to time by the Board of Governors
of the Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “eurocurrency
liabilities”). The Offshore Rate shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.

 

“Rate Period” means, unless otherwise mutually agreed by the Administrative
Agent and the Servicer (on behalf of the Seller), (a) with respect to any
Portion of Investment funded by the issuance of Commercial Paper, (i) initially
the period commencing on (and including) the date of the initial purchase or
funding of such Portion of Investment and ending on (and including) the last day
of the current Fiscal Month, and (ii) thereafter, each period commencing on (and
including) the first day after the last day of the immediately preceding Rate
Period for such Portion of Investment and ending on (and including) the last day
of the current Fiscal Month; and (b) with respect to any Portion of Investment
not funded by the issuance of Commercial Paper, (i) initially the period
commencing on (and including) the date of the initial purchase or funding of
such Portion of Investment and ending on (but excluding) the next following
Settlement Date, and (ii) thereafter, each period commencing on (and including)
a Settlement Date and ending on (but excluding) the next following Settlement
Date; provided, that

 

(A) any Rate Period with respect to any Portion of Investment (other than any
Portion of Investment accruing Yield at the CP Rate) which would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day; provided, however, if Yield in respect of such Rate Period is
computed by reference to the Offshore Rate, and such Rate Period would otherwise
end on a day which is not a Business Day, and there is no subsequent Business
Day in the same Fiscal Month as such day, such Rate Period shall end on the next
preceding Business Day;

 

(B) in the case of any Rate Period for any Portion of Investment which commences
before the Termination Date and would otherwise end on a date occurring after
the Termination Date, such Rate Period shall end on such Termination Date and
the duration of each Rate Period which commences on or after the Termination
Date shall be of such duration as shall be selected by the Administrative Agent;
and

 

Schedule I-3

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

(C) any Rate Period in respect of which Yield is computed by reference to the CP
Rate may be terminated at the election of, and upon notice thereof to the Seller
by, the Administrative Agent any time, in which case the Portion of Investment
allocated to such terminated Rate Period shall be allocated to a new Rate Period
commencing on (and including) the date of such termination and ending on (but
excluding) the next following Settlement Date, and shall accrue Yield at the
Alternate Rate.

 

“Rate Type” means the Offshore Rate, the Base Rate or the CP Rate.

 

“Yield” means:

 

(i) for any Portion of Investment during any Rate Period to the extent a Conduit
Purchaser funds such Portion of Investment through the issuance of Commercial
Paper (directly or indirectly through a related commercial paper issuer),

 

(CPR + PF + DF) x I x     D  

                                        360

 

(ii) for any Portion of Investment funded by the Alternate Purchasers and for
any Portion of Investment to the extent the Conduit Purchaser will not be
funding such Portion of Investment through the issuance of Commercial Paper
(directly or indirectly through a related commercial paper issuer),

 

                 D  

AR x I x 360

 

where:

 

AR

  

=

   the Alternate Rate for such Portion of Investment for such Rate Period,

CPR

  

=

   the CP Rate for such Portion of Investment for such Rate Period (as
determined by the Administrator on or prior to the fifth (5th) Business Day of
the Fiscal Month next following such Rate Period),

D

  

=

   the actual number of days during such Rate Period,

DF

  

=

   5.0 basis points per annum,

I

  

=

   the weighted average of such Portion of Investment during such Rate Period,
and

PF

  

=

   the Program Fee Rate

 

Schedule I-4

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

; provided that (i) no provision of this Agreement shall require the payment or
permit the collection of Yield in excess of the maximum permitted by applicable
law and (ii) that at all times after the declaration of the Termination Date
pursuant to Section 8.2, Yield for all Portion of Investment shall be determined
as provided in clause (ii) of this definition; provided, however, that in the
event that at any time the Yield shall exceed a per annum rate equal to the
Offshore Rate plus seventy-five basis points (0.75%) per annum, such excess
shall only be payable pursuant to clause (xi) of Section 2.12 and shall not be
guaranteed by the Insurance Policy.

 

(d) Offshore Rate Protection; Illegality. (i) If the Administrative Agent is
unable to obtain on a timely basis the information necessary to determine the
Offshore Rate for any proposed Rate Period, then

 

(A) the Administrative Agent shall forthwith notify the Conduit Purchaser or
Alternate Purchasers, as applicable, and the Servicer and the Seller that the
Offshore Rate cannot be determined for such Rate Period, and

 

(B) while such circumstances exist, none of the Conduit Purchaser, the Alternate
Purchasers or the Administrative Agent shall allocate any Portion of Investment
with respect to Investments made during such period or reallocate any Portion of
Investment allocated to any then existing Rate Period ending during such period,
to a Rate Period with respect to which Yield is calculated by reference to the
Offshore Rate.

 

(ii) If, with respect to any outstanding Rate Period, the Conduit Purchaser or
any of the Alternate Purchasers on behalf of which the Administrative Agent
holds any Portion of Investment notifies the Administrative Agent that it is
unable to obtain matching deposits in the London interbank market to fund its
purchase or maintenance of such Portion of Investment or that the Offshore Rate
applicable to such Portion of Investment will not adequately reflect the cost to
the Person of funding or maintaining such Portion of Investment for such Rate
Period, then (A) the Administrative Agent shall forthwith so notify the Seller,
the Servicer and the Purchasers and (B) upon such notice and thereafter while
such circumstances exist none of the Administrative Agent, the Conduit Purchaser
or the Alternate Purchasers, as applicable, shall allocate any other Portion of
Investment with respect to Investments made during such period or reallocate any
Portion of Investment allocated to any Rate Period ending during such period, to
a Rate Period with respect to which Yield is calculated by reference to the
Offshore Rate.

