Exhibit 10.8
EXECUTION COPY     
 
SECURITY AND GUARANTEE AGREEMENT
Dated as of April 16, 2010
among
FLYING FORTRESS INC.,
FLYING FORTRESS US LEASING INC.,
FLYING FORTRESS IRELAND LEASING LIMITED,
THE ADDITIONAL GUARANTORS REFERRED TO HEREIN
and
CITICORP USA, INC.
as Collateral Agent
 
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TABLE OF CONTENTS

              Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
       
 
       
Section 1.01 Certain Defined Terms
    2  
Section 1.02 Accounting Terms
    8  
Section 1.03 Other Definitional Provisions
    8  
 
       
ARTICLE II
GUARANTEE
       
 
       
Section 2.01 Guarantee; Limitation of Liability
    8  
Section 2.02 Guarantee Absolute
    9  
Section 2.03 Waivers and Acknowledgments
    10  
Section 2.04 Subrogation
    11  
Section 2.05 Continuing Guarantee
    12  
Section 2.06 Payments Free and Clear of Taxes, Etc
    12  
Section 2.07 Right of Set-off
    12  
Section 2.08 Subordination
    12  
 
       
ARTICLE III
REPRESENTATIONS AND WARRANTIES
       
 
       
Section 3.01 Representations and Warranties of each Guarantor
    13  
Section 3.02 Additional Representations and Warranties of the Guarantors
    15  
 
       
ARTICLE IV
COVENANTS
       
 
       
Section 4.01 Covenants
    17  
 
       
ARTICLE V
GRANT OF SECURITY INTEREST; REMEDIES
       
 
       
Section 5.01 Grant of Security Interest
    19  
Section 5.02 Security for Obligations
    20  
Section 5.03 Delivery and Control of Security Collateral
    21  
Section 5.04 The Account Collateral
    21  
Section 5.05 Further Assurances
    22  
Section 5.06 Post-Closing Changes
    23  
Section 5.07 Voting Rights; Dividends; Etc
    23  
Section 5.08 Transfers and Other Liens; Additional Shares
    24  
Section 5.09 Agent Appointed Attorney-in-Fact
    25  
Section 5.10 Agent May Perform
    25  

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              Page
Section 5.11 The Agent’s Duties
    25  
Section 5.12 Remedies
    26  
Section 5.13 Continuing Security Interest
    27  
Section 5.14 Release; Termination
    27  
Section 5.15 Application of Irish Law
    28  
 
       
ARTICLE VI
MISCELLANEOUS
       
 
       
Section 6.01 Amendments, Waivers, Supplements, Etc
    31  
Section 6.02 Notices, Etc
    32  
Section 6.03 No Waiver; Remedies Cumulative
    33  
Section 6.04 Indemnification
    33  
Section 6.05 Collateral Agent
    34  
Section 6.06 Assignments; Binding Effect
    34  
Section 6.07 Execution in Counterparts; Severability
    34  
Section 6.08 Governing Law
    34  
Section 6.09 Jurisdiction; Etc
    34  
Section 6.10 Table of Contents, Headings, Etc.
    35  
Section 6.11 Non-Invasive Provisions
    35  
Section 6.12 Limited Liability
    36  
Section 6.13 USA Patriot Act
    36  
Section 6.14 WAIVER OF JURY TRIAL
    36  

     
SCHEDULES
   
 
   
Schedule I
  Location, Chief Executive Office, Type Of Organization, Jurisdiction Of
Organization, Organizational Identification Number and Trade Names
 
   
Schedule II
  Pledged Equity
 
   
Schedule III
  Changes in Name, Location, Etc.
 
   
Schedule 3.02(g)
  Authorizations and Approvals
 
   
Schedule 4.01(f)
  Insurance
 
   
EXHIBITS
   
 
   
