Document:

Exhibit 10.9

 

STOCK PURCHASE AGREEMENT

 

dated as of March 16, 2006

 

by and between

 

AERCAP, INC.

 

and

 

NICOLAS FINAZZO, ROSE ANN FINAZZO and ROBERT B. NICHOLS

with respect to all

outstanding capital stock of

AEROTURBINE, INC.

 

 

TABLE OF CONTENTS

 

This
Table of Contents is not part of the Agreement to which it is attached but is
inserted for convenience only.

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
  No.

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I SALE OF
  SHARES AND CLOSING

  	
   

  	
  2

  
	
  1.01

  	
  Purchase and Sale

  	
   

  	
  2

  
	
  1.02

  	
  Purchase Price

  	
   

  	
  2

  
	
  1.03

  	
  Closing

  	
   

  	
  2

  
	
  1.04

  	
  Tax Payment Dividends

  	
   

  	
  2

  
	
  1.05

  	
  Further Assurances; Post-Closing Cooperation

  	
   

  	
  4

  
	
  1.06

  	
  Purchase Price Allocation

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  REPRESENTATIONS AND WARRANTIES OF SELLERS

  	
   

  	
  5

  
	
  2.01

  	
  Power of Sellers

  	
   

  	
  5

  
	
  2.02

  	
  Authority

  	
   

  	
  6

  
	
  2.03

  	
  Organization of the Company

  	
   

  	
  6

  
	
  2.04

  	
  Capital Stock

  	
   

  	
  6

  
	
  2.05

  	
  Subsidiaries

  	
   

  	
  6

  
	
  2.06

  	
  Material Asset Sales

  	
   

  	
  7

  
	
  2.07

  	
  No Conflicts

  	
   

  	
  7

  
	
  2.08

  	
  Governmental Approvals and Filings

  	
   

  	
  7

  
	
  2.09

  	
  Books and Records

  	
   

  	
  8

  
	
  2.10

  	
  Financial Statements

  	
   

  	
  8

  
	
  2.11

  	
  Absence of Changes

  	
   

  	
  9

  
	
  2.12

  	
  No Undisclosed Liabilities

  	
   

  	
  11

  
	
  2.13

  	
  Taxes

  	
   

  	
  11

  
	
  2.14

  	
  Legal Proceedings

  	
   

  	
  13

  
	
  2.15

  	
  Compliance With Laws and Orders

  	
   

  	
  14

  
	
  2.16

  	
  Benefit Plans; ERISA

  	
   

  	
  14

  
	
  2.17

  	
  Real Property

  	
   

  	
  17

  
	
  2.18

  	
  Tangible Personal Property; Investment Assets

  	
   

  	
  17

  
	
  2.19

  	
  Intellectual Property Matters

  	
   

  	
  18

  
	
  2.20

  	
  Contracts

  	
   

  	
  19

  
	
  2.21

  	
  Aircraft-Related Assets and Aircraft Asset Leases

  	
   

  	
  20

  
	
  2.22

  	
  Licenses

  	
   

  	
  21

  
	
  2.23

  	
  Insurance

  	
   

  	
  21

  
	
  2.24

  	
  Affiliate Transactions

  	
   

  	
  22

  
	
  2.25

  	
  Employees; Labor Relations

  	
   

  	
  22

  
	
  2.26

  	
  Environmental Matters

  	
   

  	
  23

  
	
  2.27

  	
  Bank and Brokerage Accounts; Investment Assets

  	
   

  	
  24

  
	
  2.28

  	
  No Powers of Attorney

  	
   

  	
  24

  

 

i

 

	
  2.29

  	
  Accounts Receivable

  	
   

  	
  24

  
	
  2.30

  	
  No Illegal Payments

  	
   

  	
  25

  
	
  2.31

  	
  Inventory

  	
   

  	
  25

  
	
  2.32

  	
  Product Liability Claims

  	
   

  	
  25

  
	
  2.33

  	
  Brokers

  	
   

  	
  26

  
	
  2.34

  	
  Disclosure

  	
   

  	
  26

  
	
  2.35

  	
  Indebtedness and Cash Position

  	
   

  	
  26

  
	
  2.36

  	
  Substantial Customers, Suppliers and Lessees

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  REPRESENTATIONS AND WARRANTIES OF PURCHASER

  	
   

  	
  27

  
	
  3.01

  	
  Organization

  	
   

  	
  27

  
	
  3.02

  	
  Authority

  	
   

  	
  27

  
	
  3.03

  	
  No Conflicts

  	
   

  	
  27

  
	
  3.04

  	
  Governmental Approvals and Filings

  	
   

  	
  27

  
	
  3.05

  	
  Legal Proceedings

  	
   

  	
  28

  
	
  3.06

  	
  Purchase for Investment

  	
   

  	
  28

  
	
  3.07

  	
  Financing

  	
   

  	
  28

  
	
  3.08

  	
  Brokers

  	
   

  	
  28

  
	
  3.09

  	
  Disclosure

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV COVENANTS
  OF SELLERS

  	
   

  	
  28

  
	
  4.01

  	
  Regulatory and Other Approvals

  	
   

  	
  29

  
	
  4.02

  	
  HSR Filings

  	
   

  	
  29

  
	
  4.03

  	
  Investigation by Purchaser

  	
   

  	
  29

  
	
  4.04

  	
  No Solicitations

  	
   

  	
  29

  
	
  4.05

  	
  Conduct of Business

  	
   

  	
  30

  
	
  4.06

  	
  Financial Statements and Reports; Filings

  	
   

  	
  31

  
	
  4.07

  	
  Employee Matters

  	
   

  	
  31

  
	
  4.08

  	
  Certain Restrictions

  	
   

  	
  32

  
	
  4.09

  	
  Affiliate Transactions

  	
   

  	
  33

  
	
  4.10

  	
  Books and Records

  	
   

  	
  33

  
	
  4.11

  	
  Employment

  	
   

  	
  33

  
	
  4.12

  	
  Non-Competition

  	
   

  	
  33

  
	
  4.13

  	
  Notice and Cure

  	
   

  	
  33

  
	
  4.14

  	
  Fulfillment of Conditions

  	
   

  	
  34

  
	
  4.15

  	
  S Corporation Status

  	
   

  	
  34

  
	
  4.16

  	
  New Real Estate Lease

  	
   

  	
  34

  
	
  4.17

  	
  AeroTurbine Capital Shares Contribution

  	
   

  	
  34

  
	
  4.18

  	
  Sellers’ Account

  	
   

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE V COVENANTS
  OF PURCHASER

  	
   

  	
  35

  
	
  5.01

  	
  Regulatory and Other Approvals

  	
   

  	
  35

  
	
  5.02

  	
  HSR Filings

  	
   

  	
  36

  
	
  5.03

  	
  Employment

  	
   

  	
  36

  
	
  5.04

  	
  Non-Competition

  	
   

  	
  36

  
	
  5.05

  	
  Notice and Cure

  	
   

  	
  36

  

 

ii

 

	
  5.06

  	
  Fulfillment of Conditions

  	
   

  	
  36

  
	
  5.07

  	
  New Real Estate Lease

  	
   

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  CONDITIONS TO OBLIGATIONS OF PURCHASER

  	
   

  	
  37

  
	
  6.01

  	
  Representations and Warranties

  	
   

  	
  37

  
	
  6.02

  	
  Performance

  	
   

  	
  37

  
	
  6.03

  	
  Certificates of Sellers

  	
   

  	
  37

  
	
  6.04

  	
  Orders and Laws

  	
   

  	
  37

  
	
  6.05

  	
  Regulatory Consents and Approvals

  	
   

  	
  37

  
	
  6.06

  	
  Third Party Consents

  	
   

  	
  38

  
	
  6.07

  	
  Resignations of Directors and Officers

  	
   

  	
  38

  
	
  6.08

  	
  Proceedings

  	
   

  	
  38

  
	
  6.09

  	
  Shareholder Equity Agreements

  	
   

  	
  38

  
	
  6.10

  	
  Employment Agreements

  	
   

  	
  38

  
	
  6.11

  	
  Non-Competition Agreement

  	
   

  	
  38

  
	
  6.12

  	
  AeroTurbine Capital Shares Contribution

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  CONDITIONS TO OBLIGATIONS OF SELLERS

  	
   

  	
  38

  
	
  7.01

  	
  Representations and Warranties

  	
   

  	
  39

  
	
  7.02

  	
  Performance

  	
   

  	
  39

  
	
  7.03

  	
  Officers’ Certificates

  	
   

  	
  39

  
	
  7.04

  	
  Orders and Laws

  	
   

  	
  39

  
	
  7.05

  	
  Regulatory Consents and Approvals

  	
   

  	
  39

  
	
  7.06

  	
  Proceedings

  	
   

  	
  39

  
	
  7.07

  	
  Shareholder Equity Agreements

  	
   

  	
  39

  
	
  7.08

  	
  Employment Agreements

  	
   

  	
  40

  
	
  7.09

  	
  Release of Seller Guarantees

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TAX
  MATTERS AND POST-CLOSING TAXES

  	
   

  	
  40

  
	
  8.01

  	
  Tax Returns

  	
   

  	
  40

  
	
  8.02

  	
  Code §338(h)(10) Election

  	
   

  	
  41

  
	
  8.03

  	
  Tax Indemnification

  	
   

  	
  41

  
	
  8.04

  	
  Refunds

  	
   

  	
  42

  
	
  8.05

  	
  Tax Audits and Contests; Cooperation

  	
   

  	
  42

  
	
  8.06

  	
  Transfer Taxes

  	
   

  	
  43

  
	
  8.07

  	
  Exclusivity

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX EMPLOYEE
  BENEFITS MATTERS

  	
   

  	
  44

  
	
  9.01

  	
  Employee Benefits Matters

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X SURVIVAL
  OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS

  	
   

  	
  45

  
	
  10.01

  	
  Survival of Representations, Warranties, Covenants and Agreements

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI
  INDEMNIFICATION

  	
   

  	
  45

  
	
  11.01

  	
  Tax Treatment of Indemnity Payments

  	
   

  	
  45

  

 

iii

 

	
  11.02

  	
  Indemnification

  	
   

  	
  45

  
	
  11.03

  	
  Method of Asserting Claims

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII
  TERMINATION

  	
   

  	
  48

  
	
  12.01

  	
  Termination

  	
   

  	
  48

  
	
  12.02

  	
  Effect of Termination

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII
  DEFINITIONS

  	
   

  	
  49

  
	
  13.01

  	
  Definitions

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV
  MISCELLANEOUS

  	
   

  	
  57

  
	
  14.01

  	
  Notices

  	
   

  	
  57

  
	
  14.02

  	
  Entire Agreement

  	
   

  	
  59

  
	
  14.03

  	
  Expenses

  	
   

  	
  59

  
	
  14.04

  	
  Public Announcements

  	
   

  	
  59

  
	
  14.05

  	
  Confidentiality

  	
   

  	
  59

  
	
  14.06

  	
  Waiver

  	
   

  	
  60

  
	
  14.07

  	
  Amendment

  	
   

  	
  60

  
	
  14.08

  	
  No Third Party Beneficiary

  	
   

  	
  60

  
	
  14.09

  	
  No Assignment; Binding Effect

  	
   

  	
  60

  
	
  14.10

  	
  Headings

  	
   

  	
  61

  
	
  14.11

  	
  Consent to Jurisdiction

  	
   

  	
  61

  
	
  14.12

  	
  Invalid Provisions

  	
   

  	
  61

  
	
  14.13

  	
  Governing Law

  	
   

  	
  61

  
	
  14.14

  	
  Counterparts

  	
   

  	
  61

  

 

iv

 

EXHIBITS

 

	
  EXHIBIT A

  	
  Employment
  Agreements

  
	
  EXHIBIT B

  	
  Non-Competition
  Agreement

  
	
  EXHIBIT C

  	
  Restricted
  Shares Purchase Agreement

  
	
  EXHIBIT D

  	
  Stockholders
  Agreement

  
	
  EXHIBIT E

  	
  Certificate of
  Sellers

  
	
  EXHIBIT F

  	
  Officer’s
  Certificate of Purchaser

  
	
  EXHIBIT G

  	
  Secretary’s
  Certificate of Purchaser

  

 

v

 

This
STOCK PURCHASE AGREEMENT dated as of March 16, 2006 is made and entered into by
and between AerCap, Inc., a Delaware corporation (“Purchaser”), and Mr.
Nicolas Finazzo (“Nick”), Mrs. Rose Ann Finazzo (“Rose Ann”) and
Mr. Robert B. Nichols (“Bob”; Nick, Rose Ann and Bob, each a “Seller”,
and together, “Sellers”; and Nick and Bob, each a “Management Seller”;
and together, “Management Sellers”). 
Capitalized terms not otherwise defined herein have the meanings set
forth in Section 13.01.

 

WHEREAS,
Sellers own in the aggregate 45,000 shares of Series B common stock, $.001 par
value per share, of AeroTurbine, Inc., a Delaware corporation (the “Company”),
constituting all issued and outstanding shares of capital stock of the Company
(such shares being referred to herein as the “Shares”);

 

WHEREAS, AerCap, B.V. (“Parent”), is a limited
liability company formed and validly existing under the laws of the Netherlands
and the indirect parent and indirect owner of 100% of the authorized, issued
and outstanding common stock of Purchaser;

 

WHEREAS, as a condition to the purchase of the Shares
hereunder, (i) each Management Seller has agreed to enter into an employment
agreement with Parent and the Company substantially in the form of Exhibit A
hereto (the “Employment Agreements”) and (ii) each Seller has agreed to
enter into a non-competition agreement with Parent and the Company
substantially in the form of Exhibit B hereto (the “Non-Competition
Agreement”); 

 

WHEREAS,
Sellers desire to sell, and Purchaser desires to purchase, the Shares on the
terms and subject to the conditions set forth in this Agreement;

 

WHEREAS, upon the Closing of the purchase and sale of
the Shares pursuant to this Agreement, each Seller and each of Cerberus Fern
Holdings Ltd., Cerberus Fern Holdings II Ltd., Cerberus Fern Holdings III Ltd.
and Cerberus Fern Holdings IV Ltd., each a limited liability exempted company
incorporated under the laws of Bermuda (collectively, the “Cerberus Entities”)
will, on the Closing Date (as defined herein), enter into separate restricted
share purchase agreements, all four restricted share purchase agreements
substantially in the form of Exhibit C hereto (the “Restricted Shares
Purchase Agreement”) pursuant to which Sellers will purchase from the Cerberus
Entities six and a half percent (6.5%) of the common shares of certain entities
which hold the controlling interest in Parent; and

 

WHEREAS, upon the Closing of the purchase and sale of
the Shares pursuant to this Agreement, each Seller and the Cerberus Entities
will, on the Closing Date (as defined herein) enter into a stockholders
agreement substantially in the form of Exhibit D hereto (the “Stockholders
Agreement”; and together with the Restricted Shares Purchase Agreement, the
“Shareholder Equity Agreements”).

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

 

ARTICLE
I

SALE OF SHARES AND CLOSING

 

1.01        Purchase
and Sale.  Sellers agree to sell to
Purchaser, and Purchaser agrees to purchase from Sellers, all of the right,
title and interest of Sellers in and to the Shares at the Closing on the terms
and subject to the conditions set forth in this Agreement.

 

1.02        Purchase
Price.  The aggregate purchase price
for the Shares and for the covenants of Sellers contained in the
Non-Competition Agreement (the “Purchase Price”) shall be equal to the
sum of $127,070,588 (i) plus
$1,200,000 for each full calendar month (or prorated portion thereof) occurring
during the period commencing August 1, 2005 and ending on the Closing Date (the
“Interim Period”) and (ii) plus the amount, if any, to be
paid by Purchaser to Sellers as provided for in Section 1.04 and/or minus the amount, if any, to be paid
by Sellers to Purchaser as provided for in Section 1.04.  The Purchase Price exclusive of the addition
thereto or subtraction therefrom referred in the foregoing clause (ii) is
referred to herein as the “Closing Purchase Price”.

 

1.03        Closing.  The Closing will take place at the offices of
Milbank, Tweed, Hadley and McCloy LLP, 1 Chase Manhattan Plaza, New York, New
York, 10005, or at such other place as Purchaser and Sellers mutually agree, at
10:00 A.M. local time, on the Closing Date. 
At the Closing, Purchaser will pay the Closing Purchase Price by wire
transfer of immediately available funds to such account as Sellers may
reasonably direct by written notice delivered to Purchaser at least two (2)
Business Days before the Closing Date. 
Simultaneously, Sellers will assign and transfer to Purchaser all of
Sellers’ right, title and interest in and to the Shares by delivering to
Purchaser certificates representing the Shares, in genuine and unaltered form,
duly endorsed in blank or accompanied by duly executed stock powers endorsed in
blank, with requisite stock transfer tax stamps, if any, attached.  At the Closing, there shall also be delivered
to Sellers and Purchaser the opinions, certificates and other Contracts,
documents and instruments to be delivered under Articles VI and VII.

 

1.04        Tax Payment Dividends.  

 

(a)       Sellers shall cause the Company to
prepare, in consultation with the independent accounting firm of the Company
and at the Company’s expense, and file with the relevant taxing authorities the
Company’s 2005 federal and state income tax returns.  The Company shall provide
Purchaser with a draft of the 2005 federal and state income tax returns at
least ten (10) Business Days prior to the due dates (including any extensions)
for filing such returns.  Purchaser shall
have the right to comment on the 2005 tax returns of the Company and its
Subsidiaries and those returns will be revised to reflect changes suggested by
the Purchaser unless the Company determines in good faith that Purchaser’s
suggested changes are contrary to applicable law or inconsistent with prior
practice.  A copy of such returns shall be provided to Purchaser
and Sellers not later than five (5) Business Days following the filing of such
returns.  The taxable income of the
Company shown on line 21 (and with respect to income not included on line 21,
such other line items as may be applicable) of IRS Form 1120S of such 2005
income tax returns of the Company (the “2005 Relevant Taxable Income”)
shall be used

 

2

 

for
purposes of calculating amounts to be paid to or by Sellers or Purchaser
pursuant to this Section 1.04. 

 

(b)       Purchaser and Sellers shall
cause the Company to prepare, in consultation with the independent accounting
firm of the Company and consistent with prior practice, and file with the
relevant taxing authorities the Company’s federal and state income tax returns
for the period beginning January 1, 2006 and ending on the Closing Date (the “2006
Short Period”, and such returns, the “2006 Short Period Returns”).  A copy of the 2006 Short Period Returns shall
be provided to Purchaser and Sellers not later than five (5) Business Days
following the filing of such returns. 
The taxable income of the Company for such period (the “2006 Relevant Taxable Income”) shown on line 21(and with respect to income not included
on line 21, such other line items as may be applicable) of IRS Form
1120S of such 2006 Short Period Return, but adjusted to exclude any income, gain,
loss or deduction attributable to the Election reflected therein, shall be used
for purposes of calculating amounts to be paid to or by Sellers or Purchaser pursuant to this Section
1.04. 

 

(c)       In the event that the 2005
Relevant Taxable Income is a positive amount, then (A) Purchaser shall pay to
Sellers, on the later of the Closing Date or ten (10) Business Days following
delivery to Purchaser and Sellers of the Company’s 2005 income tax returns, the
amount, if any, by which (x) 35% (or 15% with respect to long term capital gain
items) of the 2005 Relevant Taxable Income,
which resulting amount shall be reduced by the Foreign Tax Credit Benefit (as
defined below) exceeds (y) $5,789,513 (the “Pre-Signing Dividend
Amount”) or (B) Sellers shall pay to Purchaser, within ten (10) Business
Days following delivery to Purchaser and Sellers of the Company’s 2005 income
tax returns, the amount, if any, by which (x) the Pre-Signing Dividend Amount
exceeds (y) 35% (or 15% with respect to long term capital gain items) of the 2005 Relevant Taxable Income, which resulting amount
shall be reduced by the Foreign Tax Credit Benefit for 2005.

 

(d)       In the event that the 2006
Relevant Taxable Income is a positive amount, then Purchaser shall pay to
Sellers, within ten (10) Business Days following delivery to Purchaser and
Sellers of the 2006 Short Period Returns, an amount equal to 35% (or 15% with
respect to long term capital gain items) of the 2006
Relevant Taxable Income, which amount shall be reduced by the Foreign Tax Credit
Benefit for the 2006 Short Period.

 

(e)       In the event that the 2005
Relevant Taxable Income or the 2006 Relevant Taxable Income is a negative
amount (for example, reduces the relevant gross income of Sellers for income
tax purposes), then Sellers will pay to Purchaser an amount such that (x) the
Pre-Signing Dividend Amount plus the aggregate amount, if any, paid to Sellers
pursuant to paragraph (c) and/or (d) above, minus the aggregate amount, if any,
paid by Sellers to the Purchaser pursuant to paragraph (c) above, and minus the
amount payable by Sellers to Purchaser pursuant to this paragraph (e), is equal
to, and does not exceed, (y) 35% (or 15% with respect to long term capital gain
items) of the sum of the 2005 Relevant
Taxable Income and the 2006 Relevant Taxable Income, which amount shall be
reduced by the Foreign Tax Credit Benefit for 2005 or the 2006 Short Period.

 

(f)        The Foreign Tax Credit
Benefit means, with respect to a taxable period, the amount by which the taxes
payable by Sellers in respect of such period may be reduced in

 

3

 

respect of a credit for foreign taxes paid by the
Company or any Subsidiary (such benefit to be determined assuming the income,
gains, deductions and losses of the Company are the only items of income, gain,
deduction and loss of Sellers for the taxable period in question).

 

(g)       All payments made by or to
Sellers or Purchaser pursuant to this Section 1.04 shall be made by wire
transfer of immediately available funds to such account or accounts as are
designated in advance by the recipient thereof to the payor thereof.

 

(h)       Any dispute or objection by
Purchaser or Sellers as to the determination of the 2005 Relevant Taxable
Income or the 2006 Relevant Taxable Income, or the calculation of any payment
required to be made pursuant to this Section 1.04, shall be submitted to
and resolved by the Company’s independent accounting firm, whose resolution
thereof shall be final and binding on Purchaser and Sellers; provided, however,
that such calculation and payment shall be subject to subsequent adjustment
based upon final determination pursuant to any Tax audit, which Purchase and
Sellers agree shall be subject to the terms of Section 8.05 hereof.

 

(i)        To the extent Sellers are required
to report items of AeroTurbine Capital income, gain, deduction and loss on
their U.S. federal income tax returns by reason of AeroTurbine Capital being
treated as an S Corporation for U.S. federal income tax purposes, those items
that are required to be reported on Sellers’ individual tax returns shall be
included in the 2005 Relevant Taxable Income and 2006 Relevant Taxable Income
of the Company.

 

1.05        Further Assurances;
Post-Closing Cooperation.  

 

(a)       At any time or from time to
time after the Closing, Sellers shall execute and deliver to Purchaser such
other documents and instruments, provide such materials and information and
take such other actions as Purchaser may reasonably request more effectively to
vest title to the Shares in Purchaser and, to the full extent permitted by Law,
to put Purchaser in actual possession and operating control of the Company and
the Subsidiaries and their Assets and Properties and Books and Records, and
otherwise to cause Sellers to fulfill their obligations under this Agreement
and the Operative Agreements to which they are a party.

 

(b)       Following the Closing, each
party will afford the other party, its counsel and its accountants, during
normal business hours, reasonable access to the books, records and other data
relating to the Business or Condition of the Company in its possession with
respect to periods prior to the Closing and the right to make copies and
extracts therefrom, to the extent that such access may be reasonably required
by the requesting party in connection with (i) the preparation of Tax Returns,
(ii) the determination or enforcement of rights and obligations under this
Agreement, (iii) compliance with the requirements of any Governmental or
Regulatory Authority, (iv) the determination or enforcement of the rights and
obligations of any party to this Agreement or any of the Operative Agreements
or (v) in connection with any actual or threatened Action or Proceeding.  Further, each party agrees for a period extending
six (6) years after the Closing Date not to destroy or otherwise dispose of any
such books, records and other data unless such party shall first offer in
writing to surrender such books,

 

4

 

records and other data to the other party and such
other party shall not agree in writing to take possession thereof during the
ten (10) day period after such offer is made.

 

(c)       If, in order properly to
prepare its Tax Returns, other documents or reports required to be filed with
Governmental or Regulatory Authorities or its financial statements or to
fulfill its obligations hereunder, it is necessary that a party be furnished
with additional information, documents or records relating to the Business or
Condition of the Company not referred to in paragraph (b) above, and such
information, documents or records are in the possession or control of the other
party, such other party shall use its best efforts to furnish or make available
such information, documents or records (or copies thereof) at the recipient’s
request, cost and expense.  Any
information obtained by Sellers in accordance with this paragraph shall be held
confidential by Sellers in accordance with Section 14.05.

 

1.06        Purchase Price
Allocation.  The Purchase Price shall
be allocated as follows:  $125,070,588 to
the Shares (the “Share Purchase Price”) and $2,000,000 to the
Non-Competition Agreement.  If, pursuant
to Section 8.02 herein, Purchaser determines to make an election under
Code Section 338(h)(10), Purchaser shall propose an allocation of the Share
Purchase Price (including any Company liabilities properly included in the
Purchase Price for purposes of determining the Purchase Price under Code
Section 338(h)(10)) among the assets of the Company and each Subsidiary in
accordance with Code Section 1060 and the Treasury Regulations promulgated
thereunder (and any similar provision of state, local or foreign law, as
appropriate), and shall notify Sellers of such proposed Purchase Price
allocation.  The parties shall cooperate
in good faith to agree on an allocation of the Purchase Price and once agreed
to, the allocation shall be binding on the parties (the “Allocation”).  If the parties cannot agree upon the
Allocation within 30 days of Purchaser’s delivery of its proposed allocation to
Sellers, the parties shall submit any disputes to the independent accountants
acceptable to both of the parties.  The
independent accountants shall finally and conclusively resolve any disputed
matters in accordance with Code Section 1060 within 30 days of receipt of the
submission.  Purchaser and Sellers shall
report,  and file Tax Returns (including
but not limited to Internal Revenue Service Form 8594) in all respects and for
all purposes consistent with the Allocation. 
Neither Purchaser nor Sellers shall take any position (whether in
audits, Tax Returns or otherwise) that is inconsistent with the Allocation
unless required to do so by applicable law.

 

ARTICLE
II

REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Sellers,
jointly and severally, hereby represent and warrant to Purchaser as follows:

 

2.01        Power of Sellers.  Each Seller has full power and authority to
execute and deliver this Agreement and the Operative Agreements to which it is
a party and to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby, including without limitation
to own, hold, sell and transfer (pursuant to this Agreement) the Shares.

 

5

 

2.02        Authority.  This Agreement has been duly and validly
executed and delivered by each Seller and constitutes, and upon the execution
and delivery by each Seller of the Operative Agreements to which it is a party,
such Operative Agreements will constitute, legal, valid and binding obligations
of each Seller enforceable against each Seller in accordance with its terms.

 

2.03        Organization of the
Company.  The Company is a
corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware, and has full corporate power and authority to
conduct its business as and to the extent now conducted and to own, use and
lease its Assets and Properties.  Section 2.03
of the Disclosure Schedule lists all lines of business in which the Company
is participating or engaged.  The Company
is duly qualified, licensed or admitted to do business and is in good standing
in those jurisdictions specified in Section 2.03 of the Disclosure Schedule,
which are the only jurisdictions where the failure to be so qualified, licensed
or admitted to do business could reasonably be expected to have a Material
Adverse Effect.  The name of each
director and officer of the Company on the date hereof, and the position with
the Company held by each, are listed in Section 2.03 of the Disclosure
Schedule.  Sellers have prior to the
execution of this Agreement delivered to Purchaser true and complete copies of
the certificate of incorporation and by-laws of the Company as in effect on the
date hereof.

 

2.04        Capital Stock.  The authorized capital stock of the Company
consists solely of 60,000 shares of Common Stock, $.001 par value per share, of
which 15,000 shares are Series “A” Common Stock, none of which is issued or
outstanding, and 45,000 shares are Series “B” Common Stock and constitute all
the Shares.  The Shares are duly
authorized, validly issued, outstanding, fully paid and nonassessable.  Sellers own the Shares, beneficially and of
record, free and clear of all Liens except as set forth in Section 2.04 of
the Disclosure Schedule.  Except for
this Agreement and as set forth in Section 2.04 of the Disclosure Schedule,
there are no outstanding Options with respect to the Company.  The delivery of a certificate or certificates
at the Closing representing the Shares in the manner provided in Section
1.03 will transfer to Purchaser good and valid title to the Shares, free
and clear of all Liens.

 

2.05        Subsidiaries.  Section 2.05 of the Disclosure Schedule
lists the name of each Subsidiary and all lines of business in which each
Subsidiary is participating or engaged. 
Each Subsidiary is a corporation duly organized, validly existing and in
good standing under the Laws of its jurisdiction of incorporation identified in
Section 2.05 of the Disclosure Schedule, and has full corporate power
and authority to conduct its business as and to the extent now conducted and to
own, use and lease its Assets and Properties. 
Each Subsidiary is duly qualified, licensed or admitted to do business
and is in good standing in those jurisdictions specified in Section 2.05 of
the Disclosure Schedule, which are the only jurisdictions in which the
ownership, use or leasing of such Subsidiary’s Assets and Properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary.  Section 2.05 of
the Disclosure Schedule lists for each Subsidiary the amount of its
authorized capital stock, the amount of its outstanding capital stock and the
record owners of such outstanding capital stock.  All of the outstanding shares of capital stock
of each Subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable, and are owned, beneficially and of record, by the Company or
Subsidiaries wholly owned by the Company, free and clear of all Liens.  There are no outstanding Options with respect
to any Subsidiary.  The name of each
director and officer of

 

6

 

each Subsidiary on the
date hereof, and the position with such Subsidiary held by each, are listed in Section
2.05 of the Disclosure Schedule. 
Sellers have prior to the execution of this Agreement delivered to
Purchaser true and complete copies of the certificate or articles of
incorporation and by-laws (or other comparable corporate charter documents) of
each of the Subsidiaries as in effect on the date hereof.

 

2.06        Material Asset Sales.  Except as set forth in Section 2.06 of the
Disclosure Schedule, and except for sales of aircraft, engines and spare
parts by the Company or any Subsidiary in the ordinary course of business, (i)
since July 31, 2005, neither the Company nor any Subsidiary has effected a sale
or distribution of all or any substantial portion of its assets of and (ii)
there are no existing agreements, options, commitments or rights with, of or to
any Person to acquire any material assets or rights of the Company, any
Subsidiary or any interest therein.

 

2.07        No Conflicts.  The execution and delivery by Sellers of this
Agreement do not, and the execution and delivery by Sellers of the Operative
Agreements to which they are party, the performance by Sellers of their
obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:

 

(a)           conflict with or result
in a violation or breach of any of the terms, conditions or provisions of the
certificate or articles of incorporation or by-laws (or other comparable
corporate charter documents) of the Company or any Subsidiary; 

 

(b)           subject to obtaining
the consents, approvals and actions, making the filings and giving the notices
disclosed in Section 2.07 of the Disclosure Schedule and under the
HSR Act, conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to Sellers, the Company or any
Subsidiary or any of their respective Assets and Properties; or

 

(c)           except as disclosed in Section 2.07(c)
of the Disclosure Schedule or required under the HSR Act, (i) conflict
with or result in a violation or breach of, (ii) constitute (with or without
notice or lapse of time or both) a default under, (iii) require Sellers, the
Company or any Subsidiary to obtain any consent, approval or action of, make
any filing with or give any notice to any Person as a result or under the terms
of, (iv) result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, (v) result in
or give to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under, or (vi) result in the creation
or imposition of any Lien upon Sellers, the Company or any Subsidiary or any of
their respective Assets and Properties under, any Contract or License to which
Sellers, the Company or any Subsidiary is a party or by which any of their
respective Assets and Properties are bound.

 

2.08        Governmental Approvals
and Filings.  Except as disclosed in Section 2.08
of the Disclosure Schedule and filings required under the HSR Act, no
consent, approval or action of, filing with or notice to any Governmental or Regulatory
Authority on the part of Sellers, the Company or any Subsidiary is required in
connection with the execution, delivery and performance of this Agreement or
any of the Operative Agreements or the consummation of

 

7

 

the transactions contemplated hereby or thereby except
where the failure to obtain such consent, approval or action, make such filing
or provide such notice would not have a Material Adverse Effect.

 

2.09        Books and Records.  The minute books and other similar records of
the Company and the Subsidiaries as made available to Purchaser prior to the
execution of this Agreement contain a true and complete record, in all material
respects, of all action taken at all meetings and by all written consents in
lieu of meetings of the stockholders, the boards of directors and committees of
the boards of directors of the Company and the Subsidiaries.  The stock transfer ledgers and other similar
records of the Company and the Subsidiaries as made available to Purchaser
prior to the execution of this Agreement accurately reflect all record
transfers prior to the execution of this Agreement in the capital stock of the
Company and the Subsidiaries.  Except as
set forth in Section 2.09 of the Disclosure Schedule, neither the
Company nor any Subsidiary has any of its Books and Records recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or held by
any means (including any electronic, mechanical or photographic process,
whether computerized or not) which (including all means of access thereto and
therefrom) are not under the exclusive ownership and direct control of the
Company or a Subsidiary.

 

2.10        Financial Statements.  Prior to the execution of this Agreement,
Sellers have delivered to Purchaser true and complete copies of the following
financial statements:

 

(a)           the
audited balance sheets of the Company and its consolidated subsidiaries as of
December 31, 2003 and 2004, and the related audited consolidated statements of
operations, stockholders’ equity and cash flows for each of the fiscal years
then ended, together with a true and correct copy of the report on such audited
information by KPMG International, and all letters from such accountants with
respect to the results of such audits;

 

(b)           the
unaudited balance sheets of the Company and its consolidated subsidiaries as of
the last Business Day of March, June, September and December, 2004 and the last
Business Day of March, June and September 2005, and the related unaudited consolidated
statements of operations and stockholders’ equity for the portion of the fiscal
year then ended; and

 

(c)           the
unaudited estimated balance sheets of the Company and its consolidated
subsidiaries as of July 31, 2005, and the related unaudited estimated consolidated
statements of operations and stockholders’ equity for the portion of the fiscal
year then ended.

 

Except as set forth in the notes thereto and as
disclosed in Section 2.10 of the Disclosure Schedule, all such
financial statements (i) were prepared in accordance with GAAP, except that the
unaudited financial statements do not have footnotes, (ii) fairly present the
consolidated financial condition and results of operations of the Company and
its consolidated subsidiaries as of the respective dates thereof and for the
respective periods covered thereby, subject to normal year-end adjustments in
the case of the unaudited financial statements, and (iii) were compiled from
the Books and Records of the Company and the Subsidiaries regularly maintained
by

 

8

 

management and used to prepare the financial
statements of the Company and the Subsidiaries in accordance with the
principles stated therein.  The Company
and the Subsidiaries have maintained their respective Books and Records in a
manner sufficient to permit the preparation of financial statements in
accordance with GAAP.  Except for those
Subsidiaries listed in Section 2.10 of the Disclosure Schedule, the
financial condition and results of operations of each Subsidiary are, and for
all periods referred to in this Section 2.10 have been, consolidated
with those of the Company.

 

2.11        Absence of Changes.  Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto on or prior to the
Closing Date, since December 31, 2004 there has not been any event or
development which, individually or together with other such events, has had or
could reasonably be expected to have a Material Adverse Effect.  Without limiting the foregoing, except as
disclosed in Section 2.11 of the Disclosure Schedule or as
explicitly disclosed in any other Section of the Disclosure Schedule, there has
not occurred since December 31, 2004 and the date hereof:

 

(i)            any declaration, setting aside or payment
of any dividend or other distribution in respect of the capital stock of the
Company or any Subsidiary not wholly owned by the Company, or any direct or
indirect redemption, purchase or other acquisition by the Company or any
Subsidiary of any such capital stock of or any Option with respect to the
Company or any Subsidiary not wholly owned by the Company;

 

(ii)           any authorization, issuance, sale or
other disposition by the Company or any Subsidiary of any shares of capital
stock of or Option with respect to the Company or any Subsidiary, or any
modification or amendment of any right of any holder of any outstanding shares
of capital stock of or Option with respect to the Company or any Subsidiary;

 

(iii)          (x)
any increase in the salary, wages or other compensation of any officer,
employee or consultant of the Company or any Subsidiary whose annual salary is,
or after giving effect to such change would be, $100,000 or more; (y) any
establishment or modification of (A) incentive compensation arrangements, (B)
targets, goals, pools or similar provisions in respect of any fiscal year under
any Benefit Plan, employment-related Contract or other employee compensation
arrangement or (C) salary ranges, increase guidelines or similar provisions in respect
of any Benefit Plan, employment-related Contract or other employee compensation
arrangement; or (z) any adoption, entering into or becoming bound by any
Benefit Plan, employment-related Contract or collective bargaining agreement,
or amendment, modification or termination (partial or complete) of any Benefit
Plan, employment-related Contract or collective bargaining agreement, except to
the extent required by applicable Law and, in the event compliance with legal
requirements presented options, only to the extent the option which the Company
or Subsidiary reasonably believed to be the least costly was chosen;

 

(iv)           (A) incurrences by the Company or any
Subsidiary of Indebtedness in an aggregate principal amount exceeding
$1,000,000, or (B) any voluntary purchase, cancellation, prepayment or complete
or partial discharge in advance of a scheduled

 

9

 

payment
date with respect to, or waiver of any right of the Company or any Subsidiary
under, any Indebtedness of or owing to the Company or any Subsidiary;

 

(v)           any physical damage, destruction or other
casualty loss (whether or not covered by insurance) affecting any of the plant,
real or personal property (including aircraft, engines and spare parts) or
equipment of the Company or any Subsidiary in an aggregate amount exceeding $250,000,

 

(vi)          any material change in (x) any pricing,
investment, accounting, financial reporting, inventory, credit, allowance or
Tax practice or policy of the Company or any Subsidiary, or (y) any method of
calculating any bad debt, contingency or other reserve of the Company or any
Subsidiary for accounting, financial reporting or Tax purposes, or any change
in the fiscal year of the Company or any Subsidiary;

 

(vii)         any
write-off or write-down of or any determination to write off or write down any
of the Assets and Properties of the Company or any Subsidiary in an aggregate
amount exceeding $100,000;

 

(viii)        any
acquisition or disposition of, or incurrence of a Lien (other than a Permitted
Lien) on, any Assets and Properties of the Company or any Subsidiary, other
than in the ordinary course of business consistent with past practice;

 

(ix)          any (x) amendment of the articles of
incorporation or by-laws or other comparable corporate charter documents of the
Company or any Subsidiary, (y) recapitalization, reorganization, liquidation or
dissolution of the Company or any Subsidiary or (z) merger or other business
combination involving the Company or any Subsidiary and any other Person;

 

(x)           any entering into, amendment,
modification, termination (partial or complete) or granting of a waiver under
or giving any consent with respect to (A) any Contract which is required (or
had it been in effect on the date hereof would have been required) to be
disclosed in the Disclosure Schedule pursuant to Section 2.20 or
(B) any material License held by the Company or any Subsidiary;

 

(xi)          capital expenditures or commitments for
additions to property, plant or equipment of the Company and the Subsidiaries
constituting capital assets in an amount exceeding $250,000 for each such
expenditure or commitment;

 

(xii)         expenditures
or requirements to make an expenditure on those Aircraft-Related Assets that
have a maintenance reserve tracking account which have been leased by the
Company or any Subsidiary to any third party, other than expenditures in
amounts consistent with the related maintenance reserves;

 

(xiii)        any
commencement or termination by the Company or any Subsidiary of any line of
business;

 

(xiv)        any
transaction by the Company or any Subsidiary with Sellers or Affiliate (other
than the Company or any Subsidiary) of Sellers (A) outside the ordinary
course of

 

10

 

business
consistent with past practice or (B) other than on an arm’s-length basis, other
than pursuant to any Contract in effect since December 31, 2004 and disclosed
pursuant to Section 2.20 of the Disclosure Schedule;

 

(xv)         any entering into of a Contract to do or
engage in any of the foregoing after the date hereof; or

 

(xvi)        any
other transaction involving or development affecting the Company or any
Subsidiary outside the ordinary course of business consistent with past
practice.

 

2.12        No Undisclosed
Liabilities.  Except as reflected or
reserved against in the balance sheet included in the Audited Financial
Statements or in the notes thereto or as disclosed in Section 2.12 of
the Disclosure Schedule or any other Section of the Disclosure Schedule,
there are no Liabilities against, relating to or affecting the Company or any
Subsidiary or any of their respective Assets and Properties, other than
Liabilities (i) incurred in the ordinary course of business consistent with
past practice or (ii) which, individually or in the aggregate, are not material
to the Business or Condition of the Company.

 

2.13        Taxes.  Except as set forth in Section 2.13 of the
Disclosure Schedule:

 

(a)           The
Company has filed all Tax Returns required to be filed by applicable law prior
to the date hereof.  All such Tax Returns
were (and, as to Tax Returns not filed as of the date hereof, will be) true,
complete and correct and filed on a timely basis.  The Company (and each Subsidiary) has paid
all Taxes that are due, or claimed or asserted by any taxing authority to be
due, from the Company (or such Subsidiary) for the periods covered by the Tax
Returns.  

 

(b)           To
the Knowledge of Sellers, no jurisdiction (whether within or without the United
States) in which the Company or any Subsidiary has not filed a specific Tax
Return has asserted that the Company or such Subsidiary is required to file
such Tax Return in such jurisdiction.  Section
2.13 of the Disclosure Schedule lists all states and nations in which the
Company or any Subsidiary files any Tax Returns and indicates in the case of
income or franchise tax filings whether such filings are made on a
consolidated, combined or unitary basis and the
state allocation factors for the most recent taxable year for which filings
have been made.

 

(c)           The
Company (and each Subsidiary) has established (and until the Closing Date will
maintain) on its books and records reserves adequate to pay all Taxes not yet
due and payable and such reserves are clearly identified as reserves for
current Taxes.

 

(d)           There
are no Tax liens upon the assets of the Company (or any Subsidiary) except
liens for Taxes not yet due and payable.

 

(e)           The
Company (and each Subsidiary) has complied (and until the Closing Date will
comply) with all applicable laws, rules, and regulations relating to the
payment and withholding of Taxes (including withholding and reporting
requirements under Code §§1441 through 1464, 3401 through 3406, 6041 and 6049
and similar provisions under any other laws) and has, within the time and in
the manner prescribed by law, withheld

 

11

 

from employee wages and paid over to the proper
governmental authorities all required amounts.

 

(f)            Neither
the Company nor any Subsidiary has requested (and no request has been made on
its behalf) any extension of time within which to file any Tax Return which
extension is currently effective. 
Neither the Company nor any Subsidiary has executed any outstanding
waivers or comparable consents regarding the application of the statute of
limitations for any Taxes or Tax Returns (and no extensions have been executed
on their behalf).  The statute of
limitations for the assessment of all Taxes has expired for all applicable Tax
Returns of the Company (or any Subsidiary) through December 31, 2001. 

 

(g)           No
deficiency for any Taxes has been suggested, proposed, asserted or assessed
against the Company (or any Subsidiary) that has not been resolved and paid in
full; no audits or other administrative proceedings or court proceedings are
presently pending or to the Knowledge of Sellers threatened with regard to any
Taxes or Tax Returns of the Company (or any Subsidiary); and all prior adjustments
of federal Tax liability resulting from the resolution of any audit or proposed
deficiency have been reported to appropriate state and local taxing authorities
and all resulting Taxes payable to state and local taxing authorities have been
paid.

 

(h)           There
is no power of attorney currently in force with respect to any Tax matter
involving the Company (or any Subsidiary).

 

(i)            Neither
the Company nor any Subsidiary has received any written ruling of a taxing
authority relating to Taxes, or any other written and legally binding agreement
with a taxing authority relating to Taxes.

 

(j)            The
Company has made available (or, in the case of Tax Returns to be filed on or
before the Closing Date, will make available) to Purchaser complete and
accurate copies of all Tax Returns and associated work papers filed by or on
behalf of the Company for all taxable years ending on or prior to the Closing Date.

 

(k)           No agreement as to
indemnification for, contribution to, or payment of Taxes exists between the
Company or any Subsidiary and any other Person (other than the Company or a
Subsidiary), including pursuant to any tax sharing agreement, lease agreement,
purchase or sale agreement, partnership agreement or any other agreement,
except where the Company or such Subsidiary is the beneficiary of, or Person
entitled to, such indemnification, contribution or payment.

 

(l)            Neither
the Company nor any Subsidiary has any liability for Taxes of any Person under
Treasury Regulation 1.1502-6 (or any similar provision of any state, local or
foreign law), or as a transferee or successor, or by contract or otherwise.

 

(m)          Neither
the Company nor any Subsidiary is or has been a “distributing corporation” or a
“controlled corporation” within the meaning of Code section 355.

 

12

 

(n)           Neither
the Company nor any Subsidiary is a party to any agreement, contract, or
arrangement that would result, separately or in the aggregate, in the payment
of any “excess parachute payments” within the meaning of Code Section 280G or
in the disallowance of any deductions pursuant to Code Section 162(m).

 

(o)           No
property of the Company (or any Subsidiary) is property that the Company or any
party to this transaction is or will be required to treat as being owned by
another person pursuant to the provisions of Code Section 168(f)(8) (as in
effect prior to its amendment by the Tax Reform Act of 1986) or property
described in Code Section 168(g)(1)(A) or is “tax-exempt use property” or “tax-exempt
bond financed property” within the meaning of Code Section 168.

 

(p)           Neither
the Company nor any Subsidiary is required to include in income any adjustment
pursuant to Code §481(a) by reason of a voluntary change in accounting method
initiated by the Company (or any Subsidiary), and the Internal Revenue Service
(“IRS”) has not proposed an adjustment or change in accounting
method.  No income of the Company or any
Subsidiary that economically accrued prior to the Closing will be recognized as
taxable income after the Closing as a result of the Company or a Subsidiary
having been a party to an installment sale, an open transaction or otherwise.  

 

(q)           The
Company is qualified as an S Corporation within the meaning of Code Section
1361 and will continue to be treated as an S Corporation until the Closing
causes termination of S Corporation status pursuant to Code Section 1362(d)(2).  The Company has built-in gains attributable
to periods during which it was taxed as a C Corporation as provided in Section
2.13(q) of the Disclosure Schedule and has no other unrealized built-in
gains.  The Company has accumulated
earnings and profits attributable to periods that the Company was taxed as a C
Corporation for federal tax purposes as provided in Section 2.13(q) of the
Disclosure Schedule.  Each state in
which the Company is required to file tax returns respects the Company’s status
as an S Corporation and conforms to the federal income tax treatment of S
Corporations.

 

(r)            Neither
the Company nor any Subsidiary has participated in or cooperated with any
international boycott with in the meaning of Code section 999.

 

(s)            The
Company is not a United States real property holding corporation within the
meaning of Code section 897(c)(2).

 

(t)            The
Company (and each Subsidiary) has disclosed on its federal income Tax Return
all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Code section
6662.  Neither the Company nor any
Subsidiary has engaged in any reportable transactions that were required to be
disclosed pursuant to Treasury Regulation section 1.6011-4.

 

2.14        Legal Proceedings.  Except as disclosed in Section 2.14
of the Disclosure Schedule (with paragraph references corresponding to
those set forth below):

 

(a)           there are no Actions or
Proceedings pending or, to the Knowledge of Sellers, threatened against,
relating to or affecting Sellers, the Company or any

 

13

 

Subsidiary or any of their respective Assets and
Properties which (i) could reasonably be expected to result in the issuance of
an Order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any
of the Operative Agreements or otherwise result in a material diminution of the
benefits contemplated by this Agreement or any of the Operative Agreements to
Purchaser, or (ii) if determined adversely to Sellers, the Company or a
Subsidiary, could reasonably be expected to (x) result in any injunction or
other equitable relief against the Company or any Subsidiary that would
interfere in any material respect with its business or operations or (y) Losses
by the Company or any Subsidiary, individually or in the aggregate with Losses
in respect of other such Actions or Proceedings, exceeding $1,000,000;

 

(b)           there are no facts or
circumstances Known to Sellers that could reasonably be expected to give rise
to any Action or Proceeding that would be required to be disclosed pursuant to
clause (a) above; and

 

(c)           there are no Orders
outstanding against the Company or any Subsidiary.

 

Prior to the execution of this Agreement, Sellers have
delivered to Purchaser all responses of counsel for the Company and the
Subsidiaries to auditors’ requests for information delivered in connection with
the Audited Financial Statements (together with any updates provided by such
counsel) regarding Actions or Proceedings pending or threatened against,
relating to or affecting the Company or any Subsidiary.

 

2.15        Compliance With Laws
and Orders.  Except as disclosed in Section 2.15
of the Disclosure Schedule, none of Sellers, the Company or any Subsidiary
is or has at any time within the last five (5) years been, or is or has been
subject to any Action or Proceeding alleging that it is or has at any time
within the last five (5) years been, or has received any notice that it is or
has at any time within the last five (5) years been, in violation of or in
default under, in any material respect, any Law or Order applicable to the
Company or any Subsidiary or any of their respective Assets and Properties.

 

2.16        Benefit Plans; ERISA.  

 

(a)       Section 2.16(a) of the
Disclosure Schedule contains a true and complete list and description
of each of the Benefit Plans.  Neither
the Company nor any Subsidiary has scheduled or agreed upon future increases of
benefit levels (or creations of new benefits) with respect to any Benefit Plan,
and no such increases or creation of benefits have been proposed, made the
subject of representations to employees or requested or demanded by employees
under circumstances which make it reasonable to expect that such increases will
be granted.  Except as disclosed in Section 2.16(a)
of the Disclosure Schedule, no loan is outstanding between the Company or
any Subsidiary and any employee.

 

(b)       Neither the Company nor any
Subsidiary maintains or is obligated to provide benefits under any life,
medical or health plan which provides benefits to retirees or other terminated
employees other than benefit continuation rights under the Consolidated Omnibus
Budget Reconciliation of 1985, as amended. 

 

14

 

(c)       Except as set forth in Section
2.16(c) of the Disclosure Schedule, each Benefit Plan covers only employees
who are employed by the Company or a Subsidiary (or former employees or
beneficiaries with respect to service with the Company or a Subsidiary.

 

(d)       Neither the Company, any
Subsidiary, any ERISA Affiliate nor any other corporation or organization
controlled by or under common control with any of the foregoing within the
meaning of Section 4001 of ERISA has at any time contributed to a Defined
Benefit Plan in any “multiemployer plan”, as that term is defined in Section
4001 of ERISA.

 

(e)       Each of the Benefit Plans
is, and its administration is and has been since inception, in all material
respects in compliance with, and neither the Company nor any Subsidiary has
received any claim or notice that any such Benefit Plan is not in compliance
with, all applicable Laws and Orders and prohibited transactions exemptions,
including the requirements of ERISA, the Code, the Age Discrimination in Employment
Act, the Equal Pay Act and Title VII of the Civil Rights Act of 1964.  Each Qualified Plan either has received a
favorable determination letter from the IRS, or is maintained under and substantially
in accordance with a prototype plan that is the subject of a favorable opinion
letter issued by the IRS, as to the Plan’s tax qualified status under Section
401(a) of the Code, and, to the Knowledge of Sellers, nothing has occurred that
could adversely affect the Plan’s tax qualified status.  Each Benefit Plan which is intended to
provide for the deferral of income, the reduction of salary or other
compensation or to afford other Tax benefits is in all material respects in
compliance with the applicable provisions of the Code or other Laws required in
order to provide such Tax benefits.

 

(f)        None of the Sellers, the
Company nor any Subsidiary is in default in performing any of its contractual
obligations under any of the Benefit Plans or any related trust agreement or
insurance contract.  All contributions and
other payments required to be made by Sellers, the Company or any Subsidiary to
any Benefit Plan with respect to any period ending before or at or including
the Closing Date have been made or reserves adequate for such contributions or
other payments have been or will be set aside therefor and have been or will be
reflected in Financial Statements in accordance with GAAP.  There are no outstanding liabilities of any
Benefit Plan other than liabilities for benefits to be paid to participants in
such Benefit Plan and their beneficiaries in accordance with the terms of such
Benefit Plan.

 

(g)       No event has occurred, and
there exists no condition or set of circumstances in connection with any
Benefit Plan, under which the Company or any Subsidiary, directly or indirectly
(through any indemnification agreement or otherwise), could reasonably be
expected to be subject to any material risk of liability under Section 409 of
ERISA, Section 502(i) of ERISA, Title IV of ERISA or Section 4975 of the
Code.

 

(h)       No transaction contemplated
by this Agreement will result in liability to the PBGC under Section
302(c)(ii), 4062, 4063, 4064 or 4069 of ERISA, or otherwise, with respect to
the Company, any Subsidiary, Purchaser or any corporation or organization
controlled by or under common control with any of the foregoing within the
meaning of Section 4001 of ERISA, and no event or condition exists or has
existed which could reasonably

 

15

 

be expected to result in any such liability with
respect to Purchaser, the Company, any Subsidiary or any such corporation or
organization.

 

(i)        No benefit under any Benefit
Plan, including, without limitation, any severance or parachute payment plan or
agreement, will be established or become accelerated, vested, funded or payable
by reason of any transaction contemplated under this Agreement.

 

(j)        To the Knowledge of Sellers,
there are no pending or threatened claims by or on behalf of any Benefit Plan,
by any Person covered thereby, or otherwise, which allege violations of Law
which could reasonably be expected to result in liability on the part of
Purchaser, the Company, any Subsidiary or any fiduciary of any such Benefit
Plan, nor is there any basis for such a claim.

 

(k)       No benefit under any Benefit
Plan, including, without limitation, any severance or parachute payment plan or
agreement, will be established or become accelerated, vested, funded or payable
by reason of any transaction contemplated under this Agreement and no Benefit
Plan provides for any additional amounts to be paid with respect to any tax
imposed under Section 4999 of the Code. 
Neither the Company nor any Subsidiary have incurred any obligation to
make (or possibly make) any payments that (A) will be non-deductible under, or
would otherwise constitute a “parachute payment” within the meaning of, Section
280G of the Code (or any corresponding provision of state, local or foreign
income Tax law) or (B) are or may be subject to the imposition of an excise tax
under Section 4999 of the Code.

 

(l)        Complete and correct copies
of the following documents have been furnished to Purchaser prior to the
execution of this Agreement:

 

(i)            the Benefit Plans and any predecessor
plans referred to therein, any related trust agreements, and service provider
agreements, insurance contracts or agreements with investment managers,
including without limitation, all amendments thereto;

 

(ii)           current summary Plan descriptions of each
Benefit Plan subject to ERISA, and any similar descriptions of other Benefit
Plans, to the extent such summaries exist;

 

(iii)          the
most recently-filed Form 5500 and Schedules thereto for each Benefit Plan
subject to ERISA reporting requirements;

 

(iv)          the most recent determination or opinion
of the IRS, whichever applies, with respect to the qualified status of each
Qualified Plan;

 

(v)           the most recent accountings with respect
to any Benefit Plan funded through a trust;

 

(vi)          the most recent actuarial report of the
qualified actuary of any Subject Defined Benefit Plan or any other Benefit Plan
with respect to which actuarial valuations are conducted; and

 

(vii)         all
qualified domestic relations orders or other orders governing payments from any
Benefit Plan.

 

16

 

2.17        Real Property.  

 

(a)       Neither the Company nor any
Subsidiary owns any real property.  Section 2.17(a)
of the Disclosure Schedule contains a true and correct list of each parcel
of real property leased by the Company or any Subsidiary.

 

(b)       Except as disclosed in Section 2.17(b)
of the Disclosure Schedule, the Company and the Subsidiaries have adequate
rights of ingress and egress with respect to the real property listed in Section 2.17(a)
of the Disclosure Schedule and all buildings, structures, facilities,
fixtures and other improvements thereon. 
To the Knowledge of Sellers, none of such real property, buildings,
structures, facilities, fixtures or other improvements, or the use thereof,
contravenes or violates any building, zoning, administrative, occupational safety
and health or other applicable Law in any material respect (whether or not
permitted on the basis of prior nonconforming use, waiver or variance).

 

(c)       The Company or a Subsidiary
has a valid and subsisting leasehold estate in and the right to quiet enjoyment
of the real properties leased by it for the full term of the lease
thereof.  Each lease referred to in
paragraph (a) above is a legal, valid and binding agreement, enforceable
in accordance with its terms, of the Company or a Subsidiary and of each other
Person that is a party thereto, and there is no, and neither the Company nor
any Subsidiary has received notice of any, default (or any condition or event
which, after notice or lapse of time or both, would constitute a default)
thereunder.  Neither the Company nor any
Subsidiary owes any brokerage commissions with respect to any such leased
space.

 

(d)       Seller has delivered to
Purchaser prior to the execution of this Agreement true and complete copies of
all leases (including any amendments and renewal letters) with respect to the
real property leased by the Company and the Subsidiaries.

 

(e)       Except as disclosed in Section 2.17(e)
of the Disclosure Schedule, the improvements on the real property
identified in Section 2.17(a) of the Disclosure Schedule are in
good operating condition and in a state of good maintenance and repair,
ordinary wear and tear excepted, are adequate and suitable for the purposes for
which they are presently being used and, to the Knowledge of Sellers, there are
no condemnation or appropriation proceedings pending or threatened against any
of such real property or the improvements thereon.

 

2.18        Tangible Personal
Property; Investment Assets.  

 

(a)       The Company or a Subsidiary
is in possession of and has good title to, or has valid leasehold interests in
or valid rights under Contract to use, all tangible personal property
(including Aircraft-Related Assets) used in or reasonably necessary for the
conduct of their business, including all tangible personal property reflected
on the balance sheet included in the Unaudited Financial Statements and
tangible personal property acquired since the Unaudited Financial Statement
Date other than property disposed of since such date in the ordinary course of
business consistent with past practice. 
All such tangible personal property is free and clear of all Liens,
other than Permitted Liens and Liens disclosed in Section 2.18(a) of
the Disclosure Schedule, and its use complies in all material respects with
all applicable Laws.

 

17

 

(b)       Section 2.18(b) of the
Disclosure Schedule describes each Investment Asset owned by the
Company or any Subsidiary on the date hereof. 
Except as disclosed in Section 2.18(b) of the Disclosure
Schedule, all such Investment Assets are owned by the Company or a
Subsidiary free and clear of all Liens other than Permitted Liens.

 

2.19        Intellectual Property
Matters.  

 

(a)       The Company has not utilized
or does not currently utilize any patent, trademark, trade name, service mark,
copyright, software, trade secret or know-how material to the business of the
Company, except for commercial software generally
available and those listed in Section 2.19(a) of the Disclosure Schedule
(the “Intellectual Property”), all of which are owned by, or licensed
to, the Company free and clear of any liens, claims, charges or encumbrances.
The Intellectual Property constitutes all such assets, properties and rights
which are used or held for use in, or are necessary for, the conduct of the business
of the Company.

 

(b)       Except as set forth in Section
2.19(b) of the Disclosure Schedule and except for “shrink wrap” agreements
covering software, there are no royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements, pertaining to any of the
Intellectual Property.

 

(c)       Except as set forth in Section
2.19(c) of the Disclosure Schedule, the Company does not infringe upon
unlawfully or wrongfully use any patent, trademark, trade name, service mark,
copyright or trade secret owned or claimed by another. No action, suit,
proceeding or investigation has been instituted or, to the Knowledge of Sellers
or the Company, threatened relating to any, patent, trademark, trade name,
service mark, copyright or trade secret formerly or currently used by the
Company.  Except as set forth in Section
2.19(c) of the Disclosure Schedule, none of the Intellectual Property is
subject to any outstanding order, decree or judgment. The Company has not
agreed to indemnify any Person for or against any infringement of or by the
Intellectual Property.

 

(d)       Except as set forth in Section
2.19(d) of the Disclosure Schedule, no present or former employee of the
Company and no other Person owns or has any proprietary, financial or other
interest, direct or indirect, in whole or in part, in any of the Intellectual
Property.  Section 2.19(d) of the
Disclosure Schedule lists all confidentiality or non-disclosure agreements
currently in force and effect in connection with the Intellectual Property to
which the Company or any of its respective employees is a party.

 

(e)       Except as set forth in Section
2.19(d) of the Disclosure Schedule, none of the Company’s Intellectual
Property is registered in, filed in or issued by the United States Copyright
Office or the United States Patent and Trademark Office, or in any offices in
the various states of the United States and any offices in other jurisdictions.

 

(f)        All Intellectual Property in
the form of computer software that is utilized by the Company in the operations
of its business is capable of processing date data between the twentieth and
twenty-first centuries, or can be rendered capable of processing such data
within 30 days by the expenditure of no more than $10,000 in the aggregate.

 

18

 

2.20        Contracts.  

 

(a)       Section 2.20(a) of the
Disclosure Schedule (with paragraph references corresponding to those
set forth below) contains a true and complete list of each of the following
Contracts or other arrangements (true and complete copies or, if none,
reasonably complete and accurate written descriptions of which, together with
all amendments and supplements thereto and all waivers of any terms thereof,
have been delivered to Purchaser prior to the execution of this Agreement), to
which the Company or any Subsidiary is a party or by which any of their
respective Assets and Properties is bound:

 

(i)            (A) all Contracts (excluding Benefit
Plans) providing for a commitment of employment or consultation services for a
specified or unspecified term or otherwise relating to employment or the
termination of employment, the name, position and rate of compensation of each
Person party to such a Contract and the expiration date of each such Contract;
and (B) any written or unwritten representations, commitments, promises,
communications or courses of conduct (excluding Benefit Plans and any such
Contracts referred to in clause (A)) involving an obligation of the Company or
any Subsidiary to make payments in any year;

 

(ii)           all Contracts with any Person containing
any provision or covenant prohibiting or limiting the ability of the Company or
any Subsidiary to engage in any business activity or compete with any Person or
prohibiting or limiting the ability of any Person to compete with the Company
or any Subsidiary;

 

(iii)          all
partnership, joint venture, shareholders’ or other similar Contracts with any
Person;

 

(iv)          all Contracts relating to Indebtedness of
the Company or any Subsidiary in excess of $250,000;

 

(v)           all Contracts with distributors, dealers,
manufacturer’s representatives, sales agencies or franchisees;

 

(vi)          all Contracts relating to (A) the
future disposition or acquisition of any Assets and Properties, other than
dispositions or acquisitions in the ordinary course of business consistent with
past practice, and (B) any merger or other business combination;

 

(vii)         all
Contracts between or among the Company or any Subsidiary, on the one hand, and
a Seller or an Affiliate (other than the Company or any Subsidiary) of a
Seller, on the other hand;

 

(viii)        all
collective bargaining or similar labor Contracts;

 

(ix)          all Contracts that (A) limit or contain
restrictions on the ability of the Company or any Subsidiary to declare or pay
dividends on, to make any other distribution in respect of or to issue or
purchase, redeem or otherwise acquire its capital stock, to incur Indebtedness,
to incur or suffer to exist any Lien, to purchase or sell any Assets and
Properties, to change the lines of business in which it participates or engages

 

19

 

or
to engage in any Business Combination or
(B) require the Company or any Subsidiary to maintain specified financial
ratios or levels of net worth or other indicia of financial condition;

 

(x)           all other Contracts (other than Benefit
Plans, leases listed in Section 2.21 of the Disclosure Schedule and
insurance policies listed in Section 2.23 of the Disclosure Schedule)
that involve the payment or potential payment, pursuant to the terms of any
such Contract, by or to the Company or any Subsidiary of more than $500,000 in
any twelve (12) month period;

 

(xi)          Contracts containing minimum purchase
requirements or “take or pay” provisions, or otherwise requiring the purchase
of all or a specified portion of the goods or services offered for sale by any
Person to the Company or any Subsidiary;

 

(xii)         Contracts
not otherwise listed in Section 2.20 of the Disclosure Schedule and
continuing over a period of more than six months from the date hereof and
exceeding $500,000 in value;

 

(xiii)        Contracts
containing a provision to indemnify any Person with respect to, or to assume,
any tax or environmental or product liability;

 

(xiv)        Contracts
with federal, state, local or foreign regulatory or other governmental
entities;

 

(xv)         Contracts for any charitable or political
contribution; and

 

(xvi)        all
Aircraft Asset Leases.

 

(b)       Each Contract required to be
disclosed in Section 2.20(a) of the Disclosure Schedule is in full
force and effect and constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, of each party thereto; and except as
disclosed in Section 2.20 of the Disclosure Schedule neither the
Company, any Subsidiary nor, to the Knowledge of Sellers, any other party to
such Contract is, or has received notice that it is, in violation or breach of
or default under any such Contract (or with notice or lapse of time or both,
would be in violation or breach of or default under any such Contract) in any
material respect.

 

(c)       Except as disclosed in Section
2.20(c) of the Disclosure Schedule, the Company is not now or has it ever
been a party to any contract with any governmental entity subject to price
redetermination or renegotiation.

 

2.21        Aircraft-Related Assets
and Aircraft Asset Leases.  

 

(a)       Set forth in Section
2.21(a) of the Disclosure Schedule is a true and complete list specifying (i) with
respect to each aircraft owned by the Company, the manufacturer, model,
registration marks, manufacturer’s serial number, year of manufacture, any damage
in excess of $500,000 which has either not been repaired or where such repair
has not been paid in full and, in either case, setting forth whether such costs
of repair is covered by

 

20

 

the insurance policies set forth in Section 2.23
of the Disclosure Schedule, (ii) with respect to each engine and each
spare part with a book value of more than $25,000 owned by the Company, the
manufacturer and model, and (iii) with respect to each Aircraft Asset
Lease (A) the Aircraft-Related Assets subject to such Aircraft Asset
Lease, (B) the identity of the lessee, (C) the expiry date of the Aircraft
Asset Lease, (D) the current monthly rental (in United States dollars) and whether
it is floating or fixed, (E) any extension or termination rights and (F)
maintenance rent (if payable).

 

(b)       Except as set forth
in Section 2.21(b) of the Disclosure Schedule, the Company holds good
and marketable title to each of the Aircraft-Related Assets described in Section
2.21(a) of the Disclosure Schedule free and clear of all Liens other than
Permitted Liens and any Lien permitted pursuant to the terms of any Aircraft
Asset Lease related to such Aircraft-Related Asset (other than a Lien
attributable to the Company).

 

(c)       Except as set forth
in Section 2.21(c) of the Disclosure Schedule, no Person has an option
to purchase any Aircraft-Related Asset pursuant to an Aircraft Asset Lease or
otherwise, and no lessee has exercised an option to extend or terminate any
Aircraft Asset Lease.

 

(d)       Except as disclosed
in Section 2.21(d) of the Disclosure Schedule, there are no claims which
have been asserted against the Company arising out of any Aircraft Asset Lease.

 

2.22        Licenses.  Section 2.22 of the Disclosure Schedule
contains a true and complete list of all Licenses used in and material,
individually or in the aggregate, to the business or operations of the Company
or any Subsidiary (and all pending applications for any such Licenses), setting
forth the grantor, the grantee, the function and the expiration and renewal
date of each.  Prior to the execution of
this Agreement, Sellers have delivered to Purchaser true and complete copies of
all such Licenses.  Except as disclosed
in Section 2.22 of the Disclosure Schedule:

 

(i)            the Company and each Subsidiary owns or
validly holds all Licenses that are material, individually or in the aggregate,
to its business or operations;

 

(ii)           each License listed in Section 2.22
of the Disclosure Schedule is valid, binding and in full force and effect;
and

 

(iii)          to
the Knowledge of Sellers, neither the Company nor any Subsidiary is, or has
received any notice that it is, in default (or with the giving of notice or
lapse of time or both, would be in default) under any such License.