 

(iii) Notwithstanding any other provision of this Agreement, if the Conduit
Purchaser or any of the Alternate Purchasers, as applicable, shall notify the
Administrative Agent that such Person has determined (or has been notified by
any Program Support Provider) that the introduction of or any change in or in
the interpretation of any Law makes it unlawful (either for the Conduit
Purchaser, such Alternate Purchaser, or such Program Support Provider, as
applicable), or any central bank or other Official Body asserts that it is
unlawful, for the Conduit Purchaser, such Alternate Purchaser or such Program
Support Provider, as applicable, to fund the

 

Schedule I-5

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

purchases or maintenance of any Portion of Investment accruing Yield calculated
by reference to the Offshore Rate, then (A) as of the effective date of such
notice from such Person to the Administrative Agent, the obligation or ability
of the Conduit Purchaser or such Alternate Purchaser or Program Support
Provider, as applicable, to fund the making or maintenance of any Portion of
Investment accruing Yield calculated by reference to the Offshore Rate shall be
suspended until such Person notifies the Administrative Agent that the
circumstances causing such suspension no longer exist and (B) each Portion of
Investment made or maintained by such Person shall either (1) if such Person may
lawfully continue to maintain such Portion of Investment accruing Yield
calculated by reference to the Offshore Rate until the last day of the
applicable Rate Period, be reallocated on the last day of such Rate Period to
another Rate Period and shall accrue Yield calculated by reference to the Base
Rate; or (2) if such Person shall determine that it may not lawfully continue to
maintain such Portion of Investment accruing Yield calculated by reference to
the Offshore Rate until the end of the applicable Rate Period, such Person’s
share of such Portion of Investment allocated to such Rate Period shall be
deemed to accrue Yield at the Base Rate from the effective date of such notice
until the end of such Rate Period.

 

 

Schedule I-6

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

SCHEDULE II

 

Obligors, Subleases and Cash Deposits, Brazilian Operating Leases, Repossession

Insurance, Subleases, Letters of Credit, Exempt Receivables and Extended
Receivables

 

[To be agreed upon by the Administrative Agent, MBIA and the Performance
Guarantor,

and provided by the Servicer]

 

Schedule II-1

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

SCHEDULE III

 

Performance Guarantor Financial Covenants

 

I. ADDITIONAL SERVICER DEFAULTS. So long as the Servicer is RACC or an Affiliate
thereof, except as such provisions may be otherwise deemed amended or waived as
set forth in Part III of this Schedule III, it shall be a Servicer Default if
either of the following events occurs:

 

(a) Debt to Capitalization. The Performance Guarantor shall permit Total Debt to
exceed (i) 55% of Total Capitalization at any time from and after the Closing
Date to, but excluding, June 28, 2004 and (ii) 50% of Total Capitalization at
any time from June 28, 2004 and thereafter; or

 

(b) Consolidated Interest Coverage Ratio. The Performance Guarantor shall permit
the Consolidated Interest Coverage Ratio for any period of four consecutive
fiscal quarters of the Performance Guarantor ending with any fiscal quarter (i)
after the Closing Date until, but excluding, June 28, 2004 to be less than 2.5
to 1.0 and (ii) commencing June 28, 2004 and thereafter to be less than 3.0 to
1.0.

 

II. DEFINED TERMS.

 

Capitalized terms in this Schedule III which are not otherwise defined in this
Agreement shall have the following definitions:

 

“Consolidated EBITDA” shall mean, for any period, the sum of (a) Consolidated
Net Income for such period and (b) the aggregate amounts deducted in determining
Consolidated Net Income in respect of (i) Consolidated Net Interest Expense for
such period, (ii) income taxes, depreciation and amortization of the Performance
Guarantor and its consolidated Subsidiaries for such period determined in
accordance with GAAP and (iii) write-offs of goodwill as required, or as would
be required in the next succeeding fiscal year of the Performance Guarantor, by
Statement of Financial Accounting Standards No. 142, Goodwill and other
Intangible Assets.

 

“Consolidated Interest Coverage Ratio” shall mean for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Net Interest Expense
for such period.

 

“Consolidated Net Income” shall mean for any period, the consolidated net income
(or deficit) of the Performance Guarantor and its consolidated Subsidiaries for
such period, determined in accordance with GAAP; provided that (i) for the
fiscal quarter of the Performance Guarantor and its consolidated Subsidiaries
ending April 1, 2001, such Consolidated Net Income shall be increased by
$325,000,000 representing one-time charges recorded in connection with the
discontinued operations of Raytheon Engineers and Constructors, (ii) for the
fiscal quarter of the Performance Guarantor and its consolidated Subsidiaries
ending July 1, 2001, such Consolidated Net Income shall be increased by an
aggregate amount not to exceed $272,000,000 for such fiscal quarter,
representing additional one-time charges to the extent recorded in connection
with the discontinued operations of Raytheon Engineers and Constructors during
such fiscal quarter, (iii) for the fiscal quarter of the Performance Guarantor
and its consolidated Subsidiaries ending September 30, 2001, such Consolidated
Net Income shall be increased by an

 

Schedule III-1

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

aggregate amount not to exceed $750,000,000 representing one-time charges
recorded in connection with the inventory write-down and valuation reserve
related to various aircraft, (iv) for the fiscal quarter of the Performance
Guarantor and its consolidated Subsidiaries ending June 30, 2002, such
Consolidated Net Income shall be increased by an aggregate amount not to exceed
$450,000,000 for such quarter, representing one-time charges to the extent
recorded in connection with the discontinued operations of Raytheon Engineers
and Constructors with respect to such fiscal quarter and (v) for the fiscal
quarter of the Performance Guarantor and its consolidated Subsidiaries ending
June 29, 2003, such Consolidated Net Income shall be increased by an amount not
to exceed $100,000,000 for such fiscal quarter, representing one-time charges to
the extent recorded in connection with the discontinued operations or Raytheon
Engineers and Constructors with respect to such fiscal quarter.

 

“Consolidated Net Interest Expense” shall mean, for any period, net interest
expense of the Performance Guarantor and its consolidated Subsidiaries for such
period, determined in accordance with GAAP.

