Exhibit 10.6


 


[Execution Copy]


 


 


SENIOR CREDIT AGREEMENT


 


dated as of April 26, 2006


 


among


 


AerCap AT, Inc.,


as Borrower


(to be merged with AeroTurbine, Inc. at
Closing with AeroTurbine, Inc. to 


survive as the Borrower from and after the
Closing),


 


The Several Lenders from Time to Time Parties
Hereto,


 


CALYON New York Branch,


as Administrative Agent,


 


HSH Nordbank AG,


 as
Syndication Agent; 


 


and


 


Wachovia Bank N.A.


 and 


National City Bank,


 as
Co-Documentation Agents


 






 


Calyon New York
Branch,

as Lead Arranger and Bookrunner


 


 

















 


Table of Contents


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Defined Terms

  	
  1

  
	
  1.2

  	
  Other Definitional Provisions

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND TERMS OF COMMITMENTS

  	
  2

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Term Commitments

  	
  2

  
	
  2.2

  	
  Procedure for Term Loan Borrowing

  	
  2

  
	
  2.3

  	
  Repayment of Tranche A Term Loans

  	
  2

  
	
  2.4

  	
  Revolving Commitments

  	
  2

  
	
  2.5

  	
  Procedure for Revolving Loan Borrowing

  	
  2

  
	
  2.6

  	
  Commitment Fees, etc

  	
  3

  
	
  2.7

  	
  Termination or Reduction of Revolving Commitments

  	
  3

  
	
  2.8

  	
  Optional Prepayments

  	
  4

  
	
  2.9

  	
  Mandatory Prepayments and Commitment Reductions

  	
  4

  
	
  2.10

  	
  Interest Rates and Payment Dates

  	
  5

  
	
  2.11

  	
  Computation of Interest and Fees

  	
  6

  
	
  2.12

  	
  Pro Rata Treatment and Payments

  	
  6

  
	
  2.13

  	
  Requirements of Law

  	
  7

  
	
  2.14

  	
  Taxes

  	
  9

  
	
  2.15

  	
  Indemnity

  	
  11

  
	
  2.16

  	
  Change of Lending Office

  	
  11

  
	
  2.17

  	
  Replacement of Lenders

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  BORROWING BASE

  	
  12

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Borrowing Base

  	
  12

  
	
  3.2

  	
  Borrowing Base Definitions

  	
  12

  
	
  3.3

  	
  Borrowing Base Valuations

  	
  15

  
	
  3.4

  	
  Requests to Add Additional Equipment Types

  	
  15

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  16

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Financial Condition

  	
  16

  
	
  4.2

  	
  No Change

  	
  16

  
	
  4.3

  	
  Existence; Compliance with Law

  	
  16

  
	
  4.4

  	
  Power; Authorization; Enforceable Obligations

  	
  17

  
	
  4.5

  	
  No Legal Bar

  	
  17

  
	
  4.6

  	
  Litigation

  	
  17

  
	
  4.7

  	
  No Default

  	
  18

  
	
  4.8

  	
  Ownership of Property; Liens

  	
  18

  
	
  4.9

  	
  Intellectual Property

  	
  18

  
	
  4.10

  	
  Taxes

  	
  18

  
	
  4.11

  	
  Federal Regulations

  	
  18

  



 


i

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  4.12

  	
  Labor Matters

  	
  18

  
	
  4.13

  	
  ERISA

  	
  18

  
	
  4.14

  	
  Investment Company Act; Other Regulations

  	
  19

  
	
  4.15

  	
  Subsidiaries

  	
  19

  
	
  4.16

  	
  Use of Proceeds

  	
  19

  
	
  4.17

  	
  Environmental Matters

  	
  19

  
	
  4.18

  	
  Accuracy of Information, etc

  	
  20

  
	
  4.19

  	
  Security Documents

  	
  21

  
	
  4.20

  	
  Solvency

  	
  21

  
	
  4.21

  	
  Certain Documents

  	
  21

  
	
  4.22

  	
  Employment Arrangements

  	
  21

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  CONDITIONS PRECEDENT

  	
  21

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Conditions to Initial Loans

  	
  21

  
	
  5.2

  	
  Conditions to Each Loan

  	
  26

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  AFFIRMATIVE COVENANTS

  	
  27

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Financial Statements

  	
  28

  
	
  6.2

  	
  Certificates; Other Information

  	
  28

  
	
  6.3

  	
  Payment of Obligations

  	
  29

  
	
  6.4

  	
  Maintenance of Existence; Compliance

  	
  29

  
	
  6.5

  	
  Maintenance of Property; Insurance

  	
  29

  
	
  6.6

  	
  Inspection of Property; Books and Records;
  Discussions

  	
  29

  
	
  6.7

  	
  Notices

  	
  30

  
	
  6.8

  	
  Environmental Laws

  	
  30

  
	
  6.9

  	
  Hedge Agreements; Key Man Insurance

  	
  31

  
	
  6.10

  	
  Additional Collateral

  	
  31

  
	
  6.11

  	
  Subsidiaries

  	
  33

  
	
  6.12

  	
  Post Closing Registration of International Interests

  	
  33

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  NEGATIVE COVENANTS

  	
  33

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Financial Condition Covenants

  	
  33

  
	
  7.2

  	
  Indebtedness

  	
  34

  
	
  7.3

  	
  Liens

  	
  35

  
	
  7.4

  	
  Fundamental Changes

  	
  36

  
	
  7.5

  	
  Lines of Business

  	
  37

  
	
  7.6

  	
  Restricted Payments

  	
  37

  
	
  7.7

  	
  Capital Expenditures

  	
  37

  
	
  7.8

  	
  Investments

  	
  37

  
	
  7.9

  	
  Optional Payments and Modifications of Certain Debt
  Instruments; Synthetic Purchase Agreements

  	
  38

  
	
  7.10

  	
  Transactions with Affiliates

  	
  38

  



 


ii

















 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  7.11

  	
  Sales and Leasebacks

  	
  38

  
	
  7.12

  	
  Changes in Fiscal Periods

  	
  38

  
	
  7.13

  	
  Negative Pledge Clauses

  	
  39

  
	
  7.14

  	
  Clauses Restricting Subsidiary Distributions

  	
  39

  
	
  7.15

  	
  Amendments to Acquisition Documents

  	
  39

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  EVENTS OF DEFAULT

  	
  39

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  THE ADMINISTRATIVE AGENT

  	
  42

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Appointment

  	
  42

  
	
  9.2

  	
  Delegation of Duties

  	
  42

  
	
  9.3

  	
  Exculpatory Provisions

  	
  42

  
	
  9.4

  	
  Reliance by Administrative Agent

  	
  43

  
	
  9.5

  	
  Notice of Default

  	
  43

  
	
  9.6

  	
  Non-Reliance on Agents and Other Lenders

  	
  43

  
	
  9.7

  	
  Indemnification

  	
  44

  
	
  9.8

  	
  Administrative Agent in Its Individual Capacity

  	
  44

  
	
  9.9

  	
  Successor Administrative Agent

  	
  45

  
	
  9.10

  	
  Administrative Agent Fees

  	
  45

  
	
  9.11

  	
  Intercreditor Agreement

  	
  45

  
	
  9.12

  	
  Intralinks

  	
  45

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
  45

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Amendments and Waivers

  	
  45

  
	
  10.2

  	
  Notices

  	
  46

  
	
  10.3

  	
  No Waiver; Cumulative Remedies

  	
  46

  
	
  10.4

  	
  Survival of Representations and Warranties

  	
  47

  
	
  10.5

  	
  Payment of Expenses

  	
  47

  
	
  10.6

  	
  Successors and Assigns; Participations and
  Assignments

  	
  48

  
	
  10.7

  	
  Adjustments; Set-off

  	
  50

  
	
  10.8

  	
  Counterparts

  	
  51

  
	
  10.9

  	
  Severability

  	
  51

  
	
  10.10

  	
  Integration

  	
  51

  
	
  10.11

  	
  Governing Law

  	
  51

  
	
  10.12

  	
  Submission To Jurisdiction; Waivers

  	
  51

  
	
  10.13

  	
  Acknowledgements

  	
  52

  
	
  10.14

  	
  Releases of Guarantees and Liens

  	
  52

  
	
  10.15

  	
  Confidentiality

  	
  53

  
	
  10.16

  	
  WAIVERS OF JURY TRIAL

  	
  53

  



 


iii

















 


	
  APPENDIX I:

  	
  Definitions Appendix

  	
   

  
	
   

  	
   

  	
   

  
	
  ANNEXES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Economics Schedule

  	
   

  
	
  B

  	
  Eligible Equipment

  	
   

  
	
  C

  	
  Advance Rates

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1A

  	
  Commitments

  	
   

  
	
  4.4

  	
  Consents, Authorizations, Filings and Notices

  	
   

  
	
  4.15

  	
  Subsidiaries

  	
   

  
	
  4.19(a)

  	
  Aircraft Assets and Aircraft Asset Leases

  	
   

  
	
  4.19(b)

  	
  Locations of Eligible Equipment and Eligible Inventory

  	
   

  
	
  4.19(c)

  	
  Deposit Accounts

  	
   

  
	
  4.19(d)

  	
  Intellectual Property

  	
   

  
	
  4.22

  	
  Employment Contracts

  	
   

  
	
  7.2(d)

  	
  Existing Indebtedness

  	
   

  
	
  7.3(f)

  	
  Existing Liens

  	
   

  
	
  10.2

  	
  Notice Information

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Form of Guarantee and Collateral Agreement

  	
   

  
	
  B

  	
  Form of Compliance Certificate

  	
   

  
	
  C

  	
  Form of Notice of Borrowing

  	
   

  
	
  D

  	
  Form of Assignment and Acceptance

  	
   

  
	
  E

  	
  Form of Aircraft Asset Security Agreement

  	
   

  
	
  F

  	
  Form of Account Control Agreement

  	
   

  
	
  G

  	
  Form of Intercreditor Agreement

  	
   

  
	
  H

  	
  Form of Landlord Consent

  	
   

  
	
  I

  	
  Form of Collateral Lease Assignment

  	
   

  
	
  J

  	
  Form of Pledge Agreement

  	
   

  
	
  K

  	
  Form of Borrowing Base Report

  	
   

  
	
  L

  	
  Form of Key Man Guarantee

  	
   

  



 


iv

















 


THIS SENIOR CREDIT AGREEMENT (this “Agreement”), dated as of April 26,
2006, among AerCap AT, Inc., a Delaware corporation (the “Borrower”), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the “Lenders”), CALYON New York
Branch, as administrative agent for the Lenders as provided herein (the “Administrative Agent”), HSH Nordbank AG, as
Syndication Agent; and Wachovia Bank N.A. and National City Bank, as
Co-Documentation Agents.


 


The
parties hereto hereby agree as follows:


 


Section 1.              Definitions.


 


1.1           Defined
Terms.  As used in this Agreement,
the terms listed in Appendix I or any Security Document shall have the
respective meanings set forth in such Appendix or Security Document. Any
reference in Appendix I to a Section, Annex, Schedule or Exhibit without
designation as to the particular agreement to which the same relates shall be
deemed a reference to the related Section, Annex, Schedule or Exhibit hereof or
hereto, including any such Section, Annex, Schedule or Exhibit incorporated
herein by reference.


 


1.2           Other
Definitional Provisions.  (a) Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate or
other document made or delivered pursuant hereto or thereto.


 


(b)           As
used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to Borrower or any of its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP, (ii) the words “include”, “includes” and “including” shall be deemed
to be followed by the phrase “without limitation”, (iii) the word “incur”
shall be construed to mean incur, create, issue, assume, become liable in
respect of or suffer to exist (and the words “incurred” and “incurrence” shall
have correlative meanings), (iv) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights, and
(v) references to agreements or other Contractual Obligations shall,
unless otherwise specified, be deemed to refer to such agreements or
Contractual Obligations as amended, supplemented, restated or otherwise
modified from time to time.


 


(c)           The
words “hereof”, “herein” and “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, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.


 


(d)           The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.


 

















 


Section 2.              Amount
and Terms of Commitments.


 


2.1           Term
Commitments.  Subject to the terms
and conditions hereof, each Tranche A Term Lender severally agrees to make
a term loan (a “Tranche A Term Loan”)
to the Borrower on the Closing Date in an amount not to exceed the amount of
the Tranche A Term Commitment of such Lender.


 


2.2           Procedure
for Term Loan Borrowing.  The
Borrower shall give the Administrative Agent irrevocable notice (which notice
must be received by the Administrative Agent prior to 10:00 a.m., New York
City time, one Business Day prior to the anticipated Closing Date) requesting
that the Tranche A Term Lenders make the Tranche A Term Loans on the
Closing Date and specifying the amount to be borrowed.  Upon receipt of such notice the
Administrative Agent shall promptly notify each Tranche A Term Lender
thereof.  Not later than 12:00 noon,
New York City time, on the Closing Date each Tranche A Term Lender shall
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Tranche A Term Loan to be made by
such Lender.  The Administrative Agent
shall credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Tranche A Term Lenders in immediately
available funds.


 


2.3           Repayment
of Tranche A Term Loans.  The
Tranche A Term Loan of each Tranche A Lender shall mature in 20
consecutive quarterly installments, each of which shall be in an amount equal
to such Lender’s Tranche A Term Percentage multiplied by the “Tranche A
Quarterly Amortization Amount” specified on Annex A. The Borrower shall repay
all outstanding Tranche A Term Loans on the Maturity Date.


 


2.4           Revolving
Commitments.  (a)  Subject
to the terms and conditions hereof, each Revolving Lender severally agrees to
make revolving credit loans (“Revolving Loans”)
to the Borrower from time to time during the Revolving Commitment Period in an
aggregate principal amount at any one time outstanding which does not exceed
the amount of such Lender’s Revolving Commitment.  During the Revolving Commitment Period the
Borrower may use the Revolving Commitments by borrowing, prepaying the
Revolving Loans in whole or in part, and reborrowing, all in accordance with
the terms and conditions hereof.


 


(b)           Revolving
Loans may be borrowed by the Borrower only in connection with its acquisition
(or refinancing the acquisition) of Eligible Equipment or the refinancing of
Returned Equipment (to the extent of any previous reduction in the Borrowing
Base Value of such Returned Equipment pursuant to the proviso to Section
3.2(h)) and, in either case, the Revolving Loans made in respect thereof shall
not exceed the Advance Rate therefor.


 


(c)           The
Borrower shall repay all outstanding Revolving Loans on the Maturity Date.


 


2.5           Procedure
for Revolving Loan Borrowing.  The
Borrower may borrow under the Revolving Commitments during the Revolving
Commitment Period on any Business Day, provided that the Administrative
Agent shall have received a Notice of Borrowing prior to 12:00 Noon, New York
City time, three Business Days (one Business Day during the Prime Rate 


 


2

















 


Period) prior to the
requested Borrowing Date.  Each borrowing
under the Revolving Commitments shall be in an amount equal to not less than $500,000.  Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Lender
thereof.  Each Revolving Lender will make
the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the Funding Office prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent.  Such borrowing
will then be made available to the Borrower by the Administrative Agent
crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Lenders and in like funds as received by the Administrative
Agent.  The Borrower may, by notice given
to the Administrative Agent (which notice may be given by telecopy or by email
attaching a copy of a notice as a printable file) not later than 4:00 p.m., New
York City time, on the initially requested Borrowing Date, postpone the
Borrowing Date by not more than five Business Days, provided, that (i)
all amounts received by the Administrative Agent with respect to the initially
requested Borrowing Date shall be deposited in the Restricted Account, (ii)
subject to the terms and conditions hereof, such amounts will be made available
to the Borrower by the Administrative Agent on any day during such five
Business Day period upon notice from the Borrower given to the Administrative
Agent (which notice may be given by telecopy or by email attaching a copy of a
notice as a printable file) not later than 10:00 a.m., New York City time, on
the date requested, (iii) the Interest Period for such borrowing shall commence
on the initially requested Borrowing Date and (iv) if the Borrower fails to
borrow such amounts by the end of business on the fifth Business Day after the
originally requested Borrowing Date, the Administrative Agent shall return such
amounts to the respective Lenders on the next Business Day and the Borrower
shall pay to the Administrative Agent, for distribution to the Lenders,
interest on such funds at the LIBOR Rate (or, during the Prime Rate Period, at
the Prime Rate) plus the applicable Margin (less any amounts earned with
respect to such funds by the Administrative Agent pursuant to Section 6(a)(iii)
of the Guarantee and Collateral Agreement) together with amounts payable under
Section 2.15, if any.