 

2.23        Insurance.  Section 2.23 of the Disclosure Schedule
contains a true and complete list (including the names and addresses of the
insurers, the names of the Persons to whom such policies have been issued, the
expiration dates thereof, the annual premiums and payment terms thereof,
whether it is a “claims made” or an “occurrence” policy and a brief description
of the interests insured thereby) of all liability, property, workers’
compensation, directors’ and officers’ liability and other insurance policies
currently in effect that insure the business, operations or employees of the
Company or any Subsidiary or affect or relate to the

 

21

 

ownership, use or operation of any of the Assets and
Properties of the Company or any Subsidiary and that (i) have been issued to
the Company or any Subsidiary or (ii) have been issued to any Person (other
than the Company or any Subsidiary) for the benefit of the Company or any
Subsidiary.  The insurance coverage
provided by any of the policies described in clause (i) above will not
terminate or lapse by reason of the transactions contemplated by this
Agreement.  Each policy listed in Section 2.23
of the Disclosure Schedule is valid and binding and in full force and
effect, no premiums due thereunder have not been paid and, to the Knowledge of
Sellers, neither the Company, any Subsidiary nor the Person to whom such policy
has been issued has received any notice of cancellation or termination in
respect of any such policy or is in default thereunder.  To the Knowledge of Sellers, neither the
Company, any Subsidiary nor the Person to whom such policy has been issued has
received notice that any insurer under any policy referred to in this Section
is denying liability with respect to a claim thereunder or defending under a
reservation of rights clause.  The
current and historical policies are on commercially reasonable terms without historical
gaps in coverage and no further premiums or payments will be due after the
Closing with respect to periods prior to the Closing, except to the extent
reserved against in the Financial Statements.

 

2.24        Affiliate Transactions.  Except as disclosed in Section 2.05
or Section 2.24 of the Disclosure Schedule, (i) there are no Liabilities
between the Company or any Subsidiary, on the one hand, and a Seller or an
Affiliate (other than the Company or any Subsidiary) of a Seller, on the other,
(ii) none of Sellers or any such Affiliates provides or causes to be provided
any assets, services or facilities to the Company or any Subsidiary, (iii)
neither the Company nor any Subsidiary provides or causes to be provided any
assets, services or facilities to a Seller or any such Affiliate and (iv)
neither the Company nor any Subsidiary beneficially owns, directly or
indirectly, any Investment Assets issued by a Seller or any such
Affiliate.  Except as disclosed in Section 2.24
of the Disclosure Schedule, each of the Liabilities and transactions listed
in Section 2.24 of the Disclosure Schedule was incurred or engaged
in, as the case may be, on an arm’s-length basis.  Except as disclosed in Section 2.24 of the
Disclosure Schedule, since December 31, 2004, all settlements of
Liabilities between the Company or any Subsidiary, on the one hand, and a
Seller or any such Affiliate, on the other, have been made, and all allocations
of expenses have been applied, in the ordinary course of business consistent
with past practice.

 

2.25        Employees;
Labor Relations.

 

(a)       Section 2.25(a) of the
Disclosure Schedule contains a list of the name of each officer and
employee of the Company and the Subsidiaries whose annual base salary or wages,
plus any compensation paid or payable pursuant to any incentive, bonus or
commission arrangement, was or was reasonably likely to be, at least $250,000,
in respect of the year ended December 31, 2005 or is currently expected to
exceed such amount in respect of the year ending December 31, 2006, together
with each such person’s position or function, annual base salary or wages and
any incentive, bonus or commission compensation with respect to such person in
effect on such date.  Sellers have not
received any information that would lead them to believe that any of such
persons will or may cease to be employees of the Company because of or in
connection with the consummation of the transactions contemplated by this
Agreement.

 

22

 

(b)       Except as disclosed in Section 2.25(b)
of the Disclosure Schedule, (i) no employee of the Company or any
Subsidiary is presently a member of a collective bargaining unit and, to the
Knowledge of Sellers, there are no threatened or contemplated attempts to
organize for collective bargaining purposes any of the employees of the Company
or any Subsidiary, and (ii) no unfair labor practice complaint or sex, age,
race or other discrimination claim has been brought during the last five (5)
years against the Company or any of the Subsidiaries before the National Labor
Relations Board, the Equal Employment Opportunity Commission or any other
Governmental or Regulatory Authority. 
Since January 1, 2001, there has been no work stoppage, strike or other
concerted action by employees of the Company or any Subsidiary.  During that period, the Company and the
Subsidiaries have complied in all material respects with all applicable Laws
relating to the employment of labor, including, without limitation those
relating to wages, hours and collective bargaining.

 

2.26        Environmental Matters.  

 

(a)       The Company has obtained,
maintains, and is in compliance with, all permits, authorizations, approvals
and consents required under Environmental Laws with respect to the operations
of the Company or any premises on which its business is operated (“Environmental
Permits”), all of which Environmental Permits shall remain vested in the
Company upon consummation of the transactions contemplated hereby.  No actions are pending, or to the knowledge
of the Company or Knowledge of Sellers, threatened, to suspend, modify, amend,
challenge, terminate or appeal any Environmental Permits.  The Company is in compliance and has at all
times complied with all Environmental Laws.

 

(b)       Neither the Company nor any
Seller has received any communication from any governmental entity or any other
Person that alleges that the Company is not in compliance with any
Environmental Law or Environmental Permits or has or could have any liability
or investigative, corrective or remedial obligations under any Environmental
Law.

 

(c)       The Company has not entered
into or agreed to any court decree or order, and is not subject to any
judgment, decree or order, relating to compliance with or any liability under
any Environmental Law or, except as described in Section 2.26(c) of the
Disclosure Schedule, to any investigation or cleanup of a Hazardous
Substance under any Environmental Law.

 

(d)       No lien, charge, interest or
encumbrance has been attached, asserted, or to the knowledge of the Company or
to the Knowledge of Sellers, threatened to or against any assets or properties
of the Company pursuant to any Environmental Law.

 

(e)       Except as described in Section
2.26(e) of the Disclosure Schedule, (i) there has been no treatment,
storage, disposal or Release of any Hazardous Substance on any current or
former property owned, operated or leased by the Company or any of its
predecessors or Affiliates, or (ii) none of the Company nor any of its
predecessors or Affiliates has treated, stored, disposed of, arranged or
permitted the disposal of, transported, handled or released any Hazardous
Substance, in each case of (i) or (ii) above, so as to give rise to a liability
or investigatory, corrective or remedial obligation under CERCLA or any other
Environmental Law.

 

23

 

(f)        The Company has not received
a CERCLA 104(e) information request and has not been named a potentially
responsible party for any National Priorities List site under CERCLA or any
site under analogous state law or received an analogous notice or request from
any non-U.S. governmental entity, which notice, request or any resulting
inquiry or litigation has not been fully and finally resolved without
possibility of reopening.

 

(g)       Except as described in Section
2.26(g) of the Disclosure Schedule, none of the real property or facilities
owned, leased or operated by the Company contains any of the following:
(i)  above ground tanks or underground
storage tanks or any former aboveground or underground tanks that have not been
removed and all Releases remediated in accordance with all Environmental Laws;
(ii) polychlorinated biphenyls (“PCBs”) in any article, container or
equipment , (iii) asbestos containing material in any form or condition, or
(iv) any impoundments, landfills or waste disposal areas.

 

(h)       The Company and Sellers
collectively have provided to Purchaser true and complete copies of all written
environmental assessment materials and reports in their possession or control
relating to any current or former facilities or operations of the Company or
any of its predecessors.

 

2.27        Bank and Brokerage
Accounts; Investment Assets.  Section 2.27
of the Disclosure Schedule sets forth (a) a true and complete list of the
names and locations of all banks, trust companies, securities brokers and other
financial institutions at which the Company or any Subsidiary has an account or
safe deposit box or maintains a banking, custodial, trading or other similar
relationship; (b) a true and complete list and description of each such
account, box and relationship, indicating in each case the account number and
the names of the respective officers, employees, agents or other similar
representatives of the Company or any Subsidiary having signatory power with
respect thereto; and (c) a list of each Investment Asset, the name of the
record and beneficial owner thereof, the location of the certificates, if any,
therefor, the maturity date, if any, and any stock or bond powers or other
authority for transfer granted with respect thereto.

 

2.28        No Powers of Attorney.  Except as set forth in Section 2.28
of the Disclosure Schedule, neither the Company nor any Subsidiary has any
powers of attorney or comparable delegations of authority outstanding.

 

2.29        Accounts Receivable.  Except as set forth in Section 2.29
of the Disclosure Schedule, the accounts and notes receivable of the
Company and the Subsidiaries reflected on the balance sheet included in the
Unaudited Financial Statements, and all accounts and notes receivable arising
subsequent to the Unaudited Financial Statement Date, (i) arose from bona
fide sales transactions in the ordinary course of business and are
payable on ordinary trade terms, (ii) are legal, valid and binding obligations
of the respective debtors enforceable in accordance with their terms, (iii) are
not subject to any valid set-off or counterclaim, (iv) do not represent
obligations for goods sold on consignment, on approval or on a sale-or-return
basis or subject to any other repurchase or return arrangement, (v) are not
subject to fixed or potential retroactive price adjustments, rebates or similar
matters or provisions affecting the net amounts collectible or expected to be
collected in respect thereof, (vi) to the Knowledge of Sellers, are collectible
in the ordinary course of business consistent with past practice in the
aggregate recorded amounts

 

24

 

thereof, net of any applicable reserve reflected in
the balance sheet included in the Unaudited Financial Statements and (vii) are
not the subject of any Actions or Proceedings brought by or on behalf of the
Company or any Subsidiary.  Section 2.29
of the Disclosure Schedule sets forth a description of any security
arrangements and collateral securing the repayment or other satisfaction of
receivables of the Company and the Subsidiaries.  All steps necessary to render all such
security arrangements legal, valid, binding and enforceable, and to give and
maintain for the Company or a Subsidiary, as the case may be, a perfected
security interest in the related collateral, have been taken.

 

2.30        No Illegal Payments.  The Company, any Subsidiary and, to the
Knowledge of Sellers, no Affiliate, officer, agent or employee thereof or of
Sellers has, directly or indirectly, during the past five years, on behalf of
or with respect to the Company, any Subsidiary or any Affiliate thereof, (a)
made any payment or provided any goods or services which were not legal to make
(or that would otherwise make any related Contract, License or transaction void
or voidable) or provide or which the Company, any Subsidiary or any Affiliate
thereof or any such officer, agent or employee knew or should have known were
not legal for the payee or the recipient of such goods or services to receive,
(b) received any payment or any goods or services which were not legal for the
payer or the provider (or that would otherwise make any related Contract,
License or transaction void or voidable) of such goods or services to make or
provide, (c) engaged in any material transactions or made or received any
material payments related to the Company or any Subsidiary which are not
recorded in their accounting books and records or (d) except for petty cash for
office use, had any off-book bank or cash accounts or “slush funds” related to
the Company or any Subsidiary.

 

2.31        Inventory.  Except as disclosed in the notes to the
Unaudited Financial Statements, all items included in the inventory of the
Company and the Subsidiaries are the property of the Company and the
Subsidiaries, free and clear of any Liens other than Permitted Liens, have not
been pledged as collateral, are not held by the Company or any Subsidiary on
consignment from others and conform in all material respects to all standards
applicable to such inventory or its use or sale imposed by Governmental or
Regulatory Authorities; are fit and sufficient for the purposes for which they
were procured or manufactured; could reasonably be expected to be sold in the
ordinary course of business at an amount in the aggregate not less than the
amount reflected on the balance sheet included in the Unaudited Financial Statements;
and, with respect to inventory reflected on the balance sheet included in the
Unaudited Financial Statements, reflect an aggregate (not per item or SKU)
valuation at the lower of cost or market not in excess of the valuations of
inventories computed in accordance with GAAP applied on a consistent
basis.  All inventory of the Company and
the Subsidiaries purchased after the Unaudited Financial Statement Date was
purchased in the ordinary course of business at an aggregate (not per item or
SKU) cost not exceeding market prices prevailing at the time of purchase.  All inventory of the Company and the
Subsidiaries sold after the Unaudited Financial Statement Date was sold in the
ordinary course of business at an aggregate (not per item or SKU) cost not less
than the value attributed to such inventory on the balance sheet included in
the Unaudited Financial Statements.

 

2.32        Product Liability
Claims.  Except as set forth in Section
2.32 of the Disclosure Schedule, there are, and during the past five years
there have been, no product liability claims asserted, pending or, to the
Knowledge of Sellers, threatened with respect to any

 

25

 

products or services sold or provided by the Company
or any Subsidiary.  Except as set forth
in Section 2.32 of the Disclosure Schedule and except for credit
memoranda issued by the Company to customers in the ordinary course of
business, none of which were material individually or in the aggregate, there
are, and during the past five years there have been, no warranty claims
asserted, pending or, to the Knowledge of Sellers, threatened with respect to
any products or services sold or provided by the Company or any
Subsidiary.  Neither the Company, any
Subsidiary nor any Seller is aware of any condition, situation or set of
circumstances which could reasonably be expected to result in any such product
liability or warranty claim. 

 

2.33        Brokers.  Except for Wachovia Capital Markets, LLC,
whose fees, commissions and expenses are the sole responsibility of Sellers,
all negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Sellers directly with Purchaser without the
intervention of any Person on behalf of any Seller or the Company in such
manner as to give rise to any valid claim by any Person against Purchaser, the
Company or any Subsidiary for a finder’s fee, brokerage commission or similar
payment.

 

2.34        Disclosure.  No representation or warranty contained in
this Agreement, and no statement contained in the Disclosure Schedule or in any
certificate, list or other writing furnished by Sellers to Purchaser pursuant
to any provision of this Agreement (including without limitation the Financial
Statements), contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading.

 

2.35        Indebtedness and Cash
Position.  As of July 31, 2005 (i) the
consolidated Indebtedness of the Company and its Subsidiaries did not exceed
$115,500,000; (ii) the aggregate Cash held by the Company and its Subsidiaries
was not less than $493,482.  The Cash
amount described in the foregoing clause (ii) would have been capable of being
freely distributed to or used by Purchaser not later than five (5) Business
Days after July 31, 2005 if the Closing had occurred at that date, except
insofar as such distribution or use would have been restricted or limited
solely by operation of applicable Law.

 

2.36        Substantial Customers,
Suppliers and Lessees.  Section 2.36(a)
of the Disclosure Schedule lists the ten (10) largest customers of the
business and operations of the Company, on the basis of revenues for goods sold
or services provided for the most recently-completed fiscal year and the
corresponding percentage of revenue derived from each of such customers.  Section 2.36(b) of the Disclosure
Schedule lists the ten (10) largest suppliers of the business and
operations of the Company, on the basis of cost of goods or services purchased
for the most recently-completed fiscal year and the corresponding percentage of
cost incurred for each of such suppliers. 
Section 2.36(c) of the Disclosure Schedule lists the ten
(10) largest lessees of the business and operations of the Company, on the
basis of leasing revenue for goods under lease for the most recently-completed
fiscal year.  Except as disclosed in Section 2.36(d)
of the Disclosure Schedule, no such customer, supplier or lessee has ceased
or materially reduced its purchases from, use of the services of, or sales or
provision of services to the business and operations of the Company since the
Unaudited Financial Statement Date, or to the Knowledge of Sellers, has
threatened to cease or materially reduce such purchases, leases, use, sales or
provision of services after the date hereof. 
Except as disclosed in Section 2.36(e) of the

 

26

 

Disclosure Schedule, to the
Knowledge of Sellers, no such customer, supplier or lessee is threatened with
bankruptcy or insolvency.

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser
hereby represents and warrants to Sellers as follows:

 

3.01        Organization.  Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.  Purchaser has full corporate power and
authority to execute and deliver this Agreement and the Operative Agreements to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.

 

3.02        Authority.  The execution and delivery by Purchaser of
this Agreement and the Operative Agreements to which it is a party, and the performance
by Purchaser of its obligations hereunder and thereunder, have been duly and
validly authorized by the Board of Directors of Purchaser, no other corporate
action on the part of Purchaser or its stockholders being necessary.  This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes, and upon the execution and
delivery by Purchaser of the Operative Agreements to which it is a party, such
Operative Agreements will constitute legal, valid and binding obligations of
Purchaser enforceable against Purchaser in accordance with their terms.

 

3.03        No Conflicts.  The execution and delivery by Purchaser of
this Agreement do not, and the execution and delivery by Purchaser of the
Operative Agreements to which it is a party, the performance by Purchaser of
its obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:

 

(a)           conflict with or result
in a violation or breach of any of the terms, conditions or provisions of the
corporate charter documents of Purchaser;

 

(b)           subject to obtaining
the consents, approvals and actions, making the filings and giving the notices
disclosed in Schedule 3.04 hereto, conflict with or result in a
violation or breach of any term or provision of any Law or Order applicable to
Purchaser or any of its Assets and Properties; or

 

(c)           except as disclosed in Schedule 3.03
hereto, (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Purchaser to obtain any consent, approval or action of, make any
filing with or give any notice to any Person as a result or under the terms of,
or (iv) result in the creation or imposition of any Lien upon Purchaser or any
of its Assets or Properties under, any Contract or License to which Purchaser
is a party or by which any of its Assets and Properties is bound.

 

3.04        Governmental Approvals
and Filings.  Except as disclosed in Schedule 3.04
hereto, no consent, approval or action of, filing with or notice to any

 

27

 

Governmental or Regulatory Authority on the part of
Purchaser is required in connection with the execution, delivery and
performance of this Agreement or the Operative Agreements to which it is a
party or the consummation of the transactions contemplated hereby or thereby.

 

3.05        Legal Proceedings.  There are no Actions or Proceedings pending
or, to the knowledge of Purchaser, threatened against, relating to or affecting
Purchaser or any of its Assets and Properties which could reasonably be
expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or any of the Operative Agreements.

 

3.06        Purchase for Investment.  The Shares will be acquired by Purchaser (or,
if applicable, its assignee pursuant to Section 14.09(b)(i)) for its own
account for the purpose of investment, it being understood that the right to
dispose of such Shares shall be entirely within the discretion of Purchaser (or
such assignee, as the case may be). 
Purchaser (or such assignee, as the case may be) will refrain from transferring
or otherwise disposing of any of the Shares, or any interest therein, in such
manner as to cause Sellers to be in violation of the registration requirements
of the Securities Act of 1933, as amended, or applicable state securities or
blue sky laws.

 

3.07        Financing.  On or prior to the Closing Date, Purchaser
shall have obtained all financing, or shall otherwise have sufficient funds,
necessary for it to consummate the purchase of the Shares and the other transactions
contemplated hereby.

 

3.08        Brokers.  Except for Lehman Brothers, whose fees,
commissions and expenses are the sole responsibility of Purchaser, all
negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Purchaser directly with Sellers without the
intervention of any Person on behalf of Purchaser in such manner as to give
rise to any valid claim by any Person against Sellers, the Company or any
Subsidiary for a finder’s fee, brokerage commission or similar payment.

 

3.09        Disclosure.  No representation or warranty contained in
this Agreement, and no statement contained in any certificate, list or other
writing furnished by Purchaser, the Cerberus Entities or Parent to Sellers
pursuant to any provision of this Agreement, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements herein or therein, in the light of the circumstances under which
they were made, not misleading.

 

ARTICLE
IV

COVENANTS OF SELLERS

 

Sellers
jointly and severally covenant and agree with Purchaser that, at all times from
and after the date hereof until the Closing and, with respect to any covenant
or agreement by its terms to be performed in whole or in part after the
Closing, for the period specified therein or, if no period is specified therein,
indefinitely, Sellers will comply with all covenants and provisions of this Article
IV, except to the extent Purchaser may otherwise consent in writing.

 

28

 

4.01        Regulatory and Other
Approvals.  Sellers will, and will
cause the Company and the Subsidiaries to, as promptly as practicable
(a) at no additional cost or expense to Sellers except as provided in this
Agreement, take all commercially reasonable steps necessary or desirable to
obtain all consents, approvals or actions of, make all filings with and give
all notices to Governmental or Regulatory Authorities or any other Person
required of Sellers, the Company or any Subsidiary to consummate the
transactions contemplated hereby and by the Operative Agreements, including
without limitation those described in Sections 2.07 and 2.08 of the
Disclosure Schedule, (b) provide such other information and
communications to such Governmental or Regulatory Authorities or other Persons
as Purchaser or such Governmental or Regulatory Authorities or other Persons
may reasonably request in connection therewith and (c) cooperate with
Purchaser in connection with the performance of its obligations under Sections 5.01
and 5.02.  Sellers will provide
prompt notification to Purchaser when any such consent, approval, action,
filing or notice referred to in clause (a) above is obtained, taken, made or
given, as applicable, and will advise Purchaser of any communications (and,
unless precluded by Law, provide copies of any such communications that are in
writing) with any Governmental or Regulatory Authority or other Person
regarding any of the transactions contemplated by this Agreement or any of the
Operative Agreements.

 

4.02        HSR Filings.  In addition to and not in limitation of
Sellers’ covenants contained in Section 4.01, Sellers will (a) take
promptly all actions necessary to make the filings required of Sellers or their
Affiliates under the HSR Act, (b) comply at the earliest practicable date
with any request for additional information received by Sellers or their
Affiliates from the Federal Trade Commission or the Antitrust Division of the
Department of Justice pursuant to the HSR Act and (c) cooperate with
Purchaser in connection with Purchaser’s filing under the HSR Act and in
connection with resolving any investigation or other inquiry concerning the
transactions contemplated by this Agreement commenced by either the Federal
Trade Commission or the Antitrust Division of the Department of Justice or
state attorneys general.

 

4.03        Investigation by
Purchaser.  Sellers will, and will
cause the Company and the Subsidiaries to, (a) provide Purchaser and any Person
who is considering providing financing to Purchaser or Parent to finance all or
any portion of the Purchase Price and their respective officers, directors,
employees, agents, counsel, accountants, financial advisors, consultants and
other representatives (together “Representatives”) with full access,
upon reasonable prior notice and during normal business hours, to all officers,
employees, agents and accountants of the Company and the Subsidiaries and their
Assets and Properties and Books and Records, and (b) furnish Purchaser and such
other Persons with all such information and data (including without limitation
copies of Contracts, Benefit Plans and other Books and Records) concerning the
business and operations of the Company and the Subsidiaries as Purchaser or any
of such other Persons reasonably may request in connection with such
investigation.

 

4.04        No Solicitations.  Sellers will not take, nor will it permit the
Company, the Subsidiaries or any Affiliate of any Seller (or authorize or
permit any investment banker, financial advisor, attorney, accountant or other
Person retained by or acting for or on behalf of any Seller, the Company, the
Subsidiaries or any such Affiliate) to take, directly or indirectly, any action
to solicit, encourage, receive, negotiate, assist or otherwise facilitate
(including by furnishing confidential information with respect to the Company
or any Subsidiary or permitting access to the Assets and Properties and Books
and Records of the Company or any Subsidiary)

 

29

 

any offer or inquiry from any Person concerning an
Acquisition Proposal.  If any Seller, the
Company, any Subsidiary or any such Affiliate (or any such Person acting for or
on their behalf) receives from any Person any offer, inquiry or informational
request referred to above, Sellers will promptly advise such Person, by written
notice, of the terms of this Section 4.04 and will promptly, orally
and in writing, advise Purchaser of such offer, inquiry or request and deliver
a copy of such notice to Purchaser.

 

4.05        Conduct of Business.  Sellers will cause the Company and the Subsidiaries
to conduct business only in the ordinary course consistent with past
practice.  Without limiting the
generality of the foregoing, Sellers will:

 

(a)           cause the Company and
the Subsidiaries to use commercially reasonable efforts to (i) preserve
intact the present business organization and reputation of the Company and the
Subsidiaries, (ii) keep available (subject to dismissals and retirements
in the ordinary course of business consistent with past practice) the services
of the present officers, employees and consultants of the Company and the
Subsidiaries, (iii) maintain the Assets and Properties of the Company and
the Subsidiaries in good working order and condition, ordinary wear and tear
excepted, (iv) maintain the good will of customers, suppliers, lenders and
other Persons from or to whom the Company or any Subsidiary obtains or provides
goods or services or with whom the Company or any Subsidiary otherwise has
significant business relationships and (v) continue all current sales,
marketing and promotional activities relating to the business and operations of
the Company and the Subsidiaries;

 

(b)           except to the extent
required by applicable Law, (i) cause the Books and Records to be maintained in
the usual, regular and ordinary manner, (ii) not permit any material change in
(A) any pricing, investment, accounting, financial reporting, inventory,
credit, allowance or Tax practice or policy of the Company or any Subsidiary,
or (B) any method of calculating any bad debt, contingency or other reserve of
the Company or any Subsidiary for accounting, financial reporting or Tax
purposes and (iii) not permit any change in the fiscal year of the Company or
any Subsidiary;

 

(c)           (i) use, and will cause
the Company and the Subsidiaries to use, commercially reasonable efforts to
maintain in full force and effect until the Closing substantially the same
levels of coverage as the insurance afforded under the Contracts listed in Section
2.23 of the Disclosure Schedule and (ii) cause any and all benefits under
such Contracts paid or payable (whether before or after the date of this
Agreement) with respect to the business, operations, employees or Assets and
Properties of the Company and the Subsidiaries to be paid to the Company and
the Subsidiaries; and

 

(d)           cause the Company and
the Subsidiaries to comply, in all material respects, with all Laws and Orders
applicable to the business and operations of the Company and the Subsidiaries,
and promptly following receipt thereof to give Purchaser copies of any formal
or informal notice received from any Governmental or Regulatory Authority or
other Person alleging any violation or potential violation of any such Law or
Order.

 

30

 

4.06         Financial Statements
and Reports; Filings.  

 

(a)       As promptly as practicable
and in any event no later than forty five (45) days after the end of each
fiscal quarter ending after the date hereof and before the Closing Date (other
than the fourth quarter) or ninety (90) days after the end of each fiscal year
ending after the date hereof and before the Closing Date, as the case may be,
Sellers will deliver to Purchaser true and complete copies of (in the case of
any such fiscal year) the audited and (in the case of any such fiscal quarter)
the unaudited consolidated balance sheet, and the related audited or unaudited
consolidated statements of operations, stockholders’ equity and cash flows, of
the Company and its consolidated subsidiaries, in each case as of and for the
fiscal year then ended or as of and for each such fiscal quarter and the
portion of the fiscal year then ended, as the case may be, together with the
notes, if any, relating thereto, which audited financial statements shall be
prepared on a basis consistent with the Audited Financial Statements and which
unaudited financial statements shall be prepared on a basis consistent with the
Unaudited Financial Statements.

 

(b)       As promptly as practicable,
Sellers will deliver to Purchaser true and complete copies of such other
financial statements, reports and analyses as may be prepared or received by
Sellers, the Company or any Subsidiary relating to the business or operations
of the Company or any Subsidiary or as Purchaser may otherwise reasonably
request.

 

(c)       As promptly as practicable,
Sellers will deliver copies of all License applications and other filings made
by the Company or any Subsidiary after the date hereof and before the Closing
Date with any Governmental or Regulatory Authority (other than routine,
recurring filings made in the ordinary course of business consistent with past
practice). 

 

4.07         Employee Matters.  Except as may be required by Law, Sellers
will refrain, and will cause the Company and the Subsidiaries to refrain, from
directly or indirectly:

 

(a)           making any
representation or promise, oral or written, to any officer, employee or
consultant of the Company or any Subsidiary concerning any Benefit Plan, except
for statements as to the rights or accrued benefits of any officer, employee or
consultant under the terms of any Benefit Plan or as otherwise may be required
by applicable Law;

 

(b)           making any increase in
the salary, wages or other compensation of any officer, employee or consultant
of the Company or any Subsidiary whose annual aggregate compensation is or is
expected to be or, after giving effect to such change, would or would be
expected to be, $100,000 or more;

 

(c)           adopting, entering into
or becoming bound by any Benefit Plan, employment-related Contract or collective
bargaining agreement, or amending, modifying or terminating (partially or
completely) any Benefit Plan, employment-related Contract or collective
bargaining agreement, except to the extent required by applicable Law and, in
the event compliance with legal requirements presents options, only to the
extent that the option which the Company or Subsidiary reasonably believes to
be the least costly is chosen; or

 

31

 

(d)           establishing or
modifying any (i) incentive compensation arrangements, (ii) targets, goals,
pools or similar provisions in respect of any fiscal year under any Benefit
Plan, employment-related Contract or other employee compensation arrangement or
(iii) salary ranges, increase guidelines or similar provisions in respect of
any Benefit Plan, employment-related Contract or other employee compensation
arrangement. 

 

Sellers will cause the Company and the Subsidiaries to
administer each Benefit Plan, or cause the same to be so administered, in all
material respects in accordance with the applicable provisions of the Code,
ERISA and all other applicable Laws. 
Sellers will promptly notify Purchaser in writing of each receipt by
Sellers, the Company or any Subsidiary (and furnish Purchaser with copies) of
any notice of investigation or administrative proceeding by the IRS, Department
of Labor, PBGC or other Person involving any Benefit Plan.

 

4.08         Certain Restrictions.  Sellers will cause the Company and the
Subsidiaries to refrain from:

 

(a)           amending their articles
of incorporation or by-laws (or other comparable corporate charter documents)
or taking any action with respect to any such amendment or any
recapitalization, reorganization, liquidation or dissolution of any such
corporation;

 

(b)           authorizing, issuing,
selling or otherwise disposing of any shares of capital stock of or any Option
with respect to the Company or any Subsidiary, or modifying or amending any
right of any holder of outstanding shares of capital stock of or Option with
respect to the Company or any Subsidiary;

 

(c)           declaring, setting
aside or paying any dividend or other distribution in respect of the capital
stock of the Company or any Subsidiary not wholly owned by the Company, or
directly or indirectly redeeming, purchasing or otherwise acquiring any capital
stock of or any Option with respect to the Company or any Subsidiary not wholly
owned by the Company; 

 

(d)           acquiring or disposing
of, or incurring any Lien (other than a Permitted Lien) on, any Assets and
Properties, other than in the ordinary course of business consistent with past
practice; 

 

(e)           (i) entering into,
amending, modifying, terminating (partially or completely), granting any waiver
under or giving any consent with respect to (A) any Contract that would, if in
existence on the date of this Agreement, be required to be disclosed in the
Disclosure Schedule pursuant to Section 2.20, excluding any
Aircraft Asset Leases or (B) any material License or (ii) granting any
irrevocable powers of attorney;

 

(f)            violating, breaching
or defaulting under in any material respect, or taking or failing to take any
action that (with or without notice or lapse of time or both) would constitute
a material violation or breach of, or default under, any term or provision of
any License held or used by the Company or any Subsidiary or any Contract to
which the Company or any Subsidiary is a party or by which any of their
respective Assets and Properties is bound;

 

32

 

(g)           (i) other than taking
advances under the Company’s existing revolving credit facility with Wachovia
Bank, N.A., incurring Indebtedness in an aggregate principal amount exceeding
$1,000,000, or (ii) voluntarily purchasing, canceling, prepaying or otherwise
providing for a complete or partial discharge in advance of a scheduled payment
date with respect to, or waiving any right of the Company or any Subsidiary
under, any Indebtedness of or owing to the Company or any Subsidiary;

 

(h)           engaging with any
Person in any merger or other business combination;

 

(i)            making capital
expenditures or commitments for additions to property, plant or equipment
constituting capital assets in amounts exceeding $1,000,000 in the aggregate
or, in the case of assets constituting Aircraft-Related Assets, exceeding
$5,000,000 individually or $20,000,000 in the aggregate;

 

(j)            making any change in
the lines of business in which they participate or are engaged;

 

(k)           writing off or writing
down any of their Assets and Properties outside the ordinary course of business
consistent with past practice; or

 

(l)            entering into any
Contract to do or engage in any of the foregoing.

 

4.09         Affiliate Transactions.  Except as set forth in Section 4.09 of the
Disclosure Schedule, immediately prior to the Closing, all Indebtedness and
other amounts owing under Contracts between a Seller or any Affiliate (other
than the Company or any Subsidiary) of a Seller, on the one hand, and the
Company or any of the Subsidiaries, on the other, will be paid in full, and
such Seller will terminate and will cause any such Affiliate to terminate each
Contract with the Company or any Subsidiary. 
Prior to the Closing, neither the Company nor any Subsidiary will enter
into any Contract or amend or modify any existing Contract, and will not engage
in any transaction outside the ordinary course of business consistent with past
practice or not on an arm’s-length basis (other than pursuant to Contracts
disclosed pursuant to Section 2.20 of the Disclosure Schedule),
with any Seller or any such Affiliate.

 

4.10         Books and Records.  On the Closing Date, Sellers will deliver or
make available to Purchaser at the offices of the Company and the Subsidiaries
all of the Books and Records, and if at any time after the Closing Sellers
discover in their possession or under their control any other Books and
Records, they will forthwith deliver such Books and Records to Purchaser.

 

4.11         Employment.  Management Sellers shall, simultaneously with
the Closing, enter into the Employment Agreements.

 

4.12         Non-Competition.  Sellers shall, simultaneously with the
Closing, enter into the Non-Competition Agreement.

 

4.13         Notice and Cure.  Sellers will notify Purchaser in writing
(where appropriate, through updates to the Disclosure Schedule) of, and
contemporaneously will provide

 

33

 

Purchaser with true and complete copies of any and all
information or documents relating to, and will use all commercially reasonable
efforts to cure before the Closing, any event, transaction or circumstance, as
soon as practicable after it becomes Known to Sellers, occurring after the date
of this Agreement that causes or will cause any covenant or agreement of
Sellers under this Agreement to be breached or that renders or will render
untrue any representation or warranty of Sellers contained in this Agreement as
if the same were made on or as of the date of such event, transaction or
circumstance.  No notice given pursuant
to this Section shall have any effect on the representations, warranties,
covenants or agreements contained in this Agreement for purposes of determining
satisfaction of any condition contained herein or shall in any way limit
Purchaser’s right to seek indemnification under Article XI.

 

4.14         Fulfillment of
Conditions.  Sellers will execute and
deliver at the Closing each Operative Agreement that Sellers are required
hereby to execute and deliver as a condition to the Closing, will take all
commercially reasonable steps necessary or desirable and proceed diligently and
in good faith to satisfy each other condition to the obligations of Purchaser
contained in this Agreement (including without limitation, the conditions set
forth in Section 6.05 and 6.08) and will not, and will not permit
the Company or any Subsidiary to, take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any such condition.

 

4.15         S Corporation Status.  Sellers will not take any action, and will
cause the Company to refrain from taking any action, that would cause the
Company to cease to be treated as an S Corporation within the meaning of Code
Section 1361.  Sellers will not take any
action, and will ensure that the neither the Company nor any Subsidiary takes
any action, that would cause any Subsidiary to cease to qualify as either (i) a
qualified subchapter S subsidiary within the meaning of Code Section
1361(b)(3)(B), (ii) an entity the existence of which is disregarded or (iii) a
partnership with respect to which an election under Code Section 754 is in
effect.

 

4.16         New Real Estate Lease.  Sellers shall cause Enbee Capital, LLC (“Enbee”)
to negotiate in good faith with Purchaser and on an arms-length basis definitive
documentation with respect to the premises located at 2323 NW 82nd Avenue (the “New
Real Estate Lease”) (which lease shall contain customary market-based terms);
provided, however, if Enbee and Purchaser cannot agree to all
terms of the New Real Estate Lease (notwithstanding such good faith
negotiation), the current lease, as amended, between Enbee and the Company
shall remain in full force and effect, and the failure to have entered into the
New Real Estate Lease shall not be a breach of the covenant hereunder.

 

4.17         AeroTurbine Capital
Shares Contribution.  Sellers shall,
on or before the Closing, contribute all of the outstanding shares in
AeroTurbine Capital to the Company.

 

4.18         Sellers’ Account.  Each of the Management Sellers shall, for two
(2) years from and after the Closing Date, keep available not less than
$10,000,000 (i.e., $20,000,000 in the aggregate for both Management Sellers) in
Cash Equivalent Investments (as hereinafter defined) in an account of such
Management Seller (each, an “Investment Account”) in a depository institution or trust company
incorporated under the laws of the United States of America which is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000 (any such institution being an

 

34

 

“Authorized Bank”), and
provide Purchaser with bank or
brokerage statements with respect to such accounts on a monthly basis.  Sellers and Purchaser further agree that upon
creation of such account, Sellers and Purchaser will execute joint signature
instructions directing the Authorized Bank not to permit, without the joint
written instructions of both Sellers and Purchaser, (i) the release or other
distribution or transfer of any funds in such account, if such release,
transfer or distribution would cause either Investment Account to be left with
Cash Equivalent Investments with an aggregate market value of less than $10,000,000,
(ii) an assignment to any Person of such account or funds contained therein or
(iii) the use of such account or funds contained therein as collateral; provided,
however, that such restrictions shall lapse and no longer be applicable
on the second anniversary of the Closing Date, irrespective of whether any
claims are then pending against Sellers by any Purchaser Indemnified
Party.  As used herein, “Cash
Equivalent Investments” means, at any time, (a) any evidence of
indebtedness maturing not more 30 days after such time, issued or guaranteed by
the United States Government or any agency thereof, (b) commercial paper,
maturing not more than 30 days from the date of issue, or corporate demand
notes, in each case rated at least A-l by Standard & Poor’s Corporation or
P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time
deposit or banker’s acceptance, maturing not more than 30 days after such time,
or any overnight Federal Funds transaction that is issued or sold by any
Authorized Bank, (d) medium and long-term securities rated at least A- by
Standard & Poor’s Corporation, and (e) money market accounts or mutual
funds which invest exclusively in assets satisfying the foregoing
requirements.  If at any time or from
time to time the aggregate fair market value of the Cash Equivalent Investments
in either Investment Account falls below $10,000,000, the Management Seller
owning such Account shall deposit additional cash and/or Cash Equivalent
Investments to bring such aggregate fair market value to at least $10,000,000.

 

ARTICLE
V

COVENANTS OF PURCHASER

 

Purchaser
covenants and agrees with Sellers that, at all times from and after the date
hereof until the Closing, Purchaser will comply with all covenants and
provisions of this Article V, except to the extent Sellers may otherwise
consent in writing.

 

5.01         Regulatory and Other
Approvals.  Purchaser will as
promptly as practicable (a) take all commercially reasonable steps necessary or
desirable to obtain all consents, approvals or actions of, make all filings
with and give all notices to Governmental or Regulatory Authorities or any
other Person required of Purchaser to consummate the transactions contemplated
hereby and by the Operative Agreements, including without limitation those
described in Schedules 3.03 and 3.04 hereto, (b) provide such other
information and communications to such Governmental or Regulatory Authorities
or other Persons as Sellers or such Governmental or Regulatory Authorities or
other Persons may reasonably request in connection therewith and (c) cooperate
with Sellers, the Company and the Subsidiaries in connection with the
performance of their obligations under Sections 4.01 and 4.02.  Purchaser will provide prompt notification to
Sellers when any such consent, approval, action, filing or notice referred to
in clause (a) above is obtained, taken, made or given, as applicable, and will
advise Sellers of any communications (and, unless precluded by Law, provide
copies of any such

 

35

 

communications that are in writing) with any
Governmental or Regulatory Authority or other Person regarding any of the
transactions contemplated by this Agreement or any of the Operative Agreements.

 

5.02         HSR Filings.  In addition to and without limiting Purchaser’s
covenants contained in Section 5.01, Purchaser shall (a) take promptly
all actions necessary to make the filings required of Purchaser or its
Affiliates under the HSR Act, (b) comply at the earliest practicable date with
any request for additional information received by Purchaser or its Affiliates
from the Federal Trade Commission or the Antitrust Division of the Department
of Justice pursuant to the HSR Act and (c) cooperate with Sellers in connection
with Sellers’ filing under the HSR Act and in connection with resolving any
investigation or other regulatory inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade Commission
or the Antitrust Division of the Department of Justice or state attorneys
general.

 

5.03         Employment.  Purchaser shall, simultaneously with the
Closing, enter into the Employment Agreements.

 

5.04         Non-Competition.  Purchaser shall, simultaneously with the
Closing, enter into the Non-Competition Agreement.

 

5.05         Notice and Cure.  Purchaser shall notify Sellers in writing of,
and contemporaneously will provide Sellers with true and complete copies of any
and all information or documents relating to, and will use all commercially
reasonable efforts to cure before the Closing, any event, transaction or
circumstance, as soon as practicable after it becomes known to Purchaser,
occurring after the date of this Agreement that causes or will cause any
covenant or agreement of Purchaser under this Agreement to be breached or that
renders or will render untrue any representation or warranty of Purchaser
contained in this Agreement as if the same were made on or as of the date of
such event, transaction or circumstance. 
No notice given pursuant to this Section shall have any effect on the
representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein or shall in any way limit Sellers’ right to seek indemnification under Article XI.

 

5.06         Fulfillment of
Conditions.  Purchaser will execute
and deliver at the Closing each Operative Agreement that Purchaser is hereby
required to execute and deliver as a condition to the Closing, will take all
commercially reasonable steps necessary or desirable and proceed diligently and
in good faith to satisfy each other condition to the obligations of Sellers
contained in this Agreement (including without limitation, the conditions set
forth in Section 6.05 and 6.08) and will not take or fail to take
any action that could reasonably be expected to result in the nonfulfillment of
any such condition.

 

5.07         New Real Estate Lease.  Purchaser shall negotiate in good faith with
Enbee and on an arms-length basis definitive documentation with respect to the
New Real Estate Lease (which lease shall contain customary market-based terms);
provided, however, if Enbee and Purchaser cannot agree to all terms of the New
Real Estate Lease (notwithstanding such good faith negotiation), the current
lease, as amended, between Enbee and the Company shall

 

36

 

remain in full force and effect, and the failure to
have entered into the New Real Estate Lease shall not be a breach of the
covenant hereunder.

 

ARTICLE
VI

CONDITIONS TO OBLIGATIONS OF PURCHASER

 

The
obligations of Purchaser hereunder to purchase the Shares are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by Purchaser in its sole
discretion):

 

6.01         Representations and
Warranties.  Each of the
representations and warranties made by Sellers in this Agreement (other than
those made as of a specified date earlier than the Closing Date) shall be true
and correct in all material respects on and as of the Closing Date as though
such representation or warranty was made on and as of the Closing Date, and any
representation or warranty made as of a specified date earlier than the Closing
Date shall have been true and correct in all material respects on and as of
such earlier date.

 

6.02         Performance.  Sellers shall have performed and complied
with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by Sellers at or
before the Closing.

 

6.03         Certificates of
Sellers.  Sellers shall have
delivered to Purchaser a certificate, dated the Closing Date and executed by
Sellers, substantially in the form and to the effect of Exhibit E
hereto.

 

6.04         Orders and Laws.  There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements or which could reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement or any of the Operative Agreements
to Purchaser, and there shall not be pending or threatened on the Closing Date
any Action or Proceeding by any Governmental or Regulatory Authority which
could reasonably be expected to result in the issuance of any such Order or the
enactment, promulgation or deemed applicability to Purchaser, the Company, any
Subsidiary or the transactions contemplated by this Agreement or any of the
Operative Agreements of any such Law.

 

6.05         Regulatory Consents
and Approvals.  All consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit Purchaser and Sellers to perform their
obligations under this Agreement and the Operative Agreements and to consummate
the transactions contemplated hereby and thereby (a) shall have been duly
obtained, made or given, (b) shall be in form and substance reasonably
satisfactory to Purchaser, (c) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (d) shall be in full force
and effect, and all terminations or expirations of waiting periods imposed by
any Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement and the Operative Agreements,
including under the HSR Act, shall have occurred.

 

37

 

6.06         Third Party Consents.  The consents (or in lieu thereof waivers)
listed in Section 6.06 of the Disclosure Schedule, and all other
consents (or in lieu thereof waivers) to the performance by Purchaser and
Sellers of their obligations under this Agreement and the Operative Agreements
or to the consummation of the transactions contemplated hereby and thereby as
are required under any Contract to which Purchaser, Sellers, the Company or any
Subsidiary is a party or by which any of their respective Assets and Properties
are bound (a) shall have been obtained, (b) shall be in form and substance
reasonably satisfactory to Purchaser, (c) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived and (d)
shall be in full force and effect, except (other than in the case of the
consents listed in Section 6.06 of the Disclosure Schedule) where
the failure to obtain any such consent (or in lieu thereof waiver) could not
reasonably be expected, individually or in the aggregate with other such
failures, to have a Material Adverse Effect or otherwise result in a material
diminution of the benefits of the transactions contemplated by this Agreement
and the Operative Agreements to Purchaser.

 

6.07         Resignations of
Directors and Officers.  Such members
of the boards of directors and such officers of the Company and the
Subsidiaries as are designated in a written notice delivered at least two (2)
Business Days prior to the Closing Date by Purchaser to Sellers shall have
tendered, effective at the Closing, their resignations as such directors and
officers.

 

6.08         Proceedings.  All proceedings to be taken on the part of
Sellers in connection with the transactions contemplated by this Agreement and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Purchaser, and Purchaser shall have received copies of all such
documents and other evidences as Purchaser may reasonably request in order to
establish the consummation of such transactions and the taking of all
proceedings in connection therewith.

 

6.09         Shareholder Equity
Agreements.  Sellers shall have
entered into the Stockholders Agreement and, simultaneously with the Closing,
shall have consummated the issuance and sale of shares pursuant to the terms of
the Restricted Shares Purchase Agreement.

 

6.10         Employment Agreements.  Management Sellers shall have entered into
the Employment Agreements.

 

6.11         Non-Competition
Agreement.  Sellers shall have
entered into the Non-Competition Agreement.

 

6.12         AeroTurbine Capital
Shares Contribution.  Sellers shall
have contributed all of the outstanding shares in AeroTurbine Capital to the
Company.

 

ARTICLE
VII

CONDITIONS TO OBLIGATIONS OF SELLERS

 

The
obligations of Sellers hereunder to sell the Shares are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by Sellers in their sole
discretion):

 

38

 

7.01         Representations and
Warranties.  Each of the
representations and warranties made by Purchaser in this Agreement shall be
true and correct in all material respects on and as of the Closing Date as
though such representation or warranty was made on and as of the Closing Date.

 

7.02         Performance.  Purchaser shall have performed and complied
with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by Purchaser at
or before the Closing.

 

7.03         Officers’ Certificates.  Purchaser shall have delivered to Sellers a
certificate, dated the Closing Date and executed in the name and on behalf of
Purchaser by the Chairman of the Board, the President or any Executive or
Senior Vice President of Purchaser, substantially in the form and to the effect
of Exhibit F hereto, and a certificate, dated the Closing Date and
executed by the Secretary or any Assistant Secretary of Purchaser,
substantially in the form and to the effect of Exhibit G hereto.

 

7.04         Orders and Laws.  There shall not be in effect on the Closing
Date any Order or Law that became effective after the date of this Agreement
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any
of the Operative Agreements.

 

7.05         Regulatory Consents
and Approvals.  All consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit Sellers and Purchaser to perform their
obligations under this Agreement and the Operative Agreements and to consummate
the transactions contemplated hereby and thereby (a) shall have been duly
obtained, made or given, (b) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (c) shall be in full force
and effect, and all terminations or expirations of waiting periods imposed by
any Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement and the Operative Agreements,
including under the HSR Act, shall have occurred.

 

7.06         Proceedings.  All proceedings to be taken on the part of
Purchaser in connection with the transactions contemplated by this Agreement
and all documents incident thereto shall be reasonably satisfactory in form and
substance to Sellers, and Sellers shall have received copies of all such
documents and other evidences as Sellers may reasonably request in order to establish
the consummation of such transactions and the taking of all proceedings in
connection therewith.

 

7.07         Shareholder Equity
Agreements.  The Cerberus Entities
shall have entered into the Stockholders Agreement and, simultaneously with the
Closing, shall have consummated the issuance and sale of shares pursuant to the
terms of the Restricted Shares Purchase Agreement.

 

39

 

7.08         Employment Agreements.  Purchaser shall have entered into the
Employment Agreements.

 

7.09         Release of Seller
Guarantees.  Wachovia Bank, N.A.
shall have released the individual guarantees of Sellers under the Company’s
existing revolving credit facility with Wachovia Bank, N.A.

 

ARTICLE
VIII

TAX MATTERS AND POST-CLOSING TAXES

 

8.01         Tax
Returns.  

 

(a)       Except as otherwise provided in Section 1.04, Sellers shall, at the
Company’s expense, prepare (or cause to be prepared) and timely file (or cause
to be timely filed) all Tax Returns of the Company or any Subsidiary that are
due (after any extensions) prior to the Closing Date and,
except to the extent reflected in or reserved against in the Financial
Statements, shall pay any Taxes due in respect of such Tax Returns.

 

(b)       Except as otherwise provided
in Section 1.04, Purchaser shall prepare (or cause to be prepared) and
file when due (or cause to be filed) all Tax Returns that are required to be
filed by or with respect to the Company after the Closing Date and shall remit
any Taxes imposed on the Company or any Subsidiary that are due in respect of
such Tax Returns.  With respect to Tax
Returns that are required to be filed by or with respect to the Company for any
tax period that begins before and ends after the Closing Date (such periods “Straddle
Periods” and such Tax Returns “Straddle Returns”), such Straddle
Returns shall be prepared in a manner consistent with past practice (unless
otherwise required by law), and Sellers shall be responsible for Taxes due in
respect of that portion of such Straddle Period that ends on the Closing Date, except to the extent reflected in or reserved against in the
Financial Statements, (“Straddle Pre-Closing Taxes”), calculated
as provided in Section 8.01(c) below. 
Purchaser shall notify Sellers of any amounts due from Sellers in
respect of any Straddle Return no later than ten (10) Business Days prior to
the date on which such Straddle Return is due, and Sellers shall remit such
payment to Purchaser no later than five (5) Business Days prior to the date
such Straddle Return is due.  Purchaser
shall deliver any Straddle Return to the Sellers for their review at least
thirty (30) days prior to the date on which such Tax Return is required to be
filed.  If a Seller disputes any item on
such Tax Return, it shall notify Purchaser of such disputed item (or items) and
the basis for its objection and Purchaser shall consider such objections in
good faith.  

 

(c)       In the case of any Taxes of
the Company or any Subsidiary that are payable with respect to Straddle
Periods, the portion of any such Taxes that are attributable to the portion of
the Straddle Period that ends on the Closing Date shall (i) in the case of
Taxes that are based upon or related to income or receipts or imposed on a
transactional basis be deemed equal to the amount that would be payable if the
Tax year or period ended on the Closing Date; and (ii) in the case of
other Taxes be allocated pro  rata per day
between the period ending on the Closing Date and the period beginning after
the Closing Date.  For

 

40

 

purposes of clause (i) of the preceding
sentence, any exemption, deduction, credit or other item that is calculated on
an annual basis shall be allocated pro rate per day between the period ending
on the Closing Date and the period beginning after the Closing Date.  The parties hereto will, to the extent
permitted by applicable law, elect with the relevant Tax authority to treat a
portion of any Straddle Period as a short taxable period ending as of the close
of business on the Closing Date.

 

8.02         Code §338(h)(10)
Election.  At Purchaser’s request
Sellers and Purchaser shall jointly make the election described in Code
§338(h)(10) and any corresponding election under applicable state and local tax
laws (the “Elections”).  Seller
and Purchaser agree to report the transactions under this Agreement
consistently with these Elections. 
Purchaser will prepare and file all Tax Returns in connection with the
Election (“Code §338 Forms”). 
Sellers shall promptly execute and deliver to Purchaser all documentation
reasonably requested by Purchaser, including the completed Code §338
Forms.  Purchaser will compute the
adjusted grossed up basis of the assets of the Company (pursuant to applicable
Treasury Regulations) and will allocate such basis among the assets in
accordance with Section 1.06.

 

8.03         Tax Indemnification.  

 

(a)       After the Closing Date,
Sellers shall jointly and severally indemnify and hold harmless the Purchaser,
the Company and each Subsidiary from and against any and all Losses resulting
from, arising out of or relating to (i) any Taxes of the Company (or any
Subsidiary) (except to the extent reflected in or reserved against in the
Financial Statements) relating to (x) any periods ending on or before the
Closing Date and (y) that portion of any Straddle Period that ends on the
Closing Date (calculated as set forth in Section 8.01(c) above) and (ii)
without duplication of amounts included in clause (i), without regard to the
tax period to which the Tax relates, any Taxes resulting from a breach of the
representations in Section 2.13. 
The indemnity provided in the foregoing sentence shall include, without
limitation, any Tax liability arising by reason of the Company or any
Subsidiary being severally liable for any Taxes of another person pursuant to
Treasury Regulation §1.1502-6 or any analogous state, local or foreign Tax
provision, by contract as a transferee or otherwise and any Tax liability
incurred in connection with the transactions contemplated by this Agreement;
including, if determined by Purchaser, the making of an election pursuant to
Code Section 338(h)(10).  Notwithstanding
anything to the contrary contained herein, the Sellers shall be required to
indemnify the Purchaser for Taxes payable by the Company resulting from a Code
Section 338(h)(10) election on the sale to Purchaser of the Company shares only
to the extent such Taxes exceed $500,000. 
Sellers shall be responsible to determine the calculations to be
included in the relevant Tax Returns with respect to such Taxes payable by the
Company and, in their capacities as officers of the Company, shall execute and
file such Tax Returns.

 

(b)       If Purchaser determines to
make the Election pursuant to Section 8.02 above, Purchaser shall
indemnify and hold harmless Sellers from and against Taxes imposed on Sellers
equal to the excess, if any, of (x) income Taxes payable by the Sellers in
connection with the transactions contemplated by this Agreement (other than (i)
any Taxes payable by the Company in connection with the recognition of any built-in
gain that existed at the time the Company converted to S Corporation status,
which, for the avoidance of doubt, Sellers are obligated to indemnify the
Purchaser against pursuant to Section 8.03(a)), over (y) the income

 

41

 

Taxes Sellers would have paid had the Purchaser not
determined to make the Election pursuant to Section 8.02 hereof and
Sellers were taxed on the gain realized on the sale of the Shares.  Payment by Purchaser to Sellers under this Section
8.03(b) shall be made simultaneously with Sellers’ execution of the
Elections pursuant to Section 8.02, with subsequent adjustments, if any,
based upon amended Tax Returns and/or final determination pursuant to any Tax
audit.

 

8.04         Refunds.  Sellers will be entitled to any credits and
refunds (including interest received thereon) in respect of any taxable period
prior to Closing and that portion of any Straddle Period that ends on the
Closing Date and the Company or its Subsidiaries will be entitled to any
refunds (including any interest received thereon) in respect of any other
federal, state, local or foreign Tax liability of the Company or any of its
Subsidiaries.  So long as there is no
outstanding claim for indemnification pursuant to this Article VIII or Article
XI, Purchaser shall cause any refunds allocated to Sellers pursuant to the
preceding sentence to be paid to the Sellers promptly following receipt.  If there are any outstanding claims against
the Sellers for indemnification under Articles VIII or Article XI
of this Agreement, Purchaser shall be entitled to hold such refunds in trust
pending resolution of the indemnification claim or claims and if such
indemnification claim is determined to be owing to Purchaser pursuant to the
terms of this Agreement, Purchaser may offset any refund amounts against
Sellers’ indemnification obligations hereunder. 

 

8.05         Tax Audits and
Contests; Cooperation.  

 

(a)       After the Closing, Purchaser
and Sellers shall promptly notify the other party or parties in writing of any
demand, claim or notice of the commencement of an audit received by such party
from any Tax authority or any other person with respect to Taxes for which such
other party may be liable pursuant to Section 8.03 of this Agreement; provided,
however, that a failure to give such notice will not affect such other
party’s rights to indemnification under Section 8.03, except to the
extent that such party’s ability to defend has been irreparably prejudiced by
such failure.  Such notice shall contain
factual information (to the extent known) describing the asserted Tax liability
and shall include copies of the relevant portion of any notice or other
document received from any Tax authority or any other Person in respect of any
such asserted Tax liability.  

 

(b)       At Sellers’ request,
Purchaser shall contest any asserted Tax for which Sellers may have an
indemnity obligation and shall request any Tax refund to which Sellers shall be
entitled.  If Sellers first acknowledge
their liability to Purchaser with respect to an asserted Tax, and the only Tax
that is the subject of such proceeding is a Tax for which Sellers are required
to indemnify Purchaser, Sellers shall be entitled to control the conduct,
through counsel of its own choosing at its own expense, of any audit, claim for
refund, or administrative or judicial proceeding involving any asserted Tax
liability or refund with respect to the Company or any Subsidiary (any such
audit, claim for refund, or proceeding relating to an asserted Tax liability or
Tax refund referred to herein as a “Contest”) relating to Taxes for
which Sellers have any indemnification obligation pursuant to Section 8.03
or a right to the refund pursuant to Section 8.04.  Purchaser shall have the right to control the
Contest of any Tax for which Sellers do not have control rights pursuant to the
preceding sentence.

 

42

 

(c)       Sellers and Purchaser agree
to furnish or cause to be furnished to each other, upon request, as promptly as
practicable, such information (including access to books and records and the
Company’s and any Subsidiary’s accountants) and assistance relating to the
Company and any Subsidiary as is reasonably requested for the filing of any Tax
Returns and the preparation, prosecution, defense or conduct of any
Contest.  Sellers and Purchaser shall
reasonably cooperate with each other in the conduct of any Contest or other
proceeding involving or otherwise relating to the Company or any Subsidiary
with respect to any Tax and each shall execute and deliver such powers of
attorney and other documents as are necessary to carry out the intent of this Section 8.05.  Any information obtained under this Section 8.05
shall be kept confidential, except as may be otherwise necessary in connection
with the filing of Tax Returns or in the conduct of a Contest or other Tax
proceeding.

 

(d)       Each of Purchaser and the
Company and its Subsidiaries shall (a) use its commercially reasonable
efforts to properly retain and maintain the tax and accounting records of the
Company and Subsidiaries that relate to Tax periods for which Sellers may have
any indemnification obligations pursuant to Article VIII for six
(6) years and shall thereafter provide Sellers with written notice prior
to any destruction, abandonment or disposition of all or any portions of such
records, (b) transfer such records to Sellers upon their written request
prior to any such destruction, abandonment or disposition and (c) allow
Sellers and their respective agents and representatives, at times and dates
reasonably and mutually acceptable to the parties, to from time to time inspect
and review such records as Sellers may deem necessary or appropriate; provided,
however, that in all cases, such activities are to be conducted by Sellers
during normal business hours and at the Sellers’ sole expense.  Any information obtained under this Section 8.05
shall be kept confidential, except as may be otherwise necessary in connection
with the filing of Tax Returns or in the conduct of a Contest or other Tax
proceedings.

 

(e)       Except with respect to a
payment made pursuant to Section 8.03(b), payment by an indemnitor of
any amount due to an indemnitee under Section 8.03 of this Agreement
shall be made within ten (10) days following written notice by the indemnitee
that payment of such amounts to the appropriate Tax authority or other
applicable third party is due by the indemnitee, provided that the
indemnitor shall not be required to make any payment earlier than five (5)
Business Days before it is due to the appropriate Tax authority or applicable
third party.  In the case of a Tax that
is contested in accordance with the provisions of Section 8.05(b)
of this Agreement, payment of such contested Tax will not be considered due
earlier than the date a “Final Determination” to such effect is made by
such Tax authority or a court.  For this
purpose, a Final Determination shall mean a settlement, compromise, or other
agreement with the relevant Tax authority, a deficiency notice with respect to
which the period for filing a petition with the Tax court or the relevant
state, local or foreign tribunal has expired or a decision of any court of
competent jurisdiction that is not subject to appeal or as to which the time
for appeal has expired.

 

8.06         Transfer Taxes.  Sellers shall pay all sales, use, transfer,
real property transfer, recording, gains, stock transfer and other similar
taxes and fees (“Transfer Taxes”) arising out of or in connection with
the transactions effected pursuant to this Agreement, and shall indemnify,
defend, and hold harmless Purchaser, the Company and each Subsidiary on an
after-Tax basis with respect to such Transfer Taxes.  Sellers shall file all necessary

 

43

 

documentation and Tax Returns with respect to such
Transfer Taxes and shall promptly provide Purchaser with copies of such Tax
Returns and evidence of the payment of any Transfer Taxes.

 

8.07         Exclusivity.  This Article VIII shall be the sole
provision governing indemnities for Taxes under this Agreement and no provision of Article XI
(including, without limitation, the limitations set forth in Section 11.02(d))
shall in any way effect the rights of the parties under this Article VIII.

 

ARTICLE
IX

EMPLOYEE BENEFITS MATTERS

 

9.01         Employee
Benefits Matters.

 

(a)       The Purchaser shall, or
shall cause its Affiliates to, credit employees of the Company and its
Subsidiaries at the Closing (“Company Employees”) for purposes of
eligibility to participate, vesting and benefit calculation purposes (but not
for purposes of benefit accrual under any defined benefit pension plan) such
Company Employees’ service with the Company and its Subsidiaries under all
employee plans, programs or arrangements maintained by Purchaser or its
Affiliates for such Company Employees will be eligible after the Closing (each,
a “New Plan”) to the same extent such service is recognized by the
Company and its Subsidiaries immediately prior to the Closing under any Benefit
Plan in which such employees participate immediately prior to the Closing
(each, an “Old Plan”).

 

(b)       Purchaser shall cause the
terms of each New Plan to provide that: (i) each Company Employee shall be
immediately eligible to participate, without any waiting time, in any and all
New Plans to the extent coverage under such New Plan is of the same type as
provided under an Old Plan in which such Company Employee participated
immediately before the Closing; and (ii) for purposes of each New Plan
providing medical, dental, pharmaceutical and/or vision benefits to any Company
Employee, the Purchaser shall cause all pre-existing condition exclusions and
actively-at-work requirements of such New Plan to be waived for any such
employee and his or her covered dependents, unless such conditions would not
have been waived under the comparable Old Plan in which such employee
participated immediately prior to the Closing and Purchase shall cause any
eligible expenses incurred by such employee and his or her covered dependents
during the portion of the plan year of the Old Plan ending on the date such
employee’s participation in the corresponding New Plan begins to be taken into
account under such New Plan for purposes of satisfying all deductible,
coinsurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year as if such
amounts had been paid in accordance with such New Plan.

 

44

 

ARTICLE
X

SURVIVAL OF REPRESENTATIONS, WARRANTIES,

COVENANTS AND AGREEMENTS

 

10.01       Survival of
Representations, Warranties, Covenants and Agreements.  Notwithstanding any right of Purchaser
(whether or not exercised) to investigate the affairs of the Company and the
Subsidiaries or any right of any party (whether or not exercised) to
investigate the accuracy of the representations and warranties of the other
party contained in this Agreement, Sellers and Purchaser have the right to rely
fully upon the representations, warranties, covenants and agreements of the
other contained in this Agreement.  The
representations, warranties, covenants and agreements of Sellers and Purchaser
contained in this Agreement will survive the Closing (a) indefinitely with
respect to (i) the representations and warranties contained in Sections 2.02,
2.04, 2.05 (but only insofar as it relates to the capital stock
of the Subsidiaries), 2.24, 2.33, 3.02 and 3.08 and
(ii) the covenants and agreements contained in Sections 1.05, 4.09,
14.03 and 14.05; (b) until sixty (60) days after the
expiration of all applicable statutes of limitation (including all periods of
extension, whether automatic or permissive) with respect to matters covered by
(i) Section 2.13 and Article VIII, (ii) (insofar as they
relate to ERISA or the Code) Section 2.16 and Article IX and (iii) Section 2.26; (c) until the
second anniversary of the Closing Date in the case of all other representations
and warranties and any covenant or agreement to be performed in whole or in
part on or prior to the Closing or (d) with respect to each other covenant
or agreement contained in this Agreement, until sixty (60) days following the
last date on which such covenant or agreement is to be performed or, if no such
date is specified, indefinitely; provided that any representation,
warranty, covenant or agreement that would otherwise terminate in accordance
with clause (b), (c) or (d) above will continue to survive if a Claim Notice or
Indemnity Notice (as applicable) shall have been timely given under Article XI
on or prior to such termination date, until the related claim for
indemnification has been satisfied or otherwise resolved as provided in Article
XI.  

 

ARTICLE
XI

INDEMNIFICATION

 

11.01       Tax Treatment of
Indemnity Payments.  It is the
intention of the parties to treat any indemnity payment made under this
Agreement as an adjustment to the Purchase Price for all federal, state, local
and foreign Tax purposes, and the parties agree to file their Tax Returns
accordingly.  

 

11.02       Indemnification.

 

(a)       Subject to
paragraph (d) of this Section and the other Sections of this Article XI,
Sellers shall jointly and severally indemnify the Purchaser Indemnified Parties
in respect of, and hold each of them harmless from and against, any and all
Losses suffered, incurred or sustained by any of them or to which any of them
becomes subject, resulting from, arising out of or relating to (i) any breach
of representation or warranty (or resulting from, arising out of or relating to
the facts, circumstances or conditions giving rise to, or constituting

 

45

 

or underlying such breach) or (ii) nonfulfillment of
or failure to perform any covenant or agreement on the part of Sellers or a
Seller contained in this Agreement (determined in all cases as if the terms “material”
or “materially” were not included therein). 

 

(b)       Subject to the other
Sections of this Article XI, Purchaser shall indemnify Sellers
Indemnified Parties in respect of, and hold each of them harmless from and
against, any and all Losses suffered, incurred or sustained by any of them or
to which any of them becomes subject, resulting from, arising out of or
relating to any breach of representation or warranty or nonfulfillment of or
failure to perform any covenant or agreement on the part of Purchaser contained
in this Agreement.

 

(c)       Sellers shall jointly and
severally indemnify the Purchaser Indemnified Parties in respect of, and hold
each of them harmless from and against, any and all Losses suffered, incurred
or sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to the Sellers’ purchase of shares of the
Company from the estate of George E. Batchelor in 2003.

 

(d)       Notwithstanding anything to
the contrary contained herein, (A) no amount of indemnity shall be paid in the
case of a claim by a Purchaser Indemnified Party under Section 11.02(a)(i)
unless and until the aggregate amount of all Losses of the Purchaser
Indemnified Parties upon which valid claims are based exceeds $10,000,000 and
then Sellers shall only be responsible for indemnification of Losses in excess
of $7,500,000 and (B) the amount payable by Sellers for indemnification under
this Article XI shall be limited, in the aggregate, to $60,000,000; provided
that this paragraph (d) shall not apply to (i) a breach of a representation or
warranty contained in Section 2.02, 2.04, 2.11(i), 2.24,
2.26, 2.33, or 2.35, (ii) a breach of a covenant contained
in Section 1.05, 14.03 or 14.05 or (iii) any amount
payable by Sellers for indemnification under Section 11.02(c).