Exhibit A
  Form of Guarantee Supplement
 
   
Exhibit B
  Form of Collateral Supplement

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SECURITY AND GUARANTEE AGREEMENT
Dated as of April 16, 2010
          THIS SECURITY AND GUARANTEE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this “Agreement”) is made by Flying
Fortress Inc., a California corporation (“Holdco I”), Flying Fortress US Leasing
Inc., a California corporation (the “Initial Parent Holdco (California)”),
Flying Fortress Ireland Leasing Limited, a company incorporated under the laws
of Ireland (the “Initial Parent Holdco (Ireland)”, and together with the Initial
Parent Holdco (California), collectively, the “Initial Parent Holdcos” and
individually, an “Initial Parent Holdco”), the Additional Guarantors (as defined
below) (Holdco I, the Initial Parent Holdcos and the Additional Guarantors
being, collectively, the “Guarantors”, and individually, each a “Guarantor”),
and Citicorp USA, Inc. (“CUSA”), as collateral agent (in such capacity, together
with any successor collateral agent appointed pursuant to Section 6.05 below,
the “Collateral Agent” or the “Agent”) for the Secured Parties. Capitalized
terms used herein without definition shall be interpreted in accordance with
Section 1.03.
PRELIMINARY STATEMENTS
          (A) International Lease Finance Corporation (the “Company”), the Banks
party thereto and Citicorp USA, Inc. as administrative agent for the Banks (in
such capacity, together with its successors and assigns in such capacity, the
“Administrative Agent”), are parties to a Five-Year Revolving Credit Agreement
dated as of October 13, 2006 (as amended, supplemented or otherwise modified
from time to time, the “Credit Agreement”) providing, subject to the terms and
conditions thereof, for loans to be made by said Banks to the Company in an
aggregate principal amount not exceeding $2,500,000,000.
          (B) The Company desires to extend the Termination Date under the
Credit Agreement, and has requested that the Banks thereunder extend such
Termination Date by entering into Amendment No. 1 to the Credit Agreement, dated
as of April 16, 2010 (the “Amendment”), pursuant to which each 2012 Bank shall,
among other things, exchange its Commitment existing immediately prior to the
Amendment Effective Date (as defined in the Amendment) for a new commitment with
an extended Termination Date, on the terms and conditions set forth in the
Amendment.
          (C) In connection with Amendment, (i) the Company shall form Holdco I
which shall be a special purpose direct Wholly-owned Subsidiary of the Company,
(ii) Holdco I shall form or acquire the Parent Holdcos (including the Initial
Parent Holdcos), each of which shall be a special purpose direct Wholly-owned
Subsidiary of Holdco I and (iii) each Parent Holdco shall form or acquire each
Pledged SPE (as defined below) and, if applicable, each Intermediate Lessee (as
defined below), with each such Pledged SPE and Intermediate Lessee being a
special purpose direct Wholly-owned Subsidiary of a Parent Holdco. Each Pledged
SPE shall Own Eligible Aircraft (as defined in the Credit Agreement).
          (D) Holdco I is the owner of the Equity Interests (as defined below)
issued by the Initial Parent Holdcos (the “Initial Pledged Parent Holdco
Equity”) set forth opposite
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Holdco I’s name on and as otherwise described in Schedule II hereto, and each
Initial Parent Holdco is the owner of the Equity Interests issued by the Pledged
SPEs (if any) and Intermediate Lessees (if any) existing on the date hereof (the
“Initial Pledged SPE and Intermediate Lessee Equity”, and together with the
Initial Pledged Parent Holdco Equity, the “Initial Pledged Equity”) set forth
opposite such Initial Parent Holdco’s name on and as otherwise described in
Schedule II hereto.
          (E) Holdco I will be the owner of a deposit account (the “Holdco I
Cash Collateral Account”, and together with any other cash collateral account in
which a security interest will be granted hereunder, the “Cash Collateral
Accounts”), in each case maintained with Citibank, N.A. or Bank of America,
N.T.&S.A. in New York, New York.
          (F) It is a condition precedent to the effectiveness of the Amendment
and the extension of the Termination Date with respect to the 2012 Banks that
the Guarantors execute and deliver this Agreement, to, among other things, enter
into the Guarantee (as defined below) and grant the security interest
contemplated hereby.
          (G) The Guarantors are entering into this Agreement in order to
guarantee the Guaranteed Obligations (as defined below) and to grant to the
Agent for the ratable benefit of the Secured Parties a security interest in the
Collateral (as defined below).
          (H) Each Guarantor will derive substantial direct and indirect
benefits from the transactions contemplated by the Amendment.
          NOW, THEREFORE, in consideration of the premises and in order to
induce the 2012 Banks to enter into the Amendment and to extend the Termination
Date, each Guarantor hereby jointly and severally agrees as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
          Section 1.01 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and the plural forms of the terms defined):
          “Account Collateral” has the meaning specified in Section 5.01(b).
          “Additional Guarantor” has the meaning specified in Section 6.01(d).
          “Agent” has the meaning specified in the first paragraph to this
Agreement.
          “Agreement” has the meaning specified in the first paragraph of this
Agreement.
          “Amendment” has the meaning specified in the Preliminary Statements to
this Agreement.
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          “Bankruptcy Law” has the meaning specified in Section 2.01(b).
          “Cash Collateral Accounts” has the meaning specified in the
Preliminary Statements to this Agreement.
          “Cash Equivalents” means, in each case, book-entry securities,
negotiable instruments or securities in bearer or registered form that evidence:
(a) direct obligations of, and obligations fully guaranteed as to timely payment
by, the United States of America (having original maturities of no more than
365 days, or such lesser time as is required for the distribution of funds);
(b) demand deposits, time deposits or certificates of deposit of the Collateral
Agent or of depositary institutions or trust companies organized under the laws
of the United States of America or any state thereof, or the District of
Columbia (or any domestic branch of a foreign bank) (i) having original
maturities of no more than 365 days, or such lesser time as is required for the
distribution of funds; provided that at the time of investment or contractual
commitment to invest therein, the short-term debt rating of such depositary
institution or trust company shall be at least “A-1” by S&P and “P-1” by Moody’s
and the long-term debt rating of such depositary or institution or trust company
shall be at least A1 by Moody’s or (ii) having maturities of more than 365 days
and, at the time of the Investment or contractual commitment to invest therein,
a rating of “AA” by S&P and “Aa1” by Moody’s; (c) fully collateralized
repurchase agreements with a term of not more than 30 days for securities
described in clause (a) of this definition and entered into with a financial
institution satisfying the criteria described in clause (b) of this definition;
(d) corporate or municipal debt obligations (including open market commercial
paper) (i) having remaining maturities of no more than 365 days, or such lesser
time as is required for the distribution of funds, and having, at the time of
the investment or contractual commitment to invest therein, a rating of at least
“A-1+” or “AA” by S&P and “P-1” or “Aa1” by Moody’s or (ii) having maturities of
more than 365 days and, at the time of the Investment or contractual commitment
to invest therein, a rating of “AA” by S&P and “Aa1” by Moody’s; (e) investments
in money market funds (including funds in respect of which the Collateral Agent
or any of its Affiliates is investment manager or advisor, including but not
limited to Citicorp USA, Inc. money market funds) having a rating of at least
“AA” by S&P and “Aa2” by Moody’s previously approved by the Company or the
Collateral Agent; or (f) notes or bankers’ acceptances (having original
maturities of no more than 365 days, or such lesser time as is required for the
distribution of funds) issued by any depositary institution or trust company
satisfying the criteria described in clause (b) above; provided, however, that
no investment shall be made in any obligations of any depositary institution or
trust company which has a contractual right to set off and apply any deposits
held, and other indebtedness owing, by the Company or any Guarantor to or for
the credit or the account of such depositary institution or trust company;
provided further, that if, at any time, the rating of any of the foregoing
investments falls below “BBB” by S&P or Baa2” by Moody’s, such downgrades
investments shall no longer constitute “Cash Equivalents”.
          “Collateral” has the meaning specified in Section 5.01.
          “Collateral Agent” has the meaning specified in the first paragraph to
this
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Agreement.
          “Collateral Supplement” means a supplement to this Agreement in
substantially the form attached as Exhibit B hereto.
          “Company” has the meaning specified in the Preliminary Statements to
this Agreement.
          “Credit Agreement” has the meaning specified in the Preliminary
Statements to this Agreement.
          “Equity Interests” means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other acquisition from
such Person of such shares (or such other interests), and other ownership or
profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.
          “Guarantee” means the guarantee of the Guarantors set forth in
Article II hereof.
          “Guarantee Supplement” has the meaning specified in Section 6.01(d).
          “Guaranteed Obligations” has the meaning specified in Section 2.01(a).
          “Guarantor” has the meaning specified in the first paragraph to this
Agreement.
          “Guarantor Material Adverse Effect” means (a) a material adverse
effect on the business, assets, liabilities, operations, condition (financial or
otherwise) or operating results of the Guarantors taken as a whole, the result
of which is a material impairment of the ability of the Guarantors taken as a
whole to perform their respective obligations under any Loan Document, (b) a
material impairment of the totality of rights and remedies of, or benefits
available to, any Secured Party under the Loan Documents or (c) a material
adverse effect on the value of the Collateral taken as a whole.
          “Holdco I” has the meaning specified in the first paragraph to this
Agreement.
          “Holdco I Cash Collateral Account” has the meaning specified in the
Preliminary Statements to this Agreement.
          “Holdco I DACA” shall mean the Deposit Account Control Agreement,
among Holdco I, Agent, and the relevant depositary bank, in form and substance
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reasonably satisfactory to Holdco I, Agent and the relevant depositary bank.
          “Indemnified Party” has the meaning specified in Section 6.04.
          “Indenture” means the Indenture, dated as of August 1, 2006, between
the Company and Deutsche Bank Trust Company Americas, as trustee, as amended,
supplemented or otherwise modified from time to time.
          “Initial Parent Holdco” has the meaning specified in the first
paragraph to this Agreement.
          “Initial Parent Holdco (California)” has the meaning specified in the
first paragraph to this Agreement.
          “Initial Parent Holdco (Ireland)” has the meaning specified in the
first paragraph to this Agreement.
          “Initial Pledged Equity” has the meaning specified in the Preliminary
Statements to this Agreement.
          “Initial Pledged Parent Holdco Equity” has the meaning specified in
the Preliminary Statements to this Agreement.
          “Initial Pledged SPE and Intermediate Lessee Equity” has the meaning
specified in the Preliminary Statements to this Agreement.
          “Intermediate Lessee” means each direct Wholly-owned Subsidiary
(subject to the Local Requirements Exception) of a Parent Holdco other than any
Pledged SPE, all of whose issued and outstanding Equity Interests constitute
Collateral.
          “Irish Act” means the Irish Land and Conveyancing Law Reform Act 2009.
          “Obligation” means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 11.1.3 of the Credit Agreement. Without limiting the generality of the
foregoing, the Obligations of any Loan Party under the Loan Documents include
(a) the obligation to pay principal, interest, charges, expenses, fees,
attorneys’ fees and disbursements, indemnities and other amounts payable by such
Loan Party under any Loan Document and (b) the obligation of such Loan Party to
reimburse any amount in respect of any of the foregoing arising from or under
any Loan Document that the Administrative Agent or the Collateral Agent, in its
sole discretion, may elect to pay or advance on behalf of such Loan Party.
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          “Parent Holdco” means the Initial Parent Holdcos and any other direct
Wholly-owned Subsidiary (subject to the Local Requirements Exception) of Holdco
I formed or acquired after the date hereof, each of whom shall execute and
deliver a Guarantee Supplement.
          “Permitted Holdco I Activities” means, with respect to Holdco I,
(a) the execution, delivery and performance of its obligations under this
Agreement or any other agreement or document required by the terms of the Loan
Documents, (b) the establishment, formation, purchase, acquisition, holding,
maintenance or permitted sale or other disposition of any Parent Holdco, and
(c) activities permitted or required under Sections 4 and 5 hereof, and (d) all
other activities incidental thereto or that are immaterial, including
contracting for management services from the Company, the incurrence and lending
of intercompany indebtedness and payments in respect thereof, and other
activities and actions taken in accordance with Leasing Company Practice.
          “Permitted Intermediate Lessee Activities” means, with respect to an
Intermediate Lessee, (a) the execution, delivery and performance of its
obligations under any agreement or document required by the terms of the Loan
Documents, (b) the acquisition, ownership, holding, conversion, maintenance,
modification, management, operation, leasing, re-leasing, subleasing and sale or
other disposition of any Eligible Aircraft or related assets and the entry into
all agreements and engaging in all related activities incidental thereto,
including from time to time accepting, exchanging, holding promissory notes,
contingent payment obligations or Equity Interests of lessees or their
Affiliates issued in connection with the bankruptcy, reorganization or other
similar process, or in settlement of delinquent obligations or obligations
anticipated to be delinquent, of such lessees or their respective Affiliates,
(c) activities permitted or required under Sections 4 and 5 hereof, and (d) all
other activities incidental thereto or that are immaterial, including
contracting for management services from the Company, Holdco I or a Parent
Holdco, the incurrence and lending of intercompany indebtedness and payments in
respect thereof, and other activities and actions taken in accordance with
Leasing Company Practice.
          “Permitted Parent Holdco Activities” means, with respect to a Parent
Holdco, (a) the execution, delivery and performance of its obligations under
this Agreement or any other agreement or document required by the terms of the
Loan Documents, (b) the establishment, formation, purchase, acquisition,
holding, maintenance or permitted sale or other disposition of any Pledged SPE
or Intermediate Lessee, (c) activities permitted or required under Sections 4
and 5 hereof, and (d) all other activities incidental thereto or that are
immaterial, including contracting for management services from the Company or
Holdco I, the incurrence and lending of intercompany indebtedness and payments
in respect thereof, and other activities and actions taken in accordance with
Leasing Company Practice.
          “Permitted Pledged SPE Activities” means, with respect to a Pledged
SPE, (a) the execution, delivery and performance of its obligations under any
agreement or document required by the terms of the Loan Documents, (b) the
acquisition, ownership, holding, conversion, maintenance, modification,
management, operation,
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leasing, re-leasing, subleasing and sale or otherwise disposition of any
Eligible Aircraft or related assets and the entry into all agreements and
engaging in all related activities incidental thereto, including from time to
time accepting, exchanging, holding promissory notes, contingent payment
obligations or Equity Interests of lessees or their Affiliates issued in
connection with the bankruptcy, reorganization or other similar process, or in
settlement of delinquent obligations or obligations anticipated to be
delinquent, of such lessees or their respective Affiliates, (c) activities
permitted or required under Sections 4 and 5 hereof, and (d) all other
activities incidental thereto or that are immaterial, including contracting for
management services from the Company, Holdco I or a Parent Holdco, the
incurrence and lending of intercompany indebtedness and payments in respect
thereof, and other activities and actions taken in accordance with Leasing
Company Practice.
          “Pledged Debt” means all the Indebtedness from time to time owing by
any Guarantor, any Pledged SPE, any Intermediate Lessee or the Company to any
Guarantor.
          “Pledged Debt Collateral” has the meaning specified in
Section 5.01(a)(iii).
          “Pledged Equity” has the meaning specified in Section 5.01(a)(ii).
          “Pledged SPE” means each direct Wholly-owned Subsidiary (subject to
the Local Requirements Exception) of a Parent Holdco that Owns any Eligible
Aircraft, all of whose issued and outstanding Equity Interests constitute
Collateral. Each Pledged SPE shall be organized under the laws of Delaware,
California, Utah, Ireland or any other jurisdiction reasonably acceptable to the
Collateral Agent.
          “Post Petition Interest” has the meaning specified in Section 2.08(b).
          “Receiver” means any one or more receivers and/or managers appointed
by the Collateral Agent in respect of each relevant Guarantor or over all or any
part of the Irish Collateral.
          “Secured Obligations” has the meaning specified in Section 5.02.
          “Secured Parties” means the Agent and the 2012 Banks.
          “Security Collateral” has the meaning specified in Section 5.01(a).
          “Security Interest” means any mortgage, pledge, lien, charge,
assignment, hypothecation or right in security or security interest, trust
arrangement for the purpose of providing security, retention of title
arrangement or any other agreement or arrangement having the effect of
conferring security.
          “Solvent” means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities of such Person and (b) such Person is not and
will not be rendered insolvent
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     as a result of the transactions contemplated by the Loan Documents.
          “Subagent” has the meaning specified in Section 5.11.
          “Subordinated Obligations” has the meaning specified in Section 2.08.
          “UCC” means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that, if perfection or the effect of
perfection or non perfection or the priority of the security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “UCC” means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non perfection or priority.
          Section 1.02 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles in the United States of America.
          Section 1.03 Other Definitional Provisions. In this Agreement and each
other Loan Document, (a) in the computation of periods of time from a specified
date to a later specified date, (i) the word “from” means “from and including”
and (ii) the words “to” and “until” each mean “to but excluding”, (b) references
to any agreement or contract “as amended” means and shall be a reference to such
agreement or contract as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with its terms, (c) terms
defined in the Credit Agreement and not otherwise defined in this Agreement are
used in this Agreement as defined in the Credit Agreement, and unless otherwise
defined in this Agreement or in the Credit Agreement, terms defined in Article 8
or 9 of the UCC are used in this Agreement as such terms are defined in such
Article 8 or 9, (d) references to “writing” include printing, typing,
lithography and other means of reproducing words in a tangible visible form,
(e) the words “hereof”, “herein”, “hereunder” and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, (f) Section, Article, Schedule and