 


2.6           Commitment
Fees, etc.  (a)  The
Borrower agrees to pay to the Administrative Agent for account of each
Revolving Lender a commitment fee for the period from and including the date
hereof to the Maturity Date (or, if earlier, the date the Revolving Loans shall
have been paid in full and the Total Revolving Commitments shall have been
reduced to zero or otherwise terminated), computed at the Commitment Fee Rate
on the average daily amount of the Available Revolving Commitment of such
Lender during the period for which payment is made, payable quarterly in
arrears on each Quarterly Date and on the Maturity Date (or, if earlier, the
date the Revolving Loans shall have been paid in full and the Total Revolving
Commitments shall have been reduced to zero or otherwise terminated),
commencing on the first of such dates to occur after the date hereof.


 


(b)           The
Borrower agrees to pay to Calyon New York Branch the fees in the amounts and on
the dates specified in the Fee Letter.


 


2.7           Termination
or Reduction of Revolving Commitments. 
The Borrower shall have the right, upon not less than three Business
Days’ notice to the Administrative Agent, to terminate the Total Revolving
Commitments or, from time to time, to reduce the amount of the Total Revolving
Commitments; provided that no such termination or reduction of Total


 


3

















 


Revolving Commitments
shall be permitted if, after giving effect thereto and to any prepayments of
the Revolving Loans made on the effective date thereof, the aggregate
outstanding amount of Revolving Loans would exceed the Total Revolving
Commitments.  Any such reduction shall be
in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Commitments then in effect on a pro-rata basis.


 


2.8           Optional
Prepayments.  The Borrower may at any
time and from time to time prepay the Loans, in whole or in part, without
premium or penalty except for the Prepayment Fee, upon revocable notice
delivered to the Administrative Agent at least three Business Days prior
thereto, in which notice shall specify the date and amount of prepayment; provided,
that if a Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.15.  Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.  If any such
notice is given, the amount specified in such notice shall be due and payable
on the date specified therein, together with accrued interest to such date on
the amount prepaid and any Prepayment Fee, provided, however,
that if the Borrower shall notify the Administrative Agent on or prior to 4:00
p.m., New York City time, on the date specified for the prepayment that the
Borrower has revoked its election to prepay, the Borrower shall not be required
to make such prepayment, provided, further, that if such notice
is delivered to the Administrative Agent less than three Business Days prior to
the date specified for prepayment, the Borrower shall pay to the Administrative
Agent on demand any amounts payable under Section 2.15. For the avoidance of
doubt if, after the expiration of the Prime Rate Period, such notice is
delivered to the Administrative Agent less than three Business Days prior to
the date specified for prepayment, “LIBOR” for such amount not prepaid for the
remaining portion of the Interest Period commencing on the date of scheduled
prepayment shall be the amount the Administrative Agent shall reasonably
determine, in consultation with the Lenders, as the rate which compensates the Lenders
for their cost of funding for such period. 
Partial prepayments of Tranche A Term Loans and Revolving Loans
shall be in an aggregate principal amount of $1,000,000 or a whole multiple
thereof.


 


2.9           Mandatory
Prepayments and Commitment Reductions. 
(a)  If, as at any Report Date, the aggregate outstanding
principal amount of Revolving Loans and Tranche A Term Loans exceeds the
Borrowing Base as at such date, the Borrower shall on the last day of the
Interest Period including such Report Date prepay the Loans as provided in the
succeeding sentence in such amount as shall allow the sum of the aggregate
outstanding Revolving Loans and Tranche A Term Loans not to exceed the
Borrowing Base. Amounts to be applied in connection with prepayments made
pursuant to this Section 2.9(a) shall be applied, first, to the
prepayment of the Revolving Loans, second, to the prepayment of the
Tranche A Term Loans.


 


(b)           All
proceeds received with respect to the Key Man Insurance or the Key Man
Guarantee shall be deposited in the Restricted Account and, on the earlier of
the last day of the Interest Period during which such proceeds were received
or, at the election of the Borrower, on a date specified by the Borrower by
notice delivered to the Administrative Agent at least three Business Days prior
to such date, such proceeds (or cash collateral deposited by the Borrower in
the Restricted Account in lieu of the Key Man Guarantee and payable pursuant to
the last sentence of Section 6(a)(i) of the Guarantee and Collateral Agreement)
shall be applied (together with interest accrued thereon pursuant to Section
6(a)(iii) of the Guarantee and Collateral


 


4

















 


Agreement), first,
to the prepayment of the Tranche A Term Loans, second, to the prepayment
of the Revolving Loans and third to the prepayment of the Tranche B Term
Loans.  Any prepayment of the Revolving
Loans pursuant to this Section 2.9(b) shall permanently reduce the Total
Revolving Commitments by the amount of such prepayment.


 


(c)           All
Net Cash Proceeds received from any Recovery Event shall be deposited in the
Restricted Account and, on the earlier of the last day of the Interest Period
during which such Net Cash Proceeds were received or, at the election of the
Borrower, on a date specified by the Borrower by notice delivered to the
Administrative Agent at least three Business Days prior to such date, shall be
applied (together with interest accrued thereon pursuant to Section 6(a)(iii)
of the Guarantee and Collateral Agreement) to the prepayment of the Revolving
Loans and the Tranche A Term Loans on an Allocated Basis; provided, that,
notwithstanding the foregoing, any such prepayment may be deferred until the
aggregate Net Cash Proceeds of Recovery Events theretofore received (and as to
which no prepayment has been made) exceeds $250,000.


 


(d)           If,
as at any date on which the Borrowing Base Value of an Aircraft Asset is
reduced pursuant to the proviso to Section 3.2(h), the aggregate outstanding
principal amount of Revolving Loans and Tranche A Term Loans exceeds the
Borrowing Base as at such date, the Borrower shall, within five Business Days
of such date deposit in the Restricted Account an amount equal to the
difference between the Borrowing Base Value as of such date and the aggregate
outstanding Revolving Loans and Tranche A Term Loans at that date and, on the
earlier of the last day of the Interest Period during which such deposit was
made or, at the election of the Borrower, on a date specified by the Borrower
by notice delivered to the Administrative Agent at least three Business Days
prior to such date, shall be applied (together with interest accrued thereon
pursuant to Section 6(a)(iii) of the Guarantee and Collateral Agreement) first,
to the prepayment of the Revolving Loans, second, to the prepayment of
the Tranche A Term Loans.


 


(e)           Each
prepayment of the Loans under this Section 2.9 shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid, together
with amounts payable under Section 2.15 if such prepayment was made on a date
other than the last day of an Interest Period, but without premium or penalty.


 


2.10         Interest
Rates and Payment Dates.  (a) Each
Loan shall bear interest for each Interest Period with respect thereto at a
rate per annum equal to the LIBOR Rate determined for such day plus the
Applicable Margin, provided, that during the Interest Period ending July
15, 2006, each Loan shall bear interest for each day during the Prime Rate
Period at a rate per annum equal to the Prime Rate determined for such day plus
the Applicable Margin and for the remainder of such Interest Period, shall bear
interest at a rate per annum equal to the LIBOR Rate determined for such day
plus the Applicable Margin.


 


(b)           (i) If
all or a portion of the principal amount of any Loan shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to in the case of the
Loans, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this Section plus 2% and (ii) if all or a
portion of any interest payable on any Loan or any commitment fee or other


 


5

















 


amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal
to the rate then applicable to Loans under the relevant Facility plus 2%
(or, in the case of any such other amounts that do not relate to a particular
Facility, the rate then applicable to Loans under the Revolving Facility plus
2%), in each case, with respect to clauses (i) and (ii) above, from the date of
such non-payment until such amount is paid in full (as well after as before
judgment).


 


(c)           Interest
shall be payable in arrears on May 15, 2006 and on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (b) of this Section shall
be payable from time to time on demand.


 


2.11         Computation
of Interest and Fees.  (a)  Interest
and fees payable pursuant hereto shall be calculated on the basis of a 360-day
year (a 365-day year during the Prime Rate Period) for the actual days
elapsed.  The Administrative Agent shall
promptly notify the Borrower and the relevant Lenders of each determination of
a LIBOR Rate.


 


(b)           Each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and
the Lenders in the absence of manifest error. 
The Administrative Agent shall, at the request of the Borrower, deliver
to the Borrower a statement showing the quotations used by the Administrative
Agent in determining any interest rate pursuant to Section 2.11(a).


 


2.12         Pro
Rata Treatment and Payments.  (a)  Each
payment by the Borrower on account of any commitment fee and any reduction of
the Commitments of the Lenders shall be made to the Administrative Agent and
the Administrative Agent shall distribute such payments to the Lenders pro rata according to their respective
Revolving Percentage and Tranche A Term Percentages, as the case may be,
of the relevant Lenders.


 


(b)           Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Tranche A Term Loans shall be made to the
Administrative Agent and the Administrative Agent shall distribute such
payments to the Lenders pro rata according
to the respective outstanding principal amounts of the Tranche A Term
Loans then held by the Tranche A Term Lenders.  The amount of each principal prepayment of
the Term Loans shall be applied to reduce the then remaining installments of
the Tranche A Term Loans in inverse order of maturity.  Amounts prepaid on account of the Term Loans
may not be reborrowed.


 


(c)           Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Revolving Loans shall be made to the Administrative Agent
and the Administrative Agent shall distribute such payments to the Lenders pro rata according to the respective
outstanding principal amounts of the Revolving Loans then held by the Revolving
Lenders.


 


(d)           All
payments (including prepayments) to be made by the Borrower hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without
setoff or counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the Administrative Agent, for the account
of the Lenders, at the Funding Office,


 


6

















 


in Dollars and in
immediately available funds.  The
Administrative Agent shall distribute such payments to the Lenders promptly
upon receipt in like funds as received. 
If any payment hereunder becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day unless
the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day.  In the case of
any extension of any payment of principal pursuant to the preceding sentence,
interest thereon shall be payable at the then applicable rate during such
extension.


 


(e)           Unless
the Administrative Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  If such amount is not made
available to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Effective Rate for the period until such Lender makes such amount immediately
available to the Administrative Agent.  A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this paragraph shall be conclusive in the absence of
manifest error.


 


(f)            Unless
the Administrative Agent shall have been notified in writing by the Borrower
prior to the date of any payment due to be made by the Borrower hereunder that
the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares of a corresponding
amount.  If such payment is not made to
the Administrative Agent by the Borrower within three Business Days after such
due date, the Administrative Agent shall be entitled to recover, on demand,
from each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate.  Nothing herein shall be deemed to limit the
rights of the Administrative Agent or any Lender against the Borrower.


 


2.13         Requirements
of Law.  (a)  If the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:


 


(i)            shall
subject any Lender to any Tax of any kind whatsoever with respect to this
Agreement or any Loan made by it, or change the basis of taxation of payments
to such Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 2.14 and changes in the rate of tax on the overall net income of
such Lender);


 


(ii)           shall
impose, modify or hold applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits or other


 


7

















 


liabilities
in or for the account of, advances, loans or other extensions of credit by, or
any other acquisition of funds by, any office of such Lender; or


 


(iii)          shall
impose on such Lender any other condition;


 


and the result of any of the foregoing is to
increase the cost to such Lender, by an amount that such Lender deems to be
material, of making, converting into, continuing or maintaining Loans, or to
reduce any amount receivable hereunder in respect thereof, then, in any such
case, the Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable.  If any
Lender becomes entitled to claim any additional amounts pursuant to this
paragraph, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) (which notice shall be accompanied by a certificate
setting forth the basis for such demand and a calculation of the amount thereof
but not including any matters which that Lender regards as confidential in
relation to its funding arrangements) of the event by reason of which it has
become so entitled.


 


(b)           If
any Lender shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof (including the implementation of regulations in respect of
the capital adequacy regime commonly known as Basle II) or compliance by such
Lender or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender’s or such corporation’s capital
as a consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such corporation’s
policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor (which request shall be accompanied by a certificate setting forth the
basis for such demand and a calculation of the amount thereof but not including
any matters which that Lender regards as confidential in relation to its
funding arrangements), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such corporation for such
reduction.


 


(c)           A
certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender to the Borrower (with a copy to the Administrative
Agent) shall be conclusive in the absence of manifest error.  The obligations of the Borrower pursuant to
this Section shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.


 


(d)           Notwithstanding
the foregoing, the Borrower shall not be required to compensate a Lender
pursuant to this Section 2.13  for (i)
any amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender’s intention to claim compensation
therefor; and provided further that, if the circumstances giving rise to such
claim have a retroactive effect, then such six-month period shall be extended
to include the period of such retroactive effect or (ii) any amounts incurred
by such Lender as a result of a decline in the credit rating of such Lender.


 


8

















 


2.14         Taxes.  (a)  All payments made by the
Borrower under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any Taxes, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income, net receipts, capital, franchise, net worth, or other
similar “doing business” Taxes imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such Tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the Administrative
Agent or such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan
Document).  If any such non-excluded
Taxes, (“Non-Excluded Taxes”) or
Other Taxes are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrower shall not be required to increase any such
amounts payable to any Lender with respect to any Non-Excluded Taxes
(i) to the extent imposed as a result of such Lender’s failure to comply
with the requirements of paragraph (d) or (e) of this Section 2.14 or
(ii) that are United States withholding Taxes imposed on amounts payable
to such Lender at the time such Lender becomes a party to this Agreement,
except to the extent that such Lender’s assignor (if any) was entitled, at the
time of assignment, to receive additional amounts from the Borrower with
respect to such Non-Excluded Taxes pursuant to this paragraph.


 


(b)           In
addition, the Borrower shall pay any and all Other Taxes to the relevant
Governmental Authority in accordance with applicable law, and shall indemnify
the Administrative Agent and Lenders, on demand for any failure to do so.


 


(c)           Whenever
any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly
as possible thereafter the Borrower shall send to the Administrative Agent for
its own account or for the account of the relevant Lender, as the case may be,
a certified copy of an original official receipt received by the Borrower
showing payment thereof, if any, or other evidence of payment reasonably
acceptable to such Person.  If the
Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate Governmental Authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders on demand for any
incremental Taxes, interest or penalties that may become payable by the
Administrative Agent or the Lenders as a result of any such failure.


 


(d)           Each
Lender (or Transferee) that is not a “U.S. Person” as defined in
Section 7701(a)(30) of the Code (a “Non-U.S.
Lender”) shall deliver to the Borrower and the Administrative Agent
(or, in the case of a Participant, to the Lender from which the related
participation shall have been purchased) two copies of either U.S. Internal
Revenue Service Form W-8BEN, W-8ECI, W-8IMY (with appropriate
documentation), or W-8EXP or, in the case of a Non-U.S. Lender claiming
exemption from U.S. federal withholding Tax under Section 871(h) or 881(c)
of the Code with respect to payments of “portfolio interest”, a statement
substantially in the form of Exhibit H and a Form W-8BEN, or any
subsequent versions thereof


 


9

















 


or successors thereto,
properly completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding Tax on all
payments by the Borrower under this Agreement. 
Such forms shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this Agreement (or, in the case of any Participant,
on or before the date such Participant purchases the related
participation).  In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. Governmental Authorities for such
purpose).  Notwithstanding any other
provision of this paragraph, a Non-U.S. Lender shall not be required to deliver
any form pursuant to this paragraph that such Non-U.S. Lender is not legally
able to deliver.


 


(e)           At
the reasonable request of the Borrower, each Lender that is entitled to an
exemption from or reduction of non-U.S. withholding Tax under the law of any
jurisdiction (other than the United States), or any treaty to which such
jurisdiction is a party with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law or reasonably requested by the Borrower,
such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at a reduced
rate, provided that such Lender is legally entitled to complete, execute
and deliver such documentation and in such Lender’s sole judgment such
completion, execution or submission would not prejudice the legal position of
such Lender, including its lending office(s), or cause such Lender or its
lending office(s) to suffer any economic, legal, or regulatory disadvantage.