 

11.03       Method of Asserting
Claims.  All claims for
indemnification by any Indemnified Party under Section 11.02 will
be asserted and resolved as follows:

 

(a)           Unless a different
procedure is specified in Article XI, in the case of a Loss for which
indemnification is sought hereunder, the Indemnified Party shall promptly
deliver an Indemnity Notice to the Indemnifying Party; provided, however,
that no failure or delay by the Indemnified Party in the performance of the
foregoing shall reduce or otherwise affect the obligation of the Indemnifying
Party to indemnify and hold the Indemnified Party harmless, except to the
extent the Indemnified Party’s failure to give or delay in giving the required
Indemnity Notice impairs the Indemnifying Party’s ability to indemnify or
defend or to mitigate its Losses, in which case the Indemnifying Party shall
have no obligation to indemnify the Indemnified Party to the extent of Losses,
if any, caused by such failure to give or delay in giving the required
notice.  If such Losses arise out of a
claim by a third Person, the Indemnified Party must give the Indemnifying Party
a reasonable opportunity to defend the same or prosecute such action to
conclusion or settlement satisfactory to the Indemnifying Party (but only with
the consent of the Indemnified Party, which consent will not be unreasonably
withheld, in the case of any settlement that provides for any relief other than
the payment of monetary damages as to which the Indemnified Party will be indemnified
in full) at the Indemnifying Party’s sole

 

46

 

cost and expense, and with counsel of its own
selection and with the consent of the Indemnified Party, which consent shall
not be unreasonably withheld, and the Indemnifying Party shall pay any
resulting settlements (including all associated Losses), satisfy any judgments
or comply with any decrees; provided, further, however,
that the Indemnified Party shall at all times also have the right fully to
participate in the defense at Indemnified Party’s sole cost and expense so long
as such participation occurs without hindering or impairing the defense of the
Indemnifying Party.  If the Indemnifying
Party shall, within a reasonable time after receipt of an Indemnity Notice,
fail to defend, the Indemnified Party shall have the right, but not the
obligation, and without waiving any rights against the Indemnifying Party, to
undertake the defense of, and with the consent of the Indemnifying Party (such
consent not to be withheld unreasonably), to compromise or settle the claim on
behalf, for the account, and at the risk and expense, of the Indemnifying Party
and shall be entitled to collect the amount of any settlement or judgment or
decree and all costs and expenses (including, without limitation, reasonable
attorney’s fees) in connection therewith from the Indemnifying Party.  Except as provided in the preceding sentence,
the Indemnified Party shall not compromise or settle any claim without the
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld.

 

(b)           The amount of any
Losses for which indemnification is provided under this Article XI shall
be net of any amounts recovered by the Indemnified Party under insurance
policies or from unaffiliated third parties with respect to such Losses.  If any Indemnified Party shall have received
indemnity payments hereunder and subsequently receives insurance payments or
payments from an unaffiliated third party that would have reduced the
Indemnifying Party’s indemnification obligations pursuant to the preceding
sentence, such Indemnified Party shall be required to deliver such insurance or
third party payments to the applicable Indemnifying Party.  In addition, all Losses subject to
indemnification hereunder shall be calculated net of any tax benefits which
have been actually realized by Purchaser (including those received indirectly
as the sole stockholder of the Company) or Sellers as a result thereof and
shall be calculated to include any tax imposed on the receipt of the indemnity
payment.  All indemnity payments due
under this Agreement shall be made without withholding of any nature for Taxes
except to the extent required by applicable Laws, in which case such indemnity
payments shall be “grossed up” so that the net amount received by Purchaser or
Sellers, as the case may be, will equal the full amount of indemnity due
hereunder.

 

(c)           Following
indemnification as provided for hereunder, the Indemnifying Party shall be
subrogated to all rights of the Indemnified Party with respect to all Persons
relating to the matter for which indemnification has been made.

 

47

 

ARTICLE
XII

TERMINATION

 

12.01       Termination.  This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned:

 

(a)           at any time before the
Closing, by mutual written agreement of Sellers and Purchaser;

 

(b)           at any time before the
Closing, by Sellers, on the one hand, or Purchaser, on the other hand, in the
event (i) of a material breach hereof by the non-terminating party if such
non-terminating party fails to cure such breach within five (5) Business Days
following notification thereof by the terminating party or (ii) upon
notification of the non-terminating party by the terminating party that the
satisfaction of any condition to the terminating party’s obligations under this
Agreement becomes impossible or impracticable with the use of commercially
reasonable efforts if the failure of such condition to be satisfied is not
caused by a breach hereof by the terminating party; or

 

(c)           at any time following
the later of (i) the 90th day after the date of this Agreement, or
(ii) the 60th day after the date of the last request by the
Department of Justice or the Federal Trade Commission under the HSR Act, by
Sellers, on the one hand, or Purchaser, on the other hand, upon notification of
the non-terminating party by the terminating party if the Closing shall not
have occurred on or before such date and such failure to consummate is not
caused by a breach of this Agreement by the terminating party.

 

For purposes of this Section 12.01, Sellers
shall be considered a single party and a breach by a Seller will constitute a
breach by Sellers.

 

12.02       Effect of Termination.  If this Agreement is validly terminated
pursuant to Section 12.01, this Agreement will forthwith become null and
void, and there will be no liability or obligation on the part of Sellers or
Purchaser (or any of their respective officers, directors, employees, agents or
other representatives or Affiliates), except as provided in the next succeeding
sentence and except that the provisions with respect to expenses in Section 14.03
and confidentiality in Section 14.05 will continue to apply following
any such termination.  Notwithstanding
any other provision in this Agreement to the contrary, upon termination of this
Agreement pursuant to Section 12.01(b) or (c), Sellers will
remain liable to Purchaser for any willful or grossly negligent breach of this
Agreement by Sellers existing at the time of such termination, and Purchaser
will remain liable to Sellers for any willful or grossly negligent breach of
this Agreement by Purchaser existing at the time of such termination, and
Sellers or Purchaser may seek such remedies, including damages and fees of
attorneys, against the other with respect to any such breach as are provided in
this Agreement or as are otherwise available at Law or in equity.

 

48

 

ARTICLE
XIII

DEFINITIONS

 

13.01       Definitions.

 

(a)       Defined Terms.  As used in this Agreement, the following
defined terms have the meanings indicated below:

 

“2005
Relevant Taxable Income” has the meaning ascribed to it in Section
1.04(a).

 

“2006
Relevant Taxable Income” has the meaning ascribed to it in Section
1.04(b).

 

“2006
Short Period” has the meaning ascribed to it in Section 1.04(b).

 

“2006
Short Period Return” has the meaning ascribed to it in Section 1.04(b).

 

“Acquisition
Proposal” means any proposal for (i) a merger or other business combination
to which the Company is a party or (ii) the direct or indirect acquisition of
any equity interest in, or a substantial portion of the assets of, the Company,
other than the transactions contemplated by this Agreement.

 

“Actions
or Proceedings” means any action, suit, proceeding, arbitration or
Governmental or Regulatory Authority investigation or audit.

 

“AeroTurbine
Capital” means AeroTurbine Capital Corp., a Florida corporation, all of the
outstanding capital stock of which is owned by the Management Sellers.

 

“Affiliate”
means any Person that directly, or indirectly through one of more
intermediaries, controls or is controlled by or is under common control with
the Person specified and, with respect to an individual, means such individual’s
immediate family members and the immediate family members of any such
individual’s immediate family members. 
For purposes of this definition, control of a Person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such Person whether by Contract or otherwise and, in any event and
without limitation of the previous sentence, any Person owning ten percent
(10%) or more of the voting securities of another Person shall be deemed to
control that Person.

 

“Agreement”
means this Stock Purchase Agreement and the Exhibits, the Disclosure Schedule
and the Schedules hereto and the certificates delivered in accordance with Sections 6.03
and 7.03, as the same shall be amended from time to time.

 

“Aircraft
Asset Lease” means any lease agreement (and all other agreements, including
any side-letters, extension agreements, assignment of warranties and option
agreements related to any such lease agreement) in respect of an aircraft or an
engine pursuant to which an aircraft or an engine is leased by the Company or
any Subsidiaries to any lessee.

 

49

 

“Aircraft-Related
Assets” means any aircraft, any engines, any spare parts in respect
thereof, and any other assets that are specifically used in connection with the
aircraft, the engines or the spare parts.

 

“Allocation”
has the meaning ascribed to it in Section 1.06.

 

“Alternative
Transaction” has the meaning ascribed to it in Section 4.04.

 

“Assets
and Properties” of any Person means all assets and properties of every
kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including without limitation cash,
cash equivalents, Investment Assets, accounts and notes receivable, chattel
paper, documents, instruments, general intangibles, real estate, equipment,
inventory, goods and Intellectual Property.

 

“Audited
Financial Statements” means the Financial Statements for the most recent
fiscal year of the Company delivered to Purchaser pursuant to Section 2.10.

 

“Authorized
Bank” has the meaning ascribed to it in Section 4.18.

 

“Benefit
Plan” means any Plan established by the Company or any Subsidiary, or any
predecessor or Affiliate of any of the foregoing, existing at the Closing Date
or within three (3) years prior thereto, to which the Company or any Subsidiary
contributes or has contributed, under which any employee, former employee or
director of the Company or any Subsidiary or any beneficiary thereof is
covered, is eligible for coverage or has benefit rights or with respect to
which the Company or any Subsidiary has any actual or contingent liability.

 

“Books
and Records” means all files, documents, instruments, papers, books and
records relating to the Business or Condition of the Company, including without
limitation financial statements, Tax Returns and related work papers and
letters from accountants, budgets, pricing guidelines, ledgers, journals,
deeds, title policies, minute books, stock certificates and books, stock
transfer ledgers, Contracts, Licenses, customer lists, computer files and
programs, retrieval programs, operating data and plans and environmental
studies and plans.

 

“Business
Day” means a day other than Saturday, Sunday or any day on which banks
located in New York and Florida are authorized or obligated to close.

 

“Business
or Condition of the Company” means the business, condition (financial or
otherwise), results of operations, Assets and Properties and prospects of the
Company and the Subsidiaries taken as a whole.

 

“Cash”  means cash (including checks received prior
to the close of business on the relevant date, whether or not deposited or
cleared prior to the close of business on the relevant date), commercial paper,
certificates of deposit and other bank deposits, treasury bills and any other
cash equivalents.

 

“Cash Equivalent
Investments” has the meaning ascribed to it in Section 4.18.

 

50

 

“Cerberus
Entities” has the meaning ascribed to it in the forepart of this Agreement.

 

“CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, and the rules and regulations promulgated thereunder.

 

“Claim
Notice” means written notification of a third party claim as to which
indemnity under Section 11.02 is sought by an Indemnified Party,
enclosing a copy of all papers served, if any, and specifying the nature of and
basis for such third party claim and for the Indemnified Party’s claim against
the Indemnifying Party under Section 11.02, together with the
amount or, if not then reasonably determinable, the estimated amount,
determined in good faith, of the Loss arising from such third party claim.

 

“Closing”
means the closing of the transactions contemplated by Section 1.03.

 

“Closing
Date” means (a) the fifth Business Day after the day on which the last of the
consents, approvals, actions, filings, notices or waiting periods described in
or related to the filings described in Sections 6.05 through 6.07
and Section 7.05 has been obtained, made or given or has expired,
as applicable, or (b) such other date as Purchaser and Sellers mutually agree
upon in writing.

 

“Closing
Purchase Price” has the meaning ascribed to it in Section 1.02.

 

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

 

“Code
§338 Forms” has the meaning ascribed to it in Section 8.02.

 

“Company”
has the meaning ascribed to it in the forepart of this Agreement.

 

“Company
Employees” has the meaning ascribed to it in Section 9.01(a).

 

“Contest”
has the meaning ascribed to it in Section 8.05(b).

 

“Contract”
means any agreement, lease, license, evidence of Indebtedness, mortgage,
indenture, security agreement or other contract (whether written or oral).

 

“Defined
Benefit Plan” means any Plan that is subject to Part 3 of Title I
of ERISA, Section 412 of the Code or Title IV of ERISA.

 

“Disclosure
Schedule” means the record delivered to Purchaser by Sellers herewith and
dated as of the date hereof, containing all lists, descriptions, exceptions and
other information and materials as are required to be included therein by
Sellers pursuant to this Agreement.

 

“Elections”
has the meaning ascribed to it in Section 8.02.

 

51

 

“Employment
Agreements” has the meaning ascribed to it in the forepart of this
Agreement.

 

“Enbee”
has the meaning ascribed to it in Section 4.16.

 

“Environmental
Law” means any Law or Order relating to the regulation or protection of
human health, safety or the environment or to emissions, discharges, Releases
or threatened Releases of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes into the environment (including,
without limitation, ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes.  

 

“Environmental
Permits” has the meaning ascribed to it in Section 2.26.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and the
rules and regulations promulgated thereunder.

 

“ERISA
Affiliate” means any Person who is in the same controlled group of
corporations or who is under common control with Sellers or, before the
Closing, the Company or any Subsidiary (within the meaning of Section 414 of
the Code).

 

“Final
Determination” has the meaning ascribed to it in Section 8.05(e).

 

“Financial
Statements” means the consolidated financial statements of the Company and
its consolidated Subsidiaries delivered to Purchaser pursuant to Section
2.10 or 4.06.

 

“Foreign Tax Credit Benefit” has the meaning
ascribed to it in Section 1.04(f).

 

“GAAP” means generally accepted accounting
principles, consistently applied throughout the specified period and in the
immediately prior comparable period.

 

“Governmental
or Regulatory Authority” means any court, tribunal, arbitrator, authority,
agency, commission, official or other instrumentality of the United States, any
foreign country or any domestic or foreign state, county, city or other
political subdivision.

 

“Hazardous
Material” means (A) any petroleum or petroleum products, radioactive
materials, asbestos in any form or condition, urea formaldehyde foam insulation
and polychlorinated biphenyls (PCBs); (B) any other chemicals or other
materials, substances or wastes which are now or hereafter become defined as or
included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous
materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic
substances,” “toxic pollutants” or words of similar import under any
Environmental Law; and (C) any other chemical or other material, substance or
waste, exposure to which is now or hereafter prohibited, limited or regulated
by any Governmental or Regulatory Authority under any Environmental Law or with
respect to which liability or standards of conduct are imposed under an
Environmental Law.

 

52

 

“HSR
Act” means Section 7A of the Clayton Act (Title II of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended) and the rules and regulations
promulgated thereunder.

 

“Indebtedness”
of any Person means all obligations of such Person (i) for borrowed money, (ii)
evidenced by notes, bonds, debentures or similar instruments, (iii) for the
deferred purchase price of goods or services (other than trade payables or
accruals incurred in the ordinary course of business), (iv) under capital
leases and (v) in the nature of guarantees of the obligations described in
clauses (i) through (iv) above of any other Person.

 

“Indemnified
Party” means any Person claiming indemnification under any provision of Article
XI.

 

“Indemnifying
Party” means any Person against whom a claim for indemnification is being
asserted under any provision of Article XI.

 

“Indemnity
Notice” means written notification pursuant to Section 11.03(b) of a
claim for indemnity under Article XI by an Indemnified Party, specifying
the nature of and basis for such claim, together with the amount or, if not
then reasonably determinable, the estimated amount, determined in good faith,
of the Loss arising from such claim.

 

“Intellectual
Property” means all patents and patent rights, trademarks and trademark
rights, trade names and trade name rights, service marks and service mark
rights, service names and service name rights, brand names, inventions,
processes, formulae, copyrights and copyright rights, trade dress, business and
product names, logos, slogans, trade secrets, industrial models, processes,
designs, methodologies, computer programs (including all source codes) and
related documentation, technical information, manufacturing, engineering and
technical drawings, know-how and all pending applications for and registrations
of patents, trademarks, service marks and copyrights.

 

“Interim
Period” has the meaning ascribed to it in Section 1.02.

 

“Investment
Account” has the meaning ascribed to it in Section 4.18.

 

“Investment
Assets” means all debentures, notes and other evidences of Indebtedness,
stocks, securities (including rights to purchase and securities convertible
into or exchangeable for other securities), interests in joint ventures and
general and limited partnerships, mortgage loans and other investment or
portfolio assets owned of record or beneficially by the Company or any
Subsidiary and issued by any Person other than the Company or any Subsidiary
(other than trade receivables generated in the ordinary course of business of
the Company and the Subsidiaries).

 

“IRS”
means the United States Internal Revenue Service.

 

“Knowledge
of Sellers” or “Known to Sellers” means the knowledge of any Seller.

 

53

 

“Laws”
means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.

 

“Liabilities”
means all Indebtedness, obligations and other liabilities of a Person (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become
due and whether known or unkown).

 

“Licenses”
means all licenses, permits, certificates of authority, authorizations,
approvals, registrations, franchises and similar consents granted or issued by
any Governmental or Regulatory Authority.

 

“Liens”
means any mortgage, pledge, assessment, security interest, lease, lien, adverse
claim, levy, charge or other encumbrance of any kind, or any conditional sale
Contract, title retention Contract or other Contract to give any of the
foregoing.

 

“Loss”
means any and all direct or indirect damages, fines, fees, penalties,
deficiencies, losses and expenses (including without limitation interest, court
costs, fees of attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or assessment) and
shall include any decrease in the value of the Shares due to a Loss suffered by
or in the Company or any Subsidiary to the Purchaser. 

 

“Material
Adverse Effect” means any circumstance, change in or effect on the Company
or any Subsidiary that, individually or in the aggregate with all other circumstances,
changes in or effects on the Company or any Subsidiary, is or is reasonably
likely to be materially adverse to the business, operations, assets or
liabilities (including, without limitation, contingent liabilities), customer
or supplier relationships, results of operations or the condition (financial or
otherwise) of the Company and the Subsidiaries taken as a whole; provided,
however, that “Material Adverse Effect” shall not include any event,
circumstance, change or effect arising out of or attributable to general
economic conditions or events, circumstances, changes or effects affecting the
securities markets generally or the industry in which the Company operates.

 

“New
Plan” has the meaning ascribed to it in Section 9.01(a).

 

“New
Real Estate Lease” has the meaning ascribed to it in Section 4.16.

 

“Non-Competition
Agreement” has the meaning ascribed to it in the forepart of this
Agreement.

 

“NPL”
means the National Priorities List under CERCLA.

 

“Obligor”
has the meaning ascribed to it in Section 2.21.

 

“Old
Plan” has the meaning ascribed to it in Section 9.01(a).

 

54

 

“Operative
Agreements” means the Shareholder Equity Agreements, Non-Competition
Agreement and any support or other agreements to be entered into in connection
with the transaction.

 

“Option”
with respect to any Person means any security, right, subscription, warrant,
option, “phantom” stock right or other Contract that gives the right to (i)
purchase or otherwise receive or be issued any shares of capital stock of such
Person or any security of any kind convertible into or exchangeable or
exercisable for any shares of capital stock of such Person or (ii) receive or
exercise any benefits or rights similar to any rights enjoyed by or accruing to
the holder of shares of capital stock of such Person, including any rights to
participate in the equity or income of such Person or to participate in or
direct the election of any directors or officers of such Person or the manner
in which any shares of capital stock of such Person are voted.

 

“Order”
means any writ, judgment, decree, injunction or similar order of any
Governmental or Regulatory Authority (in each such case whether preliminary or
final). 

 

“Parent”
has the meaning ascribed to it in the forepart of this Agreement.

 

“PCBs”
has the meaning ascribed to it in Section 2.26.

 

“PBGC”
means the Pension Benefit Guaranty Corporation established under ERISA.

 

“Pension
Benefit Plan” means each Benefit Plan which is a pension benefit plan
within the meaning of Section 3(2) of ERISA.

 

“Permitted
Lien” means (i) any Lien for Taxes, assessments and governmental charges
not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with GAAP, (ii) any Lien arising in the ordinary course of business by
operation of Law with respect to a Liability that is not yet due or delinquent,
(iii) any minor imperfection of title or similar Lien which individually or in
the aggregate with other such Liens does not materially impair the value of the
property subject to such Lien or the use of such property in the conduct of the
business of the Company or any Subsidiary, and (iv) Liens and deposits incurred
in the ordinary course to secure obligations under workers’ compensation Laws
or similar legislation or other Liens required by Law to secure public or
statutory obligations.

 

“Person”
means any natural person, corporation, limited liability company, general
partnership, limited partnership, proprietorship, other business organization,
trust, union, association or Governmental or Regulatory Authority.

 

“Plan”
means any bonus, incentive compensation, deferred compensation, change in
control, retention, pension, profit sharing, retirement, stock purchase, stock
option, stock ownership, stock appreciation rights, phantom stock, leave of
absence, layoff, vacation, day or dependent care, legal services, cafeteria,
life, health, accident, disability, workmen’s compensation or other insurance,
severance, separation or other employee benefit plan, practice,

 

55

 

policy or arrangement of any kind, whether written or
oral, including, but not limited to, any “employee benefit plan” within the
meaning of Section 3(3) of ERISA.

 

“Pre-Signing
Dividend Amount” has the meaning ascribed to it in Section 1.04(c).

 

“Purchase
Price” has the meaning ascribed to it in Section 1.02.

 

“Purchaser”
has the meaning ascribed to it in the forepart of this Agreement.

 

“Purchaser
Indemnified Parties” means Purchaser and its officers, directors,
employees, agents and Affiliates (including the Company).

 

“Qualified
Plan” means each Benefit Plan which is intended to qualify under
Section 401 of the Code.

 

“Release(s)”
means any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the indoor or
outdoor environment, including, without limitation, the movement of Hazardous
Materials through ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata.

 

“Representatives”
has the meaning ascribed to it in Section 4.03.

 

“Restricted
Shares Purchase Agreement” has the meaning ascribed to it in the forepart
of this Agreement.

 

“Scheduled
Payments” has the meaning ascribed to it in Section 2.21.

 

“Seller”
and “Sellers” has the meaning ascribed to it in the forepart of this
Agreement.

 

“Sellers
Indemnified Parties” means Sellers and its officers, directors, employees,
agents and Affiliates.

 

“Shareholder
Equity Agreements” has the meaning ascribed to it in the forepart of this
Agreement.

 

“Share
Purchase Price” has the meaning ascribed to it in Section 1.06.

 

“Shares”
has the meaning ascribed to it in the forepart of this Agreement.

 

“Stockholders
Agreement” has the meaning ascribed to it in the forepart of this
Agreement.

 

“Straddle
Periods” has the meaning ascribed to it in Section 8.01(b).

 

“Straddle
Pre-Closing Taxes” has the meaning ascribed to it in Section 8.01(b).

 

“Straddle
Returns” has the meaning ascribed to it in Section 8.01(b).

 

56

 

“Subsidiary”
means any Person in which the Company, directly or indirectly through
Subsidiaries or otherwise, beneficially owns more than fifty percent (50%) of
either the equity interests in, or the voting control of, such Person.  For purposes of representations and
warranties under this Agreement, AeroTurbine Capital shall be deemed to be a
Subsidiary of the Company.

 

“Tax
Returns” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof, including, where
permitted or required, combined or consolidated returns for any group of
entities that include the Company or any Subsidiary.

 

“Taxes”
means any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code §59A), customs duties,
capital stock, franchise, profits, withholding (including on non-resident
shareholders of S corporations), social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, unclaimed
property or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not and any expenses incurred in
connection with the determination, settlement or litigation of any Tax
liability.

 

“Transfer
Taxes” has the meaning ascribed to it in Section 8.06.

 

“Unaudited
Financial Statement Date” means the last day of the most recent fiscal
quarter of the Company for which Financial Statements are delivered to
Purchaser pursuant to Section 2.10.

 

“Unaudited
Financial Statements” means the Financial Statements for the most recent
fiscal quarter of the Company delivered to Purchaser pursuant to Section 2.10.

 

(b)       Construction of Certain Terms
and Phrases.  Unless the
context of this Agreement otherwise requires, (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this entire Agreement;
(iv) the terms “Article” or “Section” refer to the specified Article or
Section of this Agreement; and (v) the phrases “ordinary course of business”
and “ordinary course of business consistent with past practice” refer to the
business and practice of the Company or a Subsidiary.  Whenever this Agreement refers to a number of
days, such number shall refer to calendar days unless Business Days are
specified.  All accounting terms used
herein and not expressly defined herein shall have the meanings given to them
under GAAP.

 

ARTICLE
XIV

MISCELLANEOUS

 

14.01       Notices.  All notices, requests and other
communications hereunder must be in writing and will be deemed to have been
duly given only if delivered personally or by

 

57

 

facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:

 

If to
Purchaser, to:

 

AerCap,
Inc.

100 N.E. Third Avenue, Suite 800

Ft.
Lauderdale, Florida, 33301, USA

Facsimile
No.:  (954) 760-7716

 

with a
copy to:

 

AerCap,
B.V.

Evert van de Beekstraat 312

1118 CX SCHIPHOL Airport

The Netherlands

 

and

 

Cerberus
Capital Management, L.P.

299 Park Avenue

New York, New York 10171

Attn:  Robert G. Warden

 

Milbank,
Tweed, Hadley and McCloy LLP

1 Chase Manhattan Plaza

New York, New York 10005

Facsimile No.:  (212) 822-5171

Attn:  Alexander M. Kaye, Esq.

 

If to
Sellers, to:

 

Mr.
Nicolas Finazzo, Mrs. Rose Ann Finazzo or Mr. Robert B. Nichols

AeroTurbine, Inc.

2323 N.W. 82nd Avenue

Miami, Florida 33122-1512

Facsimile No.:  (305) 406-3065

 

with a
copy to:

 

Stearns
Weaver Miller Weissler Alhadeff & Sitterson, P.A.

150 West Flagler Street, Suite 2200

Miami,
Florida 33130

Facsimile No.:  (305) 789-3395

Attn:  Stuart D. Ames, Esq.

 

All such notices, requests and other communications
will (i) if delivered personally to the address as provided in this
Section, be deemed given upon delivery, (ii) if delivered by facsimile

 

58

 

transmission to the facsimile number as provided in
this Section, be deemed given upon receipt, and (iii) if delivered by mail
in the manner described above to the address as provided in this Section, be
deemed given upon receipt (in each case regardless of whether such notice,
request or other communication is received by any other Person to whom a copy
of such notice, request or other communication is to be delivered pursuant to
this Section).  Any party from time to
time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the
other party hereto.

 

14.02       Entire Agreement.  This Agreement and the Operative Agreements
supersede all prior discussions and agreements between the parties with respect
to the subject matter hereof and thereof, including without limitation that
certain letter of intent between AerCap, B.V., Nicolas Finazzo and Robert B.
Nichols dated as of November 24, 2005 and confidentiality agreement between
AerCap, B.V. and Wachovia Capital Markets, LLC dated September 2, 2005, and
contain the sole and entire agreement between the parties hereto with respect
to the subject matter hereof and thereof.

 

14.03       Expenses.  Except as otherwise expressly provided in
this Agreement (including without limitation as provided in Section 12.02),
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses, and Sellers shall pay the costs and
expenses of the Company and the Subsidiaries, incurred in connection with the
negotiation, execution and closing of this Agreement and the Operative
Agreements and the transactions contemplated hereby and thereby.  Notwithstanding the foregoing, Purchaser
shall pay the entire filing fee for the Premerger Notification and Report Form
under the HSR Act.

 

14.04       Public Announcements.  At all times at or before the Closing,
Sellers and Purchaser will not, and Sellers will not permit the Company to,
issue or make any reports, statements or releases to the public or generally to
the employees, customers, suppliers or other Persons to whom the Company and
the Subsidiaries sell goods or provide services or with whom the Company and
the Subsidiaries otherwise have significant business relationships with respect
to this Agreement or the transactions contemplated hereby without the consent
of the other, which consent shall not be unreasonably withheld.  If either party is unable to obtain the
approval of its public report, statement or release from the other party and
such report, statement or release is, in the opinion of legal counsel to such
party, required by Law in order to discharge such party’s disclosure
obligations, then such party may make or issue the legally required report,
statement or release and promptly furnish the other party with a copy
thereof.  Sellers and Purchaser will also
obtain the other party’s prior approval of any press release to be issued
immediately following the Closing announcing the consummation of the
transactions contemplated by this Agreement. 
Without limiting the generality of the foregoing, none of the parties to
this Agreement or the Company shall make any public disclosure of the Purchase
Price or the Closing Purchase Price without the prior written consent of the
other parties hereto unless such disclosure is required by applicable Laws and
then only to the extent so required.  If
any Affiliate of Purchaser or Parent makes any disclosure which Purchaser is not
permitted to make hereunder, Purchaser shall be deemed to have breached the
covenant contained in this Section.

 

14.05       Confidentiality.  Each party hereto will hold, and will use its
best efforts to cause its Affiliates, and their respective Representatives to
hold, in strict confidence from any

 

59

 

Person (other than any such Affiliate or
Representative) all documents and information provided to such party by another
party to this Agreement or such other party’s Representatives, unless (i)
compelled to disclose by judicial or administrative process (including without
limitation in connection with obtaining the necessary approvals of this
Agreement and the transactions contemplated hereby of Governmental or
Regulatory Authorities) or by other requirements of Law or (ii) disclosed in an
Action or Proceeding brought by a party hereto in pursuit of its rights or in
the exercise of its remedies hereunder, all documents and information
concerning the other party or any of its Affiliates furnished to it by the
other party or such other party’s Representatives in connection with this
Agreement or the transactions contemplated hereby, except to the extent that
such documents or information can be shown to have been (a) previously known by
the party receiving such documents or information, (b) in the public domain
(either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired by
the receiving party from another source if the receiving party is not aware
that such source is under an obligation to another party hereto to keep such
documents and information confidential; provided that following the
Closing the foregoing restrictions will not apply to Purchaser’s use of
documents and information concerning the Company and the Subsidiaries furnished
by Sellers hereunder.  In the event the
transactions contemplated hereby are not consummated, upon the request of the
other party, each party hereto will, and will cause its Affiliates, any Person
who has provided, or who is considering providing, financing to such party and
their respective Representatives to, promptly (and in no event later than five
(5) Business Days after such request) redeliver or cause to be redelivered all
copies of documents and information furnished by the other party in connection
with this Agreement or the transactions contemplated hereby and destroy or
cause to be destroyed all notes, memoranda, summaries, analyses, compilations
and other writings related thereto or based thereon prepared by the party
furnished such documents and information or its Representatives.

 

14.06       Waiver.  Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition.  No waiver by any party of any term or
condition of this Agreement, in any one or more instances, shall be deemed to
be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.  All
remedies, either under this Agreement or by Law or otherwise afforded, will be
cumulative and not alternative.

 

14.07       Amendment.  This Agreement may be amended, supplemented
or modified only by a written instrument duly executed by or on behalf of each
party hereto.

 

14.08       No Third Party
Beneficiary.  The terms and
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective successors or permitted assigns, and it is not the
intention of the parties to confer third-party beneficiary rights upon any
other Person other than any Person entitled to indemnity under Article XI.

 

14.09       No Assignment; Binding
Effect.  Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of
Law and (b) that Purchaser may assign this Agreement

 

60

 

or any or all of its rights, interests and obligations
hereunder (including without limitation its rights under Article XI)
to (i) a wholly-owned subsidiary, provided that any such subsidiary agrees in
writing to be bound by all of the terms, conditions and provisions contained
herein, (ii) any post-Closing purchaser of all of the issued and outstanding
stock of the Company or a substantial part of its assets or (iii) any financial
institution providing purchase money or other financing to Purchaser or the
Company from time to time as collateral security for such financing, but no such
assignment referred to in clause (i) or (ii) shall relieve Purchaser of
its obligations hereunder.  Subject to
the preceding sentence, this Agreement is binding upon, inures to the benefit
of and is enforceable by the parties hereto and their respective successors and
assigns.

 

14.10       Headings.  The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.

 

14.11       Consent to Jurisdiction.  Each
party hereby irrevocably submits to the exclusive jurisdiction of any federal
court located in the Borough of Manhattan in the City and State of New York or
any New York state court located in the Borough of Manhattan in the City of New
York in any such action, suit or proceeding arising out of or relating to this
Agreement or any of the Operative Agreements or any of the transactions
contemplated hereby or thereby, and agrees that any such action, suit or
proceeding shall be brought only in such court, provided, however,
that such consent to jurisdiction is solely for the purpose referred to in this
Section 14.11 and shall not be deemed to be a general submission to
the jurisdiction of said courts or in the State of New York other than for such
purpose.  Each party hereby irrevocably
waives, to the fullest extent permitted by Law, (i) trial by jury and (ii) any
objection that it may now or hereafter have to the laying of the venue of any
such action, suit or proceeding brought in such a court and any claim that any
such action, suit or proceeding brought in such a court has been brought in an
inconvenient forum.

 

14.12       Invalid Provisions.  If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
and (c) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.

 

14.13       Governing Law.  This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to a
Contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.

 

14.14       Counterparts.  This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

 

[Signatures are on the next page]

 

61

 

IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officer of each party hereto as of the date first above
written.

 

	
   

  	
  AERCAP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laura B.
  Showalter

  
	
   

  	
   

  	
  Name:  Laura B. Showalter

  
	
   

  	
   

  	
  Title:  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Nicolas Finazzo

  
	
   

  	
  NICOLAS FINAZZO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rose Ann Finazzo

  
	
   

  	
  ROSE ANN FINAZZO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert B. Nichols

  
	
   

  	
  ROBERT B. NICHOLS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AERCAP, B.V.

  
	
   

  	
   

  
	
   

  	
  AerCap, B.V. hereby guarantees the due and

  punctual performance and discharge of all of

  Purchaser’s obligations under this Agreement.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Israel Padron

  
	
   

  	
   

  	
  Name:  Israel Padron

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wouter M.
  den Dikken

  
	
   

  	
   

  	
  Name:  Wouter M. den Dikken

  
	
   

  	
   

  	
  Title:  Authorized Signatory

  

 

62Exhibit 10.10

 

Execution
version

 

Dated                   23 April                2003

 

	
   

  	
  THE BANKS AND FINANCIAL INSTITUTIONS NAMED HEREIN

  	
  (1)

  
	
   

  	
  as ECA Lenders

  	
   

  
	
   

  	
  THE BANKS AND FINANCIAL INSTITUTIONS NAMED HEREIN

  	
  (2)

  
	
   

  	
  as Mismatch Lenders

  	
   

  
	
   

  	
  CREDIT LYONNAIS

  	
  (3)

  
	
   

  	
  and

  	
   

  
	
   

  	
  KREDITANSTALT FÜR WIEDERAUFBAU

  	
  (4)

  
	
   

  	
  as National Agents

  	
   

  
	
   

  	
  KREDITANSTALT FÜR WIEDERAUFBAU

  	
  (5)

  
	
   

  	
  as German Parallel Lender

  	
   

  
	
   

  	
  CREDIT LYONNAIS

  	
  (6)

  
	
   

  	
  as ECA Agent

  	
   

  
	
   

  	
  CREDIT LYONNAIS

  	
  (7)

  
	
   

  	
  as Mismatch Agent

  	
   

  
	
   

  	
  CREDIT LYONNAIS

  	
  (8)

  
	
   

  	
  as Security Trustee

  	
   

  
	
   

  	
  SUNRISE LEASING LIMITED

  	
  (9)

  
	
   

  	
  as Principal Borrower

  	
   

  
	
   

  	
  SUNDANCE LEASING LIMITED

  	
  (10)

  
	
   

  	
  as First Aircraft Borrower

  	
   

  
	
   

  	
  SUNRAY LEASING LIMITED

  	
  (11)

  
	
   

  	
  as Second Aircraft Borrower

  	
   

  
	
   

  	
  SUNSHINE LEASING LIMITED

  	
  (12)

  
	
   

  	
  as Third Aircraft Borrower

  	
   

  
	
   

  	
  SUNGLOW LEASING LIMITED

  	
  (13)

  
	
   

  	
  as Fourth Aircraft Borrower

  	
   

  
	
   

  	
  SUNFLOWER AIRCRAFT LEASING LIMITED

  	
  (14)

  
	
   

  	
  as Principal Irish Lessee

  	
   

  
	
   

  	
  DEBIS AIRCRAFT LEASING XXX B.V.

  	
  (15)

  
	
   

  	
  as Principal Dutch Lessee

  	
   

  
	
   

  	
  and

  	
   

  
	
   

  	
  DEBIS AIRFINANCE B.V.

  	
  (16)

  
	
   

  	
   

  	
   

  
	
  
  

  

  

  
	
   

  	
   

  	
   

  
	
   

  	
  FACILITY AGREEMENT

  	
   

  
	
   

  	
  in respect of up to twenty (20) Airbus Aircraft

  	
   

  
	
   

  	
   

  	
   

  
	
  
  

  

  

  

 

 

 

Contents

 

	
  Clause

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Availability
  - ECA Facility

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Availability
  - Mismatch Facility

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Utilisation
  of the ECA Facility

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Utilisation
  of the Mismatch Facility

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  Representations
  and warranties

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  Undertakings
  and covenants - general

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
  Undertakings
  and covenants of Lessees - operational and sub-leasing

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  Change of
  ownership and/or leasing structure with respect to an Aircraft

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  Mitigation

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  Contest

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
   

  	
  Covenants -
  Finance Parties

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  Enforcement
  of Trust Documents

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
   

  	
  Proceeds
  Account

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  Application
  of sums received

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16

  	
   

  	
  Fees,
  Expenses and indemnities

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17

  	
   

  	
  National
  Agents

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18

  	
   

  	
  ECA Agent

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
   

  	
  Mismatch
  Agent

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20

  	
   

  	
  Appointment
  and powers of the Security Trustee

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21

  	
   

  	
  Declaration
  of trust; supplemental provisions

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22

  	
   

  	
  Restrictions
  and limitations on and exclusions of the duties and responsibilities of the
  Security Trustee

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23

  	
   

  	
  No
  restriction on or liability to account for other transactions

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24

  	
   

  	
  Common Agent
  and Security Trustee

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25

  	
   

  	
  Change of
  Security Trustee

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26

  	
   

  	
  Limited
  recourse obligations of Borrowers

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27

  	
   

  	
  Set-off

  	
   

  	
  70

  

 

 

	
  28

  	
   

  	
  Notices

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  29

  	
   

  	
  Confidentiality

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30

  	
   

  	
  Joint and
  several liability

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31

  	
   

  	
  Consents and
  related matters

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  32

  	
   

  	
  Subordination

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  33

  	
   

  	
  Miscellaneous

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  34

  	
   

  	
  Transfers

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  35

  	
   

  	
  Governing
  law and jurisdiction

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  36

  	
   

  	
  Contracts
  (Rights of Third Parties) Act 1999

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  37

  	
   

  	
  Export
  Credit Agencies

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  38

  	
   

  	
  Parallel
  debt

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1
  Definitions

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 2
  The Lenders

  	
   

  	
  123

  
	
   

  	
   

  	
  Part I - The
  British Lenders

  	
   

  	
  123

  
	
   

  	
   

  	
  Part II -
  The French Lenders

  	
   

  	
  124

  
	
   

  	
   

  	
  Part III -
  The German Lenders

  	
   

  	
  125

  
	
   

  	
   

  	
  Part IV -
  The Mismatch Lenders

  	
   

  	
  126

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3
  The Aircraft

  	
   

  	
  127

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part 1

  	
   

  	
  127

  
	
   

  	
   

  	
  Part 1

  	
   

  	
  127

  
	
   

  	
   

  	
  Part 2

  	
   

  	
  128

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4
  ECA Utilisation Notice

  	
   

  	
  129

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 5
  Mismatch Utilisation Notice

  	
   

  	
  130

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 6
  ECA Loan Agreement

  	
   

  	
  131

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 7
  Operational Undertakings

  	
   

  	
  132

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 8
  Sub-Lease requirements

  	
   

  	
  142

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 9
  Quiet Enjoyment Undertaking

  	
   

  	
  146

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 10

  	
   

  	
  148

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Part I :
  Conditions precedent - initial

  	
   

  	
  148

  
	
   

  	
   

  	
  Part II:
  Conditions precedent to each Loan

  	
   

  	
  150

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 11
  Transfer Certificate

  	
   

  	
  152

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 12
  English Law Mortgage Letter

  	
   

  	
  156

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

THIS FACILITY AGREEMENT is made on 23 April 2003 as a deed

 

BETWEEN:

 

(1)                      THE BANKS AND FINANCIAL INSTITUTIONS listed in Part I of schedule 2 as British
Lenders;

 

(2)                      THE BANKS AND FINANCIAL INSTITUTIONS listed in Part II of schedule 2 as French
Lenders;

 

(3)                      THE BANKS AND FINANCIAL INSTITUTIONS listed in Part III of schedule 2 as the German
banking syndicate;

 

(4)                      KREDITANSTALT FÜR WIEDERAUFBAU a public corporation established under the laws
of Germany and having its principal place of business at Palmengartenstrasse
5-9, 60325 Frankfurt am Main, Federal Republic of Germany as German Parallel
Lender;

 

(5)                      THE BANKS AND FINANCIAL INSTITUTIONS listed in Part IV of schedule 2 as Mismatch Lenders;

 

(6)                      CRÉDIT LYONNAIS a banking institution established under the laws
of France acting through its office in England at Broadwalk House, 5 Appold
Street, London EC2A 2JP, England, in its capacity as national agent of the
British Lenders;

 

(7)                      CRÉDIT LYONNAIS a banking institution established under the laws
of France acting through its office at 1-3 rue des Italiens, 75009 Paris,
France, in its capacity as national agent of the French Lenders;

 

(8)                      KREDITANSTALT FÜR WIEDERAUFBAU a public corporation established under the laws
of Germany and having its principal place of business at Palmengartenstrasse
5-9, 60325 Frankfurt am Main, Federal Republic of Germany, in its capacity as
national agent of the German Lenders;

 

(9)                      CRÉDIT LYONNAIS a banking institution established under the laws
of France acting through its office at 1-3 rue des Italiens, 75009 Paris,
France, in its capacity as agent of the ECA Lenders;

 

(10)                CRÉDIT LYONNAIS a banking institution established under the laws
of France acting through its office at 1-3 rue des Italiens, 75009 Paris,
France, in its capacity as agent of the Mismatch Lenders;

 

(11)                CRÉDIT LYONNAIS, a banking
institution established under the laws of France acting through its office at
1-3 rue des Italiens, 75009 Paris, France, in its capacity as security trustee
for and on behalf of the Secured Parties;

 

(12)                SUNRISE LEASING LIMITED, a company incorporated under the laws of the
Cayman Islands and having its registered office at Walkers SPV Limited, Walker
House, Mary Street, P.O. Box 908GT, George Town, Grand Cayman, Cayman Islands
as Principal Borrower;

 

(13)                SUNDANCE LEASING LIMITED, a company incorporated under the laws of the
Cayman Islands and having its registered office at Walkers SPV Limited, Walker
House, Mary Street, P.O. Box 908GT, George Town, Grand Cayman, Cayman Islands
as First Aircraft Borrower;

 

(14)                SUNRAY LEASING LIMITED,
a company incorporated under the laws of the Cayman Islands and having its
registered office at Walkers SPV Limited, Walker House, Mary Street, P.O. Box
908GT, George Town, Grand Cayman, Cayman Islands as Second Aircraft Borrower;

 

(15)                SUNSHINE LEASING LIMITED, a company incorporated under the laws of the Cayman Islands and
having its registered office at Walkers SPV Limited, Walker House, Mary Street,
P.O. Box 908GT, George Town, Grand Cayman, Cayman Islands as Third Aircraft
Borrower;

 

1

 

(16)                SUNGLOW LEASING LIMITED, a company incorporated under the laws of the
Cayman Islands and having its registered office at Walkers SPV Limited, Walker
House, Mary Street, P.O. Box 908GT, George Town, Grand Cayman, Cayman Islands
as Fourth Aircraft Borrower;

 

(17)                SUNFLOWER AIRCRAFT LEASING LIMITED, a company incorporated under the laws of Ireland and having its
registered office at debis AirFinance House, Shannon, Co. Clare, Ireland as
Principal Irish Lessee;

 

(18)                DEBIS AIRCRAFT LEASING XXX B.V., a company incorporated under the laws of the Netherlands and
having its registered office at Evert van Beekstraat 312, 1118 CX Schiphol
Airport, Amsterdam, the Netherlands as Principal Dutch Lessee; and

 

(19)                DEBIS AIRFINANCE B.V., a company organised and existing under the laws of the
Netherlands whose registered office is at Evert van de Beekstraat 312, 1118 CX
Schiphol Airport, Amsterdam, The Netherlands.

 

IT IS AGREED as follows:

 

1                               Definitions

 

In this
Agreement (including schedules), except where the context otherwise requires or
there is express provision to the contrary, words and expressions set out in
schedule 1 shall have the meanings ascribed thereto.  The rules of interpretation set out in
schedule 1 are also applicable to this Agreement.

 

2                               Availability
- ECA Facility

 

2.1                    ECA Facility

 

Subject to the
terms and conditions of this Agreement and in reliance on the representations
and warranties of the Principal Lessees and the Initial Borrowers set out in
clause 6, the ECA Lenders hereby grant and undertake to make available to the
Borrowers a loan facility in the principal amount of up to the ECA Facility
Amount as ECA Loans.

 

2.2                     ECA Availability
Period

 

2.2.1                                           The ECA Facility shall be available for drawdown at any time during
the ECA Availability Period on the terms and subject to the conditions of this
Agreement.

 

2.2.2                                           It is currently contemplated that each of the Aircraft will be
delivered during the Scheduled Delivery Month for that Aircraft and accordingly
debis shall, as soon as reasonably practicable following receipt of notice from
or agreement with the Manufacturer of a change to the Scheduled Delivery Month
for an Aircraft, notify the ECA Agent of that change.  Upon receipt by the ECA Agent of that notice
and provided that the new scheduled delivery month falls (a) no later than six
(6) months after the original Scheduled Delivery Month for the relevant
Aircraft specified in Part 1 of schedule 3, and (b) within the ECA Availability
Period, the Scheduled Delivery Month for that Aircraft shall be amended
accordingly.  If either (a) or (b) does
not apply, then, unless the ECA Agent and the Mismatch Agent otherwise agree,
that Aircraft shall thereupon cease to be an Aircraft under and for the
purposes of this Agreement and the ECA Commitments for that Aircraft and the
Mismatch Commitments for that Aircraft shall each be reduced to zero.

 

2.3                     Number and
composition of ECA Loans

 

2.3.1                              The ECA Facility shall be available as up to twenty (20) ECA Loans,
constituting one ECA Loan for each Aircraft.

 

2.3.2                              The maximum amount of the ECA Loan for each Aircraft shall be the
Maximum ECA Amount for that Aircraft or, if that ECA Loan is denominated in
Euro, the Euro Equivalent thereof.

 

2

 

2.3.3                              Subject to the terms and conditions of this Agreement and the ECA
Loan Agreement for that ECA Loan, the British Lenders, the French Lenders and
the German Lenders shall participate in an ECA Loan for an Aircraft through
their respective Lending Offices as follows:

 

(a)            the
British Lenders - (i) the British ECA Portion for that Aircraft of the Maximum
ECA Aircraft Amount for that Aircraft, plus (ii) the Qualifying ECA Premium
referred to in paragraph (a) of the definition thereof for that ECA Loan;

 

(b)           the French Lenders - (i)
the French ECA Portion for that Aircraft of the Maximum ECA Aircraft Amount for
that Aircraft, plus (ii) the Qualifying ECA Premium referred to in paragraph
(b) of the definition thereof for that ECA Loan; and

 

(c)            the German Lenders - (i)
the German ECA Portion for that Aircraft of the Maximum ECA Aircraft Amount for
that Aircraft, plus (ii) the Qualifying ECA Premium referred to in paragraph
(c) of the definition thereof for that ECA Loan.

 

2.3.4                              Subject to the terms and conditions of this Agreement and the ECA
Loan Agreement for that ECA Loan, each ECA Lender for an Aircraft shall
participate in an ECA Loan for an Aircraft through its Lending Office in an
amount equal to its ECA Commitment for that Aircraft.

 

2.3.5                              To the extent that, pursuant to the Transaction Documents, the ECA
Commitments for an Aircraft, the Mismatch Commitments for an Aircraft, the
Unutilised Mismatch Facility for an Aircraft and/or the Unutilised ECA Facility
are from time to time reduced:

 

(a)                        The Maximum ECA Amount for an Aircraft shall from time to time be
reduced by an amount equal to all reductions in the ECA Commitments for that
Aircraft.

 

(b)                       The Maximum Mismatch Amount for an Aircraft and the Unutilised
Mismatch Facility for an Aircraft shall from time to time be reduced by an
amount equal to all reductions in the Mismatch Commitments and/or the
Unutilised Mismatch Facility, in each case, for that Aircraft.

 

(c)                        The ECA Facility Amount shall from time to time be reduced by an
amount equal to all reductions in the ECA Commitments for any Aircraft and/or
the Unutilised ECA Facility (but without double counting).

 

(d)                       The Mismatch Facility Amount shall from time to time be reduced by
an amount equal to all reductions in the Mismatch Commitments for any Aircraft
and/or the Unutilised Mismatch Facility for any Aircraft (but without double
counting).

 

(e)                        The Unutilised ECA Facility shall from time to time be reduced by an
amount equal to all reductions in the ECA Commitments for any Aircraft.

 

2.3.6                              If the ECA Commitments for an Aircraft are at any time cancelled or
otherwise reduced to zero pursuant to the Transaction Documents, the Mismatch
Commitments for that Aircraft shall, simultaneously therewith, be cancelled and
reduced to zero.

 

2.3.7                              Notwithstanding anything herein or in any other Transaction Document
to the contrary, the maximum aggregate amounts to be advanced as ECA Loans by
the British Lenders, the French Lenders and the German Lenders shall be as
follows:

 

(a)              the
British Lenders - two hundred million Dollars ($200,000,000);

 

(b)             the
French Lenders - three hundred and eighty five million Dollars ($385,000,000);

 

(c)              the
German Lenders - two hundred and seventy five million Dollars ($275,000,000),

 

and the
foregoing provisions of this clause 2.3 shall be construed accordingly.

 

3

 

2.4                     Cancellation of
the ECA Facility

 

Upon the
expiry of the ECA Availability Period, the Unutilised ECA Facility (if any)
then remaining shall be cancelled.

 

2.5                     Currency

 

Each ECA Loan
may be drawn down either wholly in Dollars or wholly in Euro at the option of
debis, as notified by debis to the ECA Agent in the relevant ECA Utilisation
Notice.

 

2.6                     Terms and
conditions

 

Each ECA Loan
shall be documented by an ECA Loan Agreement.

 

2.7                     Several
obligations

 

2.7.1                              The obligations of each ECA Lender to make its ECA Commitment or any
part thereof available and to perform its obligations under this Agreement and
the other Transaction Documents are several and not joint.  The failure of any ECA Lender to perform its
obligations under this Agreement or any other Transaction Document shall not
result in any of the other ECA Finance Parties assuming any additional
obligation or liability whatsoever.

 

2.7.2                              Nothing contained in any Transaction Document shall constitute a
partnership, association, joint venture or other entity between any two or more
of the ECA Finance Parties.

 

2.8                     Repayment
schedules

 

2.8.1                              Each ECA Loan shall be repaid on a quarterly instalment basis, one
on each ECA Repayment Date for that ECA Loan, in the amounts specified in
schedule 1 to the ECA Loan Agreement for that ECA Loan, with the final
repayment being due on the Final ECA Repayment Date for that ECA Loan.

 

2.8.2                              The amounts of the repayment instalments shown in schedule 1 to the
ECA Loan Agreement for an ECA Loan shall be calculated on a “mortgage style”
basis applying the Relevant Rate plus the ECA Margin for that ECA Loan.

 

2.9                     ECA Premium

 

Each Obligor hereby expressly agrees and acknowledges
that the ECA Premium for an ECA Loan is payable to the Export Credit Agencies
respectively in full, as a condition to, and prior to, the issue by them of the
Support Agreements for that ECA Loan and is not refundable in whole or in part
in any circumstances or for any reason whatsoever except, in relation to a
particular Export Credit Agency and the corresponding component of the ECA Premium,
if that Export Credit Agency does not issue its Support Agreement for that ECA
Loan. The Borrower in relation to an Aircraft agrees with the Lessee of that
Aircraft that it will pay the ECA Premium for the ECA Loan for that Aircraft to
the National Agents respectively as soon as reasonably practicable following
the receipt by that Borrower of the full amount of the Initial Rent under (and
as defined in) the Lease for that Aircraft.

 

3                               Availability
- Mismatch Facility

 

3.1                     Mismatch Facility

 

Subject to the terms and conditions of this Agreement
(including without limitation clause 3.10) and in reliance on the
representations and warranties of the Principal Lessees and the Initial
Borrowers set out in clause 6, the Mismatch Lenders hereby grant and undertake
to make available to the Borrowers a mismatch loan facility in the principal
amount of up to the Mismatch Facility Amount as Mismatch Loans.

 

4

 

3.2                     Mismatch
Availability Period

 

The Mismatch Facility shall be available for an
Aircraft during the Mismatch Commitment Period for that Aircraft, for drawdown
at any time during the Mismatch Availability Period for that Aircraft, on the
terms and subject to the conditions of this Agreement.

 

3.3                     Number and composition
of Mismatch Advances

 

3.3.1                                 The
Mismatch Facility shall be available in connection with each Aircraft, other
than where the ECA Loan for that Aircraft is denominated in Euro, and the
Mismatch Facility for an Aircraft shall be available by the advance of one (1)
Mismatch Advance on or in respect of each ECA Repayment Date for the ECA Loan
for that Aircraft or, in the case of the 2003 Aircraft, each ECA Repayment Date
for the ECA Loan for that Aircraft which falls on or after the First Mismatch
Advance Date for that Mismatch Loan.

 

3.3.2                                 The
maximum amount of the Mismatch Loan for an Aircraft shall be the Maximum
Mismatch Amount for that Aircraft.

 

3.3.3                                 Subject
to the terms and conditions of this Agreement and the Mismatch Loan Agreement
for that Mismatch Loan, each Mismatch Lender shall participate in a Mismatch
Loan for an Aircraft through its Lending Office in its Mismatch Portion for
that Aircraft.

 

3.4                     Cancellation of
the Mismatch Facility

 

3.4.1                                 Upon
the expiry of the Mismatch Availability Period in respect of an Aircraft, the
Unutilised Mismatch Facility for that Aircraft and all of the Mismatch
Commitments for that Aircraft then remaining (if any) shall be cancelled.

 

3.4.2                                 If,
in respect of an Aircraft:

 

(a)            an ECA Loan has not been
made prior to the expiry of the ECA Availability Period, with immediate effect
from the expiry of the ECA Availability Period; or

 

(b)           the Mismatch Facility for
that Aircraft is not utilised by the time at which the ECA Loan for that
Aircraft is drawn down or, with respect to the 2003 Aircraft only, within
twelve (12) months thereafter;

 

(c)            an ECA Loan is denominated
in Euro, with effect from the drawdown of that ECA Loan,

 

the
Unutilised Mismatch Facility for that Aircraft and all of the Mismatch
Commitments for that Aircraft then remaining (if any) shall be cancelled.

 

3.4.3                                 The
Borrowers may, by not less than ten (10) Banking Days notice from debis to the
Mismatch Agent, elect to cancel the Unutilised Mismatch Facility for an
Aircraft and the Mismatch Commitments for that Aircraft in whole or in part on
any date (being the date specified in that notice).  In the event of a partial cancellation, the
Mismatch Commitments for that Aircraft of each Mismatch Lender for that
Aircraft shall be cancelled in accordance with the respective Mismatch Portions
for that Aircraft of those Mismatch Lenders.

 

3.4.4                                 The
relevant Borrower shall be entitled, under the terms of the Mismatch Loan
Agreement for an Aircraft, to prepay in part as well as in full the Mismatch
Loan for that Aircraft.

 

3.5                     Currency

 

The Mismatch
Advances shall be made available wholly in Dollars.

 

3.6                     Terms and
conditions

 

Each Mismatch
Loan shall be documented in a Mismatch Loan Agreement.

 

5

 

3.7                     Several obligations

 

3.7.1                                 The
obligations of each Mismatch Lender to make its Mismatch Commitment or any part
thereof available and to perform its obligations under this Agreement and the
other Transaction Documents are several and not joint.  The failure of any Mismatch Lender to perform
its obligations under this Agreement or any other Transaction Documents shall
not result in any of the other Mismatch Finance Parties assuming any additional
obligation or liability whatsoever.

 

3.7.2                                 Nothing
contained in any Transaction Document shall constitute a partnership,
association, joint venture or other entity between any two or more of the
Mismatch Finance Parties.

 

3.8                     Repayments

 

The Mismatch Loan for an Aircraft shall be repaid in
one (1) instalment on the Final ECA Repayment Date in respect of the ECA Loan
for that Aircraft (subject always to the relevant Borrower’s voluntary
prepayment rights under the relevant Mismatch Loan Agreement).

 

3.9                     Commitment
commission

 

In respect of each Aircraft, the Principal Borrower
shall pay in arrears to the Mismatch Agent (for the account of each Mismatch
Lender for that Aircraft according to its Mismatch Commitment for that
Aircraft), on each Reference Date falling during the Mismatch Commitment Period
for that Aircraft and prior to the ECA Drawdown Date for that Aircraft, on the
ECA Drawdown Date for that Aircraft, on each ECA Repayment Date for that
Aircraft falling prior to the last day of the Mismatch Commitment Period for
that Aircraft and on the last day of that Mismatch Commitment Period,
commitment commission computed from the first day of that Mismatch Commitment
Period on the daily amount of the Unutilised Mismatch Facility for that
Aircraft at the rate which is zero point two five per cent. (0.25%) per annum.  The commitment commission referred to in this
clause 3.9 shall be payable by the Principal Borrower whether or not any
Mismatch Advance for the relevant Aircraft is ever made.

 

3.10              Mismatch Commitment
Period

 

3.10.1                           debis and
each of the other Obligors hereby acknowledge and agree that, as at the Signing
Date, no Mismatch Lender has committed to provide, nor has any Mismatch Lender
obtained internal credit approvals in respect of, any Mismatch Loan and,
accordingly, no Mismatch Lender has any obligations and/or liabilities in
respect thereof or otherwise under this Agreement or any other Transaction
Document, except as expressly provided for in this clause 3.10 and clauses
5.2.1 and 5.2.2.

 

3.10.2                           debis and
each of the other Obligors further hereby acknowledge and agree that, as at the
Signing Date, the only Mismatch Lenders are those referred to in paragraph (a)
of the definition thereof, that the Mismatch Commitments (if any) of those
Mismatch Lenders have not yet been determined and that the Mismatch Commitments
(if any) of those Mismatch Lenders will in any event be insufficient to enable
a Mismatch Loan to be made available in respect of any Aircraft.

 

3.10.3                           If debis
wishes a Mismatch Loan to be made available for an Aircraft, debis shall:

 

(a)              identify
one or more persons who are prepared to be or become Mismatch Lenders for that
Aircraft so that the Mismatch Portions of all Mismatch Lenders for that
Aircraft total one hundred per cent. (100%); and

 

(b)             if
those persons are not already Lenders, procure that they accede to this
Agreement pursuant to documentation acceptable to the Mismatch Agent and the
ECA Agent (each acting reasonably) and, if they are already Lenders, procure
that such documentation as the Mismatch Agent and the ECA Agent may require
(each acting reasonably) is executed to effect their introduction as Mismatch
Lenders; and

 

(c)              subject
to the conclusion of the steps referred to in paragraphs (a) and (b) above,
send a written notice (a “Request Notice”)
to each Mismatch Lender no later than three (3)

 

6

 

months (or
such other period as debis and the Mismatch Agent may agree) prior to the date
on which debis is required to issue a Mismatch Utilisation Notice for that
Mismatch Loan, as specified in clause 5.1.1.  Each Request Notice shall contain, to the
extent that the same is then available, the same information as is required
(pursuant to the terms of clause 5.1.1) to be included in a Mismatch
Utilisation Notice.

 

3.10.4                           Following
the issue by debis of a Request Notice for an Aircraft, if all of the Mismatch
Lenders for that Aircraft notify debis in writing that they are committed to
provide a Mismatch Loan for that Aircraft (a “Confirmation
Notice”), then, upon the issue of the Confirmation Notice, those
Mismatch Lenders shall (subject to the terms and conditions of this Agreement)
be committed to provide a Mismatch Loan for that Aircraft, and (subject always
to the following provisions of this clause 3.10.4) the Mismatch Commitment
Period, and the rights, obligations, duties and liabilities of the relevant
Mismatch Lenders under the Transaction Documents, for that Aircraft shall
thereupon commence.  The Mismatch Lenders
agree to respond to any Request Notice as soon as reasonably practicable and,
in any event, not later than one (1) month after receipt thereof. If any of the
Mismatch Lenders decides that it does not wish to be committed, that Mismatch
Lender will notify debis of this decision as soon as reasonably practicable and
will, if requested by debis, consult with debis in relation to that
decision.  debis shall be entitled, by
written notice to each Mismatch Lender, to withdraw a Request Notice at any
time prior to the issue of a corresponding Confirmation Notice.

 

For the
avoidance of doubt, each Mismatch Lender shall be entitled in its sole and
absolute discretion to:

 

(a)                        commit or refuse to commit to provide any Mismatch Loan;

 

(b)                       if it does so commit, commit to provide any Mismatch Loan according
to such Mismatch Portion and such Mismatch Commitments as it determines in its
sole and absolute discretion;

 

(c)                        if it does so commit, commit to provide any Mismatch Loan according
to such terms and conditions as it determines in its sole and absolute
discretion (which may include without limitation terms and conditions which
necessitate changes to the terms of this Agreement and the other Transaction
Documents),

 

provided that, in the case of each of paragraphs (b)
and (c) above (i) the relevant Mismatch Lender shall, prior to the issue of the
relevant Confirmation Notice, obtain debis’ prior agreement to the same (and
debis shall be entitled to accept or reject the same in its sole and absolute
discretion), and (ii) the relevant Mismatch Portion(s), Mismatch Commitment(s)
and terms and conditions shall be specified in the relevant Confirmation
Notice.

 

3.10.5                           For the
avoidance of doubt, the Mismatch Commitment Period for an Aircraft shall not
commence, and no Mismatch Lender shall be committed to provide a Mismatch Loan
for an Aircraft, unless and until a Confirmation Notice in respect of that
Aircraft shall have been issued by all of the Mismatch Lenders for that
Aircraft and any applicable terms and conditions have been satisfied in full.

 

3.10.6                           The
Mismatch Lenders agree for the benefit of debis and each of the other Obligors
that neither debis nor any other Obligor shall have any duties, obligations or
liabilities whatsoever to any Mismatch Lender or the Mismatch Agent under or in
connection with this Agreement or any other Transaction Document prior to the
issuance of a Confirmation Notice and, prior to such issuance, all references
in this Agreement or in any other Transaction Document to all or any of the
Mismatch Lenders or the Mismatch Agent shall be ignored in construing any
provisions relating to the obligations, duties or liabilities of debis or any
other Obligor.

 

7

 

4                               Utilisation
of the ECA Facility

 

4.1                     ECA Utilisation
Notices

 

4.1.1                                 In
order to effect an ECA Loan other than the ECA Loans for the Initial Aircraft,
debis must submit a notice to the ECA Agent substantially in the form set out
in schedule 4 identifying:

 

(a)                        the proposed ECA Drawdown Date for that ECA Loan, which shall be a
Banking Day within the ECA Availability Period not less than fifteen (15)
Banking Days (or such shorter period as the ECA Agent, acting on the
instructions of the National Agents, may agree) after the date of service of
that notice;

 

(b)                       the proposed
Final ECA Repayment Date for that ECA Loan;

 

(c)                        the amount
(which shall not exceed the maximum amount calculated pursuant to clause 2.3.2)
and currency (which shall be Dollars or Euros) of the proposed ECA Loan;

 

(d)                       the relevant
Aircraft (including its manufacturer’s serial number, the proposed registration
mark (if then known) and the manufacturer, type and serial numbers (if then
known) of its Engines);

 

(e)                        if known, the identity of and the principal place of business of the
proposed Sub-Lessee and any Sub-Sub-Lessee of that Aircraft;

 

(f)                          the jurisdiction in which that Aircraft shall be registered and
whether, taking into account the requirements of paragraph 1(c) of schedule 7,
it is proposed that there will be a Mortgage in respect of the Aircraft;

 

(g)                       the anticipated
Aircraft Purchase Price for that Aircraft;

 

(h)                       the identity of
each Borrower and Lessee to be party to the Transaction Documents for that
Aircraft; and

 

(i)                           if that Aircraft is to be placed on lease to a Sub-Lessee pursuant
to a Sub-Lease on that ECA Drawdown Date, the notice shall have attached
thereto a Certified Copy of the latest draft (if any) or, if the same is then
available, the executed version of the proposed Sub-Lease.

 

4.1.2                                 The
ECA Agent shall:

 

(a)            send
to each National Agent a copy of each ECA Utilisation Notice received from
debis which complies with clause 4.1.1; and

 

(b)           assist in the preparation
of the ECA Utilisation Documentation for the relevant ECA Loan, and as soon as
reasonably practicable following receipt of the same shall procure that that
ECA Utilisation Documentation is circulated to the National Agents and the
relevant Borrower.

 

4.1.3                                 The
ECA Agent, the relevant Borrower and each relevant Lessee shall, on or prior to
the date falling three (3) Banking Days prior to the proposed ECA Drawdown
Date, execute the ECA Utilisation Documentation for that ECA Loan and each ECA
Finance Party (other than the ECA Agent and the Security Trustee) hereby
authorises and instructs the ECA Agent to execute that ECA Utilisation
Documentation on its behalf.

 

4.2                     Conditions
precedent

 

4.2.1                                 The
obligations of each of the ECA Finance Parties under this Agreement and the
relevant ECA Loan Agreement in respect of the first ECA Loan shall be subject
to the ECA Agent having received (or (acting on the instructions of the
Majority Lenders) having waived receipt of) the documents and other evidence
referred to in Part I of schedule 10, in each case, in form and substance
satisfactory to the ECA Agent (acting reasonably).

 

8

 

4.2.2                                 The
obligations of each of the ECA Finance Parties under this Agreement and the
relevant ECA Loan Agreement in respect of each ECA Loan shall be subject to:

 

(a)            the
ECA Agent having received (or (acting on the instructions of the Majority
Lenders) having waived receipt of) the documents and other evidence referred to
in Part II of schedule 10 in form and substance satisfactory to the ECA Agent
and, if the relevant Aircraft is to be placed on lease to a Sub-Lessee pursuant
to a Sub-Lease on the ECA Drawdown Date for that ECA Loan, the Sub-Lease
Requirements shall have been complied with in full to the satisfaction of the
ECA Agent (acting reasonably) in respect of that Sub-Lease, provided that the
Sub-Lease Requirements (other than those set out in paragraph 4 of schedule 8)
in relation to the Initial Sub-Leases shall not be required to be complied with
pursuant to this clause 4.2.2(a) or any other provision of this Agreement;

 

(b)           no Relevant Event,
Termination Event, ECA Utilisation Block Event or Mandatory Prepayment Event in
respect of that Aircraft having occurred which is continuing;

 

(c)            any requisite approvals of
the competent authorities of the French Republic, the Federal Republic of
Germany and the United Kingdom shall have been obtained and COFACE, HERMES and
ECGD shall have indicated that they are willing to give guarantees, insurances
or other applicable support (subject to satisfaction of the relevant conditions
precedent) in terms satisfactory to the British National Agent, the French
National Agent and the German National Agent respectively on that ECA Drawdown
Date; and

 

(d)           with respect to the ECA
Loan for any Aircraft other than the Initial Aircraft:

 

(i)                           the
appointment of the German National Agent for that Aircraft, as contemplated by
paragraph (b) of the definition of German National Agent, pursuant to
documentation acceptable to the ECA Agent and the German Parallel Lender (each
acting reasonably); and

 

(ii)                        the agreement
of one or more persons to become German Lenders for that Aircraft and fund the
German ECA Portion for that Aircraft, as contemplated by paragraph (b) of the
definition of German Lenders, and, if those persons are not already Lenders,
the accession to this Agreement by those persons pursuant to documentation
acceptable to the ECA Agent and the German Parallel Lender (each acting
reasonably) and, if they are already Lenders, the execution of such
documentation as the ECA Agent and the German Parallel Lender (each acting
reasonably) may require to effect their introduction as German Lenders for that
Aircraft.