 

“Mandatorily Redeemable Equity Securities” shall mean the 17,500,000 equity
security units, including any remarketed securities, issued by the Performance
Guarantor in May 2001. Each equity security unit consists of a contract to
purchase shares of the Performance Guarantor’s common stock on May 15, 2004, and
a mandatorily redeemable equity security, with a stated liquidation amount of
$50.00 due on May 15, 2004. The mandatorily redeemable equity security
represents an undivided interest in the assets of RC Trust I, a Delaware
business trust, formed for the purpose of issuing these securities and whose
assets consist solely of subordinated notes issued by the Performance Guarantor.

 

“Stockholders Equity” shall mean, as at any date of determination, the
stockholders’ equity of the Performance Guarantor and its consolidated
Subsidiaries as of such date, as determined in accordance with GAAP.

 

“Total Capitalization” shall mean, as at any date of determination, the sum of
Total Debt at such date, the dollar amount of Mandatorily Redeemable Equity
Securities outstanding on such date as determined in accordance with GAAP, and
Stockholders’ Equity at such date.

 

“Total Debt” shall mean, at a particular date, all amounts which would be
included as indebtedness (including capitalized leases) on a consolidated
balance sheet of the Performance Guarantor and its consolidated Subsidiaries,
determined in accordance with GAAP.

 

III. AMENDMENTS AND WAIVERS

 

It is understood and agreed that the above-described financial covenants of the
Performance Guarantor as of the date hereof are equivalent to the financial
covenants and agreements of the Performance Guarantor set forth in Section 7.05
of the Raytheon Revolver. In the event that the Performance Guarantor requests
from the banks party to the Raytheon Revolver an amendment or waiver of any such
financial covenant or agreement set forth in such Section 7.05, then (i) the
Servicer shall provide a written request for such amendment or waiver to each of
the Administrative Agent and the Insurer at the same time that the request for
such amendment or waiver under the Raytheon Revolver is requested, (ii) each of
the Administrative

 

Schedule III-2

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

Agent and the Insurer will have the same amount of time (but, in no event, less
than a period of five (5) Business Days) to consider and give its approval or
disapproval of such amendment or waiver as is given to the parties under the
Raytheon Revolver to grant the approval or disapproval and (iii) if the
Administrative Agent or the Insurer does not respond in the time period
specified in clause (ii), then the Administrative Agent or the Insurer, as
applicable, shall be deemed to have given the same response as the required
parties under the Raytheon Revolver. If both the Administrative Agent and the
Insurer agree in writing (or are deemed to have so agreed pursuant to the
immediately preceding clause (iii)), with the response of the required parties
under the Raytheon Revolver, the provisions of this Schedule III shall be deemed
automatically amended to conform to the revised covenants set forth in Section
7.05 of the Raytheon Revolver, and the Servicer will promptly distribute a
revised version of this Schedule III (reflecting such revised covenants) to each
of the Administrative Agent and the Insurer.

 

Schedule III-3

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

SCHEDULE IV

 

Schedule of Receivables

 

[To be agreed upon by the Administrative Agent, MBIA and the Performance
Guarantor,

and provided by the Servicer]

 

Schedule IV-1

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

SCHEDULE V

 

List of Sub-Servicers

 

None

 

Schedule V

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

SCHEDULE 4.1(g)

 

List of Actions and Suits

 

Those matters described in the Performance Guarantor’s Quarterly Report on Form
10-Q for the quarter ended June 29, 2003.

 

4.1(g)-1

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

SCHEDULE 4.1(i)

 

Location of Certain Offices and Records of the

Transferor, the Seller and the Servicer

 

Principal Place of Business:

 

The Transferor:

 

101 South Webb Road, Suite 300A, Wichita, Kansas 67207

The Seller:

 

101 South Webb Road, Suite 300B, P.O. Box 2985, Wichita, Kansas 67207

The Servicer:

 

101 South Webb Road, Suite 300, Wichita, Kansas 67207

Chief Executive Office:

   

The Transferor:

 

101 South Webb Road, Suite 300A, Wichita, Kansas 67207

The Seller:

 

101 South Webb Road, Suite 300B, P.O. Box 2985, Wichita, Kansas 67207

The Servicer:

 

101 South Webb Road, Suite 300, Wichita, Kansas 67207

Location of Records:

   

The Transferor:

 

101 South Webb Road, Suite 300A, Wichita, Kansas 67207

The Seller:

 

101 South Webb Road, Suite 300B, P.O. Box 2985, Wichita, Kansas 67207

The Servicer:

 

101 South Webb Road, Suite 300, Wichita, Kansas 67207

 

4.1(i)-1

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

SCHEDULE 4.1(j)

 

List of Subsidiaries, Divisions and Tradenames of the Transferor, the Seller

and the Servicer; FEINs

 

Subsidiaries:

  RARC:     

GARC

    GARC:     

None

Divisions:

  RARC:     

None

    GARC:     

None

    RACC:     

None

Tradenames:

  RARC:     

None

    GARC:     

None

    RACC:     

None

Federal Employer

          

Identification Number:

  RARC:     

74-2819665

    GARC:     

20-0181291

    RACC:     

48-0619846

 

 

4.1(j)-1

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

SCHEDULE 4.1(r)

 

List of Blocked Account Banks and Blocked Accounts

 

Name of Blocked Account Bank

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

 

Blocked Account

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

JPMorgan Chase (Collection Account

Bank)

2 Chase Manhattan Plaza, 22nd Floor

New York, New York 10005

Attention: Frances Ruke

Telephone: (212) 552-7040

 

323368867

(Collection Account)

 

 

4.1(r)-1

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

SCHEDULE 11.3

 

Address and Payment Information

 

If to the Conduit Purchaser:

 

Receivables Capital Corporation

c/o AMACAR Group, L.L.C.