 


(f)            If
a Lender actually receives a permanent benefit of a Tax credit or refund which
the Borrower has paid or reimbursed such Lender pursuant to this
Section 2.14 or if a Lender actually realizes an allowance of or deduction
in Taxes as a result of any amount or additional amount paid by the Borrower
pursuant to this Section 2.14, such Lender shall pay to the Borrower such
refund or the amount of such reduction in Taxes, but only to the extent of the
amounts paid by the Borrower pursuant to this Section 2.14 with respect to
the Taxes, provided, however, (x) no Lender shall be obliged
to disclose to the Borrower or any other Person information regarding its tax
affairs or computations, or tax books or records, (y) the Borrower hereby
acknowledges that the order and manner in which a Lender claims credits,
refunds, allowances, and deductions available to it is a matter which will be
determined in accordance with the Lender’s taxation and accounting policies and
practices and that any credits, refunds, allowances or deductions resulting
from amounts or additional amounts paid pursuant to this Section 2.14
shall not receive any preferential treatments, and (z) no Lender shall be
required to take any action which in its reasonable opinion would or may
prejudice its ability to benefit from any other refund, credit, allowance or
deduction to which it may be entitled.


 


(g)           Where
the Borrower has an obligation to indemnify or reimburse the Administrative
Agent or a Lender for a Tax under this Section 2.14, the calculation of
the amount payable by way of indemnity or reimbursement shall be based upon the
Tax treatment in the hands of the Administrative Agent or such Lender (as
determined by such Person acting in good faith) of the amount payable by way of
indemnity or reimbursement and of the Tax in respect of which the amount is
payable so as to leave the Administrative Agent or Lender, as the


 


10

















 


case may be, in the same
after-Tax position it would have been in had the payment made to such Person
not given rise to a liability to Tax.


 


(h)           The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.


 


2.15         Indemnity.  The Borrower agrees to indemnify each Lender
for, and to hold each Lender harmless from, any loss or expense that such
Lender may sustain or incur after the Prime Rate Period as a consequence of
(a) failure by the Borrower to make a borrowing of Loans after the Borrower
has given a notice requesting the same in accordance with the provisions of
this Agreement, (b) failure by the Borrower to make any prepayment of
Loans after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Loans on
a day that is not the last day of an Interest Period with respect thereto.  Such indemnification may include an amount
equal to the excess, if any, of (i) the amount of interest that would have
accrued on the amount so prepaid, or not so borrowed, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included
therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the London interbank market.  A
certificate as to any amounts payable pursuant to this Section submitted to the
Borrower by any Lender shall be conclusive in the absence of manifest
error.  This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.


 


2.16         Change
of Lending Office.  Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
Section 2.13 or 2.14(a) with respect to such Lender, it will, if requested
by the Borrower, use reasonable efforts to designate another lending office for
any Loans affected by such event with the object of avoiding the consequences
of such event or take such actions as the Borrower may reasonably request; provided,
that no Lender shall be obligated to take any action that, in the sole judgment
of such Lender, would cause such Lender and its lending office(s) to suffer any
economic, legal or regulatory disadvantage, and provided, further,
that nothing in this Section shall affect or postpone any of the obligations of
the Borrower or the rights of any Lender pursuant to Section 2.13 or
2.14(a).


 


2.17         Replacement
of Lenders.  The Borrower shall be
permitted to replace any Lender that (a) requests reimbursement for
amounts owing pursuant to Section 2.13 or 2.14(a) or (b) defaults in
its obligation to make Loans hereunder, with a replacement financial
institution; provided that (i) such replacement does not conflict
with any Requirement of Law, (ii) no Event of Default shall have occurred
and be continuing at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under Section 2.16 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 2.13 or 2.14(a), (iv) the replacement financial institution
shall purchase, at par, all Loans and other amounts owing to such replaced
Lender on or prior to the date of replacement, (v) the Borrower shall be
liable to such replaced Lender under Section 2.15 if any Loan owing to
such replaced Lender


 


11

















 


shall be purchased other
than on the last day of the Interest Period relating thereto, (vi) the
replacement financial institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (vii) the replaced Lender shall
be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such
time as such replacement shall be consummated, the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.13 or 2.14(a),
as the case may be, and (ix) any such replacement shall not be deemed to
be a waiver of any rights that the Borrower, the Administrative Agent or any
other Lender shall have against the replaced Lender.


 


Section 3.              Borrowing
Base.


 


3.1           Borrowing
Base.  As at any Report Date, the sum
of (A) the aggregate outstanding principal amount of the Revolving Loans plus (B) the aggregate outstanding
principal amount of the Tranche A Term Loans shall not exceed the Borrowing
Base as of such Report Date; provided that, if such Loans exceed the Borrowing
Base on a Report Date, such Loans shall be subject to prepayment as provided in
Section 2.9(a) by such excess amount.


 


3.2           Borrowing
Base Definitions.


 


(a)           “Acceptable Accounts Receivables”: as at
the Closing Date and at any Quarterly Date, the accounts receivables of the
Borrower and its Subsidiaries as at such date calculated in accordance with
GAAP, excluding any such accounts receivables that (i) are more than 60 days
past due or (ii) are from Aeropostal.


 


(b)           “Appraisal Value”: as at the Closing
Date and at any Quarterly Date, the “current market value” (as such term is
defined by the International Society of Transport Aircraft Trading (ISTAT)) of
the Borrowing Base Assets (other than the accounts receivable) as determined by
the Appraiser as of February 28, 2006 with respect to the Appraisal Value as at
the Closing Date, and with respect to the Appraisal Value as at Quarterly Date,
as of the last day of the previous month to such Quarterly Date.  The Appraisal Value with respect to any
Quarterly Date shall be calculated utilizing such physical assessments of such
assets, maintenance status of such assets, current trading history and other
methodologies as are consistent with the methodologies utilized to provide the
Baseline Appraisal (provided, that, the appraisal with respect to the June
Quarterly Date shall be a “desk-top” appraisal and physical assessments of such
assets shall only be performed with respect to the December Quarterly Date) and
shall be presented to the parties in an appraisal addressed to both the
Borrower and the Administrative Agent.


 


(c)           “Appraiser”: SH&E, Inc., unless
SH&E, Inc. becomes incapable of determining the Appraisal Value with a
degree of care recognized in the industry, in which case, such other nationally
recognized appraiser selected by the Borrower and not objected to by the
Administrative Agent on an unreasonable basis.


 


(d)           “Baseline Appraisal”: the appraisal
furnished by the Appraiser dated April 24, 2006 and addressed to the Borrower
and the Administrative Agent.


 


12

















 


(e)           “Borrowing Base”: as at the Closing Date
and at any Quarterly Date, the sum of: (x) the aggregate of Borrowing Base
Values of all Borrowing Base Assets, subject to the Borrowing Base Constraints,
plus (y) the aggregate amount of
sales proceeds from the disposition by the Borrower of Eligible Equipment and
Eligible Inventory effected within six months of any date of calculation
subject to: (i) such proceeds being in the Restricted Account and (ii) such
proceeds not exceeding $20,000,000.  The
Borrowing Base as in effect immediately prior to reduction in the Borrowing
Base Value for an Aircraft Asset pursuant to the proviso to Section 3.2(h)
shall be reduced by the amount of such reduction and, on the date such Aircraft
Asset ceases to be an Impaired Aircraft Asset or Lease Default Equipment shall
be increased by the amount of any reduction in the Borrowing Base Value for
such Aircraft Asset.


 


(f)            “Borrowing Base Assets”: the following
categories of assets of the Borrower and its Subsidiaries:


 


(i)            Acceptable
Accounts Receivable;


 


(ii)           Eligible
Inventory; and


 


(iii)          Eligible
Equipment.


 


(g)           “Borrowing Base Constraints”: in
determining the Borrowing Base, the following constraints shall be considered:


 


(i)            Eligible
Inventory located at vendors or consignees shall have a Borrowing Base Value of
zero;


 


(ii)           if the
Eligible Equipment consists of any engine in overhaul (but not an engine sent
out for testing preceding any agreement to commence an overhaul or an engine
being overhauled by the Borrower or any of its Subsidiaries by its own
personnel), such engine shall either be excluded as a Borrowing Base Asset or
the estimated cost of the overhaul payable to the overhaul provider shall be
deposited in the Restricted Account (which costs shall be subject to withdrawal
as provided in Section 6(a) of the Guarantee and Collateral Agreement);


 


(iii)          in
respect of Eligible Equipment constituting whole aircraft that are in Advance
Category 3, no more than 10% of the Borrowing Base (exclusive of the component
thereof constituting Acceptable Accounts Receivables) may be attributable to
such type of asset;


 


(iv)          in order
for any whole aircraft to be counted as Eligible Equipment (as compared to
inventory constituting Eligible Equipment), such aircraft must either (i) be
subject to an operating lease with a third party (not an Affiliate of the
Borrower) or (ii) if not subject to such an operating lease, become subject to
an operating lease within four months (or, such further period beyond such four
months not to exceed another two months during which such aircraft is subject
to a letter of intent (pursuant to which the prospective lessee has made a
non-refundable deposit (in cash or by letter of credit issued by a commercial
bank) equal to at least one month’s rent, unless the Administrative Agent shall
otherwise consent, such consent not to be unreasonably refused) to have it


 


13

















 


become
subject to such an operating lease); if a whole aircraft constituting Eligible
Equipment does not satisfy the foregoing tests, it will be treated as Eligible
Inventory; and


 


(v)           no more
than 50% of the Borrowing Base may be attributable to Eligible Inventory.


 


(h)           “Borrowing Base Value” as at the Closing
Date and at any Quarterly Date: for any Borrowing Base Asset owned by the
Borrower or any of its Subsidiaries, a value determined as follows:


 


(i)            in the
case of Acceptable Accounts Receivables, 50% of the amount thereof;


 


(ii)           in the
case of each item of Eligible Inventory, the percentage of the Appraisal Value
or Certified Value, as the case may be, of such item as specified in Annex C
for the applicable Advance Category of such item;


 


(iii)          in
the case of each item of Eligible Equipment (other than whole aircraft), the
percentage of the Appraisal Value or Certified Value, as the case may be, of
such item as specified in Annex C for the applicable Advance Category of such
item; and


 


(iv)          in the case
of each item of Eligible Equipment that is a whole aircraft, the lower of (x)
the percentage of the Appraisal Value or Certified Value, as the case may be,
and (y) the percentage of the acquisition cost, of such item as specified in
Annex C for the applicable Advance Category of such item;


 


provided,
that (x) in the case of any Aircraft Asset that constitutes Lease Default
Equipment, but only for so long as it remains Lease Default Equipment, the
Borrowing Base Value for such Aircraft Asset shall be:


 


(1) for the initial period of ninety days
commencing on the date such Aircraft Asset became Lease Default Equipment, the
Borrowing Base Value for such Aircraft Asset shall be the Borrowing Base Value
(the “Original Borrowing Base Value”)
for such Aircraft Asset as of the Quarterly Date occurring on or immediately
prior to the date such Aircraft Asset became Lease Default Equipment;


 


(2) for the 90 day period commencing
immediately after the period referred to in clause (1) above, the Borrowing
Base Value for such Aircraft Asset shall be two-thirds (2/3) of the Original
Borrowing Base Value for such Aircraft Asset;


 


(3) for the 90 day period commencing
immediately after the period referred to in clause (2) above, the Borrowing
Base Value for such Aircraft Asset shall be one-third (1/3) of the Original
Borrowing Base Value for such Aircraft Asset; and


 


14

















 


(4) thereafter, the Borrowing Base Value for
such Eligible Equipment shall be zero;


 


and (y) in the case of any Aircraft Asset that constitutes an Impaired Aircraft Asset,
but only for so long as it remains an Impaired Aircraft Asset, the Borrowing
Base Value for such Aircraft Asset shall be zero effective as of the
date such Aircraft Asset became an Impaired Aircraft Asset.


 


In the case of the June
and December Quarterly Dates, the Borrowing Base Value shall be adjusted to
reflect any change in the Eligible Equipment or Eligible Inventory (e.g., sales,
acquisitions and change in status) occurring between the date as of which the
Appraisal Values were determined and the Quarterly Date.


 


(i)            “Certified Value” of any item of
Eligible Equipment or item of Eligible Inventory: the current market value of
such item certified by the Borrower based on its good faith and best knowledge
assessment of such item based on (i) in respect of non-traded Eligible
Equipment and Eligible Inventory, the most recent Appraisal Value, and the
Borrower’s assessment of any changes in valuation based on asset purchases,
sales and trading activity during the quarterly reporting period (ii) in
respect of newly acquired Eligible Equipment and Eligible Inventory, the most
recent Appraisal Value in respect of comparable equipment and the prices paid
by it during such period in respect thereof and (iii) such other factors as the
Borrower may reasonably consider to be relevant.


 


3.3           Borrowing
Base Valuations.


 


(a)           The
Borrower shall deliver a Borrowing Base Report (in substantially the form of
Exhibit K hereto, on the Closing Date and not later than 15 days after each
Quarterly Date, which shall calculate the Borrowing Base, (i) in respect of the
Closing Date by reference to the Appraisal Value with respect to the Closing
Date, (ii) in respect of the Quarterly Dates in June and December of each year,
by reference to the Appraisal Value with respect to such Quarterly Dates and
(iii) in respect of the Quarterly Dates in September and March of each year, by
reference to the Certified Value with respect to such Quarterly Dates.


 


(b)           The
Borrower will cooperate with the Appraiser in its due diligence associated with
determining any Appraisal Value, and will provide to the Appraiser access to
its facilities to determine the Appraisal Value during normal business hours
and without any material interruption of the Borrower’s business operations, as
well as, on a timely basis, all relevant and necessary data required by the
Appraiser to determine the Appraisal Value (including disc sheets, inspection
reports and records, as applicable).


 


3.4           Requests
to Add Additional Equipment Types. 
The Borrower may from time to time propose the inclusion of additional
types of Aircraft Assets in Annex B and Annex C.  Upon receipt of any such proposal, the Administrative
Agent agrees to negotiate in good faith whether to add such additional types of
Aircraft Assets, the respective Categories such Aircraft Assets would have on
Annex B and the respective Borrowing Base Advance Rates for such Aircraft
Assets in Annex C, it being understood that the inclusion of different types of
Aircraft Assets


 


15

















 


would require an
amendment to this Agreement requiring the consent of the Lenders pursuant to
Section 10.1.


 


Section 4.              Representations
and Warranties.  To induce the
Administrative Agent and the Lenders to enter into this Agreement and to make
the Loans, the Borrower hereby represents and warrants to the Administrative
Agent and each Lender that:


 


4.1           Financial
Condition.


 


(a)           The
unaudited pro forma consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at March 31, 2006 (the “Pro Forma Balance Sheet”), copies of which have heretofore
been furnished to the Administrative Agent, has been prepared giving effect (as
if such events had occurred on such date) to (i) the consummation of the
Acquisition, (ii) the Loans to be made on the Closing Date and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with
the foregoing.  The Pro Forma Balance
Sheet has been prepared based on the best information available to the Borrower
as of the date of delivery thereof, and presents fairly on a pro forma basis
the estimated financial position of Borrower and its consolidated Subsidiaries
as at March 31, 2006, assuming that the events specified in the preceding
sentence had actually occurred at such date.


 


(b)           The
audited consolidated balance sheet of AeroTurbine, Inc. as at December 31, 2004
and the related consolidated statements of income and of cash flows for the
fiscal years ended on such dates, reported on by and accompanied by an
unqualified report from KPMG, present fairly the consolidated financial
condition of AeroTurbine as at such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended.  The unaudited consolidated
balance sheet of AeroTurbine as at September 30, 2005, and the related
unaudited consolidated statements of income and cash flows for the nine-month
period ended on such date, present fairly the consolidated financial condition
of AeroTurbine as at such date, and the consolidated results of its operations
and its consolidated cash flows for the nine-month period then ended (subject
to normal year-end audit adjustments). 
All such financial statements have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein).  Neither AeroTurbine nor any of its
Subsidiaries has any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this
paragraph.  Since the date of the
Pro-Forma Balance Sheet there has been no Disposition by AeroTurbine or any of
its Subsidiaries of any material part of its business or property.


 


4.2           No
Change.  Since the date of the Pro
Forma Balance Sheet, there has been no development or event that has had or
could reasonably be expected to have a Material Adverse Effect.