 

4.2.3                                 Each
National Agent hereby confirms and agrees that:

 

(a)              it
has requested the approvals and indications referred to in clause 4.2.2(c) in
respect of the ECA Loans for (i) in the case of the German National Agent, the
Initial Aircraft, and (ii) in the case of the British National Agent and the
French National Agent respectively, the 2003 Aircraft;

 

(b)             as
soon as reasonably practicable following a written request from debis to do so,
it will request the approvals and indications referred to in clause 4.2.2(c) in
respect of the ECA Loans for the other Aircraft, consistent with its normal
procedures for obtaining the same;

 

(c)              it
will keep debis advised of progress in relation to such approvals and
indications and notify debis as soon as reasonably practicable following
receipt of such approvals and/or indications or of any rejection of any
approval application or change of position in relation to any of the foregoing
matters; and

 

(d)             it
will, if appropriate, involve debis in discussions with the relevant Export
Credit Agencies.

 

9

 

5                               Utilisation
of the Mismatch Facility

 

5.1                     Mismatch
Utilisation Notices

 

5.1.1                                 In
order to effect a Mismatch Loan for an Aircraft, debis must (i) in the case of
any Aircraft other than the 2003 Aircraft, at the same time as debis submits
the ECA Utilisation Notice for that Aircraft to the ECA Agent pursuant to
clause 4.1.1, or (ii) in the case of the 2003 Aircraft, not less than fifteen
(15) Banking Days prior to the proposed First Mismatch Advance Date thereunder
which must be no later than the date falling twelve (12) months after the ECA
Drawdown Date for the ECA Loan for that Aircraft and within the Mismatch
Commitment Period for that Aircraft, submit a notice to the Mismatch Agent
substantially in the form set out in schedule 5 identifying:

 

(a)              (i)
in the case of any Aircraft other than the 2003 Aircraft, the proposed ECA
Drawdown Date for the ECA Loan for that Aircraft, or (ii) in the case of the
2003 Aircraft, the proposed First Mismatch Advance Date, and the amount (which
must be in Dollars) of that ECA Loan;

 

(b)             (i)
in the case of any Aircraft other than the 2003 Aircraft, the proposed Final
ECA Repayment Date for that ECA Loan, or (ii) in the case of the 2003 Aircraft,
the actual Final ECA Repayment Date for that ECA Loan;

 

(c)              the
amount (which shall not exceed the maximum amount calculated pursuant to clause
3.3.2) of that Mismatch Loan;

 

(d)             that
Aircraft (including its manufacturer’s serial number, the proposed registration
mark (if then known) and the manufacturer, type and serial numbers (if then
known) of its Engines);

 

(e)              if
known, the identity of and the principal place of business of the proposed
Sub-Lessee and any Sub-Sub-Lessee of that Aircraft;

 

(f)                the
jurisdiction in which that Aircraft shall be registered and whether, taking
into account the requirements of paragraph 1(c) of schedule 7, it is proposed
that there will be a Mortgage in respect of the Aircraft;

 

(g)             the
anticipated Aircraft Purchase Price for that Aircraft;

 

(h)             the
identity of each Borrower and Lessee to be party to the Transaction Documents
for that Aircraft; and

 

(i)                 if
that Aircraft is to be placed on lease to a Sub-Lessee pursuant to a Sub-Lease
on that ECA Drawdown Date, the notice shall have attached thereto a Certified
Copy of the latest draft (if any) or, if the same is then available, the
executed version of the proposed Sub-Lease.

 

5.1.2                                 The
Mismatch Agent shall:

 

(a)              send
to each Mismatch Lender a copy of each Mismatch Utilisation Notice received
from debis which complies with clause 5.1.1; and

 

(b)             assist
in the preparation of the Mismatch Utilisation Documentation for the relevant
Mismatch Loan, and as soon as reasonably practicable following receipt of the
same shall procure that that Mismatch Utilisation Documentation is circulated
to the Mismatch Lenders and the relevant Borrower.

 

5.1.3                                 The
Mismatch Agent, the relevant Borrower and each relevant Lessee shall, on or
prior to the date falling three (3) Banking Days prior to (i) in the case of
any Aircraft other than the 2003 Aircraft, the proposed ECA Drawdown Date, or
(ii) in  the case of the 2003 Aircraft,
the proposed First Mismatch Advance Date, execute the Mismatch Utilisation Documentation
for

 

10

 

that
Mismatch Loan and each Mismatch Finance Party (other than the Mismatch Agent
and the Security Trustee) hereby authorises and instructs the Mismatch Agent to
execute that Mismatch Utilisation Documentation on its behalf.

 

5.2                     Conditions
precedent

 

5.2.1                                 The
obligations of each of the Mismatch Finance Parties under this Agreement and
each relevant Mismatch Loan Agreement shall be subject to the Mismatch Agent
having received (or (acting on the instructions of the Majority Mismatch
Lenders) having waived receipt of) the documents and other evidence referred to
in Part I of schedule 10, in each case, in form and substance satisfactory to
the Mismatch Agent. Notwithstanding that no Mismatch Commitment Period will
have commenced, the Mismatch Agent will on or prior to the first ECA Drawdown
Date confirm in writing to debis whether the conditions referred to in this
clause 5.2.1 have been fulfilled and if any such conditions have not then been
fulfilled the Mismatch Agent will confirm to debis which conditions remain to
be fulfilled.

 

5.2.2                                 The
obligations of each of the Mismatch Finance Parties under this Agreement and
the relevant Mismatch Loan Agreement in respect of each Mismatch Loan shall be
subject to a Confirmation Notice (as defined in clause 3.10) having been issued
in respect of that Mismatch Loan and the Mismatch Agent having received (or
(acting on the instructions of the Majority Mismatch Lenders) having waived
receipt of) the documents and other evidence referred to in Part II of schedule
10 in form and substance satisfactory to the Mismatch Agent (acting reasonably)
and, if the relevant Aircraft is to be placed on lease to a Sub-Lessee pursuant
to a Sub-Lease on the Mismatch Drawdown Date for that Mismatch Loan, the Sub-Lease
Requirements shall have been complied with in full to the satisfaction of the
Mismatch Agent (acting reasonably) in respect of that Sub-Lease, provided that
the Sub-Lease Requirements (other than those set out in paragraph 4 of schedule
8) in relation to the Initial Sub-Leases shall not be required to be complied
with pursuant to this clause 5.2.2 or any other provision of this Agreement.

 

5.2.3                                 The
obligations of each of the Mismatch Finance Parties under this Agreement and
the relevant Mismatch Loan Agreement in respect of each Mismatch Loan shall be
subject to the Mismatch Commitment Period for that Aircraft being current at:

 

(a)              the
times at which the Mismatch Loan Agreement for that Mismatch Loan is entered
into by the parties thereto; and

 

(b)             the
First Mismatch Advance Date thereunder.

 

5.2.4                                 The
obligations of each of the Mismatch Finance Parties under this Agreement and
the relevant Mismatch Loan Agreement in respect of each Mismatch Advance shall
be subject to no Termination Event, Mismatch Utilisation Block Event or
Mandatory Prepayment Event in respect of that Aircraft having occurred which is
continuing.

 

6                               Representations
and warranties

 

6.1                     Representations
and warranties of each Borrower

 

To induce each of the Finance Parties, the Lessees and
debis to enter into the Transaction Documents, each Borrower represents and
warrants (as to itself only) to the Finance Parties, the Lessees and debis
that:

 

6.1.1                                 it is
duly organised or, as the case may be, incorporated and validly existing under
the laws of its State of Incorporation, and has full power, authority and legal
right to own its property and carry on its business as presently conducted;

 

6.1.2                                 it
has the power and capacity to execute and deliver, and to perform its
obligations under, the Transaction Documents to which it is or will be a party
and all necessary action has been or will prior to the entering into of the
same be taken to authorise the execution, delivery and performance of the same;

 

11

 

6.1.3                                 all
necessary legal action to authorise the person or persons who execute and
deliver the Transaction Documents to which it is or will be a party to execute
and deliver the same and thereby bind it to all the terms and conditions hereof
and thereof and to act for and on behalf of it as contemplated hereby and
thereby has been or will prior to the entering into of the same be taken;

 

6.1.4                                 the
Transaction Documents to which it is or will be a party constitute or will when
executed constitute its legal, valid and binding obligations enforceable in
accordance with their terms subject to bankruptcy, insolvency and other laws
affecting creditor’s rights generally, subject to general principles of equity
and subject to the qualifications set out in the legal opinions to be provided
to the Finance Parties in accordance with the provisions of this Agreement;

 

6.1.5                                 the
execution and delivery by it of, the performance of its obligations under, and
compliance with the provisions of, the Transaction Documents to which it is or
will be a party will not (i) contravene any existing Applicable Law of its
State of Incorporation to which it is subject, (ii) conflict with, or result in
any breach of any of the terms of, or constitute a default under, any document,
instrument or agreement to which it is a party or is subject or by which it or
any of its assets may be bound, (iii) contravene or conflict with any provision
of its constitutional documents, or (iv) result in the creation or imposition
of, or oblige it to create, any Lien on or over any of its assets other than
any Lien created pursuant to or permitted by the Transaction Documents;

 

6.1.6                                 save
in respect of applicable Cayman Islands stamp duty, every consent,
authorisation, licence or approval of, or registration with or declaration to,
any Government Entity of its State of Incorporation in connection with the
execution, delivery, validity, enforceability or admissibility in evidence of
the Transaction Documents to which it is or will be a party, or the performance
by it of its obligations under the Transaction Documents to which it is or will
be party has been or will prior to the relevant ECA Drawdown Date be obtained
or made and is or will prior to the relevant ECA Drawdown Date be in full force
and effect and there has been no default in the observance of any of the
conditions or restrictions (if any) imposed in, or in connection with, any of
the same;

 

6.1.7                                 no
litigation, arbitration or administrative proceeding is taking place, pending
or, to its knowledge or the knowledge of its officers, threatened against it or
against any of its assets;

 

6.1.8                                 it
has not taken any action nor, to its knowledge or the knowledge of its
officers, have any steps been taken or legal proceedings been started for any
Insolvency Event in relation to it;

 

6.1.9                                 the
claims of the Finance Parties against it under this Agreement and the other
Transaction Documents to which it is a party will rank at least pari passu with the claims of all its other unsecured
creditors save those whose claims are preferred solely by any bankruptcy,
insolvency, liquidation or other similar laws of general application or
otherwise mandatorily preferred by law;

 

6.1.10                           except as
otherwise permitted hereunder, there have been no amendments or supplements to
its constitutional documents from the form of those documents last supplied by
it to the ECA Agent and the Mismatch Agent respectively and the constitutional
documents in the form last supplied by it to the ECA Agent and the Mismatch
Agent respectively remain in full force and effect;

 

6.1.11                           the board
resolutions and, if applicable, power of attorney supplied by it to the ECA
Agent and the Mismatch Agent respectively pursuant to the provisions of this
Agreement remain in full force and effect and have not been amended,
supplemented, varied or revoked, in whole or in part, since they were entered
into and the authority therein given to the persons therein named to agree and
execute on its behalf the Transaction Documents remains in full force and effect
and has not been revoked, amended, supplemented or varied, in whole or in part;

 

6.1.12                           it has not,
prior to entering into the Transaction Documents, engaged in any business or
transaction or entered into any contract or agreement with any person or otherwise
created or incurred any liability to, or acquired any asset from, any person,
other than any such

 

12

 

transactions,
contracts, agreements or liabilities or acquisitions of assets as (i) have been
necessary solely in order for it to establish itself as a company duly
incorporated and validly existing under the laws of its State of Incorporation,
or (ii) have occurred pursuant to or are contemplated by any of the Transaction
Documents; and

 

6.1.13                           no Borrower
Event has occurred and it continuing.

 

6.2                     Representations
and warranties of each Lessee

 

To induce each
of the Finance Parties and each of the Borrowers to enter into the Transaction
Documents, each Lessee represents and warrants (as to itself only) to the
Finance Parties and the Borrowers that:

 

6.2.1                                 it is
duly incorporated and validly existing under the laws of its State of
Incorporation as a limited liability company and has power to carry on its
business as it is now being conducted and to own its property and other assets;

 

6.2.2                                 it
has the power to execute and deliver and to perform its obligations under the
Transaction Documents to which it is or will be a party and all necessary
corporate, shareholder and other action has been or will prior to the entering
into of the same be taken to authorise the execution, delivery and performance
of the same;

 

6.2.3                                 the
Transaction Documents to which it is or will be a party constitute or will,
when executed, constitute valid and legally binding obligations of it
enforceable in accordance with their respective terms subject to applicable
bankruptcy, insolvency and other laws affecting creditor’s rights generally,
subject to general principles of equity and subject to the qualifications set
out in the legal opinions to be provided to the Finance Parties in accordance
with the provisions of this Agreement;

 

6.2.4                                 the
execution and delivery of, the performance of its obligations under, and
compliance by it with the provisions of, the Transaction Documents to which it
is or will be a party will not (i) contravene any existing Applicable Law of
its State of Incorporation (ii) conflict with, or result in any breach of
any of the terms of, or constitute a default under, any agreement or other
instrument to which it is a party or is subject or by which it or any of its
property is bound, or (iii) contravene or conflict with any provision of
its constitutional documents;

 

6.2.5                                 its
obligations under the Transaction Documents to which it is or will be a party
will rank at least pari passu with all other present and future unsecured and
unsubordinated obligations (including contingent obligations) of it with the
exception of any such obligations which are mandatorily preferred by law and
not by contract;

 

6.2.6                                 it is
subject to civil and commercial law with respect to its obligations under the
Transaction Documents to which it is or will be a party and the transactions
contemplated thereby constitute private and commercial acts done for private
and commercial purposes and neither it nor any of its assets is entitled to any
immunity on the grounds of sovereignty or otherwise from any legal action or
proceeding (which shall include, without limitation, suit, attachment prior to
judgment, execution or other enforcement);

 

6.2.7                                 its
only business is that of leasing the Aircraft and the entering into of the
Transaction Documents to which it is or will be a party and any and all
agreements related thereto;

 

6.2.8                                 every
consent, authorisation, licence or approval of, or registration with or
declaration to, any Government Entity of its State of Incorporation in
connection with the execution, delivery, validity, enforceability or
admissibility in evidence of the Transaction Documents to which it is or will
be a party, or the performance by it of its obligations under the Transaction
Documents to which it is or will be party has been or will prior to the
relevant ECA Drawdown Date be obtained or made and is or will prior to the
relevant ECA Drawdown Date be in full force and effect and there has been no
default in the observance of any of the conditions or restrictions (if any)
imposed in, or in connection with, any of the same;

 

13

 

6.2.9                                 no
litigation, arbitration or administrative proceeding that could (by itself or
together with any other such proceedings or claims) reasonably be expected to
have a material adverse effect on its ability to observe or perform its
obligations under the Transaction Documents to which it is or will be a party
or a material adverse effect upon its financial condition, business, assets or
operations is presently in progress or, to its knowledge or the knowledge of
its officers, pending or threatened against it or any of its assets;

 

6.2.10                           it is not
in breach of or in default under any agreement relating to Financial
Indebtedness to which it is a party or by which it may be bound; and

 

6.2.11                           no Lease
Event has occurred and is continuing.

 

6.3                     Repetition

 

The representations and warranties set out in clause
6.1 are made by the Initial Borrowers on the Signing Date and, in the case of
any Borrower which enters into an Accession Deed after the date of this
Agreement, will be deemed to be made by that Borrower on the date it executes
that Accession Deed.

 

The representations and warranties set out in clause
6.2 are made by each Principal Lessee on the Signing Date and, in the case of
any Lessee which enters into an Accession Deed after the date of this
Agreement, will be deemed to be made by that Lessee on the date it executes
that Accession Deed.

 

6.4                     English Law
Mortgage

 

Notwithstanding any provision of any Transaction
Document (including clause 6.1 or clause 6.2), where the State of Registration
of an Aircraft is not the United Kingdom, no Lessee or Borrower shall be
obliged to or be deemed to have represented that the English Law Mortgage for
that Aircraft is valid and enforceable in the State of Registration or in any
other jurisdiction if that English Law Mortgage is not recognised as valid and
enforceable in such jurisdiction, and the representations and warranties of
each Borrower and each Lessee under any Transaction Document as they relate to
any English Law Mortgage shall be construed accordingly.

 

7                               Undertakings
and covenants - general

 

7.1                     Undertakings and
covenants of each Borrower

 

Until all of the Secured Obligations have been
satisfied in full, each Borrower hereby undertakes and covenants with each
Finance Party, each Lessee and debis (severally as to itself only) that from
the date of this Agreement:

 

7.1.1                                 it
shall remain duly incorporated and validly existing under the laws of its State
of Incorporation;

 

7.1.2                                 it
will limit its business exclusively to the purchase, financing, leasing and
disposal of the Aircraft and the transactions contemplated by the Transaction
Documents and matters reasonably incidental thereto;

 

7.1.3                                 it
will not, without the prior written consent of the ECA Agent, the Mismatch
Agent and debis, enter into any contract or agreement with any person, and will
not, without the prior written approval of the ECA Agent, the Mismatch Agent
and debis, otherwise create or incur any liability to any person, in each case,
other than as provided for in, or permitted by, the Transaction Documents or
other than such liabilities with respect to Taxes, ordinary costs and overhead
expenses as have arisen or may arise in the ordinary course of its business as
referred to in the immediately preceding paragraph;

 

7.1.4                                 to
the extent possible pursuant to Applicable Law of its State of Incorporation, it
will obtain or cause to be obtained, maintain in full force and effect and
comply in all material respects with the conditions and restrictions (if any)
imposed in, or in connection with, every consent,

 

14

 

authorisation,
licence or approval of governmental or public bodies or authorities or courts
and do, or cause to be done, all other acts and things, in each case, which may
from time to time be necessary or advisable under Applicable Law of its State
of Incorporation for the continued due performance of all its obligations under
the Transaction Documents;

 

7.1.5                                 subject
to indemnification in respect of such Taxes (other than those in respect of
which it is personally liable) pursuant to the terms of this Agreement, it will
as soon as reasonably practicable discharge or procure the discharge of all or
any Taxes which are payable by it from time to time;

 

7.1.6                                 in
the case of each Initial Borrower and each other Borrower incorporated in the
Cayman Islands, it will not take any action, nor permit any action to be taken,
which would result in it ceasing to be an exempted company incorporated with
limited liability in the Cayman Islands;

 

7.1.7                                 to
the extent possible pursuant to Applicable Law and subject to the provisions of
clause 26, it will duly observe and perform all the covenants, obligations and
conditions which are required to be observed and performed by it under the
Transaction Documents;

 

7.1.8                                 it
will not exercise any right, power or discretion vested in it pursuant to any
Transaction Document otherwise than in a manner consistent with the provisions
thereof;

 

7.1.9                                 it
will not without the prior written consent of the ECA Agent, the Mismatch Agent
and debis create or permit to subsist any Lien over all or any of its present
and future revenues and assets other than Permitted Liens; and

 

7.1.10                           it will
take such action as the Security Trustee and (subject to no Lease Termination
Event having occurred and being continuing) debis shall reasonably require to
maintain the rights granted to the Secured Parties and debis under the
Transaction Documents and, after the occurrence of a Lease Termination Event
which is continuing, to take such action as the Security Trustee may reasonably
require in relation to the exercise of the rights of that Borrower under the
Transaction Documents.

 

7.2                     Undertakings and
covenants of each Lessee

 

Until all of the Secured Loan Obligations have been
satisfied in full, each Lessee hereby undertakes and covenants with each
Finance Party and each Borrower (severally as to itself only) that from the
date of this Agreement:

 

7.2.1                                 to
the extent possible pursuant to Applicable Law it shall obtain (within any
applicable time limits) and maintain in full force and effect and comply with the
terms of all authorisations, approvals, consents, licences, exemptions,
filings, registrations, notarisations and other matters for the time being
required by all Applicable Laws of its State of Incorporation to enable it to
perform its obligations under, or for the validity or enforceability of, the
Transaction Documents to which it is or will be a party;

 

7.2.2                                 it
shall as soon as reasonably practicable notify the Security Trustee if it
becomes aware of the occurrence of a Lease Termination Event which is
continuing or of any other event or circumstance which will adversely affect in
any material respect its ability to perform its obligations under the
Transaction Documents to which it is or will be a party and shall provide the
Security Trustee with reasonable details of any steps which the Lessee is
taking, or proposes to take, to remedy or mitigate the effect of any such Lease
Termination Event or such other event or circumstance;

 

7.2.3                                 it
shall deliver or cause to be delivered to the Security Trustee as soon as
reasonably practicable after the same are available:

 

(a)              and
in any event within one hundred and eighty (180) days after the end of debis’
financial year, a copy of debis’ audited consolidated financial accounts for
the relevant financial year;

 

15

 

(b)             and
in any event within the lesser of one hundred and eighty (180) days after the
end of debis’ financial year and thirty (30) days after debis’ shareholders
have approved the same, a CFO Certificate in relation thereto;

 

(c)              and
in any event within ninety (90) days after the end of each semi-annual
accounting period of debis, a copy of debis’ consolidated management accounts
for the relevant semi-annual period, together with a CFO Certificate in relation
thereto;

 

(d)             if
so requested by the Security Trustee at any time because the Security Trustee
and/or any other Finance Party has reasonable grounds to believe that a Trigger
Event may have occurred and be continuing, a copy of debis’ most recent monthly
management reports, together with a CFO Certificate in relation thereto,

 

in each case, prepared in accordance with US or Dutch
GAAP;

 

7.2.4                                 if so
requested by the Security Trustee at any time, because the Security Trustee
and/or any other Finance Party has reasonable grounds to believe that the
contents of any CFO Certificate may not be true and correct, it shall procure
that debis’ auditors confirm in writing to the Security Trustee that the
contents of that CFO Certificate are true and correct;

 

7.2.5                                 it
shall as soon as reasonably practicable provide the Security Trustee with such
information as is available to it concerning its financial condition, business,
assets and operations (subject to Applicable Laws and confidentiality
restrictions), and/or concerning any of the Aircraft, including the
maintenance, operation, usage and location thereof, as the Security Trustee may
from time to time reasonably request in the context of the Transaction
Documents and the transactions contemplated thereby;

 

7.2.6                                 it
shall as soon as reasonably practicable provide the Security Trustee with such
information as is available to it concerning a Sub-Lease or a Sub-Sub-Lease as
the Security Trustee may from time to time reasonably request, subject always
to any Applicable Laws and confidentiality restrictions to which it is subject
in relation thereto;

 

7.2.7                                 it
will duly and punctually perform its obligations under and comply with the
terms of the Transaction Documents to which it is or will be a party;

 

7.2.8                                 it
will ensure that its obligations under the Transaction Documents to which it is
or will be a party are, or will upon execution thereof by it rank, at least
pari passu with all other present and future unsecured and unsubordinated
obligations (including contingent obligations) of it save for obligations
mandatorily preferred by law;

 

7.2.9                                 it
shall preserve its corporate existence (but, for the avoidance of doubt, it
shall not be prevented from concluding any solvent reconstruction,
reorganisation, merger, amalgamation or securitisation); and

 

7.2.10                           its only
business shall be that of leasing the Aircraft and entering into the
Transaction Documents to which it is or will be a party and any and all
agreements related thereto and it will not undertake any other business other
than the purchase and sale of Aircraft as and when it becomes entitled to do so
under the terms of the Transaction Documents.

 

7.3                     Change of control

 

7.3.1                                 If at
any time any of the current shareholders of debis reduces its shareholding
interest (in percentage terms) in debis, debis shall as soon as reasonably
practicable give written notice (“Notice”) to the
ECA Agent and the Mismatch Agent.

 

7.3.2                                 If
the result of such reduction is that the current shareholders of debis as at
the Signing Date cease, in the aggregate, to own at least sixty-six point six
six per cent. (66.66%) of the issued shares and voting rights of debis, and the
new shareholder(s) of debis are not, as at the time of their acquisition of the
shares, either (i) rated BBB- or above by Standard & Poors Ratings Group
and/or the equivalent thereof by Moody’s Investments Services Inc, or (ii) of

 

16

 

at
least equivalent credit worthiness as the transferring shareholders, as
demonstrated by debis to the reasonable satisfaction of the ECA Agent (acting
on the instructions of the National Agents) and, if there is a Mismatch Loan,
the Mismatch Agent (acting on the instructions of the Majority Mismatch
Lenders) then, as soon as reasonably practicable after receipt of the Notice,
the ECA Agent (if so instructed by the National Agents) and, if there is a
Mismatch Loan, the Mismatch Agent (if so instructed by the Majority Mismatch
Lenders) shall enter into good faith discussions with debis with a view to
agreeing alternative arrangements and conditions (including, without
limitation, as to the provision of additional security) acceptable to the ECA
Agent (acting on the instructions of the National Agents acting reasonably)
and, if there is a Mismatch Loan, the Mismatch Agent (acting on the
instructions of the Majority Mismatch Lenders acting reasonably) for the
continuation of the transactions contemplated by the Transaction Documents.

 

7.3.3                                 If no
such arrangements and conditions acceptable to the ECA Agent (acting on the
instructions of the National Agents) and, if there is a Mismatch Loan,  the Mismatch Agent (acting on the
instructions of the Majority Mismatch Lenders) have been agreed and implemented
in full on or prior to the date (“Final Date”)
falling sixty (60) days after the date of the commencement of the discussions
referred to in clause 7.3.2, a Mandatory Prepayment Event shall be deemed to
have occurred in respect of all of the Aircraft on the Final Date.

 

8                               Undertakings
and covenants of Lessees - operational and sub-leasing

 

8.1                     General -
operational

 

Until all of the Secured Loan Obligations have been
paid in full, each Lessee hereby undertakes and covenants with each of the
Finance Parties separately and severally from the date of this Agreement or, if
it is not a party to this Agreement on the date of this Agreement, from the
date upon which that Lessee accedes to this Agreement that, subject to clause
8.4 and save as may be agreed from time to time with the ECA Agent and (if that
Aircraft is a Mismatch Aircraft) the Mismatch Agent, it shall at its own cost
and expense, in respect of each Aircraft of which it is the Lessee, comply or
procure compliance with the Operational Undertakings.

 

8.2                     Sub-leasing

 

Until all of the Secured Loan Obligations have been
paid in full, each Lessee hereby undertakes and covenants with each of the
Finance Parties separately and severally from the date of this Agreement or, if
it is not a party to this Agreement on the date of this Agreement, from the date
upon which that Lessee accedes to this Agreement that, save as may be agreed
from time to time with the ECA Agent and (if that Aircraft is a Mismatch
Aircraft) the Mismatch Agent, it shall not sub-lease, charter or otherwise part
with possession or operational control of any Aircraft except:

 

8.2.1                                 for
testing, service, overhaul work, maintenance or repair or alterations,
modifications or additions in accordance with this Agreement or any other
Transaction Document or which is permitted or not prohibited by the Operational
Undertakings; or

 

8.2.2                                 to
the Initial Sub-Lessee pursuant to the relevant Initial Sub-Lease, provided
that the Lessee shall also comply with the Sub-Lease Requirements set out in
paragraph 4 of schedule 8; or

 

8.2.3                                 pursuant
to a Sub-Lease or a Sub-Sub-Lease which complies in all respects with the
Sub-Lease Requirements (provided however that, if a Lessee enters into a
Sub-Lease which does not comply with the Sub-Lease Requirements in breach of
this clause 8.2, that breach shall not result in a Lease Termination Event but
shall, unless the relevant deviation is approved by the Security Trustee
pursuant to clause 8.7, result in a Mandatory Prepayment Event with respect to
the relevant Aircraft if that breach is not remedied within thirty (30) days
after notice thereof from the Security Trustee).

 

Notwithstanding
any such parting with possession or operational control permitted by this
clause 8.2, each Lessee shall, subject only to clause 8.4, remain primarily
liable and

 

17

 

responsible
for performing, and procuring observance of and compliance with, all of its
obligations under this Agreement and the other Transaction Documents, provided
that performance by a Sub-Lessee or a Sub-Sub-Lessee of any obligation under a
Sub-Lease or a Sub-Sub-Lease shall without further act to the same extent
constitute performance by the relevant Lessee of any corresponding obligation
hereunder or under any other Transaction Document.

 

In addition to
the provisions of this clause 8 and the Sub-Lease Requirements, each of the ECA
Agent and (if the relevant Aircraft is a Mismatch Aircraft) the Mismatch Agent
may require that that Aircraft is owned by a new Alternative Borrower, if the
State of Registration for that Aircraft, the Habitual Base for that Aircraft as
at the time at which the leasing of that Aircraft under the relevant Sub-Lease
commences and/or the State of Incorporation of any Sub-Lessee of that Aircraft
is a jurisdiction which imposes strict liability on the relevant Borrower as
the owner of the Aircraft. If such a requirement arises, and the same is
demonstrated, by an appropriate legal opinion from reputable and experienced
counsel in the relevant jurisdiction, the ECA Agent and (if the relevant Aircraft
is a Mismatch Aircraft) the Mismatch Agent shall consult with debis in good
faith in order to agree on the Alternative Borrower and the ownership and
leasing structure for that Aircraft, and the provisions of clause 9 shall
apply.

 

8.3                     Home Country
restriction

 

8.3.1                                 If at
any time a Lessee proposes to permit an Aircraft to be delivered under a
Sub-Lease to a Sub-Lessee (if it is a technical operator of aircraft) or under
a Sub-Sub-Lease to a Sub-Sub-Lessee (if the Sub-Lessee is not a technical
operator of aircraft and the Sub-Sub-Lessee is a technical operator of
aircraft) (“Operator Lessee”) directly under a
Sub-Lease or indirectly under a Sub-Sub-Lease if that delivery is to an
Operator Lessee which is either (i) the first Operator Lessee of that Aircraft,
or (ii) the second or subsequent Operator Lessee of that Aircraft if the
Sub-Lease or Sub-Sub-Lease to that Operator Lessee commences prior to the
second anniversary of the Delivery Date for that Aircraft, and:

 

(a)              as
a result of the delivery of that Aircraft to that Operator Lessee, more than
twenty five per cent (25%) of the Aircraft financed under this Agreement and
approved by the Export Credit Agencies for that financing (determined by number
and not by value) would be Home Country Aircraft; or

 

(b)             that
Operator Lessee has its State of Incorporation in the United States of America,

 

then, unless the delivery to the relevant Operator
Lessee follows the bona fide repossession of that Aircraft by, or the delivery
or redelivery of that Aircraft to, the relevant Lessee as a result of the
termination of the leasing of that Aircraft under a previous Sub-Lease prior to
its scheduled expiry date as a result of a default or other early termination
of that Sub-Lease, debis shall as soon as reasonably practicable give notice
thereof to the Security Trustee.

 

8.3.2                                 Following
the giving of any such notice, or if any Finance Party otherwise becomes aware
of the proposed delivery of an Aircraft of the nature referred to in clause
8.3.1:

 

(a)              if
the delivery would result in the circumstances set out in clause 8.3.1(a), the
ECA Agent may, unless the Export Credit Agencies shall have approved the
delivery, at the direction of the National Agents and the German Parallel
Lender, serve a notice on the relevant Lessee requiring the prepayment of Loans
for Home Country Aircraft so that the circumstances set out in clause 8.3.1(a)
no longer apply.  The ECA Agent shall
consult with that Lessee as to the identity of the Loans which shall be
prepaid; or

 

(b)             if
the delivery would result in the circumstances set out in clause 8.3.1(b), the
ECA Agent may, unless the Export Credit Agencies shall have approved the
delivery, at the direction of the Export Credit Agencies serve a notice on the
relevant Lessee requiring the prepayment of the Loans for the relevant
Aircraft.

 

18

 

8.3.3                                 If
any of the circumstances referred to in clause 8.3.1 arise, the ECA Agent will,
if requested by debis, consult with debis and the Export Credit Agencies with a
view to determining whether a waiver may be available in relation to the
relevant circumstances.

 

8.4                     Effect of
Sub-Leases and Sub-Sub-Leases

 

8.4.1                                 No
Lessee shall be in breach of its Operational Undertakings, nor shall a Relevant
Event or Termination Event occur or be considered to have occurred (nor, for
the avoidance of doubt, shall a Lessee be or be deemed to be in breach of any
obligation to procure any matter by any Sub-Lessee, Sub-Sub-Lessee or other
person):

 

(a)              as
a result of any act or omission of any Sub-Lessee or Sub-Sub-Lessee or the
occurrence of an event of default (howsoever defined) under any Sub-Lease or
Sub-Sub-Lease, if and for so long as the obligations of that Lessee under the
following provisions of this clause 8.4 are being complied with, and subject
always to clause 8.4.3; or

 

(b)             as a
result of any confiscation, restraint, detention, forfeiture, compulsory
acquisition, requisition for title or requisition for hire of an Aircraft by or
under the order of any Government Entity.

 

8.4.2                                 The
relevant Lessee shall as soon as reasonably practicable and diligently take all
steps in accordance with the Standard to:

 

(a)              prevent
the condition of the Aircraft from being materially adversely affected as a
result of the relevant matter referred to in clause 8.4.1;

 

(b)             compel
the Sub-Lessee to remedy the relevant matter referred to in clause 8.4.1 and/or
to repossess the Aircraft.

 

8.4.3                                 Notwithstanding
anything to the contrary in this clause 8.4 or in any other provision of the
Transaction Documents:

 

(a)              clause
8.4.1 shall not apply and shall not be deemed to apply to any payment,
reimbursement and/or indemnity obligation or liability of any Lessee under the
Transaction Documents, to any Lease Termination Event (other than any referred
to in paragraphs (c) and (d) of the definition thereof) or corresponding Lease
Event, to any obligations of any Lessee of the nature or in respect of any of
the matters referred to in paragraph 2.2 of schedule 8 or to the obligations of
any Lessee under paragraph 10 of schedule 7; and

 

(b)             the
provisions of clause 8.4.1 are without prejudice to:

 

(i)                           the
provisions of the Transaction Documents in relation to Mandatory Prepayment
Events and Total Loss respectively; and

 

(ii)                        the
obligations of the Lessees pursuant to clause 8.2.3.

 

8.5                     Off-Lease Period

 

During any Off-Lease Period for an Aircraft:

 

8.5.1                                 unless
the Security Trustee (acting on the instructions of all of the National Agents,
(if that Aircraft is a Mismatch Aircraft) the Mismatch Agent and the German
Parallel Lender) otherwise agrees, that Aircraft shall be registered in the
United States, Ireland, the Netherlands, the United Kingdom or such other
jurisdiction as the Security Trustee (acting on the instructions of all of the
National Agents, (if that Aircraft is a Mismatch Aircraft) the Mismatch Agent
and the German Parallel Lender) may consent to in writing (such consent not to
be unreasonably withheld or delayed), to the extent possible under Applicable
Law in the name of the relevant Borrower or the relevant Lessee (as the case
may be) and a

 

19

 

Mortgage
for that Aircraft shall, to the extent possible under Applicable Law, be
registered in the aircraft mortgage register with the relevant Aviation Authority;

 

8.5.2                                 the
relevant Lessee shall at all times carry out the Operational Undertakings in
relation to that Aircraft but so that they shall be deemed to be modified to
reflect the fact that that Aircraft is not being operated but is instead
grounded and being stored, insured and maintained by that Lessee and, in
particular:

 

(a)            the insurance requirements
shall be modified so that that Lessee shall be required to obtain and maintain
only insurance against ground risks (if and for so long as that Aircraft is not
flown); and

 

(b)           that Lessee shall procure
that the Aircraft is safely stored;

 

8.5.3                                 the
relevant Borrower and each of the Finance Parties:

 

(a)              acknowledge
and agree that, subject always to the compliance in full with all relevant
requirements set out in clause 9, in the case of registration of the Aircraft
with the FAA, an owner-trustee structure may be utilised; and

 

(b)             shall,
at the request of the relevant Lessee and at the cost of  the Borrowers, take such action as that
Lessee may reasonably request in connection with the foregoing matters; and

 

8.5.4                                 to the extent that that Aircraft will be registered in The Netherlands in accordance with
clause 8.5.1:

 

(a)                        no lease interest will be
registered in the Dutch register pursuant to the Geneva Convention (Register voor de teboekstelling van Inchtvaartuigen); and

 

(b)                       the Mortgage over that
Aircraft will include (i) an irrevocable notarial power of attorney granted by
the relevant Borrower to the Security Trustee to deregister that Mortgage, (ii)
a right of pledge on  “Parts” as described in
Article XVI of the Geneva Convention whether or not in advance, and (iii) a
right of pledge in advance (bij voorbaat)
on that Aircraft to the extent that it will be deregistered from the register
pursuant to the Geneva Convention.

 

8.6                     Sub-Leases -
management and notification requirements

 

Until all of the Secured Loan Obligations have been
paid in full, each Lessee and debis hereby undertake and covenant with each of
the Finance Parties and each of the Borrowers separately and severally from the
date of this Agreement or, if it is not a party to this Agreement on the date
of this Agreement, from the date upon which that Lessee accedes to this
Agreement that, save as may be agreed from time to time with the ECA Agent and
(if that Aircraft is a Mismatch Aircraft) the Mismatch Agent, it shall, in
relation to each Aircraft:

 

8.6.1                                 manage
that Aircraft and each Sub-Lease pursuant to which it is leased at any time and
monitor each Sub-Lessee’s performance of its obligations under the relevant
Sub-Lease in a manner consistent with the highest level of management provided
by debis with respect to any leased and/or owned aircraft within its portfolio
and will not adversely discriminate against that Aircraft in any material respect
when compared to other aircraft within that portfolio, being any commercial
passenger aircraft that are owned and/or leased by debis Group Companies;

 

8.6.2                                 notify
the ECA Agent and (if that Aircraft is a Mismatch Aircraft) the Mismatch Agent
in writing, as soon as reasonably practicable after it becomes aware of the
same, of:

 

(a)            the
occurrence of any Notifiable Sub-Lease Event of Default under any Sub-Lease for
that Aircraft which is then continuing (which notice shall contain reasonably
sufficient detail of the nature of that Notifiable Sub-Lease Event of Default,
the circumstances

 

20

 

giving rise to
it (if known) and the steps which the relevant Lessee is taking in connection
with it); and

 

(b)           of that Notifiable
Sub-Lease Event of Default ceasing to occur,

 

and that
Lessee shall, for so long as any such Notifiable Sub-Lease Event of Default is
continuing, as soon as reasonably practicable provide to the ECA Agent and (if
that Aircraft is a Mismatch Aircraft) the Mismatch Agent in writing any
information in connection therewith, which is available to it and subject to
any confidentiality restrictions, which the ECA Agent (acting upon the
instructions of the National Agents) or (if that Aircraft is a Mismatch
Aircraft) the Mismatch Agent may from time to time reasonably request;

 

8.6.3                                 at
any time when clause 8.6.8(b) applies and for so long as the relevant Trigger
Event is continuing, notify the ECA Agent and (if that Aircraft is a Mismatch
Aircraft) the Mismatch Agent in writing, as soon as reasonably practicable
after it becomes aware thereof, of:

 

(a)              any
sub-lessee furnished equipment installed on that Aircraft at the time at which
it is delivered under a Sub-Lease; and

 

(b)             the
installation on that Aircraft at any time of any other leased equipment to
which the relevant Borrower shall not take title,

 

and which (in
either such case) has a value greater than the Damage Notification Threshold;

 

8.6.4                                 procure
that, as at the redelivery date under any Sub-Lease or Sub-Sub-Lease of that
Aircraft, either:

 

(a)            any
sub-lessee furnished equipment is removed from that Aircraft and that Aircraft
is restored to the condition it was in immediately prior to the installation of
that equipment; or

 

(b)           title to that sub-lessee
furnished equipment is transferred to the relevant Borrower free of all Liens
(other than Permitted Liens);

 

8.6.5                                 inform
the ECA Agent and (if that Aircraft is a Mismatch Aircraft) the Mismatch Agent
if it is repossessing that Aircraft from a Sub-Lessee or Sub-Sub-Lessee and,
upon receipt of any request from the ECA Agent or (if that Aircraft is a
Mismatch Aircraft) the Mismatch Agent, respond as soon as reasonably
practicable to such issues as the ECA Agent or (if that Aircraft is a Mismatch
Aircraft) the Mismatch Agent may reasonably request further information on in
respect of that repossession;

 

8.6.6                                 inform
the ECA Agent and (if that Aircraft is a Mismatch Aircraft) the Mismatch Agent
as soon as reasonably practicable after it becomes aware of any:

 

(a)            Lien
which has arisen over or in respect of that Aircraft or any part thereof other
than any Permitted Lien; or

 

(b)           steps being taken by the
holders of any Lien (including any Permitted Lien referred to in paragraph (b),
(c), (d) or (e) of the definition thereof) to exercise or enforce that Lien or
any rights in respect thereof;

 

8.6.7                                 at no
time (other than as directed or consented to in writing by the Security
Trustee) consent to any amendment, alteration, waiver, novation or substitution
of any Sub-Lease, Sub-Sub-Lease, Assignment of Insurances, Deregistration Power
of Attorney, Sub-Lease Credit Document or Subordination Acknowledgement, or
give any approval or consent or permission or make any determination or
election provided for in any Sub-Lease, Sub-Sub-Lease, Assignment of
Insurances, Deregistration Power of Attorney, Sub-Lease Credit Document or
Subordination Acknowledgement, in each case, to the extent that that waiver,
consent, amendment, alteration, novation, substitution, approval or permission:

 

21

 

(a)              in
the case of any Sub-Lease Credit Document, is not in accordance with the
Standard:

 

(b)             in
the case of any Sub-Lease or Sub-Sub-Lease, will result in the relevant
Sub-Lease or Sub-Sub-Lease not complying with the Sub-Lease Requirements;

 

(c)              in
the case of any Deregistration Power of Attorney or Subordination
Acknowledgement, would or might reasonably be expected to result in the rights,
title and interests of the Finance Parties and the Borrowers (or any of them)
in and to the Aircraft and/or under any Transaction Document being materially
adversely affected, based on advice received by the Security Trustee and shared
with debis from reputable legal counsel in the relevant jurisdictions; and/or

 

(d)             is
of or relates to an Assignment of Insurances and/or any provision of any
Sub-Lease which relates to Insurances; and

 

8.6.8                                 if a
Trigger Event occurs and is continuing then, in relation to each of the
Aircraft:

 

(a)              if
requested by the ECA Agent and/or (if that Aircraft is a Mismatch Aircraft) the
Mismatch Agent, debis will consult with the ECA Agent and (if applicable) the
Mismatch Agent, each party acting in good faith, for a period of up to thirty
(30) days (or such longer period as debis, the ECA Agent and (if applicable)
the Mismatch Agent may agree), to determine whether any additional security is
required in relation to the financing of that Aircraft; and

 

(b)             if,
at the end of such consultation period (“Specified Date”),
the ECA Agent and/or (if applicable) the Mismatch Agent has determined that
additional security is required but debis, the ECA Agent and (if applicable)
the Mismatch Agent have not reached agreement on the nature of and/or the
timing for provision of that additional security, then the Lessee for that
Aircraft shall as soon as reasonably practicable:

 

(i)                           open a
Sub-Lease Account for that Aircraft and execute a Sub-Lease Account Charge over
that Sub-Lease Account. The Sub-Lease Account Charge will provide for (without
limitation) the provision to the Security Trustee by the Sub-Lease Account Bank
of monthly statements of all deposits, transfers and withdrawals and such other
information concerning the Sub-Lease Account as the Security Trustee may from
time to time reasonably request. In addition, debis shall provide to the
Security Trustee, at or about the same time as each such monthly statement, an
explanation in reasonable detail of the nature of all deposits, transfers and
withdrawals identified in that monthly statement and such other information
concerning the Sub-Lease Account as the Security Trustee may from time to time
reasonably request. The Security Trustee shall be entitled to rely on all such
information provided to it by the Sub-Lease Account Bank and/or debis without
further enquiry and shall have no liability to any party hereto if any such
information proves not to have been correct;

 

(ii)                        deposit, and
direct the Sub-Lessee of that Aircraft to deposit, in the relevant Sub-Lease
Account, all cash deposits, Maintenance Reserves and any other Sub-Lessee
Security in the form of cash which may (A) have been received by that Lessee
from a Sub-Lessee of that Aircraft, and not been reimbursed to that Sub-Lessee,
at any time on or prior to the Specified Date, and/or (B) at any time be
received by or paid for the account of that Lessee by, from or on behalf of any
Sub-Lessee of that Aircraft after the Specified Date and for so long as the
Trigger Event is continuing.  Upon the
cessation of the relevant Trigger Event, the provisions of this clause 8.6.8(b)
shall no longer apply and the Security Trustee will as soon as reasonably
practicable pay or direct the Sub-Lease Account Bank to pay to the Lessee, to
such account as it may direct, the balance then standing to the credit of each
Sub-Lease Account; and

 

(iii)                     if requested by
the Security Trustee, deposit with the Security Trustee the originals of all
letters of credit and other Sub-Lease Credit Documents which may

 

22

 

at any
time have been or be provided to or for the account of that Lessee (or any
other person on its behalf) by a Sub-Lessee of that Aircraft and execute or
procure the execution in favour of the Security Trustee of an irrevocable power
of attorney with respect to such letters of credit and other Sub-Lease Credit
Documents, together with such other documents as the Security Trustee (acting
reasonably) may require in order to ensure that the Security Trustee is able to
draw amounts under such letters of credit and other Sub-Lease Credit
Documents.  Upon any cessation of the
relevant Trigger Event, the foregoing documents shall be as soon as reasonably
practicable returned by the Security Trustee to debis.

 

In the event
that that Lessee is entitled to make a claim under any such letter of credit or
other Sub-Lease Credit Document, it shall as soon as reasonably practicable
notify the Security Trustee.  The
Security Trustee shall as soon as reasonably practicable take such action, at
the request of that Lessee and at the cost of the Borrowers, as shall be
necessary to enable that Lessee to make the relevant claim, provided that that
Lessee shall ensure that any amounts paid under any such letters of credit or
other Sub-Lease Credit Documents shall be paid to the relevant Sub-Lease
Account for application in accordance with this clause 8.6.8.

 

In the event that the Lessee of that Aircraft becomes
obliged, pursuant to the terms of the relevant Sub-Lease of that Aircraft, to
return any cash deposits, any other Sub-Lessee Security, any Maintenance
Reserves or any Sub-Lease Credit Documents paid to the Sub-Lease Account or
deposited with the Security Trustee pursuant to the foregoing provisions of
this clause 8.6.8, or make any payment determined on the basis of the amount of
such cash deposits, other Sub-Lessee Security, Maintenance Reserves or
Sub-Lease Credit Documents, to a Sub-Lessee, or that Lessee itself incurs
expenditure in respect of the Aircraft in circumstances where that Lessee would
be entitled, in the absence of the provisions of this clause 8.6.8, to use such
cash deposits, other Sub-Lessee Security, Maintenance Reserves or Sub-Lease
Credit Documents in reimbursement of or application towards that expenditure,
the Security Trustee shall, to such extent and as soon as reasonably
practicable:

 

(A)                    return such cash deposits, other Sub-Lessee Security, Maintenance
Reserves or Sub-Lease Credit Documents to that Sub-Lessee or direct the
Sub-Lease Account Bank to do so; or

 

(B)                      (provided that no Cross Collateralisation Event has occurred and is
continuing) reimburse the same to that Lessee or direct the Sub-Lease Account
Bank to do so,

 

subject to that Lessee having certified in writing to
the Security Trustee that that Lessee has become so obliged (in the case of
(A)) or has incurred that expenditure (in the case of (B)).

 

In addition, if the relevant Sub-Lessee shall have
defaulted in the payment of rent under the relevant Sub-Lease, the Security
Trustee shall, at the written request from time to time of the relevant Lessee
(which written request may be given at any time after such default), release
and pay to that Lessee or direct the Sub-Lease Account Bank to do so, from any
cash deposits and/or other Sub-Lessee Security paid to or deposited with the
Security Trustee pursuant to the foregoing provisions of this clause 8.6.8, an
amount equal to the lesser of (A) the total amount of all such defaulted rent
payments attributable to any period prior to the ECA Repayment Date immediately
preceding that written request (as certified by that Lessee in that written
request), (B) such lesser amount as may be requested by that Lessee in that
written request, and (C) the amount of rent paid by that Lessee to the relevant
Borrower under the Lease for that Aircraft on the ECA Repayment Date
immediately preceding that written request. 
There shall be no limit to the number of requests which may be submitted
by a Lessee under this paragraph and the maximum referred to in (C) of this paragraph
shall not prevent the relevant Lessee from including in any subsequent written
request under this paragraph any amount of unpaid rent under the relevant
Sub-Lease attributable to any prior period in respect of which it has not
already received payment from or at the direction of the Security Trustee.

 

23

 

For the avoidance of doubt, the Security Trustee shall
in no circumstances be obliged at any time to pay or direct the Sub-Lease
Account Bank to pay any amount to any person pursuant to the foregoing
provisions of this clause 8.6.8 to the extent that such amount exceeds the
amount of cash deposits, other Sub-Lessee Security and (if applicable)
Maintenance Reserves in relation to the relevant Aircraft received by the
Security Trustee and/or in the relevant Sub-Lease Account prior to that time
under this clause 8.6.8 and not prior to that time paid or reimbursed by or at
the direction of the Security Trustee to any person under this clause 8.6.8.

 

8.7                     Further
provisions relating to Sub-Leases

 

8.7.1                                 The
Finance Parties acknowledge that debis and/or any Lessee may, in relation to a
particular Aircraft, from time to time, request the approval, consent, waiver
or agreement of the ECA Agent and (if that Aircraft is a Mismatch Aircraft) the
Mismatch Agent in respect of any of the matters referred to in this clause 8,
including any request for a deviation from the requirements of the Sub-Lease
Requirements.  Any such request shall be
addressed to the Security Trustee and shall be dealt with by the Security
Trustee (on behalf of and in conjunction with the relevant Agent).  debis, the Security Trustee and the relevant
Finance Parties agree to consult each other and with the Export Credit Agencies
in good faith, each acting reasonably, in relation to any such request.

 

8.7.2                                 If
debis and/or any Lessee makes any request pursuant to clause 8.7.1 for a
deviation from the Sub-Lease Requirements, the consultation period referred to
in clause 8.7.1 shall be ten (10) Banking Days or such longer period as debis
and/or the relevant Lessee may request (each acting reasonably).

 

8.7.3                                 For
the avoidance of doubt, nothing in this clause 8 shall prevent any Lessee or
debis from entering into any contract and/or documentation with a proposed
Sub-Lessee in relation to a proposed Sub-Lease which does not comply with the
Sub-Lease Requirements (but not, for the avoidance of doubt, actually leasing
an Aircraft to a Sub-Lessee pursuant to that contract and/or documentation or
otherwise) if the parties’ rights and obligations under that contract and/or
documentation are expressed to be subject to the consent of the Security
Trustee to the relevant deviation from the Sub-Lease Requirements.

 

8.8                     Matters relating
to Notices and Acknowledgements

 

A Lessee shall
be entitled to deviate from the terms of any notice or acknowledgement attached
to any Security Document in order to accommodate the reasonable requests of any
Sub-Lessee, Sub-Sub-Lessee or Insurer or any other person (other than an
Obligor) to whom such notice is addressed or who is to execute such
acknowledgement, provided always that no such deviation:

 

8.8.1                                 is
inconsistent with the Standard; and

 

8.8.2                                 would
or might reasonably be expected to result in the rights, title and interests of
the Finance Parties and the Borrowers (or any of them) in and to the Aircraft
and/or under any Transaction Document being materially adversely affected.

 

8.9                     Insurances

 

The Lessee of an Aircraft shall, prior to the delivery
of that Aircraft under any Sub-Lease or Sub-Sub-Lease, provide the Security
Trustee with (in each case, in English or accompanied by a certified
translation into English) certificates of insurance and a broker’s or insurer’s
letter of undertaking that evidence to the satisfaction of the Security Trustee
that the insurances required by this Agreement will continue in full force
after the delivery of that Aircraft to the Sub-Lessee or Sub-Sub-Lessee (as
applicable).

 

24

 

9                               Change
of ownership and/or leasing structure with respect to an Aircraft

 

9.1                     Acknowledgement
of need for changes

 

The Finance Parties hereby acknowledge that it may be
necessary, from time to time during the Security Period, to change the
ownership and/or leasing structure with respect to any Aircraft.  Each Obligor which is a party hereto hereby
acknowledges that, pursuant to clause 8.2, the ECA Agent and/or (if the
relevant Aircraft is a Mismatch Aircraft) the Mismatch Agent may require a
change in the Borrower for an Aircraft in the circumstances referred to in
clause 8.2.  In any such case, the
following provisions of this clause 9 shall apply.

 

9.2                     Consent

 

The Finance Parties hereby agree to consent to any
change of ownership and/or leasing structure with respect to any Aircraft,
including without limitation a transfer of the relevant Lease to another Lessee
or the transfer of the shares of the relevant Lessee to another Lessee or to
debis or another Lessee Parent, as the case may be (provided that, in the case
of any change of Sub-Lessee, the provisions of clause 8.2 instead shall apply),
and co-operate in a timely manner with the relevant Lessee to give effect to
that change, provided that the following conditions are satisfied:

 

9.2.1                                 debis
shall have given to the ECA Agent and (if that Aircraft is a Mismatch Aircraft)
the Mismatch Agent thirty (30) Banking Days’ written notice prior to the
proposed effective date of the proposed change (“Proposed
Effective Date”) details of the following:

 

(a)              the
affected Aircraft;

 

(b)             the
proposed change in the ownership and/or leasing structure, each affected
Borrower, each affected Lessee and each other person that will play a role in
the proposed ownership and/or leasing structure with respect to that Aircraft
(including, without limitation, each proposed new Borrower and/or new Lessee);

 

(c)              if
the change involves a change of, or a new, Borrower and/or Lessee:

 

(i)                           the
identity and ownership structure of the new Borrower and/or Lessee; and

 

(ii)                        its proposed
State of Incorporation;

 

9.2.2                                 debis
shall have agreed the following with the Security Trustee (acting on the
instructions of the National Agents, the German Parallel Lender and (if that
Aircraft is a Mismatch Aircraft) the Mismatch
Agent) at least ten (10) Banking Days prior to the Proposed Effective Date:

 

(a)              if
the change involves a change in ownership of the affected Aircraft, the
documentation pursuant to which title to the affected Aircraft will be
transferred from one Borrower to another Borrower;

 

(b)             all
Borrower Novations and Lessee Novations (if any) required in connection with
the change;

 

(c)              if
the change involves a change of, or a new, Borrower and/or Lessee:

 

(i)                           such other
documents as the Security Trustee (acting on the instructions of the National
Agents, the German Parallel Lender and (if that Aircraft is a Mismatch
Aircraft) the Mismatch Agent) shall reasonably require to ensure that the
Finance Parties and, in the case of any change in, or new, Lessee, the relevant
Borrower will be in no worse position than they would have been in the absence of
that change; and

 

(ii)                        such legal
opinion or opinions as the Security Trustee (acting on the instructions of the
National Agents, the German Parallel Lender and (if that Aircraft is a Mismatch
Aircraft) the Mismatch Agent) shall reasonably require to demonstrate that the
Finance Parties and, in the case of any change in, or new, Lessee, the relevant
Borrower will be in no worse position than they would have been in the absence
of that change;

 

25

 

(d)             if
the change involves the introduction of any Alternative Obligor into such
ownership and/or leasing structure, the requirements set out in clause 9.3
shall have been satisfied;

 

9.2.3                                 the
Borrower in respect of that Aircraft shall have paid:

 

(a)                        to the Security Trustee and the German Parallel Lender in full on or
prior to the Proposed Effective Date such fees in connection with that proposed
change as are agreed from time to time pursuant to the Fees Letters; and

 

(b)                       to the Export Credit Agencies in full on or prior to the Proposed
Effective Date all reasonable fees charged by the relevant Export Credit Agency
in connection with, and notified by them to debis in advance of, that proposed
change;

 

9.2.4                                 if
the change involves the introduction of a tax lease structure in respect of
that Aircraft, the revised structure shall (subject always to clause 9.2.5)
reflect any absence of cross-default or cross-collateralisation, as between
that Aircraft and the other Aircraft; and

 

9.2.5                                 the
Export Credit Agencies, the German Parallel Lender and (if that Aircraft is a
Mismatch Aircraft) the Mismatch Agent shall have consented in writing to the
change.

 

Any change in ownership and/or leasing structure
satisfying the requirements of this clause 9.2 is referred to as a “Permitted Change”.

 

9.3                     Alternative Obligors

 

9.3.1                                 debis
shall be entitled to request that an Alternative Obligor be incorporated into
the ownership and/or leasing structure in respect of an Aircraft.

 

Any such request shall be made by debis by written
notice to the Security Trustee (an “Alternative Obligor
Request”).  The Alternative
Obligor Request shall identify the following:

 

(a)              its
proposed State of Incorporation;

 

(b)             in
the case of an Alternative Borrower, the identity of the Alternative Borrower
Manager and the Alternative Borrower Trustee; and

 

(c)              in
the case of an Alternative Lessee, the role which that party is intended to
take in the leasing structure with respect to that Aircraft.

 

The Security
Trustee (acting on the instructions of the National Agents, the German Parallel
Lender and (if that Aircraft is a Mismatch Aircraft) the Mismatch Agent) shall
consider that request in good faith taking into account the matters referred to
above.  Subject to the Security Trustee
receiving instructions from the National Agents, the German Parallel Lender and
(if that Aircraft is a Mismatch Aircraft) the Mismatch Agent, the Security
Trustee shall inform debis within fifteen (15) Banking Days of receipt of an
Alternative Obligor Request in respect of an Alternative Lessee and within
thirty (30) Banking Days of receipt of an Alternative Obligor Request in
respect of an Alternative Borrower as to whether the Alternative Obligor
Request has been approved by the National Agents, the German Parallel Lender
and (if that Aircraft is a Mismatch Aircraft) the Mismatch Agent.

 

9.3.2                                 Each
Alternative Obligor shall be capable of providing representations, warranties,
undertakings and covenants having substantially the same effect as those given
by the relevant Obligors in clauses 6 and 7. 
Each Alternative Lessee shall be a direct or indirect and wholly-owned
Subsidiary of debis.

 

9.3.3                                 Each
Alternative Borrower shall be a company whose shares are held by (a) the
Trustee or another trustee approved by the Security Trustee (acting on the
instructions of the National Agents, the German Parallel Lender and the
Mismatch Agent) on trust for charitable

 

26

 

purposes,
or (b) the Principal Borrower.  Each
Alternative Borrower shall be managed by the Initial Manager or another
established and recognised management company acceptable to the Security
Trustee (acting on the instructions of the National Agents, the German Parallel
Lender and the Mismatch Agent) and on terms either pursuant to the Initial
Administration Agreement (where the manager is the Initial Manager) or
otherwise on terms substantially similar to the Initial Administration
Agreement.

 

9.3.4                                 debis
shall procure that the Security Trustee is provided with the following documents
and evidence, in form and substance satisfactory to the Security Trustee
(acting on the instructions of the National Agents, the German Parallel Lender
and (if the relevant Aircraft is a Mismatch Aircraft) the Mismatch Agent) no
later than fifteen (15) Banking Days prior to the Proposed Effective Date (or
such later date as the Security Trustee (acting on the instructions of the
National Agents, the German Parallel Lender and (if the relevant Aircraft is a
Mismatch Aircraft) the Mismatch Agent) and debis may agree):

 

(a)            an
Accession Deed duly executed by the parties thereto;

 

(b)           an Alternative Lessee Share
Charge or, as applicable, an Alternative Borrower Share Charge duly executed by
the parties thereto over the entire issued share capital of the Alternative
Obligor together with certified copies of the minute books and the share
register (if any) of the Alternative Obligor and the originals of the share
certificates of the Alternative Obligor referred to therein and duly executed
originals of the letters of resignation, irrevocable proxies and undated share
transfer forms referred to therein;

 

(c)            in the case of an
Alternative Borrower;

 

(i)                           an
Alternative Borrower Floating Charge together with any documents deliverable
therewith;

 

(ii)                        a Security
Assignment duly executed by the parties thereto, together with duly executed
notices and acknowledgements referred to therein, in each case, duly perfected
and (if applicable) registered in all applicable jurisdictions;

 

(iii)                     an English Law
Mortgage, an English Law Mortgage Letter and (subject to clause 16.6) a
Mortgage, each duly executed by the parties thereto and, in the case of the
Mortgage (if any), duly perfected and registered in the State of Registration;
and

 

(iv)                    either an
accession deed whereby the Alternative Borrower accedes to the Initial
Administration Agreement (where the Alternative Borrower is managed by the
Initial Manager) or an Alternative Borrower Administration Agreement duly
executed by the Alternative Borrower Manager and the other parties thereto, on
the terms required by clause 9.3.3 (in all other circumstances), (except where
the shares in the Alternative Borrower are held by the Principal Borrower) an
Alternative Declaration of Trust duly executed by the Alternative Borrower
Trustee and an Alternative Borrower Comfort Letter duly executed by the
Alternative Borrower Manager;

 

(d)           in the
case of an Alternative Lessee, a Lessee Assignment duly executed by the parties
thereto, together with duly executed notices and acknowledgements referred to
therein, in each case, duly perfected and (if applicable) registered in all
applicable jurisdictions;

 

(e)            if any Intermediate Lease
will be entered into:

 

(i)                         an
Intermediate Lessee Assignment duly executed by the parties thereto, together
with duly executed notices and acknowledgements referred to therein, in each
case, duly perfected and (if applicable) registered in all applicable
jurisdictions;

 

27

 

(ii)                      a draft of that
Intermediate Lease evidencing that (A) that Intermediate Lease is made between
two Lessees, and (B) that Intermediate Lease is expressly subject and
subordinate to the Lease for that Aircraft; and

 

(iii)                     a legal opinion
from legal counsel reasonably acceptable for the Security Trustee in all
relevant jurisdictions addressed to the Security Trustee (in form and substance
reasonably satisfactory to the Security Trustee) confirming that that
Intermediate Lease shall be recognised as being subject and subordinate to the
Lease for that Aircraft pursuant to the Applicable Laws of that jurisdiction;

 

(f)              any
such novations, assignments or other documents as may be required in order to
make the Alternative Obligor a party to the Airframe Warranties Agreement and
the Engine Warranties Agreement, in each case, for that Aircraft;

 

(g)           a certificate signed by a
director of the Alternative Obligor and, in the case of an Alternative
Borrower, the relevant Alternative Borrower Trustee, setting out, in each case,
the specimen signature of those persons authorised to sign the Transaction
Documents to which the Alternative Obligor is or is to be a party and
attaching, in each case, Certified Copies of the following (or their
equivalent):

 

(i)                           the
certificate of incorporation of the Alternative Obligor together with its
constitutional documents;

 

(ii)                        the
resolutions of the board of directors and shareholders of the Alternative
Obligor approving the execution and performance by it of each Transaction
Document to which it is or is to be a party;

 

(iii)                     the resolutions
of the owner of the entire issued share capital of the Alternative Obligor
approving the execution and performance by that person of each Transaction
Document to which it is or is to be a party; and

 

(iv)                    a power of
attorney appointing those persons authorised to sign on behalf of the
Alternative Obligor each Transaction Document to which it is, or is to be, a
party;

 

(h)           if the
Alternative Obligor is to be incorporated in the Cayman Islands, a certificate
of exemption in respect of the Alternative Obligor from the appropriate Cayman
Islands authorities;

 

(i)               a legal opinion from
in-house counsel to debis as to the due execution by debis of the Accession
Deed, in form and substance reasonably acceptable to the Security Trustee;

 

(j)               a legal and tax opinion
from reputable counsel acceptable to the Security Trustee in the State of
Incorporation of the Alternative Obligor, in form and substance reasonably
acceptable to the Security Trustee; and

 

(k)            a legal opinion from
Norton Rose, counsel to the Lenders, as to English law, in form and substance
reasonably acceptable to the Security Trustee.

 

9.3.5                                 Each
debis Obligor other than the Alternative Obligor hereby irrevocably authorises
debis to execute any duly completed Accession Deed on its behalf.  Each Finance Party and each Borrower other
than the Alternative Obligor hereby irrevocably authorises the Security Trustee
to execute any duly completed Accession Deed on its behalf. Upon receipt by the
Security Trustee of the Accession Deed signed by debis and the Alternative
Obligor, the Security Trustee shall sign the same for itself and on behalf of
the other Finance Parties and the Borrowers other than the Alternative Obligor
and shall as as soon as reasonably practicable give notice of that execution to
all of the parties to the Accession Deed. 
Upon execution of any such Accession Deed, it shall take effect in
accordance with, but subject to, the terms hereof and thereof.

 

28

 

9.3.6                                 It is agreed that where an Aircraft is to be
registered with the FAA, title to the relevant Aircraft may be held by a
professional US owner trustee pursuant to a US ownership trust arrangement
under which the relevant Borrower shall be the owner participant (such owner
trustee and ownership trust arrangement to be satisfactory to the Security
Trustee, acting on the instructions of the National
Agents, the German Parallel Lender and (if that Aircraft is a Mismatch
Aircraft) the Mismatch Agent, each acting
reasonably).  The provisions of clause
9.3.1 relating to the submission, consideration and approval of an Alternative
Obligor Request shall apply in relation to any written request by debis to
utilise such an arrangement and the provisions of the Transaction Documents
relating to ownership and registration of that Aircraft and the taking of
security over that Aircraft shall be construed accordingly. The parties
hereto agree and acknowledge that the use of such an ownership trust arrangement may result in a need for security alternative
and/or additional to that contemplated by the relevant foregoing provisions of
this clause 9.

 

9.4                    Consummation of
Permitted Change

 

Provided that all of the documents and opinions
referred to in clauses 9.2.2 and, if relevant, 9.3 relating to a Permitted
Change have been agreed with all relevant parties in accordance with such
clauses and the fees payable pursuant to clause 9.2.3 have been paid, the
affected Obligors may and, at the request of the relevant Lessee and at the
cost of the Borrowers, the affected Obligors and the Finance Parties shall
consummate that Permitted Change on the date specified by debis (which shall be
a Banking Day occurring no earlier than the Proposed Effective Date and no later
than the date falling forty five (45) days after the Proposed Effective Date)
and, simultaneously therewith, debis will deliver to the Security Trustee
originals or Certified Copies of all such documents and opinions.

 

9.5                    Co-operation

 

Each of the Finance Parties agrees, at the request of
debis and at the cost of the Borrowers, to do such acts and things and execute
such documents as may reasonably be required to complete any Permitted Change,
subject to and in accordance with the provisions of this clause 9.