Exhibit references contained in this Agreement are references to Sections,
Articles, Schedules and Exhibits in or to this Agreement unless otherwise
specified and (g) the term “including” shall mean “including without
limitation”.
ARTICLE II
GUARANTEE
          Section 2.01 Guarantee; Limitation of Liability. (a) Each Guarantor
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of each
other Loan Party to any Secured Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such Obligations being the “Guaranteed
Obligations”), and agrees to pay any and all
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reasonable out-of-pocket expenses (including, without limitation, reasonable
fees and expenses of counsel) incurred by the Agent or any other Secured Party
in enforcing any rights under this Agreement or any other Loan Document. Without
limiting the generality of the foregoing, each Guarantor’s liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by any other Loan Party to any Secured Party under or in respect
of the Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such other Loan Party.
          (b) Each Guarantor, and by its acceptance of this Guarantee, the Agent
and each other Secured Party, hereby confirms that it is the intention of all
such Persons that this Guarantee and the Obligations of each Guarantor hereunder
not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law (as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guarantee and the Obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Agent, the other Secured
Parties and the Guarantors hereby irrevocably agree that the Obligations of each
Guarantor under this Guarantee at any time shall be limited to the maximum
amount as will result in the Obligations of such Guarantor under this Guarantee
not constituting a fraudulent transfer or conveyance. For purposes hereof,
“Bankruptcy Law” means any proceeding of the type referred to in Section 11.1.3
of the Credit Agreement or Title 11, U.S. Code, or any similar foreign, federal
or state law for the relief of debtors.
          (c) Each Guarantor hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to any Secured Party under
this Guarantee, such Guarantor will contribute, to the maximum extent permitted
by law, such amounts to each other Guarantor so as to maximize the aggregate
amount paid to the Secured Parties under or in respect of the Loan Documents.
          Section 2.02 Guarantee Absolute. Each Guarantor hereby guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto. The Obligations of each Guarantor under or
in respect of this Guarantee are independent of the Guaranteed Obligations or
any other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guarantee, irrespective of whether any
action is brought against any other Loan Party or whether any other Loan Party
is joined in any such action or actions. The liability of each Guarantor under
this Guarantee shall be irrevocable, absolute and unconditional irrespective of,
and each Guarantor hereby irrevocably waives any defenses (other than payment in
full of the Guaranteed Obligations) it may now have or hereafter acquire in any
way relating to, any or all of the following:
     (a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
     (b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations or any other Obligations of
any other
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Loan Party under or in respect of the Loan Documents, or any other amendment or
waiver of or any consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Loan Party or any of its Subsidiaries or
otherwise;
     (c) any taking, exchange, release or non-perfection of any Collateral or
any other collateral, or any taking, release or amendment or waiver of, or
consent to departure from, any other guarantee, for all or any of the Guaranteed
Obligations;
     (d) any manner of application of Collateral or any other collateral, or
proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any Collateral or any other collateral for all or
any of the Guaranteed Obligations or any other Obligations of any Loan Party
under the Loan Documents or any other assets of any Loan Party or any of its
Subsidiaries;
     (e) any change, restructuring or termination of the organizational
structure or existence of any Loan Party or any of its Subsidiaries;
     (f) any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party now or
hereafter known to such Secured Party (each Guarantor hereby waiving any duty on
the part of the Secured Parties to disclose such information);
     (g) the failure of any other Person to execute or deliver this Agreement,
any Guarantee Supplement or any other guarantee or agreement or the release or
reduction of liability of any Guarantor or other guarantor or surety with
respect to the Guaranteed Obligations; or
     (h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any
Secured Party that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety (other than
payment in full of the Guaranteed Obligations).
This Guarantee shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Company or any other Loan Party
or otherwise, all as though such payment had not been made.
          Section 2.03 Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guarantee and any requirement that
any Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.
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          (b) Each Guarantor hereby unconditionally and irrevocably waives any
right to revoke this Guarantee and acknowledges that this Guarantee is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
          (c) Each Guarantor hereby unconditionally and irrevocably waives
(i) any defense arising by reason of any claim or defense based upon an election
of remedies by any Secured Party that in any manner impairs, reduces, releases
or otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other guarantor
or any other Person or any Collateral and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the Obligations of such
Guarantor hereunder.
          (d) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of any Secured Party to disclose to such Guarantor any matter,
fact or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party or any
of its Subsidiaries now or hereafter known by such Secured Party.
          (e) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by the
Loan Documents and that the waivers set forth in Section 2.02 and this
Section 2.03 are knowingly made in contemplation of such benefits.
          Section 2.04 Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Company, any other Guarantor or any other insider guarantor
that arise from the existence, payment, performance or enforcement of such
Guarantor’s Obligations under or in respect of any Loan Document, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of any Secured Party against the Company, any other Guarantor or any
other insider guarantor or any Collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from the Company, any other
Guarantor or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, while any Event of Default has occurred
and is continuing, unless and until all of the Guaranteed Obligations and all
other amounts payable under this Guarantee shall have been paid in full in cash
and the 2012 Commitments shall have expired or been terminated. If any amount
shall be paid to any Guarantor in violation of the immediately preceding
sentence at any time, while any Event of Default has occurred and is continuing,
prior to the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Article II and termination or expiration of the 2012
Commitments, such amount shall be received and held in trust for the benefit of
the Secured Parties, shall be segregated from other property and funds of such
Guarantor and shall forthwith be paid or delivered to the Agent in the same form
as so received (with any necessary endorsement or assignment) to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this
Guarantee, whether matured or unmatured, in accordance with the terms of the
Loan Documents, or to be held as Collateral for any Guaranteed Obligations or
other amounts payable under this Guarantee thereafter arising. If
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(i) any Guarantor shall make payment to any Secured Party of all or any part of
the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Guarantee shall have been paid in full in cash, and
(iii) the 2012 Commitments shall have been terminated or expired, the Secured
Parties will, at such Guarantor’s request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment made by such Guarantor pursuant to this Article II.
          Section 2.05 Continuing Guarantee. This Guarantee is a continuing
guarantee and shall (a) remain in full force and effect until payment in full in
cash of the Guaranteed Obligations and all other amounts payable under this
Agreement and termination or expiration of the 2012 Commitments, or, with
respect to any Parent Holdco, the sale, transfer or other disposition of such
Parent Holdco in accordance with the terms of the Loan Documents, (b) be binding
upon each Guarantor, its successors and assigns and (c) inure to the benefit of
and be enforceable by the Secured Parties and their successors, transferees and
assigns.
          Section 2.06 Payments Free and Clear of Taxes, Etc. Section 6.4 of the
Credit Agreement shall apply to this Agreement mutatis mutandis.
          Section 2.07 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request referred
to in Section 11.2 of the Credit Agreement to authorize the Agent to declare the
Loans due and payable pursuant to the provisions of said Section 11.2, each
Secured Party and each of their respective Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Secured Party or such Affiliate to or for the credit or the account of
any Guarantor against any and all of the Obligations of such Guarantor now or
hereafter existing under the Loan Documents, irrespective of whether such
Secured Party shall have made any demand under this Agreement or any other Loan
Document and although such Obligations may be unmatured. Each Secured Party
agrees promptly to notify such Guarantor after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Secured Party and
their respective Affiliates under this Section 2.07 are in addition to other
rights and remedies (including, without limitation, other rights of set off)
that such Secured Party and their respective Affiliates may have.
          Section 2.08 Subordination. Each Guarantor hereby subordinates any and
all debts, liabilities and other Obligations owed to such Guarantor by each
other Loan Party (the “Subordinated Obligations”) to the Guaranteed Obligations
to the extent and in the manner hereinafter set forth in this Section 2.08:
          (a) Prohibited Payments, Etc. Except during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor may
receive payments from any other Loan Party on account of the Subordinated
Obligations. After the occurrence and during the continuance of any Event of
Default (including the commencement and continuation of any
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proceeding under any Bankruptcy Law relating to any other Loan Party), however,
unless the Agent otherwise agrees, no Guarantor shall demand, accept or take any
action to collect any payment on account of the Subordinated Obligations.
          (b) Prior Payment of Guaranteed Obligations. In any proceeding under
any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that
the Secured Parties shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing after the
commencement of a proceeding under any Bankruptcy Law, whether or not
constituting an allowed claim in such proceeding (“Post Petition Interest”))
before such Guarantor receives payment of any Subordinated Obligations.
          (c) Turn-Over. After the occurrence and during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
shall, if the Agent so requests, collect, enforce and receive payments on
account of the Subordinated Obligations as trustee for the Secured Parties and
deliver such payments to the Agent on account of the Guaranteed Obligations
(including all Post Petition Interest), together with any necessary endorsements
or other instruments of transfer.
          (d) Agent Authorization. After the occurrence and during the
continuance of any Event of Default (including the commencement and continuation
of any proceeding under any Bankruptcy Law relating to any other Loan Party),
the Agent is authorized and empowered (but without any obligation to so do), in
its discretion, (i) in the name of each Guarantor, to collect and enforce, and
to submit claims in respect of, Subordinated Obligations and to apply any
amounts received thereon to the Guaranteed Obligations (including any and all
Post Petition Interest), and (ii) to require each Guarantor (A) to collect and
enforce, and to submit claims in respect of, Subordinated Obligations and (B) to
pay any amounts received on such obligations to the Agent for application to the
Guaranteed Obligations (including any and all Post Petition Interest).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
          Section 3.01 Representations and Warranties of each Guarantor. Each
Guarantor represents and warrants to each of the Secured Parties as follows:
     (a) Such Guarantor is an entity duly organized or incorporated and validly
existing under the laws of its jurisdiction of organization or incorporation,
and has the corporation, trust or other power to own its property and carry on
its business as now being conducted and is duly qualified and in good standing,
if applicable, as a foreign corporation or other entity authorized to do
business in each jurisdiction where, because of the nature of its activities or
properties, such qualification is required, except where the failure to be so
qualified or in good standing could not reasonably be expected to have a
Guarantor Material Adverse Effect.
     (b) The execution and delivery by such Guarantor of this Agreement and the
performance by such Guarantor of its obligations hereunder (i) are within the
corporate,
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trust or other powers of such Guarantor, (ii) have been duly authorized by all
necessary corporate, trust or other action on the part of such Guarantor,
(iii) have received all necessary approvals, authorizations, consents,
registrations, notices, exemptions and licenses (if any shall be required) from
Governmental Authorities and other Persons, except for any such approvals,
authorizations, consents, registrations, notices, exemptions or licenses
non-receipt of which could not reasonably be expected to have a Guarantor
Material Adverse Effect, (iv) do not and will not contravene or conflict with
any provision of (A) law, (B) any judgment, decree or order to which such
Guarantor or any of its Subsidiaries is a party or by which such Guarantor or
any of its Subsidiaries is bound, (C) the charter, bylaws, constitutional or
other organizational documents of such Guarantor or any of its Subsidiaries, or
(D) any provision of (1) the Indenture (including, without limitation,
Sections 1006, 1007, 1008 and 1009 thereof) or (2) any other agreement or
instrument binding on such Guarantor or any of its Subsidiaries, or any
agreement or instrument of which such Guarantor is aware affecting the
properties of such Guarantor or any of its Subsidiaries, except with respect to
(A), (B) and (D) above, for any such contravention or conflict which could not
reasonably be expected to have a Material Adverse Effect, and (v) do not and
will not result in or require the creation or imposition of any Lien on any of
such Guarantor’s or its Subsidiaries’ properties other than the Lien in favor of
the Agent for the benefit of the Secured Parties in the Collateral granted under
this Agreement and Permitted Collateral Liens.
     (c) This Agreement is the legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms,
subject to bankruptcy, insolvency, examinorship, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors’ rights and to general equity principles.
     (d) Such Guarantor is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, required to register thereunder, or
a company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.
     (e) Such Guarantor maintains insurance with insurers or reinsurers of
recognized responsibility or pursuant to governmental indemnities, to such
extent and against such hazards and liabilities as is commonly maintained, or
caused to be maintained, as the case may be, by companies similarly situated.
Each Pledged SPE maintains, or, in the case of any property Owned by such
Pledged SPE and leased to lessees, such Pledged SPE (or the applicable
Intermediate Lessee) has contractually required such lessees to maintain,
insurance with insurers or reinsurers of recognized responsibility or pursuant
to governmental indemnities, covering such risks and in such amounts as set
forth in Schedule 4.01(f).
     (f) Such Guarantor has, independently and without reliance upon any Secured
Party and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and each
other Loan Document to which it is or is to be a party, and such Guarantor has
established adequate means of obtaining from each other Loan Party on a
continuing basis information
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pertaining to, and is now and on a continuing basis will be completely familiar
with, the business, condition (financial or otherwise), operations, performance,
properties and prospects of such other Guarantor.
     (g) The Guarantors will be, as of the Collateral Value Effective Date and
on each Appraisal Date thereafter, together with their respective Subsidiaries,
taken as a whole, Solvent.
     (h) Holdco I is a direct Wholly-owned Subsidiary of the Company, each
Parent Holdco is a direct Wholly-owned Subsidiary of Holdco I and each Pledged
SPE and each Intermediate Lessee is a direct Wholly-owned Subsidiary of a Parent
Holdco.
     (i) Each Pledged SPE Owns any Eligible Aircraft specified as being Owned by
it free and clear of all Liens other than Permitted Collateral Liens.
     (j) In each case, since the date of such Person’s organization, (i) Holdco
I has not engaged in any activity other than Permitted Holdco I Activities,
(ii) each Parent Holdco has not engaged in any activity other than Permitted
Parent Holdco Activities, (iii) each Pledged SPE has not engaged in any activity
other than Permitted Pledged SPE Activities, and (iv) each Intermediate Lessee
has not engaged in any activity other than Permitted Intermediate Lessee
Activities.
          Section 3.02 Additional Representations and Warranties of the
Guarantors. Each Guarantor represents and warrants to each of the Secured
Parties as follows:
     (a) Such Guarantor’s exact legal name, as defined in Section 9-503(a) of
the UCC, is correctly set forth in Schedule I hereto. Such Guarantor is located
(within the meaning of Section 9-307 of the UCC) and has its chief executive
office in the state or jurisdiction set forth in Schedule I hereto. The
information set forth in Schedule I hereto with respect to such Guarantor is
true and accurate in all respects. Such Guarantor has not previously changed its
name, location, chief executive office, type of organization or incorporation,
as applicable, jurisdiction of organization or incorporation, as applicable, or
organizational or incorporation identification number from those set forth in
Schedule I hereto except as disclosed in Schedule III hereto.
     (b) All Security Collateral consisting of certificated securities and
instruments existing as of the date hereof (or, with respect to any other date
on which this representation is made, repeated, brought down or otherwise deemed
made, existing as of such date) has been delivered to the Agent.
     (c) Such Guarantor is the legal and beneficial owner of the Collateral of
such Guarantor free and clear of any Lien, claim, option or right of others,
except for the security interest created under this Agreement or Permitted
Collateral Liens. No effective financing statement or other instrument similar
in effect covering all or any part of such Collateral or listing such Guarantor
as debtor with respect to such Collateral is on file in any recording office,
except such as may have been filed in favor of the Agent relating to the Loan
Documents, or otherwise with respect to Permitted Collateral Liens.
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     (d) The Pledged Equity pledged by such Guarantor hereunder has been duly
authorized and validly issued and is fully paid and non assessable. With respect
to any Pledged Equity that is an uncertificated security issued by an issuer
organized under the laws of the United States or any State thereof, such
Guarantor has caused such issuer either (i) to register the Agent as the
registered owner of such security or (ii) to agree in an authenticated record
with such Guarantor and the Agent that such issuer will comply with instructions
with respect to such security originated by the Agent without further consent of
such Guarantor (and, for the avoidance of doubt, such issuer will not comply