6525 Morrison Boulevard, Suite 318

Charlotte, North Carolina 28211

Attention:

  

Doris Hearn

Telephone:

  

704/365-0569

Facsimile:

  

704/365-1362

 

Payment Information:

Deutsche Bank, New York, NY

ABA No.: 021 001 033

BNF: BTCO as Depository for Bank of America

Account No.: 00 384 710

Ref: Raytheon Aircraft - RCC

Attention: Jessica Richmond

(with a copy to the Administrator)

 

If to the Seller:

 

GENERAL AVIATION RECEIVABLES CORPORATION

101 South Webb Road, Suite 300B

P.O. Box 2985

Wichita, Kansas 67207

Attention:

  

General Counsel

Telephone:

  

316/676-0438

Facsimile:

  

316/676-4636

Payment Information:

 

JPMorgan Chase Bank

ABA No.: 021 000 021

SWIFT Code: CHAS8S33

Account No.: 910-40032-763

Ref: Raytheon Company

 

(with a copy to the Administrator)

 

11.3-1

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

If to the Transferor (to be provided in a separate notice):

 

RAYTHEON AIRCRAFT RECEIVABLES CORPORATION

101 South Webb Road, Suite 300A

Wichita, Kansas 67207

Attention:

  

General Counsel

Telephone:

  

316/676-6524

Facsimile:

  

316/676-4636

 

If to the Servicer:

 

RAYTHEON AIRCRAFT CREDIT CORPORATION

101 South Webb Road, Suite 300

Wichita, Kansas 67207

Attention:

  

General Counsel

Telephone:

  

316/676-7673

Facsimile:

  

316/676-4636

 

If to the Administrative Agent:

 

Bank of America, N.A.,

as Administrative Agent

231 South LaSalle Street, 16th Floor

Chicago, Illinois 60697

Attention:

  

Banc of America Securities LLC

    

Global Structured Finance

    

Conduit Investment Management

Telephone:

  

312/828-3119

Facsimile:

  

312/453-3410

 

If to the Administrator:

 

Bank of America, N.A.,

as Administrator

Hearst Tower

19th Floor

Charlotte, North Carolina 28255

Attention:

  

Banc of America Securities LLC

    

Global Structured Finance

    

Conduit Investment Management

Telephone:

  

704/386-8361

Facsimile:

  

704/387-2828

Attention:

  

Camille Zerbinos

 

11.3-2

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

Payment Information:

 

If to the Administrative Agent for the Cash Reserve Account:

 

Bank of America, N.A.

Charlotte, North Carolina

ABA: 053 000 196

BNF: Bank of America as Agent for Receivables Capital Corporation

Raytheon Air Cash Reserve Account

Account No.: 0006 8765 2978

Ref: Raytheon Air Cash Reserve Funds

Attention:

  

Shawn Glanzer

Telephone:

  

704/388-2650

Facsimile:

  

704/387-2828

 

If otherwise to the Administrative Agent:

 

Deutsche Bank

ABA 021-001-033

BTCO as depository for Bank of America, as Administrator

Account No:

  

00-384-710

Ref: Bank of America, as Administrator

Attention:

  

Jessica Richmond

 

If to the Insurer:

 

MBIA Insurance Corporation

113 King Street

Armonk, New York 10504

Attention:

  

IPM/STF-Corporate

  (with reference to Policy # 42457)

Telephone:

  

914/273-4545

Facsimile:

  

914/765-3810

 

Payment Information:

 

JPMorgan Chase Bank

New York, New York

ABA #021000021

for credit to MBIA Insurance Corporation

Premium Account #910-2-721-728

Re: Raytheon Securitization Policy No. 42457

 

 

11.3-3

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Exhibit A

 

Form of Assignment and Assumption Agreement

 

Reference is made to the Fifth Amended and Restated Purchase and Sale Agreement
dated as of September 1, 2003 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Agreement”) by and among GENERAL
AVIATION RECEIVABLES CORPORATION, a Delaware corporation, as seller (in such
capacity, the “Seller”), RAYTHEON AIRCRAFT RECEIVABLES CORPORATION, a Kansas
corporation (“RARC”), as Transferor (in such capacity, the “Transferor”),
RAYTHEON AIRCRAFT CREDIT CORPORATION, a Kansas corporation (“RACC”), as servicer
(in such capacity, the “Servicer”), RECEIVABLES CAPITAL CORPORATION, a Delaware
corporation (together with the other Purchasers from time to time party thereto,
the “Purchasers”), and BANK OF AMERICA, N.A., a national banking association, as
Administrative Agent (the “Administrative Agent”). Terms defined in the
Agreement are used herein with the same meaning.

 

[                                    ] (the “Assignor”) and
[                                             ] (the “Assignee”) agree as
follows:

 

1. The Assignor hereby sells and assigns to the Assignee, without recourse and
without representation or warranty, and the Assignee hereby purchases and
assumes from the Assignor, an interest in and to all of the Assignor’s rights
and obligations under the Agreement and the other Transaction Documents. Such
interest expressed as a percentage of all rights and obligations of the
Alternate Purchasers, shall be equal to the percentage equivalent of a fraction,
the numerator of which is $[            ] and the denominator of which is the
Facility Limit. After giving effect to such sale and assignment, the Assignee’s
Commitment will be as set forth on the signature page hereto.

 

2. [In consideration of the payment of $[                        ], being
[                    ]% of the existing Net Investment, and of
$[                    ], being [                    ]% of the aggregate unpaid
accrued Yield, receipt of which payment is hereby acknowledged, the Assignor
hereby assigns to the Administrative Agent for the account of the Assignee, and
the Assignee hereby purchases from the Assignor, a [                    ]%
interest in and to all of the Assignor’s right, title and interest in and to the
Net Investment.]