 

9.6                    Matters relating to the Borrower Trustee and the Manager

 

9.6.1                                 If:

 

(a)              any
Borrower Trustee or Manager defaults in the performance of any of its material
obligations under any Transaction Document to which it is a party and such
default is not remedied within thirty (30) days of notice thereof from the
Security Trustee (with a copy to debis); or

 

(b)             a
Winding Up (as defined in clause 3.2 of the Initial Administration Agreement)
occurs and is continuing with respect to any Borrower Trustee or Manager; or

 

(c)              the
ultimate beneficial owner of any Borrower Trustee or Manager (being the person
who issues the relevant Comfort Letter in respect of any Borrower Trustee or
Manager) notifies any party hereto that it proposes to dispose of all or any of
its shares in the relevant Borrower Trustee or Manager,

 

each of
the Finance Parties and debis agrees as follows:

 

(i)                           as soon as
reasonably practicable upon becoming aware of such default, Insolvency Event or
disposal, it will notify each other of the same and thereafter consult with
each other in good faith for a period of up to sixty (60) days or, in the case
of paragraph (c) above, six (6) weeks (or, in either such case, such longer
period as debis and the Security Trustee may agree) as to the most appropriate
course of action with regard to such default, Insolvency Event or disposal and
will take such steps as are reasonable and open to them, at the cost of the
Borrowers, to mitigate the effect of such default, Insolvency Event or disposal

 

29

 

subject
always to the proviso to clause 10.1.4 and the conditions set forth in clause
10.2.  Without limiting the foregoing
(but subject always to the proviso to clause 10.1.4 and clause 10.2), debis and
the Finance Parties will consider whether action should be taken to:

 

(A)                    terminate any applicable Administration Agreement or the appointment
of the Manager thereunder or replace the defaulting Manager and defaulted
Administration Agreement with an alternative manager and administration
agreement acceptable to debis and the Security Trustee (both acting
reasonably); and/or

 

(B)                      preserve or enforce the rights of the Security Trustee under any
Borrower Share Charge, including action to have the shares in the relevant
Borrower which are subject to such Borrower Share Charge transferred to another
person acceptable to debis and the Security Trustee (both acting reasonably),
to be held on trust on terms substantially the same as the Declaration of Trust
for the relevant Borrower and subject to a further share charge on terms
substantially the same as the related Borrower Share Charge; and

 

and if
such action is considered appropriate by debis and agreed to by the Security
Trustee, then debis and/or the Security Trustee shall take such steps as are
open to them, at the cost of the relevant Borrower(s), to effect such
termination, replacement, preservation, enforcement and/or transfer; and

 

(ii)                        if at the end
of the consultation period referred to above the relevant default, Insolvency
Event or disposal is still subsisting and the same has not been mitigated as
contemplated by the foregoing provision, the Security Trustee shall, if the ECA
Agent and (if the relevant Aircraft is a Mismatch Aircraft) the Mismatch Agent
consider that the same would or might reasonably be expected to result in the
rights, title and interests of the Finance Parties and the Borrowers (or any of
them) in and to the Aircraft and/or under any Transaction Document being
materially adversely affected, based on advice received by the Security Trustee
and shared with debis from reputable legal counsel in the relevant
jurisdictions, be entitled to declare a Mandatory Prepayment Event with respect
to the relevant Aircraft.

 

9.6.2                                 Notwithstanding
any provision of any Transaction Document to the contrary, the Finance Parties
and debis agree that if debis considers it appropriate that action is taken to:

 

(a)                        terminate any
Administration Agreement and replace that Administration Agreement with an
alternative manager and/or administration agreement acceptable to Security
Trustee (acting reasonably) or terminate the appointment of any Manager and
replace that Manager with an alternative manager acceptable to Security Trustee
(acting reasonably); and/or

 

(b)                       preserve or
enforce the rights of the Security Trustee under any Borrower Share Charge,
including action to have the shares in the relevant Borrower which are subject
to that Borrower Share Charge transferred to another person acceptable to debis
and the Security Trustee (both acting reasonably), to be held on trust on terms
substantially the same as the Principal Declaration of Trust and subject to a
further share charge on terms substantially the same as that Borrower Share
Charge,

 

in each
case, at a time when no Lease Termination Event has occurred and is continuing
and as a result of concerns that debis may have in relation to the continuation
of the participation of a particular Manager or Borrower Trustee in the
transactions contemplated by the Transaction Documents, debis shall be entitled
to take, or direct the Security Trustee to take, such action, and the Security
Trustee shall take such action as is available to it as soon as reasonably
practicable after being required to do so by debis.  The relevant

 

30

 

Borrower(s)
agrees to indemnify the Security Trustee in respect of all Losses and Expenses
suffered or incurred as a result of the Security Trustee taking any such
action.

 

9.6.3                                 Each
of the parties hereto agrees, at the cost of the relevant Borrower(s), to enter
into or approve the execution of such documentation (including amendments to
any of the Transaction Documents) as may be required in order to implement the
arrangements contemplated by clause 9.6.1 or 9.6.2.

 

9.6.4                                 At
all times when no Lease Termination Event has occurred and is continuing, the
consent of debis shall be required for the appointment of any new Manager or
new Borrower Trustee.

 

10                       Mitigation

 

10.1             General

 

If:

 

10.1.1                        a Borrower Termination Event occurs in relation to an Aircraft; or

 

10.1.2                        as a result of a Change in Law, any of the Security Documents for an
Aircraft, at any time and for any reason, ceases to be valid or enforceable in
accordance with its terms; or

 

10.1.3                        any Obligor becomes obliged to make any payment or any increased
payment under any of clauses 4.7, 9.1, 9.7 or 10.1 of a Loan Agreement for an
Aircraft or any of clauses 8.8, 13.1 or 13.2 of the Lease for an Aircraft; or

 

10.1.4                        clause 10.2 or clause 10.3 of the Loan Agreement for an Aircraft
applies,

 

(each a “Relevant Circumstance”)
then, without in any way limiting, reducing or otherwise qualifying the rights
and obligations of the Finance Parties under any provision of the Transaction
Documents, any party hereto who is aware of the same will, upon becoming aware
of the same, notify the other parties hereto thereof and, for a period of up to
sixty (60) days, and subject as provided in clause 10.2, the Finance Parties
agree that they will not take any action which will result in the acceleration
of any Loan, and that the provisions of clauses 13.5 and 13.6 (except to the
extent that such clauses relate to Notices of Reservation of Rights) shall not
apply, by reason of the Relevant Circumstance and that they will take such
steps as are reasonable and as may be open to them to mitigate the effects of
that circumstance (including the restructuring of the transactions hereby
contemplated in a manner which will avoid the circumstance in question (which
may include a change in the identity of one or more of the Lenders) and on
terms which the Finance Parties and debis consider reasonable), provided that
(and the following proviso shall also apply to clause 9.6):

 

(a)              no
party shall be under any obligation to take any such action if to do so would
have a material adverse effect on its business, operations or financial
condition or the financial basis under which the Transaction Documents have
been entered into or would entail any cost, Loss, Expense or Tax to that party
(unless, in the case of an adverse effect on that financial basis, or cost,
Loss, Expense or Tax, the relevant party shall have been indemnified or
otherwise secured to its satisfaction by the Borrowers, who shall have received
a counter-indemnity from the Lessees which shall have been guaranteed by debis
under the Guarantee); and

 

(b)             the
parties shall not be under any obligation to achieve any particular result nor
shall any of them incur any liability to any Obligor by virtue of the steps
taken or such steps resulting in less than complete mitigation.

 

10.2             Conditions - general

 

The agreement
of the parties set forth in clauses 9.6 and 10.1 is subject to the conditions
that:

 

31

 

10.2.1                        at the relevant time, no Lease Termination Event, Mandatory
Prepayment Event for that Aircraft (other than a Mandatory Prepayment Event of
the nature referred to in paragraph (c) or (d) of the definition thereof) or
Total Loss of that Aircraft shall have occurred and be continuing;

 

10.2.2                        no action to be taken under, or any delay in any action as a result
of the operation of, clause 9.6 or 10.1 (as applicable) would or might
reasonably be expected to result in the rights, title and interests of the
Finance Parties and the Borrowers (or any of them) in and to the Aircraft
and/or under any Transaction Document being materially adversely affected,
based on advice received by the Security Trustee and shared with debis from
reputable legal counsel in the relevant jurisdictions;

 

10.2.3                        all amounts due and payable, or expressed to be due and payable, to
each party pursuant to the Transaction Documents at the relevant time shall
have been paid to them; and

 

10.2.4                        no Applicable Law shall prevent any party from performing its
obligations under clause 9.6 or 10.1 (as applicable).

 

11                       Contest

 

11.1                Each of the Finance
Parties hereby agrees that, if any Obligor is required to indemnify such
Finance Party for any Loss under clause 9.1 of any Loan Agreement and/or clause
13.2 of any Lease, so long as no Lease Termination Event has occurred and is
continuing, any Lessee and any Sub-Lessee shall have the right to investigate
and the right in its sole discretion and its own name to defend or compromise
any such Loss and such Finance Party shall co-operate, at the Borrowers’
expense, with all reasonable requests of such Lessee in connection
therewith.  Such co-operation will
include, without limitation, the relevant Finance Party providing such details
as are available to it (free from confidentiality restrictions) of the relevant
events and circumstances, the relevant Finance Party notifying the relevant
Lessee of its proposed course of action in relation to the claim which forms
the basis of the Loss and the relevant Finance Party reviewing any representations
from any Lessee or any Sub-Lessee (or their respective counsel) as to the legal
basis of such claim and responding to all reasonable questions from any Lessee
or any Sub-Lessee generally in relation to such claim.  Each of the Finance Parties agrees that, if
it is not possible under Applicable law for a Lessee and/or Sub-Lessee to
defend or compromise any Loss of the nature indemnified under clause 9.1 of any
Loan Agreement and/or clause 13.2 of any Lease in its own name, the relevant
Lessee will consult with, consider representations from and discuss with such
Finance Party, in each case in good faith, with a view to determining whether
and, if so, on what basis such Finance Party may be prepared to defend or
compromise such Loss in it own name and if, following such good faith
consultation, such Finance Party determines that it is not prepared to defend
or compromise such Loss in its own name then such Finance Party shall be under
no obligation to defend or compromise such Loss in its own name.

 

11.2                No Finance Party shall
be obliged to provide any co-operation pursuant to clause 11.1 unless (i) the
relevant Lessee shall indemnify such Finance Party to its reasonable
satisfaction against all Losses which the Finance Party may incur in connection
with, or as a result of, contesting such Loss or taking such action, including,
without limitation, all legal and accountancy fees and disbursements, and the
amount of any interest payments or penalties which may be payable or any other
loss or damage whatsoever which may be incurred as a result of contesting such
claim or taking such action and (ii) if such contest is to be initiated by the
payment of, and the claiming of a refund for, such Losses, the relevant Lessee
shall have advanced to such Finance Party sufficient funds (on an interest free
basis and if such advance results in taxable income to such Finance Party on an
after Tax basis) to make such payment. 
Nothing herein shall require such Finance Party to take or refrain from
taking any action or do anything pursuant to clause 11.1 (i) which would (or
might), in the reasonable opinion of such Finance Party, entail any material
risk of civil or criminal liability to any Obligor or any Finance Party or (ii)
if, judged by reference to the generally accepted practice in the aviation
finance market at such time, it would be materially prejudicial to such Finance
Party’s interests.  If such Finance Party
shall obtain a refund of all or any part of any such Losses which any Obligor
shall have paid, such Finance Party shall as soon as reasonably practicable pay
to the relevant Lessee an amount which such

 

32

 

Finance
Party determines will leave such Finance Party in no better or worse position
than it would have been had there been no claim against such Finance Party for
such Losses.

 

11.3                Each Finance Party
shall take such action as it may, in good faith, deem reasonable under the
circumstances to mitigate any indemnification obligation of the Obligors under
clause 9.1 of any Loan Agreement and/or clause 13.2 of any Lease, provided that
the failure of such Finance Party to take any such mitigation action shall not
reduce, diminish or otherwise affect the obligation of the relevant Obligors to
indemnify such Finance Party pursuant to clause 9.1 of the relevant Loan
Agreement and/or clause 13.2 of any Lease.

 

11.4                The provisions of
clause 11 shall not apply to any Export Credit Agency which may become a party
to this Agreement.

 

11.5                Each Borrower agrees
to extend the same contest and mitigation rights, mutatis mutandis, to each
Lessee and Sub-Lessee as those set out in clauses 11.1 and 11.3, as if all
references therein to the “Finance Parties” were references to that Borrower.

 

12                       Covenants - Finance Parties

 

12.1             Quiet enjoyment - Lessee

 

So long as no
Lease Termination Event has occurred and is continuing, each Finance Party
agrees that neither it, nor any person lawfully claiming through that Finance
Party, will interfere with the quiet use, possession and enjoyment of an
Aircraft which is then subject to the security constituted by the Security
Documents by any Lessee, any Sub-Lessee or any Sub-Sub-Lessee of that Aircraft.

 

12.2             Quiet enjoyment -
Sub-Lessees

 

The Finance
Parties and the Borrowers acknowledge that a Sub-Lessee of an Aircraft which is
then the subject of an ECA Loan and/or a Mismatch Loan may request the Lessee
of that Aircraft to procure the execution and delivery of a quiet enjoyment
undertaking by the Finance Parties, or by the Security Trustee on their behalf,
and by the relevant Borrower.  The
Finance Parties and the Borrowers agree that they shall, as soon as reasonably
practicable following a request by that Lessee, grant, or (in the case of the
Finance Parties only) shall instruct the Security Trustee to grant, a quiet
enjoyment undertaking to that Sub-Lessee, in the same terms mutatis mutandis as
the Quiet Enjoyment Undertaking, provided that all provisions of the Sub-Lease
Requirements in relation to the sub-leasing of that Aircraft to that Sub-Lessee
are satisfied in full or waived in accordance with clause 8.7. The Finance
Parties and the Borrowers agree that they shall perform their respective
obligations under each Quiet Enjoyment Undertaking.

 

12.3             Non-receipt of Borrower
amounts

 

If any Agent
shall not receive on its due date any amount due or expressed to be due from a
Borrower to that Agent (on its own behalf or on behalf of the relevant Lenders
or any of them) under the Transaction Documents, that Agent shall as soon as
reasonably practicable notify debis in writing of that non-receipt.

 

12.4             Finance Party Liens

 

Each Finance
Party agrees for the benefit of debis and each Lessee as follows:

 

12.4.1

 

(a)              it
shall not create or permit to arise or subsist any Finance Party Lien (other
than any Permitted Finance Party Lien) over or with respect to any Aircraft
which is then the subject of an ECA Loan and/or a Mismatch Loan and shall as
soon as reasonably practicable, at its own expense, discharge or procure the
discharge of any such Finance Party Lien if the same shall exist at any time;
and

 

33

 

(b)             it
will not do, and will use all reasonable endeavours to prevent, any act which
could reasonably be expected to result in any Aircraft which is then the
subject of an ECA Loan and/or a Mismatch Loan being arrested, confiscated,
seized, taken in execution, impounded, forfeited, detained in exercise or
purported exercise of any possessory Finance Party Lien and, if any such
arrest, confiscation, seizure, taking, impounding, forfeiture or detention
occurs, it will give debis immediate written notice thereof, and will procure
the prompt release of that Aircraft; and

 

12.4.2                           it will
comply with the obligations expressed to be assumed by it under the Transaction
Documents.

 

12.5             Direct payments

 

In circumstances where a payment obligation by a
Lessee to a Borrower under the Lease for an Aircraft is matched by a
corresponding payment obligation by that Borrower to the Finance Parties under
the Loan Agreements for that Aircraft or any other Transaction Document for
that Aircraft, payment of that amount by that Lessee direct to the relevant
Agent shall (upon receipt thereof by the relevant Agent) be deemed to
constitute payment of that amount by that Lessee to that Borrower under that
Lease and payment of that amount by that Borrower to the relevant Finance
Parties under those Loan Agreements or other Transaction Document (as
applicable).

 

12.6             Release of security

 

12.6.1                           Provided
that no Cross Collateralisation Event has occurred and is continuing, upon
irrevocable receipt in full by the Security Trustee and/or the Agents of all
amounts of principal and interest owing in respect of each Loan for an
Aircraft, so that each such Loan shall have been repaid in full, together with
all other amounts due but unpaid at that time in respect of each such Loan in
accordance with the terms of the Loan Agreements for those Loans, then:

 

(a)              the
rights of the Secured Parties (other than the related Lessee) in respect of the
Mortgage (if any), the English Law Mortgage, the Security Assignment and the
other Security Documents (in each case, to the extent solely relating to the
relevant Aircraft) shall thereupon be deemed to be released, terminated and, as
the case may be, reassigned; and

 

(b)             the
Security Trustee shall confirm in writing to the Lessee for that Aircraft that
all such amounts have been paid in full, at which time title to that Aircraft
shall be transferred by the relevant Borrower in accordance with the Lease for
that Aircraft.

 

Upon
title so transferring, if so requested by that Lessee, the Security Trustee
shall, at the cost of the Borrowers, as soon as reasonably practicable release,
terminate and, as the case may be, reassign the English Law Mortgage, the
Mortgage (if any), each Security Assignment and the other Security Documents
(in each case, to the extent solely relating to the relevant Aircraft), and
take such other action which that Lessee may reasonably request in order to
effect those releases, terminations and reassignments.  If the Borrower is the beneficiary of any
security constituted by the Security Documents, the Borrower will also
thereupon take such other action which that Lessee may reasonably request in
order to effect the release, termination and reassignment of the Borrower’s
interests under the Security Documents, to the extent solely relating to that
Aircraft.

 

12.6.2                           Upon an
Aircraft ceasing to be leased by the Lessee for that Aircraft to a particular
Sub-Lessee under a Sub-Lease and where that Sub-Lessee has returned that
Aircraft to that Lessee in accordance with that Sub-Lease:

 

(a)              the
Security Trustee and the relevant Borrower agree (at the cost and expense of
the Borrowers), if so requested by that Lessee, as soon as reasonably
practicable to release and reassign that Sub-Lease, the relevant Assignment of
Insurances and the relevant Deregistration Power of Attorney from the security
created pursuant to the Lessee Assignment(s) which relates to that Aircraft and
the Security Assignment which

 

34

 

relates to
that Aircraft and to take such further action as that Lessee may reasonably
request in order to effect such releases and reassignments; and

 

(b)             the
Security Trustee agrees (at the cost and expense of the Borrowers), if so
requested by that Lessee, as soon as reasonably practicable to release any
Mortgage for that Aircraft granted to it in connection with the leasing of that
Aircraft to that Sub-Lessee and as soon as reasonably practicable to take such
further action as that Lessee may reasonably request in order to give effect to
that release, provided that the Borrower has, if it is required to do so
pursuant to paragraph 1 of schedule 7, granted a new Mortgage for that Aircraft
in favour of the Security Trustee in accordance with the provisions of this
Agreement and the other Transaction Documents. 
The foregoing undertakings shall also apply, subject to the related
proviso, in circumstances where there is a change of the State of Registration
permitted under this Agreement.

 

12.6.3                           Upon title
to an Engine or Part transferring to a Lessee pursuant to clause 11.5 of the
relevant Lease, if so requested by that Lessee, the Security Trustee shall, at
the cost of the Borrowers, as soon as reasonably practicable release, terminate
and, as the case may be, reassign the English Law Mortgage and the Mortgage (if
any) (in each case, to the extent solely relating to the relevant Engine or
Part, and subject always to equivalent security having first been created and
perfected over the relacement Engine or Part), and take such other action which
that Lessee may reasonably request in order to effect those releases,
terminations and reassignments.

 

12.7             Substitution of Aircraft

 

12.7.1                           Subject to
no Cross Collateralisation Event having occurred and continuing, if a Total
Loss of an Aircraft occurs or the relevant Lessee otherwise wishes to
substitute an Aircraft for the purposes of the Transaction Documents (in each
case, the “Existing Aircraft”), that Lessee
may, by notice to the ECA Agent, (if the Existing Aircraft is or may become a
Mismatch Aircraft) the Mismatch Agent and the German Parallel Lender, request
permission to substitute for the Existing Aircraft another Airbus aircraft of
the same type or in the same family of aircraft as the Existing Aircraft (the “Replacement Aircraft”). 
The notice shall provide details of the age from delivery by the
Manufacturer and number of block hours since the last Heavy Maintenance Check
of the proposed Replacement Aircraft. 
The National Agents, the German Parallel Lender and (if the Existing
Aircraft is or may become a Mismatch Aircraft) the Mismatch Agent shall
consider any such request in good faith, in accordance with the then current
practice of the Export Credit Agencies in relation to the substitution of
aircraft, and shall inform that Lessee within twenty one (21) Banking Days of
the receipt of that notice as to whether the proposed substitution has been
approved and, if approved, the terms upon which that Replacement Aircraft shall
be substituted for the Existing Aircraft. 
The parties to this Agreement acknowledge that the current practice of
the Export Credit Agencies is that Export Credit Agency-supported Airbus
aircraft may only be substituted in Export Credit Agency-supported facilities
by new Airbus aircraft of the same type or in the same family of aircraft as
the Existing Aircraft and that any such substitution is, in any event, subject
to the approval of the Export Credit Agencies.

 

12.7.2                           Following a
request by the relevant Lessee for the substitution of an Aircraft in
accordance with clause 12.7.1 following a Total Loss of that Aircraft and if
the Total Loss Proceeds for that Total Loss have been paid to the Security
Trustee either:

 

(a)              prior
to the ECA Agent and (if relevant) the Mismatch Agent respectively informing
that Lessee of the National Agents’, the German Parallel Lender’s and (if
relevant) the Mismatch Agent’s decision as to that substitution; or

 

(b)             if
the National Agents, the German Parallel Lender and (if relevant) the Mismatch
Agent have approved the substitution of the Existing Aircraft, prior to the
actual substitution of the Existing Aircraft by a Replacement Aircraft,

 

an amount of
the Total Loss Proceeds for that Total Loss equal to the Required Insurance
Value (“Retained Proceeds”) shall remain in the
relevant Proceeds Account pending

 

35

 

completion of
the substitution (and assuming, in the case of clause 12.7.2(a), that the
substitution will be approved) for up to one hundred and eighty (180) days or
such other period of time as shall then reflect the then current practice of
the Export Credit Agencies as notified to the relevant National Agent and the
German Parallel Lender by the relevant Export Credit Agencies.  If the Existing Aircraft is then substituted
by the Replacement Aircraft in accordance with the approval and terms given or
specified pursuant to clause 12.7.1, the Retained Proceeds (together with
accrued interest thereon for the period whilst held in the relevant Proceeds
Account at the rate agreed between the Security Trustee and that Lessee) shall,
subject to the proviso to this clause 12.7.2, be returned to that Lessee.  Notwithstanding anything to the contrary
herein or in any other Transaction Document, the Obligors agree and acknowledge
that the relevant Lessee shall continue to be obliged to pay Rent under and in
accordance with the relevant Lease and the relevant Borrower shall continue to
be obliged to make all payments of principal and interest falling due under the
relevant Loan Agreements, in each case, for the Existing Aircraft, unless and
until either (i) the substitution has been completed, from which time the
relevant Lessee shall be obliged to pay Rent under and in accordance with the
relevant Lease and the relevant Borrower shall be obliged to make all payments
of principal and interest falling due under the relevant Loan Agreements, in
each case, for the Replacement Aircraft in place of the Existing Aircraft, or (ii)
the Retained Proceeds have pursuant thereto been applied in accordance with
clause 15.4.

 

Provided
however that, if at any time prior to the actual substitution of the Existing
Aircraft by a Replacement Aircraft, a Lease Termination Event shall occur and
be continuing, the foregoing provisions of this clause 12.7 shall cease to be
of any further application and the Retained Proceeds shall be applied in
accordance with clause 15.7.

 

12.7.3                           If at any
time the relevant Lessee withdraws its request for substitution following a
Total Loss or such request is rejected or such substitution has not been
completed within one hundred and eighty (180) days of the submission of the
relevant request (or such other period as the parties may agree), then, as soon
as reasonably practicable thereafter, the Retained Proceeds (together with
accrued interest thereon for the period whilst held in the relevant Proceeds
Account at the rate agreed between the Security Trustee and that Lessee) shall
be applied in accordance with clause 15.4, and the other provisions of this
Agreement and the Transaction Documents relating to a Total Loss shall be
implemented, disregarding for this purpose any reference therein to any such
substitution.

 

12.8             Borrower matters

 

Each Finance Party agrees with debis that, prior to
the exercise of any rights, discretions or powers conferred on it under any of
the Administration Agreements and/or pursuant to the Declarations of Trust, it
shall, if no Lease Termination Event has then occurred which is continuing,
consult in good faith with debis as to the manner and nature of such exercise,
provided however that the relevant Finance Party shall nevertheless, subject to
clause 10, be entitled to exercise such discretion without reference (or, as
the case may be, without further reference) to debis if at any time it believes
(acting reasonably) that failure to do so would or might reasonably be expected
to result in the rights, title and interests of the Finance Parties and the
Borrowers (or any of them) in and to any Aircraft and/or under any Transaction
Document being materially adversely affected, based on advice received by the
Security Trustee and shared with debis from reputable legal counsel in the
relevant jurisdictions.  The foregoing
provisions of this clause 12.8 are subject always to the requirements of clause
9.6.

 

12.9             Transaction Documents

 

Each of the parties hereto agrees for the benefit of
each of the other parties hereto that it will not, other than in accordance
with the express terms of the Transaction Documents, terminate, or acquiesce in
the termination of, or alter or amend the provisions of, the Transaction
Documents or any of them without the prior written consent of each of the other
parties hereto.

 

36

 

13                       Enforcement of Trust Documents

 

13.1             No enforcement by Secured
Parties

 

None of the Secured Parties shall have any independent
power to enforce any of the Trust Documents, to exercise any rights and/or
powers or to grant any consents or releases under or pursuant to any of the
Trust Documents or otherwise have direct recourse to the security constituted
by any of the Trust Documents. 
Notwithstanding the foregoing or any other provision of this Agreement
or any other Transaction Document, it is hereby acknowledged and agreed that
the ECA Agent shall be entitled to send an ECA Acceleration Notice under any
ECA Loan Agreement and the Mismatch Agent shall be entitled to send a Mismatch
Acceleration Notice under any Mismatch Loan Agreement.

 

13.2             Acceleration of Loans

 

Save as expressly provided in this clause 13 and
expressly without prejudice to any rights of the Mismatch Agent or the Mismatch
Lenders to cancel the Unutilised Mismatch Facility for an Aircraft under the
Mismatch Loan Agreement for that Aircraft in accordance with the terms thereof
from time to time, none of the Finance Parties shall have any independent power
to take any steps to accelerate or demand repayment of any Loan pursuant to any
Loan Agreement, or to exercise, save to the extent provided above, any rights
or powers or to grant any consents or releases relating to or in connection
with the occurrence or existence of any Termination Event.

 

13.3             Action under Trust
Documents

 

At all times before the Secured Loan Obligations have
been fully repaid and discharged, subject to the Security Trustee being
indemnified to its satisfaction in accordance with clause 16 and without
prejudice to clause 13.5, the Security Trustee shall take such action
(including, without limitation, the exercise of all rights and/or powers and
the granting of consents or releases) or, as the case may be, refrain from
taking such action under or pursuant to the Trust Documents as the Majority
Lenders shall specifically direct the Security Trustee (that direction being
given in writing through the relevant Agent). At all times after the Secured
Loan Obligations have been fully repaid and discharged, subject to the Security
Trustee being indemnified to its satisfaction, the Security Trustee shall take
such action (including, without limitation, the exercise of all rights and/or
powers and the granting of consents or releases) or, as the case may be,
refrain from taking such action under or pursuant to the Trust Documents as the
relevant Lessee may direct.  Unless and
until the Security Trustee shall have received such directions or instructions,
the Security Trustee shall not be required to take any action under any of the
Trust Documents.

 

13.4             Instructions of Majority
Lenders

 

The Security Trustee shall be entitled (and bound) to
assume that any directions received by it from an Agent (or, once the Secured
Loan Obligations have been fully repaid and discharged, the relevant Lessee)
under or pursuant to this Agreement or any of the other Transaction Documents
are the directions of the Majority Lenders (in the case of the directions of
the relevant Agent) or, if applicable, the directions of the relevant Agent
itself (or, once the Secured Loan Obligations have been fully repaid and
discharged, of the relevant Lessee) acting pursuant to the provisions of the
Transaction Documents. The Security Trustee shall not be liable to the Secured
Parties or any of them for any action taken or omitted under or in connection
with this Agreement or any of the other Transaction Documents in accordance
with any such directions.

 

13.5             Action following Termination Event

 

Subject always to clause 10, if at any time before the
Secured Loan Obligations have been fully repaid and discharged any party hereto
becomes aware that a Termination Event has occurred and is continuing, that
party shall as soon as practicable after becoming aware thereof give written
notice to the relevant Borrower, the ECA Agent, the Mismatch Agent and the
Security Trustee and the ECA Agent shall thereupon give notice (a “Notice of Applicable Event”) of the same to the National
Agents and if:

 

37

 

13.5.1                           within a
period of thirty (30) days following the giving of the Notice of Applicable
Event by the ECA Agent or the expiry of any period specified in any Notice of
Reservation of Rights issued by the Security Trustee pursuant to clause 13.6,
the National Agents shall not have given either (i) notice (a “Notice for Inaction”) to the ECA Agent requiring that action
not to be taken, or (ii) notice to the ECA Agent and the Security Trustee
requiring the issue of a Notice of Reservation of Rights, or a further Notice
of Reservation of Rights, pursuant to clause 13.6; or

 

13.5.2                           any
National Agent gives notice (a “Notice for Action”)
in writing to the ECA Agent requiring that action to be taken,

 

then, upon the
expiry of the relevant period referred to in clause 13.5.1 or upon the giving
of notice by any National Agent pursuant to clause 13.5.2 (or, if any Notice(s)
of Reservation of Rights have been delivered by the Security Trustee pursuant
to clause 13.6, upon the expiry of the period specified in the last Notice of
Reservation of Rights so delivered by the Security Trustee), to the extent
permitted by the Transaction Documents and Applicable Law (and provided that,
at the relevant time, that Termination Event is continuing and subject always
to clause 10):

 

(a)              an
ECA Acceleration Notice shall be deemed to have been given pursuant to and for
all purposes of each ECA Loan Agreement and a Mismatch Acceleration Notice
shall be deemed to have been given pursuant to and for all purposes of each
Mismatch Loan Agreement and the Loans shall become due and payable pursuant to
and in accordance with the terms of the Loan Agreements; and/or

 

(b)             the
Security Trustee shall ensure that such steps as may be available and as may be
prudent are taken to enforce the security constituted, and/or the rights
contained, in the relevant Trust Documents,

 

provided that, for the avoidance of doubt, if any
National Agent shall have given a Notice for Action pursuant to this clause
13.5 and any other National Agent shall have given or, as the case may be,
shall give a Notice(s) for Inaction pursuant to this clause 13.5 or a Notice of
Reservation of Rights pursuant to clause 13.6, the ECA Agent shall disregard
the Notice(s) for Inaction and/or Notice of Reservation of Rights and shall act
in accordance with the Notice for Action.

 

13.6             Reservation of rights

 

Subject to clause 10, if within thirty (30) days after
the ECA Agent has given a Notice of Applicable Event, each of the National
Agents (at the request of their respective Export Credit Agency) has given to
the ECA Agent and the Security Trustee a notice in writing requiring it to do
so (provided that the ECA Agent does not receive a Notice for Action pursuant
to clause 13.5.2 within that period), the Security Trustee shall by notice in
writing to the Lessees and debis (a “Notice of Reservation of
Rights”) reserve all of its rights under the Transaction Documents
arising as a consequence of the occurrence of the Termination Event in question
and take any such other action as specified in that notice, which notice may (inter alia) require the relevant debis Obligor (in the case
of a Lease Termination Event) or the relevant Borrower (in the case of a
Borrower Termination Event) to remedy that Termination Event within a period of
thirty (30) days after the date on which the Notice of Reservation of Rights is
given or such other period as the National Agents may agree and specify in that
notice.  Upon the expiry of the period
specified in any Notice of Reservation of Rights, the Security Trustee shall,
if it is instructed in writing to do so by all of the National Agents (at the
request of their respective Export Credit Agencies) prior to the expiry of that
period (provided the ECA Agent does not receive a Notice for Action pursuant to
clause 13.5.2 within that period), give to the relevant Lessee and any other
relevant person a further Notice of Reservation of Rights.

 

38

 

13.7             Demands under the
Guarantee

 

13.7.1                           Notwithstanding
anything in this Agreement or any of the other Transaction Documents to the
contrary, each of the Finance Parties agrees and acknowledges in connection
with the Guarantee that:

 

(a)              the
ECA Agent shall be entitled to instruct the Security Trustee to send a Notice
of Demand in respect of any amounts outstanding from a Lessee to a Borrower for
the ultimate account of any ECA Finance Party or in respect of any obligations
owed by a Lessee to a Borrower for the ultimate account of any ECA Finance
Party, in each case in accordance with and subject to the provisions of the
Guarantee; and

 

(b)             the
Mismatch Agent shall be entitled to instruct the Security Trustee to send a
Notice of Demand in respect of any amounts outstanding from a Lessee to a
Borrower for the ultimate account of any Mismatch Finance Party or in respect
of any obligations owed by a Lessee to a Borrower for the ultimate account of
any Mismatch Finance Party, in each case in accordance with and subject to the
provisions of the Guarantee.

 

13.7.2                           So long as
no Lease Termination Event, no Cross Collateralisation Event, no ECA
Utilisation Block Event and no Mismatch Utilisation Block Event has occurred
and is continuing at that time:

 

(a)              any
amounts received by the Security Trustee under the Guarantee as a result of any
Notice of Demand sent in accordance with the instructions of the ECA Agent
shall be applied in accordance with clause 15.8.1; and

 

(b)             any
amounts received by the Security Trustee under the Guarantee as a result of any
Notice of Demand sent in accordance with the instructions of the Mismatch Agent
shall be applied in accordance with clause 15.8.2.

 

13.7.3                           If any
amounts are received by the Security Trustee under the Guarantee:

 

(a)              and
at that time a Lease Termination Event has occurred and is continuing, such
amounts shall be applied in accordance with clause 15.7;

 

(b)             and
at that time a Cross Collateralisation Event, ECA Utilisation Block Event or
Mismatch Utilisation Block Event has occurred and is continuing, such amounts
shall be held in the relevant Proceeds Account until such time as clause 13.7.2
or clause 13.7.3(a) shall become applicable, at which time such amounts shall
be applied in accordance with clause 13.7.2 or clause 13.7.3(a) (as
applicable).

 

14                       Proceeds
Account

 

14.1             Proceeds Account

 

On or before the occurrence of any event which will
result in the payment of any Proceeds in relation to an Aircraft or as soon as
reasonably practicable thereafter, the Security Trustee shall open the Proceeds
Account for that Aircraft and shall as soon as reasonably practicable notify
all parties to this Agreement of such details of that account as they may
require in order to comply with their obligations under clause 14.3.

 

14.2             Proceeds to be held on
trust

 

Any sum received or recovered by any party hereto
which is required by any provision hereof to be paid to the Security Trustee
for credit to the applicable Proceeds Account shall be received by that party
on trust for the Security Trustee and that party shall as soon as reasonably
practicable pay that sum to the Security Trustee for credit to the applicable
Proceeds Account.

 

14.3             Payments to Proceeds
Account

 

Each party shall from time to time pay any Proceeds
(other than any such amounts as may be received by way of distribution from any
Proceeds Account) to the Security Trustee as soon as

 

39

 

reasonably practicable upon receipt thereof for
application in accordance with the terms of this Agreement.

 

14.4             Proceeds received

 

All Proceeds received or recovered by the Security
Trustee (otherwise than by way of distribution from any Proceeds Account) shall
as soon as reasonably practicable be credited to the applicable Proceeds
Account.

 

14.5             Currency conversion

 

If any Proceeds in respect of an Aircraft are received
or recovered by the Security Trustee (otherwise than by way of distribution
from any Proceeds Account) in any currency other than the Applicable Currency
for that Aircraft, such Proceeds shall be applied in the purchase of that
Applicable Currency at the spot rate of exchange available to the Security
Trustee (in the ordinary course of business) on the date of receipt or, if it
is not practicable to effect that purchase on that date, the immediately
following day on which banks are generally open for the transaction of that
foreign exchange business in the jurisdiction through which the Security
Trustee is acting for the purposes of this Agreement, and the net amount of
that Applicable Currency so purchased (after the deduction by the Security
Trustee of any reasonable costs incurred by it in connection with that
purchase) shall be credited to the applicable Proceeds Account.

 

14.6             No set-off or
counterclaim

 

Each party agrees that any sums which it pays in
accordance with clause 14.3 shall be made without any set-off or counterclaim
and free and clear of and without any withholding or deduction whatsoever
(except as required by law and, in the case of each Obligor, subject to clause
4.7 of the relevant Loan Agreement or, as applicable, clause 13.1 of the
relevant Lease) to the Security Trustee, in the currency of receipt, in
accordance with the terms of this Agreement (but if any such deduction or
withholding is required by law then the party affected by that requirement (the
affected party) agrees that it shall consult in good faith with the parties to
this Agreement who may be affected thereby with a view to mitigating the effect
of any such deduction or withholding provided that the affected party shall not
be obliged (subject, in the case of each Obligor to clause 4.7 of the relevant
Loan Agreement or, as applicable, clause 13.1 of the relevant Lease) to incur any
additional expense, nor to take any course of action other than it would do in
relation to any counterparty to any of its similar contracts who would be
affected by the same or any similar legal requirement).

 

14.7             Interest

 

Interest shall accrue from day to day on the amounts
of all Proceeds received by the Security Trustee and from time to time standing
to the credit of any Proceeds Account at the best rate available to the
Security Trustee for such interest periods as the Security Trustee shall reasonably
select from time to time.  Any such
interest shall be credited to the relevant Proceeds Account at the end of each
such interest period.

 

15                       Application of
sums received

 

15.1             Application of principal
and interest prior to the occurrence of a Lease Termination Event

 

15.1.1                           Upon
receipt by the ECA Agent of any amount referred to in clause 4.10.1 of an ECA
Loan Agreement prior to the occurrence of a Lease Termination Event which is
continuing, the ECA Agent shall make the same available in accordance with the
provisions of clause 4.10.2 of that ECA Loan Agreement to each of the National
Agents for application by each National Agent in or towards the payment of
amounts due to the relevant ECA Lenders, that application by each National
Agent to be in accordance with the terms agreed between that National Agent,
the relevant ECA Lenders and the relevant Export Credit Agency.

 

40

 

15.1.2                           Upon
receipt by the Mismatch Agent of any amount referred to in clause 4.10.1 of a
Mismatch Loan Agreement prior to the occurrence of a Lease Termination Event
which is continuing, the Mismatch Agent shall apply the same in accordance with
the provisions of clause 4.10.2 of that Mismatch Loan Agreement in or towards
the payment of amounts due to the relevant Mismatch Lenders.

 

15.2             Application of amounts
received in respect of indemnity obligations

 

15.2.1                           Notwithstanding
any provision of the Transaction Documents to the contrary, any amounts payable
to any ECA Finance Party in respect of any indemnity obligations owed by any
Obligor pursuant to the Transaction Documents shall be paid by the relevant
Obligor to the ECA Agent.

 

15.2.2                           Notwithstanding
any provision of the Transaction Documents to the contrary, any amounts payable
to any Mismatch Finance Party in respect of any indemnity obligations owed by
any Obligor pursuant to the Transaction Documents shall be paid by the relevant
Obligor to the Mismatch Agent.

 

15.2.3                           Any and all
monies received by an Agent (whether as a result of the provisions of clause
15.2.1 or 15.2.2 or otherwise) or (as the case may be) the Security Trustee
from any Obligor in respect of any indemnity obligations of that Obligor prior
to the occurrence of a Lease Termination Event which is continuing shall be paid
by that Agent or (as the case may be) the Security Trustee, as soon as
reasonably practicable following receipt thereof, to the relevant Finance Party
(through the relevant National Agent in the case of any ECA Lender) in respect
of whom the indemnity claim was made up to the total amount owing to that
Finance Party in respect of that indemnity claim.

 

15.3             Application of insurance
proceeds (other than in respect of a Total Loss of an Aircraft)

 

15.3.1                           At any time
when no Lease Termination Event has occurred and is continuing, any insurance
proceeds in respect of any loss of or damage to an Aircraft not amounting to a
Total Loss of that Aircraft or any of its Engines which are received by any
party to this Agreement, other than any such proceeds which are received by a
Lessee pursuant to and as permitted by paragraph 10(i) of schedule 7, together
with such amount of interest as may have accrued thereon whilst held by that
party, shall be paid to either:

 

(a)              the
repairers against presentation of their invoices; or

 

(b)             the
relevant Lessee against presentation of receipts or other evidence of the
repairers evidencing the payment in full of the repairers’ invoices,

 

and, pending
that payment, such insurance proceeds (together with accrued interest thereon) shall
be held by that party (if not the Security Trustee) on trust for and to the
order of the Security Trustee (as trustee for the Secured Parties pursuant to
the terms hereof).

 

15.3.2                           At any time
when no Lease Termination Event has occurred and is continuing, any insurance
proceeds in respect of a Total Loss of an Engine not amounting to a Total Loss
of an Aircraft (including where the Engine has been detached from the relevant
Airframe and is installed on another airframe), other than any such proceeds which
are received by a Lessee pursuant to and as permitted by paragraph 10(i) of
schedule 7, which are received by any party to this Agreement, together with
that amount of interest as may have accrued thereon whilst held by that party,
shall be paid to either:

 

(a)              the
vendor of a replacement Engine; or

 

(b)             the
relevant Lessee against presentation of receipts or other evidence of the
vendor evidencing the payment in full of the purchase price for the replacement
Engine, provided that (and, in the case of (b) above, as a condition to payment
to the relevant Lessee):

 

41

 

(i)                           title to
that replacement Engine shall vest with the relevant Borrower free and clear of
all Liens (other than Permitted Liens) pursuant to a full warranty bill of sale
in form and substance reasonably satisfactory to the Security Trustee; and

 

(ii)                        all steps as
the Security Trustee may reasonably require are taken to render that
replacement Engine subject to this Agreement, the Loan Agreements, the Security
Documents and the other applicable Transaction Documents so that the rights of
the Finance Parties and the relevant Borrower in respect of the replacement
Engine are the same as they were in respect of the Engine that suffered a Total
Loss save that they are in respect of the replacement Engine.

 

Pending that
payment, such insurance proceeds (together with accrued interest thereon) shall
be held by that party (if not the Security Trustee) on trust for and to the
order of the Security Trustee (as trustee for the Secured Parties pursuant to
the terms hereof).

 

15.3.3                           Notwithstanding
the provisions of clauses 15.3.1 or 15.3.2, if and to the extent that AVN67B
(or any replacement or equivalent thereof) shall be in effect in relation to
the Insurances, and if any provision of clause 15.3.1 or clause 15.3.2 shall
conflict with AVN67B (or any replacement or equivalent thereof), the terms of
AVN67B (or any replacement or equivalent thereof) shall apply.

 

15.3.4                           Notwithstanding
any provision of this clause 15 to the contrary, any monies paid under
liability insurances shall be paid to the person, firm or company by whom the
liability (or alleged liability) covered by such insurances was incurred, or,
if the liability (or alleged liability) has previously been discharged or
indemnified, such monies shall be paid to the person who has discharged or
indemnified that liability (or alleged liability) in reimbursement of the
monies so expended by it in satisfaction of that liability (or alleged
liability) or indemnity.

 

15.4             Application of Total Loss
Proceeds

 

15.4.1                           Subject to
clause 12.7, if any Total Loss Proceeds in respect of a Total Loss of an ECA
Aircraft are received by the Security Trustee at a time when no Lease
Termination Event has occurred and is continuing, an amount of those Total Loss
Proceeds equal to the Required Insurance Value, together with such amount of
interest as may have accrued thereon whilst held in the relevant Proceeds
Account, shall be applied as soon as reasonably practicable following that
receipt in the following order:

 

(a)            first,
in reimbursement of the ECA Finance Parties and/or the Export Credit Agencies
of any and all Qualifying Expenses due and payable to any of the ECA Finance
Parties and/or the Export Credit Agencies pursuant to any of the Transaction
Documents;

 

(b)           secondly, in payment on a pro rata and pari passu basis
of an amount of up to the total amount of interest then due in respect of the
ECA Loan for that ECA Aircraft to be applied to each of the National Agents in
the proportions specified in the ECA Loan Agreement for that ECA Aircraft for
application by each National Agent in or towards payment of interest
outstanding to the relevant ECA Lenders under that ECA Loan Agreement;

 

(c)              thirdly,
in payment on a pro rata and pari passu basis
of an amount of up to the total amount of principal then outstanding in respect
of the ECA Loan for that ECA Aircraft to be applied to each of the National
Agents in the proportions specified in the ECA Loan Agreement for that ECA
Aircraft for application by each National Agent in or towards payment of
principal outstanding to the relevant ECA Lenders under that ECA Loan
Agreement;

 

(d)             fourthly,
in payment to each ECA Finance Party and/or the Export Credit Agencies on a pro rata and pari passu
basis of all other amounts owing to that ECA Finance Party and/or Export Credit
Agency under this Agreement, the ECA Loan Agreement for that ECA Aircraft and
any other Transaction Document which remain unpaid (which shall

 

42

 

include, for
the avoidance of doubt, any Expenses other than Qualifying Expenses which are
owing at that time and any amounts due and payable under clause 9.2.1 or clause
9.2.2 of that ECA Loan Agreement), in each case, to the extent relating to the
ECA Loan for that ECA Aircraft;

 

(e)              fifthly,
in payment to the Borrower for that ECA Aircraft of all amounts owing by the
relevant Lessee and/or debis to that Borrower under this Agreement or any other
Transaction Document which remain unpaid, to the extent relating to that ECA
Aircraft; and

 

(f)                finally,
if no Cross Collateralisation Event has then occurred which is continuing, any
balance shall be paid as directed by the relevant Lessee.

 

15.4.2                           Subject to
clause 12.7, if any Total Loss Proceeds in respect of a Total Loss of a
Mismatch Aircraft are received by the Security Trustee at a time when no Lease
Termination Event has occurred and is continuing, an amount of those Total Loss
Proceeds equal to the Required Insurance Value, together with such amount of
interest as may have accrued thereon whilst held in the relevant Proceeds
Account, shall be applied as soon as reasonably practicable following that
receipt in the following order:

 

(a)              first,
in reimbursement of the Finance Parties and/or the Export Credit Agencies of
any and all Qualifying Expenses due and payable to any of the Finance Parties
and/or the Export Credit Agencies pursuant to any of the Transaction Documents;

 

(b)             secondly,
in payment on a pro rata and pari passu basis
of an amount of up to the total amount of interest then due in respect of each
Loan for that Mismatch Aircraft to be applied as follows:

 

(i)                           to each of
the National Agents in the proportions specified in the ECA Loan Agreement for
that Mismatch Aircraft for application by each National Agent in or towards
payment of interest outstanding to the relevant ECA Lenders under that ECA Loan
Agreement; and

 

(ii)                        to the
Mismatch Agent for application by the Mismatch Agent in or towards payment of
interest outstanding to the relevant Mismatch Lenders under the Mismatch Loan
Agreement for that Mismatch Aircraft;

 

(c)              thirdly,
in payment on a pro rata and pari passu basis
of an amount of up to the total amount of principal then outstanding in respect
of each Loan for that Mismatch Aircraft to be applied as follows:

 

(i)                           to each of
the National Agents in the proportions specified in the ECA Loan Agreement for
that Mismatch Aircraft for application by each National Agent in or towards
payment of principal outstanding to the relevant ECA Lenders under that ECA
Loan Agreement; and

 

(ii)                        to the
Mismatch Agent for application by the Mismatch Agent in or towards payment of
principal outstanding to the relevant Mismatch Lenders under the Mismatch Loan
Agreement for that Mismatch Aircraft;

 

(d)             fourthly,
in payment to each Finance Party and/or the Export Credit Agencies on a pro rata and pari passu
basis of all other amounts owing to that Finance Party and/or Export Credit
Agency under this Agreement, the Loan Agreements for that Mismatch Aircraft and
any other Transaction Document which remain unpaid (which shall include, for
the avoidance of doubt, any Expenses other than Qualifying Expenses which are
owing at that time and any amounts due and payable under clause 9.2.1 or clause
9.2.2 of any of the Loan Agreements for that Aircraft), in each case, to the
extent relating to the Loans for that Aircraft;

 

43

 

(e)              fifthly,
in payment to the Borrower for that Mismatch Aircraft of all amounts owing by
the relevant Lessee and/or debis to that Borrower under this Agreement or any
other Transaction Document which remain unpaid, to the extent relating to that
Mismatch Aircraft; and

 

(f)                finally,
if no Cross Collateralisation Event has then occurred which is continuing, any
balance shall be paid as directed by the relevant Lessee.

 

15.4.3                           If any
amounts under clause 15.4.1 or 15.4.2 can not be applied in full by the
Security Trustee because a Cross Collateralisation Event has occurred and is
continuing and, as a result thereof, paragraph (f) of clause 15.4.1 or clause
15.4.2 (as applicable) applies, such amounts shall be held in the relevant
Proceeds Account until the earlier of the times at which:

 

(a)              no
Cross Collateralisation Event has occurred and is continuing, in which case the
amounts, together with such amount of interest as may have accrued thereon
whilst held in the relevant Proceeds Account, shall be applied in accordance
with such paragraph (f); or

 

(b)             a
Lease Termination Event has occurred and is continuing, in which case clause
15.4.5 shall apply.

 

15.4.4                           If the
amount of Total Loss Proceeds to be applied in or towards payment of sums due
pursuant to any of sub-clauses 15.4.1(a) to (d) or any of sub-clauses
15.4.2(a) to (d) is insufficient to pay in full all sums referred to in the
relevant sub-clause, the amount so available shall be paid to each party
entitled to receive such sums pursuant to that sub-clause on a pari passu and pro tanto basis
to its respective interest in the total amount due and payable pursuant to that
sub-clause.

 

15.4.5                           If any
Total Loss Proceeds are received after the occurrence of a Lease Termination
Event which is continuing, an amount of those Total Loss Proceeds equal to the
Required Insurance Value, together with such amount of interest as may have
accrued thereon whilst held in the relevant Proceeds Account, shall be applied
in accordance with clause 15.7.1 or 15.7.2 (as applicable).

 

15.4.6                           To the
extent that the Total Loss Proceeds for an Aircraft which are received by the
Security Trustee exceed the Required Insurance Value, the amount of the excess
shall be paid as soon as reasonably practicable following receipt to the Lessee
of that Aircraft or as it may direct, notwithstanding any provision hereof to
the contrary.

 

15.5             Application of
Requisition Proceeds

 

If any
Requisition Proceeds (other than Total Loss Proceeds) or similar proceeds are
received by the Security Trustee, such Requisition Proceeds, together with such
amount of interest as may have accrued thereon whilst held in the relevant
Proceeds Account, shall as soon as reasonably practicable be paid by the
Security Trustee to the relevant Lessee (or as it may direct) unless a Lease
Termination Event has occurred and is continuing in which case they shall be
applied in accordance with clause 15.7 and subject always to the rights of any
Sub-Lessee under any Assignment of Insurances and/or Sub-Lease.

 

15.6             Application of Proceeds received as a result of a prepayment made
pursuant to clauses 4.3, 4.5 or 10.3 of any ECA Loan Agreement and/or clauses
4.3, 4.5, 4.6 or 10.3 of any Mismatch Loan Agreement

 

15.6.1                           If any
Proceeds are received by the Security Trustee as a result of a prepayment made
pursuant to clauses 4.3, 4.5 or 10.3 of any ECA Loan Agreement (in this clause
15.6, “ECA Prepayment Proceeds”) prior to the
occurrence of a Lease Termination Event which is continuing, such ECA
Prepayment Proceeds, together with such amount of interest as may have accrued
thereon whilst held in the relevant Proceeds Account, shall be applied as soon
as reasonably practicable following that receipt in the following order:

 

44

 

(a)            first,
in reimbursement of the ECA Finance Parties and/or the Export Credit Agencies
of any and all Qualifying Expenses due and payable to any of the ECA Finance
Parties and/or the Export Credit Agencies pursuant to any of the Transaction
Documents for the Aircraft to which that ECA Loan relates;

 

(b)           secondly, in payment of an
amount of up to the total amount of interest in respect of the ECA Loan which
is being prepaid to each of the National Agents in the proportions specified in
the ECA Loan Agreement for that ECA Loan for application by each National Agent
in or towards payment of interest outstanding to the relevant ECA Lenders under
that ECA Loan Agreement;

 

(c)            thirdly, in payment of an
amount of up to the total amount of principal outstanding in respect of the ECA
Loan which is being prepaid to each of the National Agents in the proportions
specified in the ECA Loan Agreement for that ECA Loan for application by each
National Agent in or towards payment of principal outstanding to the relevant
ECA Lenders under that ECA Loan Agreement;

 

(d)           fourthly, in payment to the
ECA Finance Parties and/or the Export Credit Agencies on a pro rata
and pari passu basis of all amounts owing to
the ECA Finance Parties and/or the Export Credit Agencies under this Agreement,
that ECA Loan Agreement or any other Transaction Document which remain unpaid
(which shall include, for the avoidance of doubt, any Expenses other than
Qualifying Expenses which are owing at that time and any amounts due and
payable under clause 9.2.1 or clause 9.2.2 of that ECA Loan Agreement), in each
case, to the extent relating to that ECA Loan;

 

(e)            fifthly, in payment to the
Borrower under that ECA Loan Agreement of all amounts owing by the relevant
Lessee and/or debis to that Borrower under this Agreement or any other
Transaction Document which remain unpaid, to the extent relating to that ECA
Loan; and

 

(f)              finally, if no Cross
Collateralisation Event has then occurred which is continuing, any balance
shall be paid as directed by the relevant Lessee.

 

15.6.2                           If any
Proceeds are received by the Security Trustee as a result of a prepayment made
pursuant to clauses 4.3, 4.5, 4.6 or 10.3 of any Mismatch Loan Agreement (in
this clause 15.6, “Mismatch Prepayment
Proceeds”) prior to the occurrence of a Lease Termination Event
which is continuing, such Mismatch Prepayment Proceeds, together with such
amount of interest as may have accrued thereon whilst held in the relevant
Proceeds Account, shall be applied as soon as reasonably practicable
following  that receipt in the following
order:

 

(a)            first,
in reimbursement of the Mismatch Finance Parties of any and all Qualifying
Expenses due and payable to any of the Mismatch Finance Parties pursuant to any
of the Transaction Documents relating to the Mismatch Loan which is being
prepaid;

 

(b)           secondly, in payment of an
amount of up to the total amount of interest in respect of the Mismatch Loan
which is being prepaid to the Mismatch Agent for application by the Mismatch
Agent in or towards payment of interest outstanding to the relevant Mismatch
Lenders under the Mismatch Loan Agreement for that Mismatch Loan;

 

(c)            thirdly, in payment of an
amount of up to the total amount of principal outstanding in respect of the
Mismatch Loan which is being prepaid to the Mismatch Agent for application by
the Mismatch Agent in or towards payment of principal outstanding to the
relevant Mismatch Lenders under that Mismatch Loan Agreement;

 

(d)           fourthly, in payment to
Mismatch Finance Parties on a pro rata and pari passu basis of all amounts owing to the Mismatch
Finance Parties under this Agreement, that Mismatch Loan Agreement or any other
Transaction Document which remain unpaid (which shall include, for the
avoidance of doubt, any Expenses other than Qualifying Expenses which are owing
at that time and any amounts due and payable under clause 9.2.1 or clause 9.2.2
of that Mismatch Loan Agreement), in each case, to the extent relating to that
Mismatch Loan;

 

45

 

(e)            fifthly, in payment to the
Borrower under that Mismatch Loan Agreement of all amounts owing by the
relevant Lessee and/or debis to that Borrower under this Agreement or any other
Transaction Document which remain unpaid, to the extent relating to that
Mismatch Loan; and

 

(f)              finally, if no Cross
Collateralisation Event has then occurred which is continuing, any balance
shall be paid as directed by the relevant Lessee.

 

15.6.3                           If any
amounts under clause 15.6.1 or 15.6.2 can not be applied in full by the
Security Trustee because a Cross Collateralisation Event has occurred and is
continuing and, as a result thereof, paragraph (f) of clause 15.6.1 or clause
15.6.2 (as applicable) applies, such amounts shall be held in the relevant
Proceeds Account until the earlier of the times at which:

 

(a)              no
Cross Collateralisation Event has occurred and is continuing, in which case the
amounts, together with such amount of interest as may have accrued thereon
whilst held in the relevant Proceeds Account, shall be applied in accordance
with such paragraph (f); or

 

(b)             a
Lease Termination Event has occurred and is continuing, in which case clause
15.6.5 shall apply.

 

15.6.4                           If the
amount of any ECA Prepayment Proceeds or any Mismatch Prepayment Proceeds to be
applied in or towards payment of sums due pursuant to any of sub-clauses
15.6.1(a) to (d) or any of sub-clauses 15.6.2(a) to (d), as the case may
be, is insufficient to pay in full all sums referred to in the relevant
sub-clause, the amount so available shall be paid to each party entitled to
receive such sums pursuant to that sub-clause on a pari passu
and pro tanto basis to its respective
interest in the total amount due and payable pursuant to that sub-clause.

 

15.6.5                           If any ECA
Prepayment Proceeds or any Mismatch Prepayment Proceeds are received after the
occurrence of a Lease Termination Event which is continuing, such ECA
Prepayment Proceeds and/or such Mismatch Prepayment Proceeds, together with
such amount of interest as may have accrued thereon whilst held in the relevant
Proceeds Account, shall be applied in accordance with clause 15.7.1 or 15.7.2 (as
applicable).

 

15.7             Application of Proceeds following a Lease Termination Event

 

15.7.1                           Subject to
clause 15.4.6, any Proceeds in respect of an ECA Aircraft or otherwise in
relation to the ECA Loan for that ECA Aircraft which are held in a Proceeds
Account or received by the Security Trustee at any time when a Lease
Termination Event has occurred and is continuing (and any other amounts which
are, pursuant to this clause 15, to be applied in accordance with this clause
15.7.1), together with such amount of interest as may have accrued thereon
whilst held in the relevant Proceeds Account, shall be applied by the Security
Trustee as soon as reasonably practicable following receipt by the Security
Trustee as follows:

 

(a)              first,
in or towards reimbursing each of the ECA Representatives and/or any Receiver
for any and all Qualifying Expenses due and payable pursuant to any of the
Transaction Documents and in or towards payment of any debts or claims which
are by Applicable Law payable in preference to the amounts due to the ECA
Representatives and/or the ECA Lenders (but only to the extent such debts or
claims have such preference);

 

(b)             secondly,
in payment on a pro rata and pari passu basis
of an amount of up to the total interest outstanding in respect of the ECA Loan
for that Aircraft to be applied to each of the National Agents in the
proportions specified in that ECA Loan Agreement for that

 

46

 

ECA Loan for
application by each National Agent in or towards the payment of interest
outstanding to the relevant ECA Lenders under that ECA Loan Agreement;

 

(c)              thirdly,
in payment on a pro rata and pari passu basis
of an amount of up to the total principal outstanding in respect of the ECA
Loan for that Aircraft to be applied to each of the National Agents in the
proportions specified in the ECA Loan Agreement for that ECA Loan for
application by each National Agent in or towards the payment of principal
outstanding to the relevant ECA Lenders under that ECA Loan Agreement;

 

(d)             fourthly,
to the persons, in the order and in respect of the matters referred to in
paragraphs (a) to (c) inclusive above, in relation to each of the ECA Loans for
the ECA Aircraft other than that ECA Aircraft;

 

(e)              fifthly,
to the relevant ECA Finance Party and/or the Export Credit Agencies on a pro rata and pari passu
basis in respect of all other amounts owing to that ECA Finance Party and/or
the Export Credit Agencies under this Agreement or any other Transaction
Document which remain unpaid (which shall include, for the avoidance of doubt,
any Expenses other than Qualifying Expenses which are owing at that time and
any amounts due and payable under clause 9.2.1 or clause 9.2.2 of any ECA Loan
Agreement for an ECA Aircraft), in each case, to the extent relating to the ECA
Aircraft;

 

(f)                sixthly,
in payment to each Borrower which is the owner of an ECA Aircraft of all
amounts owing by any Lessee and/or debis to that Borrower under this Agreement
or any other Transaction Document which remain unpaid, to the extent relating
to an ECA Aircraft;

 

(g)             seventhly,
to the persons, in the order and in respect of the matters referred to in
paragraphs (a) to (f) inclusive of clause 15.7.2, in relation to each of the
Loans for the Mismatch Aircraft; and

 

(h)             finally,
once all the amounts referred to in paragraphs (a) to (g) inclusive above have
been satisfied and discharged in full and the Secured Loan Obligations have
been satisfied and discharged in full, any balance shall be paid as directed by
the relevant Lessee.

 

If the amount of any Proceeds to be applied in or
towards payment of sums due pursuant to any of paragraphs (a) to (g) inclusive
above is insufficient to pay in full all sums referred to in the relevant sub-clause,
the amount so available shall be paid to each party entitled to receive such
sums pursuant to that sub-clause on a pari passu and pro tanto basis to its respective interest in the total
amount due and payable pursuant to that sub-clause.

 

15.7.2                           Subject to
clause 15.4.6, any Proceeds in respect of a Mismatch Aircraft or otherwise in
relation to the Loans  (or either of
them) for that Mismatch Aircraft which are held in a Proceeds Account or
received by the Security Trustee at any time when a Lease Termination Event has
occurred and is continuing (and any other amounts which are, pursuant to this
clause 15, to be applied in accordance with this clause 15.7.2), together with
such amount of interest as may have accrued thereon whilst held in the relevant
Proceeds Account, shall be applied by the Security Trustee as soon as
reasonably practicable following receipt by the Security Trustee as follows:

 

(a)              first,
in or towards reimbursing each of the Representatives and/or any Receiver for
any and all Qualifying Expenses due and payable pursuant to any of the
Transaction Documents and in or towards payment of any debts or claims which
are by Applicable Law payable in preference to the amounts due to the
Representatives and/or the Lenders (but only to the extent such debts or claims
have such preference);

 

(b)             secondly,
in payment on a pro rata and pari passu basis
of an amount of up to the total interest outstanding in respect of the Loans
for that Mismatch Aircraft to be applied as follows:

 

47

 

(i)                           to each of
the National Agents in the proportions specified in the ECA Loan Agreement for
the ECA Loan for that Mismatch Aircraft for application by each National Agent
in or towards the payment of interest outstanding to the relevant ECA Lenders
under that ECA Loan Agreement; and

 

(ii)                        to the
Mismatch Agent for application by the Mismatch Agent in or towards payment of
interest outstanding to the relevant Mismatch Lenders under the Mismatch Loan
Agreement for the Mismatch Loan for that Mismatch Aircraft;

 

(c)              thirdly,
in payment on a pro rata and pari passu basis
of an amount of up to the total principal outstanding in respect of the Loans
for that Mismatch Aircraft to be applied as follows:

 

(i)                           to each of
the National Agents in the proportions specified in the ECA Loan Agreement for
the ECA Loan for that Mismatch Aircraft for application by each National Agent
in or towards the payment of principal outstanding to the relevant ECA Lenders
under that ECA Loan Agreement; and

 

(ii)                        to the
Mismatch Agent for application by the Mismatch Agent in or towards payment of
principal outstanding to the relevant Mismatch Lenders under the Mismatch Loan
Agreement for the Mismatch Loan for that Mismatch Aircraft;

 

(d)             fourthly,
to the persons, in the order and in respect of the matters referred to in
paragraphs (a) to (c) inclusive above, in relation to each of the Loans for the
Mismatch Aircraft other than that Mismatch Aircraft;

 

(e)              fifthly,
to the relevant Finance Party and/or the Export Credit Agencies on a pro rata and pari passu
basis in respect of all other amounts owing to that Finance Party and/or the
Export Credit Agencies under this Agreement or any other Transaction Document
which remain unpaid (which shall include, for the avoidance of doubt, any
Expenses other than Qualifying Expenses which are owing at that time and any
amounts due and payable under clause 9.2.1 or clause 9.2.2 of any Loan
Agreement for a Mismatch Aircraft), in each case, to the extent relating to a
Mismatch Aircraft;

 

(f)                sixthly,
in payment to each Borrower which is the owner of a Mismatch Aircraft of all
amounts owing by any Lessee and/or debis to that Borrower under this Agreement
or any other Transaction Document which remain unpaid, to the extent relating
to a Mismatch Aircraft;

 

(g)             seventhly,
to the persons, in the order and in respect of the matters referred to in
paragraphs (a) to (f) inclusive of clause 15.7.1, in relation to each Loan for
the ECA Aircraft; and

 

(h)             finally,
once all the amounts referred to in paragraphs (a) to (g) inclusive above have
been satisfied and discharged in full and the Secured Loan Obligations have
been satisfied and discharged in full, any balance shall be paid as directed by
the relevant Lessee.

 

If the amount
of any Proceeds to be applied in or towards payment of sums due pursuant to any
of paragraphs (a) to (g) inclusive above is insufficient to pay in full all
sums referred to in the relevant sub-clause, the amount so available
shall be paid to each party entitled to receive such sums pursuant to that sub-clause
on a pari passu and pro tanto
basis to its respective interest in the total amount due and payable pursuant
to that sub-clause.

 

15.8             Application of Proceeds received pursuant to the Guarantee

 

15.8.1                           If any
Proceeds are received by the Security Trustee pursuant to the Guarantee as a
result of any demand or notice given by the Security Trustee under the
Guarantee at the request of the ECA Agent in accordance with clause 13.7.1 (in
this clause 15.8, “ECA Guarantee Proceeds”)
and clause 13.7.2(a) applies, such ECA Guarantee Proceeds, together with

 

48

 

such
amount of interest as may have accrued thereon whilst held in the relevant
Proceeds Account, shall be applied as soon as reasonably practicable following  that receipt in the following order:

 

(a)            first,
in reimbursement of the ECA Finance Parties and/or the Export Credit Agencies
of any and all Qualifying Expenses due and payable to any of the ECA Finance
Parties and/or the Export Credit Agencies pursuant to any of the Transaction
Documents;

 

(b)           secondly, in payment of an
amount of up to the total amount of interest outstanding in respect of the ECA
Loans to each of the National Agents in the respective proportions specified in
the ECA Loan Agreements for application by each National Agent in or towards
payment of interest outstanding to the relevant ECA Lenders under the ECA Loan
Agreements;

 

(c)            thirdly, in payment of an
amount of up to the total amount of principal outstanding in respect of the ECA
Loans to each of the National Agents in the respective proportions specified in
the ECA Loan Agreements for application by each National Agent in or towards
payment of principal outstanding to the relevant ECA Lenders under the ECA Loan
Agreements;

 

(d)           fourthly, in payment to the
ECA Finance Parties and/or the Export Credit Agencies on a pro rata
and pari passu basis of all amounts owing to
the ECA Finance Parties and/or the Export Credit Agencies under this Agreement,
the ECA Loan Agreements or any other Transaction Document which remain unpaid
(which shall include, for the avoidance of doubt, any Expenses other than
Qualifying Expenses which are owing at that time and any amounts due and
payable under clause 9.2.1 or clause 9.2.2 of that ECA Loan Agreement);

 

(e)            fifthly, in payment to
each Borrower under the ECA Loan Agreements of all amounts owing by any Lessee
and/or debis to that Borrower under this Agreement or any other Transaction
Document which remain unpaid; and

 

(f)              finally, if no Cross
Collateralisation Event has then occurred which is continuing, any balance
shall be paid as directed by the relevant Lessee.

 

15.8.2                           If any
Proceeds are received by the Security Trustee pursuant to the Guarantee as a
result of any demand or notice given by the Security Trustee under the
Guarantee at the request of the Mismatch Agent in accordance with clause 13.7.1
(in this clause 15.8, “Mismatch Guarantee
Proceeds”) and clause 13.7.2(b) applies, such Mismatch Guarantee
Proceeds, together with such amount of interest as may have accrued thereon
whilst held in the relevant Proceeds Account, shall be applied as soon as
reasonably practicable following  that
receipt in the following order:

 

(a)            first,
in reimbursement of the Mismatch Finance Parties of any and all Qualifying
Expenses due and payable to any of the Mismatch Finance Parties pursuant to any
of the Transaction Documents;

 

(b)           secondly, in payment of an
amount of up to the total amount of interest outstanding in respect of the
Mismatch Loans to the Mismatch Agent for application by the Mismatch Agent in
or towards payment of interest outstanding to the relevant Mismatch Lenders
under the Mismatch Loan Agreements;

 

(c)            thirdly, in payment of an
amount of up to the total amount of principal outstanding in respect of the
Mismatch Loans to the Mismatch Agent for application by the Mismatch Agent in
or towards payment of principal outstanding to the relevant Mismatch Lenders
under the Mismatch Loan Agreements;

 

(d)           fourthly, in payment to
Mismatch Finance Parties on a pro rata and pari passu basis of all amounts owing to the Mismatch
Finance Parties under this Agreement, the Mismatch Loan Agreements or any other
Transaction Document which remain unpaid (which shall

 

49

 

include,
for the avoidance of doubt, any Expenses other than Qualifying Expenses which
are owing at that time and any amounts due and payable under clause 9.2.1 or
clause 9.2.2 of that Mismatch Loan Agreement);

 

(e)            fifthly, in payment to
each Borrower under the Mismatch Loan Agreements of all amounts owing by any
Lessee and/or debis to that Borrower under this Agreement or any other
Transaction Document which remain unpaid; and

 

(f)              finally, if no Cross
Collateralisation Event has then occurred which is continuing, any balance
shall be paid as directed by the relevant Lessee.