with any such instructions originated by such Guarantor only upon the occurrence
and during the continuance of an Event of Default). If any Security Collateral
issued by an issuer organized under the laws of the United States or any State
thereof is not a security pursuant to Section 8-103 of the UCC, no Guarantor
shall take any action that, under such Section 8-103, converts such Security
Collateral into a security without causing the issuer thereof to issue to it
certificates or instruments evidencing such Security Collateral, which it shall
deliver to the Agent as provided in Section 5.03. If such Guarantor is an issuer
of Pledged Equity, such Guarantor confirms that it has received notice of the
security interest granted under this Agreement.
     (e) The Initial Pledged Equity pledged by such Guarantor constitutes the
percentage of the issued and outstanding Equity Interests of the issuers thereof
indicated on Schedule II hereto.
     (f) All filings and other actions (including without limitation, actions
necessary to obtain control of Collateral as provided in Sections 9-104 or 9-106
of the UCC) necessary to perfect the security interest in the Collateral of such
Guarantor created under this Agreement existing on the date hereof (or, with
respect to any other date on which this representation is made, repeated,
brought down or otherwise deemed made, existing as of such date) have been duly
made or taken and are in full force and effect, or will be taken within the
required time periods as set out by applicable laws outside of the United
States, and this Agreement creates in favor of the Agent for the benefit of the
Secured Parties a valid and, together with such filings and other actions,
perfected first priority security interest in the Collateral of such Guarantor
existing on the date hereof (or, with respect to any other date on which this
representation is made, repeated, brought down or otherwise deemed made,
existing as of such date), securing the payment of the Secured Obligations,
except for Permitted Collateral Liens.
     (g) Except for such authorizations and approvals listed on Schedule 3.02(g)
hereto, which have been obtained and remain in full force and effect as of the
date hereof, no authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body of the United
States or any State thereof (or in the case of the Equity Interests of Initial
Parent Holdco (Ireland), Ireland) or any other third party is required for
(i) the grant by such Guarantor of the security interest granted hereunder or
for the execution, delivery or performance of this Agreement by such Guarantor,
(ii) the perfection or maintenance of the security interest created hereunder
(including the first priority nature of such security interest as contemplated
hereby), except for the filing of financing and continuation statements under
the UCC and certain filings in Ireland that will be made within 21 days after
the date hereof, and the actions
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required to be taken pursuant to Section 5.03 with respect to Security
Collateral, which actions have been taken and are in full force and effect in
respect of Security Collateral existing on the date hereof (or, with respect to
any other date on which this representation is made, repeated, brought down or
otherwise deemed made, existing as of such date) or (iii) the exercise by the
Agent of its voting or other rights provided for in this Agreement or the
remedies in respect of the Collateral pursuant to this Agreement, except as may
be required in connection with the disposition of any portion of the Security
Collateral by laws affecting the offering and sale of securities generally or
any other applicable laws.
ARTICLE IV
COVENANTS
          Section 4.01 Covenants. Each Guarantor covenants and agrees that, so
long as any part of the Guaranteed Obligations shall remain unpaid or any 2012
Bank shall have any 2012 Commitment, such Guarantor will perform and observe,
and cause each of its Subsidiaries to perform and observe, all of the terms,
covenants and agreements set forth in the Loan Documents on its or their part to
be performed or observed or that the Company has agreed to cause such Guarantor
or such Subsidiaries, as applicable, to perform or observe, and in addition,
each Guarantor agrees that:
     (a) Separate Existence. Each Guarantor shall, and shall cause each of its
Subsidiaries to, maintain its existence as a separate corporation, trust or
other Person for the sole purpose of (i) in the case of each Pledged SPE,
owning, leasing and disposing of the Eligible Aircraft and activities incidental
thereto and other Permitted Intermediate Lessee Activities, (ii) in the case of
each Intermediate Lessee, leasing the Eligible Aircraft and activities
incidental thereto and other Permitted Pledged SPE Activities, and (iii) in the
case of each Guarantor, holding and disposing of the assets contemplated to be
held hereunder and entering into the Loan Documents and the transactions
contemplated thereby and activities incidental thereto and, in the case of
Holdco I, Permitted Holdco I Activities. Each Guarantor shall, and shall cause
each of its Subsidiaries to, maintain certain policies and procedures relating
to its separateness, including, (x) maintaining its own books and records (other
than any Guarantor, Pledged SPE or Intermediate Lessee which is a trust) and
maintaining its assets and liabilities in such a manner that it is not difficult
to segregate, identify or ascertain such assets and liabilities from those of
the Company, other Guarantors, other Pledged SPEs, other Intermediate Lessees or
any other Person, and (y) holding itself out to creditors and the public as a
legal entity (other than any trust) separate and distinct from the Company,
other Guarantors, other Pledged SPEs, other Intermediate Lessees or any other
Person (except for consolidated tax returns, financial statements and similar
reports). For the avoidance of doubt, the Company (or a Subsidiary thereof) may
act as a “servicer” to any Guarantor or any Subsidiary thereof and in such
capacity may perform, or cause to be performed, leasing, administration, sale,
aircraft and equipment maintenance and related services on behalf of such
Guarantor or such Subsidiary.
     (b) Limitation on Indebtedness. No Guarantor may, and may not permit any of
its Pledged SPEs or Intermediate Lessees to, incur, create, issue, assume,
guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment
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of, contingently or otherwise, whether present or future, any Indebtedness other
than (i) in the case of the Guarantors, Indebtedness in respect of the Guarantee
hereunder, (ii) leases and obligations to lessees, trustees and others under the
leases, trust agreements and other documents related thereto, including any
Indebtedness owed to any lessee under any such agreement or the lease with
respect to maintenance contributions, redelivery condition adjustment payments
or any other obligation of any Guarantor, Pledged SPE or Intermediate Lessee to
a lessee, in each case that is incurred in accordance with Leasing Company
Practice; (iii) Indebtedness of any Guarantor, Pledged SPE or Intermediate
Lessee owed to the Company or any of its Subsidiaries; provided that, no such
Indebtedness shall be permitted unless (x) such Indebtedness has been
subordinated to the Guaranteed Obligations on the terms set forth herein or, to
the extent such terms are not applicable, on terms reasonably acceptable to the
Collateral Agent, and (y) in the case of any Pledged Debt Collateral, the
Collateral Agent has a first priority perfected security interest in such
Pledged Debt Collateral, subject to Permitted Collateral Liens, and such Pledged
Debt Collateral is, or when issued, will be, evidenced by an instrument which
has been delivered and indorsed to the Collateral Agent; (iv) Indebtedness
required in connection with repossession of an Aircraft or any engine related
thereto; and (v) Indebtedness in favor of the issuer of a surety, letter of
credit or similar instrument to be obtained by any Guarantor, Pledged SPE or
Intermediate Lessee in connection with the repossession or detention of an
Aircraft or other enforcement action under a lease.
     (c) Permitted Activities. (i) Holdco I shall not engage in any activity
other than Permitted Holdco I Activities, (ii) each Parent Holdco shall not
engage in any activity other than Permitted Parent Holdco Activities, (iii) each
Pledged SPE shall not engage in any activity other than Permitted Pledged SPE
Activities, and (iv) each Intermediate Lessee shall not engage in any activity
other than Permitted Intermediate Lessee Activities.
     (d) Equity Interests Ownership. Holdco I shall at all times remain a direct
Wholly-owned Subsidiary of the Company, each Parent Holdco shall at all times
remain a direct Wholly-owned Subsidiary of Holdco I (unless transferred in
accordance with the Credit Agreement) and each Pledged SPE and each Intermediate
Lessee shall at all times remain a direct Wholly-owned Subsidiary of a Parent
Holdco, in each case subject to the Local Requirements Exception, it being
understood that Holdco I and any Parent Holdco may sell or otherwise dispose of
the Equity Interests of a Parent Holdco, a Pledged SPE, as the case may be, in
accordance with Section 9.9, Section 9.18 and Section 9.19 of the Credit
Agreement and Section 5.14 of this Agreement, and that, in connection with any
permitted sale or other disposal of the Equity Interests of any Pledged SPE,
such Parent Holdco may sell or otherwise dispose of any Intermediate Lessee
leasing any Eligible Aircraft Owned by such Pledged SPE, provided that such
Intermediate Lessee is not, at the time of such sale or other disposal, leasing
any Eligible Aircraft Owned by any other Pledged SPE.
     (e) No Other Subsidiaries. Holdco I shall not have any subsidiaries other
than Parent Holdcos, Pledged SPEs and Intermediate Lessees.
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     (f) Insurance. Each Guarantor shall maintain insurance with insurers or
reinsurers of recognized responsibility or pursuant to governmental indemnities,
to such extent and against such hazards and liabilities as is commonly
maintained, or caused to be maintained, as the case may be, by companies
similarly situated. Each Pledged SPE shall maintain, or, in the case of any
property Owned by such Pledged SPE and leased to lessees, such Pledged SPE (or
the applicable Intermediate Lessee) has contractually required such lessees to
maintain, insurance with insurers or reinsurers of recognized responsibility or
pursuant to governmental indemnities, covering such risks and in such amounts as
set forth in Schedule 4.01(f).
     (g) Additional Parent Holdcos. Each Parent Holdco formed or acquired after
the date hereof shall, and each Guarantor shall cause such Parent Holdco to,
execute and deliver a Guarantee Supplement promptly upon the formation or
acquisition of such Parent Holdco. Each Parent Holdco shall deliver to the Agent
updated schedules to this Agreement promptly upon formation or acquisition by
such Parent Holdco of any Pledged SPE or Intermediate Lessee.
ARTICLE V
GRANT OF SECURITY INTEREST; REMEDIES
          Section 5.01 Grant of Security Interest. Each Guarantor hereby grants
to the Agent, for the ratable benefit of the Secured Parties, a security
interest in such Guarantor’s right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by such Guarantor, wherever located, and whether now or
hereafter existing or arising (collectively, the “Collateral”):
          (a) the following (the “Security Collateral”):
     (i) the Initial Pledged Equity and the certificates, if any, representing
the Initial Pledged Equity, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Initial
Pledged Equity and all subscription warrants, rights or options issued thereon
or with respect thereto;
     (ii) all additional shares of stock and other Equity Interests from time to
time acquired by such Guarantor in any manner (such shares and other Equity
Interests, together with the Initial Pledged Equity, being the “Pledged
Equity”), and the certificates, if any, representing such additional shares or
other Equity Interests, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other Equity Interests and all subscription warrants, rights or options
issued thereon or with respect thereto; and
     (iii) the Pledged Debt and all instruments evidencing the Pledged Debt, and
all interest, cash, instruments and other property from time to time received,
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receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Debt (the “Pledged Debt Collateral”).
(b) the following (collectively, the “Account Collateral”):
     (i) the Cash Collateral Accounts and in each case all funds and financial
assets from time to time deposited therein or credited thereto (including,
without limitation, all Cash Equivalents), and all certificates and instruments,
if any, from time to time representing or evidencing the Cash Collateral
Account;
     (ii) all promissory notes, certificates of deposit, checks and other
instruments from time to time delivered to or otherwise possessed by the Agent
for or on behalf of such Guarantor in substitution for or in addition to any or
all of the then existing Account Collateral; and
     (iii) all interest, dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Account
Collateral; and
     (c) all proceeds of, collateral for, income and other payments now or
hereafter due and payable with respect to, and supporting obligations relating
to, any and all of the Collateral (including, without limitation, proceeds,
collateral and supporting obligations that constitute property of the types
described in clauses (a) and (b) of this Section 5.01 and this clause (c)) and,
to the extent not otherwise included, all (i) payments under insurance (whether
or not the Agent is the loss payee thereof), or any indemnity, warranty or
guarantee, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral and (ii) cash;
provided, however, that notwithstanding any of the foregoing provisions, so long
as no Event of Default shall have occurred and be continuing, the Company and
each Guarantor shall have the right, to the exclusion of the Agent, to (i) all
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Security Collateral (other than the Pledged Debt), (ii) all interest,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Debt, and (iii) subject to satisfaction of the conditions for the release of
such Collateral set forth in Section 5.04(b) hereof, the Account Collateral (and
once paid in accordance with such Section 5.04(b) shall be free and clear of the
Lien hereof and shall not constitute Collateral).
          Section 5.02 Security for Obligations. In the case of each Guarantor,
the grant of the security interest set forth in Section 5.01 is made to the
Agent to secure, for the ratable benefit of the Secured Parties, payment in full
in cash when due of all Obligations of such Guarantor and each other Loan Party
to any Secured Party, now or hereafter existing under this Agreement and the
other Loan Documents, whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest (including interest
on such obligations accruing after, and fees and expenses arising after, the
commencement of any proceeding under Title 11 of the United States Code or any
similar proceeding under state or federal law for the
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dissolution, restructuring, reorganization, liquidation or the winding up of
such Guarantor or such Loan Party, regardless of whether such interest, fees, or
expenses are allowed as a claim against such Guarantor or such Loan Party in any
such proceeding), fees, premiums, penalties, indemnifications, contract causes
of action, costs, expenses in accordance with Section 6.04(a) or otherwise. The
obligations of the Guarantors and the other Loan Parties described in this
Section 5.02 are referred to herein, collectively, as the “Secured Obligations”.
          Section 5.03 Delivery and Control of Security Collateral.
          (a) All certificates or instruments representing or evidencing
Security Collateral shall be delivered to and held by or on behalf of the Agent
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank
and undated, all in form and substance reasonably satisfactory to the Agent. The
Agent shall have the right, at any time after the occurrence and during the
continuance of an Event of Default, in its discretion and without notice to any
Guarantor, to transfer to or to register in the name of the Agent or any of its
nominees any or all of the Security Collateral, subject only to the revocable
rights specified in Section 5.07(a). In addition, the Agent shall have the right
at any time after the occurrence and during the continuance of an Event of
Default to exchange certificates or instruments representing or evidencing
Security Collateral for certificates or instruments of smaller or larger
denominations.
          (b) With respect to any Security Collateral in which any Guarantor has
any right, title or interest and that constitutes an uncertificated security
issued by an issuer organized under laws of the Untied States or any State
thereof, such Guarantor will cause the issuer thereof either (i) to register the
Agent as the registered owner of such security or (ii) to agree in an
authenticated record with such Guarantor and the Agent that such issuer will
comply with instructions with respect to such security originated by the Agent
without further consent of such Guarantor (and, for the avoidance of doubt, such
issuer will not comply with any such instructions originated by such Guarantor
only upon the occurrence and during the continuance of an Event of Default),
such authenticated record to be in form and substance reasonably satisfactory to
the Agent. If any Security Collateral is not a security pursuant to
Section 8-103 of the UCC, no Guarantor shall take any action that, under such
Section, converts such Security Collateral into a security without causing the
issuer thereof to issue to it certificates or instruments evidencing such
Security Collateral, which it shall deliver to the Agent as provided in this
Section 5.03.
          (c) With respect to any Security Collateral in which any Guarantor has
any right, title or interest and that is not a security pursuant to
Section 8-103 of the UCC, upon the request of the Agent upon the occurrence and
during the continuance of an Event of Default, such Guarantor will notify the
issuer of such Security Collateral that such Security Collateral is subject to
the security interest granted hereunder.
          Section 5.04 The Account Collateral. (a) Until payment in full in cash
of the Secured Obligations and termination or expiration of the 2012
Commitments, (A) Holdco I shall maintain the Holdco I Cash Collateral Account
and shall maintain the Holdco I DACA in full force and effect, and (B) the Agent
may, at any time and without notice to, or consent from,
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Holdco I transfer, or direct the transfer of, funds from the Holdco I Cash
Collateral Account to satisfy the Secured Obligations if an Event of Default
shall have occurred and be continuing.
          (b) So long as no Event of Default shall have occurred and be
continuing, if Holdco I shall have Cash Collateralized the Secured Obligations
pursuant to and in accordance with Section 13.8(a) of the Credit Agreement and
thereafter the aggregate Aircraft Value of the Eligible Aircraft Owned by the
Pledged SPEs, determined in accordance with the three Appraisal Reports by the
Appraisers most recently delivered to the Agent pursuant to Section 9.17 of the
Credit Agreement, exceeds the Required Collateral Amount (or the Minimum
Required Collateral Amount if such determination is made prior to the Collateral
Value Effective Date) as set forth in a Required Collateral Determination
Certificate delivered to the Agent, the relevant depositary bank shall pay and
release to Holdco I or to Holdco I’s order or, at the request of the Company, to
the Agent to be applied to the Secured Obligations, such amount, if any, as is
then on deposit in the Holdco I Cash Collateral Account as requested, provided
that, after giving effect to such payment and release, the Aggregate Collateral
Value shall not be less than the Required Collateral Amount (or the Minimum
Required Collateral Amount if such determination is made prior to the Collateral
Value Effective Date), as certified by the Company in a Required Collateral
Determination Certificate delivered to the Agent.
          (c) If the Company shall be required to prepay and permanently reduce
Committed Loans pursuant to Section 13.8(a)(iv)(B) of the Credit Agreement, the
Agent may, not earlier than the last day required for such prepayment and
permanent reduction unless otherwise agreed by the Company, upon notice to the
Company and Holdco I, charge, set off and otherwise apply all or any part of the
amount required to be so prepaid pursuant to such Section against any funds held
with respect to the Account Collateral.
          Section 5.05 Further Assurances.
          (a) Each Guarantor agrees that from time to time it will, at its own