 

3. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any Adverse Claim; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement, any other
Transaction Document or any other instrument or document furnished pursuant
thereto or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Agreement or the Receivables, any other Transaction
Document or any other instrument or document furnished pursuant thereto; and
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Raytheon Entity or the performance or
observance by any Raytheon Entity of any of its obligations under the Agreement,
any other Transaction Document, or any instrument or document furnished pursuant
thereto.

 

Exhibit A-1

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

4. The Assignee (i) confirms that it has received a copy of the Agreement and
the First Tier Agreement together with copies of the financial statements
referred to in Section 6.1(a) of the Agreement, to the extent delivered through
the date of this Assignment and Assumption Agreement (this “Assignment”), and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment; (ii) agrees that
it will, independently and without reliance upon the Administrative Agent, any
of its Affiliates, the Assignor or any other Alternate Purchaser and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Agreement and any other Transaction Document; (iii) appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Agreement and the other
Transaction Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; (iv) agrees that it will perform in accordance with the terms of the
Agreement all of the obligations required to be performed by it as an Alternate
Purchaser thereunder; and (v) specifies as its address for notices and its
account for payments the office and account set forth beneath its name on the
signature pages hereof[; and (vi) attaches the forms prescribed by the Internal
Revenue Service of the United States of America certifying as to the Assignee’s
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty].

 

5. The effective date for this Assignment shall be the later of (i) the date on
which the Administrative Agent receives this Assignment executed by the parties
hereto and receives the consent of the Administrator, on behalf of the Conduit
Purchaser, and (ii) the date of this Assignment (the “Effective Date”).
Following the execution of this Assignment and the consent of the Administrator,
on behalf of the Conduit Purchaser, this Assignment will be delivered to the
Administrative Agent for acceptance and recording.

 

6. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment, have the rights and obligations of an Alternate Purchaser
thereunder, and (ii) the Assignor shall, to the extent provided in this
Assignment, relinquish its rights and be released from its obligations under the
Agreement.

 

7. Upon such acceptance and recording, from and after the Effective Date, to the
extent that the Agreement expressly requires the Administrative Agent to make
payments to an Alternate Purchaser the Administrative Agent shall make all
payments under the Agreement in respect of the interest assigned hereby
(including, without limitation, all payments in respect of such interest in Net
Investment, Yield and fees) to the Assignee. The Assignor and Assignee shall
make all appropriate adjustments in payments under the Agreement for periods
prior to the Effective Date directly between themselves.

 

Exhibit A-2

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

8. The Assignee shall not be required to fund hereunder an aggregate amount at
any time outstanding in excess of $[                    ], minus the aggregate
outstanding amount of any interest funded by the Assignee in its capacity as a
participant under a Program Support Agreement.

 

9. The Assignor agrees to pay the Assignee its pro rata share of fees in an
amount equal to the product of (a) [            ] per annum and (b) the
Commitment during the period after the Effective Date for which such fees are
owing and paid by the Seller pursuant to the Agreement. [Amounts paid under this
section shall be credited against amounts payable to the Assignee under Section
19 of the Participation Agreement dated as of [date] by and between Bank of
America, National Association and [Alternate Purchaser] (and vice versa).]

 

10. THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).

 

11. This Assignment contains the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire Assignment among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings
with respect to such subject matter.

 

12. If any one or more of the covenants, agreements, provisions or terms of this
Assignment shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Assignment and shall in no
way affect the validity or enforceability of the other provisions of this
Assignment.

 

13. This Assignment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery by facsimile of an
executed signature page of this Assignment shall be effective as delivery of an
executed counterpart hereof.

 

14. This Assignment shall be binding on the parties hereto and their respective
successors and assigns.

 

Exhibit A-3

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

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their respective officers thereunto duly
authorized as of the date first above written

 

[ASSIGNOR]

By:

 

 

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

Name:

 

 

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

Title:

 

 

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

 

[ASSIGNEE]

By:

 

 

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

Name:

 

 

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

Title:

 

 

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

 

Exhibit A-4

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

Address for notices and Account for payments:

 

For Credit Matters:

 

For Administrative Matters:

Bank of America, N.A.,

as Administrative Agent

231 South LaSalle Street, 16th Floor

Chicago, Illinois 60697

 

Bank of America, N.A.

Hearst Tower

19th Floor

Charlotte, North Carolina 28255

Attention: Willem Van Beek

 

Attention: Camille Zerbinos

Telephone: 312/828-3119

Telefax: 312/453-3410

 

Telephone: (704) 386-8361

Telefax: (704) 388-0027

Account for Payments:

   

Deutsche Bank

   

ABA Number: 021-001-033

Account Number: 00-384-710

Attention: Jessica Richmond

   

                Re: [                    ]

    Consented to this [            ] day of
[                                    ], 20       Accepted this[            ] day
of [                                    ], 20    

Bank of America, N.A., as Administrator

 

Bank of America, N.A., as Administrative Agent

 

By:

 

 

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

 

By:

 

 

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

Name:

     

Name:

   

Title:

     

Title:

   

 

Exhibit A-5

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

Exhibit B

 

Credit and Collection Policies

 

The Servicer’s Credit and Collection Policy, relating to Contracts and
Receivables, existing on the Closing Date hereof are as set forth in manuals
that were delivered by the Servicer to the Administrative Agent and the Insurer
prior to the Closing Date.

 

 

Exhibit B-1

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Exhibit C

 

Form of Monthly Servicer Report

 

[To be agreed upon by the Administrative Agent, MBIA and the Performance
Guarantor and to be provided by the Servicer]

 

[To include the monthly certifications listed under “Reports and Information” on
the Term Sheet.]