 


4.3           Existence;
Compliance with Law.  The Borrower
and each of its Subsidiaries (a) is duly organized, validly existing and (if
applicable) in good standing under the laws of the jurisdiction of its
organization, (b) has the power and authority, and the legal right, to own and


 


16

















 


operate its property, to
lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation and in
good standing (if applicable) under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification (except to the extent that the failure to be so
qualified could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect) and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.


 


4.4           Power;
Authorization; Enforceable Obligations. 
The Borrower and each of its Subsidiaries has the power and authority,
and the legal right, to make, deliver and perform the Loan Documents to which
it is a party and, in the case of the Borrower, to obtain extensions of credit
hereunder.  The Borrower and each of its
Subsidiaries has taken all necessary organizational action to authorize the
execution, delivery and performance of the Loan Documents to which it is a
party and, in the case of the Borrower, to authorize the extensions of credit
on the terms and conditions of this Agreement. 
No consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or any other Person is required in
connection with the Acquisition and the extensions of credit hereunder or with
the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except (i) consents, authorizations,
filings and notices described in Schedule 4.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect and (ii) the filings contemplated by Section 5.  Each Loan Document has been duly executed and
delivered on behalf of the Borrower and/or each of its Subsidiaries party
thereto.  This Agreement constitutes, and
each other Loan Document upon execution will constitute, a legal, valid and
binding obligation of the Borrower and each of its Subsidiaries party thereto,
enforceable against each thereof in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether enforcement
is sought by proceedings in equity or at law).


 


4.5           No
Legal Bar.  The execution, delivery
and performance of this Agreement and the other Loan Documents, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or any Contractual Obligation of Borrower or any of its Subsidiaries and
will not result in, or require, the creation or imposition of any Lien on any
of their respective properties or revenues pursuant to any Requirement of Law
or any such Contractual Obligation (other than the Liens created by the
Security Documents).  No Requirement of
Law or Contractual Obligation applicable to the Borrower or any of its
Subsidiaries could reasonably be expected to have a Material Adverse Effect.


 


4.6           Litigation.  No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against Borrower or any of its
Subsidiaries or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected to have a Material
Adverse Effect.


 


17

















 


4.7           No
Default.  No Loan Party is in default
under or with respect to any of its Contractual Obligations in any respect that
could reasonably be expected to have a Material Adverse Effect.  No Default or Event of Default has occurred
and is continuing.


 


4.8           Ownership
of Property; Liens.  Schedule 4.8
lists all real property owned or leased by the Borrower or any of its Subsidiaries.


 


4.9           Intellectual
Property.  The Borrower and each of
its Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted.  No material claim has been asserted and is
pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor does
the Borrower know of any valid basis for any such claim.  The use of Intellectual Property by the
Borrower and each of its Subsidiaries does not infringe on the rights of any
Person in any material respect.


 


4.10         Taxes.  The Borrower and each of its Subsidiaries has
filed or caused to be filed all Federal, state and other material Tax returns
that are required to be filed and has paid all Taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other Taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity
of which are currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided
on the books of the relevant Loan Party); and, to the knowledge of the
Borrower, no Tax lien has been filed and no claim is being asserted, with
respect to any such Tax, fee or other charge.


 


4.11         Federal
Regulations.  No part of the proceeds
of any Loans, and no other extensions of credit hereunder, will be used for “buying”
or “carrying” any “margin stock” within the respective meanings of each of the
quoted terms under Regulation U as now and from time to time hereafter in
effect or for any purpose that violates the provisions of the Regulations of
the Board.  If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.


 


4.12         Labor
Matters.  Except as, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect:  (a) there are no strikes or
other labor disputes against Borrower or any of its Subsidiaries pending or, to
the knowledge of the Borrower, threatened; (b) hours worked by and payment made
to employees of the Borrower and each of its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement
of Law dealing with such matters; and (c) all payments due from Borrower or any
of its Subsidiaries on account of employee health and welfare insurance have
been paid or accrued as a liability on the books of the relevant Loan Party.


 


4.13         ERISA.  Neither a Reportable Event nor an “accumulated
funding deficiency” (within the meaning of Section 412 of the Code or
Section 302 of ERISA) has occurred during the five-year period prior to
the date on which this representation is made or deemed made with respect to
any Plan, and each Plan has complied in all material respects with the
applicable


 


18

















 


provisions of ERISA and
the Code.  No termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period. 
The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. 
Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan that has resulted or
could reasonably be expected to result in a material liability under ERISA, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any material liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. 
No such Multiemployer Plan is in Reorganization or Insolvent.


 


4.14         Investment
Company Act; Other Regulations. 
Neither the Borrower nor any of its Subsidiaries is an “investment
company”, or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended.  No Loan Party is subject to regulation under
any Requirement of Law (other than Regulation X of the Board) that limits its
ability to incur Indebtedness.


 


4.15         Subsidiaries.  Except for Subsidiaries created after the
Closing Date which have become parties to the Guarantee and Collateral
Agreement and the Aircraft Asset Security Agreement as provided therein (“New Subsidiaries”): (a)
Schedule 4.15 sets forth the name and jurisdiction of incorporation of
each Subsidiary; and, as to each such Subsidiary and each New Subsidiary, the
Borrower owns 100% of each class of Capital Stock issued thereby; and (b) there
are no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock options granted to employees or
directors and directors’ qualifying shares) of any nature relating to any
Capital Stock of the Borrower or any such Subsidiary, except as created by the
Loan Documents.


 


4.16         Use
of Proceeds.  The proceeds of the
Term Loans shall be used to finance a portion of the Acquisition and the
repayment of the Wachovia Credit Facility. 
The proceeds of the Revolving Loans shall be used to acquire (or
refinance the acquisition cost of) Eligible Equipment or refinance Returned
Equipment.  The Borrower is the ultimate
beneficiary of the Loans being made under this Agreement.


 


4.17         Environmental
Matters.  Except as, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect:


 


(a)           the
facilities and properties owned, leased or operated by Borrower or any of its
Subsidiaries (the “Properties”) do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or concentrations
or under circumstances that constitute or constituted a violation of, or could
give rise to liability under, any Environmental Law;


 


(b)           no
Loan Party has received or is aware of any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or


 


19

















 


compliance with
Environmental Laws with regard to any of the Properties or the business
operated by Borrower or any of its Subsidiaries (the “Business”), nor does the
Borrower have knowledge or reason to believe that any such notice will be
received or is being threatened;


 


(c)           Materials
of Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location that could give
rise to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of at, on or
under any of the Properties in violation of, or in a manner that could give
rise to liability under, any applicable Environmental Law;


 


(d)           no
judicial proceeding or governmental or administrative action is pending or, to
the knowledge of the Borrower, threatened, under any Environmental Law to which
Borrower or any of its Subsidiaries is or will be named as a party with respect
to the Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business;


 


(e)           there
has been no release or threat of release of Materials of Environmental Concern
at or from the Properties, or arising from or related to the operations of
Borrower or any of its Subsidiaries in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws;


 


(f)            the
Properties and all operations at the Properties are in compliance, and have in
the last five years been in compliance, with all applicable Environmental Laws,
and there is no contamination at, under or about the Properties or violation of
any Environmental Law with respect to the Properties or the Business; and


 


(g)           no
Loan Party has assumed any liability of any other Person under Environmental
Laws.


 


4.18         Accuracy
of Information, etc.  No
representation or warranty contained in this Agreement or any other Loan
Document or any other document or certificate furnished by or on behalf of
Borrower or any of its Subsidiaries to the Administrative Agent or the Lenders,
or any of them, for use in connection with the transactions contemplated by
this Agreement or the other Loan Documents, taken as a whole, contained as of the
date such statement, information, document or certificate was so furnished, any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.  The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount.  As of the date
hereof, the representations and warranties of the Borrower contained in the
Acquisition Documentation are true and correct in all material respects.


 


20

















 


4.19         Security
Documents.


 


(a)           The
Security Documents are effective to create in favor of the Collateral
Administrative Agent, for the benefit of the Lenders, the security interests in
the Collateral purported to be created thereby, with such priority and
perfected as provided in the Loan Documents.


 


(b)           Schedule
4.19(a) lists all Aircraft Assets and all Aircraft Asset Leases owned by the
Borrower or any Subsidiary.


 


(c)           Schedule
4.19(b) lists each location at which the Borrower or any Subsidiary maintains
or stores Eligible Equipment (other than any such Equipment subject to an
Aircraft Asset Lease) or Eligible Inventory having a aggregate value at any one
location of in excess of $1,000,000.


 


(d)           Schedule
4.19(c) lists each bank account or investment account maintained by the
Borrower or any of its Subsidiaries;


 


(e)           Schedule
4.19(d) lists all Intellectual Property owned by the Borrower or any of its
Subsidiaries.


 


(f)            Notwithstanding
the foregoing provisions of this Section 4.19, no representation is made under
this Section 4 as to any Exempted Property.


 


4.20         Solvency.  The Borrower and each Subsidiary thereof is,
and after giving effect to the Acquisition and the incurrence of all
Indebtedness and obligations being incurred in connection herewith and therewith
will be Solvent.


 


4.21         Certain
Documents.  The Borrower has
delivered to the Administrative Agent a complete and correct copy of the
Acquisition Documentation, including any amendments, supplements or
modifications with respect to any of the foregoing.


 


4.22         Employment
Arrangements.  The Borrower has
delivered to the Administrative Agent a complete and correct copy of all
employment contracts to which the Borrower is a party, a list of which is on
Schedule 4.22.


 


Section 5.              Conditions
Precedent.


 


5.1           Conditions
to Initial Loans.  The agreement of
each Lender to make the Senior Loans requested to be made by it is subject to
the satisfaction, prior to or concurrently with the making of such Loans on the
Closing Date, of the following conditions precedent:


 


(a)           Loan
Documents.  The Administrative Agent
shall have received the following documents, each duly executed and delivered
by the intended parties thereto:


 


(i)            this
Agreement;


 


(ii)           the
Guarantee and Collateral Agreement;


 


21

















 


(iii)          the
Aircraft Asset Security Agreement;


 


(iv)          the Pledge
Agreement;


 


(v)           the
Account Control Agreement;


 


(vi)          the
Intercreditor Agreement; ; and


 


(vii)         the
Fee Letter.


 


(b)           Acquisition,
etc.  The Administrative Agent shall
have received evidence, in each case on terms and conditions reasonably
satisfactory to the Administrative Agent, that, prior to or concurrently with
the making of such Loans on the Closing Date:


 


(i)            the
Borrower shall have acquired all of the Capital Stock of AeroTurbine pursuant
to the Acquisition Documentation (the “Acquisition”);


 


(ii)           the
Minimum Equity Contribution shall have been contributed by Pledgor to the
Borrower;


 


(iii)          the
Borrower shall have been merged into AeroTurbine with AeroTurbine being the
surviving corporation and after giving effect to such merger, (x) all of the
Capital Stock of AeroTurbine will be owned directly or indirectly by AerCap
B.V. and (y) AeroTurbine shall have succeeded as a matter of law to all of the
Borrower’s rights and obligations, including its obligations under the Loan
Documents. AeroTurbine shall have confirmed in writing that it is obligated
under each of the Loan Documents with the same force and effect as if
AeroTurbine had been named therein as the “Borrower”;


 


(iv)          (i) 
the existing Wachovia Credit Facility shall have been terminated and all
amounts thereunder shall have been paid in full and (ii) satisfactory
arrangements shall have been made for the termination of all Liens granted in
connection therewith; and


 


(v)           the
Borrower shall be in compliance with the financial condition covenants of
Section 7.1(a) and 7.1(b), as evidenced by a Compliance Certificate of a
Responsible Officer in the form of Exhibit B.


 


(c)           Pro
Forma Balance Sheet; Financial Statements, Baseline Appraisal, etc.  The Administrative Agent shall have received:
(i) the Pro Forma Balance Sheet and the audited consolidated financial
statements and unaudited interim consolidated financial statements referred to
in Section 4.1(a), (ii) the Baseline Appraisal and (iii) the Borrowing Base
Report with respect to the Closing Date.


 


(d)           Approvals.  All governmental and third party approvals
(including landlords’ and other consents) necessary in connection with the
Acquisition, the continuing operations of the Borrower and the transactions
contemplated hereby shall have been obtained and be in full force and effect,
and all applicable waiting periods shall have expired without any


 


22

















 


action being taken or
threatened by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the Acquisition or the financing contemplated
hereby.


 


(e)           Lien
Searches.  The Administrative Agent
shall have received the results of the following lien searches: (i) a UCC lien
search for the state in which the Borrower and each of its Subsidiaries is “located”
within the meaning of Section 9-307 of the Uniform Commercial Code with respect
to the Borrower and each of its Subsidiaries; (ii) an International Registry
Search with respect to each Aircraft Asset; (iii) an FAA search with respect to
each Aircraft Asset and (iv) a Federal tax lien search with respect to the
Borrower and each of its Subsidiaries, in each case revealing no Liens on any of
the assets of the Borrower or any of its Subsidiaries except for Permitted
Liens or Liens which have been (or will be) discharged on or before the Closing
Date pursuant to documentation reasonably satisfactory to the Administrative
Agent.


 


(f)            Environmental
Audit.  The Administrative Agent
shall have received an environmental audit with respect to the real properties
of the Borrower and its Subsidiaries specified by the Administrative Agent.


 


(g)           Fees.  The Lenders and the Administrative Agent
shall have received all fees required to be paid, and all expenses for which
invoices have been presented (including the reasonable fees and expenses of
legal counsel), on or before the Closing Date. 
All such amounts will be paid with proceeds of Loans made on the Closing
Date and will be reflected in the funding instructions given by the Borrower to
the Administrative Agent on or before the Closing Date.


 


(h)           Closing
Certificates.  The Administrative
Agent shall have received such documents and certificates as the Administrative
Agent or its counsel may reasonably request relating to the organization,
existence and good standing (if applicable) of the Borrower and each of its
Subsidiaries, the authorization of the transactions contemplated hereby, all in
form and substance reasonably satisfactory to the Administrative Agent and its
counsel. The Administrative Agent shall have also received a certificate, dated
the Closing Date and signed by the President, a Vice President or a Financial
Officer of the Borrower confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 5.2.


 


(i)            Legal
Opinions.  The Administrative Agent
shall have received the following executed legal opinions:


 


(i)            the legal
opinion of Milbank, Tweed, Hadley & McCloy, special counsel to the Pledgor,
the Borrower and its Subsidiaries, in form and substance reasonably
satisfactory to the Administrative Agent and its counsel;


 


(ii)           the legal
opinion of Vedder, Price, Kaufman & Kammholz, special counsel to the
Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent;


 


(iii)          the
legal opinion of McAfee & Taft, special FAA counsel, in form and substance
reasonably satisfactory to the Administrative Agent and its counsel;


 


23

















 


(iv)          the legal
opinion of the General Counsel to the Borrower, in form and substance
reasonably satisfactory to the Administrative Agent and its counsel; and


 


(v)           the legal
opinion of, Loyens & Loeff N.V., special counsel in the Netherlands;


 


in each case in form and
substance reasonably satisfactory to the Administrative Agent and its counsel.


 


(j)            Pledged
Stock; Stock Powers.  The
Administrative Agent shall have received the certificates representing the
shares of Capital Stock pledged pursuant to the Pledge Agreement and the
Guarantee and Collateral Agreement, together with an undated stock power for
each such certificate executed in blank by a duly authorized officer of the
pledgor thereof.


 


(k)           Lien
waivers, Assignment of Real Estate Leases. 
With respect to each lease of real estate listed in
Schedule 4.19(b), (i) the Borrower shall have assigned the lease of
the Borrower’s Miami, Florida premises to the Administrative Agent as
collateral pursuant to a Collateral Lease Assignment and (ii) the Borrower
shall have obtained from each Person with any interest in the Borrower’s Miami,
Florida facilities and its Roswell, New Mexico facilities (with respect to the
Roswell, New Mexico facilities, within 180 days of the Closing Date using
commercially reasonable efforts) (whether as fee owner, landlord, tenant,
ground lessor, mortgagee, leasehold mortgagee, beneficiary of deed of trust,
beneficiary of leasehold deed of trust or otherwise), a waiver of any and all
right or interest that such Person may otherwise have in the inventory and
other Collateral and such Person’s consent, if applicable, to access by the
Administrative Agent or its representative to the premises in connection with
the exercise of any rights or remedies under or pursuant to the Security
Documents pursuant to a Landlord Consent and such assignments and such Landlord
Consent, to the extent the relevant real estate lease has been filed,
registered or recorded, shall have been filed, registered or recorded in the
appropriate real estate registry.