expense, promptly execute and deliver, or otherwise authenticate, all further
instruments and documents, and take all further action that may be necessary, or
that the Agent may reasonably request and that are necessary, in order to
perfect and protect any pledge or security interest granted or purported to be
granted by such Guarantor hereunder or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Guarantor will, promptly
with respect to Collateral of such Guarantor: (i) if any such Collateral shall
be evidenced by a promissory note or other instrument, deliver and pledge to the
Agent hereunder such note or instrument duly indorsed and accompanied by duly
executed instruments of transfer or assignment, all in form reasonably
satisfactory to the Agent; (ii) at the Agent’s request, file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the Agent may reasonably request and that
are necessary, in order to perfect and preserve the security interest granted or
purported to be granted by such Guarantor hereunder; (iii) deliver and pledge to
the Agent for benefit of the Secured Parties certificates representing Security
Collateral that constitutes certificated securities, accompanied by undated
stock or note powers executed in blank; (iv) at the Agent’s request, take all
action necessary to ensure that the Agent has control of Collateral consisting
of investment property as provided in Section 9-106 of the UCC; and (v) deliver
to the Agent evidence that all other action that the Agent may deem
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reasonably necessary in order to perfect and protect the security interest
created by such Guarantor under this Agreement has been taken.
          (b) Each Guarantor hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, in each case
without the signature of such Guarantor. A photocopy or other reproduction of
this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
Each Guarantor ratifies its authorization for the Agent to have filed such
financing statements, continuation statements or amendments filed prior to the
date hereof.
          (c) Each Guarantor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with such Collateral as the Agent may
reasonably request, all in reasonable detail.
          Section 5.06 Post-Closing Changes. No Guarantor will change its name,
type of organization or incorporation, as applicable, jurisdiction of
organization or incorporation, as applicable, organizational or incorporation
identification number or location from those set forth in Section 3.02(a)
without first giving at least 30 days’ (or such shorter period of time
acceptable to Agent) prior written notice to the Agent and taking all action
reasonably required by the Agent for the purpose of perfecting or protecting the
security interest granted by this Agreement. Each Guarantor will hold and
preserve its records relating to the Collateral and will permit representatives
of the Agent at any time during normal business hours to inspect and make
abstracts from such records and other documents. If any Guarantor does not have
an organizational identification number and later obtains one, it will promptly
notify the Agent of such organizational identification number.
          Section 5.07 Voting Rights; Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing:
     (i) Each Guarantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Security Collateral of such Guarantor
or any part thereof for any purpose; provided, however, that such Guarantor will
not exercise or refrain from exercising any such right if such action would
constitute a breach of a Loan Document.
     (ii) Each Guarantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the Security
Collateral of such Guarantor if and to the extent that the payment thereof is
not otherwise prohibited by the terms of the Loan Documents; provided, however,
that after an Event of Default has occurred and is continuing any and all
     (A) dividends, interest and other distributions paid or payable other than
in cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any Security
Collateral,
     (B) dividends and other distributions paid or payable in cash in respect of
any Security Collateral in connection with a partial or total
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liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid in surplus and
     (C) cash paid, payable or otherwise distributed in respect of principal of,
or in redemption of, or in exchange for, any Security Collateral
shall be, and shall be forthwith delivered to the Agent to hold as, Security
Collateral and shall, if received by such Guarantor, be received in trust for
the benefit of the Agent, be segregated from the other property or funds of such
Guarantor and be forthwith delivered to the Agent as Security Collateral in the
same form as so received (with any necessary indorsement).
     (iii) The Agent will execute and deliver (or cause to be executed and
delivered) to each Guarantor all such proxies and other instruments as such
Guarantor may reasonably request for the purpose of enabling such Guarantor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends or interest payments that it is
authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of any Event of Default:
     (i) All rights of each Guarantor (A) to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 5.07(a)(i) shall cease and (B) to receive the
dividends, interest and other distributions that it would otherwise be
authorized to receive and retain pursuant to Section 5.07(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in the
Agent, which shall thereupon have the sole right to exercise or refrain from
exercising such voting and other consensual rights and to receive and hold as
Security Collateral such dividends, interest and other distributions.
     (ii) All dividends, interest and other distributions that are received by
any Guarantor contrary to the provisions of paragraph (i) of this
Section 5.07(b) shall be received in trust for the benefit of the Agent, shall
be segregated from other funds of such Guarantor and shall be forthwith paid
over to the Agent as Security Collateral in the same form as so received (with
any necessary indorsement).
          Section 5.08 Transfers and Other Liens; Additional Shares. (a) Each
Guarantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the terms of the Credit Agreement, or (ii) create or
suffer to exist any Lien upon or with respect to any of the Collateral of such
Guarantor except for the pledge, assignment and security interest created under
this Agreement and Permitted Collateral Liens.
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     (b) Each Guarantor agrees that it will (i) cause each issuer of the Pledged
Equity pledged by such Guarantor not to issue any Equity Interests or other
securities in addition to or in substitution for the Pledged Equity issued by
such issuer, except to such Guarantor, and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
Equity Interests or other securities.
          Section 5.09 Agent Appointed Attorney-in-Fact. Each Guarantor hereby
irrevocably appoints the Agent such Guarantor’s attorney-in-fact, with full
authority in the place and stead of such Guarantor and in the name of such
Guarantor or otherwise, from time to time in the Agent’s discretion, after the
occurrence and during the continuance of an Event of Default, to take any action
and to execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement (such power being coupled with an
interest), including, without limitation:
     (a) to ask for, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral,
     (b) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above, and
     (c) to file any claims or take any action (including any action necessary
to consummate the sale or transfer of title to any of the Collateral in
accordance with the provisions of the Loan Documents) or institute any
proceedings that the Agent may deem reasonably necessary for the collection of
any of the Collateral or otherwise to enforce compliance with the terms and
conditions of any Loan Document or the rights of the Agent with respect to any
of the Collateral.
          Section 5.10 Agent May Perform. If any Guarantor fails to perform any
agreement contained herein, the Agent may, but without any obligation to do so
and without prior notice except such notice as is reasonable to provide under
the circumstances, itself perform, or cause performance of, such agreement; and
the reasonable expenses of the Agent incurred in connection therewith shall be
payable by such Guarantor under Section 7.04(a).
          Section 5.11 The Agent’s Duties. (a) The powers conferred on the Agent
hereunder are solely to protect the Secured Parties’ interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Agent shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not any Secured Party has or is deemed to have knowledge
of such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Collateral. The Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords its own property.
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          (b) Anything contained herein to the contrary notwithstanding, the
Agent may from time to time, when the Agent deems it to be necessary, appoint
one or more subagents (each a “Subagent”) for the Agent hereunder with respect
to all or any part of the Collateral. In the event that the Agent so appoints
any Subagent with respect to any Collateral, (i) the assignment and pledge of
such Collateral and the security interest granted in such Collateral by each
Guarantor hereunder shall be deemed for purposes of this Agreement to have been
made to such Subagent, in addition to the Agent, for the ratable benefit of the
Secured Parties, as security for the Secured Obligations, (ii) such Subagent
shall automatically be vested, in addition to the Agent, with all rights,
powers, privileges, interests and remedies of the Agent hereunder with respect
to such Collateral, and (iii) the term “Agent”, when used herein in relation to
any rights, powers, privileges, interests and remedies of the Agent with respect
to such Collateral, shall include such Subagent; provided, however, that no such
Subagent shall be authorized to take any action with respect to any such
Collateral unless and except to the extent expressly authorized in writing by
the Agent.
          Section 5.12 Remedies. If any Event of Default shall have occurred and
be continuing:
          (a) The Agent may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and also may:
(i) without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the Agent’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Agent may deem commercially reasonable; and (ii) exercise any
and all rights and remedies of any of the Guarantors under or in connection with
the Collateral, or otherwise in respect of the Collateral, including, without
limitation, (A) withdraw all funds with respect to the Account Collateral and
(B) those set forth in Section 9-607 of the UCC. Each Guarantor agrees that, to
the extent notice of sale shall be required by law, at least ten days’ notice to
such Guarantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.
          (b) Any cash held by or on behalf of the Agent and all cash proceeds
received by or on behalf of the Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may, in the
discretion of the Agent, be held by the Agent as collateral for, and/or then or
at any time thereafter applied (after payment of any amounts payable to the
Agent pursuant to Section 14) in whole or in part by the Agent for the ratable
benefit of the Secured Parties against, all or any part of the Secured
Obligations, in the following manner:
     (i) first, paid to the Agent for any amounts then owing to it pursuant to
Section 13.5 of the Credit Agreement or otherwise under the Loan Documents; and
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     (ii) second, paid to the Agent for the account of the 2012 Banks, for any
Secured Obligations then owing to them under the Loan Documents.
Any surplus of such cash or cash proceeds held by or on the behalf of the Agent
and remaining after payment in full in cash of all the Secured Obligations shall
be paid over to the applicable Guarantor or to whomsoever may be lawfully
entitled to receive such surplus.
          (c) All payments received by any Guarantor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of such Guarantor and shall be forthwith paid over
to the Agent in the same form as so received (with any necessary indorsement).
          (d) The Agent may, without notice to any Guarantor except as required
by law and at any time or from time to time, charge, set off and otherwise apply
all or any part of the Secured Obligations against any funds held with respect
to the Account Collateral or in any other deposit account.
          (e) The Agent may send to each bank, securities intermediary or issuer
party to the Holdco I DACA, any securities account control agreement or
uncertificated security control agreement a “Notice of Exclusive Control” as
defined in and under such agreement.
          Section 5.13 Continuing Security Interest. This Article V shall create
a continuing security interest in the Collateral and shall, except as provided
in Section 5.14, (a) remain in full force and effect until the termination of
the Guarantee pursuant to Section 2.05(a) and the payment in full of the Secured
Obligations in cash, (b) be binding upon each Guarantor, its successors and
assigns and (c) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns.
          Section 5.14 Release; Termination. (a) Upon any sale, transfer or
other disposition of any Pledged SPE, Intermediate Lessee or Parent Holdco in
accordance with the terms of the Loan Documents, the security interest hereof
and related guaranties will be deemed to be released in respect of, and the
Agent will, at such Guarantor’s expense, execute and deliver to such Guarantor
such documents as such Guarantor shall reasonably request to evidence the
release of (i) such Pledged SPE or Intermediate Lessee from the security
interest granted hereby, in the case of any sale, transfer or other disposition
of any Pledged SPE or Intermediate Lessee, or (ii) such Parent Holdco from its
obligations hereunder and from the security interest granted hereby, in the case
of any sale, transfer or other disposition of any Parent Holdco, and to the
extent that (A) the Collateral Agent’s consent is required for any
deregistration of the interests in such released Collateral from any registry or
(B) the Collateral Agent is required to initiate any such deregistration, the
Collateral Agent shall, at such Guarantor’s expense, take all action reasonably
requested by such Guarantor to provide such consent or to initiate such
deregistration. For the avoidance of doubt, upon or following any sale, transfer
or other disposition by any Pledged SPE of any Eligible Aircraft strictly in
accordance with the terms of the Loan Documents, such Pledged SPE and any
related Intermediate Lessee may be dissolved, liquidated or wound up, provided
that at the time of such dissolution, liquidation or winding up such Pledged SPE
shall not Own any Eligible Aircraft and, in the case of any related Intermediate
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Lessee, such Intermediate Lessee shall not be leasing any Eligible Aircraft
Owned by any other Pledged SPE.
          (b) Upon payment in full in cash of the Secured Obligations and
termination or expiration of the 2012 Commitments, the pledge, assignment and
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Guarantor. Upon any such termination,
the Agent will, at the applicable Guarantor’s expense, execute and deliver to
such Guarantor such documents as such Guarantor shall reasonably request to
evidence such termination.
          (c) If, prior to the termination of this Agreement, the Collateral
Agent ceases to be the Collateral Agent in accordance with the definition of
“Collateral Agent” hereunder, all certificates, instruments or other documents
being held by the Collateral Agent at such time shall, as soon as reasonably
practicable, be delivered to the successor Collateral Agent.
          Section 5.15 Application of Irish Law. (a) In the event that:
          (i) the laws of Ireland apply at any time to (A) the Collateral or any
part thereof, or (B) the security created by this Agreement over or with respect
to the Collateral or any part thereof; or
          (ii) the Collateral or any part thereof is at any time situated in
Ireland (any Collateral described in (i) or (ii) above being referred to as the
“Irish Collateral”);
          the following provisions of this Section 5.15 shall apply.
          (b) The provisions of Chapter 2 (Powers and rights of mortgagor) and
Chapter 3 (Obligations, powers and rights of mortgagee) of Part 10 (Mortgages)
of the Irish Act, subject to clauses (c), (d), (e ), (f) and (g) below, shall
apply to this Agreement notwithstanding anything to the contrary contained in
this Agreement.
          (c) The provisions of sections 96(1)(c) (Powers and rights generally),
97 (Taking possession), 99(1) (Mortgagee in possession), 101 (Applications under
sections 97 and 100), 103(2) (Obligations on selling), 106(3) (Mortgagee’s
receipts), 107 (Application of proceeds of sale), 108(7) (Appointment of
receiver), 109 (Application of money received) and 110(2) (Insurance) of the
Irish Act shall not apply to this Agreement.
          (d) The restrictions and any requirements to give notice to each
relevant Guarantor contained in sections 100 (Power of sale) and 108(1)
(Appointment of receiver) of the Irish Act shall not apply to this Agreement.
          (e) Notwithstanding anything to the contrary contained in the Irish
Act, the Collateral Agent reserves the right to consolidate mortgage securities
without restriction.
          (f) No Guarantor shall be entitled to take any action in respect of
the Irish Collateral pursuant to section 94 (Court order for sale) of the Irish
Act.
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          (g) The Collateral Agent may, at any time and from time to time,
delegate by power of attorney or in any other manner (including, without
limitation, under the hand of any officer of the Collateral Agent) to any person
or persons or company or fluctuating body of persons all or any of the powers,
authorities and discretions which are, for the time being, exercisable by the
Collateral Agent under this Agreement or under the Irish Act without the
restrictions contained in the Irish Act in relation to the Irish Collateral or
any part thereof, and any such delegation may be made upon such terms and
conditions (including power to sub-delegate) and subject to such regulations as
the Collateral Agent may think fit, and the Collateral Agent shall not be in any
way liable or responsible to each relevant Guarantor for any loss or damage
arising from any act, default, omission, or misconduct on the part of any such
delegate (or sub-delegate).
          (h) The restrictions on taking possession of mortgaged property
contained in section 97 of the Irish Act shall not apply to this Agreement. If
an Event of Default shall have occurred and be continuing the Collateral Agent
may, without notice to each relevant Guarantor, in writing as a deed under its
Common Seal or under the hand of any officer or manager or any other nominated
person of the Collateral Agent, appoint any person to be a Receiver of all or
any part of the Irish Collateral and may, except as otherwise required by
statute, remove any such Receiver and appoint another in his place or appoint
another person to act jointly with any such Receiver.
          (i) Such an appointment over part only of the Irish Collateral shall
not preclude the Collateral Agent from making any subsequent appointment of the
same or another Receiver over any part of the Irish Collateral over which an
appointment has not been previously made.
          (j) Where more than one Receiver is appointed they shall have power to
act severally unless the Collateral Agent shall in the appointment specify to
the contrary.
          (k) A Receiver shall be deemed at all times and for all purposes to be
the agent of each relevant Guarantor in respect of which he is appointed and
each relevant Guarantor shall be solely responsible for his acts or defaults and
for the payment of his remuneration and the Receiver shall at no time act as
agent for the Collateral Agent.
          (l) Neither the Collateral Agent nor any Receiver shall be liable to
account as a mortgagee in possession in respect of all or any part of the Irish
Collateral or be liable for any loss upon realisation or for any neglect or
default of any nature whatsoever in connection with all or any part of the Irish
Collateral to which a mortgagee in possession might as such be liable.
          (m) A Receiver shall have all the powers conferred from time to time
on receivers by statute and in the case of the powers and rights conferred by
the Irish Act without the restrictions contained in the Irish Act and, in
addition, power on behalf and at the cost of each relevant Guarantor
(notwithstanding liquidation of each relevant Guarantor) to do or omit to do
anything which each relevant Guarantor could do or omit to do in relation to the