 

Exhibit C-1

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Exhibit D

 

Form of Assignments of Rents

 

[To be inserted]

 

Exhibit D-1

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

Exhibit E

 

Microsoft Excel Report

 

[To be inserted]

 

Exhibit E-1

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

Exhibit F

 

Form of Certificate of Perfection

 

[date]

 

Pursuant to and in accordance with Section 2.9(c) of that certain Fifth Amended
and Restated Purchase and Sale Agreement, dated as of September 1, 2003, by and
among Raytheon Aircraft Credit Corporation, as originator and servicer, General
Aviation Receivables Corporation, as seller, Raytheon Aircraft Receivables
Corporation, as transferor, the Purchasers as defined therein, and Bank of
America, N.A., as Administrative Agent, as Administrator and as Alternate
Purchaser and the other Alternate Purchasers from time to time party thereto (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Purchase and Sale Agreement”; capitalized terms used and not defined
herein shall have the respective meanings ascribed thereto in the Purchase and
Sale Agreement), the Servicer hereby certifies to each of the Administrative
Agent and each of the Secured Parties that:

 

(1) All items related to the Receivables identified on Schedule 1 attached
hereto (the “Subject Receivables”) which as of the date of the Investment did
not satisfy the requirements of perfection referred to in the definition of
“Investment Condition” now have been executed, recorded and delivered as
contemplated by Section 6.1(q) of the Purchase and Sale Agreement; and

 

(2) The amount requested to be disbursed from the Cash Reserve Account in
respect of the Subject Receivables is $             which is the lesser of (a)
the current balance in the Cash Reserve Account minus the amount of any net loss
incurred on any Eligible Investments made from funds on deposit in the Cash
Reserve Account to the extent not previously deducted from any prior payment to
the Seller pursuant to Section 2.9(c) of the Purchase and Sale Agreement and (b)
$             [100% of the aggregate Unpaid Balance of the Subject Receivables].

 

The Servicer hereby requests that the Control Party instruct the Administrative
Agent to disburse the funds to which the Seller is entitled pursuant to
paragraph 2 above in accordance with the following instructions:
                                                 .

 

RAYTHEON AIRCRAFT CREDIT CORPORATION,

as Servicer

By:

 

 

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

Name:

 

 

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

Title:

 

 

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

 

Exhibit F-1

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Exhibit G

 

Form of Notice of Release

 

[date]

 

Pursuant to and in accordance with Section 2.9(c) of that certain Fifth Amended
and Restated Purchase and Sale Agreement, dated as of September 1, 2003, by and
among Raytheon Aircraft Credit Corporation, as originator and servicer, General
Aviation Receivables Corporation, as seller, Raytheon Aircraft Receivables
Corporation, as transferor, the Purchasers as defined therein, and Bank of
America, N.A., as Administrative Agent, as Administrator and as Alternate
Purchaser and the other Alternate Purchasers from time to time party thereto (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Purchase and Sale Agreement”; capitalized terms used and not defined
herein shall have the respective meanings ascribed thereto in the Purchase and
Sale Agreement), the Control Party hereby instructs the Administrative Agent
that:

 

(1) In reliance upon the Certificate of Perfection dated as of
                     with respect to the Receivables identified on Schedule I
hereto (the “Subject Certificate of Perfection”, a copy of which is attached
hereto), the amount authorized to be released to the Seller is $            .

 

The Control Party hereby directs and authorizes the Administrative Agent to
disburse the amount referred to in paragraph (1) above to the Seller in
accordance with the instructions provided in the attached Subject Certificate of
Perfection.

 

[CONTROL PARTY]

By:

 

 

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

Name:

 

 

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

Title:

 

 

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

 

Exhibit G-1

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Annex A

 

Minimum Capital Payments and Related Settlement Dates

 

Amount of Investment due

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

 

Related Settlement Date

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

$70,107,868.51

  The Settlement Date occurring in October 2005

$56,086,294.81

  The Settlement Date occurring in April 2007

$56,086,294.81

  The Settlement Date occurring in October 2008

$42,064,721.11

  The Settlement Date occurring in April 2010

$28,043,147.40

  The Settlement Date occurring in October 2011

$14,021,573.70

  The Settlement Date occurring in April 2013

$14,021,573.70

  The Settlement Date occurring in October 2014

 

Annex A-1

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

Annex B

 

Duties of the Servicer

 

Standard of Care

 

In performing the Services, the Servicer shall comply with the Standard of Care.

 

Receivable Management

 

The Servicer shall take or cause to be taken all such actions as may be
necessary or advisable to administer, service and collect each Receivable from
time to time, all in accordance with applicable laws, rules and regulations,
with reasonable care and diligence, in accordance with the Standard of Care and
solely in accordance with the Credit and Collection Policy. The Servicer shall
enforce the rights and interests of the Administrative Agent, the Purchasers and
the Insurer in and under the Receivables and the Contracts and with respect to
the Aircraft.

 

General services in connection with each Receivable

 

The Servicer shall:

 

  • Monitor the performance of the Obligor under the relevant Receivable;

 

  • Bring to the attention of each Obligor any concerns regarding the
performance of the Obligor of its obligations under the relevant Contract; and

 

  • Remind the Obligor, where appropriate, of its obligations under the relevant
Contract to provide periodic information.

 

Collections and Disbursements

 

The Servicer shall:

 

  • Prepare and issue invoices, notices and advices to each Obligor for all
payments due including rents, deposits, reserves, fees, principal, interest,
interest on past due amounts, late payment charges, any payments due in respect
of taxes and any other payments that may be due under the relevant Receivable;

 

  • Use reasonable administrative efforts to enforce payment of each Receivable
in the event of non-payment by the relevant due date;

 

  • Direct all Obligors to remit payments relating to the Receivables solely to
a post office box, lockbox or deposit account, in each case covered by a Blocked
Account Agreement;

 

  • Remit (or cause to be remitted) daily to the Collection Account, all
Collections within five (5) Business Days (i) after deposit thereof into either
of the Raytheon Aircraft and Affiliated Companies Account or the RACC Intrust
Bank Account and (ii) in the case of Collections otherwise received by any
Raytheon Entity or any Affiliate of a Raytheon Entity, after identification by
such the Servicer of such funds as Collections.