 

15.8.3                           If any
amounts under clause 15.8.1 or 15.8.2 can not be applied in full by the
Security Trustee because a Cross Collateralisation Event has occurred and is
continuing and, as a result thereof, paragraph (f) of clause 15.8.1 or clause
15.8.2 (as applicable) applies, such amounts shall be held in the relevant
Proceeds Account until the earlier of the times at which:

 

(a)              no
Cross Collateralisation Event has occurred and is continuing, in which case the
amounts, together with such amount of interest as may have accrued thereon
whilst held in the relevant Proceeds Account, shall be applied in accordance
with such paragraph (f); or

 

(b)             a
Lease Termination Event has occurred and is continuing, in which case the
amounts, together with such amount of interest as may have accrued thereon
whilst held in the relevant Proceeds Account, shall be applied in accordance
with 15.7.1 or 15.7.2 (as applicable).

 

15.8.4                           If the
amount of any ECA Guarantee Proceeds or any Mismatch Guarantee Proceeds to be
applied in or towards payment of sums due pursuant to any of sub-clauses
15.8.1(a) to (e) or any of sub-clauses 15.8.2(a) to (e), as the case may
be, is insufficient to pay in full all sums referred to in the relevant
sub-clause, the amount so available shall be paid to each party entitled to
receive such sums pursuant to that sub-clause on a pari passu
and pro tanto basis to its respective
interest in the total amount due and payable pursuant to that sub-clause.

 

15.9             Application by National Agents

 

15.9.1                           Any
application by a National Agent of funds received from the Security Trustee by
way of distribution from a Proceeds Account pursuant to any provision of this
clause 15 shall be effected in accordance with the terms agreed between that
National Agent, the relevant ECA Lenders and the relevant Export Credit Agency,
and each National Agent shall inform each other party hereto, upon that party’s
request, of the effect of that application on the remaining principal and
interest due on the relevant national portion of the relevant ECA Loan.

 

15.9.2                           If any
Proceeds in one currency (as applicable, the “Recovered
Currency”) are required to be exchanged into another currency (as
applicable, the “Required Currency”) in order that
such Proceeds can be applied in accordance with the order of application of
proceeds set out in this clause 15, then the Security Trustee shall sell the
relevant amount in the Recovered Currency and purchase an equivalent amount in the
Required Currency at the spot rate of exchange available to the Security
Trustee (in the ordinary course of business) on the date of receipt or, if it
is not practicable to effect that purchase on that date, the immediately
following day on which banks are generally open for the transaction of that
foreign exchange business in the jurisdiction through which the Security
Trustee is acting for the purposes of this Agreement.  The new amount of the Required Currency so
purchased (after the deduction by the Security Trustee of any reasonable costs
of exchange incurred by it in connection with that purchase) shall be applied
in accordance with this clause 15.

 

15.9.3                           Following
the occurrence of a Lease Termination Event and for as long thereafter as the
same is continuing, the Security Trustee shall be entitled, at the discretion
of the National Agents (acting on the instructions of the Export Credit Agencies),
to retain any Proceeds

 

50

 

received
or recovered in a Proceeds Account until the Export Credit Agencies shall
direct all or part of such Proceeds to be applied in accordance with clause
15.7.

 

15.10      Identity of Finance Parties

 

In considering at any time (and from time to time) the
persons entitled to the benefit of any or all of the Proceeds or the Trust
Property, each Representative may:

 

15.10.1                     (without
prejudice to clause 22.4) rely and act in reliance upon any Transfer
Certificate or notice of assignment unless and until the same is superseded by
a further Transfer Certificate or notice so that no Representative shall have
any liability or responsibility to any party as a consequence of placing
reliance on and acting in reliance upon any Transfer Certificate or notice of
assignment (including if any notice of assignment or Transfer Certificate was
not, or proves not to have been, authentic or duly authorised); and

 

15.10.2                     (without
prejudice to clause 22.4) to the extent that any such information is not
inconsistent with information on which any Representative is entitled to rely
under this clause 15, rely and act in reliance upon any information provided to
any Representative by any party to the Transaction Documents so that no
Representative shall have any liability or responsibility to any party as a consequence
of placing reliance on and acting in reliance upon any such information unless
the relevant Representative has actual knowledge that that information is
inaccurate or incorrect (for which purpose no Representative shall be treated
as having actual knowledge of any matter of which the corporate finance,
corporate lending, loan administration or any other department or division
outside the Transportation Group/Middle Office of that Representative (or
equivalent department of the person for the time being acting as that
Representative) may become aware in the context of corporate finance, advisory,
lending or loan administration activities from time to time undertaken by that
Representative for any Obligor or any other person).

 

15.11      Information to Security Trustee

 

Each of the Finance Parties (whether directly or
through its relevant Agent) shall provide the Security Trustee and each other
Representative with such written information as the Security Trustee or such
other Representative may reasonably require for the purpose of carrying out its
duties and obligations under this Agreement and/or the Trust Documents and, in
particular, with such directions in writing as may reasonably be required so as
to enable the Security Trustee and each other Representative to apply the
proceeds of realisation of the Trust Documents and the Trust Property, in each
case, as contemplated by this clause 15.

 

15.12       Recoveries by Lenders

 

15.12.1                     General

 

If:

 

(a)            a
Lender receives or recovers any amount in respect of sums due from a Borrower
under any Loan Agreement (whether by set-off or otherwise) which is
greater than the amount it should have received in accordance with the terms of
that Loan Agreement on or before the date of that receipt or recovery; or

 

(b)           a Lender receives or
recovers any amount in respect of sums due from a Borrower under any Loan
Agreement (whether by set-off or otherwise) at any time after any
National Agent has notified the ECA Agent that it has not received all amounts
then due to have been paid to it for the account of the relevant ECA Lenders in
its National Syndicate or the Mismatch Agent has not received all amounts then
due to have been paid to it for the account of the relevant Mismatch Lenders,

 

that Lender
shall as soon as reasonably practicable notify its Agent (either directly or,
in the case of an ECA Lender, via its National Agent) of that amount and the
manner of its receipt or recovery.

 

51

 

15.12.2                     Redistribution of
receipts

 

Following:

 

(a)            receipt
of notice from a Lender under clause 15.12.1; or

 

(b)           the relevant Agent
notifying the Lenders (directly or through the National Agents) that not all
Lenders have received all sums then due to have been received by them pursuant
to the Loan Agreements,

 

the ECA Agent
shall, as soon as practicable, having regard to the circumstances, consult with
the Lenders to establish the aggregate amount of sums received or recovered by
the Lenders participating in the relevant Loans and what payments are necessary
amongst the Lenders for (in the first instance) that aggregate amount to be
divided amongst the Lenders in proportion to their respective Contributions in
order to, and in such manner as will, accord with the application provisions
and order of priority of payment set out in the foregoing provisions of this
clause 15.

 

15.12.3                     Payments by
Lenders

 

The Lenders
shall as soon as reasonably practicable make such payments to each other,
through the ECA Agent, as the ECA Agent shall direct to effect the
proportionate divisions referred to in clause 15.12.2.

 

15.12.4                     Deemed payments
by relevant Obligor

 

If a Lender
makes a payment or payments pursuant to clause 15.12.3, any payment previously
received by that Lender as described in clause 15.12.1 shall, subject to clause
15.12.6, be deemed to have been made by the relevant Obligor on the
understanding that it was received by that Lender as agent for the Lenders and
that the payments described in clause 15.12.5 would be made and the liabilities
of the relevant Obligor to each of the Lenders shall accordingly be determined
on the basis that such payment or payments pursuant to clause 15.12.5 would be
made.

 

15.12.5                     No discharge of
indebtedness

 

If a Lender
makes a payment or payments pursuant to clause 15.12.3, clause 15.12.4 shall not apply if the relevant indebtedness of the
relevant Obligor to that Lender has been extinguished, discharged or satisfied
by the amount received or recovered (for example, because of set-off).  In this event, for the purpose only of
determining the liabilities of the relevant Obligor to the Lenders (other than
the relevant Lender making the said payment or payments) and the liabilities of
the Lenders to each other, the said payment or payments by the relevant Lender
shall be deemed to have been made on behalf of the relevant Obligor in respect
of its obligations under the relevant Loan Agreement.

 

15.12.6                     Adjustment upon
rebate

 

The parties
shall make such payments and take such steps as may be just and equitable to re-adjust
the position of the parties if a Lender, having followed the procedures
required above, is obliged to return any sum (referred to in clause 15.12.1) to
the relevant Obligor or any person claiming by or through the relevant Obligor.

 

15.12.7                     Consents for payments

 

Each Finance
Party agrees to take all steps required of it pursuant to clause 15.12.1 to use
all reasonable endeavours to obtain any consents or authorisations which may at
any relevant time be required for any payment by it pursuant to clause 15.12.3.

 

52

 

15.12.8                     No charge created

 

The provisions
contained in this clause 15.12 shall not and shall not be construed so as to
constitute a charge by any Lender over all or any part of a sum received or recovered
by it in the circumstances mentioned in this clause 15.12.

 

15.13      Aircraft

 

The foregoing provisions of this clause 15 apply to
Aircraft which, at the relevant time, are subject to the security constituted
by the Security Documents.

 

16                       Fees, Expenses and indemnities

 

16.1             Indemnification from Trust Property - Security Trustee

 

Without
prejudice to any right to indemnity arising under Applicable Law, clause 16.2
or any other provision of the Transaction Documents, the Security Trustee and
every agent or other person appointed by it in connection with its appointment
under this Agreement shall be entitled to be indemnified out of the proceeds of
enforcement of the Trust Documents in respect of all Expenses, Losses and
Taxes, in respect of which the Security Trustee is entitled to be indemnified
by any Obligor pursuant to any other provision of this Agreement or any other
Transaction Document but which is not received by the Security Trustee when
due, provided always that the foregoing provisions of this clause 16.1 shall be
in all respects subject to clause 15.

 

16.2             Indemnification of Expenses - Finance Parties and Export Credit
Agencies

 

16.2.1                           Each
Borrower shall pay to the relevant Agent for the account of the relevant
Finance Party (which, in the case of the Security Trustee, shall for the
purposes of this clause 16.2 include each agent or other person appointed by it
in connection with its appointment under this Agreement) or Export Credit
Agency (as applicable), within ten (10) days of demand (which demand shall be
accompanied by reasonable evidence of the amount demanded), whether or not any
ECA Utilisation Documentation and/or Mismatch Utilisation Documentation is
entered into and/or any amount is disbursed under the Loan Agreements, all
Expenses incurred by the Finance Parties and the Export Credit Agencies (or any
of them).

 

16.2.2                           Each Lender
(other than a Lender which is an Export Credit Agency) shall reimburse the
Security Trustee, rateably in accordance with its Liability, for any amount
which is due and payable to the Security Trustee (or, as the case may be, the
relevant agent or other person appointed by it in connection with its
appointment under this Agreement) pursuant to clause 16.2.1 but is not received
by the Security Trustee.

 

16.2.3                           Each ECA
Lender (other than an ECA Lender which is an Export Credit Agency) shall
reimburse the ECA Agent, rateably in accordance with its Liability, for any
amount which is due and payable to the ECA Agent pursuant to clause 16.2.1 but
is not received by the ECA Agent.

 

16.2.4                           Each
British Lender (other than a British Lender which is an Export Credit Agency)
shall reimburse the British National Agent, rateably in accordance with its
Liability, for any amount which is due and payable to the British National
Agent pursuant to clause 16.2.1 but is not received by the British National
Agent.

 

16.2.5                           Each French
Lender (other than a French Lender which is an Export Credit Agency) shall
reimburse the French National Agent, rateably in accordance with its Liability,
for any amount which is due and payable to the French National Agent pursuant
to clause 16.2.1 but is not received by the French National Agent.

 

16.2.6                           Each German
Lender (other than a German Lender which is an Export Credit Agency) shall
reimburse the German National Agent, rateably in accordance with its Liability,
for any amount which is due and payable to the German National Agent pursuant
to clause 16.2.1 but is not received by the German National Agent.

 

53

 

16.2.7                           Each
Mismatch Lender shall reimburse the Mismatch Agent, rateably in accordance with
its Liability, for any amount which is due and payable to the Mismatch Agent
pursuant to clause 16.2.1 but is not received by the Mismatch Agent.

 

16.3             Borrower fees

 

Each Borrower shall:

 

16.3.1                           procure
that all fees payable to the relevant Manager from time to time are paid as
soon as reasonably practicable when due in accordance with the relevant
Administration Agreement; and

 

16.3.2                           pay or
procure that there are paid all other fees, costs and expenses in connection
with the incorporation, administration and management of that Borrower and its
related trust and/or other ownership arrangements including, without
limitation, all fees, costs and expenses in connection with the preparation and
approval of accounts for that Borrower by auditors approved by the Security
Trustee and debis.

 

16.4             Stamp and other duties

 

Subject to clause 16.6 and to the proviso to this
clause 16.4, each Borrower shall pay any stamp, documentary, transaction,
registration or other like duties or Taxes (including any duties or Taxes
payable by any Finance Party, but excluding Excluded Taxes) imposed on any
Transaction Document for an Aircraft which is owned by that Borrower and shall
indemnify the Finance Parties against any liability arising by reason of any
delay or omission by that Borrower to pay such duties or Taxes (other than
Excluded Taxes).  Provided however that
no Borrower shall be liable to indemnify any Finance Party under this clause
16.4 in respect of any duties or Taxes which are imposed in a jurisdiction as a
result of that Finance Party taking or sending the relevant Transaction
Document into that jurisdiction unless that Finance Party was required to do so
by Applicable Law or in order to take enforcement action in that jurisdiction
following the occurrence of a Lease Termination Event which is then
continuing.  The other parties hereto
agree to co-operate in good faith with each other with a view to avoiding or
minimising liability for stamp, documentary, transaction, registration or other
like duties of Taxes which may be imposed in connection with any Transaction
Document in any jurisdiction.

 

16.5             Recordation and registration expenses

 

Subject to clause 16.6, the Borrowers shall pay and
indemnify the Finance Parties and the Lessees shall pay and indemnify the
Borrowers against all fees, costs and expenses associated with:

 

16.5.1                           the filing
or recording of this Agreement or any other Transaction Document for an Aircraft
which is leased to that Lessee or the relevant Borrower’s ownership interest in
the State of Registration for that Aircraft, any State of Incorporation for a
person which is party to the ownership and/or leasing arrangements for that
Aircraft or the Habitual Base for that Aircraft including (but not limited to)
the provision of translations, registrations, notarisations or legalisations,
if required by Applicable Law; and

 

16.5.2                           the
registration of that Aircraft and integration of that Aircraft into that Lessee’s,
any Sub-Lessee’s and/or any Sub-Sub-Lessee’s fleet.

 

16.6             Mortgage cost

 

No Borrower shall be liable to pay and/or indemnify
any Finance Party and no Lessee shall be liable to pay and/or indemnify any
Borrower against any of the Taxes, fees, costs and expenses referred to in
clauses 16.4 and 16.5 to the extent that, in relation to any individual
Mortgage for an Aircraft, such Taxes, fees, costs and expenses together exceed
ten thousand Dollars ($10,000) and, pursuant to paragraph 1(c) of schedule 7,
no Mortgage for that Aircraft is required.

 

54

 

17                       National Agents

 

17.1             Appointment of National Agents

 

Each of the British Lenders, the French Lenders and
the German Lenders, in each case, for an Aircraft irrevocably appoints
respectively the British National Agent, the French National Agent and the
German National Agent, in each case, for that Aircraft as its agent for the
purposes of this Agreement and the other Transaction Documents and authorises that
National Agent (whether or not by or through employees or agents) to take such
action on the relevant National Syndicate’s behalf and to exercise such rights,
remedies, powers and discretions as are specifically delegated to that National
Agent by this Agreement, together with such powers and discretions as are
reasonably incidental thereto. The British National Agent, the French National
Agent and the German National Agent shall not, however, have any duties,
obligations or liabilities to their respective National Syndicates beyond those
expressly stated in this Agreement and the other Transaction Documents.

 

17.2             Identity of ECA Lenders

 

The British National Agent, the French National Agent
and the German National Agent may deem and treat (a) each relevant ECA Lender
in its National Syndicate as the person entitled to the benefit of the
Contribution of that ECA Lender in any ECA Loan for all purposes of the
Transaction Documents unless and until a notice of assignment of that ECA
Lender’s Contribution in any ECA Loan or any part thereof, or any Transfer
Certificate in respect thereof, shall have been filed with the ECA Agent and
the ECA Agent shall have notified the British National Agent, the French
National Agent or the German National, as appropriate, thereof, and (b) the
office set opposite the name of each ECA Lender in its National Syndicate in
schedule 2 or, as the case may be, in any relevant Transfer Certificate as that
ECA Lender’s facility office unless and until a written notice of change of facility
office shall have been received by the relevant National Agent, and the
relevant National Agent may act upon any such notice unless and until the same
is superseded by a further such notice.

 

17.3             No responsibility for other parties

 

None of the British National Agent, the French
National Agent or the German National Agent shall have any responsibility to
any ECA Lender in its National Syndicate:

 

17.3.1                           on account
of the failure of any Obligor, any other party to the Transaction Documents or
any other person to perform their obligations under any of the Transaction
Documents; or

 

17.3.2                           for the
financial condition of any Obligor, any other party to the Transaction
Documents or any other person; or

 

17.3.3                           for the
completeness or accuracy of any statements, representations or warranties in
any of the other Transaction Documents or any document delivered under this
Agreement or any of the other Transaction Documents; or

 

17.3.4                           for the
execution, effectiveness, adequacy, genuineness, validity, enforceability or
admissibility in evidence of this Agreement or any of the other Transaction
Documents, of any certificate, report or other document executed or delivered
under this Agreement or any of the Transaction Documents and/or of all or any
part of the ownership, leasing, security and/or financing structure
contemplated by the Transaction Documents (or any of them); or

 

17.3.5                           otherwise
in connection with any ECA Loan or the negotiation of this Agreement or any of
the other Transaction Documents; or

 

17.3.6                           for acting
(or, as the case may be, refraining from acting) in accordance with the
instructions of the Majority Lenders and/or in accordance with any provision of
any Transaction Document.

 

55

 

17.4             No restriction on other business

 

Each National Agent may, without any liability to
account to any ECA Lender, accept deposits from, lend money to, and generally
engage in any kind of banking or trust business with, any Obligor, any other
party to the Transaction Documents, any debis Group Company or any of their
respective Subsidiaries or Affiliates or any other ECA Finance Party as if it
were not a National Agent.

 

17.5             Retirement of National Agents

 

17.5.1                           Each
National Agent may retire from its appointment as agent for its National
Syndicate having given to the ECA Agent, each Lessee, debis and each of the ECA
Lenders in its National Syndicate not less than thirty (30) days’ notice of its
intention to do so, provided that no such
retirement by the British National Agent, the French National Agent or the
German National Agent shall take effect unless there has been appointed by the
ECA Lenders in its National Syndicate as a successor agent (which shall have
accepted such appointment in writing) either:

 

(a)              an
ECA Lender nominated by the ECA Lenders in the relevant National Syndicate and,
for so long as no Lease Termination Event has occurred and is continuing,
consented to in writing by debis (such consent not to be unreasonably withheld
or delayed); or

 

(b)             failing
such a nomination and for so long as no Lease Termination Event has occurred
and is continuing, an ECA Lender nominated by debis and consented to in writing
by the ECA Lenders in the relevant National Syndicate (such consent not to be
unreasonably withheld or delayed); or

 

(c)              failing
such a nomination, any reputable and experienced bank or financial institution
(or other person approved by debis) nominated by the relevant National Agent
after consultation with the Secured Parties.

 

17.6             Payments to National Agents

 

All moneys to be paid or distributed by the ECA Agent
or the Security Trustee to the relevant ECA Lenders in respect of any ECA Loan
under this Agreement or any other Transaction Document may be effected by
payment to each National Agent for the account of the relevant ECA Lenders in
its National Syndicate of its portion of the amount so to be paid or
distributed.  Each payment so received by
the National Agents shall (unless otherwise agreed by that National Agent and
the relevant ECA Lenders in its National Syndicate to the contrary) be
distributed between the relevant ECA Lenders in its National Syndicate in
accordance with their respective Contributions.

 

17.7             Service of notice on National Agents

 

Any party to this Agreement may validly effect service
of any notice required under this Agreement or otherwise in respect of any ECA
Loan on any ECA Lender by delivering that notice to the relevant ECA Lender’s
National Agent for onward transmission to the relevant ECA Lender.

 

17.8             Notice to ECA Lenders

 

Any notice required to be given by or to any ECA
Lender to or by the ECA Agent or the Security Trustee shall be given through
that ECA Lender’s National Agent and the ECA Agent and the Security Trustee
shall each disregard any notice purported to be given by an ECA Lender in any
other manner. In the event that any National Agent gives any notice or consent
or, in the circumstances contemplated by clause 13.5, fails to give any notice
or consent, the ECA Agent and the Security Trustee shall be entitled (and
bound) to assume that that notice or consent has been given or, as the case may
be, failed to have been given by all the ECA Lenders in the relevant National
Agent’s National Syndicate.

 

56

 

17.9             Information relating to notices

 

Each National Agent shall as soon as reasonably
practicable notify each ECA Lender in its National Syndicate of the contents of
each notice, certificate, document or other communication received by it from
any other party under or pursuant to any Transaction Document.

 

18                       ECA Agent

 

18.1             Appointment of ECA Agent

 

Each ECA Lender and each National Agent irrevocably
appoints the ECA Agent as its agent for the purposes of each ECA Loan and the
Transaction Documents on the following terms and further authorises the ECA
Agent (whether or not by or through employees or agents) to take such action on
its behalf and to exercise such rights, remedies, powers and discretions as are
specifically delegated to the ECA Agent by this Agreement and the other
Transaction Documents, together with such powers and discretions as are
reasonably incidental thereto. The ECA Agent shall not, however, have any
duties, obligations or liabilities to the ECA Lenders or the National Agents
beyond those expressly stated in this Agreement and the other Transaction
Documents.

 

18.2             Amendments to Transaction Documents

 

18.2.1                           Subject to
clauses 12.9, 13 and 18.2.2, the ECA Agent may, with the consent of the
Majority Lenders (or to the extent expressly authorised by the other provisions
of this Agreement or any other Transaction Document), amend, modify or
otherwise vary or waive breaches of, or defaults under, or otherwise excuse
performance of, any provision of this Agreement or any other Transaction
Document. Any such action so authorised and effected by the ECA Agent shall be
as soon as reasonably practicable notified to the National Agents by the ECA
Agent and shall be binding on each ECA Lender.

 

18.2.2                           Except with
the prior written consent of the relevant ECA Lender and subject to clause 12.9
(and, in the case of sub-paragraphs (iv), (v) and (vii), of each of the ECA
Lenders) (communicated in each case in writing by the National Agents), the ECA
Agent shall not agree with the other parties thereto any amendment to any
Transaction Document which would (i) extend the due date, availability period
or reduce the amount of any payment under any Transaction Document to or of
that ECA Lender, (ii) change the currency in which any amount is payable under
any Transaction Document to that ECA Lender, (iii) increase that ECA Lender’s
Contribution or ECA Commitment, (iv) change the definition of ECA Lender or
Majority Lenders, (v) change clause 13 or clause 15 or this clause 18.2 or any
other provision of this Agreement or the other Transaction Documents which
provides for the consent of the National Agents, all of the ECA Lenders and/or
the German Parallel Lender to be obtained, (vi) reduce any applicable margin or
interest rate or other amount in each case owing to that ECA Lender pursuant to
any Transaction Document, or (vii) amend, modify, vary, release or discharge
any of the Security Documents or the Liens constituted thereby or consent to
any of the same other than in accordance with the terms of this Agreement and the
other Transaction Documents.

 

18.3             Rights of ECA Agent

 

With respect to its own Contribution (if any) in any
ECA Loan, the ECA Agent shall have the same rights and powers under this
Agreement and the other Transaction Documents as any other ECA Lender and may
exercise the same as though it were not performing the duties and functions
delegated to it (as agent) under this Agreement or, as the case may be, the
Transaction Documents, and the term “ECA Lender” shall, unless the context
otherwise indicates, include the ECA Agent. 
Neither this Agreement nor any of the other Transaction Documents shall
(nor shall the same be construed so as to) constitute a partnership between the
parties or any of them or so as to establish a fiduciary relationship between
the ECA Agent (in any capacity) and any other person.

 

18.4             No obligations to other parties

 

The ECA Agent shall not:

 

57

 

18.4.1                           be obliged
to make any enquiry as to any default by any Borrower, any Lessee, debis or any
other person in the performance or observance of any of the provisions of any
of the Transaction Documents or as to the existence of a default, a Relevant
Event or a Termination Event unless the ECA Agent has actual knowledge thereof,
or has been notified in writing thereof by a National Agent or any ECA Lender,
in which case the ECA Agent shall as soon as reasonably practicable notify the
ECA Lenders (through the National Agents) of the relevant event or
circumstances;

 

18.4.2                           be liable
to any ECA Lender for any action taken or omitted under or in connection with
this Agreement or any of the other Transaction Documents or any ECA Loan except
in the case of the gross negligence or wilful misconduct of the ECA Agent.

 

For the purposes of this clause 18, the ECA Agent
shall not be treated as having actual knowledge of any matter of which the
corporate finance or leasing or any other division outside the Transportation
Group/Middle Office of the ECA Agent (or equivalent department of the person
for the time being acting as the ECA Agent) may become aware in the context of
corporate finance or advisory activities from time to time undertaken by the
ECA Agent for any Borrower, any Lessee or debis or any other person.

 

18.5             Communications

 

The ECA Agent shall as soon as reasonably practicable
notify each National Agent of the contents of each notice, certificate,
document or other communication received by it in its capacity as ECA Agent
from any Obligor under or pursuant to any of the Transaction Documents.

 

18.6             Identity of ECA Lenders

 

The ECA Agent may deem and treat (a) each relevant ECA
Lender as the person entitled to the benefit of the Contribution with respect
to an ECA Loan of that ECA Lender for all purposes of the Transaction Documents
unless and until a notice of assignment of that ECA Lender’s Contribution (with
respect to that ECA Loan) or any part thereof, or a Transfer Certificate in
respect thereof, shall have been filed with the ECA Agent, and (b) the office
set opposite the name of each ECA Lender in schedule 2 or, as the case may be,
in any relevant Transfer Certificate as that ECA Lender’s facility office
unless and until a written notice of change of facility office shall have been
received by the ECA Agent and the ECA Agent may act upon any such notice unless
and until the same is superseded by a further such notice.

 

18.7             No reliance on ECA Agent

 

Each ECA Lender acknowledges that it has not relied on
any statement, opinion, forecast or other representation made by the ECA Agent
to induce it to enter into any of the Transaction Documents and that it has
made and will continue to make, without reliance on the ECA Agent and based on
such documents as it considers appropriate, its own appraisal of the
creditworthiness of each Obligor and each other party to the Transaction
Documents and its own independent investigation of the financial condition and
affairs of each Obligor and each other party to the Transaction Documents in
connection with the making and continuation of any ECA Loan.  The ECA Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide the ECA
Lenders with any credit or other information with respect to any Obligor or any
other party to the Transaction Documents whether coming into its possession
before the making of the relevant ECA Loan or at any time or times thereafter,
other than as provided in clauses 18.4.1 and 18.5.  The ECA Agent shall not have any duty or
responsibility for the completeness or accuracy of any information given by any
Obligor or any other person in connection with or pursuant to any of the
Transaction Documents, whether the same is given to the ECA Agent and passed on
by it to the ECA Lenders or otherwise.

 

18.8             No responsibility for other parties

 

The ECA Agent shall not have any responsibility to any
ECA Lender or any National Agent:

 

58

 

18.8.1                           on account
of the failure of any Obligor, any other party to the Transaction Documents or
any other person to perform their obligations under any of the Transaction
Documents; or

 

18.8.2                           for the
financial condition of any Obligor, any other party to the Transaction
Documents, or any other person; or

 

18.8.3                           for the
completeness or accuracy of any statements, representations or warranties in
any of the Transaction Documents or any document delivered under this Agreement
or any of the other Transaction Documents; or

 

18.8.4                           for the
execution, effectiveness, adequacy, genuineness, validity, enforceability or
admissibility in evidence of this Agreement or any of the other Transaction
Documents, of any certificate, report or other document executed or delivered
under this Agreement or any of the Transaction Documents and/or of all or any
part of the ownership, leasing, security and/or financing structure
contemplated by the Transaction Documents (or any of them); or

 

18.8.5                           otherwise
in connection with any ECA Loan or the negotiation of this Agreement or any of
the other Transaction Documents; or

 

18.8.6                           for acting
(or, as the case may be, refraining from acting) in accordance with the
instructions of the Majority Lenders (or, where it is expressly required to do
so, the National Agents and (if applicable) the German Parallel Lender) and/or
in accordance with any provision of any Transaction Document.

 

The ECA Agent shall be entitled to rely on any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person and shall be entitled to
rely as to legal or other professional matters on opinions and statements of
any legal or other professional advisers selected or approved by it.

 

18.9             No restriction on other business

 

The ECA Agent may, without any liability to account to
any ECA Lender, accept deposits from, lend money to, and generally engage in
any kind of banking or trust business with, any Obligor, any other party to the
Transaction Documents, any debis Group Company or any of their respective
Subsidiaries or Affiliates or any other ECA Finance Party as if it were not the
ECA Agent.

 

18.10      Retirement of ECA Agent

 

18.10.1                     The ECA Agent may
retire from its appointment as ECA Agent under this Agreement and the other
Transaction Documents having given to each Lessee, each Borrower, debis and
each ECA Lender not less than thirty (30) days’ notice of its intention to do
so, provided that no such retirement shall take
effect unless there has been appointed by the Majority Lenders as a successor:

 

(a)              an
ECA Lender nominated by the Majority Lenders and, for so long as no Lease
Termination Event has occurred and is continuing, consented to in writing by
debis (such consent not to be unreasonably withheld or delayed); or

 

(b)             failing
such a nomination and for so long as no Lease Termination Event has occurred
and is continuing, an ECA Lender nominated by debis and consented to in writing
by the Majority Lenders (such consent not to be unreasonably withheld or
delayed); or

 

(c)              failing
such a nomination, any reputable and experienced bank or financial institution
(or other person approved by debis) nominated by the retiring ECA Agent after
consultation with the Secured Parties,

 

and that
successor ECA Agent shall have accepted that appointment in writing.

 

59

 

18.10.2                     Upon any such
successor as aforesaid being appointed, the retiring ECA Agent shall be
discharged from any further obligation under this Agreement and the other
Transaction Documents and its successor and each of the other parties to this
Agreement and the other Transaction Documents shall have the same rights and
obligations among themselves as they would have had if that successor had been
a party to this Agreement in place of the retiring ECA Agent.

 

18.11      Removal of ECA Agent

 

The Majority Lenders may at any time require the ECA
Agent to retire from its appointment as ECA Agent under this Agreement and the
other Transaction Documents without giving any reason upon giving to the ECA
Agent and each Borrower, each Lessee and debis not less than thirty (30) days’
prior written notice to that effect.  The
ECA Agent agrees to co-operate in giving effect to that resignation in
accordance with any such notice duly received by it and, in that connection,
shall execute all such deeds and documents as the Majority Lenders may
reasonably require in order to provide for:

 

(a)                        that resignation;

 

(b)                       the appointment of a successor ECA Agent in compliance with clause
18.10 but so that, for this purpose, the reference in clause 18.10.1(c) to the
retiring ECA Agent shall be deemed to be a reference to the Majority Lenders;
and

 

(c)                        the transfer of the rights and obligations of the ECA Agent under
this Agreement and the other Transaction Documents to that successor,

 

in each case in a legal, valid and binding
manner.  The retiring ECA Agent shall not
be responsible for any costs occasioned by that retirement (including in
relation to any such deeds or documents referred to in this clause 18.11).

 

19                       Mismatch Agent

 

19.1             Appointment of Mismatch Agent

 

Each Mismatch Lender irrevocably appoints the Mismatch
Agent as its agent for the purposes of each relevant Mismatch Advance, each
relevant Mismatch Loan and the Transaction Documents on the following terms and
further authorises the Mismatch Agent (whether or not by or through employees
or agents) to take such action on its behalf and to exercise such rights,
remedies, powers and discretions as are specifically delegated to the Mismatch
Agent by this Agreement and the other Transaction Documents, together with such
powers and discretions as are reasonably incidental thereto. The Mismatch Agent
shall not, however, have any duties, obligations or liabilities to the Mismatch
Lenders beyond those expressly stated in this Agreement and the other
Transaction Documents.

 

19.2             Amendments to Transaction Documents

 

19.2.1                           Subject to
clauses 12.9, 13 and 19.2.2, the Mismatch Agent may, with the consent of the
Majority Mismatch Lenders (or to the extent expressly authorised by the other
provisions of this Agreement or any other Transaction Document), amend, modify
or otherwise vary or waive breaches of, or defaults under, or otherwise excuse
performance of, any provision of this Agreement or any other Transaction
Document. Any such action so authorised and effected by the Mismatch Agent
shall be as soon as reasonably practicable notified to the Mismatch Lenders by
the Mismatch Agent and shall be binding on each Mismatch Lender.

 

19.2.2                           Except with
the prior written consent of the relevant Mismatch Lender and subject to clause
12.9 (and, in the case of clauses 19.2.2(d), (e) and (g), of each of the
Mismatch Lenders) (communicated in each case in writing by the Mismatch
Lenders), the Mismatch Agent shall not agree with the other parties thereto any
amendment to any Transaction Document which would:

 

60

 

(a)                       extend the due date, availability period or reduce the amount of any
payment under any Transaction Document to or of that Mismatch Lender;

 

(b)                      change the currency in which any amount is payable under any
Transaction Document to that Mismatch Lender;

 

(c)                       increase that Mismatch Lender’s Contribution or Mismatch Commitment;

 

(d)                      change the definition of Mismatch Lender, Majority Lenders or
Majority Mismatch Lenders;

 

(e)                       change clause 13 or clause 15 or this clause 19.2 or any other
provision of this Agreement or the other Transaction Documents which provides
for the consent of the Majority Mismatch Lenders or all of the Mismatch Lenders
to be obtained;

 

(f)                         reduce any applicable margin or interest rate or other amount in
each case owing to that Mismatch Lender pursuant to any Transaction Document;
or

 

(g)                      amend, modify, vary, release or discharge any of the Security
Documents or the Liens constituted thereby or consent to any of the same other
than in accordance with the terms of this Agreement and the other Transaction
Documents.

 

19.3             Rights of Mismatch Agent

 

With respect to its own Contribution (if any) in any
Mismatch Loan, the Mismatch Agent shall have the same rights and powers under
this Agreement and the other Transaction Documents as any other Mismatch Lender
and may exercise the same as though it were not performing the duties and
functions delegated to it (as agent) under this Agreement or, as the case may
be, the Transaction Documents, and the term “Mismatch Lender” shall, unless the
context otherwise indicates, include the Mismatch Agent.  Neither this Agreement nor any of the other
Transaction Documents shall (nor shall the same be construed so as to)
constitute a partnership between the parties or any of them or so as to
establish a fiduciary relationship between the Mismatch Agent (in any capacity)
and any other person.

 

19.4             No obligations to other parties

 

The Mismatch Agent shall not:

 

19.4.1                           be obliged
to make any enquiry as to any default by any Borrower, any Lessee, debis or any
other person in the performance or observance of any of the provisions of any
of the Transaction Documents or as to the existence of a default, a Relevant
Event or a Termination Event unless the Mismatch Agent has actual knowledge
thereof, or has been notified in writing thereof by any Mismatch Lender, in
which case the Mismatch Agent shall as soon as reasonably practicable notify
the Mismatch Lenders of the relevant event or circumstance;

 

19.4.2                           be liable
to any Mismatch Lender for any action taken or omitted under or in connection
with this Agreement or any of the other Transaction Documents or any Mismatch
Loan except in the case of the gross negligence or wilful misconduct of the
Mismatch Agent.

 

For the purposes of this clause 19.4, the Mismatch
Agent shall not be treated as having actual knowledge of any matter of which
the corporate finance or leasing or any other division outside the
Transportation Group/Middle Office of the Mismatch Agent (or equivalent
department of the person for the time being acting as the Mismatch Agent) may
become aware in the context of corporate finance or advisory activities from
time to time undertaken by the Mismatch Agent for any Borrower, any Lessee or
debis or any other person.

 

61

 

19.5             Communications

 

The Mismatch Agent shall as soon as reasonably
practicable notify each Mismatch Lender of the contents of each notice,
certificate, document or other communication received by it in its capacity as
Mismatch Agent from any Obligor under or pursuant to any of the Transaction
Documents.

 

19.6             Identity of Mismatch Lenders

 

The Mismatch Agent may deem and treat (a) each
Mismatch Lender as the person entitled to the benefit of the Contribution (with
respect to the Mismatch Loans) of that Mismatch Lender and as the person
obliged to advance that Mismatch Lender’s participation in any Mismatch Advance
for all purposes of the Transaction Documents unless and until a notice of
assignment of that Mismatch Lender’s Contribution (with respect to the Mismatch
Loans) or that Mismatch Lender’s Mismatch Commitment or any part thereof, or a
Transfer Certificate in respect thereof, shall have been filed with the
Mismatch Agent, and (b) the office set opposite the name of each Mismatch
Lender in Part IV of schedule 2 or, as the case may be, in any relevant
Transfer Certificate as that Mismatch Lender’s facility office unless and until
a written notice of change of facility office shall have been received by the
Mismatch Agent, and the Mismatch Agent may act upon any such notice unless and
until the same is superseded by a further such notice.

 

19.7             No reliance on Mismatch Agent

 

Each Mismatch Lender acknowledges that it has not
relied on any statement, opinion, forecast or other representation made by the
Mismatch Agent to induce it to enter into any of the Transaction Documents and
that it has made and will continue to make, without reliance on the Mismatch
Agent and based on such documents as it considers appropriate, its own
appraisal of the creditworthiness of each Obligor and each other party to the
Transaction Documents and its own independent investigation of the financial
condition and affairs of each Obligor and each other party to the Transaction
Documents in connection with the making and continuation of any Mismatch
Advance and any Mismatch Loan.  The
Mismatch Agent shall not have any duty or responsibility, either initially or
on a continuing basis, to provide the Mismatch Lenders with any credit or other
information with respect to any Obligor or any other party to the Transaction
Documents whether coming into its possession before the making of any relevant
Mismatch Advance or at any time or times thereafter, other than as provided in
clauses 19.4.1 and 19.5.  The Mismatch
Agent shall not have any duty or responsibility for the completeness or
accuracy of any information given by any Obligor or any other person in
connection with or pursuant to any of the Transaction Documents, whether the
same is given to the Mismatch Agent and passed on by it to the Mismatch Lenders
or otherwise.

 

19.8             No responsibility for other parties

 

The Mismatch Agent shall not have any responsibility
to any Mismatch Lender:

 

19.8.1                           on account
of the failure of any Obligor, any other party to the Transaction Documents or
any other person to perform their obligations under any of the Transaction
Documents; or

 

19.8.2                           for the
financial condition of any Obligor, any other party to the Transaction
Documents or any other person; or

 

19.8.3                           for the
completeness or accuracy of any statements, representations or warranties in
any of the other Transaction Documents or any document delivered under this
Agreement or any of the other Transaction Documents; or

 

19.8.4                           for the
execution, effectiveness, adequacy, genuineness, validity, enforceability or
admissibility in evidence of this Agreement or any of the other Transaction
Documents, of any certificate, report or other document executed or delivered
under this Agreement or any of the Transaction Documents and/or of all or any
part of the ownership, leasing, security and/or financing structure
contemplated by the Transaction Documents (or any of them); or

 

19.8.5                           otherwise
in connection with any Mismatch Loan or any Mismatch Advance or the negotiation
of this Agreement or any of the other Transaction Documents; or

 

62

 

19.8.6                           for acting
(or, as the case may be, refraining from acting) in accordance with the
instructions of the Majority Mismatch Lenders and/or in accordance with any
provision of any Transaction Document.

 

The Mismatch
Agent shall be entitled to rely on any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person and shall be entitled to rely as to legal or other professional
matters on opinions and statements of any legal or other professional advisers
selected or approved by it.

 

19.9             No restriction on other business

 

The Mismatch Agent may, without any liability to
account to any Mismatch Lender, accept deposits from, lend money to, and
generally engage in any kind of banking or trust business with, any Obligor,
any other party to the Transaction Documents, any debis Group Company or any of
their respective Subsidiaries or Affiliates or any other Mismatch Finance Party
as if it were not the Mismatch Agent.

 

19.10      Retirement of Mismatch Agent

 

19.10.1                  The Mismatch Agent may retire from its appointment as Mismatch Agent
under this Agreement and the other Transaction Documents having given to each
Lessee, each Borrower, debis and each Mismatch Lender not less than thirty (30)
days’ notice of its intention to do so, provided that no
such retirement shall take effect unless there has been appointed by the
Majority Mismatch Lenders as a successor:

 

(a)              any
reputable and experienced bank or financial institution (or other person
approved by debis) nominated by the Majority Mismatch Lenders and, for so long
as no Lease Termination Event has occurred and is continuing, consented to in
writing by debis (such consent not to be unreasonably withheld or delayed); or

 

(b)             failing
such a nomination and for so long as no Lease Termination Event has occurred
and is continuing, any reputable and experienced bank or financial institution
(or other person approved by debis) nominated by debis and consented to in
writing by the Majority Mismatch Lenders (such consent not to be unreasonably
withheld or delayed); or

 

(c)              failing
such a nomination, any reputable and experienced bank or financial institution
(or other person approved by debis) nominated by the retiring Mismatch Agent
after consultation with the Secured Parties,

 

and that
successor Mismatch Agent shall have accepted that appointment in writing.

 

19.10.2                     Upon any such
successor as aforesaid being appointed, the retiring Mismatch Agent shall be
discharged from any further obligation under this Agreement and the other
Transaction Documents and its successor and each of the other parties to this
Agreement and the other Transaction Documents shall have the same rights and
obligations among themselves as they would have had if that successor had been
a party to this Agreement in place of the retiring Mismatch Agent.

 

19.11      Removal of Mismatch Agent

 

The Majority Mismatch Lenders may at any time require
the Mismatch Agent to retire from its appointment as Mismatch Agent under this
Agreement and the other Transaction Documents without giving any reason upon
giving to the Mismatch Agent and each Borrower, each Lessee and debis not less
than thirty (30) days’ prior written notice to that effect.  The Mismatch Agent agrees to co-operate in
giving effect to that resignation in accordance with any such notice duly
received by it and, in that connection, shall execute all such deeds and
documents as the Majority Mismatch Lenders may reasonably require in order to
provide for:

 

(a)                        that resignation;

 

63

 

(b)                       the appointment of a successor Mismatch Agent in compliance with
clause 19.10 but so that, for this purpose, the reference in clause 19.10.1(c)
to the retiring Mismatch Agent shall be deemed to be a reference to the Majority
Mismatch Lenders; and

 

(c)                        the transfer of the rights and obligations of the Mismatch Agent
under this Agreement and the other Transaction Documents to that successor,

 

in each case in a legal, valid and binding
manner.  The retiring Mismatch Agent shall
not be responsible for any costs occasioned by that retirement (including in
relation to any such deeds or documents referred to in this clause 19.11).

 

20                       Appointment and powers of the Security Trustee

 

20.1             The trust

 

Each of the Secured Parties irrevocably appoints the
Security Trustee as its security agent and trustee to hold the Trust Property
for the purposes of this Agreement and the other Transaction Documents on the
terms set out in this Agreement and in the other Trust Documents.

 

20.2             Delegation of powers

 

By virtue of the appointment set out in clause 20.1,
each of the Secured Parties hereby authorises the Security Trustee (whether or
not by or through its employees as agents) to take such action on its behalf
and to exercise such rights, remedies and powers as are specifically delegated
to the Security Trustee by this Agreement and/or any of the other Transaction
Documents together with such powers and rights as are reasonably incidental
thereto.

 

20.3             Obligations of Security Trustee

 

The Security Trustee shall have no duties, obligations
or liabilities to any of the parties by whom it has been appointed beyond those
expressly stated in this Agreement and/or the other Transaction Documents and
specifically (but without prejudice to the generality of the foregoing) the
Security Trustee shall not be obliged to take any action or exercise any
rights, remedies or powers under or pursuant to this Agreement or any of the
other Transaction Documents beyond those which it is specifically instructed in
writing to take or exercise as provided in clause 13 and then only to the
extent stated in such specific written instructions.

 

21                       Declaration of trust; supplemental provisions

 

21.1             Declaration of trust

 

The Security Trustee hereby accepts its appointment
under clause 20.1 as trustee in relation to the Trust Property and the
Transaction Documents with effect from the date of this Agreement and
irrevocably acknowledges and declares that from that date it holds the same on
trust for the Secured Parties and that it shall apply, and deal with, the Trust
Property (including without limitation any moneys received by the Security
Trustee under the Trust Documents) in accordance with the provisions of this
Agreement.

 

21.2             Perpetuities

 

The trusts constituted or evidenced by this Agreement
shall remain in full force and effect until whichever is the earlier of the
expiration of a period of eighty (80) years from the date of this Agreement and
receipt by the Security Trustee of written confirmation from the Agents and the
Lessees that all the obligations and liabilities for which such Trust Documents
are constituted as security have been discharged in full.  The parties to this Agreement declare that
the perpetuity period applicable to this Agreement shall, for the purposes of
the Perpetuities and Accumulations Act 1964 be a period of eighty (80) years
from the date of this Agreement.

 

64

 

21.3             Implicit powers

 

In its capacity as trustee in relation to the Trust
Documents, the Security Trustee shall, without prejudice to any of the powers
and immunities conferred upon trustees by law (and to the extent not
inconsistent with the provisions of this Agreement or any of the other Trust
Documents) have all the same powers as a natural person acting as the
beneficial owner of that property and/or as are conferred upon the Security
Trustee by this Agreement and/or any of the other Trust Documents.

 

21.4      Determination of issues

 

The Finance Parties agree that, in its capacity as trustee
in relation to the Trust Documents, the Security Trustee shall have full power
to determine all questions and doubts arising in relation to the interpretation
or application of any of the provisions of this Agreement or any of the other
Trust Documents as it affects the Security Trustee and every such determination
(whether made upon a question actually raised or implied in the acts or
proceedings of the Security Trustee) shall be conclusive and shall bind each of
the Finance Parties (save in the case of manifest error or the wilful
misconduct or gross negligence of the Security Trustee).

 

21.5             Use of agents

 

The Security Trustee may, in the conduct of any trusts
constituted by this Agreement and in the conduct of its obligations under and
in respect of the Trust Documents or any of them (otherwise than in relation to
its right to make any declaration, determination or decision), instead of
acting personally, employ and pay any agent (whether being a lawyer, chartered
accountant or any other person) to transact or concur in transacting any
business and to do or concur in doing any acts required to be done by the
Security Trustee (including the receipt and payment of money). Any such agent
shall be reputable and experienced and, unless at the time of appointment a
Lease Termination Event shall have occurred and be continuing, not a competitor
of debis as an aircraft operating lessor and, if engaged in any profession or
business, such agent shall be entitled to be paid all usual professional and
other charges for business transacted and acts done by him or any partner or
employee of his in connection with such trusts. The Security Trustee shall not
be bound to supervise, or be responsible for any loss incurred by reason of any
act or omission of, any such agent if the Security Trustee shall have exercised
reasonable care in the selection of that agent.

 

21.6                         Effect of Agreement

 

It is agreed between all parties to this Agreement
that in relation to any jurisdiction the courts of which would not recognise or
give effect to the trusts expressed to be constituted by this Agreement, the
relationship of the Secured Parties to the Security Trustee shall in the case
of each of the trusts constituted hereby be construed simply as one of
principal and agent but, to the fullest extent permissible under the laws of
each and every such jurisdiction, this Agreement shall have full force and
effect as between the parties.

 

22                       Restrictions and limitations on and exclusions of the duties and
responsibilities of the Security Trustee

 

22.1             No obligation to act

 

The Security Trustee shall not be obliged:

 

22.1.1                           to request
any certificate or opinion under any Transaction Document unless so required in
writing by an Agent or, if the Secured Loan Obligations have been paid and
discharged in full, the relevant Lessee, in which case the Security Trustee
shall as soon as reasonably practicable make the appropriate request of the
relevant party; or

 

22.1.2                           to make any
enquiry as to any default by any party in the performance or observance of any
provision of any of the Trust Documents or as to whether any event or
circumstance has occurred as a result of which the security constituted by any
of the Trust Documents shall have or may become enforceable.

 

65

 

22.2             No responsibility to provide information

 

The Security Trustee shall not have any duty or
responsibility, either initially or on a continuing basis:

 

22.2.1                        subject to clause 22.7, to provide any of the Secured Parties with
any information with respect to any Borrower, any Lessee, debis or any other
person whenever coming into its possession; or

 

22.2.2                        to investigate or make any enquiry into the title of any party to
the Trust Property or any part thereof.

 

22.3             No responsibility for other parties

 

The Security Trustee shall not have any responsibility
to any of the Secured Parties (a) on account of the failure of any party to
perform any of its or their obligations under any of the Transaction Documents,
(b) for the financial condition of any Obligor, the Manufacturer, the Engine
Manufacturer, any Sub-Lessee, any Sub-Sub-Lessee, any Insurer or any other
person, (c) for the completeness or accuracy of any statements, representations
or warranties in any of the Transaction Documents or any document delivered
under any of the Transaction Documents, (d) for the execution, effectiveness,
adequacy, genuineness, validity, enforceability or admissibility in evidence of
this Agreement or any of the other Transaction Documents, of any certificate,
report or other document executed or delivered under this Agreement or any of
the Transaction Documents and/or of all or any part of the ownership, leasing,
security and/or financing structure contemplated by the Transaction Documents
(or any of them), (e) to investigate or make any enquiry into the title of any
party to the Trust Property or any part thereof, (f) for the failure to
register any of the Transaction Documents on any register with any Government
Entity, (g) for the failure to take or require any Obligor, the Manufacturer,
the Engine Manufacturer, any Sub-Lessee, any Sub-Sub-Lessee, any Insurer or any
other person to take any steps to render any of the Trust Property effective or
to secure the creation of any ancillary charge under the laws of the
jurisdiction concerned, or (h) otherwise in connection with the Transaction
Documents or their negotiation or for acting (or, as the case may be,
refraining from acting) in accordance with the directions of any of the Secured
Parties given pursuant to clause 13 or in reliance upon information provided by
any of the Secured Parties pursuant to clause 13 or otherwise other than to the
extent of its own wilful misconduct or gross negligence.

 

22.4             Reliance on communications

 

The Security Trustee shall be entitled to rely on any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person and shall be entitled to
rely as to legal or other professional matters on opinions and statements of
any legal or other professional advisers selected or approved by it.

 

22.5             Safekeeping of Trust Documents

 

The Security Trustee shall be entitled to place all
deeds, certificates and other documents relating to the Trust Property
deposited with it under or pursuant to the Trust Documents or any of them in
any safe deposit, safe or receptacle selected by the Security Trustee or with
any solicitor or firm of solicitors and may make any such arrangements as it
thinks fit for allowing each Secured Party access to, or its solicitors or
auditors possession of, such documents when necessary or convenient, and the
Security Trustee shall not be responsible for any Loss incurred in connection
with any such deposit, access or possession.

 

22.6             No obligation to act in breach of Applicable Law

 

The Security Trustee may refrain from doing anything
which would, or might in its opinion, be contrary to any Applicable Law or
which would or might render it liable to any person and may do anything which
is, in its opinion, necessary to comply with any such law, directive,
regulation or regulatory requirement.

 

66

 

22.7             Communications

 

The Security Trustee shall, as soon as practicable,
notify the National Agents and each Agent of the contents of any communication
received by it from any Obligor, any Sub-Lessee or any Sub-Sub-Lessee pursuant
to any Transaction Document.

 

23                       No restriction on or liability to account for other transactions

 

23.1             No restriction on other business

 

The Security Trustee may, without any liability to
account to any of the Finance Parties or any Lessee, accept deposits from, lend
money to, and generally engage in any kind of trust or banking business with,
or be the owner or holder of any shares or other securities of, any Obligor,
any Sub-Lessee, any Sub-Sub-Lessee or any debis Group Company or any Subsidiary
or Affiliate of any Obligor, any Sub-Lessee, any Sub-Sub-Lessee or any debis
Group Company or any of the Finance Parties or any other person as if it were
not the Security Trustee.

 

23.2             Rights of Security Trustee

 

With respect to its own participation in the
Transaction Documents, the Security Trustee shall have the same rights and
powers thereunder and under the Trust Documents as any other Lender and may
exercise the same as though it were not performing the duties and functions
delegated to it under this Agreement.

 

24                       Common Agent and Security Trustee

 

Notwithstanding that the ECA Agent, the Mismatch
Agent, the Security Trustee, the British National Agent and the French National
Agent may from time to time be the same entity, the ECA Agent, the Mismatch
Agent, the Security Trustee, the British National Agent and the French National
Agent have entered into this Agreement in their separate capacities as agent
for the ECA Lenders, as agent for the Mismatch Lenders, as security agent and
trustee for the Secured Parties, as agent for the British Lenders and as agent
for the French Lenders under and pursuant to the Transaction Documents,
provided that where this Agreement provides for the ECA Agent, the Mismatch
Agent, the Security Trustee, the British National Agent or the French National
Agent to communicate with or provide instructions to any of the ECA Agent, the
Mismatch Agent, the Security Trustee, the British National Agent or the French
National Agent, while the ECA Agent, the Mismatch Agent, the Security Trustee,
the British National Agent or the French National Agent are the same entity, it
will not be necessary for there to be any such formal communication or
instructions notwithstanding that this Agreement provides in certain cases for
the same to be in writing.

 

25                       Change of Security Trustee

 

25.1             Retirement of Security Trustee

 

The Security Trustee may retire from its appointment
as Security Trustee under this Agreement and the other Transaction Documents
without giving any reason and without being responsible for any costs
occasioned by that retirement having given to the Finance Parties, each
Borrower, each Lessee and debis not less than thirty (30) days’ notice of its
intention to do so, provided that no such retirement shall take effect unless
there has been appointed as a successor security agent and trustee by
instrument in writing signed by the Security Trustee and accepted in writing by
the successor:

 

25.1.1                           a bank or
financial institution (or other person approved by debis) nominated by the
Majority Lenders and, for so long as no Lease Termination Event has occurred
and is, consented to in writing by debis (such consent not be unreasonably withheld
or delayed); or

 

25.1.2                           failing
such a nomination and for so long as no Lease Termination Event has occurred
and is continuing, a bank or financial institution (or other person approved by
debis) nominated by

 

67

 

debis
and consented to in writing by the Majority Lenders (such consent not be
unreasonably withheld or delayed); or

 

25.1.3                           failing
such a nomination, any bank or financial institution (or other person approved
by debis) nominated by the Security Trustee after consultation with the Secured
Parties,

 

and, in either case, that successor security trustee
shall have duly accepted that appointment by delivering to each Agent written
confirmation (in a form acceptable to each Agent) of that acceptance agreeing
to be bound by this Agreement in the capacity of Security Trustee as if it had
been an original party to this Agreement and the other Transaction Documents.

 

25.2             Removal of Security Trustee

 

The Majority Lenders (or, if the Secured Loan Obligations
have been paid and discharged in full, the Lessees) may at any time require the
Security Trustee to retire from its appointment as Security Trustee with
respect to the Trust Property under this Agreement and the other Transaction
Documents without giving any reason upon giving to the Security Trustee, each
Borrower, each Lessee and debis not less than thirty (30) days’ prior written
notice to that effect. The Security Trustee agrees to co-operate in
giving effect to that retirement in accordance with any such notice duly
received by it and, in that connection, shall execute all such deeds and
documents as either Agent may reasonably require in order to provide for:

 

(a)                        that resignation;

 

(b)                       the appointment of a successor security agent and trustee in
compliance with clause 25.1 but so that, for this purpose, the reference in
clause 25.1.3 to the Security Trustee shall be deemed to be a reference to the
Majority Lenders; and

 

(c)                        the transfer of the rights and obligations of the Security Trustee
under this Agreement to that successor,

 

in each case, in a legal, valid and binding manner.
The retiring Security Trustee shall not be responsible for any costs occasioned
by that retirement (including in relation to any such deeds or documents
referred to in this clause 25.2).

 

25.3             Discharge of retiring Security Trustee

 

Upon any successor to the Security Trustee being
appointed pursuant to clause 25.1 or 25.2, the retiring Security Trustee shall
be discharged from any further obligation under this Agreement and the other
Trust Documents with respect to the Trust Property and its successor and each
of the other parties to this Agreement shall have the same rights and
obligations among themselves as they would have had if that successor had been
a party to this Agreement and the other Trust Documents in place of the
retiring Security Trustee.  If the
Security Trustee should retire pursuant to clause 25.1 or be removed pursuant
to clause 25.2, the Finance Parties and the Lessees agree to consult in good
faith in selecting and appointing a new Security Trustee.

 

25.4             Retirement after discharge of Secured Loan Obligations

 

Notwithstanding clauses 25.1 and 25.2, the Security
Trustee shall be entitled to retire from its appointment as Security Trustee
under this Agreement upon giving five (5) days’ written notice to debis at any
time when the Secured Loan Obligations have been fully repaid and
discharged.  A Lessee selected by debis
shall, at its own cost, at that time assume the role of Security Trustee under
this Agreement and the other Trust Documents.

 

25.5             Cost of change in Security Trustee

 

In relation to
any change of Security Trustee, other than a change at the request or direction
of any Export Credit Agency, the costs and expenses thereby incurred by each of
the other parties hereto shall be for the account of the retiring Security Trustee
and the incoming Security

 

68

 

Trustee (as
they may agree between themselves), in the case of a resignation, or the
Lenders (as they may agree between themselves), in the case of a removal.  If that change is at the request or direction
of any Export Credit Agency, the costs and expenses thereby incurred by each of
the other parties hereto shall be for the account of the Borrowers.

 

26                       Limited recourse obligations of Borrowers

 

26.1

 

26.1.1                           Subject to
clause 26.2 but otherwise notwithstanding the provisions of this Agreement or
any of the other Transaction Documents to the contrary, all amounts payable or
expressed to be payable by any Borrower for, in respect of or in connection
with its obligations, covenants, representations, warranties, indemnities or
other contractual assurances which are owed to the Security Trustee, the
Agents, the National Agents, the Lenders, debis, any other debis Obligor or any
other person under, pursuant to or in connection with this Agreement and the
other Transaction Documents, together with any liability of any Borrower for
any breach by that Borrower of its obligations, covenants, representations, warranties,
indemnities or other contractual assurances which are owed to the Security
Trustee, the Agents, the Lenders, debis, any other debis Obligor or any other
person under, pursuant to or in connection with this Agreement and the other
Transaction Documents, shall be limited to and only be made or payable from:

 

26.1.2                           the
recovery from that Borrower of all sums that are paid to or recovered by that
Borrower (or any person lawfully claiming through or on behalf of that Borrower
to the extent that that Borrower recovers the same from that person) pursuant
to any provision of any Transaction Document, any Sub-Lease, any Sub-Lessee
Security or any Sub-Sub-Lease or any sale or disposal of the relevant Aircraft
or any part thereof or as a result of the enforcement of the Security Documents
and/or in respect of Proceeds and/or in respect of any proceeds from Insurances
(other than third party liability insurance proceeds); and

 

26.1.3                           the
realisation of any proceeds from the enforcement of any security granted to the
Security Trustee, the Agents and/or any of the Lenders under the Security
Documents (except to the extent that the Borrower is not entitled to retain
such sums as against any third party by virtue of Applicable Law),

 

and each of the Security Trustee, the Agents, the
National Agents, Lenders, debis and the other debis Obligors irrevocably and
unconditionally agrees that it shall look solely to such rights and sums for
payments to be made by that Borrower under this Agreement and the other
Transaction Documents and that it shall not otherwise take or pursue any
judicial or other steps or proceedings or exercise any other right or remedy
that it might otherwise have against that Borrower or any of its other assets
except:

 

(a)                        to the extent that judgment or similar order is a necessary
procedural step to enable the realisation of the full benefit of the security
and rights granted by and under the Transaction Documents to obtain (but not
enforce) a declaratory judgment or similar order as to the obligations of that
Borrower expressed to be assumed under this Agreement or under any other
Transaction Documents; or

 

(b)                       to the extent that claim or proof is a necessary procedural step to
enable the realisation of the full benefit of the security and rights granted
by and under the Transaction Documents, to make or file a claim or proof in any
Insolvency Event in relation to that Borrower, but not to take proceedings to
instigate that Insolvency Event.

 

26.2                Clause
26.1 shall be of no application in respect of a Borrower and that Borrower
shall be fully liable and the Secured Parties shall be at liberty to prove all
their respective rights and remedies against that Borrower and its assets for
any Loss (including, without limitation, legal fees and expenses) sustained or
incurred by any Secured Party as a consequence of:

 

26.2.1                           the wilful
misconduct or gross negligence of that Borrower; or

 

69

 

26.2.2                           a
representation or warranty as to a matter of fact (and not, for the avoidance
of doubt, as to a matter of law) made by that Borrower in any Transaction
Document being untrue, incorrect or misleading; or

 

26.2.3                           fraud on
the part of that Borrower.

 

26.3                The provisions of this
clause 26 shall only limit the personal liability of each Borrower for the
discharge of its obligations under this Agreement and the other Transaction
Documents and shall not:

 

26.3.1                           limit or
restrict in any way the accrual of interest on any unpaid amount (although the
limitations as to the personal liabilities of each Borrower shall apply to the
actual payment of that interest); or

 

26.3.2                           derogate
from or otherwise limit the right of recovery, realisation or application by
the Secured Parties under or pursuant to any of the Security Documents or
anything assigned, mortgaged, charged, pledged or secured under or pursuant to
any of the Security Documents.

 

26.4

 

26.4.1                           debis and
each other debis Obligor each hereby agrees that it shall not petition for any
Insolvency Event in relation to any Borrower until after all of the Secured
Loan Obligations have been paid and discharged in full.

 

26.4.2                           Each of the
Finance Parties hereby agrees that it shall not petition for any Insolvency
Event in relation to any Borrower, unless failure to do so would or might
reasonably be expected to result in the rights, title and interests of the
Finance Parties and the Borrowers (or any of them) in and to the Aircraft
and/or under any Transaction Document being materially adversely affected,
based on advice received by the Security Trustee and shared with debis from
reputable legal counsel in the relevant jurisdictions.

 

26.5                Each of the Security
Trustee, the Agents, the National Agents, the Lenders, debis and the other
debis Obligors agrees not to seek before any court or governmental agency to
have any shareholder, director or officer of any Borrower held liable for any
actions or inactions of that Borrower or any obligations of that Borrower under
the Transaction Documents, except if such actions or inactions are the result
of the fraud or wilful default of that shareholder, director or officer.

 

27                       Set-off

 

27.1             Set-off

 

27.1.1                           Subject to
clause 27.1.4, at any time during the continuance of a Lease Termination Event:

 

(a)              each
Borrower may set off from any sum payable by it to any one or more of the debis
Obligors any sum due and unpaid by the relevant debis Obligor to that Borrower,
in each case, under or in relation to any of the Transaction Documents; and

 

(b)             each
Finance Party may set off from any sum payable by it to any one or more of the
Obligors any sum due and unpaid by the relevant Obligor to that Finance Party,
in each case, under or in relation to any of the Transaction Documents.

 

27.1.2                           No Obligor
shall be entitled to deduct any sum which may be due to it from the Finance
Parties and the Borrowers (or any of them) howsoever arising from any sum
payable by that Obligor under or in connection with any of the Transaction
Documents.

 

27.1.3                           No Obligor
shall be entitled to refuse or postpone performance of any payment or other
obligation under any of the Transaction Documents by reason of any claim which
it may have or may consider that it has against;

 

70

 

(a)            the
Finance Parties and the Borrowers (or any of them) under or in connection with
any of the Transaction Documents or any other agreement with any of the Finance
Parties and/or any of the Borrowers; and/or

 

(b)           any other party under or in
connection with any of the Transaction Documents.

 

27.1.4                           Each
Finance Party irrevocably and unconditionally waives any rights of set off that
it may have at law or under clause 27.1.1 in relation to any amount due to any
Sub-Lessee or Lessee under clause 8.6.8.

 

27.2             Set-off not mandatory

 

No Finance Party shall be obliged to exercise any of
its rights under clause 27.1.

 

28                       Notices

 

28.1                Unless otherwise
expressly provided herein, all notices, requests, demands or other
communications to or upon the respective parties hereto in connection with this
Agreement shall:

 

28.1.1                           in order to
be valid be in English and in writing;

 

28.1.2                           be deemed
to have been duly served on, given to or made in relation to a party if it is:

 

(a)            left
at the address of that party set out herein or at such other address as that
party has specified by fifteen (15) days’ written notice to the other parties
hereto;

 

(b)           posted by first class
airmail postage prepaid or sent with an internationally recognised courier
service in each case in an envelope addressed to that party at that address; or

 

(c)            sent
by facsimile to the facsimile number of that party set out herein or to such
other facsimile number as that party has specified by fifteen (15) days’
written notice to the other parties hereto;

 

28.1.3                           be
sufficient if:

 

(a)            executed
under the seal of the party giving, serving or making the same; or

 

(b)           signed or sent on behalf of
the party giving, serving or making the same by any attorney, director,
secretary, agent or other duly authorised officer or representative of that
party;

 

28.1.4                           be
effective:

 

(a)              in
the case of a letter, when left at the address referred to in clause 28.1.2(a)
after being deposited in the post first class airmail postage prepaid or
deposited with an internationally recognised courier service and in each case
in an envelope addressed to the addressee at the address referred to in clause
28.1.2 (a); and

 

(b)             in
the case of a facsimile transmission, upon receipt of a facsimile transmission
slip indicating that the correct number of pages have been sent to the correct
facsimile number.

 

28.2                For the purposes of
this clause 28, all notices, requests, demands or other communications shall be
given or made by being addressed as follows:

 

71

 

	
  28.2.1

  	
  if to an
  Initial Borrower, to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  c/o Walkers SPV Limited

  	
   

  
	
   

  	
  Walker House

  	
   

  
	
   

  	
  Mary Street

  	
   

  
	
   

  	
  PO Box 908 GT

  	
   

  
	
   

  	
  George Town

  	
   

  
	
   

  	
  Grand Cayman

  	
   

  
	
   

  	
  Cayman Islands

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No:

  	
  +1 345 945 4757

  	
   

  
	
   

  	
  Attention:

  	
  The Directors

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with copies to debis and each Agent at the addresses detailed below;

  	
   

  
	
   

  	
   

  	
   

  
	
  28.2.2

  	
  if to any
  debis Obligor, to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  debis AirFinance B.V.