Irish Collateral or any part thereof and in particular (but without limitation)
a Receiver shall have the power to do all or any of the following:
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          (i) possession: to take possession of, collect and get in the property
in respect of which he is appointed or any part thereof;
          (ii) manage: to carry on or manage or develop or diversify or concur
in carrying on or managing or developing or diversifying the business of each
relevant Guarantor;
          (iii) compromise: to settle, adjust, submit to arbitration, compromise
and arrange any claims, accounts, disputes, questions, demands, with or by any
person who is or claims to be a creditor of each relevant Guarantor relating in
any way to the Irish Collateral which he or the Collateral Agent may reasonably
think expedient;
          (iv) employees, etc: to appoint, hire and employ officers, employees,
contractors, agents and advisors of all kinds and to discharge any such persons
and any such persons appointed, hired or employed by each relevant Guarantor;
          (v) redemption of Security Interests: to redeem any Security Interest
(whether or not having priority to the security hereby created) over the Irish
Collateral and to settle the accounts of encumbrances;
          (vi) take an indemnity: to take any indemnity from each relevant
Guarantor from and against all actions, claims, expenses, demands and
liabilities whether arising out of contract or out of tort or in any other way
incurred by him or by any manger, agent, officer, servant or workman for whose
debt, default or miscarriage he may be answerable for anything done or omitted
to be done in the exercise or purported exercise of his powers under this
Agreement or under any appointment duly made under the provisions of this
paragraph and if he thinks fit but without prejudice to the foregoing to effect
with any insurance company or office or underwriters any policy or policies of
insurance either in lieu or satisfaction of or in addition to such indemnity
from each relevant Guarantor;
          (vii) sell: to sell, exchange, convert into money and realise all or
any part of the Irish Collateral by public auction or private contract and
generally in such manner and on such terms and conditions as he shall think
proper. (The consideration for any such transaction may consist of cash,
debenture or other obligations, shares, stock or valuable consideration and any
such consideration may be payable in a lump sum or by instalments spread over
such period as he thinks fit);
          (viii) borrow money: to raise and borrow money either unsecured or on
the security of any Irish Collateral either in priority to the security
constituted by this Agreement or otherwise and generally on any terms and for
whatever purpose which he thinks fit. (No person lending that money is concerned
to enquire as to the propriety or purpose of the exercise of that power or to
check the application of any money so raised or borrowed).
          (ix) legal actions: to bring, prosecute, enforce, defend, and abandon
all actions, suits and proceedings in relation to any Irish Collateral which may
seem to him to be expedient;
          (x) receipts: to give valid receipts for all monies and execute all
assurances and things which may be proper or desirable for realising the Irish
Collateral;
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          (xi) use the name of each relevant Guarantor: to use the name of each
relevant Guarantor for all or any of the purposes aforesaid and in any legal
proceedings with full power to convey any property sold in the name of each
relevant Guarantor for all of which purposes each relevant Guarantor hereby
irrevocably and by way of security appoints every such Receiver to be its
attorney; and
          (xii) other powers: to do all such other acts or things as he may
consider to be incidental or conducive to any of the matters or powers aforesaid
and to exercise in relation to the Irish Collateral or any of them all such
powers, authorities and things as he would be capable of exercising if he were
the absolute beneficial owner of the same.
          (n) Section 108(7) of the Irish Act shall not apply to the commission
and/or remuneration of a Receiver appointed pursuant to this Agreement. A
Receiver shall be entitled to remuneration at a rate to be fixed by agreement
between him and the Collateral Agent (or, failing such agreement, to be fixed by
the Collateral Agent).
ARTICLE VI
MISCELLANEOUS
          Section 6.01 Amendments, Waivers, Supplements, Etc.
          (a) Unless otherwise specifically provided for herein, no amendment,
supplement, modification or waiver of any provision of this Agreement, and no
consent to any departure by any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by each Guarantor, the
Agent and the Required Secured Parties, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it is given; provided that, in addition to the consent of each Guarantor, and
the appropriate Secured Parties, the Agent’s prior written consent shall be
required in connection with any amendment, supplement, modification, waiver or
consent subjecting the Agent to any increased or additional duties or
obligations hereunder or in connection therewith; and provided further that no
amendment, supplement, modification, waiver or consent shall do any of the
following without the consent of all the Secured Parties: (i) except as
expressly permitted under the Loan Documents, including Section 5.14 hereof,
reduce or limit the obligations of any Guarantor hereunder, release any
Guarantor hereunder or otherwise limit any Guarantor’s liability with respect to
the Obligations owing to the Secured Parties under or in respect of the Loan
Documents, (ii) except as expressly permitted under the Loan Documents, release
all or substantially all of the Collateral, (iii) change the percentage of
(A) the 2012 Commitments or (B) the aggregate unpaid principal amount of the
2012 Committed Loans that, in each case shall be required for the Secured
Parties or any of them to take any action hereunder, (iv) amend in any manner
any provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of all Secured Parties, or (v) amend this
Section 6.01(a).
          (b) This Agreement, together with the other Loan Documents, contains a
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof,
superseding all prior oral or written understandings.
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          (c) Anything herein to the contrary notwithstanding, the Guarantors
and the Agent may, without the consent of any of the 2012 Banks, amend this
Agreement or any instrument or document delivered pursuant hereto to cure any
ambiguity, defect or inconsistency therein or otherwise to implement technical,
ministerial or administrative changes.
          (d) Upon the execution and delivery by any Person of a guarantee
supplement in substantially the form of Exhibit A hereto (each, a “Guarantee
Supplement”), (i) such Parent Holdco shall be referred to as an “Additional
Guarantor” and shall become and be a Guarantor hereunder, and each reference in
this Agreement or in any other Loan Document to a “Guarantor” shall also mean
and be a reference to such Additional Guarantor, and (ii) each reference herein
to “this Agreement”, “hereunder”, “hereof” or words of like import referring to
this Agreement, and each reference in any other Loan Document to the “Security
and Guarantee Agreement”, “thereunder”, “thereof” or words of like import
referring to this Agreement, shall mean and be a reference to this Agreement as
supplemented by such Guarantee Supplement.
          (e) (i) Upon any sale, transfer or other disposition of any Parent
Holdco, Intermediate Lessee or Pledged SPE in accordance with the terms of the
Loan Documents, or the formation or acquisition of any Parent Holdco, Pledged
SPE or Intermediate Lessee, Schedule II hereof shall be deemed amended to
reflect the removal or addition, as the case may be, the Equity Interests of
such Parent Holdco, Pledged SPE or Intermediate Lessee, and the Guarantor that
owned or now owns such Equity Interests shall, promptly following such sale,
transfer or other disposition or such formation or acquisition, deliver to the
Collateral Agent a Collateral Supplement reflecting such removal or addition.
          (ii) Upon any formation or acquisition of any Parent Holdco, Pledged
SPE or Intermediate Lessee organized under the laws of Ireland, Holdco I or the
Parent Holdco holding the Equity Interests in such Pledged SPE or Intermediate
Lessee, as the case may be, shall promptly, in addition to delivering to the
Collateral Agent the revised Schedule II in accordance with clause (i) above,
promptly enter into an Irish law Share Charge, in form and substance reasonably
satisfactory to the Collateral Agent, in respect of such Equity Interests and
promptly cause such Share Charge to be filed with the Irish Companies
Registration Office and the Irish Revenue Commissioners and in each case shall
provide evidence of such filings reasonably satisfactory to the Collateral
Agent.
          Section 6.02 Notices, Etc.
          (a) All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be either in writing (including by facsimile)
and delivered by nationally recognized courier service, telefax or otherwise, or
sent by electronic mail, confirmed immediately in writing (including by
facsimile), (i) if to any Guarantor, addressed to it in care of the Company at
the Company’s address specified on Schedule III to the Credit Agreement, (ii) if
to the Agent, at its address specified on Schedule III to the Credit Agreement,
or (iii) as to any party, at such other address as shall be designated by such
party in a written notice to each other party.
          (b) All such notices and communications shall, when faxed, sent by
electronic mail or otherwise delivered, be effective when faxed (as confirmed by
generation of a
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confirmation report), when sent by electronic mail and confirmed in writing
(including by facsimile), or when otherwise delivered (as confirmed by a signed
receipt), respectively, or, if faxed, sent by electronic mail or otherwise
delivered on any day other than a Business Day, on the next succeeding Business
Day.
          Section 6.03 No Waiver; Remedies Cumulative.
          (a) No failure on the part of the Agent or any Secured Party to
exercise, and no delay in exercising, any right hereunder or under any Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right.
          (b) No right or remedy herein or in any other Loan Document conferred
upon or reserved to the Agent or any other Secured Party is intended to be
exclusive of any other right or remedy, and every such right or remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder, under any Loan Document or now or hereafter existing
at law, in equity or otherwise, and each and every right, power and remedy,
whether specifically herein given or otherwise existing, may be exercised from
time to time and as often and in such order as may be deemed expedient by the
party exercising such right, power or remedy, and the exercise or the beginning
of the exercise of any right or power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other right,
power or remedy.
          Section 6.04 Indemnification.
          (a) Without limitation on any other Obligations of any Guarantor or
remedies of the Secured Parties under this Agreement, each Guarantor shall, to
the fullest extent permitted by law, indemnify, defend and save and hold
harmless each Secured Party and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an “Indemnified
Party”) from and against, and shall pay on demand, any and all claims, damages,
losses, liabilities (including any brokers’, finders’, intermediaries’ or
similar fees or commissions) and expenses (including fees and expenses of
counsel) of any kind or nature whatsoever, imposed on, incurred by, or asserted
or awarded against any Indemnified Party, in each case in any manner relating
to, arising out of or in connection with or by reason of (including in
connection with any investigation, litigation or proceeding or the preparation
of a defense in connection therewith), (i) this Agreement or any of the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), or (ii) any failure of any Guaranteed Obligations to be the
legal, valid an binding obligations of any Guarantor enforceable against such
Guarantor in accordance with their terms, except in the case of clause (i) to
the extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 6.04(a) applies (or the preparation of a defense in connection
therewith), such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Guarantor, its directors,
shareholders or creditors, any Indemnified Party or any other Person, and
whether or not any Indemnified Party is otherwise a party thereto. Each
Guarantor also agrees not to assert any claim against any Indemnified Party,
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on any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Loan Documents or any of the
transactions contemplated thereby.
          (b) Each Guarantor shall defend the Collateral of such Guarantor
against all claims and demands of all Persons (other than Permitted Collateral
Liens) at any time claiming any interest therein that is, or in a manner which
is, adverse to any Secured Party.
          (c) Without prejudice to the survival of any other agreement of any
Guarantor hereunder or under any other Loan Document, the agreements and
obligations of the parties contained in Sections 2.01(a) (with respect to
enforcement expenses), 2.02, 2.06, this Section 6.04 and Section 6.12 shall
survive the payment in full of the Guaranteed Obligations and all other amounts
payable under this Agreement, or any termination of this Agreement.
          Section 6.05 Collateral Agent. Each 2012 Bank hereby authorizes the
Agent to act on its behalf upon and subject to the terms set forth in Section 12
of the Credit Agreement which Section 12 is hereby incorporated herein in its
entirety mutatis mutandis.
          Section 6.06 Assignments; Binding Effect. Any Secured Party may assign
or otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its 2012
Commitment, the 2012 Committed Loans owing to it and any 2012 Committed Note
held by it) to any other Person in accordance with the Credit Agreement, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Secured Party herein or otherwise, in each case as and
to the extent provided in Section 13.4 of the Credit Agreement. No Guarantor
shall have the right to assign any of its rights or obligations hereunder or any
interest herein without the prior written consent of the Secured Parties, and
any assignment or purported assignment by any Guarantor in violation of this
Section 6.06 shall be void ab initio. This Agreement shall become effective when
it shall have been executed by the Guarantors and thereafter be binding upon and
inure to the benefit of each of the parties hereto, and their respective
successors and permitted assigns.
          Section 6.07 Execution in Counterparts; Severability. 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 taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier or by email transmission of a scanned “.pdf” document
shall be effective as delivery of a manually executed counterpart of this
Agreement. If any provision set forth in this Agreement shall be deemed invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
          Section 6.08 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
          Section 6.09 Jurisdiction; Etc.
          (a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction of any
New York State or federal
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court of the United States of America sitting in New York County, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
          (b) Each of the parties hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court of the United States of
America sitting in New York County. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
          (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 6.02. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
          Section 6.10 Table of Contents, Headings, Etc.. The Table of Contents
and headings of the Articles and Sections of this Agreement have been inserted
for convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms and provisions hereof.
          Section 6.11 Non-Invasive Provisions. (a) Notwithstanding any other
provision of the Loan Documents, the Collateral Agent agrees that, so long as no
Event of Default shall have occurred and be continuing, not to take any action
or cause to be taken any action, or permit any person claiming by, through or on
behalf of it to take any action or cause any action, that would interfere with
the possession, use, operation and quiet enjoyment of and other rights with
respect to any Aircraft or other property relating thereto and all rents,
revenues, profits and income therefrom, including, the right to enforce
manufacturers’ warranties, the right to apply or obtain insurance proceeds for
damage to the Aircraft to the repair of the Aircraft and the right to engage in
pooling, leasing and similar actions, in each case in accordance with the terms
of this Agreement.
          (b) Notwithstanding any other provision of the Loan Documents, the
Collateral Agent agrees that, so long as no “Event of Default” (or similar term)
under a Lease (as defined in such Lease) shall have occurred and be continuing,
not to take any action or cause to be taken any action, or permit any person
claiming by, through or on behalf of it to take any action or cause any action,
that would interfere with the possession, use, operation and quiet enjoyment of
and other rights of the Lessee with respect to any Aircraft or other property
relating thereto and all rents, revenues, profits and income therefrom,
including, the right to enforce manufacturers’ warranties, the right to apply or
obtain insurance proceeds for damage to the Aircraft to the repair of the
Aircraft and the right to engage in pooling, leasing and similar actions, in
each case in accordance with the terms of such Lease.
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          Section 6.12 Limited Liability. (a) In the event that the direct or
indirect assets of a Guarantor are insufficient, after payment of all other
claims, if any, ranking in priority to the claims of the Collateral Agent or any
Secured Party hereunder, to pay in full such claims of the Collateral Agent or
such Secured Party (as the case may be), then the Collateral Agent or the
Secured Party shall have no further claim against such Guarantor in respect of
any such unpaid amounts; provided that the foregoing limitation on recourse
shall in no way limit the right of any Secured Party to enforce the obligations
of Company.
          (b) No recourse under any Loan Document shall be had against, and no
personal liability shall attach to, any officer, employee, director, Affiliate
or shareholder (other than any Affiliate or shareholder that is a Loan Party) of
the Agent or any Secured Party or Holdco I or any Parent Holdco or any Pledged
SPE or any Intermediate Lessee, as such, by the enforcement of any assessment or
by any legal or equitable proceeding, by virtue of any statute or otherwise in
respect of any of the Loan Documents, it being expressly agreed and understood
that each Loan Document is solely a corporate obligation of the Agent and the
Secured Parties, Holdco I, the Parent Holdcos, the Pledged SPEs, the
Intermediate Lessees and that any and all personal liability, either at common
law or in equity, or by statute or constitution, of every such officer,
employee, director, Affiliate or shareholder (other than any Affiliate or
shareholder that is a Loan Party) for breaches by any such party of any
obligations under any Loan Document is hereby expressly waived.
          (c) The guarantees, obligations, liabilities and undertakings granted
by any Guarantor, Pledged SPE or Intermediate Lessee organized under the laws of
France under this Agreement and the other Loan Documents shall, for each
relevant financial year, be, in any and all cases, strictly limited to 90% of
the annual net margin generated by such Guarantor, Pledged SPE or Intermediate
Lessee in connection with back-to-back leasing activities between it and any
other Guarantor, Pledged SPE or Intermediate Lessee with respect to the lease of
Eligible Aircraft.
          Section 6.13 USA Patriot Act. Each Secured Party hereby notifies each
Guarantor that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies such Guarantor, which
information includes the name and address of such Guarantor and other
information that will allow such Secured Party to identify such Guarantor in
accordance with the Act.
          Section 6.14 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, THE LOANS OR THE
ACTIONS OF ANY PERSON IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
[SIGNATURE PAGES FOLLOW]
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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective Authorized Officers as of the date first above
written.