 

  • Maintain appropriate records regarding payments made and payments due under
each Receivable;

 

Annex B-1

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

  • Review from time to time the level of rents, payments of principal and
interest, deposits, letters of credit and other amounts that may be adjusted
under any Receivable that shall include but not be limited to adjustments
resulting from changes in the underlying interest rate;

 

  • Make all necessary adjustments as a result of such a review and amend its
records appropriately; and

 

  • Provide for the timely drawing on any letters of credit, deposits,
guarantees or other credit support held in relation to the relevant Receivable
in each case using commercially reasonable efforts to maximize the Collections
with respect to such Receivable (except as otherwise expressly set forth in this
Agreement).

 

Administrative Services

 

The Servicer shall:

 

  • Monitor receipts in and withdrawals from the Collection Account;

 

  • Calculate the amounts due to each party as directed by Section 2.12 of this
Agreement and provide notice to the Administrative Agent of all payments due on
each Settlement Date;

 

  • With respect to any Receivable backed by a letter of credit, prepare any
drawing request required under such letter of credit and, if the payment due
under such Contract is not made by the drawing deadline under such letter of
credit, coordinate with the Administrative Agent or bailee possessing such
letter of credit so as to make a drawing thereunder. The Servicer may maintain
letters of credit and cash collateral as expressly provided in this Agreement.
Further, if the expiration date of any letter of credit related to any
Receivable is not extended when a principal balance of such Receivable remains
outstanding, the Servicer shall, or shall cause the appropriate Raytheon Entity
to, coordinate with the Administrative Agent or bailee possessing such letter of
credit so as to draw the aggregate available amount under such letter of credit
prior to the expiration thereof;

 

  • Use commercially reasonable efforts to monitor payment of taxes and other
governmental charges with respect to the Receivables;

 

  • Use commercially reasonable efforts to monitor licensing, permits and other
documentation required with respect to the Receivables;

 

  • File financing statements and continuation statements and other applicable
documents to ensure the Administrative Agent maintains, subject to the
Investment Condition, a first priority, perfected security interest in the
Receivables, Affected Assets and the Related Security;

 

  • Use commercially reasonable efforts to monitor and identify laws, rules and
regulations applicable to the Receivables; and

 

  • Maintain an information management system with respect to the Receivables
and the Collateral with substantially the same capability as the system
maintained by the Servicer on the Closing Date.

 

Annex B-2

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

Amendments to Documents

 

Except as otherwise provided in this Agreement or provided below, the Servicer
may not extend, amend or otherwise modify the terms of any Receivable, or amend,
modify or waive any term or condition of any Contract related thereto, or
extend, amend or otherwise modify the rights of the Seller other than:

 

  • Where the entire Receivable is being transferred to another entity
affiliated with the current Obligor reflecting credit characteristics at least
as favorable as those in effect prior to such transfer;

 

  • The Obligor under an existing Aircraft Fractional Share substitutes the
current collateral for another Aircraft Fractional Share of the same model type
with prevailing market value equal to or greater than the current collateral.
The Servicer shall be entitled to amend the existing Contracts or enter into new
Contracts provided that the principal financial terms of the Receivable,
including, without limitation, the principal amount thereof, remain unchanged
and all other provisions of such Contract are at least as favorable as those
prior to such amendment or entry into such new Contract and the Servicer takes
all actions perfect or to maintain perfection as are required by this Agreement;

 

  • To waive in accordance with the Standard of Care any late payment penalty or
default interest that may accrue as a result of any late payment or other
default;

 

  • The Servicer shall use commercially reasonable practices in managing past
due amounts owing in respect of Receivables. In that connection, the Servicer
shall be permitted to structure plans to bring not more than three months of
past due amounts under a Receivable current over a repayment period not to
exceed 180 days. For reporting purposes, such a Receivable will still be shown
as past due until such past due amounts, as rescheduled, have been repaid in
full;

 

  • In the case of a prepayment of a Receivable in respect of an Aircraft
Fractional Share in connection with the transfer of a portion of such Aircraft
Fractional Share back to Flight Options, to permit a release in the amount of
the lien on the portion of such Aircraft Fractional Share so transferred pro
rata with the amount of the Receivable prepayment; and

 

  • To extend the term of any Brazilian operating lease as set forth in the
“Brazilian Operating Lease” section in Schedule II to a date no later than the
Settlement Date occurring in September 2014; provided that the Servicer
simultaneously receives extended powers of attorney in favor of the
Administrative Agent effective through a date no earlier than three (3) months
after the new scheduled expiration date of such lease.

 

Insurance Provisions

 

The Servicer shall:

 

  • Monitor the performance of the obligations of Obligors relating to insurance
(including hull values, war risks and liabilities) required by the relevant
Contract;

 

  • Bring to the attention of each Obligor any concerns regarding the nature of
the prevailing insurances;

 

  • Obtain copies of associated documentation ensuring that they reflect the
requirements of the relevant Contract;

 

Annex B-3

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

  • Obtain and maintain acceptable levels of contingent insurance coverage that
become applicable if at any time there ceases to be acceptable insurance
coverage for the relevant Contract; and

 

  • In the event that any Aircraft is declared a total loss, the Servicer shall
take all steps necessary to ensure that all funds due and payable to the loss
payee under the insurances are received and applied in the appropriate manner.

 

Enforcement

 

The Servicer shall take all commercially reasonable steps in accordance with the
Standard of Care following any default by an Obligor under any applicable
Contract to preserve and enforce the rights of the Administrative Agent, the
Purchasers and the Insurer under the relevant Contract. Where the Servicer has
declared an event of default thereunder, this shall include repossessing or
taking possession of the relevant Aircraft and pursuing legal action with
respect thereto. In the case of an Aircraft Fractional Share, upon the request
of the Administrative Agent (with the prior written consent of the Control
Party), or the Control Party (with prior written notice to the Administrative
Agent), the Servicer shall exercise its right to have Flight Options repurchase
such interest for a price based on fair market value at such time and apply such
proceeds to the repayment of the related Receivable.