 


(l)            Filings,
Registrations and Recordings (Generally). 
Each document (including any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Permitted
Liens), shall be in proper form for filing, registration or recordation.


 


(m)          Filings,
Registrations and Recordings (Aircraft Assets).  The following statements shall be true, and
the Administrative Agent shall have received evidence reasonably satisfactory
to it (including, with respect to Aircraft Assets which are eligible for
registration with the International Registry, a printout of the “priority
search certificate” from the International Registry relating to such Aircraft
Assets) with respect to each Aircraft Asset and any related Aircraft Asset
Lease so acquired to the effect that:


 


(i)            the
Borrower or the applicable Subsidiary has good title to such Aircraft Asset and
Aircraft Asset Lease, free and clear of Liens other than Permitted


 


24

















 


Liens,
the mortgage, security and international interests created by the Aircraft
Asset Security Agreement and the Aircraft Asset Security Agreement Supplement
for such Aircraft Asset and Aircraft Asset Lease;


 


(ii)           with
respect to each Aircraft Asset (other than an Aircraft Asset which is an
Exempted Property), the Borrower is in compliance with Section 2.02 of the
Aircraft Asset Security Agreement and, if required by Section 2.02 of the
Aircraft Asset Security Agreement, has delivered an opinion referred to in
Section 2.02(d) of the Aircraft Asset Security Agreement with respect to such
Aircraft Assets (provided, that any Lessee Consent to Assignment pursuant to
clause (b) of the definition thereof shall not be required to be delivered on
the Closing Date); and


 


(iii)          with
respect to each Aircraft Asset (other than an Aircraft Asset which is an
Exempted Property), the Borrower is in compliance with the provisions of
Section 2.04(c) of the Aircraft Asset Security Agreement (provided, that
any Lessee Consent to Assignment pursuant to clause (b) of the definition
thereof shall not be required to be delivered on the Closing Date).


 


In the event (i) it
is not reasonably feasible to file “international interests” anticipated
pursuant to Sections 2.02 and 2.04 of the Aircraft Asset Security
Agreement, the Borrower shall be deemed in compliance with this clause (m)
if “prospective international interests” with respect to such “international
interests”, if feasible, are filed, (ii) a Deregistration Power of
Attorney or Lessee Consent to Assignment of the type referred to in
clause (b) of the definition thereof, in either case, required by
Section 2.02 or 2.04 of the Aircraft Asset Security Agreement cannot be
obtained on or prior to the Closing Date, the Borrower shall obtain such
Deregistration Power of Attorney or Lessee Consent to Assignment, as the case
may be, within 45 days after the Closing Date, except that, no such filing
of “international interests”, Deregistration Power of Attorney or Lessee
Consent to Assignment shall be required with respect to those aircraft leased
to Aeropostal Alas De Venezuela, C.A. and (iii) the mortgage and assignment of
lease required to be filed in Tunis with respect to that certain A320-211
aircraft (msn. 025) leased to Nouvelair Tunis cannot be filed prior to the
Closing Date, such mortgage and assignment of lease shall be filed promptly,
and in any event within ten Business Days, after the Closing Date.


 


(n)           Solvency
Certificate.  The Administrative
Agent shall have received a certificate from the Chief Financial Officer of the
Borrower that the Borrower and each Subsidiary thereof is, and after giving
effect to the Acquisition and the incurrence of all Indebtedness and obligations
being incurred in connection herewith and therewith will be, Solvent.


 


(o)           Insurance.  The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 6.5 hereof
and Section 2.07 of the Aircraft Asset Security Agreement in respect of each
Aircraft Asset subject to the Aircraft Asset Security Agreement Supplement
delivered on the date hereof.


 


(p)           Key
Man Insurance.  The Administrative
Agent shall have received valid assignments of the Key Man Insurance polices in
effect on the Closing Date and promptly after


 


25

















 


the Closing Date the
Borrower shall obtain the consent or acknowledgement to such assignments from
the insurers issuing such policies.


 


(q)           Interest
Rate Protection.  The Borrower shall
have entered into the Calyon Hedge Agreement.


 


(r)            Employment
Arrangements.  The Administrative
Agent shall have been furnished with the employment contracts and arrangements
in respect of “key” employees of the Borrower under Section 4.22.


 


(s)           Junior
Loans.  The Closing Date of the
Junior Credit Agreement shall have occurred and, prior to or concurrently with
the making of such Loans on the Closing Date, the Junior Lenders shall have
disbursed to or for account of the Borrower.


 


(t)            Know
Your Customer.  The Administrative
Agent shall have received such other documents or information as the
Administrative Agent may reasonably request in order to satisfy the “know your
customer” rules, guidelines, practices or policies observed by the Lenders.


 


5.2           Conditions
to Each Loan.  The agreement of each
Lender to make a Revolving Loan requested to be made by it on any date
(including its initial Loan as pertains to clauses (a) and (b) below only) is
subject to the satisfaction of the following conditions precedent:


 


(a)           Representations
and Warranties.  Each of the
representations and warranties made by Borrower in Section 4 of this Agreement
shall be true and correct on and as of such date as if made on and as of such
date; provided that, except for the extension of credit made on the Closing
Date, such representations and warranties shall not include those contained in
Sections 4.2, 4.6, 4.12 or 4.17.


 


(b)           No
Default.  No Default or Event of
Default shall have occurred and be continuing on such date or after giving
effect to the extensions of credit requested to be made on such date.


 


(c)           Notice
of Borrowing.  The Administrative
Agent shall have received from the Borrower the Notice of Borrowing therefor,
duly completed and with all attachments, together with such other evidence as
to the Purchase Price of the associated Eligible Equipment or Eligible
Inventory as the Administrative Agent may reasonably request.


 


(d)           Equity
Contribution.  The Administrative
Agent shall have received from the Borrower evidence reasonably satisfactory to
the Administrative Agent of the Borrower’s provision of the balance of the
Purchase Price for the associated Eligible Equipment or Eligible Inventory not
attributable to the related Revolving Loan.


 


(e)           Insurance.  The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 2.07 of the
Aircraft Asset Security Agreement in respect of each Aircraft Asset subject to
the Aircraft Asset Security Agreement Supplement delivered on such date.


 


26

















 


(f)            Aircraft
Asset Security Agreement Supplement. 
The Administrative Agent shall have received from the Borrower a duly
executed Aircraft Asset Security Agreement Supplement in respect of any
Aircraft Asset and Assignment of Lease in respect of any Aircraft Asset Lease
being acquired with the proceeds of such Revolving Loan.


 


(g)           Filings,
Registrations and Recordings (Aircraft Assets).  In the case of any Aircraft Asset intended to
be acquired with the proceeds of such Revolving Loan, the following statements
shall be true, and the Administrative Agent shall have received evidence
reasonably satisfactory to it (including, with respect to Aircraft Assets which
are eligible for registration with the International Registry, a printout of
the “priority search certificate” from the International Registry relating to
such Aircraft Assets) with respect to each Aircraft Asset and any related
Aircraft Asset Lease so acquired to the effect that:


 


(i)            the
Borrower or the applicable Subsidiary has good title to such Aircraft Asset and
Aircraft Asset Lease, free and clear of Liens other than Permitted Liens, the
mortgage, security and international interests created by the Aircraft Asset
Security Agreement and the Aircraft Asset Security Agreement Supplement for
such Aircraft Asset and Aircraft Asset Lease;


 


(ii)           with
respect to each Aircraft Asset (other than an Aircraft Asset which is an
Exempted Property), the Borrower is in compliance with Section 2.02 of the
Aircraft Asset Security Agreement and, if required by Section 2.02 of the
Aircraft Asset Security Agreement, has delivered an opinion referred to in
Section 2.02(d) of the Aircraft Asset Security Agreement with respect to
such Aircraft Assets (provided, that any Lessee Consent to Assignment pursuant
to clause (b) of the definition thereof shall not be required to be delivered
on the Borrowing Date); and


 


(iii)          with
respect to each Aircraft Asset (other than an Aircraft Asset which is an
Exempted Property), in respect of any Aircraft Asset Lease, the Borrower is in
compliance with the provisions of Section 2.04(c) of the Aircraft Asset
Security Agreement (provided, that any Lessee Consent to Assignment pursuant to
clause (b) of the definition thereof shall not be required to be delivered on
the Borrowing Date).


 


In the event (i) it
is not reasonably feasible to file “international interests” anticipated
pursuant to Sections 2.02 and 2.04 of the Aircraft Asset Security
Agreement, the Borrower shall be deemed in compliance with this clause (g)
if “prospective international interests” with respect to such “international
interests”, if reasonably feasible, are filed and (ii) a Deregistration
Power of Attorney or Lessee Consent to Assignment of the type referred to in
clause (b) of the definition thereof, in either case, required by
Section 2.02 or 2.04 of the Aircraft Asset Security Agreement cannot be
obtained on or prior to the date of borrowing, the Borrower shall obtain such
Deregistration Power of Attorney or Lessee Consent to Assignment, as the case
may be, within 45 days after the Borrowing Date.


 


Section 6.              Affirmative
Covenants.  The Borrower hereby
agrees that, so long as the Commitments remain in effect or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall, and shall cause each of its Subsidiaries, to:


 


27

















 


6.1           Financial
Statements.  Furnish to the
Administrative Agent on behalf of the Lenders:


 


(a)           as
soon as available, but in any event within 120 days (or, in the case of the
fiscal year ending December 31, 2005, by June 15, 2006) after the end of each
fiscal year of the Borrower, a copy of the audited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such year
and the related audited consolidated statements of income and of cash flows for
such year, setting forth in each case in comparative form the figures for the
previous year, reported on without a “going concern” or like qualification or
exception, or qualification arising out of the scope of the audit, by KPMG,
Price Waterhouse Coopers or other independent certified public accountants of
nationally recognized standing;


 


(b)           as
soon as available, but in any event not later than 90 days after the end of
each fiscal year of the Borrower, the unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such fiscal
year and the related unaudited consolidated statements of income and of cash
flows for such fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year; and


 


(c)           as
soon as available, but in any event not later than 45 days after the end of
each of the first three quarterly periods of each fiscal year of the Borrower,
the unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments).


 


All such financial statements shall be
complete and correct in all material respects and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods (except as approved by
such accountants or officer, as the case may be, and disclosed therein and
except that unaudited financial statements may not have notes).


 


6.2           Certificates;
Other Information.  Furnish to the
Administrative Agent on behalf of the Lenders:


 


(a)           concurrently
with the delivery of any financial statements pursuant to Section 6.1(a)
or 6.1(c), a Compliance Certificate of a Responsible Officer: (i) stating
that, to the best of each such Responsible Officer’s knowledge, such
Responsible Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate; (ii) in the case of
quarterly or annual financial statements, containing all information and calculations
necessary for determining compliance by the Borrower and each Subsidiary with
Sections 7.1(a) and 7.1(b) as of the last day of the fiscal quarter or fiscal
year of the Borrower, as the case may be; and (iii)  to the extent not
previously disclosed to the Administrative Agent, a listing of any location
where the Borrower or any Subsidiary maintains, stores or warehouses Eligible
Equipment or Eligible Inventory in an aggregate amount of $1,000,000 or more.


 


28














 


(b)           as
soon as available, and in any event no later than 45 days after the end of each
fiscal year of the Borrower, a consolidated budget for the following fiscal
year (including a projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow and projected income and a
description of the underlying assumptions applicable thereto), and, as soon as
available, significant revisions, if any, of such budget and projections with
respect to such fiscal year (collectively, the “Projections”);


 


(c)           no
later than 5 Business Days prior to the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver or
other modification with respect to any Acquisition Documentation; and


 


(d)           promptly
upon the Administrative Agent’s request, such additional financial and other
information as may from time to time be required by the Administrative Agent or
any Lender in order to comply with any Requirement of Law.


 


6.3           Payment
of Obligations.  Pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all its material obligations of whatever nature, except where
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the relevant Loan Party.


 


6.4           Maintenance
of Existence; Compliance. 
(a) (i) Preserve, renew and keep in full force and effect its
organizational existence and (ii) take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business, except, in each case, as otherwise permitted by
Section 7.4 and except, in the case of clause (ii) above, to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations
and Requirements of Law except to the extent that failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.


 


6.5           Maintenance
of Property; Insurance.  Without
limiting its obligations under Sections 2.07 of the Aircraft Asset Security
Agreement, (a) keep all property useful and necessary in its business in
good working order and condition, ordinary wear and tear excepted and
(b) maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least
such risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business.


 


6.6           Inspection
of Property; Books and Records; Discussions.  (a) Keep proper books of records and
account in which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities and (b)  permit representatives of the
Administrative Agent to visit and inspect any of its properties and examine and
make abstracts from any of its books and records upon reasonable notice and at
any reasonable time during normal business hours and not more than once during
any fiscal quarter (unless an Event of Default shall have occurred and be
continuing) and to discuss the business, operations, properties and financial
and other condition of the Loan Parties


 


29

















 


with officers and
employees of the Loan Parties and with their independent certified public
accountants provided that, such inspection shall not be materially
interruptive to the business of the Borrower.


 


6.7           Notices.  Promptly give notice to the Administrative
Agent of:


 


(a)           the
occurrence of any Default or Event of Default;


 


(b)           any
(i)  event of default under any Contractual Obligation of Borrower or any
of its Subsidiaries or (ii) litigation, investigation or proceeding that
may exist at any time between Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a Material
Adverse Effect;


 


(c)           any
litigation or proceeding affecting Borrower or any of its Subsidiaries
(i) in which the amount involved is $5,000,000 or more and not covered by
insurance or (ii) which relates to any Loan Document;


 


(d)           the
following events, as soon as possible and in any event within 30 days after the
Borrower knows of:  (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to make
any required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;
and


 


(e)           any
Aircraft Asset becoming an Impaired Aircraft Asset or Lease Default Equipment.


 


Each notice pursuant to this Section 6.7
shall be accompanied by a statement of a Responsible Officer setting forth
details of the occurrence referred to therein and stating what action the
relevant Loan Party proposes to take with respect thereto.


 


6.8           Environmental
Laws.  (a)  Comply in all
material respects with, and ensure compliance in all material respects by all
tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply in all material respects with and maintain, and ensure that
all tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws.


 


(b)           Conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws.


 


30

















 


6.9           Hedge
Agreements; Key Man Insurance.


 


(a)           Keep
in full force and effect, and comply with its obligations under, the Calyon
Hedge Agreement and keep in full force and effect, and comply with its
obligations under, the Existing Hedge Agreements through their respective “Termination
Dates”.


 


(b)           As
soon as commercially practicable, obtain policies of Key Man Insurance in the
amount of at least $10,000,000 each with respect to Messrs. Finazzo and
Nichols, with the Administrative Agent named as the insured party and loss
payee and otherwise containing such terms and conditions as the Administrative
Agent may reasonably request and thereafter maintain such policies in full
force and effect and comply with its obligations under such policies.


 


(c)           If
the Key Man Guarantor has not issued the Key Man Guarantee within 10 Business
Days of the Closing Date, the Borrower shall deposit with Restricted Account a
sum of $10,000,000 as cash collateral in lieu of obtaining the Key Man
Guarantee, such amount to be held pursuant to the last two sentences of Section
6(a)(i) of the Guarantee and Collateral Agreement.  Such amount (unless applied pursuant to
Section 6(a)(i) of the Guarantee and Collateral Agreement) shall be returned to
the Borrower promptly after the issuance of the Key Man Guarantee and the Key
Man Guarantor shall provide Loyens & Loeff N.V., special counsel to the
Administrative Agent in the Netherlands such information as may be reasonably
requested to permit such firm to issue an opinion with respect to the due
authorization and validity of such Key Man Guarantee in form and substance
reasonably satisfactory to the Administrative Agent.


 


(d)           Until
the policies referred to in clause (b) above are obtained, the Borrower and any
of its Subsidiaries shall maintain in full force and effect, and comply with
its obligations under, the Key Man Insurance referred to in Section 5.1(p)
and if and when a demand for payment under a Key Man Insurance Policy is being
made, the Administrative Agent may make a demand for payment under and in
accordance with the Key Man Guarantee (or may apply the amount deposited by the
Borrower pursuant to clause (c) above and the last sentence of Section 6(a)(i))
to the extent that the Key Man Insurance with respect to Mr. Finazzo or
Mr. Nichols has not been increased to $10,000,000.