            FLYING FORTRESS INC.,
as a Guarantor
      By:   /s/ Pamela S. Hendry         Name:   Pamela S. Hendry       
Title:   Director     

         
 
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            FLYING FORTRESS US LEASING INC.,
as a Guarantor
      By:   /s/ Pamela S. Hendry         Name:   Pamela S. Hendry       
Title:   Director     

         
 
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            SIGNED AND DELIVERED AS A DEED for and on behalf of:

FLYING FORTRESS IRELAND LEASING LIMITED
as a Guarantor

By its lawfully appointed attorney:
      /s/ Niall C. Sommerville       Name:   Niall C. Sommerville      Title:  
Director     

            In the presence of:
      Maeveo Reilly       30 North War Quay      Dublin 1     

         
 
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            CITICORP USA, INC.,
as Collateral Agent
      By:   /s/ Maureen P. Maroney         Name:   Maureen P. Maroney       
Title:   Authorized Signatory     

         
 
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Schedule I
to the
Security and Guarantee Agreement
LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION,
JURISDICTION OF ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION NUMBER

                                          Jurisdiction of   Organizational I.D.
Grantor   Location   Chief Executive Office   Type of Organization  
Organization   No.  
Flying Fortress Inc.
  California   10250 Constellation Blvd., Suite 3400, Los Angeles, California
90067 U.S.A.   Corporation   California   C 3285904
 
                       
Flying Fortress US Leasing Inc.
  California   10250 Constellation Blvd., Suite 3400, Los Angeles, California
90067 U.S.A.   Corporation   California   C 3285903
 
                       
Flying Fortress
Ireland Leasing
Limited
  Ireland   30 North Wall Quay,
Dublin 1
Ireland   Private Limited
Liability
Corporation   Ireland     483084  

 

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Schedule II
to the
Security and Guarantee Agreement
PLEDGED EQUITY

                                                                      Percentage
                        Number or   of         Type or Class of      
Certificate   Percentage of   Outstanding Grantor   Issuer   Equity Interest  
Par Value   No(s)   Equity Interests   Equity Interests
Flying Fortress Inc.
  Flying Fortress US Leasing Inc.   Common Stock   US $1     1       100      
100 %
 
                                   
Flying Fortress Inc.
  Flying Fortress
Ireland Leasing
Limited   Ordinary Shares   US $1     1       2       100 %

 

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Schedule III
to the
Security and Guarantee Agreement
CHANGES IN NAME, LOCATION, ETC.

1.   Changes in the Grantor’s Name (including new Grantor with a new name and
names associated with all predecessors in interest of the Grantor):

      Grantor   Changes
N/A
   

2.   Changes in the Grantor’s Location:

      Grantor   Changes
N/A
   

3.   Changes in the Grantor’s Chief Executive Office:

      Grantor   Changes
N/A
   

4.   Changes in the Type of Organization:

      Grantor   Changes
N/A
   

5.   Changes in the Jurisdiction of Organization:

      Grantor   Changes
N/A
   

6.   Changes in the Organizational Identification Number:

      Grantor   Changes
N/A
   

 

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Schedule 3.02(g)
to the
Security and Guarantee Agreement
AUTHORIZATIONS AND APPROVALS

1.   Waiver and Consent Letter dated on or about April 13, 2010, among the
Required Persons, ILFC, Top Aircraft, Inc., Shrewsbury Aircraft Leasing Limited
and States Aircraft, Inc. under that certain (i) Credit Agreement, dated as of
October 13, 2009, among ILFC (the “Parent Borrower”), States Aircraft, Inc. (the
“U.S. Subsidiary Borrower”), Shrewsbury Aircraft Leasing Limited (the “Irish
Subsidiary Borrower” and together with the Parent Borrower and the U.S.
Subsidiary Borrower, the “Borrowers”), Top Aircraft, Inc. (“Holdings”), ILFC
Ireland Limited (“ILFC Ireland”), ILFC France S.a.r.l. (“ILFC France”), ILFC
Labuan Ltd. (“ILFC Labuan” and together with ILFC Ireland and ILFC France, the
“Initial Intermediate Lessees”), ILFC Aruba A.V.V. (“ILFC Aruba”), ILFC
(Bermuda) III, Ltd. (“ILFC Bermuda”), ILFC Cayman Limited (“ILFC Cayman” and
together with ILFC Aruba and ILFC Bermuda, the “New Intermediate Lessees”), AIG
Funding, Inc. (the “Lender”), and Wells Fargo Bank Northwest, National
Association (“Wells Fargo”), as Security Trustee, and (ii) Amended and Restated
Credit Agreement, dated as of October 13, 2009 (as may be amended, restated,
supplemented or otherwise modified from time to time) among the Borrowers,
Holdings, the Initial Intermediate Lessees, the New Intermediate Lessees, the
Lender, and Wells Fargo, as Security Trustee.

2.   Waiver and Consent Letter dated on or about April 13, 2010, to that certain
Credit Agreement, dated as of September 22, 2008 (as may be amended, restated,
supplemented or otherwise modified from time to time) between American
International Group, Inc., as Borrower, and the Federal Reserve Bank of New
York, as Lender.

    4.01(f)-1   ILFC — Security and Guarantee Agreement

 

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Schedule 4.01(f)
to the
Security and Guarantee Agreement
INSURANCE

1.   Obligation to Insure       So long as this Agreement shall remain in
effect, the Guarantors will ensure that there is effected and maintained
appropriate insurances in respect of each Eligible Aircraft and the Collateral
Agent, the Administrative Agent, the Lenders and its operation including
insurance for:

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

2.   Specific Insurances       The Guarantors will maintain or will cause to be
maintained the following specific insurances with respect to each Eligible
Aircraft (subject to paragraph 3):

  (a)   All Risks Hull Insurance — All risks hull insurance policy on the
Eligible Aircraft in an amount at least equal to 110% of the outstanding
principal of the Loans allocable to such Eligible Aircraft, calculated based on
the most recent appraised value (the “Required Insured Value”) on an agreed
value basis and naming the Collateral Agent (for and on behalf of itself and the
Secured Parties) as a loss payee for the Required Insured Value (provided,
however, that, if the applicable lessee’s insurance program uses AVN67B or a
successor London market endorsement similar thereto, the Guarantor shall use
reasonable commercial efforts to procure that the Collateral Agent and the
Administrative Agent are also named as a “Contract Party” and shall ensure that
the Collateral Agent and the Administrative Agent are also named as a “Contract
Party” in respect of any new lease entered into);     (b)   Hull War Risk
Insurance — Hull war risk and allied perils insurance, including hijacking,
(excluding, however, confiscation by government of registry or country of
domicile to the extent coverage of such risk is not generally available to the
applicable lessee in the relevant insurance market at a commercially reasonable
cost or is not customarily obtained by operators in such jurisdiction at such
time) on the Eligible Aircraft where the custom in the industry is to carry war
risk for aircraft operating on routes or kept in locations similar to the
Eligible Aircraft in an amount not less than the Required Insured Value on an
agreed value basis and naming the

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      Collateral Agent (for and on behalf of itself and the other Secured
Parties) as a loss payee for the Required Insured Value (provided, however,
that, if the applicable lessee’s insurance program uses AVN67B or a successor
London market endorsement similar thereto, the Guarantors shall use reasonable
commercial efforts to procure that the Collateral Agent and the Administrative
Agent are also named as a “Contract Party” and shall ensure that the Collateral
Agent and the Administrative Agent are also named as a “Contract Party” in
respect of any new lease entered into);     (c)   Legal Liability Insurance —
Third party legal liability insurance (including war and allied perils) for a
combined single limit (bodily injured and property damage) of not less than
$500,000,000 for a narrowbody Aircraft, and not less than $750,000,000 for
widebody Aircraft. The Collateral Agent and the Administrative Agent (on behalf
of themselves and the Secured Parties) shall be named as additional insureds on
such policies; provided that the Guarantors shall ensure that the Collateral
Agent and the Administrative Agent are also named as an additional insured in
respect of any new lease.     (d)   Aircraft Spares Insurance — Insurance for
the engines and the parts while not installed on the airframe for their
replacement cost or an agreed value basis.