 

Repossession

 

At any time the Servicer deems it proper and lawful to repossess an Aircraft,
the Servicer shall use its affiliates, dealers and sales representatives to take
specific action to recover such Aircraft and transport such Aircraft to a
facility within the continental United States designated by the Servicer over
which the Servicer has control, or any other facility or location that the
Servicer considers appropriate. After repossession of an Aircraft, the Servicer
shall maintain the Aircraft free and clear of all Adverse Claims (other than any
Permitted Lien). All previously unreimbursed costs and expenses associated with
such repossession, to the extent comprising Permissible Servicer Expenses, shall
be payable to the Servicer pursuant to clause (viii) of Section 2.12 of this
Agreement or, to the extent relating to a specific Receivable and outstanding at
the time of the receipt of any related Recovery Proceeds, from such Recovery
Proceeds.

 

As part of this process, the Servicer shall:

 

  • Obtain information regarding the location of the Aircraft;

 

  • Prepare the information and documentation respecting the basis for the
repossession;

 

  • Make arrangements to ensure that the Aircraft can be repossessed;

 

  • Make enquiries to ensure that the repossession can be effectuated without
violating any laws, regulations or other pronouncements of any governmental
authority and without violating any rights of entities (including, without
limitation, the related Obligors) that hold an interest in the Aircraft;

 

  • In no event shall the Servicer be required to undertake a repossession if it
reasonably believes that to do so would be improper, unlawful, imprudent or
otherwise inappropriate;

 

  • Liaise with and instruct as appropriate legal counsel to effect the
repossession of the Aircraft;

 

Annex B-4

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

  • Ensure that the Aircraft is airworthy and make arrangements to take
possession of the Aircraft and transport it to an appropriate facility;

 

  • Deregister the Aircraft and reregister it in another jurisdiction if
necessary;

 

  • Pay any necessary amounts due to permit the Aircraft to be transported to an
appropriate facility; and

 

  • The Servicer shall be reimbursed for previously unreimbursed Permissible
Servicer Expenses that it incurs in relation to the repossession of an Aircraft,
including third party legal fees and expenses, payment of outstanding liens,
airport fees, pilot fees and expenses, required permits and licenses, air
navigation fees, fuel and essential maintenance, through clause (viii) of
Section 2.12, or to the extent relating to a specific Receivable and outstanding
at the time of the receipt of any related Recovery Proceeds, from such Recovery
Proceeds.

 

Refurbishment

 

  • As soon as practicable following the date that the Aircraft is in the
possession of the Servicer it shall, through its affiliates, dealers or
representatives, analyze the technical condition of the Aircraft. Where
necessary a detailed technical inspection of the Aircraft shall be carried out;

 

  • The Servicer shall undertake all refurbishment work required for
airworthiness by the FAA and the local aviation administration if the Aircraft
is located at a facility outside the United States;

 

  • The Servicer shall use its commercially reasonable judgment to undertake any
refurbishment work that is deemed necessary to facilitate the sale of the
Aircraft or where the price to be paid by a prospective purchaser would be
increased by an amount equal to not less than the cost of such refurbishment;

 

  • The Servicer shall perform any refurbishment tasks diligently and undertake
in good faith to do so within commercially reasonable costs and timeframes; and

 

  • The Servicer shall be reimbursed for any previously unreimbursed Permissible
Servicer Expenses, including costs relating to all reconditioning, repair, test
flights, ferrying, air navigation fees, pilot fees and expenses, required
permits and licenses, repainting, recertification costs and other related
services necessary or appropriate in order for the Aircraft to be remarketed
effectively together with all inspection costs and fees, through clause (viii)
of Section 2.12 of this Agreement, and, to the extent relating to a specific
Receivable and outstanding at the time of the receipt of any related Recovery
Proceeds, from such Recovery Proceeds.

 

Remarketing

 

For any Aircraft repossessed by the Servicer, the Servicer shall remarket such
Aircraft. In that connection, the Servicer shall:

 

  • Use commercially reasonable efforts to conduct a marketing effort to sell
and/or lease the Aircraft comparable to the efforts the Servicer would use
should the Aircraft form part of its used aircraft inventory (such effort shall
include advertisements in publications, direct mail, posting details on the
internet and any other means that would be expected of a firm recognized in the
business of selling similar aircraft);

 

Annex B-5

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

  • In remarketing the Aircraft, the Servicer shall not favor aircraft owned or
managed by it ahead of the Aircraft;

 

  • Provide details and specifications to any prospective purchaser;

 

  • Consider and evaluate all bona fide offers;

 

  • Accept any offer that results in the full repayment of the associated
Receivable and accept the highest offer that it views as representative of the
prevailing market for similar aircraft;

 

  • Arrange for storing, hangaring, maintaining, repairing, demonstrating,
insuring, fuelling, testing and ferrying the Aircraft as well as obtaining and
paying for related Permissible Servicer Expenses including permits, licenses,
air navigation fees, pilot fees and expenses and other commercially reasonable
costs as part of its remarketing effort including any sales commissions payable;
and

 

  • Be reimbursed for all previously unreimbursed Permissible Servicer Expenses
incurred with remarketing through clause (viii) of Section 2.12 of this
Agreement or, to the extent relating to a specific Receivable and outstanding at
the time of the receipt of any related Recovery Proceeds, from such Recovery
Proceeds.

 

Servicer Reports

 

Within ten (10) Business Days of the end of each Fiscal Month, the Servicer
shall provide a Monthly Servicer Report containing details of:

 

  • All Receivables;

 

  • The aging of Receivables;

 

  • Any Contracts expiring during the previous Fiscal Month;

 

  • All prepayments; and

 

  • Number and dollar amount of:

delinquencies,

losses,

defaults and

repossessed inventory

 

Annex B-6