 


(e)           The
failure by the Borrower to obtain policies of Key Man Insurance in the amount
of at least $10,000,000 each with respect to Mr. Finazzo or
Mr. Nichols (as the case may be), with the Administrative Agent named as
the insured party and loss payee and otherwise containing such terms and
conditions as the Administrative Agent may reasonably request, shall not
constitute a Default or Event of Default so long as the Key Man Insurance with
respect to Mr. Finazzo or Mr. Nichols (as the case may be) referred
to in Section 5.1(p) and, if applicable, the Key Man Guarantee with
respect to Mr. Finazzo or Mr. Nichols (as the case may be) shall
remain in full force and effect (unless such Key Man Insurance or Key Man
Guarantee shall have terminated due to payment being made thereunder).


 


6.10         Additional
Collateral.  (a)    With
respect to any personal property acquired after the Closing Date by the
Borrower or any of its Subsidiaries (other than (x) any property subject
to a Lien expressly permitted by Section 7.3 and (y) any Exempted
Property) as to which the Administrative Agent, for the benefit of the Lenders,
does not have a perfected Lien, promptly (i) execute and deliver to the
Administrative Agent such amendments or supplements to the Guarantee and
Collateral Agreement (or, in the case of any Aircraft Asset or Aircraft Asset


 


31

















 


Lease, the Aircraft Asset
Security Agreement and the Assignment of Lease) or such other documents as the
Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such property and (ii) take all actions necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in such property, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or the taking of the actions
specified in Section 5.2(g) or as may be reasonably requested by the
Administrative Agent.


 


(b)           With
respect to any interest in any real property having a value (together with
improvements thereof) of at least $500,000 acquired after the Closing Date by
the Borrower or any of its Subsidiaries, promptly (i) execute and deliver
a first priority mortgage, in favor of the Administrative Agent, for the
benefit of the Lenders, covering such real property, (ii) if requested by
the Administrative Agent, provide the Lenders with (x) title and extended
coverage insurance covering such real property in an amount at least equal to
the purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor’s certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such mortgage, each of the foregoing in
form and substance reasonably satisfactory to the Administrative Agent and
(iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent. 
With respect to any real property leased by Borrower or any of its
Subsidiaries after the Closing Date, the Borrower shall have obtained from each
Person with any interest in the real property and/or the improvements thereon
(whether as fee owner, landlord, tenant, ground lessor, mortgagee, leasehold
mortgagee, beneficiary of deed of trust, beneficiary of leasehold deed of trust
or otherwise), a waiver of any and all right or interest that such Person may
otherwise have in the inventory and other Collateral and such Person’s consent,
if applicable, to access by the Administrative Agent or its representative to
the premises in connection with the exercise of any rights or remedies under or
pursuant to the Security Documents pursuant to a Landlord Consent and, if in
the reasonable opinion of the Administrative Agent, such real property lease is
material to the continued operation of the business of the Borrower and its
Subsidiaries, the Borrower shall assign such real estate lease to the
Administrative Agent pursuant to a Collateral Lease Assignment.


 


(c)           With
respect to any new Subsidiary created or acquired after the Closing Date by
Borrower or any of its Subsidiaries, promptly (i) execute and deliver to
the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by the Borrower or any of its Subsidiaries, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the relevant Loan Party, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement
and, if applicable, the Aircraft Asset Security Agreement, (B) to take such
actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest in the
Collateral described in the Guarantee and Collateral


 


32

















 


Agreement and the
Aircraft Asset Security Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or
the taking of the actions specified in Section 5.2(g) or the Aircraft Asset
Security Agreement, as the case may be, or by law or as may be reasonably
requested by the Administrative Agent and (C) to deliver to the
Administrative Agent a certificate of such Subsidiary, substantially in the
form of Exhibit B to the Guarantee and Collateral Agreement, with
appropriate insertions and attachments, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.


 


(d)           With
respect to any Deposit Account acquired by the Borrower or any Subsidiary after
the Closing, cause an account control agreement substantially in the form of
the Account Control Agreement to be duly executed and delivered by the account
holder, the account bank/broker and the Administrative Agent.


 


6.11         Subsidiaries.  All Subsidiaries, whether existing on the
date hereof or formed or acquired in the future, shall be Wholly Owned
Subsidiaries.


 


6.12         Post
Closing Registration of International Interests.  If on the Closing Date or on any Borrowing
Date, prospective international interests with respect to an Aircraft Asset or
an Aircraft Asset Lease which are eligible for registration with the
International Registry were made, within 45 days after the Closing Date or such
Borrowing Date, the Borrower shall, if feasible, register international
interests with respect to such Aircraft Asset or Aircraft Asset Lease with the
International Registry and shall deliver to the Administrative Agent a printout
of the “priority search certificate” from the International Registry relating
thereto showing no registered international interests on the International
Registry prior to such international interest or assignment.


 


Section 7.              Negative
Covenants.  The Borrower hereby
agrees that, so long as the Commitments remain in effect, any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly:


 


7.1           Financial
Condition Covenants.


 


(a)           Consolidated
Leverage Ratio.  Permit the
Consolidated Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of the Borrower ending with any fiscal quarter set
forth below to exceed the ratio set forth below opposite such fiscal quarter:


 


	
  Fiscal Quarter(s) ending

  	
   

  	
  Consolidated Leverage Ratio

  	
   

  
	
  June 30, 2006

  	
   

  	
  5.50:1

  	
   

  
	
  September 30, 2006

  	
   

  	
  5.25:1

  	
   

  
	
  December 31, 2006

  	
   

  	
  5.00:1

  	
   

  
	
  March 31, 2007

  	
   

  	
  5.00:1

  	
   

  
	
  June 30, 2007 – March 31, 2009 (inclusive)

  	
   

  	
  4:00:1

  	
   

  
	
  Each fiscal quarter end-date thereafter

  	
   

  	
  3:00:1

  	
   

  



 


33

















 


(b)           Consolidated
Fixed Charge Coverage Ratio.  Permit
the Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower to be less than 1.25:1.


 


(c)           One
Time Charges. For the purpose of calculating the two preceding financial
covenants, the Transaction Costs (as defined in Annex A) shall be excluded from
the calculation thereof, so long as such expenses do not exceed the maximum
amount specified in the definition thereof.


 


(d)           Cure
Rights. For the purposes of ascertaining whether an Event of Default has
occurred under Section 8(c)(i) in respect of either of the two preceding
financial covenants in clauses (a) and (b) hereof, notwithstanding that either
such covenant test is not satisfied, no Event of Default shall exist until:


 


(i)            in the
case of clause (a) [Consolidated Leverage
Ratio], 30 days have elapsed from the date such test has been
determined to have not been satisfied during which the Loans shall not have
been prepaid in an amount such that, on a pro forma basis (taking into account
the resulting Loan balance after giving effect to such prepayment), such
covenant test would be satisfied; and


 


(ii)           in the
case of clause (b) [Consolidated Fixed
Charge Ratio], 30 days have elapsed from the date such test has been
determined to have not been satisfied during which the Revolving Loans and the
Tranche A Term Loans shall not have been prepaid (on a pari-passu pro rated
basis) in an aggregate amount equal to $500,000 for every basis point below
1.25:1 that the Consolidated Fixed Charge Ratio is at such date of
determination; provided that this “cure” provision for such clause (b) shall be
inapplicable if the ratio as at such date of determination is below 1.16:1.


 


7.2           Indebtedness.  Create, issue, incur, assume, become liable
in respect of or suffer to exist any Indebtedness, except:


 


(a)           Indebtedness
of Borrower or any of its Subsidiaries pursuant to any Loan Document;


 


(b)           Indebtedness
of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any
other Subsidiary and Subordinated Indebtedness of the Borrower to the Pledgor;


 


(c)           Guarantee
Obligations incurred in the ordinary course of business by the Borrower of
obligations of any Subsidiary;


 


(d)           Indebtedness
outstanding on the date hereof (excluding the Wachovia Credit Facility) and
listed on Schedule 7.2(d) and any refinancings, refundings, renewals or


 


34

















 


extensions thereof
(without increasing, or shortening the maturity of, the principal amount
thereof);


 


(e)           Hedge
Agreements in respect of Indebtedness otherwise permitted hereby that bears
interest at a floating rate, so long as such agreements are not entered into
for speculative purposes;


 


(f)            Indebtedness
of any Person that becomes a Subsidiary after the date hereof, provided,
that such Indebtedness existed immediately prior to the time such Person became
a Subsidiary and was not created in contemplation of or in connection with such
Person becoming a Subsidiary and after giving effect to such Person becoming a
Subsidiary, the Borrower would be in compliance with clauses (a) and (b) of
Section 7.1 (assuming such clauses were calculated as of the date such Person
became a Subsidiary);


 


(g)           Indebtedness
incurred in the acquisition of tooling in the ordinary course of business; and


 


(h)           Other
Indebtedness in an aggregate amount not exceeding $4,000,000 at any time
outstanding.


 


7.3           Liens.  Create, incur, assume or suffer to exist any
Lien upon any of its property, whether now owned or hereafter acquired, except
for the following permitted liens (“Permitted
Liens”):


 


(a)           Liens
for taxes not yet due or that are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP;


 


(b)           landlords’,
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Liens arising in the ordinary course of business that are not overdue for a
period of more than 60 days or that are being contested in good faith by
appropriate proceedings;


 


(c)           pledges
or deposits in connection with workers’ compensation, unemployment insurance
and other social security legislation;


 


(d)           deposits
to secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course of
business;


 


(e)           easements,
rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in
amount and that do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;


 


(f)            Liens
in existence on the date hereof listed on Schedule 7.3(f), securing
Indebtedness permitted by Section 7.2(d), provided that no such Lien is
spread to cover any


 


35

















 


additional property after
the Closing Date and that the amount of Indebtedness secured thereby is not
increased;


 


(g)           Liens
created pursuant to the Security Documents and Liens permitted by the Security
Documents (including without limitation Section 2.01 of the Asset Security
Agreement);


 


(h)           any
interest or title of a lessor or a lessee under any lease entered into by the
Borrower or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased;


 


(i)            Liens
of creditors of any person to whom the Borrower’s or a Subsidiary’s assets are
consigned for sale in the ordinary course of the Borrower’s or such Subsidiary’s
business;


 


(j)            Liens
in favor of customs and revenue authorities arising as a matter of law to
secure payment of custom duties in connection with the importation of goods, provided
that such custom duties are paid when due and adequate reserves with respect
thereto are maintained on the books of the Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP;


 


(k)           Liens
in favor of collecting or payor banks and other banks providing cash management
services, in each case having a right of setoff, revocation, refund or
chargeback against money or instruments of the Borrower or any Subsidiary on
deposit or in possession of such bank arising for the payment of bank fees and
other similar amounts owed in the ordinary course of business;


 


(l)            Judgment
and attachment Liens not giving rise to an Event of Default;


 


(m)          Other
Liens on assets (other than assets forming part of the Borrowing Base) acquired
after the Closing Date securing or relating to Indebtedness and other
liabilities and obligations not otherwise prohibited by this Agreement or the
Security Documents in an aggregate amount not to exceed $4,000,000 at any time
outstanding; and


 


(n)           Any
renewal or substitution of any Lien described in clause (f), (i) or (m)
provided that such Lien is not extended to additional assets.


 


7.4           Fundamental
Changes.  Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its property or business, except that:


 


(a)           the
Borrower may be merged into AeroTurbine as contemplated by Section 5.1;


 


(b)           any
Subsidiary of the Borrower may be merged or consolidated with or into the
Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with or into any Subsidiary (provided that the Subsidiary shall
be the continuing or surviving corporation);


 


36

















 


(c)           any
Subsidiary of the Borrower may Dispose of any or all of its assets to the
Borrower or any Subsidiary (upon voluntary liquidation or otherwise); and


 


(d)           any
Investment expressly permitted by Section 7.8 may be structured as a
merger, consolidation or amalgamation.


 


7.5           Lines
of Business.  Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement or that are reasonably related thereto.


 


7.6           Restricted
Payments.  Declare or pay any
dividend (other than dividends payable solely in common stock of the Person
making such dividend) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any Capital Stock of the
Borrower, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower (collectively, “Restricted Payments”), except that the Borrower may make
dividend payment if:


 


(a)           no
Default or Event of Default has occurred and is continuing;


 


(b)           the
aggregate amount of such dividend payment in any calendar year does not exceed
$30,000,000; and


 


(c)           after
giving effect to such dividend, the Consolidated Leverage Ratio (calculated for
the three month period ending on the date of such dividend) is not more than
2.5:1 and the Consolidated Fixed Charge Coverage Ratio (calculated for the
three month period ending on the date of such dividend) is not less than
1.25:1;


 


provided that this
Section 7.6 shall not restrict any dividend or other payment made in connection
with the Acquisition.


 


7.7           Capital
Expenditures.  Make or commit to make
any Capital Expenditure in excess of $4,000,000 in the aggregate, except
Capital Expenditures by the Borrower and its Subsidiaries of Aircraft Assets or
tooling directly related thereto in the ordinary course of business; provided,
however, that neither the Borrower nor any of its Subsidiaries may
commit to aggregate obligations to make Capital Expenditures for Aircraft
Assets (x) more than 18 but less than 24 months in the future if such aggregate
obligations would be in excess of $35,000,000 or (y) more 24 or more months in
the future if such aggregate obligations (when totaled with any aggregate
obligations more than 18 months or less than 24 months in the future) would be
in excess of $25,000,000.


 


7.8           Investments.  Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, “Investments”),
except:


 


(a)           extensions
of trade credit in the ordinary course of business and any bond, note, debenture
or other security distributed in a bankruptcy proceeding with respect thereto;


 


37

















 


(b)           investments
in Cash Equivalents;


 


(c)           Guarantee
Obligations permitted by Section 7.2;


 


(d)           the
Acquisition;


 


(e)           intercompany
Investments by Borrower or any of its Subsidiaries in the Borrower or any
Person that, prior to such investment, is a Subsidiary; and


 


(f)            in
addition to Investments otherwise expressly permitted by this Section,
Investments by the Borrower or any of its Subsidiaries in an aggregate amount
(valued at cost) not to exceed $10,000,000 during the term of this Agreement.


 


7.9           Optional
Payments and Modifications of Certain Debt Instruments; Synthetic Purchase
Agreements.  (a) Make or offer
to make any optional or voluntary payment, prepayment, repurchase or redemption
of or otherwise optionally or voluntarily defease or segregate funds with
respect to the Tranche B Term Loans; (b) amend, modify, waive or otherwise
change, or consent or agree to any amendment, modification, waiver or other
change to, any of the terms of the Junior Credit Agreement (other than any such
amendment, modification, waiver or other change that (i) would extend the
maturity or reduce the amount of any payment of principal thereof or reduce the
rate or extend any date for payment of interest thereon and (ii) does not
involve the payment of a consent fee); or (c) enter into or be party to,
or make any payment under, any Synthetic Purchase Agreement.


 


7.10         Transactions
with Affiliates.  Enter into any
transaction, including any purchase, sale, lease or exchange of property, the
rendering of any service or the payment of any management, advisory or similar
fees, with any Affiliate (other than the Borrower or any Subsidiary) unless such
transaction is (a) otherwise permitted under this Agreement,
(b) (i) in the ordinary course of business of the relevant Loan
Party, and (ii) upon fair and reasonable terms no less favorable to the
relevant Loan Party than it would obtain in a comparable arm’s length
transaction with a Person that is not an Affiliate or (c) a written tax sharing
agreement or similar arrangement between the Borrower and the Pledgor that
requires the payment by the Borrower of its allocable share of any
consolidated, combined or unitary tax liability of any group that includes the
Borrower and the Pledgor (or any affiliate of the Pledgor), which allocable
share shall be no greater than the amount of US federal, state, and local taxes
that the Borrower and the Borrower’s subsidiaries would have paid had the
Borrower and its subsidiaries filed a consolidated, combined or unitary return
for a group including only the Borrower and its Subsidiaries.


 


7.11         Sales
and Leasebacks.  Enter into any
arrangement with any Person providing for the leasing by Borrower or any of its
Subsidiaries of real or personal property that has been or is to be sold or
transferred by such Loan Party to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of such Loan Party.