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

4.   Hull Insurances in Excess of Required Insurance Value       For the
avoidance of doubt, any Guarantor and/or any lessee may carry hull risks and
hull war and allied perils insurance on the Eligible Aircraft in excess of the
Required Insured Value which (subject, in the case of the Guarantors, to no
Event of Default having occurred and being continuing) will not be payable to
the Collateral Agent. Such excess insurances will be payable to (i) if payable
to the Guarantors, to the relevant Guarantor, unless an Event of Default has
occurred and is continuing in which case the excess shall be payable to the
Collateral Agent or (ii) if payable to the lessee to the lessee in all
circumstances.

5.   Currency

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      All insurance and reinsurances effected pursuant to this Schedule 4.01(f)
shall be payable in Dollars, save that in the case of the insurances referred to
in paragraph 2(c) (if such denomination is (a) required by the law of the state
of registration of the Eligible Aircraft; or (b) the normal practice of airlines
in the relevant country that operate aircraft leased from lessors located
outside such country; or (c) otherwise agreed by the Collateral Agent) or
paragraph 2(d).

6.   Specific Terms of Insurances

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

7.   Insurance Brokers and Insurers

    In reviewing and accepting the insurance brokers (if any) and reinsurance
brokers (if any) and insurers and reinsurers (if any) providing coverage with
respect to the Eligible Aircraft, the relevant Guarantor will utilize standards
consistent with Leasing Company Practice with respect to similar aircraft. It is
recognized that airlines in certain countries are required to utilize brokers
(and sometimes even no brokers) or carry insurance with local insurance brokers
and insurers. If at any time any Eligible Aircraft is not subject to a lease,
the relevant Guarantor will cause its insurance brokers to provide the
Collateral Agent with evidence that the insurances described in this
Schedule 4.01(f) are in full force and effect.

8.   Deductible Amounts, Self-Insurance and Reinsurance

    With respect to the type of aircraft concerned, the nationality and
creditworthiness of the airline operator, the airline operator’s use and
operation thereof and to the scope of and the amount covered by the insurances
carried by the lessee, the relevant Guarantor will apply standards consistent
with Leasing Company Practice with respect to similar aircraft in reviewing and
accepting the amount of any insurance deductibles, whether the lessee may
self-insure any of the risks covered by the insurances and the scope and terms
of reinsurance, if any, including a cut-through and assignment clause.

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

10.   Information

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

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Exhibit A
to the
Security and Guarantee Agreement
FORM OF GUARANTEE SUPPLEMENT
                                   ,               
Citicorp USA, Inc., as Collateral Agent
[Address of Collateral Agent]
Attention:                     
     Credit Agreement dated as of October 13, 2006 (as amended as of April 16,
2010, and as further amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among International Lease Finance Corporation, a
California corporation, the Banks party thereto, and Citicorp USA, Inc., as
administrative agent for the Banks
Ladies and Gentlemen:
          Reference is made to the above-captioned Credit Agreement and to the
Security and Guarantee Agreement referred to therein (such Security and
Guarantee Agreement, as in effect on the date hereof and as it may hereafter be
amended, supplemented or otherwise modified from time to time, together with
this Guarantee Supplement, being the “Security and Guarantee Agreement”). The
capitalized terms defined in the Security and Guarantee Agreement or in the
Credit Agreement and not otherwise defined herein are used herein as therein
defined.
          Section 1. Guarantee; Limitation of Liability. (a) The undersigned
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of each
other Loan Party to any Secured Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premium, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such Obligations being the “Guaranteed
Obligations”), and agrees to pay any and all reasonable out-of-pocket expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by the Agent or any other Secured Party in enforcing any rights under
this Guarantee Supplement, the Security and Guarantee Agreement or any other
Loan Document. Without limiting the generality of the foregoing, the
undersigned’s liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any other Loan Party to any Secured
Party under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.
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          (b) The undersigned, and by its acceptance of this Guarantee
Supplement, the Agent and each other Secured Party, hereby confirms that it is
the intention of all such Persons that this Guarantee Supplement, the Security
and Guarantee Agreement and the Obligations of the undersigned hereunder and
thereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar foreign, federal or state law to the extent
applicable to this Guarantee Supplement, the Security and Guarantee Agreement
and the Obligations of the undersigned hereunder and thereunder. To effectuate
the foregoing intention, the Agent, the other Secured Parties and the
undersigned hereby irrevocably agree that the Obligations of the undersigned
under this Guarantee Supplement and the Security and Guarantee Agreement at any
time shall be limited to the maximum amount as will result in the Obligations of
the undersigned under this Guarantee Supplement and the Security and Guarantee
Agreement not constituting a fraudulent transfer or conveyance.
          (c) The undersigned hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to any Secured Party under
this Guarantee Supplement, the Security and Guarantee Agreement or any other
guarantee, the undersigned will contribute, to the maximum extent permitted by
applicable law, such amounts to each other Guarantor and each other guarantor so
as to maximize the aggregate amount paid to the Secured Parties under or in
respect of the Loan Documents.
          Section 2. Obligations Under the Guarantee. The undersigned hereby
agrees, as of the date first above written, to be bound as a Guarantor by all of
the terms and conditions of the Security and Guarantee Agreement to the same
extent as each of the other Guarantors thereunder. The undersigned further
agrees, as of the date first above written, that each reference in the Security
and Guarantee Agreement to an “Additional Guarantor” or a “Guarantor” shall also
mean and be a reference to the undersigned, and each reference in any other Loan
Document to a “Guarantor” or a “Loan Party” shall also mean and be a reference
to the undersigned.
          Section 3. Representations and Warranties. The undersigned hereby
makes each representation and warranty set forth in Section 3.01 and 3.02 of the
Security and Guarantee Agreement (as supplemented by the attached supplemental
schedules) to the same extent as each other Guarantor.
          Section 4. Grant of Security. The undersigned hereby grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in, all of its right, title and interest in and to all of the
Collateral of the undersigned, whether now owned or hereafter acquired by the
undersigned, wherever located and whether now or hereafter existing or arising,
including, without limitation, the property and assets of the undersigned set
forth on the attached supplemental schedules to the Schedules to the Security
and Guarantee Agreement.
          Section 5. Security for Obligations. The grant of a security interest
in the Collateral by the undersigned under this Guarantor Supplement and the
Security and Guarantee Agreement secures the payment in full in cash when due of
all Obligations of the undersigned and each other Loan Party to any Secured
Party, now or hereafter existing under or in respect of the Security and
Guarantee Agreement and the other Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest
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(including interest on such obligations accruing after, and fees and expenses
arising after, the commencement of any proceeding under Title 11 of the United
States Code or any similar proceeding under state or federal law for the
dissolution, restructuring, reorganization, liquidation or the winding up of the
undersigned or such Loan Party, regardless of whether such interest, fees, or
expenses are allowed as a claim against the undersigned or such Loan Party in
any such proceeding), fees, premiums, penalties, indemnifications, contract
causes of action, costs, expenses in accordance with Section 6.04(a) of the
Security and Guarantee Agreement or otherwise. Without limiting the generality
of the foregoing, this Guarantor Supplement and the Security and Guarantee
Agreement secures the payment of all amounts that constitute part of the Secured
Obligations and that would be owed by the undersigned to any Secured Party under
the Loan Documents but for the fact that such Secured Obligations are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Loan Party.
          Section 6. Supplements to Pledge Agreement Schedules. The undersigned
has attached hereto supplemental Schedules I through III to Schedules I through
III, respectively, to the Security and Guarantee Agreement, and the undersigned
hereby certifies, as of the date first above written, that such supplemental
schedules have been prepared by the undersigned in substantially the form of the
equivalent Schedules to the Security and Guarantee Agreement and are complete
and correct.
          Section 7. Delivery by Telecopier. Delivery of an executed counterpart
of a signature page to this Guarantee Supplement by telecopier or by email
transmission of a scanned “.pdf” document shall be effective as delivery of an
original executed counterpart of this Guarantee Supplement.
          Section 8. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a) This Guarantee Supplement shall be governed by, and construed in accordance
with, the laws of the State of New York.
          (b) The undersigned hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or any federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guarantee Supplement, the Security and
Guarantee Agreement or any of the other Loan Documents to which it is or is to
be a party, or for recognition or enforcement of any judgment, and the
undersigned hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
The undersigned agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Guarantee
Supplement or the Security and Guarantee Agreement or any other Loan Document
shall affect any right that any party may otherwise have to bring any action or
proceeding relating to this Guarantee Supplement, the Security and Guarantee
Agreement or any of the other Loan Documents to which it is or is to be a party
in the courts of any other jurisdiction.
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          (c) The undersigned irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guarantee Supplement, the Security and
Guarantee Agreement or any of the other Loan Documents to which it is or is to
be a party in any New York State or federal court. The undersigned hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.
          (d) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE 2012
COMMITTED LOANS OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

            Very truly yours,

[NAME OF ADDITIONAL GUARANTOR]1
      By           Name:           Title:        

 

1   Conform signature block as appropriate for Irish or other non-U.S. entities.

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Schedule I
to the
Guarantor Supplement
LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION,
JURISDICTION OF ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION NUMBER

                                                          Chief Executive   Type
of   Jurisdiction of   Organizational/                 Office/Registered  
Organization/   Organization/   Incorporation Guarantor   Location   Office  
Incorporation   Incorporation   I.D. No.

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Schedule II
to the
Guarantor Supplement
PLEDGED EQUITY

                                                                               
                  Percentage                                                 of
                Class of Equity           Certificate   Number   Outstanding
Guarantor   Issuer   Interest   Par Value   No(s)   of Equity Interests   Equity
Interests

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Schedule III
to the
Guarantor Supplement
CHANGES IN NAME, LOCATION, ETC.

7.   Changes in the Guarantor’s Name (including new Guarantor with a new name
and names associated with all predecessors in interest of the Guarantor):

         
 
  Guarantor   Changes
 
       
 
       

8.   Changes in the Guarantor’s Location:

         
 
  Guarantor   Changes
 
       
 
       

9.   Changes in the Guarantor’s Chief Executive Office or Registered Office:

              Guarantor   Changes
 
       
 
       

10.   Changes in the Type of Organization or Incorporation:

         
 
  Guarantor   Changes
 
       
 
       

11.   Changes in the Jurisdiction of Organization or Incorporation:

         
 
  Guarantor   Changes
 
       
 
       

12.   Changes in the Organizational or Incorporation Identification Number:

         
 
  Guarantor   Changes
 
       
 
       

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Exhibit B
to the
Security and Guarantee Agreement
FORM OF COLLATERAL SUPPLEMENT
_________ __, ____
Citicorp USA, Inc., as Collateral Agent
[Address of Collateral Agent]
Attention: _________
Ladies and Gentlemen:
          Reference is made to the Security and Guarantee Agreement, dated as of
April 16, 2010 (as amended, supplemented or otherwise modified from time to
time, the “Security and Guarantee Agreement”), among Flying Fortress Inc., a
California corporation, Flying Fortress US Leasing Inc., a California
corporation, Flying Fortress Ireland Leasing Ireland Limited, a private limited
liability company incorporated under the laws of Ireland, the Additional
Guarantors referred to therein, and Citicorp USA, Inc., as collateral agent.
This Collateral Supplement is being delivered pursuant to Section 6.01(e)(i) of
the Security and Guarantee Agreement. The capitalized terms defined in the
Security and Guarantee Agreement and not otherwise defined herein are used
herein as therein defined.
          The undersigned has attached hereto a supplemental Schedule II to
Schedule II to the Security and Guarantee Agreement, and the undersigned hereby
certifies, as of the date first above written, that (a) such supplemental
Schedule II has been prepared by the undersigned in substantially the form of
Schedule II to the Security and Guarantee Agreement and is complete and correct,
and (b) in accordance with the terms of the Loan Documents, it has [sold,
transferred or otherwise disposed of] / [formed or acquired] the Equity
Interests in the [Parent Holdco / Pledged SPE / Intermediate Lessee] described
on such attached supplemental Schedule II.
          [The undersigned hereby confirms that the property included in the
attached Schedule II constitutes part of the Collateral and hereby makes each
representation and warranty set forth in Section 3.02 of the Security and
Guarantee Agreement (as supplemented by the attached Schedule II).]2
          This Collateral Supplement shall in all respects be governed by, and
construed in accordance with, the laws of the State of New York, including all
matters of construction, validity and performance.
 

2   Insert if Collateral Supplement is being delivered in connection with the
formation or acquisition of a Parent Holdco, Pledged SPE or Intermediate Lessee.

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            Very truly yours,

[NAME OF GUARANTOR]3
      By          Name:           Title:        

 

3   Conform signature block as appropriate for Irish or other non-U.S. entities.

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Schedule II
to the
Collateral Supplement
PLEDGED EQUITY
To be [added to] / [removed from] Schedule II to the Security and Guarantee
Agreement:

                                                  Percentage                    
    of         Class of           Number   Outstanding         Equity   Par  
Certificate   of Equity   Equity Guarantor   Issuer   Interest   Value   No(s)  
Interests   Interests                                                          
                                                                               
                                                                               
                                                                               
                                                                   

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