  	
   

  
	
   

  	
  Evert van de Beekstraat 312

  	
   

  
	
   

  	
  CX Schiphol Airport

  	
   

  
	
   

  	
  The Netherlands

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  +3120 655 9100

  	
   

  
	
   

  	
  Attention:

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to each Agent at the address detailed below;

  	
   

  
	
   

  	
   

  	
   

  
	
  28.2.3

  	
  if to an
  Agent or the Security Trustee, to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Crédit Lyonnais

  	
   

  
	
   

  	
  1, rue des Italiens

  	
   

  
	
   

  	
  75009 Paris

  	
   

  
	
   

  	
  France

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  +33 1 42 95 11 81

  	
   

  
	
   

  	
  Attention:

  	
  DGRE/Head of Transportation Group

  	
   

  

 

with,
except in relation to notices from one Finance Party to another Finance Party,
a copy to debis at the address detailed above;

 

28.2.4                           if to a
Lender, to that Lender care of the relevant Agent; and

 

28.2.5                           if to a
National Agent, to the address and/or facsimile number set out opposite the
name of that National Agent (in its capacity as an ECA Lender in the relevant
National Syndicate) in the relevant section of schedule 2.

 

29                       Confidentiality

 

At all times during the Security Period and after the
termination thereof, each party hereto shall and shall procure that each of its
respective officers, directors, employees and agents shall keep secret and
confidential and not, without the prior written consent of debis, the Agents
and the Security Trustee, disclose to any third party the terms of any of the
Transaction Documents, any Sub-Lease, any Sub-Sub-Lease, the Insurances or any
Purchase Document or any of the information, reports, invoices or documents
supplied by or on behalf of any of the other parties hereto, save that any such
party shall be entitled to disclose any such terms, information, reports or
documents:

 

29.1.1                           in
connection with any proceedings arising out of or in connection with any of the
Transaction Documents to the extent that that party may consider necessary to
protect its interest; or

 

29.1.2                           to any
potential permitted assignee or transferee of all or any of that party’s rights
under any of the Transaction Documents or any other permitted person proposing
to enter into contractual arrangements with that party in relation to or in
connection with the transactions contemplated by any of the Transaction
Documents, subject to it obtaining an undertaking

 

72

 

from
that potential permitted assignee or permitted other person in the terms
similar to this clause 29; or

 

29.1.3                           if required
to do so by an order of a court of competent jurisdiction whether in pursuance
of any procedure for discovering documents or otherwise; or

 

29.1.4                           pursuant to
any Applicable Law; or

 

29.1.5                           to any
fiscal, monetary, Tax, governmental or other competent authority; or

 

29.1.6                           to its
auditors, bankers, legal or other professional advisers (which are under an
ethical obligation to or agree to hold that information confidential); or

 

29.1.7                           to any of
the Export Credit Agencies; or

 

29.1.8                           in any
manner contemplated by any of the Transaction Documents; or

 

29.1.9                           to debis or
any other debis Group Company.

 

30                       Joint and
several liability

 

For the
purpose of any provision of the Transaction Documents, it is hereby
acknowledged and agreed that:

 

30.1                where the same
obligations are expressed as being owed by more than one Lessee, each of such
Lessees shall be jointly and severally liable for such obligations;

 

30.2                where the same
obligations are expressed as being owed by more than one debis Obligor, each of
such debis Obligors shall be jointly and severally liable for such obligations;
and

 

30.3                where the same
obligations are expressed as being owed by more than one Borrower, each each of
such Borrowers shall be jointly and severally liable for such obligations (but
without prejudice to, and subject to, clause 26).

 

31                       Consents and
related matters

 

31.1                Each Lessee and debis
shall be entitled to deal exclusively with the Security Trustee and rely on
communications that it receives from the Security Trustee in relation to any
request for approval, consent, waiver, agreement or exercise of another
discretion that the Lessees or debis may, from time to time, make under or in
connection with any Transaction Document or the transactions contemplated
thereby.

 

31.2                Where any approval,
consent, waiver, agreement or exercise of other discretion is requested by any
Lessee or debis from the Security Trustee pursuant to this Agreement or any
other Transaction Document, the Security Trustee and the relevant Finance
Parties at whose direction the Security Trustee is required (pursuant to the
terms of the Transaction Documents) to act in relation to the particular matter
each agree to consider the same and respond to the relevant Lessee or debis in
a timely manner.

 

32                       Subordination

 

32.1                Each of the Finance
Parties and the Lessees hereby agrees to regulate their claims, as to
subordination and priority, in respect of any Proceeds in the manner set out in
this clause 32.

 

32.2                The Finance Parties
and the Lessees hereby agree that the Secured Loan Obligations shall for all
purposes whatsoever rank in priority to the Subordinated Secured Obligations
and that such Subordinated Secured Obligations shall at all times be subject
and subordinate to such Secured Loan Obligations.

 

73

 

32.3                Without prejudice to
the provisions of clause 32.2, if, for any reason, a Lessee claims or is
required to claim in the liquidation, winding-up, dissolution or analogous
proceedings in relation to any Borrower, then that Lessee shall direct that all
dividends and other distributions in respect of its claim be paid to the
Security Trustee for application in accordance with the provisions of clause 15
and, to the extent that any such dividend or other distribution is actually
paid to that Lessee, that Lessee shall hold any amount received by it on trust
for the Secured Parties and shall pay that amount over to the Security Trustee
as soon as it is received.

 

32.4                For so long as any of
the Secured Loan Obligations remain outstanding, each Lessee hereby agrees that
it shall have no rights whatsoever, save in respect of the express obligations
of the Security Trustee as set out in this Agreement and the other Transaction
Documents, to instruct, or give directions to, the Security Trustee, to require
that the Security Trustee take any action or exercise any right, remedy or
power or to determine any question or doubt, in each case in relation to any matter
including, without limitation, the Trust, the Trust Property and/or the Trust
Documents.

 

32.5                For
so long as any of the Secured Loan Obligations remain outstanding, each Lessee
hereby agrees that the Security Trustee shall not, other than as expressly required
by the terms of the Transaction Documents, be required to consult with, or have
regard to the interests of, any Lessee when taking any action (including,
without limitation, any enforcement action) or when exercising any right,
remedy or power, in each case in relation to any matter including, without
limitation, the Trust, the Trust Property and/or the Trust Documents.

 

32.6                For
so long as any of the Secured Loan Obligations remain outstanding, each Lessee
hereby agrees that it shall not appoint any receiver in respect of any of the
Trust Property.

 

32.7                Each
Lessee shall be entitled, at any time following the full and final discharge of
the Secured Loan Obligations:

 

32.7.1                 to require that the
relevant Borrower discharge the Subordinated Secured Obligations by
transferring title to any Aircraft to such person as is nominated by that
Lessee (who shall not be a Borrower or a Lessee); and

 

32.7.2                 to exercise all of
the rights of the Finance Parties under the Trust.

 

32.8                To
the extent required under Dutch law, the subordination set forth in this clause
32 is being accepted by the Security Trustee as agent (zaakwaarnemer)
on behalf of the Finance Parties.

 

33                       Miscellaneous

 

33.1             Cumulative rights

 

The respective rights of the Finance Parties and the
Borrowers pursuant to this Agreement and the other Transaction Documents:

 

33.1.1                   are cumulative, may be exercised as often as they consider
appropriate and are in addition to their respective rights under Applicable
Law; and

 

33.1.2                   shall not be capable of being waived or varied otherwise than by an
express waiver or variation in writing.

 

33.2             Waivers

 

Any failure to exercise, or any delay in exercising,
on the part of any Finance Party or any Borrower any right under any
Transaction Document shall not operate as a waiver or variation of that or any
other right and any defective or partial exercise of any such right shall not
preclude any other or further exercise of that or any other right, and no act
or course of conduct or negotiation shall in any way preclude any party hereto
from exercising any such right or constitute a suspension or any variation of
any such right.

 

74

 

33.3             Severability

 

If at any time any provision of any Transaction
Document is or becomes illegal, invalid or unenforceable in any respect under
any Applicable Law, neither the legality, validity nor the enforceability of
the remaining provisions hereof nor the legality, validity or enforceability of
that provision under the law of any other jurisdiction shall in any way be
affected or impaired.

 

33.4             Further assurance

 

Except to the extent inconsistent with the express
terms of the Transaction Documents:

 

33.4.1                           each Obligor shall from time to time and at its own cost, to the
extent that it is permitted to do so under Applicable Law, as soon as
reasonably practicable sign, seal, execute, acknowledge, deliver, file and
register all such additional documents, instruments, agreements, certificates,
consents and assurances and do all such other acts and things as may be
required by Applicable Law or reasonably requested by any Representative from
time to time in order to give full effect to each Transaction Document or to
establish, maintain, protect or preserve the rights of the Finance Parties and
the Borrowers under the Transaction Documents or to enable any of them to
obtain the full benefit of each Transaction Document and to exercise and
enforce their respective rights and remedies under the Transaction Documents;
and

 

33.4.2                           without prejudice to the generality of clause 33.4.1, each Obligor
which has a State of Incorporation in The Netherlands agrees from time to time
when a Cross Collateralisation Event has occurred and is continuing to provide
or procure that there is provided, to each beneficiary of the security
constituted by the Security Documents to which that Obligor is or becomes a
party, Dutch law security over the Collateral (as defined in the Security
Assignment or, as the case may be, Lease Assignments(s) to which it is a party
as assignor) in such form and in such manner as may be necessary to ensure that
that beneficiary has Dutch law security rights equivalent to those contemplated
by those Security Documents.

 

33.5             Certificates

 

A certificate given by any Finance Party as to the
amount of any sum required to be paid to it under any provisions of any of the
Transaction Documents shall, save in the case of manifest error, be prima facie
evidence of the amounts therein stated for all purposes of the Transaction
Documents.

 

33.6             Amendments

 

Each of the parties hereto agrees that no amendments,
variations, supplements or modifications may be made to any Transaction
Document other than by an instrument in writing executed by each of the parties
hereto.

 

33.7             Counterparts

 

This Agreement may be executed in any number of
counterparts and by different parties thereto on separate counterparts and any
single counterpart or set of counterparts signed, in either case, by all the
parties hereto shall be deemed to constitute a full and original agreement for
all purposes but all counterparts shall constitute but one and the same
instrument.

 

33.8             Other security

 

Nothing contained in this Agreement shall prejudice or
affect the rights of any of the Finance Parties under any guarantee, lien,
bill, note, charge or other security from any party, other than those comprised
in or contemplated by the Transaction Documents now or hereafter held by it in
respect of any moneys, obligations or liabilities thereby secured and so that
(without limitation) each and any such person may apply any moneys recovered
under any such guarantee, lien, bill, note, charge or other security in or
towards payment of any money, obligation or liability, actual or contingent,
now or hereafter due, owing or incurred to it by any

 

75

 

person or may hold such moneys on a suspense account
for such period as it may in its absolute discretion think fit.

 

33.9             Obligations several

 

The obligations of each of the Finance Parties under
this Agreement are several; the failure of any of the Finance Parties to
perform such obligations shall not relieve any other of the Finance Parties or
any Obligor of any of their respective obligations or liabilities under any of
the Transaction Documents nor shall any Agent, any National Agent or the
Security Trustee be responsible for the obligations of the other Finance
Parties nor shall any of the Finance Parties be responsible for the obligations
of any other of the Finance Parties under this Agreement.

 

33.10      No partnership

 

This Agreement shall not and shall not be construed so
as to constitute a partnership between the parties or any of them.

 

33.11      Information from debis

 

debis shall upon request of any National Agent deliver
to the Export Credit Agencies (via that National Agent) or upon request of any
Agent deliver to that Agent all such information concerning any debis Group
Company which is a party to any of the Transaction Documents and their
respective affairs and the Aircraft as shall be available to debis or another
debis Group Company (and subject to any confidentiality restrictions) and any
such National Agent or Agent shall reasonably require in the context of the
Transaction Documents and the transactions contemplated thereby.

 

33.12      Determination of LIBOR

 

In relation to the Transaction Documents for an
Aircraft generally, it is hereby agreed amongst the relevant parties thereto
that, in respect of any period, a determination of LIBOR under one Transaction
Document for that Aircraft must be the same rate as is determined in respect of
LIBOR under another Transaction Document for that Aircraft pursuant to which
LIBOR falls to be determined for the same period and, in the event of any
discrepancy, the determination of LIBOR under the ECA Loan Agreement for that
Aircraft shall prevail.

 

33.13      Determination of EURIBOR

 

In relation to the Transaction Documents for an
Aircraft generally, it is hereby agreed amongst the relevant parties thereto
that, in respect of any period, a determination of EURIBOR under one
Transaction Document for that Aircraft must be the same rate as is determined
in respect of EURIBOR under another Transaction Document for that Aircraft
pursuant to which EURIBOR falls to be determined for the same period and, in
the event of any discrepancy, the determination of EURIBOR under the ECA Loan
Agreement for that Aircraft shall prevail.

 

33.14      Mismatch Advances

 

Upon drawdown of a Mismatch Advance the proceeds of
that Mismatch Advance shall be applied in the manner required by the Mismatch
Loan Agreement under which it is drawn down and to the extent so applied:

 

33.14.1                     the amount of Rent (as defined in the relevant Lease) payable by the
relevant Lessee on the relevant Rental Payment Date (as defined therein) under
that Lease shall be deemed for the purposes of that Lease to have been reduced
by an amount equal to the amount of that Mismatch Advance; and

 

33.14.2                     the relevant Borrower shall be deemed for the purposes of the
corresponding ECA Loan Agreement to have made payment of an amount of the
relevant ECA Repayment Instalment equal to the amount of that Mismatch Advance
to the ECA Agent on the relevant ECA

 

76

 

Repayment Date
and the relevant Borrower’s obligation shall be deemed correspondingly
discharged under that ECA Loan Agreement to the extent of that amount.

 

33.15      Notices to Agents

 

Each Agent agrees that if it receives any notice
pursuant to the Transaction Documents it shall as soon as reasonably
practicable forward a copy of that notice to the other Agent (if the other
Agent is not an addressee of that notice), unless that notice relates solely to
one or more of the Loan Agreements in respect of which that Agent is acting as
agent for the relevant Lenders.

 

34                       Transfers

 

34.1             Transfers by Obligors

 

Without prejudice to the provisions of clause 9, no
Obligor shall assign any rights or transfer any obligations under any
Transaction Document without the prior written consent of the ECA Agent (acting
on the instructions of the National Agents and the German Parallel Lender) and
the Mismatch Agent.

 

34.2             Transfers by Lenders

 

Any Lender may transfer all or any of its rights,
benefits and obligations under the Transaction Documents or change its Lending
Office (whether in the same or a different jurisdiction), provided always that:

 

34.2.1                           prior to the transfer or change in Lending Office becoming
effective, the relevant Lender gives notice to debis (with a copy to each
Agent) of the identity of the Transferee or (as the case may be) the new
Lending Office and the jurisdiction of tax residence of the Transferee or (as
the case may be) the new Lending Office;

 

34.2.2                           the Transferee (i) is an Export Credit Agency, or (ii) is eligible
for support from the relevant Export Credit Agency and (unless the Transferee
is or has been a Lender) has been approved as a Transferee by debis (such
approval not to be unreasonably withheld or delayed), or (iii) is designated as
a Transferee by the relevant Export Credit Agency; and

 

34.2.3                           with the exception of transfers occurring as a result of
sub-paragraphs (i) or (iii) of clause 34.2.2, no Obligor shall be under any
obligation to pay any greater amount or suffer any other increase in
liabilities or diminution in right or benefit under the Transaction Documents
following and as a consequence of any such transfer or change in Lending
Office, except where the same arises as a consequence of a Change in Law which
occurs after the date of that transfer or change in Lending Office (but
excluding any Change in Law which is officially announced or proposed before
the date of that transfer or change in Lending Office).

 

provided further that the provisos set out above shall not apply to
the extent that any Lender has effected a transfer or changed its Lending Office
pursuant to, and in accordance with, clause 10.1.

 

34.3             Transfer Certificates

 

34.3.1                           If any Lender (the “Transferor”)
transfers all or any part of its rights, benefits and/or obligations under this
Agreement in respect of any ECA Loan or Mismatch Loan for an Aircraft to
another bank or financial institution (or other person approved by debis) (the “Transferee”) in accordance with clause 34.2, that transfer
shall be effected by way of a novation by the delivery to, and the execution
by, the Security Trustee of a duly completed Transfer Certificate or in such
other manner as the relevant National Agent or, as applicable, the Mismatch
Agent and debis may agree.

 

34.3.2                           On the date specified in the Transfer Certificate:

 

77

 

(a)            to
the extent that in the Transfer Certificate the Transferor seeks to transfer
its rights and obligations under the Transaction Documents, each of the
Transferor and the other parties hereto shall be released from further
obligations to each other under the Transaction Documents and their respective
rights against each other under the Transaction Documents shall be cancelled
(such rights and obligations being referred to in this clause 34.3 as “Discharged Rights and Obligations”);

 

(b)           the parties hereto (other
than the Transferor) and the Transferee shall each assume obligations towards
each other and/or acquire rights against each other which, subject to clause
34.2, differ from the Discharged Rights and Obligations only insofar as each of
the parties hereto (other than the Transferor) and the Transferee have assumed
and/or acquired the same in place of each of the parties hereto (other than the
Transferor) and the Transferor; and

 

(c)            each of the parties hereto
(other than the Transferor) and the Transferee shall acquire the same rights
and assume the same obligations among themselves as they would have acquired
and assumed had the Transferee originally been a party to the Transaction
Documents as a Lender with the rights and/or the obligations acquired or
assumed by it as a result of the transfer.

 

34.3.3                           The Security Trustee shall as soon as reasonably practicable
complete a Transfer Certificate on written request by a Transferor and upon
payment by the Transferee (other than in the case of an Export Credit Agency
(or a Transferee nominated thereby) being a Transferee) of a fee of one
thousand Dollars ($1,000) to the Security Trustee for each Transfer
Certificate.

 

34.3.4                           Each party hereto (other than the Security Trustee, the Transferor and
the Transferee) hereby confirms that the execution of any Transfer Certificate
by the Security Trustee on its behalf shall be binding upon and enforceable
against it as if it had executed the Transfer Certificate itself.  Each party hereto (other than the Security
Trustee, the Transferor and the Transferee) hereby irrevocably authorises the
Security Trustee to execute any duly completed Transfer Certificate on its
behalf.

 

34.4             Costs and expenses

 

In relation to any transfer contemplated by this
clause 34 which is not a transfer pursuant to clause 10.1 or a transfer to a
Transferee referred to in sub-paragraphs (i) or (iii) of clause 34.2.2, the
costs and expenses thereby incurred by each of the other parties hereto shall
be for the account of the Transferee or the Transferor (as they may agree
between themselves). In relation to any transfer contemplated by this clause 34
which is a transfer pursuant to clause 10.1 or a transfer to a Transferee
referred to in sub-paragraphs (i) or (iii) of clause 34.2.2, the costs and
expenses thereby incurred by each of the other parties hereto shall be for the
account of the Borrowers.

 

35                       Governing law
and jurisdiction

 

35.1             Governing law

 

This Agreement
shall be governed by and construed in accordance with English law.

 

35.2             Jurisdiction

 

Each of the
parties hereto agrees, for the benefit of each of the other parties hereto,
that any legal action or proceedings arising out of or in connection with this
Agreement may be brought in the courts of England, irrevocably and unconditionally
submits to the jurisdiction of such courts and irrevocably designates, appoints
and empowers:

 

(a)              in
the case of each Lessee and debis, Freshfields Bruckhaus Deringer whose current
address is at 65 Fleet Street, London EC4Y 1HS, England (Ref: DMP
Litigation/RFM);

 

78

 

(b)             in
the case of each Borrower, Norose Notices Limited whose current address is at
Kempson House, Camomile Street, London EC3A 7AN (marked for the attention of
the Director of Administration, reference AJBD/AA51491); and

 

(c)              in
the case of each of the Finance Parties, the address from time to time of the
relevant Finance Party’s branch in London, England (or, if any Finance Party
does not have or ceases to have a branch in London, it shall appoint an agent
for receipt of service of process in England and shall provide the other
parties to this Agreement with a copy of a letter from that agent accepting its
appointment),

 

in each case,
to receive for it and on its behalf service of process issued out of the courts
of England in any such legal action or proceedings.  The submission to that jurisdiction shall not
(and shall not be construed so as to) limit the right of any of the parties
hereto to take proceedings against the other parties hereto (or any of them) in
the courts of any other competent jurisdiction, nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of proceedings
in any other jurisdiction, whether concurrently or not.  The parties further agree that only the
courts of England and not those of any other state shall have jurisdiction to
determine any claim arising out of or in connection with this Agreement.

 

35.3             No immunity

 

Each of the
parties hereto agrees that in any legal action or proceedings against it or its
assets in connection with this Agreement no immunity from such legal action or
proceedings (which shall include, without limitation, suit, attachment prior to
judgment, other attachment, the obtaining of judgment, execution or other
enforcement) shall be claimed by or on behalf of it or with respect to its
assets, irrevocably waives any such right of immunity which it or its assets
now have or may hereafter acquire or which may be attributed to it or its
assets and consents generally in respect of any legal action or proceedings to
the giving of any relief or the issue of any process in connection with such
action or proceedings including, without limitation, the making, enforcement or
execution against any property whatsoever (irrespective of its use or intended
use) of any order or judgment which may be made or given in such action or
proceedings.

 

36                       Contracts
(Rights of Third Parties) Act 1999

 

36.1.1                           Each of the Obligors which is a party to this Agreement agrees that
any of its obligations in this Agreement or any other Transaction Document
which is expressly owed to any Finance Party and/or any Export Credit Agency
shall be enforceable by that Finance Party, or, as the case may be, Export
Credit Agency subject always to any relevant restriction contained in any
Transaction Document.  The provisions of
the Contracts (Rights of Third Parties) Act 1999 shall apply for the benefit of
each of the Finance Parties and the Export Credit Agencies.

 

36.1.2                           Subject to clause 36.1, it is not intended by any of the parties
hereto that any term of this Agreement shall be enforceable solely by virtue of
the Contracts (Rights of Third Parties) Act 1999 by any person who is not a
party hereto.  The parties hereto shall
not require the consent of any person who is not a party in order to rescind,
vary, waive, release, assign, novate or otherwise dispose of all or any of
their respective rights or obligations under this Agreement.

 

37                       Export Credit
Agencies

 

Each of the Obligors hereby acknowledges and accepts
that, under the Support Agreement, the Export Credit Agencies have certain
rights to require the ECA Finance Parties to act, or to omit to act, in
accordance with the instructions of the Export Credit Agencies.  Accordingly, each of the Obligors hereby
acknowledges and accepts that if any of the ECA Finance Parties is required to
exercise a right, discretion or power under any of the Transaction Documents “reasonably”,
“in good faith” or “bona fide” or with any other restriction of whatsoever
nature, then that ECA Finance Party will be deemed to be acting “reasonably”, “in
good faith” or “bona fide” or in accordance with such other restrictions (as
the case may be) if that ECA Finance

 

79

 

Party exercises, or refrains from exercising, that
right, discretion or power in accordance with the instructions of the relevant
Export Credit Agency.

 

38                       Parallel debt

 

38.1                Each
debis Obligor which is a party hereto and has a State of Incorporation in The
Netherlands (“Relevant Obligor”) hereby
irrevocably and unconditionally undertakes, as far as necessary in advance, to
pay to the Security Trustee an amount equal to the aggregate of all of its
Principal Obligations owed to all of the Finance Parties from time to time, as
and when the same become due in accordance with the terms and conditions of its
Principal Obligations (that payment undertaking and the obligations and
liabilities which are the result thereof, the “Parallel
Debt”).

 

38.2                Each
of the parties hereby acknowledges that:

 

38.2.1                           for this purpose the Parallel Debt constitutes undertakings,
obligations and liabilities of the Relevant Obligor to the Security Trustee
which are separate and independent from, and without prejudice to, the
Principal Obligations which the Relevant Obligor owes to any Finance Party; and

 

38.2.2                           the Parallel Debt represents the Security Trustee’s own claim (vordering) to receive payment of the Parallel Debt by the
Relevant Obligor, provided that the total amount which may become due in
respect of the Parallel Debt under this clause 38 shall never exceed the amount
which may become due in respect of all of its Principal Obligations owed to all
of the Finance Parties.

 

38.3                                    The total amount due by the Relevant Obligor as the Parallel Debt
under this clause 38 shall be decreased to the extent that the Relevant Obligor
shall have paid any amounts to the Finance Parties or any of them to reduce its
outstanding Principal Obligations or any Finance Party otherwise receives any amount
in discharge of those Principal Obligations (other than by virtue of clause
38.4).

 

38.4                To
the extent that the Relevant Obligor shall have paid any amounts to the
Security Trustee in respect of the Parallel Debt or the Security Trustee shall
have otherwise received monies in discharge of the Parallel Debt, the total
amount due in respect of its Principal Obligations shall be decreased
accordingly.

 

IN WITNESS WHEREOF the parties to this Agreement have caused this Agreement to be duly
executed as a deed and delivered on the date first above written.

 

80

 

Schedule 1

Definitions

 

“2003 Aircraft” means the first five (5) Aircraft identified
in Part 1 of schedule 3;

 

“Acceptance Certificate” means, in respect of an Aircraft,
the certificate (in substantially the form of schedule 2 to the relevant Lease)
signed by the relevant Lessee and given by that Lessee to the relevant Borrower
pursuant to clause 5.1 of the relevant Lease;

 

“Accession Deed” means a deed of accession to be entered into
by an Alternative Obligor in the form from time to time agreed between debis
and the Security Trustee;

 

“Additional Insureds” has the meaning
specified in paragraph 10(e)(i) of schedule 7;

 

“Administration Agreements” means together the Initial
Administration Agreement and each Alternative Borrower Administration
Agreement, and “Administration Agreement” means
any of them;

 

“Affiliate” means, in relation to any person, a Subsidiary of
that person or a Holding Company of that person or any other Subsidiary of that
Holding Company;

 

“Agents” means each of the ECA Agent and the Mismatch Agent,
and “Agent” means either of them;

 

“Agreed British Rate” means, in respect of an ECA Loan and an
ECA Interest Period, the sum of (i) the Applicable Rate for that ECA Loan and
ECA Interest Period, and (ii) the British Margin;

 

“Agreed ECA Rate” means, in respect of an ECA Loan and an ECA
Interest Period (i) for the purposes of the British Credits forming part
thereof, the Agreed British Rate, (ii) for the purposes of the French Credits
forming part thereof, the Agreed French Rate, and (iii) for the purposes of the
German Credits forming part thereof, the Agreed German Rate, in each case
referable thereto;

 

“agreed form” means, in relation to any document, the form of
such document from time to time certified as the agreed form thereof by or at
the direction of debis and the Security Trustee;

 

“Agreed French Rate” means, in respect of an ECA Loan and an
ECA Interest Period, the sum of (i) the Applicable Rate for that ECA Loan and
ECA Interest Period, and (ii) the French Margin;

 

“Agreed German Rate” means, in respect of an ECA Loan and an
ECA Interest Period, the sum of (i) the Applicable Rate for that ECA Loan and
ECA Interest Period, and (ii) the German Margin;

 

“Agreed Mismatch Rate” means, in respect of a Mismatch Loan
and a Mismatch Interest Period, the sum of (i) the Applicable Rate for that
Mismatch Loan and Mismatch Interest Period, and (ii) the Mismatch Margin.

 

“Airbus” means (as the context may
require) Airbus G.I.E. or AVSA S.A.R.L.;

 

“Airbus  Bill of Sale”
means, in relation to any Aircraft, the bill of sale, dated the Purchase Date
for that Aircraft, executed or to be executed by Airbus in favour of the Seller
or, as applicable, the Borrower in relation to that Aircraft pursuant to the
Airbus Purchase Agreement;

 

“Airbus Purchase Agreement” means, in
respect of an Aircraft, the Airbus A320 family purchase agreement dated 1 June
1999, together with the exhibits thereto, made between the Manufacturer and
debis or such other purchase agreement with the Manufacturer which relates to
that Aircraft;

 

“Aircraft” means, subject to clause 2.2.2 and as the context
may require, any or all of the twenty (20) Airbus aircraft listed in Part 1 of
schedule 3 (and, save where the context otherwise requires, includes any or all
of the Replacement Aircraft) and/or such alternative aircraft as may from time
to time be agreed in writing by all of the National Agents and the Mismatch
Agent at the request of debits, 

 

81

 

comprising,
with respect to each individual aircraft, the relevant Airframe together with
the relevant Engines (whether or not any of the relevant Engines may from time
to time be installed on the relevant Airframe) together with the relevant
Technical Records;

 

“Aircraft Purchase Price” means:

 

(a)                        in respect of
an Aircraft other than the Initial Aircraft, the aggregate amount which is
equal to:

 

(i)                           the final
contract price for that Aircraft on delivery thereof from the Manufacturer,
after deduction of all applicable credit memoranda and exclusive of any
capitalised interest, but disregarding for this purpose any Buyer Furnished
Equipment for that Aircraft (“Final Aircraft Price”);
plus

 

(ii)                        if there is
any Buyer Furnished Equipment for that Aircraft, the lesser of (i) the final
contract price for that Buyer Furnished Equipment for that Aircraft, after
deduction of all applicable credit memoranda and exclusive of any capitalised
interest, and (ii) an amount equal to five per cent. (5%) of the Final Aircraft
Price,

 

in each
case, as approved by all of the National Agents and (if that Aircraft is a
Mismatch Aircraft) the Mismatch Agent; or

 

(b)                       in respect of
an Initial Aircraft, the amount set out opposite that Initial Aircraft in Part
1 of schedule 3;

 

“Airframe” means, in respect of an Aircraft, the airframe
(except for the Engines) more particularly identified in schedule 1 to the
Lease for that Aircraft, including all Parts installed in or on the airframe at
the Purchase Date (or which, having been removed therefrom, remain the property
of the relevant Borrower) and all Replacement Parts from time to time installed
in or on the said airframe and all Parts which are for the time being detached
from the airframe but remain the property of the relevant Borrower;

 

“Airframe Warranties Agreement” means, in respect of an
Aircraft, the airframe warranties agreement relating to that Aircraft from time
to time entered into between, amongst others, the Manufacturer, debis, the
relevant Borrower, the relevant Lessee, the relevant Sub-Lessee and the
Security Trustee which shall be in the agreed form or otherwise in form and
substance reasonably satisfactory to the Security Trustee;

 

“Alternative Borrower” means a company, approved by all of
the National Agents, the German Parallel Lender and (if any of the Aircraft
owned or to be owned by that company are Mismatch Aircraft) the Mismatch Agent
and incorporated in a jurisdiction approved by all of the National Agents, the
German Parallel Lender and the Mismatch Agent, in each case, in accordance with
clause 9, which accedes to this Agreement as a Borrower pursuant to clause 9;

 

“Alternative Borrower Administration Agreements” means any
administration agreements or corporate services agreements to be entered into
by an Alternative Borrower Manager, the Security Trustee, an Alternative
Borrower and debis on terms approved by the Security Trustee (acting on the
instructions of all of the Lenders) and debis in accordance with this
Agreement, and “Alternative Borrower Administration Agreement”
means any of them;

 

“Alternative Borrower Comfort Letters” means each comfort
letter to be issued in respect of an Alternative Borrower Manager to the
Security Trustee and debis, in form and substance reasonably satisfactory to
the Security Trustee (acting on the instructions of all of the Lenders) and
debis, and “Alternative Borrower Comfort Letter”
means any of them;

 

“Alternative Borrower Floating Charge” means each floating
charge to be granted by an Alternative Borrower to the Security Trustee which
shall be in form and substance reasonably satisfactory to the Security Trustee
(acting on the instructions of all of the Lenders) and debis;

 

82

 

“Alternative Borrower Manager” means the manager, if any, of
an Alternative Borrower as approved by the Security Trustee (acting on the
instructions of all of the Lenders) and debis in accordance with this
Agreement;

 

“Alternative Borrower Share Charge” means each pledge or
charge to be granted by the holder or holders of the entire issued share
capital of an Alternative Borrower to the Security Trustee over all the shares
of that Alternative Borrower, which pledge or charge shall be in form and substance
reasonably satisfactory to the Security Trustee (acting on the instructions of
all of the Lenders) and debis;

 

“Alternative Borrower Trustees” means the legal owners of an
Alternative Borrower as approved by the Security Trustee (acting on the instructions
of all of the Lenders) and debis in accordance with this Agreement, and “Alternative Borrower Trustee” means any of them;

 

“Alternative Declaration of Trust” means each declaration of
trust to be entered into by an Alternative Borrower Trustee or the Trustee in
relation to the shares that Alternative Borrower Trustee or the Trustee (as
applicable) owns in an Alternative Borrower, in form and substance reasonably
satisfactory to the Security Trustee (acting on the instructions of all of the
Lenders) and debis;

 

“Alternative Lessee” means a company, approved by all of the
National Agents, the German Parallel Lender and the Mismatch Agent and
incorporated in a jurisdiction approved by all of the National Agents, the
German Parallel Lender and the Mismatch Agent, in each case, in accordance with
clause 9, which accedes to this Agreement as a Lessee pursuant to clause 9;

 

“Alternative Lessee Share Charge” means each pledge or charge
to be granted by the relevant Lessee Parent to the Principal Borrower over all
the shares of that Alternative Lessee, which pledge or charge shall be in form
and substance reasonably satisfactory to the Security Trustee (acting on the
instructions of all of the Lenders) and debis;

 

“Alternative Obligor” means an Alternative Borrower or an
Alternative Lessee;

 

“Applicable Currency” means, in respect
of an Aircraft, if the ECA Loan for that Aircraft is denominated in Dollars,
Dollars, or if the ECA Loan for that Aircraft is denominated in Euro, Euro;

 

“Applicable Directive” means (exclusively)
each of the Own Funds Directive (89/299/EEC of 17 April 1989) and the Solvency
Ratio Directive (89/647/EEC of 18 December 1989);

 

“Applicable Law” includes, without limitation, all applicable
(i) laws, bye-laws, statutes, decrees, acts, codes, legislation, treaties,
conventions and similar instruments and, in respect of any of the foregoing,
any instrument passed in substitution therefor or re-enactment thereof or for
the purposes of consolidation thereof with any other instrument or instruments,
(ii) final judgments, orders, determinations or awards of any court from which
there is no right of appeal or if there is a right of appeal that appeal is not
prosecuted within the allowable time, and (iii) rules and regulation of any
Government Entity;

 

“Applicable Rate” means, in respect of any Loan and any
Interest Period, the LIBOR (where the Loan is denominated in Dollars) or
EURIBOR (where the Loan is denominated in Euro) rate for that Loan and Interest
Period on the relevant Quotation Date. Notwithstanding the foregoing:

 

(a)                        in respect of
the first ECA Interest Period for an ECA Loan and the last Interest Period for
a Loan which ends on a Final ECA Repayment Date, unless that Interest Period
commences or terminates, as the case may be, on a Reference Date, the
Applicable Rate for that Interest Period shall (subject to the proviso to this
definition) be determined by interpolating (on a linear basis) between:

 

(i)                           LIBOR or EURIBOR (as
applicable) for the complete period for which that rate is publicity quoted having
the next shorter duration than that Interest Period, and

 

(ii)                        LIBOR or EURIBOR
(as applicable) for the complete period for which said rate is publicity quoted
having the next longer duration than that Interest Period; and

 

83

 

(b)                       in respect of the
first Interest Period for a Loan, if the Drawdown Notice in relation thereto is
not received by the relevant Agent by the latest time required by the terms of
the relevant Loan Agreement, the Applicable Rate for that Interest Period shall
be calculated by reference to each relevant Lender’s cost of funding its
participation in that Loan for that Interest Period,

 

in each case,
expressed as a percentage rate per annum and rounded up to four decimal places,
as notified and reasonably substantiated by the relevant Agent to the relevant
Borrower, the relevant Lessee and debis on the relevant Quotation Date,
provided however that if that Interest Period is of less that one week’s
duration and relates to a Loan denominated in Euro, the Applicable Rate shall
instead be EONIA for that Interest Period;

 

“Assignment of Insurances” means, in respect of an Aircraft,
any assignment of insurances entered or to be entered into between the relevant
Sub-Lessee (as assignor) and the relevant Lessee (as assignee);

 

“Aviation Authority” means, in respect of an Aircraft, any
Government Entity which under the laws of the State of Registration for that
Aircraft has from time to time:

 

(a)                        control or supervision of civil aviation in the
State of Registration; and/or

 

(b)                       jurisdiction over the registration,
airworthiness or operation of, or other similar matters relating to, that
Aircraft;

 

“Banking Day” means a day (other than a Saturday or Sunday or
holiday scheduled by law) on which banks are open for the transaction of
domestic and foreign exchange business in Dublin, London, Paris, Amsterdam,
Frankfurt, New York City, Luxembourg and Munich provided that:

 

(a)                            in relation to a day on which a payment is to be
made by an Obligor in Dollars, that day need only be a day (other than a
Saturday or Sunday) on which banks are open for the transaction of domestic and
foreign exchange business in New York City, London and Paris;

 

(b)                           in relation to a day on which LIBOR is to be
calculated, that day need only be a day (other than a Saturday or Sunday) on
which banks are open for the transaction of domestic and foreign exchange
business in London and Paris; and

 

(c)                            in relation to a day on which EURIBOR is to be
calculated or a payment is to be made by an Obligor in Euro, that day need only
be a day which is a TARGET Day and a day (other than a Saturday or Sunday) on
which banks are open for the transaction of domestic and foreign exchange
business in London and Paris;

 

“Bankruptcy Law” has the meaning
specified in paragraph (g) of the definition of Insolvency Event;

 

“Basle Paper”
means the paper entitled “International Convergence of Capital Measurement and
Capital Standards” dated July 1988 and prepared by the Basle Committee on
Banking Regulations and Supervision, as amended, modified, varied, supplemented
or replaced;

 

“BFE Bill of Sale” means, in respect of an Aircraft to which
any Buyer Finished Equipment relates, the bill of sale executed or to be
executed in favour of the Seller pursuant to which title to that Buyer
Furnished Equipment is transferred to the Seller;

 

“Bill of Sale” means, in respect of an
Aircraft where debis is the Seller, the bill of sale executed or to be executed
by the Seller in favour of the relevant Borrower pursuant to which title to
that Aircraft is transferred to that Borrower;

 

“Borrower Event” means any event which,
with any one or more of the lapse of time, the giving of notice, or the making
of a determination, would become a Borrower Termination Event;

 

“Borrower Floating Charges” means together each Initial
Borrower Floating Charge and each Alternative Borrower Floating Charge, and “Borrower Floating Charge” means any of them;

 

84

 

“Borrower Novation” means a borrower novation agreement
entered into in connection with a Lease for an Aircraft and/or either or both
of the Loan Agreements for that Aircraft, in form and substance acceptable to
debis and the Security Trustee (each acting reasonably);

 

“Borrower Share Charges” means together each Initial Borrower
Share Charge and each Alternative Borrower Share Charge, and “Borrower Share Charge” means any of them;

 

“Borrower Termination Event” means, in
respect of an Aircraft, any of the following events and circumstances:

 

(a)                        any Borrower fails to pay any amount due from it and for which (as a
result of the application of clause 26) it is personally liable under any
Transaction Document for that Aircraft in the currency and in the manner
stipulated in that Transaction Document within three (3) Banking Days of the
due date therefor (if that amount is a scheduled amount) or within five (5)
Banking Days of the due date in all other circumstances;

 

(b)                       any Borrower knowingly creates (or consents to the creation of) any
Lien, other than any Permitted Lien, over or with respect to that Aircraft, or
sells, transfers or otherwise disposes of, or purports to sell, transfer or
otherwise dispose of, that Aircraft, other than, in each case, as expressly
permitted by the terms of the Transaction Documents;

 

(c)                        any Borrower fails to observe or perform in any material respect any
of its obligations under any of the Transaction Documents for that Aircraft
(other than the obligations mentioned in the other paragraphs of this definition)
for a period of thirty (30) days after notice thereof from the Security
Trustee;

 

(d)                       any representation or warranty made by any Borrower in any of the
Transaction Documents for that Aircraft or in any certificate provided by a
Borrower under schedule 10 or clause 9 is or proves to have been incorrect in
any material respect when made and the circumstances giving rise to that
incorrectness are not remedied within thirty (30) days after that Borrower
receives notice of that incorrectness from the Security Trustee;

 

(e)                        any Insolvency Event occurs in relation to any Borrower which is a
party to a Transaction Document for that Aircraft;

 

(f)                          any Borrower which is a party to a Transaction Document for that
Aircraft repudiates or disclaims all or any of their respective obligations and
liabilities under any Transaction Document for that Aircraft or evidences in
writing an intention to do the same;

 

“Borrower Trustees” means together the Trustee and each
Alternative Borrower Trustee, and “Borrower Trustee”
means any of them;

 

“Borrower’s Lien” means, in respect of an Aircraft, any Lien
created by or through the Borrower which is the owner of that Aircraft over
that Aircraft, any of its Engines or any of its Parts or exercised, asserted or
claimed against that Aircraft, any of its Engines or any of its Parts in
respect of a debt, liability or other obligation (whether financial or
otherwise) of the Borrower, other than

 

(a)                        a debt,
liability or other obligation imposed on the Borrower as purchaser of that
Aircraft pursuant to the Purchase Documents for that Aircraft or arising from
the operation, maintenance, insurance, repair and storage of that Aircraft, any
of its Engines or any of its Parts by any Lessee, any Sub-Lessee or any
Sub-Sub-Lessee;

 

(b)                       any Lien over
that Aircraft created pursuant to any of the Transaction Documents; or

 

(c)                        any Lien over
that Aircraft arising by Applicable Law where that Lien does not arise as a
result of an act or omission of the Borrower unless that act or omission is
permitted or required by the Transaction Documents or arises as a result of a
breach by either (i) any debis Obligor of its obligations under the Transaction
Documents, or (ii) any Sub-Lessee or Sub-Sub-Lessee of its obligations under
any Sub-Lease or Sub-Sub-Lease;

 

85

 

“Borrowers” means together the Initial Borrowers and each
Alternative Borrower, and “Borrower” means
any of them;

 

“British Credits” in respect of an ECA Loan, has the meaning
given to that term in clause 2.2.1 of the ECA Loan Agreement in respect of that
ECA Loan;

 

“British ECA Portion” means, in respect of any Aircraft, the
percentage determined in accordance with paragraph (c) of Part 2 of schedule 3;

 

“British Lenders” means:

 

(a)                        in relation to
an Aircraft, together the banks and financial institutions listed in Part I of
schedule 2, together with their successors, permitted assigns and permitted
transferees in relation to that Aircraft; and

 

(b)                       generally,
together the banks and financial institutions listed in Part I of schedule 2,
together with their successors, permitted assigns and permitted transferees,

 

and a “British Lender” shall mean any of them;

 

“British Margin” means, in respect of an ECA Loan for an
Aircraft:

 

(a)                        if that
Aircraft is a Mismatch Aircraft, zero point three zero per cent. (0.30%) per
annum; or

 

(b)                       if that
Aircraft is an ECA Aircraft, zero point two five per cent. (0.25%) per annum;

 

“British National Agent” means Crédit Lyonnais, a banking
institution established under the laws of France acting through its office in
England at Broadwalk House, 5 Appold Street, London EC2A 2JP, England, in its
capacity as national agent for the British Lenders, together with its
successors, permitted assignees and permitted transferees;

 

“Buyer Furnished Equipment” means, in respect of an Aircraft,
the buyer furnished equipment relating to that Aircraft supplied to the Seller
or Airbus (if not the Seller) on or prior to the Purchase Date for that
Aircraft;

 

“Cape Town Convention” means the Convention
on International Interests in Mobile Equipment (the “Convention”)
and the Protocol to the Convention on International Interests in Mobile
Equipment on Matters Specific to Aircraft Equipment (the “Protocol”),
both signed in Cape Town, South Africa on the 16 November 2001, together with
any protocols, regulations, rules, orders, agreements, instruments, amendments,
supplements, revisions or otherwise that have or will be subsequently made in
connection with the Convention and/or the Protocol by the “Supervisory
Authority” (as defined in the Protocol), the “International Registry” or “Registrar”
(as defined in the Convention) or an appropriate “registry authority” (as
defined in the Protocol) or any other international or national body or
authority;

 

“Capital Adequacy Requirement” means the introduction of,
change in, or change in the interpretation of, any law or regulation relating
to capital adequacy, liquidity and/or reserve assets applicable to a Lender,
including one which makes any change to, or is based on any alteration in, the
interpretation of the Basle Paper or which increases the amounts of capital
required thereunder, other than, with respect to any Lender, a request or
requirement made by way of implementation of the Basle Paper and/or any Applicable
Directive and/or any other law or regulation relating to capital adequacy,
liquidity and/or reserve assets in the manner in which it is being implemented
as at the Signing Date by the applicable regulatory authority or authorities;

 

“Certified Copy” means, in relation to a document, a copy of
that document bearing the endorsement “Certified a true, complete and accurate
copy of the original, which has not been amended otherwise than by a document,
a Certified Copy of which is attached hereto”, which has been signed and dated
by a person duly authorised by the relevant entity and which complies with that
endorsement;

 

86

 

“CFO Certificate”
means a certificate issued by the chief financial officer for the time being of
debis which confirms, by reference to the relevant financial ratios and
components thereof, whether or not a Trigger Event had occurred and was
continuing as at the immediately preceding Testing Date;

 

“Change in Law” means, in each case after the Signing Date:

 

(a)                        the
introduction, abolition, withdrawal or variation of any Applicable Law,
regulation, practice or concession or official directive, ruling, request,
notice, guideline, statement of policy or practice statement by the Bank of England,
the Banque de France, the Deutsche Bundesbank, the United States Federal
Reserve, the European Union, the European Central Bank or any central bank,
tax, fiscal, governmental, international, national or other competent authority
or agency (whether or not having the force of law but in respect of which
compliance by banks or other financial institutions in the relevant
jurisdiction is generally considered to be mandatory or, in the case of the
German Parallel Lender, compliance by it with which is customary); or

 

(b)                       any change in
any interpretation after the Signing Date of any Applicable Law by any
Government Entity, tribunal, revenue, international, national, fiscal or other
competent authority;

 

“COFACE” means the Export Credit Agency of the French
Republic, represented by Compagnie Française d’Assurance pour le Commerce
Extérieur;

 

“Comfort Letters” means together the Initial Comfort Letter
and each Alternative Borrower Comfort Letter, and “Comfort
Letter” means any of them;

 

“Compulsory Acquisition” means, in respect of an Aircraft or
an Engine, requisition of title or other compulsory acquisition of title (but
excluding requisition for use or hire) of that Aircraft or Engine (as the case
may be) by a Government Entity;

 

“Consent and Agreement” in respect of an Aircraft, has the
meaning given to it in the Purchase Agreement Assignment (if any) in relation
to that Aircraft;

 

“Contribution” means (i) in relation to an ECA Lender and an
ECA Loan, the principal amount of that ECA Loan owing to that ECA Lender at any
relevant time, and (ii) in relation to a Mismatch Lender and a Mismatch Loan,
the principal amount of that Mismatch Loan owing to that Mismatch Lender at any
time;

 

“Cross Collaterialisation Event” means:

 

(a)                        any Lease Termination Event;

 

(b)                       any event or circumstance referred to in paragraphs (a) and (e) of
the definition of Lease Termination Event which, with any one or more of the
lapse of time, the giving of notice, or the making of a determination, would
become a Lease Termination Event;

 

“Damage Notification Threshold” means,
in respect of an Aircraft, two million Dollars ($2,000,000), escalated to two million five hundred thousand
Dollars ($2,500,000) on the fifth anniversary and to three million two hundred
thousand Dollars ($3,200,000) on the tenth anniversary of the Signing Date.
Notwithstanding the foregoing, debis and the Security Trustee agree that if
they are aware of prolonged periods of double digit year-on-year inflation in
Dollars, both acting in good faith, they may agree to the escalation of such
amount more frequently to the extent reasonably practicable but in no event for
periods shorter than one year;

 

“debis” means debis AirFinance B.V., a
company organised and existing under the laws of The Netherlands whose
registered office is at Evert van de Beekstraat 312, 1118 CX Schiphol Airport,
Amsterdam, The Netherlands;

 

“debis Group” means debis and its Subsidiaries from time to
time;

 

“debis Group Company” means any member of the debis Group;

 

87

 

“debis Ireland” means debis AirFinance Ireland plc;

 

“debis Obligors” means together each Lessee, debis and each
Lessee Parent, and “ debis Obligor”
means any of them;

 

“Declarations of Trust” means together the Principal
Declaration of Trust and each Alternative Declaration of Trust, and “Declaration of Trust” means any of them;

 

“Default Interest Period” means, in respect of an Unpaid
Amount, each period (not exceeding six (6) months) as the relevant Agent or, in
the case of clause 8.3 of any Lease, the relevant Borrower selects in its
absolute discretion, the first such period commencing on the date on which the
Unpaid Amount was due and each subsequent period commencing on the last day of
the preceding period for so long as the relevant default continues;

 

“Default Rate” means, in respect of an Unpaid Amount and any
relevant period, the rate equal to the aggregate of (i) two per cent. (2%) per
annum, (ii) the applicable Margin, and (iii) (if that Unpaid Amount is due in
Dollars) LIBOR for that period or (if that Unpaid Amount is due in Euro)
EURIBOR for that period or (if that Unpaid Amount is due in another currency)
the cost of funds of the relevant unpaid Finance Party for that period in the
Relevant Interbank Market;

 

“Delivery Date” means, in respect of an Aircraft, the
Aircraft Delivery Date as defined in the Lease for that Aircraft;

 

“Deregistration Power of Attorney” means, in respect of an
Aircraft, each deregistration power of attorney issued by the relevant
Sub-Lessee or Sub-Sub-Lessee in favour of the Lessee of that Aircraft in a form
approved by the Security Trustee acting reasonably;

 

“Dollars” and “$” means the
lawful currency for the time being of the United States of America.

 

“Drawdown Notice” means an ECA Drawdown
Notice or a Mismatch Drawdown Notice;

 

“Dutch Documents” means together each
Dutch Supplemental Pledge (Lessee Assignment) and each Dutch Supplemental
Pledge (Security Assignment);

 

“Dutch Supplemental Pledge (Lessee Assignment)”
means, in relation to any Lessee, the Dutch supplemental pledge to Lessee
Assignment entered or to be entered into between that Lessee as pledgor and the
relevant Borrower as pledgee;

 

“Dutch Supplemental Pledge (Security Assignment)”
means, in relation to any Borrower, the Dutch supplemental pledge to Security
Assignment entered or to be entered into between that Borrower as pledgor and
repledgor and the Security Trustee as pledgee and repledgee;

 

“EC Treaty” means the Treaty establishing the European
Community (signed in Rome on 25 March, 1957), as amended by the Treaty on
European Union (signed in Maastricht on 7 February, 1992) and as amended by the
Treaty of Amsterdam (signed in Amsterdam on 2 October 1997);

 

“ECA Acceleration Notice”, in respect of an ECA Loan, has the
meaning ascribed to it in clause 7 of the ECA Loan Agreement in respect of that
ECA Loan;

 

“ECA Agent” means Crédit Lyonnais, a banking institution
established under the laws of France acting through its office at 1-3 rue des
Italiens, 75009 Paris, France in its capacity as agent for the ECA Lenders,
together with its successors, permitted assignees and permitted transferees;

 

“ECA Aircraft” means, at any time, each Aircraft for which
there is at that time no Mismatch Loan;

 

“ECA Availability Period” means the period from the Signing
Date up to and including 31 December 2005 or such later date as the parties
hereto may agree, subject to earlier termination as provided for herein;

 

88

 

“ECA Broken Funding Gains” in respect of an ECA Loan, shall
have the meaning given to that term in clause 9.2.3 of the ECA Loan Agreement
in respect of that ECA Loan;

 

“ECA Commitment”
means, in relation to an Aircraft at any time prior to the drawdown of the ECA
Loan for that Aircraft:

 

(a)                        in the case of
a British Lender, that British Lender’s ECA Portion of (i) the British ECA
Portion for that Aircraft of the Maximum ECA Aircraft Amount for that Aircraft,
plus (ii) the Qualifying ECA Premium referred to in paragraph (a) of the
definition thereof for that ECA Loan;

 

(b)                       in the case of
a French Lender, that French Lender’s ECA Portion of (i) the French ECA Portion
for that Aircraft of the Maximum ECA Aircraft Amount for that Aircraft, plus
(ii) the Qualifying ECA Premium referred to in paragraph (b) of the definition
thereof for that ECA Loan;

 

(c)                        in the case of
a German Lender, that German Lender’s ECA Portion of (i) the German ECA Portion
for that Aircraft of the Maximum ECA Aircraft Amount for that Aircraft, plus
(ii) the Qualifying ECA Premium referred to in paragraph (c) of the definition
thereof for that ECA Loan,

 

in each case, as specified in schedule 2 to the ECA
Loan Agreement for that Aircraft and/or any Transfer Certificate, in each case,
as the same may be reduced or increased pursuant to any Transfer Certificate
and/or further reduced or cancelled pursuant to the terms of the Transaction
Documents;

 

“ECA Drawdown Date” means, in respect of an ECA Loan, the
date specified as such in the ECA Drawdown Notice issued pursuant to clause 3.1
of the relevant ECA Loan Agreement or such other date as the parties may agree;

 

“ECA Drawdown Notice” means, in respect of an ECA Loan, a
notice in the form of schedule 3 to the ECA Loan Agreement for that ECA Loan;

 

“ECA Facility” means the term loan facility made available by
the ECA Lenders to the Borrowers pursuant to clause 2.1;

 

“ECA Facility Amount” means eight hundred and forty million
Dollars ($840,000,000);

 

“ECA Finance Parties” means together the ECA Lenders and the
ECA Representatives, and “ECA Finance Party”
means any of them;

 

“ECA Indemnitee” means each of the ECA Agent, the National
Agents, the Security Trustee and each ECA Lender, together with their
respective officers, directors, agents, employees, successors and permitted
assignees and transferees;

 

“ECA Interest Period” means, in respect of an ECA Loan, each
period commencing from (and including) the ECA Drawdown Date in respect of that
ECA Loan or (as the case may be) an ECA Repayment Date in respect of that ECA
Loan to (but excluding) the next succeeding ECA Repayment Date in respect of
that ECA Loan;

 

“ECA Lenders” means:

 

(a)                        in relation to
an Aircraft, together the British Lenders for that Aircraft, the French Lenders
for that Aircraft and the German Lenders for that Aircraft; and

 

(b)                       generally,
together the British Lenders, the French Lenders and the German Lenders,

 

and an “ECA Lender” shall mean any of them;

 

“ECA Loan” means the principal amount of the borrowing under
an ECA Loan Agreement or, as the context may require, the principal amount of
that borrowing for the time being outstanding, being the aggregate principal
amount of the British Credits, the French Credits and the German Credits owing
to the ECA Lenders under that ECA Loan Agreement from time to time;

 

89

 

“ECA Loan Agreement”
means, in respect of an Aircraft or an ECA Loan, the ECA loan agreement
relating thereto entered or to be entered into between the relevant Borrower,
the ECA Agent (for itself and as agent for the ECA Lenders) and the Security
Trustee, substantially in the form set out in schedule 6 but, in the
case of an ECA Loan denominated in Euro, amended as necessary to reflect the
fact that that ECA Loan is denominated in Euro;

 

“ECA Loan Amount”
in respect of an ECA Loan, shall have the meaning given to that term in clause
2.1 of the ECA Loan Agreement for that ECA Loan;

 

“ECA Margin”
means (i) for the purposes of the British Credits, the British Margin, (ii) for
the purposes of the French Credits, the French Margin and (iii) for the
purposes of the German Credits, the German Margin;

 

“ECA Portion”
means, in respect of any ECA Lender and any Aircraft, that percentage of the
British ECA Portion, the French ECA Portion or, as applicable, the German ECA
Portion specified opposite that ECA Lender in the relevant part of schedule 2
or, in the case of any of the German Lenders referred to in paragraph (b) of
the definition thereof, agreed pursuant to clause 4.2.2(d)(ii), in each case,
as specified in schedule 2 to the ECA Loan Agreement for that Aircraft
and/or any Transfer Certificate, in each case, as the same may be reduced
or increased pursuant to any Transfer Certificate and/or further reduced or
cancelled pursuant to the terms of the Transaction Documents;

 

“ECA Premium”
means, in respect of any Export Credit Agency and any ECA Loan, the fee which
is payable to that Export Credit Agency in consideration for that Export Credit
Agency guaranteeing, insuring or otherwise covering the relevant participation
of the British Lenders, the French Lenders and the German Lenders respectively
in that ECA Loan;

 

“ECA Repayment Date”
means, in respect of an ECA Loan:

 

(a)                        the third Reference Date occurring after the ECA Drawdown Date in
respect of that ECA Loan or, in respect of an ECA Loan for the Initial Aircraft,
such other date as debis and the ECA Agent may agree;

 

(b)                       each subsequent Reference Date occurring at three (3) monthly
intervals thereafter prior to the Final ECA Repayment Date in respect of that
ECA Loan; and

 

(c)                        the Final ECA Repayment Date in respect of that ECA Loan,

 

in each case, as or to be (as the case may be)
set forth in column (1) of schedule 1 to the ECA Loan Agreement in
respect of that ECA Loan, provided that if any such date is not a Banking Day,
the relevant ECA Repayment Date shall instead be the next succeeding Banking
Day, unless that next succeeding Banking Day falls in the next calendar month,
in which case, it shall be the immediately preceding Banking Day;

 

“ECA Repayment Instalment”
means, in respect of an ECA Loan and an ECA Repayment Date, the principal
amount due and payable on that ECA Repayment Date, as determined in accordance
with clause 4.2 of the ECA Loan Agreement in respect of that ECA Loan and as
set out in schedule 1 to that ECA Loan Agreement, together with interest
thereon payable pursuant to clause 4.1 of that ECA Loan Agreement;

 

“ECA Representatives”
means together the ECA Agent, the Security Trustee and each of the National
Agents, and “ECA Representative” means any of
them;

 

“ECA Termination Amount”
means, in respect of an ECA Loan, the amount required to be paid on the
prepayment or acceleration of that ECA Loan being the aggregate of:

 

(a)                        the unpaid principal balance of that ECA Loan at
the relevant time;

 

(b)                       all interest which has accrued in respect of
that ECA Loan to the date of that prepayment or acceleration and remains
unpaid;

 

90

 

(c)                        all (if any) amounts due pursuant to clauses 9.2
and 9.3 of the ECA Loan Agreement in respect of that ECA Loan; and

 

(d)                       any other amounts due and payable with respect
to that ECA Loan by any relevant Obligor under any Transaction Document which
shall remain unpaid;

 

“ECA Utilisation Block
Event” means any event described as such which debis and the ECA
Agent have agreed in writing may, if the same has occurred and is continuing,
result in the relevant Borrower being unable to borrow an ECA Loan;

 

“ECA Utilisation
Documentation” means, in respect of an Aircraft and its ECA Loan:

 

(a)                        the ECA Loan Agreement for that Aircraft;

 

(b)                       the ECA Utilisation Notice for that Aircraft;

 

(c)                        the Purchase Documents for that Aircraft;

 

(d)                       the Lease for that Aircraft;

 

(e)                        the Lessee Assignment for that Aircraft;

 

(f)                          the Acceptance Certificate for that Aircraft;

 

(g)                       the Mortgage (if any) for that Aircraft;

 

(h)                       the English Law Mortgage for that Aircraft and (if applicable) the
related English Law Mortgage Letter;

 

(i)                           the Airframe Warranties Agreement for that Aircraft;

 

(j)                           the Engine Warranties Agreement for that Aircraft;

 

(k)                        where an Alternative Obligor is involved in the ownership and/or
leasing structure for that Aircraft, all documents required in relation thereto
pursuant to clause 9;

 

“ECA Utilisation Notice”
means any notice given by debis pursuant to clause 4.1 and substantially in the
form of schedule 4;

 

“ECGD” means Her
Britannic Majesty’s Secretary of State acting by the Export Credits Guarantee
Department;

 

“Engine” or “Engines” means, in respect of an Aircraft:

 

(a)                        each of the engines identified in schedule 1 to the Lease for
that Aircraft whether or not from time to time installed on the Airframe or any
other airframe unless and until title thereto is transferred to the relevant
Lessee or its designee pursuant to clause 11.5.3 of that Lease; or

 

(b)                       any replacement Engine substituted therefor which becomes the
property of the relevant Borrower including, if applicable, any other Engine
which may from time to time be installed upon or attached to the Airframe
and which becomes the property of the relevant Borrower; or

 

(c)                        insofar as the same belong to the relevant Borrower, any and all
Parts and Replacement Parts of whatever nature from time to time relating to an
engine referred to in (a) and (b) above, whether or not installed on
or attached to that engine;

 

“Engine Manufacturer”
means either CFM International, S.A. or IAE International Aero Engines AG and,
in each case, its successors and permitted assigns;

 

91

 

“Engine Warranties”
means, in respect of the Engines relating to an Aircraft, the warranties
granted by the applicable Engine Manufacturer under the Engine Warranties
Agreement for that Aircraft;

 

“Engine Warranties
Agreement” means, in respect of an Aircraft, the engines warranties
agreement relating to that Aircraft entered or to be entered into on or prior
to the Delivery Date for that Aircraft between, amongst others, the relevant
Engine Manufacturer, debis, the relevant Borrower, the relevant Sub-Lessee and
the Security Trustee which shall be in the agreed form or otherwise in form and
substance reasonably satisfactory to the Security Trustee;

 

“English Law Mortgage”
means, in respect of an Aircraft, the mortgage subject to English law for that
Aircraft to be entered into between the relevant Borrower and the Security
Trustee which shall be in the agreed form or otherwise in form and
substance reasonably satisfactory to the Security Trustee;

 

“English Law Mortgage
Letter” means, in respect of any English Law Mortgage, a letter in
the form of schedule 12 duly executed by the Borrower which owns the
Aircraft to which that English Law Mortgage relates and the Lessee of that
Aircraft;

 

“EONIA” means
the weighted average overnight rate calculated by the European Central Bank on
all overnight unsecured lending transactions carried out in the Euro area
interbank money market and reported by the panel of reference banks selected
for the calculation of the EONIA, as published on page 247 of the
Bridge/Telerate server or any other page as may replace such page, by
the Banking Federation of the European Union, prior to the start of operations
on the TARGET Day following its reporting to the European Central Bank (D+1) by
those reference banks;

 

“Equity” means, at any time, the sum of debis’ share capital
plus retained earnings (or, as applicable, accumulated deficit) minus debis’
OCL or, as applicable, plus debis’ OCI, in each case, as shown in the accounts
most recently provided to the Security Trustee pursuant to clause 7.2.3;

 

“EURIBOR” means
in relation to any amount denominated in Euro and for any period:

 

(a)                        the percentage rate per annum which is sponsored by the European
Banking Federation and which appears on Telerate page 248 or such other page as
may replace that page 248 on that system or on any other system of
the information vendor for the time being designated by the European Banking
Federation to be the official collector, calculator and distributor of the Euro
interbank offered rate at or about 11.00 a.m. Brussels time on the second
TARGET Day before the first day of that period; or

 

(b)                       if (a) does not apply, the arithmetic mean (rounded upwards, if
necessary, to the nearest four decimal places) of the rates, as supplied to the
relevant Agent at its request, quoted by the Reference Banks to leading banks
in the European interbank market at or about 11.00 a.m. Brussels time on
the second TARGET Day before the first day of that period for the offering of
deposits in Euro and in an amount comparable with that amount and for a period
comparable to that period;

 

“Euros” and “Euro” mean the lawful currency from time to time of the
member states of the European Union that adopt the single currency in
accordance with the EC Treaty;

 

“Euro Equivalent”
shall have such meaning, in terms of both the method of calculation and the
timing for calculation, as the ECA Agent and debis may from time to time
agree;

 

“Excluded Taxes” means:

 

(a)                        any Tax, other than any Tax which is imposed by way of deduction or
withholding from a payment, which is imposed on or suffered by the affected Finance
Party or payable to the affected Finance Party with respect to, or measured by,
the income or capital gain of the affected Finance Party imposed by:

 

(i)                           the jurisdiction of its Lending Office, unless it is imposed or
suffered in consequence of any failure by any other party to any Transaction
Document to perform any of its obligations thereunder; or

 

92

 

(ii)                        any other jurisdiction, other than the Cayman Islands, the
Netherlands, Ireland and any other jurisdiction in which any Obligor has its
State of Incorporation from time to time, unless such Tax is imposed or
suffered in consequence of (A) a failure by any party to the Transaction
Documents to perform its obligations thereunder, (B) any of the matters
referred to in clause 9.1.1 of any Loan Agreement, (C) any other
connection between any Obligor and such jurisdiction, and/or (D) any
payment by any Obligor under the Transaction Documents being made from, within
or through such jurisdiction; or

 

(b)                       any Tax which would not have arisen but for the existence of any
Finance Party Lien created by or through the affected Finance Party; or

 

(c)                        any Tax to the extent that that Tax would not have been imposed or
suffered, or otherwise would not have arisen, but for any breach by the
affected Finance Party of any of its express obligations under any of the
Transaction Documents (but excluding any breach in consequence of a failure by
any other party to a Transaction Document to perform any of its
obligations thereunder); or

 

(d)                       any Tax to the extent that that Tax would not have been imposed or
suffered but for any misrepresentation made by the affected Finance Party under
any of the Transaction Documents to which it is a party (but excluding any
breach in consequence of a failure by any other party to a Transaction Document
to perform any of its obligations thereunder); or

 

(e)                        any Tax which would not have been imposed or suffered but for a
reasonably avoidable delay or failure by the affected Finance Party in filing
tax computations or returns, or in paying any Tax, which:

 

(i)                           it is required by Applicable Law of the jurisdiction of its Lending
Office to file or, as applicable, pay; or

 

(ii)                        it is required by any other Applicable Law to file or, as
applicable, pay and:

 

(A)                   debis (acting reasonably) has requested the affected Finance Party
to make that filing or, as applicable, pay that Tax, and

 

(B)                     in the case of the payment of a Tax, other than a Tax which is an
Excluded Tax pursuant to the other provisions of this definition, there has
been advanced to the affected Finance Party sufficient funds to enable it to
pay the Tax in full; or

 

(f)                          any Tax which arises solely from an act or omission which
constitutes gross negligence or wilful default by the affected Finance Party;
or

 

(g)                       in relation to clause 9.1 of any Loan Agreement, a Tax attributable
to an act, matter, circumstance or thing done, arising or occurring after the
date on which title to the relevant Aircraft shall have been transferred to the
relevant Lessee under the Lease for that Aircraft (such date being herein
referred to as the “Compliance Date”),
but only to the extent not attributable, in whole or in part, to circumstances,
acts, omissions, incidents or events occurring on or before the Compliance
Date;

 

“Existing Aircraft”
shall have the meaning given to that term in clause 12.7.1;

 

“Expenses” means
all and any fees, costs and expenses (and, in the case of the expenses of the
Representatives under paragraphs (c), (d) and (h) below, including
(but otherwise excluding) all reasonable expenses referable to the cost of
management time), reasonably and properly incurred:

 

(a)                        by the Security Trustee and every agent or other
person appointed by the Security Trustee in connection with its appointment under
this Agreement in the execution or exercise or bona fide purported
execution or exercise of the trusts, rights, powers, authorities and duties
created or conferred by or pursuant to the Transaction Documents or in respect
of any action taken or omitted by the Security Trustee or any such agent or
other person under the Transaction Documents or otherwise in relation to the
Trust Property, in each case, in a manner consistent

 

93

 

with the rights and interests of the Finance
Parties under the Transaction Documents, unless they result from the Security
Trustee’s or (as applicable) such other agent’s or person’s own gross
negligence or wilful misconduct;

 