 


7.12         Changes
in Fiscal Periods.  Permit the fiscal
year of the Borrower to end on a day other than December 31 or change the
Borrower’s method of determining fiscal quarters.


 


38

















 


7.13         Negative
Pledge Clauses.  Enter into or suffer
to exist or become effective any agreement that prohibits or limits the ability
of Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its property or revenues, whether now owned or
hereafter acquired, to secure its obligations under the Loan Documents to which
it is a party other than (a) this Agreement and the other Loan Documents
and (b) any agreements governing any purchase money Liens or Capital Lease
Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby).


 


7.14         Clauses
Restricting Subsidiary Distributions. 
Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary of the Borrower to
(a) make Restricted Payments in respect of any Capital Stock of such
Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other
Subsidiary of the Borrower, (b) make loans or advances to, or other
Investments in, the Borrower or any other Subsidiary of the Borrower or
(c) transfer any of its assets to the Borrower or any other Subsidiary of
the Borrower, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents and
(ii) any restrictions with respect to a Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary.


 


7.15         Amendments
to Acquisition Documents. 
(a) Amend, supplement or otherwise modify (pursuant to a waiver or
otherwise) the terms and conditions of the indemnities and licenses furnished
to the Borrower or any of its Subsidiaries pursuant to the Acquisition
Documentation such that after giving effect thereto such indemnities or
licenses shall be materially less favorable to the interests of the Loan
Parties or the Lenders with respect thereto or (b) otherwise amend,
supplement or otherwise modify the terms and conditions of the Acquisition
Documentation or any such other documents except for any such amendment,
supplement or modification that (i) becomes effective after the Closing
Date and (ii) could not reasonably be expected to have a Material Adverse
Effect.


 


Section 8.              Events
Of Default.


 


If any of the following events shall occur and be
continuing:


 


(a)           the
Borrower shall fail to pay the principal of or any interest on any Loan, or any
fee payable hereunder or under any other Loan Document, within three Business
Days after any such principal, interest or fee becomes due in accordance with
the terms hereof; or the Borrower shall fail to pay any other amount payable
hereunder or under any other Loan Document within five Business Days after the
Borrower shall have received notice from the Administrative Agent that same
shall be due in accordance with the terms hereof; or


 


(b)           any
representation or warranty made or deemed made by any Loan Party herein or in
any other Loan Document to which it is a party or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on the date made or
deemed made and which shall have a Material Adverse


 


39

















 


Effect on the ability of
the Loan Party to comply with its obligations under the Loan Documents; or


 


(c)           the
Borrower shall default in the observance or performance of any agreement
contained in clause (i) or (ii) of Section 6.4(a),
Section 6.7(a) or Section 7 of this Agreement; or


 


(d)           the
Borrower shall have failed to deliver a Borrowing Base valuation pursuant to
Section 3.3(a) within five Business Days after the same shall be due; or


 


(e)           except
as otherwise provided in Section 6.9 hereof and Section 2.10 of the Aircraft
Asset Security Agreement, any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other
Loan Document (other than as provided in paragraphs (a) through (d) of
this Section), and such default shall continue unremedied for a period of 30
days after notice to the Borrower from the Administrative Agent; or


 


(f)            the
Borrower or any Subsidiary of the Borrower shall (i) default in making any
payment of any principal of or interest on any Indebtedness (including any
Guarantee Obligation, but excluding the Loans) beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable; provided, that a
default, event or condition described in clause (i) or (ii) of this
paragraph (e) shall not at any time constitute an Event of Default unless,
at such time, one or more defaults, events or conditions of the type described
in clauses (i) and (ii) of this paragraph (e) shall have occurred and
be continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $4,000,000; or


 


(g)           (i) Borrower
or any of its Subsidiaries shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official for it
or for all or any substantial part of its assets, or Borrower or any of its
Subsidiaries shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above that (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed, undischarged
or unbonded for a period of 60 days; or (iii) there shall be commenced
against Borrower or any of its Subsidiaries any case, proceeding or other
action


 


40

















 


seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets that results in the entry of an order for
any such relief that shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or
(iv) Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or
(v) Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or


 


(h)           (i) any
Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any “accumulated funding deficiency” (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or any
Lien in favor of the PBGC or a Plan shall arise on the assets of Borrower or any
of its Subsidiaries or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) Borrower or any of its
Subsidiaries or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or conditions, if
any, could, in the reasonable judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or


 


(i)            one
or more judgments or decrees shall be entered against the Borrower or any of
its Subsidiaries involving in the aggregate a liability (not paid or fully
covered by insurance as to which the relevant insurance company has
acknowledged coverage) of $5,000,000 or more, unless all such judgments or
decrees shall have been vacated, discharged, stayed or bonded pending appeal
within 30 days from the entry thereof; or


 


(j)            any
of the Security Documents shall cease, for any reason, to be in full force and
effect, or Borrower or any of its Subsidiaries or any Affiliate of Borrower or
any of its Subsidiaries shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or


 


(k)           the
guarantee contained in Section 2 of the Guarantee and Collateral Agreement
shall cease, for any reason, to be in full force and effect or Borrower or any
of its Subsidiaries or any Affiliate of Borrower or any of its Subsidiaries
shall so assert; or


 


(l)            AerCap
B.V. shall cease to own and control, of record and beneficially, directly or
indirectly, 51% of each class of outstanding Capital Stock of the Borrower;


 


then, and in any such event, (A) if such
event is an Event of Default specified in clause (i) or (ii) of
paragraph (g) above with respect to the Borrower, automatically the
Commitments shall immediately terminate and the Loans (with accrued interest
thereon) and all other amounts


 


41

















 


owing under this Agreement and the other Loan
shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be
taken:  (i) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become due and
payable.  Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived by the Borrower.


 


Section 9.              The
Agents.


 


9.1           Appointment.  Each Lender hereby irrevocably designates and
appoints Calyon New York Branch as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto.   Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.  Each Lender further
appoints Wachovia Bank, N.A. and National City Bank as Co-Documentation Agents
under this Agreement and HSH Nordbank AG as Syndication Agent.  The Co-Documentation Agents and the
Syndication Agent shall have no duties, liabilities or responsibilities in such
capacity whatsoever.


 


9.2           Delegation
of Duties.  The Administrative Agent
may execute any of its duties under this Agreement and the other Loan Documents
by or through agents or attorneys-in-fact selected by the Administrative Agent
with reasonable care and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.


 


9.3           Exculpatory
Provisions.  Neither any
Administrative Agent, the Syndication Agent, any Co-Documentation Agent nor any
of their respective officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (i) liable for any action lawfully taken or omitted
to be taken by it or such Person under or in connection with this Agreement or
any other Loan Document (except to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of competent jurisdiction
to have resulted from its or such Person’s own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by Borrower or any
of its Subsidiaries or any officer thereof contained in this Agreement or any
other Loan Document or in any


 


42

















 


certificate, report,
statement or other document referred to or provided for in, or received by the
any such Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of Borrower or any of its Subsidiaries a party thereto to perform its
obligations hereunder or thereunder.  No
such Agent shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of Borrower or any of its Subsidiaries.


 


9.4           Reliance
by Administrative Agent.  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any instrument, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent.  The Administrative
Agent may deem and treat each Person whose name is recorded in the Register as
the owner of the Loans recorded therein for all purposes for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. 
The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders (or, if
so specified by this Agreement, all Lenders) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.  The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Loans.


 


9.5           Notice
of Default.  The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless the Administrative Agent has received notice
from a Lender or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of
default”.  In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
if so specified by this Agreement, all Lenders); provided that unless and until
the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.


 


9.6           Non-Reliance
on Agents and Other Lenders.  Each
Lender expressly acknowledges that neither the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Administrative Agent hereafter taken, including any review of the affairs
of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute
any representation or warranty by any Administrative Agent to any Lender.  Each Lender represents to the Agents that


 


43

















 


it has, independently and
without reliance upon any Administrative Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement.  Each Lender
also represents that it will, independently and without reliance upon any Administrative
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Loan Parties and their
affiliates.  Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of Borrower or any of its
Subsidiaries or any affiliate of a Loan Party that may come into the possession
of the Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.


 


9.7           Indemnification.  The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever
that may at any time (whether before or after the payment of the Loans) be
imposed on, incurred by or asserted against such Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final
and nonappealable decision of a court of competent jurisdiction to have
resulted from such Administrative Agent’s gross negligence or willful
misconduct.  The agreements in this
Section shall survive the payment of the Loans and all other amounts payable
hereunder.


 


9.8           Administrative
Agent in Its Individual Capacity. 
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with Borrower or any
of its Subsidiaries as though such Administrative Agent were not an
Administrative Agent.  With respect to
its Loans made or renewed by it, the Administrative Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Administrative Agent,
and the terms “Lender” and “Lenders” shall include the Administrative Agent in
its individual capacity.


 


44

















 


9.9           Successor
Administrative Agent.  The
Administrative Agent may resign as Administrative Agent upon 10 days’ notice to
the Lenders and the Borrower.  If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f)
with respect to the Borrower shall have occurred and be continuing) be subject
to approval by the Borrower (which approval shall not be unreasonably withheld
or delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term “Administrative Agent”
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. 
If no successor agent has accepted appointment as Administrative Agent
by the date that is 10 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such
time, if any, as the Required Lenders appoint a successor agent as provided for
above.  After any retiring Administrative
Agent’s resignation as Administrative Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.


 


9.10         Administrative
Agent Fees.  The Borrower agrees to
pay to the Administrative Agent the fees in the amounts and on the dates
previously agreed to in writing by the Borrower and the Administrative Agent.


 


9.11         Intercreditor
Agreement.  Each Lender authorizes
and directs the Administrative Agent to enter into, and perform the obligations
undertaken by it in, the Intercreditor Agreement as “Senior Administrative
Agent” thereunder. Each Lender further agrees that it shall be bound by the
terms applicable to Senior Lenders under the Intercreditor Agreement as though
such provisions were set forth herein.


 


9.12         Intralinks.  The Administrative Agent will post all
financial statements and other information received by it pursuant to Section
6.1 or 6.2 on Intralinks within ten Business Days of receipt.


 


Section 10.            Miscellaneous.


 


10.1         Amendments
and Waivers.  Neither this Agreement,
any other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1.  The Required Lenders
and the Borrower and each of its Subsidiaries party to the relevant Loan
Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and the Borrower and each of its Subsidiaries party to the
relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case


 


45

















 


may be, may specify in
such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Tranche A Term Loan, reduce the stated
rate of any interest or fee payable hereunder (except (x) in connection
with the waiver of applicability of any post-default increase in interest rates
(which waiver shall be effective with the consent of the Majority Facility
Lenders of each adversely affected Facility) and (y) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or fees for purposes
of this clause (i)) or extend the scheduled date of any payment thereof,
or increase the amount or extend the expiration date of any Lender’s Revolving Commitment,
in each case without the written consent of each Lender directly affected
thereby; (ii) eliminate or reduce the voting rights of any Lender under
this Section 10.1 without the written consent of such Lender;
(iii) reduce any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release all or substantially
all of the Subsidiaries from their obligations under the Guarantee and
Collateral Agreement, in each case without the written consent of all Lenders;
(iv) reduce the percentage specified in the definition of Majority
Facility Lenders with respect to any Facility without the written consent of
all Lenders under such Facility; (v) amend, modify or waive any provision of
(A) Sections 3.1, 3.2 or 3.3; (B) Annex B hereto to add Eligible Equipment or
to change the Advance Category for Eligible Equipment; or (C) Annex C to
increase the Borrowing Base Advance Rate, without the written consent of all
Lenders or (vi) amend, modify or waive any provision of Section 9
without the written consent of the Administrative Agent.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Administrative Agent and all
future holders of the Loans.  In the case
of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall
be restored to their former position and rights hereunder and under the other
Loan Documents, and any Default or Event of Default waived shall be deemed to
be cured and not continuing; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent thereon.


 


10.2         Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as set forth in Schedule 10.2 in the case of the
Borrower and the Administrative Agent, and as set forth in an administrative
questionnaire delivered to the Administrative Agent in the case of the Lenders,
or to such other address as may be hereafter notified by the respective parties
hereto; provided that any notice, request or demand to or upon the
Administrative Agent or the Lenders shall not be effective until received.


 


10.3         No
Waiver; Cumulative Remedies.  No
failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude


 


46

















 


any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers
and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.


 


10.4         Survival
of Representations and Warranties. 
All representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered pursuant hereto
or in connection herewith shall survive the execution and delivery of this
Agreement and the making of the Loans and other extensions of credit hereunder.


 


10.5         Payment
of Expenses.  The Borrower agrees
(a) to pay or reimburse the Administrative Agent for all its out-of-pocket
costs and expenses incurred connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent (including
(i) Vedder, Price, Kaufman & Kammholz, P.C., special New York counsel,
(ii) McAfee & Taft, special FAA counsel and (iii) Loyens &
Loeff N.V., special Dutch counsel, the costs of each appraisal to determine the
Appraisal Value and filing, registration and recording fees and expenses, with
statements with respect to the foregoing to be submitted to the Borrower prior
to the Closing Date (in the case of amounts to be paid on the Closing Date) and
from time to time thereafter on a quarterly basis or such other periodic basis
as the Administrative Agent shall deem appropriate, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses (other than Taxes, which are solely governed by Sections 2.13 and
2.14 of this Agreement, Section 15 of the Guarantee and Collateral Agreement,
and Section 5.01 of the Aircraft Asset Security Agreement) incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to the Administrative Agent,
(c) to pay, indemnify, and hold each Lender and the Administrative Agent
and their respective officers, directors, employees, affiliates, agents and
controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (which are solely governed by
Sections 2.13 and 2.14 of this Agreement, Section 15 of the Guarantee
and Collateral Agreement, and Section 5.01 of the Aircraft Asset Security
Agreement) with respect to the execution, delivery, enforcement, performance
and administration of this Agreement, the other Loan Documents and any such
other documents, including any of the foregoing relating to the use of proceeds
of the Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of Borrower or any of its
Subsidiaries or any of the Properties and the reasonable fees and expenses of
legal counsel in connection with claims, actions or proceedings by any
Indemnitee against Borrower or any of its Subsidiaries under any Loan Document
(all the foregoing in this clause (d), collectively, the “Indemnified Liabilities”), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee.  Without limiting the foregoing,
and to the extent permitted by applicable law, the Borrower agrees not to
assert and to cause its Subsidiaries not to assert, and


 


47

















 


hereby waives and agrees
to cause its Subsidiaries to waive, all rights for contribution or any other
rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee. 
All amounts due under this Section 10.5 shall be payable not later
than 10 days after written demand therefor.  Statements payable by the Borrower pursuant
to this Section 10.5 shall be submitted to Lawrence Preston (Telephone
No. 305-590-2600, x301) (Telecopy No. 305-590-2695), at the address
of the Borrower set forth in Section 10.2, or to such other Person or
address as may be hereafter designated by the Borrower in a written notice to
the Administrative Agent.  The agreements
in this Section 10.5 shall survive repayment of the Loans and all other
amounts payable hereunder.


 


10.6         Successors
and Assigns; Participations and Assignments.  (a)  This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Lenders, the
Administrative Agent, all future holders of the Loans and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Lender.


 


(b)           Any
Lender other than any Conduit Lender may, without the consent of the Borrower,
in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a “Participant”) participating interests in any Loan owing to
such Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Loan Documents. 
In the event of any such sale by a Lender of a participating interest to
a Participant, such Lender’s obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement and the other Loan Documents.  In no event shall any Participant under any
such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by Borrower or
any of its Subsidiaries therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Loans or
any fees payable hereunder, or postpone the date of the final maturity of the
Loans, in each case to the extent subject to such participation.  The Borrower agrees that if amounts outstanding
under this Agreement and the Loans are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event
of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a)
as fully as if it were a Lender hereunder. 
The Borrower also agrees that each Participant shall be entitled to the
benefits of Sections 2.13, 2.14 and 2.15 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 2.14, such
Participant shall have complied with the requirements of said Section and provided,
further, that no Participant shall be entitled to receive any greater
amount pursuant to


 


48

















 


any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.


 


(c)           Any
Lender other than any Conduit Lender (an “Assignor”)
may, in accordance with applicable law, at any time and from time to time
assign to any Lender or any Lender Affiliate or, with the consent of the
Administrative Agent (which shall not be unreasonably withheld or delayed), to
an additional bank, financial institution or other entity (an “Assignee”) all or any part of its rights
and obligations under this Agreement and the other Loan Documents pursuant to
an Assignment and Acceptance, executed by such Assignee and such Assignor, and
delivered to the Administrative Agent for its acceptance and recording in the
Register; provided (i) that, unless otherwise agreed by the Borrower and
the Administrative Agent, no such assignment to an Assignee (other than any
Lender or any Lender Affiliate) shall be in an aggregate principal amount of
less than $3,000,000, in each case except in the case of an assignment of all
of a Lender’s interests under this Agreement or if a Default has occurred and
is continuing and (ii) such Assignee shall have complied with the
requirements of Section 2.14 of this Agreement. For purposes of the
proviso contained in the preceding sentence, the amount described therein shall
be aggregated in respect of each Lender and its Lender Affiliates, if any.  No Assignee shall be entitled to receive a
greater amount pursuant to Section 2.14 of this Agreement than the
Assignor would have been entitled to receive in respect of the assigned rights
and obligations had no such assignment occurred.   Any such assignment need not be ratable as
among the Facilities.  Upon such
execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor’s rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto).  Notwithstanding the foregoing,
any Conduit Lender may assign at any time to its designating Lender hereunder
without the consent of the Administrative Agent any or all of the Loans it may
have funded hereunder and pursuant to its designation agreement and without
regard to the limitations set forth in the first sentence of this
Section 10.6(c). Notwithstanding anything in this Section 10.6(c) or
elsewhere in this Agreement to the contrary, in the case of any assignments
contemplated by this Section 10.6(c) occurring after Calyon New York Branch’s
primary syndication of the Loans, no Assignee shall be entitled to receive any
greater amount pursuant to any such Section hereof than the Assignor would
have been entitled to receive in respect of the amount of the Loans transferred
by such Assignor to such Assignee had no such transfer occurred.


 


(d)           The
Administrative Agent shall, on behalf of the Borrower, maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the “Register”)
for the recordation of the names and addresses of the Lenders and the Commitment
of, and the principal amount of the Loans owing to, each Lender from time to
time.  The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrower, each other
Loan Party, the Administrative Agent and the Lenders shall treat each Person
whose name is recorded in the Register as the owner of the Loans recorded
therein for all


 


49

















 


purposes of this
Agreement.  Any assignment of any Loan
shall be effective only upon appropriate entries with respect thereto being
made in the Register.


 


(e)           Upon
its receipt of an Assignment and Acceptance executed by an Assignor, an
Assignee and any other Person whose consent is required by
Section 10.6(c), together with payment to the Administrative Agent of a
registration and processing fee of $4,000, the Administrative Agent shall
(i) promptly accept such Assignment and Acceptance and (ii) record
the information contained therein in the Register on the effective date determined
pursuant thereto.


 


(f)            For
avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section 10.6 concerning assignments relate only to
absolute assignments and that such provisions do not prohibit assignments
creating security interests, including any pledge or assignment by a Lender to
any Federal Reserve Bank in accordance with applicable law.


 


(g)           Each
of the Borrower, each Lender and the Administrative Agent hereby confirms that
it will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided,
however, that each Lender designating any Conduit Lender hereby agrees to
indemnify, save and hold harmless each other party hereto for any loss, cost,
damage or expense arising out of its inability to institute such a proceeding
against such Conduit Lender during such period of forbearance.


 


(h)           Notwithstanding
any provision herein to the contrary notwithstanding, upon the exercise and
performance by any Junior Lender (or the Junior Agent on behalf of the one or
more Junior Lenders) of its buy-out option under Section 3 of the Intercreditor
Agreement, (x) the Senior Loans shall be transferred to such purchasing entity,
and the transfer of such Loans to such purchaser shall be noted by the Administrative
Agent on the Register and (y) such purchaser shall assume the Revolving
Commitments of the Revolving Lenders (and the Revolving Lenders subject to such
buy-out shall be released from their respective obligations hereunder in
respect of such Revolving Commitments).


 


10.7         Adjustments;
Set-off.  (a) Except to the
extent that this Agreement expressly provides for payments to be allocated to a
particular Lender or to the Lenders under a particular Facility, if any Lender
(a “Benefited Lender”) shall, at
any time after the Loans and other amounts payable hereunder shall immediately
become due and payable pursuant to Section 8, receive any payment of all
or part of the Obligations owing to it, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events
or proceedings of the nature referred to in Section 8(f), or otherwise),
in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of the Obligations owing to such other Lender,
such Benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of the Obligations owing to each such
other Lender, or shall provide such other Lenders with the benefits of any such
collateral, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such


 


50

















 


collateral ratably with
each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefited
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.


 


(b)           In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by the Borrower hereunder
(whether at the stated maturity, by acceleration or otherwise), to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct
or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or
the account of the Borrower, as the case may be.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall
not affect the validity of such setoff and application.


 


10.8         Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.  Delivery of an
executed signature page of this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed
by all the parties shall be lodged with the Borrower and the Administrative
Agent.


 


10.9         Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


 


10.10       Integration.  This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.


 


10.11       Governing
Law.  THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


 


10.12       Submission
To Jurisdiction; Waivers.  The
Borrower hereby irrevocably and unconditionally:


 


(a)           submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and


 


51

















 


enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for the
Southern District of New York, and appellate courts from any thereof;


 


(b)           consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;


 


(c)           agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the Borrower, as the case may be at
its address set forth in Section 10.2 or at such other address of which
the Administrative Agent shall have been notified pursuant thereto;


 


(d)           agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and


 


(e)           waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.


 


10.13       Acknowledgements.  The Borrower hereby acknowledges that:


 


(a)           it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;


 


(b)           neither
the Administrative Agent nor any Lender has any fiduciary relationship with or
duty to the Borrower arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between Administrative Agent
and Lenders, on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and


 


(c)           no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or
among the Borrower and the Lenders.


 


10.14       Releases
of Guarantees and Liens.  (a)  Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 10.1) to take any action requested by the Borrower having the
effect of releasing any Collateral or guarantee obligations (i) to the
extent necessary to permit consummation of any transaction not prohibited by any
Loan Document or that has been consented to in accordance with
Section 10.1 or (ii) under the circumstances described in
paragraph (b) below.


 


(b)           At
such time as the Loans, the other obligations under the Loan Documents (other
than obligations under or in respect of Specified Hedge Agreements) and the


 


52

















 


Junior Loans shall have
been paid in full, the Commitments have been terminated, the Collateral shall
be released from the Liens created by the Security Documents, and the Security
Documents and all obligations (other than those expressly stated to survive
such termination) of the Administrative Agent and the Borrower and each of its
Subsidiaries under the Security Documents shall terminate, all without delivery
of any instrument or performance of any act by any Person.


 


10.15       Confidentiality.  Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
Borrower or any of its Subsidiaries pursuant to this Agreement that is
designated by such Loan Party as confidential; provided that nothing
herein shall prevent the Administrative Agent or any Lender from disclosing any
such information (a) to the Administrative Agent, any other Lender or any
Lender Affiliate, (b) subject to an agreement to comply with the
provisions of this Section, to any actual or prospective Transferee or any
direct or indirect counterparty to any Specified Hedge Agreement (or any
professional advisor to such counterparty), (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors or
those of any of its affiliates, (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) that has been publicly
disclosed, (h) to the National Association of Insurance Commissioners or
any similar organization or any nationally recognized rating agency that
requires access to information about a Lender’s investment portfolio in
connection with ratings issued with respect to such Lender, or (i) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.


 


10.16       WAIVERS
OF JURY TRIAL.  THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


10.17       USA
Patriot Act.  Each Lender hereby
notifies the Borrower 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 the
Borrower, which information includes the name and address of the Borrowers and
other information that will allow such Lender to identify the Borrower in
accordance with the Act.  The Borrower
shall provide such information promptly upon the request of the Administrative
Agent.


 


53

















 


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


 


 


	
   

  	
  AERCAP AT,
  INC., as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CALYON NEW
  YORK BRANCH, as

  Administrative Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSH NORDBANK
  AG, NEW YORK

  BRANCH, as Syndication Agent and as a

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Wachovia Bank, National Association, as

  Co-Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  



 


54

















 


	
   

  	
  National
  City Bank, as Co-Documentation

  Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SunTrust
  Bank, as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Regions
  Bank, N. A., as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dekabank
  Deutsche Girozentrale, as Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


55

















 


APPENDIX I


 


Definitions


 


56

















 


Annex A


 


Economic Schedule


 


“Applicable
Margin”:  for each Loan,
the rate per annum set forth under the relevant column heading below:


 


	
   

  	
   

  	
  Applicable

  Margin

  (LIBOR

  Rate)

  	
   

  	
  Applicable

  Margin

  (Prime

  Rate)

  	
   

  
	
  Revolving Loans

  	
   

  	
  3.0

  	
  %

  	
  0.25

  	
  %

  
	
  Tranche A Term Loans

  	
   

  	
  2.75

  	
  %

  	
  0.00

  	
  %

  
	
  Tranche B Term Loans

  	
   

  	
  5.50

  	
  %

  	
  2.75

  	
  %

  



 


“Closing Date”:  the date on which the conditions precedent
set forth in Section 5.1 shall have been satisfied, which date is April,
26, 2006.


 


“Commitment Fee
Rate”:  3/4 of 1% per
annum.


 


“Maturity Date”:
the fifth anniversary of the Closing Date.


 


“Minimum Equity
Contribution”: not less than $60,000,000.


 


“Prepayment Fee”:  A fee, calculated as a percentage of the
principal amount of any Loan subject to prepayment pursuant to
Section 2.10, equal to:


 


	
  For any Prepayment Received

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or prior to the first anniversary of the
  Closing Date

  	
   

  	
  1.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After the first anniversary of the Closing
  Date and on or prior to the second anniversary of the Closing Date

  	
   

  	
  0.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Thereafter

  	
   

  	
  0.0

  	
  %

  



 


“Total Revolving
Credit Commitments”: The original amount of the Total Revolving
Commitments is $171,000,000.


 


“Tranche A
Quarterly Amortization Amount”: $3,200,000.


 


1

















 


“Tranche A Term
Commitment”: The original aggregate amount of the Tranche A
Term Commitments is $160,000,000.


 


“Tranche B Term
Commitment”: The original aggregate amount of the Tranche B
Term Commitments is $15,000,000.


 


“Transaction
Costs”: the one-time initial expenses directly associated with
the Acquisition, and fees and expenses associated with the Wachovia Credit
Facility which amount shall not exceed, for the purposes of Section 7.1(c),
$18,000,000.


 


2

















 


Annex B


 


Eligible Equipment


 


	
  Eligible Equipment

  	
   

  	
  Inventory Category(1)

  	
   

  	
  Engine Category(2)

  	
   

  	
  Aircraft Category(3)

  	
   

  
	
  CFM56-5C2F

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  N/a

  	
   

  
	
  Boeing
  747-400

  	
   

  	
  1

  	
   

  	
  N/a

  	
   

  	
  1

  	
   

  
	
  Engines
  powering 747-400

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  N/a

  	
   

  
	
  Airbus A320

  	
   

  	
  1

  	
   

  	
  N/a

  	
   

  	
  1

  	
   

  
	
  Engines
  powering A320

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  N/a

  	
   

  
	
  Boeing 767

  	
   

  	
  1

  	
   

  	
  N/a

  	
   

  	
  1

  	
   

  
	
  Engines
  powering 767

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  N/a

  	
   

  
	
  CF680C2A8

  	
   

  	
  2

  	
   

  	
  2

  	
   

  	
  N/a

  	
   

  
	
  Boeing 737NG

  	
   

  	
  1

  	
   

  	
  N/a

  	
   

  	
  1

  	
   

  
	
  Engines
  powering 737NG

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  N/a

  	
   

  
	
  Boeing 737
  -300/400 /500

  	
   

  	
  2

  	
   

  	
  N/a

  	
   

  	
  2

  	
   

  
	
  Engines
  powering 737 -300/400 /500

  	
   

  	
  2

  	
   

  	
  2

  	
   

  	
  N/a

  	
   

  
	
  MD-11

  	
   

  	
  2

  	
   

  	
  N/a

  	
   

  	
  2

  	
   

  
	
  Engines
  powering MD-11

  	
   

  	
  2

  	
   

  	
  2

  	
   

  	
  N/a

  	
   

  
	
  MD-80

  	
   

  	
  2

  	
   

  	
  N/a

  	
   

  	
  3

  	
   

  
	
  JT8D/JT8D-200/217/219

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  N/a

  	
   

  
	
  Boeing 757

  	
   

  	
  2

  	
   

  	
  N/a

  	
   

  	
  2

  	
   

  
	
  Engines powering 757

  	
   

  	
  2

  	
   

  	
  2

  	
   

  	
  2

  	
   

  
	
  MD-90

  	
   

  	
  3

  	
   

  	
  N/a

  	
   

  	
  3

  	
   

  
	
  Engines
  powering MD-90

  	
   

  	
  3

  	
   

  	
  3

  	
   

  	
  N/a

  	
   

  
	
  Fokker F100

  	
   

  	
  3

  	
   

  	
  3

  	
   

  	
  3

  	
   

  
	
  Engines
  powering F100

  	
   

  	
  3

  	
   

  	
  3

  	
   

  	
  N/a

  	
   

  
	
  Airbus A310

  	
   

  	
  3

  	
   

  	
  N/a

  	
   

  	
  3

  	
   

  
	
  Engines
  powering A310

  	
   

  	
  3

  	
   

  	
  3

  	
   

  	
  N/a

  	
   

  
	
  DC-8

  	
   

  	
  4

  	
   

  	
  N/a

  	
   

  	
  4

  	
   

  
	
  Engines
  powering DC-8 (except CFM56-2)

  	
   

  	
  4

  	
   

  	
  4

  	
   

  	
  N/a

  	
   

  
	
  CFM56-2

  	
   

  	
  3

  	
   

  	
  N/a

  	
   

  	
  N/a

  	
   

  
	
  Boeing
  747-100/200/300

  	
   

  	
  4

  	
   

  	
  N/a

  	
   

  	
  4

  	
   

  
	
  Engines
  powering 747-100/200/300

  	
   

  	
  4

  	
   

  	
  4

  	
   

  	
  N/a

  	
   

  
	
  DC-10

  	
   

  	
  4

  	
   

  	
  N/a

  	
   

  	
  4

  	
   

  
	
  Engines
  powering DC-10

  	
   

  	
  4

  	
   

  	
  4

  	
   

  	
  N/a

  	
   

  
	
  DC-9

  	
   

  	
  4

  	
   

  	
  N/a

  	
   

  	
  4

  	
   

  
	
  Engines
  powering DC-9

  	
   

  	
  4

  	
   

  	
  4

  	
   

  	
  N/a

  	
   

  



 






(1) Inventory Category: Parts
and components of referenced equipment; not whole/complete equipment.


 


(2) Engine Category: A complete
engine.


 


(3) Aircraft Category: A
complete aircraft.


 


1

















 


Annex C


 


Borrowing Base Advance Rates


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Aircraft - the lower of:

  	
   

  
	
  Category

  	
   

  	
  Inventory as a % of Adj. CMV

  	
   

  	
  Engines as a % of Adj. CMV***

  	
   

  	
  Aircraft as a % of Adj.

  CMV*

  	
   

  	
  Aircraft as a % of Cost*

  	
   

  
	
  1

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  70

  	
  %

  	
  85

  	
  %

  
	
  2

  	
   

  	
  40

  	
  %

  	
  70

  	
  %

  	
  60

  	
  %

  	
  80

  	
  %

  
	
  3**

  	
   

  	
  20

  	
  %

  	
  40

  	
  %

  	
  50

  	
  %

  	
  75

  	
  %

  
	
  4

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  
	
  Inventory at Vendors

  	
   

  	
  -100

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






	
  **

  	
  Aggregate
  Category 3 Aircraft advances will not exceed 10% of the total Borrowing Base
  calculation attributable to Engines and Inventory

  
	
  ***

  	
  For
  engines in overhaul, a cash collateral deposit equal to the repair amount due
  the overhaul provider will be maintained by Administrative Agent.

  
	
   

  	
  As
  an alternative, Borrower may exclude these engines from the Borrowing Base
  calculation

  



 


1