(b)                       by any Agent in the execution or exercise or bona fide purported execution or exercise of the rights,
powers, authorities and duties created or conferred by or pursuant to the
Transaction Documents or in respect of any action taken or omitted by any Agent
under the Transaction Documents, in each case, in a manner consistent with the
rights and interests of the Finance Parties under the Transaction Documents,
including (without limitation) as a result of investigating any event which it
reasonably believes is a Termination Event or Relevant Event or acting or
relying on any notice, request or instruction which it reasonably believes to
be genuine, correct and appropriately authorised, unless they result from that
Agent’s own gross negligence or wilful misconduct;

 

(c)                        by any of the Finance Parties or the Export
Credit Agencies in contemplation of, or otherwise in connection with, the
enforcement or attempted enforcement of, or the preservation or attempted
preservation of any rights under, any of the Transaction Documents after the
occurrence of a Lease Termination Event which is then continuing;

 

(d)                       by any of the Finance Parties or the Export
Credit Agencies in preventing or attempting to prevent the arrest,
confiscation, seizure, taking in execution, impounding, forfeiture or detention
of any of the Aircraft or in securing the release of any of the Aircraft from
arrest, confiscation, seizure, taking in execution, impounding, forfeiture or
detention;

 

(e)                        by any of the Finance Parties or the Export
Credit Agencies in connection with the negotiation, preparation and execution
of each of the Transaction Documents and the delivery of the Aircraft, subject
to (where applicable) agreed caps;

 

(f)                          by any of the Finance Parties or the Export
Credit Agencies in connection with the consideration, review and implementation
of any new ownership and leasing structure or the accession of any Alternative
Obligor pursuant to clause 9;

 

(g)                       by any of the Finance Parties or the Export
Credit Agencies in connection with the implementation of any Sub-Lease and/or
Sub-Sub-Lease in accordance with the requirements of this Agreement;

 

(h)                       by any of the Finance Parties or the Export
Credit Agencies in connection with any other variation, amendment, supplement,
restructuring or novation of, or the granting of any release, waiver or consent
in connection with, any of the Transaction Documents, in each case, if
requested by a debis Obligor,

 

together with, in each case, any applicable Value
Added Tax thereon, and provided always that, if no Lease Termination Event has
at the relevant time occurred and is then continuing, or to do so would or
might reasonably be expected to result in the rights, title and interests of
the Finance Parties and the Borrowers (or any of them) in and to the Aircraft
and/or under any Transaction Document being materially adversely affected,
based on advice received by the Security Trustee and shared with debis from
reputable legal counsel in the relevant jurisdictions, the person incurring the
fee, cost or expense shall first consult in good faith with debis in relation
thereto and provide an estimate of the amount of the relevant fee, cost or
expense;

 

“Export Credit Agencies”
means together COFACE, ECGD and HERMES, and “Export
Credit Agency” means any of them;

 

“FAA” means the
Federal Aviation Administration (or its successor) of the United States of
America;

 

“Fees Letters”
means together:

 

(a)                        the various letters dated on or about the Signing Date between,
inter alia, debis and Crédit Lyonnais in relation to fees; and

 

94

 

(b)                       the various letters dated on or about the Signing Date between,
inter alia, debis and the German Parallel Lender in relation to fees;

 

“Final Disposition”
means, in respect of an Aircraft and following the enforcement of rights under
the Security Documents:

 

(a)                        the sale against immediate payment in cash or
for other consideration, whether through an agent on or otherwise, of any
right, title and interest in and to that Aircraft (including, without
limitation, a sale to the relevant Lessee, debis and/or any other person other
than to a Borrower and whether pursuant to the terms of the relevant Lease or
otherwise howsoever); or

 

(b)                       completion by delivery of that Aircraft to the
purchaser or lessee (as the case may be) of a sale, lease or other disposition,
pursuant to a conditional sale, hire purchase, full pay-out finance lease or
other arrangement providing for the payment in full of the purchase price of
that Aircraft over an agreed period of time and involving the retention of
title to, or a security or similar interest in, that Aircraft;

 

“Final Disposition Proceeds”
means, in respect of an Aircraft, the aggregate amount of:

 

(a)                            all consideration (whether cash or otherwise)
received and retained by or on behalf of any Obligor or any Secured Party as a
result of the Final Disposition of that Aircraft;

 

(b)                           any cash (including any non-refundable deposits)
received and retained as a result of the sale or proposed sale by any Obligor
or any Secured Party of any right, title and interest in and to any agreement
for the Final Disposition of that Aircraft in a manner contemplated by
paragraph (b) of the definition of Final Disposition or any non-cash
consideration received by any of them as a result of the Final Disposition of
that Aircraft or, where the Final Disposition provides for the payment in full
of the purchase price of that Aircraft over an agreed period of time, all cash
receipts in respect of that Final Disposition;

 

“Final ECA Repayment Date”
means in respect of any ECA Loan, the twelfth (12th) or tenth (10th)
anniversary of the Purchase Date for the Aircraft to which that ECA Loan
relates or such earlier date as may be agreed between debis and the ECA
Agent, as specified in the ECA Loan Agreement for that ECA Loan, provided that
if such date is not a Banking Day, the Final ECA Repayment Date shall instead
be the next succeeding Banking Day, unless that next succeeding Banking Day
falls in the next calendar month, in which case, it shall be the immediately
preceding Banking Day;

 

“Finance Parties”
means the ECA Finance Parties and the Mismatch Finance Parties, and “Finance Party” means any of them;

 

“Finance Party Lien”
means any Lien over an Aircraft or any part thereof:

 

(a)                        created by an act or omission of a Finance Party, in each case, in breach
of its express obligations under the terms of the Transaction Documents; or

 

(b)                       exercised against that Aircraft or any part thereof as a direct
result of a debt, liability or other obligation (financial or otherwise) owed
by a Finance Party other than:

 

(i)                           a debt, liability or obligation arising from the possession, use or
operation of the Aircraft by a Lessee, any Sub-Lessee or any Sub-Sub-Lessee; or

 

(ii)                        for which the Finance Party is entitled to be indemnified pursuant
to the terms of the Transaction Documents and the Finance Party shall not have
received the corresponding amount;

 

“Financial Indebtedness” means any indebtedness for or in
respect of:

 

(a)                        moneys borrowed;

 

(b)                       any amount raised by acceptance under any acceptance credit
facility;

 

95

 

(c)                        any amount raised pursuant to any note purchase facility or the
issue of bonds, notes, debentures, loan stock or any similar instrument;

 

(d)                       the amount of any liability in respect of any lease or hire purchase
contract which would, in accordance with GAAP, be treated as a finance or
capital lease;

 

(e)                        receivables sold or discounted (other than any receivables to the
extent they are sold on a non-recourse basis);

 

(f)                          any amount raised under any other transaction (including any forward
sale or purchase agreement) having the commercial effect of a borrowing;

 

(g)                       any derivative transaction entered into in connection with
protection against or benefit from fluctuation in any rate or price (and, when
calculating the value of any individual derivative transaction, only the marked
to market value of that derivative transaction shall be taken into account);

 

(h)                       any counter-indemnity obligation in respect of a guarantee,
indemnity, bond, standby or documentary letter of credit or any other
instrument issued by a bank or financial institution; and

 

(i)                           the amount of any liability in respect of any guarantee or indemnity
for any of the items referred to in paragraphs (a) to and including (h) above,

 

but excluding
(in each case):

 

(i)                           Subordinated Debt; and

 

(ii)                        any counter-indemnity obligation of the nature referred to in
paragraph (h) above and/or any derivative transaction referred to in
paragraph (g) above, in each case, where all obligations and liabilities
under the corresponding instrument are fully cash-collateralised;

 

“First Aircraft” means the first Aircraft identified in Part 1
of schedule 3;

 

“First Aircraft Borrower” means Sundance Leasing Limited, a
company incorporated under the laws of the Cayman Islands and having its
registered office at Walkers SPV Limited, Walker House, Mary Street, PO Box
908GT, George Town, Grand Cayman, Cayman Islands;

 

“First Mismatch Advance Date” means, in respect of a Mismatch
Loan:

 

(a)                        in the case of a Mismatch Loan for an Aircraft other than the 2003
Aircraft, the ECA Drawdown Date under the ECA Loan Agreement for that Aircraft;
or

 

(b)                       in the case of a Mismatch Loan for the 2003 Aircraft, the first ECA
Repayment Date under the ECA Loan Agreement for that Aircraft which falls after
the date on which the Mismatch Loan Agreement for that Mismatch Loan is entered
into by the parties thereto;

 

“Fourth Aircraft” means the fourth Aircraft identified in Part 1
of schedule 3;

 

“Fourth Aircraft Borrower”
means Sunglow Leasing Limited, a company incorporated under the laws of the
Cayman Islands and having its registered office at Walkers SPV Limited, Walker
House, Mary Street, PO Box 908GT, George Town, Grand Cayman, Cayman Islands,

 

“French ECA Portion”
means, in respect of any Aircraft, the percentage determined in accordance with
paragraph (c) of Part 2 of schedule 3;

 

“French Credits”
in respect of an ECA Loan, has the meaning given to that term in clause 2.2.2
of the ECA Loan Agreement in respect of that ECA Loan;

 

“French Lenders” means:

 

96

 

(a)                        in relation to an Aircraft, together the banks and financial
institutions listed in Part II of schedule 2, together with their
successors, permitted assigns and permitted transferees in relation to that
Aircraft; and

 

(b)                       generally, together the banks and financial institutions listed in Part II
of schedule 2, together with their successors, permitted assigns and
permitted transferees,

 

and a “French Lender”
shall mean any of them;

 

“French Margin”
means, in respect of an ECA Loan for an Aircraft:

 

(a)                        if that Aircraft is a Mismatch Aircraft, zero point three zero per
cent. (0.30%) per annum; or

 

(b)                       if that Aircraft is an ECA Aircraft, zero point two five per cent.
(0.25%) per annum;

 

“French National Agent”
means Crédit Lyonnais a banking institution established under the laws of
France acting through its office at 1-3 rue des Italiens, 75009 Paris, France,
in its capacity as national agent for the French Lenders, together with its
successors, permitted assignees and permitted transferees;

 

“German Credits”
in respect of an ECA Loan, has the meaning given to that term in clause 2.2.3
of the ECA Loan Agreement in respect of that ECA Loan;

 

“German ECA Portion”
means, in respect of any Aircraft, the percentage determined in accordance with
paragraph (c) of Part 2 of schedule 3;

 

“German Lenders”
means:

 

(a)                        in respect of any of the Initial Aircraft, together the banks and
financial institutions listed in Part III of schedule 2, together with
their successors, permitted assigns and permitted transferees in relation to
that Initial Aircraft;

 

(b)                       in respect of each other Aircraft, such persons as may be
agreed and (if applicable) accede to this Agreement pursuant to clause 4.2.2(d)(ii) ,
together with their successors, permitted assigns and permitted transferees in
relation to that Aircraft; and

 

(c)                        generally, together all of the foregoing,

 

and a “German Lender”
shall mean any of them;

 

“German Margin”
means:

 

(a)                        in respect of the ECA Loans for the 2003 Aircraft, zero point three
zero per cent. (0.30%) per annum;

 

(b)                       in respect of the ECA Loans for the other Aircraft, zero point three
zero per cent. (0.30%) per annum or such other amount as the German National
Agent may from time to time notify the ECA Agent and debis in writing;

 

“German National Agent”
means:

 

(a)                        in respect of the Initial Aircraft, Kreditanstalt für Wiederaufbau,
a public corporation established under the laws of Germany and having its
principal place of business at Palmengartenstrasse 5-9, 60325 Frankfurt am
Main, Federal Republic of Germany;

 

(b)                       in respect of each other Aircraft, the German Lender agreed between
debis and that German Lender as the person who will act as national agent for
the German Lenders in respect of that Aircraft,

 

in each case, together with its successors, permitted
assignees and permitted transferees;

 

97

 

“German Parallel Lender”
means Kreditanstalt für Wiederaufbau, a public corporation established under
the laws of Germany and having its principal place of business at
Palmengartenstrasse 5-9, 60325 Frankfurt am Main, Federal Republic of Germany,
together with its successors, permitted assigns and permitted transferees;

 

“Government Entity”
means (i) any national, state or local government, (ii) any board,
commission, department, division, courts or agency or political sub-division
thereof, howsoever constituted, and (iii) any association, organisation or
institution (international or otherwise) of which any entity mentioned in (i) or
(ii) above is a member or to whose jurisdiction it is subject or in whose
activities it is a participant;

 

“Guarantee”
means the guarantee dated the Signing Date between debis and the Borrowers
pursuant to which debis guarantees the performance of the obligations and
liabilities of the Lessees;

 

“Habitual Base”
means each country in which the Aircraft is based from time to time in
accordance with paragraph 1 of schedule 7;

 

“Heavy Maintenance Check”
means a “4C/5Y check” or “8C/10Y check”, as the case may be, or equivalent
zonal/structural checks;

 

“HERMES” means
the Export Credit Agency of Germany, represented by Hermes
Kreditversicherungsaktiengesellschaft;

 

“Holding Company”
means, in relation to any person, any other person in respect of which it is a
Subsidiary;

 

“Home Countries”
means the United Kingdom, the French Republic and Germany, and “Home Country” shall mean any of them;

 

“Home Country Aircraft”
means any Aircraft which is leased, on the Delivery Date for that Aircraft or
at any time during the first two years following that Delivery Date, to an
Operator Lessee incorporated in a Home Country. For the avoidance of doubt,
once an Aircraft has become a Home Country Aircraft in accordance the above
test, it shall remain a Home Country Aircraft for the purposes of the
calculation referred to in clause 8.3.1 until the second anniversary of the
Delivery Date for that Aircraft;

 

“Hull Additional Insureds”
has the meaning specified in 16(c)(i) of schedule 7;

 

“IATA” means the
International Air Transport Association;

 

“Indemnitees” means the ECA Indemnitees, the Mismatch
Indemnitees and the Borrowers, and “Indemnitee”
means any of them;

 

“Initial Administration Agreement” means, in respect of the
Initial Borrowers and any Alternative Borrower managed by the Initial Manager,
the agreement entitled “Corporate Services Agreement” dated on or about the
Signing Date and made between the Initial Manager, each Initial Borrower, the
Security Trustee and debis;

 

“Initial Aircraft” means, as the context may require,
any or all of the First Aircraft, the Second Aircraft, the Third Aircraft and
the Fourth Aircraft;

 

“Initial Borrower Floating
Charge” means, in relation to an Initial Borrower, the floating
charge dated on or about the Signing Date and granted by that Initial Borrower
in favour of the Security Trustee;

 

“Initial Borrower Share
Charge” means, in relation to an Initial Borrower,  the charge over shares dated on or about the
Signing Date and made between the Trustee (in the case of the Principal
Borrower) or the Principal Borrower (in the case of each of the other Initial
Borrowers) and the Security Trustee in respect of the entire issued share
capital of that Initial Borrower;

 

“Initial Borrowers”
means together the Principal Borrower, the First Aircraft Borrower, the Second
Aircraft Borrower, the Third Aircraft Borrower and the Fourth Aircraft
Borrower, and “Initial Borrower” means any of
them;

 

98

 

“Initial Comfort Letter”
means, in respect of the Initial Manager, the letter dated on or about the
Signing Date and issued by Walkers in favour of the Security Trustee and debis;

 

“Initial Sub-Leases”
means:

 

(a)                        in respect of the First Aircraft, the aircraft lease agreement dated
20 December 2001 and made between debis and the Initial Sub-Lessee, as
amended and novated by debis to the Principal Dutch Lessee pursuant to an
aircraft lease novation and amendment agreement dated on or about the Signing
Date and made between debis, the Principal Dutch Lessee, the Initial Sub-Lessee
and MyTravel Group plc (formerly known as Airtours Plc);

 

(b)                       in respect of the Second Aircraft, the aircraft lease agreement
dated 20 December 2001 and made between debis and the Initial Sub-Lessee,
as amended and novated by debis to the Principal Dutch Lessee pursuant to an
aircraft lease novation and amendment agreement dated on or about the Signing
Date and made between debis, the Principal Dutch Lessee, the Initial Sub-Lessee
and MyTravel Group plc (formerly known as Airtours Plc);

 

(c)                        in respect of the Third Aircraft, the aircraft lease agreement dated
20 December 2001 and made between debis and the Initial Sub-Lessee, as
amended and novated by debis to the Principal Dutch Lessee pursuant to an
aircraft lease novation and amendment agreement dated on or about the Signing
Date and made between debis, the Principal Dutch Lessee, the Initial Sub-Lessee
and MyTravel Group Plc (formerly known as Airtours plc);

 

(d)                       in respect of the Fourth Aircraft, the aircraft lease agreement
dated 20 December 2001 and made between debis and the Initial Sub-Lessee,
as amended and novated by debis to the Principal Dutch Lessee pursuant to an
aircraft lease novation and amendment agreement dated on or about the Signing
Date and made between debis, the Principal Dutch Lessee, the Initial Sub-Lessee
and MyTravel Group Plc (formerly known as Airtours plc),

 

and “Initial Sub-Lease”
means each or any of them (as the context may require);

 

“Initial Sub-Lessee”
means My Travel Airways A/S (formerly known as Premiair A/S);

 

“Initial Manager”
means Walkers SPV Limited, in its capacity as manager of the each Initial
Borrower;

 

“Insolvency Event”
means, in relation to any person, any of the following (whether or not on a
temporary basis):

 

(a)                        any encumbrancer takes possession of, or a trustee, examiner,
liquidator, administrator, receiver, custodian or similar officer is appointed
in respect of, that person or all or substantially all of the business or
assets of that person unless that person shall have obtained a stay of
execution in respect thereof and the release of any property subjected thereto (i) within
thirty (30) days, or (ii) if in the meantime an appeal is being presented
in good faith (and for the payment of which adequate funds are available, or,
when required in order to pursue such proceedings, an adequate bond has been
provided), sixty (60) days, so long as there are no reasonably grounds to
believe that that possession or appointment involves any material likelihood of
the sale, forfeiture or loss of the Airframe, any Engine or any Part or
any interest therein;

 

(b)                       all or substantially all of the business or assets of that person is
attached, sequestered, levied upon or subjected to any form of distraint
or execution, unless:

 

(i)                           that attachment, sequestration, levy, distraint or execution is
being contested in good faith by that person in appropriate proceedings; and

 

(ii)                        that person shall have obtained a stay of that attachment,
sequestration, levy, distraint or execution and the release of any property
subjected thereto (i) within thirty (30) days, or (ii) if in the
meantime an appeal is being presented in good faith (and for the payment of
which adequate funds are available, or, when required in order to pursue such
proceedings, an adequate bond has been provided), sixty (60) days, so long as
there are

 

99

 

no reasonable grounds to believe that that
attachment, sequestration, levy, distraint or execution involves any material likelihood
of the sale, forfeiture or loss of the Airframe, any Engine or any Part or
any interest therein; and

 

(iii)                     that attachment,
sequestration, levy, distraint or execution, whether or not stayed or released,
shall not, in the opinion of the Security Trustee (acting reasonably), have a
material adverse effect on that person’s ability to perform its
obligations under any of the Transaction Documents;

 

(c)                        that person is or becomes, or shall be deemed for the purpose of any
law to be, insolvent or unable to pay its debts as they fall due, or shall
admit in writing its inability to pay its debts as they fall due;

 

(d)                       that person suspends or threatens in writing to suspend making
payments (whether of principal or interest or rentals or otherwise) with respect
to all or substantially all of its debts, or a moratorium is declared in
respect of all or substantially all of its debts;

 

(e)                        that person convenes a meeting for the purpose of considering, or
makes, a resolution for the liquidation, or other relief under any bankruptcy,
compromise, arrangement, insolvency, readjustment of debt, suspension of
payments, dissolution, liquidation, administration, examination or similar law,
whether now or hereafter in effect (herein called a “Bankruptcy Law”) or any scheme or arrangement or
composition with, or any assignment for the benefit of, its creditors;

 

(f)                          a petition for liquidation, reorganisation or other relief under any
Bankruptcy Law is filed by any person other than that person and that petition
shall remain undismissed and unstayed for a period of sixty (60) days, or a
decree or order for relief shall be entered against that person under any
Bankruptcy Law, provided that this paragraph (f) shall not apply to any
such petition issued in any state or jurisdiction where that person does not
have or hold substantial or material assets if that petition is demonstrated by
that person to the reasonable satisfaction of the Security Trustee (acting
reasonably) to be of a frivolous, vexatious or non-meritorious nature;

 

(g)                       pursuant to an order, judgment or decree of any court or tribunal or
authority of competent jurisdiction (whether under or in relation to any
Bankruptcy Law or otherwise), that person is declared or adjudged to be
wound-up, dissolved, placed in administration, in suspension of payments,
liquidated, insolvent, bankrupt, subject to reorganisation or subject to any
other similar relief, provided that this paragraph (g) shall not apply to
any such order, judgment or decree of a court, tribunal or authority of any
state or jurisdiction where that person does not have or hold substantial or
material assets if the proceedings in relation to which that order, judgment or
decree is given are demonstrated by that person to the reasonable satisfaction
of the Security Trustee (acting reasonably) to be of a frivolous, vexatious or
non-meritorious nature;

 

(h)                       that person shall commence a voluntary case or other proceeding
seeking liquidation, reorganisation or other similar relief with respect to
itself or its debts under any Bankruptcy Law or seeking the appointment of a
trustee, examiner, liquidator, administrator, receiver, custodian or similar
official of that person or all or substantially all of its business or assets,
or shall consent to any such relief or to the appointment of or taking
possession by any such official, or shall take any corporate action to
authorise any of the foregoing;

 

(i)                           an involuntary case or other proceeding shall be commenced against
that person seeking liquidation, reorganisation or other relief with respect to
that person or its debts under any Bankruptcy Law or seeking the appointment of
a trustee, examiner, liquidator, administrator, receiver, custodian or similar
official of that person or all or substantially all of its business or assets,
and that involuntary case or other proceeding shall remain undismissed and
unstayed for a period of (i) thirty (30) days, or (ii) with respect
to which an appeal is being presented in good faith and with respect to which
there shall have been secured a stay of execution pending the determination of
that appeal (and for the payment of which adequate funds are available, or,
when required in order to pursue such proceedings, an adequate bond has been
provided) sixty

 

100

 

(60) days, so long as there are no
reasonable grounds to believe that that judgment or award involves any material
likelihood of the sale, forfeiture or loss of the Airframe, any Engine or any Part or
any Part or any interest therein,

 

provided that this paragraph (i) shall
not apply to any such involuntary case or other proceeding commenced in any
state or jurisdiction where that person does not have or hold substantial or
material assets if that involuntary case or other proceeding is demonstrated by
that person to the satisfaction of the Security Trustee (acting reasonably) to
be of a frivolous, vexatious or non-meritorious nature;

 

(j)                           any event occurs, circumstance arises or proceeding is taken with
respect to that person or its assets in any jurisdiction to which that person
or its assets is subject (including, without limitation, the loss, in whole or
in part, by that person of the free management and/or disposal of its property
in any other manner (whether or not irrevocable)) to the extent that it has a
purpose or an effect equivalent or similar to any of the events mentioned in
any of the foregoing paragraphs;

 

“Insurance Acknowledgement”
means an acknowledgement (if any) in the form and terms of schedule 1
to the relevant Assignment of Insurances;

 

“Insurance Notice”
means a notice in the form and terms of schedule 1 to the relevant
Assignment of Insurances;

 

“Insurances”
means, in relation to an Aircraft, any and all contracts or policies of
insurance taken out in respect of that Aircraft (or an indemnity from a
Government Entity if the consent thereto from the Export Credit Agencies and
the Security Trustee in accordance with the terms hereof has been obtained) and
required to be effected and maintained in accordance with this Agreement;

 

“Insurer” means
each insurer and broker with whom the contracts and policies of insurance in
relation to an Aircraft, or any part thereof, are placed from time to
time;

 

“Interest Periods”
means each ECA Interest Period and each Mismatch Interest Period, and “Interest Period” means any of them;

 

“Intermediate Lease”
means, in respect of an Aircraft financed under a structure where a Lessee
leases that Aircraft to another Lessee, a subject and subordinate lease
agreement entered into between the first Lessee as lessor and the second Lessee
as lessee in form and substance reasonably satisfactory to the Security
Trustee;

 

“Intermediate Lessee
Assignment” means each Lessee Assignment entered or to be entered
into between a Lessee which is a lessee under an Intermediate Lease and the
Lessee which is the lessor under that Intermediate Lease;

 

“JAA” means the
Joint Aviation Authorities established by the Members of the European Civil
Aviation Conference or any successor thereto including the European Aviation
Safety Agency (“EASA”), the parties hereto
acknowledging that, in respect of any jurisdiction with the European economic
community, EASA will act as such a successor and, in respect of any
jurisdiction outside the European economic community, EASA will not so act but
its rules will nevertheless be promulgated by the Joint Aviation
Authorities;

 

“Lease” means,
in respect of an Aircraft, an export lease agreement entered or to be entered
into between the relevant Borrower, as lessor, and the relevant Lessee, as
lessee which shall be in form and substance reasonably satisfactory to the
Security Trustee;

 

“Lease Event”
means any event which, with any one or more of the lapse of time, the giving of
notice, or the making of a determination, would become a Lease Termination
Event;

 

“Lease Termination Event”
means, in respect of an Aircraft, any of the following events and
circumstances:

 

101

 

(a)                        any debis Obligor fails to pay any amount due from it under any Transaction
Document for that Aircraft in the currency and in the manner stipulated in that
Transaction Document within three (3) Banking Days of the due date
therefor (if that amount is a scheduled amount) or within five (5) Banking
Days of the due date (in all other circumstances);

 

(b)                       any debis Obligor knowingly creates (or consents to the creation of)
any Lien, other than any Permitted Lien, over or with respect to that Aircraft,
or sells, transfers title to or otherwise disposes of title to or purports to
sell, transfer title to or otherwise dispose of title to, that Aircraft, other
than, in each case, as expressly permitted by the terms of the Transaction
Documents;

 

(c)                        any debis Obligor fails to observe or perform in any material
respect any of its obligations under any of the Transaction Documents for that
Aircraft (other than the obligations mentioned in the other paragraphs of this
definition) for a period of thirty (30) days after notice thereof from the
Security Trustee. It is hereby further agreed that if any debis Obligor fails
to give a notice to any other party which it is required to give pursuant to
any Transaction Document then no Lease Termination Event shall occur as a
result of such failure if such debis Obligor or debis issues the relevant
notice within five (5) Banking Days of being requested to do so by the
Security Trustee;

 

(d)                       any representation or warranty made by any debis Obligor in any of
the Transaction Documents for that Aircraft or in any certificate provided by a
debis Obligor under schedule 10 or clause 9 is or proves to have been
incorrect in any material respect when made and the circumstances giving rise
to that incorrectness are not remedied within thirty (30) days after that debis
Obligor receives notice of that incorrectness from the Security Trustee;

 

(e)                        any Insolvency Event occurs and is continuing in relation to any
debis Obligor which is a party to a Transaction Document for that Aircraft;

 

(f)                          any debis Obligor which is a party to a Transaction Document for
that Aircraft repudiates or disclaims all or any of their respective
obligations and liabilities under any Transaction Document for that Aircraft or
evidences in writing an intention to do the same;

 

(g)

 

(i)                           the Lessee of that Aircraft suspends or ceases to carry on any part of
its business or disposes, threatens to dispose or takes any action to dispose
of any of its assets, whether by one or a series of transactions, related
to or not, otherwise than as expressly permitted by the Transaction Documents;

 

(ii)                        debis suspends or ceases to carry on all or substantially all of its
business as an operating lessor of aircraft, or debis disposes, threatens to
dispose or takes any action to dispose of all or substantially all of its
assets, whether by one or a series of transactions, related or not, and
that disposal or action has or will have a material adverse effect on its
ability to perform its obligations under any of the Transaction Documents
for that Aircraft, but excluding for the purposes of a solvent reconstruction,
reorganisation, merger, amalgamation or securitisation which does not adversely
affect the creditworthiness of debis;

 

(h)                       any Financial Indebtedness of debis in excess of ten million Dollars
($10,000,000) in aggregate is not paid when due after the expiry of any
originally agreed grace periods but excluding:

 

(1)                        Financial Indebtedness in respect of which the person to whom that
Financial Indebtedness is owed has agreed to limit its recourse to particular
assets and otherwise has no recourse to any other assets of debis; and

 

(2)                        Financial Indebtedness which debis is disputing or contesting in
good faith, including by appropriate proceedings, and in respect of which debis
has provided reasonable details of the basis of such dispute or contest to the
Security Trustee;

 

102

 

(i)                           any Financial Indebtedness of debis for which debis is personally
liable which is supported by any of the Export Credit Agencies or by the United
States Eximbank (i) is not paid when due (after expiry of any applicable
grace periods relating thereto); or (ii) is declared to be due and payable
or otherwise becomes due and payable before its stated maturity by reason of a
default by debis or an event of default (howsoever described) under the
document relating to that Financial Indebtedness;

 

(j)                           the Lessee of that Aircraft ceases to be a wholly-owned direct or
indirect Subsidiary of debis; or

 

(k)                        any other event which debis and either Agent may agree in
writing from time to time is a Lease Termination Event,

 

and means, generally,
any of the foregoing in relation to any of the Aircraft;

 

“Lenders” means
together the ECA Lenders and the Mismatch Lenders, and “Lender”
means any of them;

 

“Lending Office”
means, in relation to a Lender, its branch or office at the address specified
against its name in schedule 2 or specified in the Transfer Certificate
whereby that Lender becomes a party to this Agreement or such other branch or
office determined in accordance with the provisions of this Agreement;

 

“Lessee Assignment”
means, in respect of any Aircraft, the lessee assignment(s) entered or to be
entered into between the Lessee of that Aircraft, as assignor, and:

 

(a)                        where that Lessee is party (as lessee) to an Intermediate Lease for
that Aircraft, the Lessee which is lessor under that Intermediate Lease, as
assignee; and/or

 

(b)                       where that Lessee is party (as lessee) to the Lease for that
Aircraft, the Borrower which is lessor under that Lease, as assignee,

 

which shall be in substantially the form of the
Lessee Assignments entered or to be entered into by the Principal Dutch Lessee
on or about the Signing Date and otherwise in form and substance
reasonably satisfactory to the Security Trustee;

 

“Lessee Insolvency Event”
means any Insolvency Event in relation to a Sub-Lessee or Sub-Sub Lessee of the
nature referred to in paragraphs (b) or (g) of the definition
thereof;

 

“Lessee Novation”
means a Lessee novation agreement entered into in connection with a Lease which
shall be in form and substance reasonably satisfactory to the Security
Trustee;

 

“Lessee Parent”
means:

 

(a)                        in respect of the Principal Irish Lessee, debis Ireland;

 

(b)                       in respect of the Principal Dutch Lessee, debis; and

 

(c)                        in respect of any other Lessee, the company, being debis or a direct
or indirect wholly-owned Subsidiary of debis, which owns the entire issued
share capital of that Lessee;

 

“Lessee Share Charges”
means each Principal Lessee Share Charge and each Alternative Lessee Share
Charge, and “Lessee Share Charge” means any of
them;

 

“Lessees” means
the Principal Lessees and each Alternative Lessee which accedes to this
Agreement pursuant to clause 9, and “Lessee” means
any of them;

 

“Liability”
means, at any time:

 

(a)                        in respect of a Lender, the proportion which that Lender’s
Contribution bears to the amount of all of the Loans as at that time;

 

103

 

(b)                       in respect of a British Lender, the proportion which that British
Lender’s Contribution bears to the amount of the Contributions of all of the
British Lenders as at that time;

 

(c)                        in respect of a French Lender, the proportion which that French
Lender’s Contribution bears to the amount of the Contributions of all of the
French Lenders as at that time;

 

(d)                       in respect of a German Lender, the proportion which that German
Lender’s Contribution bears to the amount of the Contributions of all of the
German Lenders as at that time;

 

(e)                        in respect of a Mismatch Lender, the proportion which that Mismatch
Lender’s Contribution bears to the amount of all of the Mismatch Loans as at
that time,

 

and “Liabilities”
shall be construed accordingly;

 

“Liability Additional
Insureds” has the meaning specified in 16(d)(ii)(A) of schedule 7;

 

“LIBOR” means,
in relation to any amount denominated in Dollars and for any period, the rate
for deposits in Dollars for that amount and for that period which is:

 

(a)                            appearing on page 3750 (or similar page, if
the Telerate page 3750 is not or no longer available) for Dollars on the
Bridge/Telerate screen at or about 11:00 a.m. (London time) on the
Quotation Date relating to that period; or

 

(b)                           if (a) does not apply, the arithmetic mean
(rounded to the nearest four decimal places) of the rates, as supplied to the
relevant Agent at its request, quoted by the Reference Banks to leading banks
in the European interbank market, at or about 11:00 a.m. (London time) on
the Quotation Date relating to that period, for the offering of deposits in
Dollars in an amount comparable with that amount and for a period comparable to
that period;

 

“Lien” means any
encumbrance or security interest whatsoever, howsoever created or arising,
including any right of ownership, security, mortgage, pledge, assignment by way
of security, charge, lease, lien, statutory right in rem, hypothecation, title
retention arrangement, attachment, levy, claim, right of detention or security
interest whatsoever, howsoever created or arising, or any right or arrangement
having a similar effect to any of the above;

 

“Loan Agreements”
means, in respect of any Aircraft, the ECA Loan Agreement for that Aircraft and
the Mismatch Loan Agreement for that Aircraft, and “Loan
Agreement” means either of them;

 

“Loans” means
together the ECA Loans and the Mismatch Loans, and “Loan”
means any of them;

 

“Losses” means
any losses, demands, liabilities, obligations, claims, actions, proceedings,
penalties, fines, damages, adverse judgments, orders or other sanctions, fees,
out-of-pocket costs and expenses (including, without limitation, the fees,
out-of-pocket costs and expenses of any legal counsel, but excluding, in all
cases, Taxes), and “Loss” shall be
construed accordingly;

 

“Maintenance Programme”
means, in relation to any Aircraft, a maintenance programme for that Aircraft
in accordance with the Manufacturer’s maintenance planning document and
approved by the Aviation Authority, including, but not limited to, servicing,
testing, preventive maintenance, repairs, structural inspections, system
checks, overhauls, approved modifications, service bulletins, engineering
orders, Airworthiness Directives, corrosion control, inspections and
treatments;

 

“Maintenance Reserves”
means, in respect of an Aircraft, the maintenance reserves or any letter(s) of
credit or other security in respect thereof, if any, which have been paid
and/or issued and which are payable and/or to be issued from time to time by
the relevant Sub-Lessee pursuant to a Sub-Lease for that Aircraft or any
amounts which that Sub-Lessee has agreed to make available to the relevant
Lessee in connection with the maintenance of that Aircraft in accordance with
the terms of that Sub-Lease (“maintenance credits”),
less, in the case of maintenance reserves and maintenance credits, any amount
paid to that Sub-Lessee or any relevant maintenance facility in reimbursement
out of a maintenance reserve account or out of the maintenance credits, as the
case may be, for maintenance of that Aircraft in accordance with the terms
of that Sub-Lessee;

 

104

 

“Majority Lenders”
means, in relation to any Aircraft:

 

(a)                        until such time as all amounts outstanding under the Transaction
Documents for that Aircraft to the ECA Finance Parties have been repaid in full
(i) in relation to any decision, discretion, action or inaction under any of
the Transaction Documents for that Aircraft in respect of which any National
Agent either must follow the instructions of the relevant Export Credit Agency
under the relevant Support Agreement or, in its good faith opinion, believes
the consent of the relevant Export Credit Agency to be necessary, the relevant
National Agent(s), and (ii) in relation to any other decision, discretion,
action or inaction under any of the Transaction Documents for that Aircraft
that is provided to be made by the Majority Lenders, the ECA Lenders the
aggregate of whose Contributions in relation to the ECA Loan for that Aircraft
is equal to or exceeds sixty-six and two thirds per cent. (66 2/3%)
of the amount of that ECA Loan; and

 

(b)                       at all times after all amounts outstanding to the ECA Finance
Parties under the Transaction Documents for that Aircraft have been repaid in
full, the Majority Mismatch Lenders for that Aircraft;

 

“Majority Mismatch Lenders”
means, in relation to any Aircraft, the Mismatch Lenders the aggregate of whose
Contributions in relation to the Mismatch Loan for that Aircraft is equal to or
exceeds sixty-six and two thirds per cent. (66 2/3%) of
the amount of that Mismatch Loans;

 

“Managers” means
the Initial Manager and each Alternative Borrower Manager, and “Manager” means any of them;

 

“Mandatory Prepayment Event”
means, in respect of an Aircraft:

 

(a)                        if any conditions precedent which the ECA Agent has agreed in
writing may be satisfied after the ECA Loan for that Aircraft has been
made or any conditions precedent which the Mismatch Agent has agreed in writing
may be satisfied after the first Mismatch Advance for that Aircraft has
been made have not been so satisfied within the period so agreed between the
ECA Agent or, as the case may be, the Mismatch Agent and debis; or

 

(b)                       if that Aircraft is not delivered to a Sub-Lessee pursuant to a
Sub-Lease within one hundred and eighty (180) days after the Delivery Date for
that Aircraft or such longer period as the ECA Agent (acting on the
instructions of the National Agents) and (if there is a Mismatch Loan for that
Aircraft) the Mismatch Agent may agree in writing; or

 

(c)                        a Borrower Termination Event occurs in respect of that Aircraft and
is continuing at the end of any period of consultation pursuant to clause 10.1;
or

 

(d)                       clause 10.1.2 applies in relation to any Security Document for that
Aircraft and continues to apply at the end of any period of consultation
pursuant to clause 10.1; or

 

(e)                        any of the Insurances for that Aircraft are not obtained and/or maintained
in accordance with the requirements of this Agreement and/or that Aircraft is
operated in a place excluded from the insurance coverage unless, immediately
upon any debis Obligor becoming aware of the same, that Aircraft is grounded in
a jurisdiction with no actual or imminent war or hostilities and, for so long
as any of those Insurances are not obtained and/or maintained in accordance
with the requirements of this Agreement, remains grounded in such a
jurisdiction, safely stored and fully covered by a “ground risk only” insurance
policy which complies with the requirements of this Agreement; or

 

(f)                          that Aircraft is flown to or within a Prohibited Country unless,
immediately upon any debis Obligor becoming aware of the same, that Aircraft is
removed from that Prohibited Jurisdiction; or

 

(g)                       a notice of prepayment is issued pursuant to 8.3.2 in respect of
that Aircraft; or

 

(h)                       the Final Date occurs under (and as defined in) clause 7.3.3; or

 

105

 

(i)                           such other circumstances as debis, the ECA Agent and/or (if there is
a Mismatch Loan for that Aircraft) the Mismatch Agent may agree in writing
from time to time; or

 

(j)                           if, at any time when that Aircraft is subject to a Sub-Lease:

 

(i)                           any debis Obligor becomes aware of the relevant Sub-Lessee or any
other person selling, transferring title to or otherwise disposing of title to,
or purporting to sell, transfer title to or otherwise dispose of title to, that
Aircraft and, if and for so long as the Security Trustee determines that there
is no material likelihood that the security over that Aircraft created by the
Security Documents and/or the relevant Borrower’s ownership interest in that
Aircraft will, by effluxion of the thirty (30) day period referred to below, be
materially prejudiced, materially limited or otherwise materially adversely
affected, the relevant Lessee fails to have that sale, transfer, other disposal
or purported sale, transfer or other disposal set aside or annulled within a
period of thirty (30) days;

 

(ii)                        any debis Obligor is or becomes aware of any Lien, other than a
Permitted Lien, over or with respect to the Aircraft and that Lien is not
discharged in full within one hundred and twenty (120) days; or

 

(k)                        the Recapitalisation is not concluded on or prior to 30 June 2003;
or

 

(l)                           unless the relevant deviation is approved by the Security Trustee
pursuant to clause 8.7, a Lessee enters into a Sub-Lease for that Aircraft
which does not comply with the Sub-Lease Requirements in breach of clause 8.2
and that breach is not remedied within thirty (30) days after notice thereof
from the Security Trustee; or

 

(m)                     the Security Trustee shall have declared a Mandatory Prepayment
Event in respect of that Aircraft pursuant to clause 9.6.1(ii),

 

and means, generally,
any of the foregoing in relation to any of the Aircraft;

 

“Manufacturer”
means Airbus;

 

“Margin” means
the relevant ECA Margin or the Mismatch Margin (as applicable);

 

“Maximum ECA Aircraft
Amount” means, in respect of any Aircraft, the lesser of:

 

(a)                        eighty-five per cent (85%) of the Aircraft Purchase Price for that
Aircraft; and

 

(b)                       the amount determined in accordance with paragraph (a) of Part 2
of schedule 3;

 

“Maximum ECA Amount”
means, in respect of any Aircraft, the lesser of:

 

(a)            the
sum of the Maximum ECA Aircraft Amount for that Aircraft plus the Qualifying
ECA Premium for the ECA Loan for that Aircraft; and

 

(b)             the
Unutilised ECA Facility for that Aircraft;

 

“Maximum Mismatch Aircraft
Amount” means, in respect of any Aircraft, the lesser of:

 

(a)

 

(1)                        where the Final ECA Repayment Date for the ECA Loan for that
Aircraft is on or about twelve (12) years after the Purchase Date for that
Aircraft (A) if that Aircraft is not a 2003 Aircraft, twenty five per
cent. (25%) of the Aircraft Purchase Price for that Aircraft, or (B) if
that Aircraft is a 2003 Aircraft, such percentage of the Aircraft Purchase
Price for that Aircraft as debis and the Mismatch Agent may agree in the
context of the procedure set out in clause 3.10; or

 

106

 

(2)                        where the Final ECA Repayment Date for the ECA Loan for that
Aircraft is on or about ten (10) years after the Purchase Date for that
Aircraft (A) if that Aircraft is not a 2003 Aircraft, thirty per cent. (30%)
of the Aircraft Purchase Price for that Aircraft, or (B) if that Aircraft
is a 2003 Aircraft, such percentage of the Aircraft Purchase Price for that
Aircraft as debis and the Mismatch Agent may agree in the context of the
procedure set out in clause 3.10; and

 

(b)                       the amount determined in accordance with paragraph (b) of Part 2
of schedule 3;

 

“Maximum Mismatch Amount”
means, in respect of any Aircraft and subject always to clause 3.10, the lesser
of:

 

(a)            the
Maximum Mismatch Aircraft Amount for that Aircraft; and

 

(b)           the
sum of:

 

(i)                           the Mismatch Facility Amount, minus

 

(ii)                        the aggregate amount of all Mismatch Loans for Aircraft other than
that Aircraft;

 

“Mismatch Acceleration
Notice” has the meaning ascribed to it in clause 7 of each Mismatch
Loan Agreement;

 

“Mismatch Advances”
means, in respect of an Aircraft, the advances made or to be made by each of
the Mismatch Lenders to the relevant Borrower in accordance with the provisions
of the Mismatch Loan Agreement for that Aircraft, and “Mismatch Advance”
means any such advance;

 

“Mismatch Agent”
means Crédit Lyonnais, a banking institution established under the laws of
France acting through its office at 1-3 rue des Italiens, 75009 Paris, France
in its capacity as agent for the Mismatch Lenders, together with its
successors, permitted assignees and permitted transferees;

 

“Mismatch Aircraft”
means, at any time, each Aircraft for which there is, at that time, a Mismatch
Loan;

 

“Mismatch Availability
Period” means, in respect of an Aircraft and a Mismatch Loan and
subject always to clause 3.10, the period commencing on and including (i) in
the case of an Aircraft other than the 2003 Aircraft, the ECA Drawdown Date for
that Aircraft, or (ii) in the case of a 2003 Aircraft, the First Mismatch
Advance Date for that Mismatch Loan, and ending on and including the earlier
of:

 

(a)                        the date upon which the ECA Loan for that Aircraft becomes due and
payable in full in accordance with the ECA Loan Agreement for that Aircraft;

 

(b)                       the Final ECA Repayment Date for that ECA Loan; and

 

(c)                        the first Banking Day on which the Unutilised Mismatch Facility for
that Aircraft is nil,

 

subject to earlier termination as provided
for in this Agreement;

 

“Mismatch Broken Funding
Gains” shall have the meaning given to that term in clause 9.2.3 of
each Mismatch Loan Agreement;

 

“Mismatch Commitment”
means, in relation to a Mismatch Lender and an Aircraft at any time and subject
always to clause 3.10, that Mismatch Lender’s Mismatch Portion of the Maximum
Mismatch Amount for that Aircraft, as specified in schedule 2 to the
Mismatch Loan Agreement for that Aircraft and/or any Transfer Certificate, or,
in the case of clause 3.9, that Mismatch Lender’s Mismatch Portion of the
Unutilised Mismatch Facility for that Aircraft, in each case, as the same may be
reduced or increased pursuant to any Transfer Certificate and/or further
reduced or cancelled pursuant to the terms of the Transaction Documents;

 

107

 

“Mismatch Commitment Period”
means, in respect of an Aircraft and subject always to clause 3.10, the period
commencing at the time determined in accordance with clause 3.10 and ending on
the last day of the Mismatch Availability Period for that Aircraft;

 

“Mismatch Drawdown Notice”
means, in respect of a Mismatch Loan, a notice in the form of schedule 3
to the Mismatch Loan Agreement for that Mismatch Loan;

 

“Mismatch Facility”
means the mismatch loan facility made available by the Mismatch Lenders to the
Borrowers pursuant to this Agreement;

 

“Mismatch Facility Amount”
means two hundred and eighty five million Dollars ($285,000,000);

 

“Mismatch Finance Parties”
means the Mismatch Lenders, the Mismatch Agent, and the Security Trustee, and “Mismatch Finance Party” means any of them;

 

“Mismatch Indemnitees”
means each of the Mismatch Agent, the Security Trustee and each Mismatch
Lender, together with their respective officers, directors, agents, employees,
successors and permitted assignees and transferees;

 

“Mismatch Interest Payment
Date “ means, in respect of a Mismatch Loan:

 

(a)                        the first ECA Repayment Date for the corresponding ECA Loan
occurring after the First Mismatch Advance Date for that Mismatch Loan;

 

(b)                       each subsequent ECA Repayment Date for the corresponding ECA Loan
occurring prior to the Mismatch Repayment Date in respect of that Mismatch
Loan; and

 

(c)                        the Mismatch Repayment Date in respect of that Mismatch Loan,

 

in each case, as or to be (as the case may be)
set forth in column (1) of schedule 1 to the Mismatch Loan Agreement in
respect of that Mismatch Loan, provided that if any such date is not a Banking
Day, the relevant Mismatch Interest Payment Date shall instead be the next
succeeding Banking Day, unless that next succeeding Banking Day falls in the
next calendar month, in which case, it shall be the immediately preceding
Banking Day;

 

“Mismatch Interest Period”
means, in respect of a Mismatch Loan, each period commencing from (and
including) the First Mismatch Advance Date in respect of that Mismatch Loan or
(as the case may be) a Mismatch Interest Payment Date in respect of that
Mismatch Loan to (but excluding) the next Mismatch Interest Payment Date in
respect of that Mismatch Loan;

 

“Mismatch Lenders” means:

 

(a)                        in relation to an Aircraft and subject always to clause 3.10,
together the banks and financial institutions listed in Part IV of schedule 2
and such other persons as may be agreed and (if applicable) accede to this
Agreement pursuant to clause 3.10 in relation to that Aircraft, together with
their successors, permitted assigns and permitted transferees in relation to
that Aircraft; and

 

(b)                       generally, together all of the foregoing,

 

and a “Mismatch Lender”
shall mean any of them;

 

“Mismatch Loan”
means the principal amount of the borrowing under a Mismatch Loan Agreement or,
as the context may require, the principal amount of that borrowing for the
time being outstanding, being the aggregate principal amount of the Mismatch
Advances under that Mismatch Loan Agreement from time to time;

 

“Mismatch Loan Agreement”
means, in respect of an Aircraft or a Mismatch Loan, the mismatch loan
agreement relating thereto entered or to be entered into between the relevant
Borrower, the Mismatch Agent, the Mismatch Lenders and the Security Trustee,
substantially in the form of the corresponding

 

108

 

ECA Loan Agreement but revised to reflect the fact
that it relates to a Mismatch Loan, such form to be agreed between debis,
the Mismatch Agent, the Mismatch Lenders and the Security Trustee in the
context of the procedure set forth in clause 3.10;

 

“Mismatch Loan Amount”
in respect of a Mismatch Loan, shall have the meaning given to that term in
clause 2.1 of the Mismatch Loan Agreement for that Mismatch Loan;

 

“Mismatch Margin”
means zero point nine zero per cent. (0.90%) per annum;

 

“Mismatch Portion”
means, in respect of any Mismatch Lender and any Aircraft, the percentage
specified opposite that Mismatch Lender in the relevant part of schedule 2
or, as the case may be, agreed pursuant to clause 3.10, in each case, as
specified in schedule 2 to the Mismatch Loan Agreement for that Aircraft
and/or any Transfer Certificate, in each case, as the same may be reduced
or increased pursuant to any Transfer Certificate and/or further reduced or
cancelled pursuant to the terms of the Transaction Documents;

 

“Mismatch Repayment Date”
means, in respect of any Mismatch Loan, the Final ECA Repayment Date for the
ECA Loan relating to the Aircraft to which that Mismatch Loan relates;

 

“Mismatch Representatives”
means the Mismatch Agent and the Security Trustee, and “Mismatch
Representative” means any of them;

 

“Mismatch Termination
Amount” means, in respect of any Mismatch Loan, the amount required
to be paid on the prepayment or acceleration of that Mismatch Loan being the
aggregate of:

 

(a)                        the unpaid principal balance of that Mismatch
Loan at the relevant time;

 

(b)                       all interest which has accrued in respect of
that Mismatch Loan to the date of that prepayment or acceleration and remains
unpaid;

 

(c)                        all other amounts due pursuant to clauses 9.2
and 9.3 of the Mismatch Loan Agreement for that Mismatch Loan as a result of
that prepayment or acceleration not being made on a Mismatch Interest Payment
Date; and

 

(d)                       any other amounts due and payable with respect
to that Mismatch Loan by any relevant Obligor under any Transaction Document at
that date as shall remain unpaid;

 

“Mismatch Utilisation Block
Event” means any event described as such which debis and the
Mismatch Agent have agreed in writing may, if the same has occurred and is
continuing, result in the relevant Borrower being unable to draw a Mismatch
Advance and/or borrow a Mismatch Loan;

 

“Mismatch Utilisation
Documentation” means, in respect of an Aircraft and its ECA Loan:

 

(a)                        the Mismatch Loan Agreement for that Aircraft;

 

(b)                       the Mismatch Utilisation Notice for that Aircraft;

 

(c)                        the Purchase Documents for that Aircraft;

 

(d)                       the Lease for that Aircraft;

 

(e)                        the Lessee Assignment for that Aircraft;

 

(f)                          the Acceptance Certificate for that Aircraft;

 

(g)                       the Mortgage (if any) for that Aircraft;

 

(h)                       the English Law Mortgage for that Aircraft and the related English
Law Mortgage Letter;

 

109

 

(i)                           the Airframe Warranties Agreement for that Aircraft;

 

(j)                           the Engine Warranties Agreement for that Aircraft;

 

(k)                        where an Alternative Obligor is involved in the ownership and/or
leasing structure for that Aircraft, all documents required in relation thereto
pursuant to clause 9;

 

“Mismatch Utilisation Notice”
means any notice given by debis pursuant to clause 5.1 and substantially in the
form of schedule 5;

 

“Mortgage”
means, in respect of an Aircraft and subject always to paragraph 1(c) of schedule 7,
the first priority mortgage for that Aircraft (but excluding, for the avoidance
of doubt, any English Law Mortgage where the relevant State of Registration is
not the United Kingdom) to be entered into (where required pursuant to
paragraph 1 of schedule 7) between the relevant Borrower and the Security
Trustee in a form approved by the Security Trustee acting reasonably;

 

“National Agents”
means together the British National Agent, the French National Agent and the
German National Agent, and “National Agent”
means any of them;

 

“National Syndicate”
means, with respect to the British National Agent, the British Lenders, with
respect to the French National Agent, the French Lenders, and with respect to
the German National Agent, the German Lenders;

 

“Net Worth”
means, at any time, the sum of debis’ Shareholder Funds at that time;

 

“Notice of Demand”
has the meaning given to that term in clause 2.2.1 of the Guarantee;

 

“Notifiable Sub-Lease Event
of Default” means, in relation to a Sub-Lease, any event of default
thereunder which relates to:

 

(a)                        a Lessee Insolvency Event in respect of the relevant Sub-Lessee; or

 

(b)

 

(i)                           at any time when a Trigger Event has not occurred and is continuing,
the insurance provisions of the Sub-Lease or Sub-Sub-Lease (as applicable); and

 

(ii)                        at any time when clause 8.6.8(b) applies and for so long as the
relevant Trigger Event has occurred and is continuing, the provisions of the
Sub-Lease which are equivalent to the Operational Undertakings;

 

“Obligors” means
each debis Obligor and each Borrower (and includes, for the avoidance of doubt,
each Alternative Obligor), and “Obligor” means
any of them;

 

“OCI” means, at
any time, debis’ accumulated other income, as shown in the accounts most
recently provided to the Security Trustee pursuant to clause 7.2.3;

 

“OCL” means, at
any time, debis’ accumulated other loss, as shown in the accounts most recently
provided to the Security Trustee pursuant to clause 7.2.3;

 

“Off-Lease Period”
means, in respect of an Aircraft, any period within the Lease Period (as
defined in the Lease for that Aircraft) during which no Sub-Lease or
Sub-Sub-Lease for that Aircraft is in effect;

 

“Operational Undertakings”
means the covenants and undertakings set out in schedule 7;

 

“Operator Lessee”
shall have the meaning given thereto in clause 8.3.1;

 

“Parallel Debt”,
in relation to this Agreement or any Loan Agreement, has the meaning ascribed
thereto in clause 38 of this Agreement or, as the case may be, clause 15
of that Loan Agreement;

 

110

 

“Part” means, in
respect of an Aircraft, each module, appliance, part, accessory, instrument,
furnishing and other item of equipment of whatsoever nature (including the
Buyer Furnished Equipment), other than a complete Engine or engine, which at
any time of determination is incorporated or installed in or attached to the
relevant Airframe or any relevant Engine, in each case, title to which is
vested in the relevant Borrower, or, having been removed therefrom, title to
which remains vested in the relevant Borrower;

 

“Permitted Finance Party
Lien” means, in relation to any Finance Party:

 

(a)                        any Lien created by the Transaction Documents; or

 

(b)                       any other Lien created at the written request of or with the prior
written consent of any debis Obligor;

 

“Permitted Lien”
means, in relation to an Aircraft:

 

(a)                        any Borrower’s Lien or Finance Party Lien; or

 

(b)                       any Lien for Taxes or other governmental or statutory charges or
levies not yet assessed or, if assessed, not yet due and payable or, if due and
payable, which the Lessee or, where relevant, the Sub-Lessee or Sub-Sub-Lessee
is disputing or contesting in good faith by appropriate proceedings (and for
the payment of which adequate funds are available, or, when required in order
to pursue such proceedings, an adequate bond has been provided), so long as, at
the time of entering into such proceedings, there are no reasonable grounds to
believe that the outcome of such proceedings, or the continued existence of
that Lien, involves any material likelihood of the sale, forfeiture or loss of
that Aircraft or any part thereof or any interest therein; or

 

(c)                        any Lien for the fees or charges of any airport or air navigation
authority arising in the ordinary course of business, by statute or by
operation of law, in each case, for amounts the payment of which either is not
yet due and payable or, if due and payable (i) the late payment reflects
the normal procedure agreed between the payer and the relevant airport or
Eurocontrol or any other relevant air navigation authority and no action is
being taken by the relevant airport or air navigation authority in connection
therewith to enforce its rights in respect of any amount owed to it, or (ii) which
is being disputed or contested in good faith by appropriate proceedings (and
for the payment of which adequate funds are available, or, when required in
order to pursue such proceedings, an adequate bond has been provided), so long
as (in the case of each of (i) and (ii)) there are no reasonable grounds
to believe that the continued existence of that Lien involves any material
likelihood of the sale, forfeiture or loss of that Aircraft or any part thereof
or any interest therein; or

 

(d)                       any Lien for the fees or charges of any supplier, hangar keeper,
mechanic, workman, repairer or employee arising in the ordinary course of
business, by statute or by operation of law, in each case, for
amounts  the payment of which either is
not yet due and payable, or, if due and payable, is being disputed or contested
in good faith by appropriate proceedings (and for the payment of which adequate
funds are available, or, when required in order to pursue such proceedings, an
adequate bond has been provided), so long as, at the time of entering into such
proceedings, there are no reasonable grounds to believe that the outcome of
such proceedings, or the continued existence of that Lien, involves any
material likelihood of the sale, forfeiture or loss of that Aircraft or any part thereof
or any interest therein; or

 

(e)                        Liens (other than Liens in respect of or resulting from Taxes)
arising out of judgments or awards against any Lessee, any Sub-Lessee or any
Sub-Sub-Lessee (i) so long as that judgment or award is discharged,
vacated or reversed within thirty (30) days, or (ii) with respect to which
an appeal is being presented in good faith and with respect to which there
shall have been secured a stay of execution pending the determination of that
appeal (and for the payment of which adequate funds are available, or, when
required in order to pursue such proceedings, an adequate bond has been
provided), or (iii) if that judgment or award is discharged, vacated or
revised within thirty (30) days after the expiration of the stay referred to in
(ii) above, in each case, so long as there are no reasonable grounds to
believe that that judgment or award, or the

 

111

 

continued existence of that Lien, involves any
material likelihood of the sale, forfeiture or loss of that Aircraft or any part thereof
or any interest therein; or

 

(f)                          any Lien created by or expressly permitted by the terms of the
Transaction Documents; or

 

(g)                       any Sub-Lease and any Sub-Sub-Lease; or

 

(h)                       any other Lien created at the written request of or with the prior
written consent of the Security Trustee;

 

“Principal Borrower”
means Sunrise Leasing Limited, a company incorporated under the laws of the
Cayman Islands and having its registered office at Walkers SPV Limited, Walker
House, Mary Street, PO Box 908GT, George Town, Grand Cayman, Cayman Islands;

 

“Principal Declaration of Trust” means the declaration of
trust entered into by the Trustee on or about the Signing Date in respect of
the entire issued share capital of the Principal Borrower;

 

“Principal Dutch Lessee”
means debis Aircraft Leasing XXX B.V., a company incorporated under the laws of
The Netherlands and having its registered office at Evert van de Beekstraat
312, 1118 CX Schiphol Airport, Amsterdam, The Netherlands;

 

“Principal Irish Lessee”
means Sunflower Aircraft Leasing Limited, a company incorporated under the laws
of Ireland and having its registered office at debis AirFinance House, Shannon,
Co. Clare, Ireland;

 

“Principal Lessee Share
Charge” means:

 

(a)                        in the case of the Principal Dutch Lessee, the share pledge dated on
or about the Signing Date and made between debis and the Principal Borrower in
respect of the entire issued share capital of the Principal Dutch Lessee,
together with the related share pledge; and

 

(b)                       in the case of the Principal Irish Lessee, the charge over shares
dated on or about the Signing Date and made between debis Ireland and the
Principal Borrower in respect of the entire issued share capital of the
Principal Irish Lessee;

 

“Principal Lessees”
means together the Principal Dutch Lessee and the Principal Irish Lessee, and “Principal Lessee” means each or either of them (as the
context may require);

 

“Principal Obligations”
means, in relation to this Agreement or any Loan Agreement and a particular
Obligor, all monetary obligations (other than the Parallel Debt in relation to
this Agreement or, as the case may be, that Loan Agreement) which now or
at any time hereafter may be or become due, owing or incurred by that
Obligor to any Finance Party, whether due or not, whether contingent or not and
whether alone or jointly with others, as principal, guarantor, surety or
otherwise, under or in connection with the Transaction Documents, as such
obligations may be extended, restated, prolonged, amended, renewed or
novated from time to time;

 

“Proceeds”
means, in relation to an Aircraft or any Loan for that Aircraft:

 

(a)                            any and all amounts received or recovered under
the Loan Agreements for that Aircraft (other than (i) prior to the
occurrence of a Lease Termination Event which is continuing, scheduled payments
of principal and interest, (ii) prior to the occurrence of a Lease
Termination Event which is continuing, any indemnity payments, or (iii) any
amounts received by application of clause 15);

 

(b)                           any Final Disposition Proceeds for that
Aircraft;

 

(c)                            any and all other proceeds of enforcement of the
Security Documents for that Aircraft;

 

(d)                           any Total Loss Proceeds for that Aircraft;

 

112

 

(e)                       any Requisition
Proceeds for that Aircraft;

 

(f)                          any and all amounts received or recovered from
debis upon enforcement of the Guarantee if and to the extent that it relates to
an amount referred to in (a) above;

 

(g)                       any and all other amounts received by any Agent,
the Security Trustee or any Lender from any of the Obligors (whether directly
or through a Borrower) pursuant to the Transaction Documents for that Aircraft;

 

“Proceeds Account”
means, in respect of an Aircraft, the account of the Security Trustee with
Crédit Lyonnais designated as such by the Security Trustee pursuant to clause
14.1 or such other account as the Security Trustee may designate as such
from time to time by notice to the other parties hereto;

 

“Prohibited Country”
means, in respect of any Aircraft, any state, country or jurisdiction which is
subject from time to time to sanctions pursuant to any United Sanctions Order,
European Union imposed sanction, US Export Controls, the United Kingdom Export
of Goods (Control) Order 1992, the Dual-Use and Related Goods (Export Control)
(Amendment) Regulations 1997 pursuant to the European Communities Act 1972 or
any statutory modification or re-enactment thereof or successor or similar or
corresponding legislation than in effect in the United Kingdom, the French
Republic or Germany, the effect of which, unless any applicable consents or
licences have been obtained in relation to such Aircraft, prohibits debis or
the relevant Lessee from exporting to and/or consigning for use of that
Aircraft in that country,

 

“Purchase Agreement
Assignment” means, in respect of any Aircraft, the Purchase Agreement
Assignment entered or to be entered into between debis and the relevant
Borrower in respect of the right to take title to that Aircraft under the
Airbus Purchase Agreement;

 

“Purchase Date”
means, in respect of any Aircraft, the date on which that Aircraft is delivered
by the Manufacturer;

 

“Purchase Documents”
means, in respect of any Aircraft:

 

(a)                        where the Aircraft is to be purchased by the relevant Borrower on
the Purchase Date from the Manufacturer pursuant to a Purchase Agreement
Assignment and the Airbus Purchase Agreement, that Purchase Agreement
Assignment, the Airbus Bill of Sale for the Aircraft and the BFE Bill of Sale
for the Aircraft;

 

(b)                       otherwise, the Bill of Sale for the Aircraft, the BFE Bill of Sale
for the Aircraft, the Sale Agreement for the Aircraft, the Sale Acceptance
Certificate for the Aircraft and the Airbus Bill of Sale for the Aircraft;

 

“Qualifying ECA Premium”
means:

 

(a)                        in relation to ECGD and any ECA Loan, one hundred per cent. (100%)
of the ECA Premium payable to ECGD for that ECA Loan;

 

(b)                       in relation to COFACE and any ECA Loan, one hundred per cent. (100%)
of the ECA Premium payable to COFACE for that ECA Loan; and

 

(c)                        in relation to HERMES and any ECA Loan, eighty five per cent. (85%)
(or such higher percentage as the German National Agent may from time to
time notify debis, the ECA Agent and the Mismatch Agent) of the ECA Premium
payable to HERMES for that ECA Loan;

 

“Qualifying Expenses”
means Expenses of the nature referred to in paragraphs (a), (b), (c) and (d) of
the definition thereof (but excluding Expenses referable to the cost of
management time) which are incurred:

 

(a)                        in the case of clause 15.4, in connection with the collection of the
relevant Total Loss Proceeds;

 

113

 

(b)                       in the case of clause 15.6, in connection with the collection of the
relevant ECA Prepayment Proceeds;

 

(c)                        in the case of clause 15.7, in connection with the relevant Lease
Termination Event and/or the collection of the relevant Proceeds; and

 

(d)                       in the case of clause 15.8, in connection with the collection of the
relevant ECA Guarantee Proceeds;

 

“Quiet Enjoyment
Undertaking” means, in respect of a Sub-Lease, a quiet enjoyment
undertaking from the Security Trustee and the relevant Borrower to the relevant
Sub-Lessee in the form set out in schedule 9 or in such other form as
the Security Trustee may agree from time to time, acting reasonably;

 

“Quotation Date”
means, in relation to any period for which an interest rate is to be
determined, the second Banking Day before the first day of such period;

 

“Recapitalisation”
means, in relation to debis, the actual injection, on an irrevocable and
unconditional basis, by debis’ shareholders of Shareholder Funds in such
amounts as are necessary to ensure that the ratio of debis’ Shareholder Funds
to debis’ Total Assets is at least fifteen per cent. (15%);

 

“Receiver” means
any receiver or receiver and manager appointed after the occurrence of a
Termination Event by either Agent, the Security Trustee or the Majority Lenders
pursuant to any Security Document;

 

“Reference Banks”
means:

 

(a)                        in relation to any calculation of LIBOR, Crédit Lyonnais and the
principal London offices of Citibank, N.A. and Bayerische Landesbank; and

 

(b)                       in relation to any calculation of EURIBOR, Crédit Lyonnais, the
principal Frankfurt office of Dresdner Bank AG and the principal Brussels
office of Fortis Bank (Nederland) N.V.;

 

“Reference Dates”
means the tenth (10th) day of each calendar month of each year, and “Reference Date” means any of them, provided that if any such
date is not a Banking Day, the relevant Reference Date shall instead be the
next succeeding Banking Day, unless that next succeeding Banking Day falls in
the next calendar month, in which case, it shall be the immediately preceding
Banking Day;

 

“Reinsurances”
has the meaning ascribed thereto in paragraph 10(a)(ii) of schedule 7;

 

“Relevant Event”
means any event which, with any one or more of the lapse of time, the giving of
notice, or the making of a determination, would become a Termination Event;

 

“Relevant Interbank Market”
means the London interbank market or, if the applicable currency is not
available in that market, the European interbank market;

 

“Relevant Rate”
means, in relation to any ECA Loan, the ten (10) or twelve (12) year
(determined by reference to the Final ECA Repayment Date for that ECA Loan)
Dollar or (as applicable) Euro swap rate as shown in the Financial Times five (5) Banking
Days prior to the proposed ECA Drawdown Date for that ECA Loan;

 

“Replacement Aircraft”
means any Aircraft approved by the Security Trustee as a Replacement Aircraft
and substituted for an Aircraft pursuant to clause 12.7;

 

“Replacement Part”
means, in respect of an Aircraft or Engine, any part installed on, incorporated
in or attached to that Aircraft or Engine as a replacement part pursuant
to the Operational Undertakings or the provisions of any relevant Sub-Lease and
where title to that part has vested in the relevant Borrower in accordance
with the Operational Undertakings or the provisions of any relevant Sub-Lease;

 

114

 

“Representatives”
means the ECA Representatives and the Mismatch Representatives, and “Representative” means any of them;

 

“Required Insurance Value”
means, in respect of an Aircraft and at any time of determination, one hundred
and fifteen per cent. (115%) of the principal amount outstanding at that time
in respect of the Loans for that Aircraft,

 

“Requisition Proceeds”
means, in respect of an Aircraft, any monies and/or other compensation received
by any Obligor or any Secured Party from any Government Entity (whether de jure
or de facto) in relation to that Aircraft in the event of that Aircraft’s
confiscation, restraint, detention, forfeiture, compulsory acquisition,
seizure, requisition for title or requisition for hire by or under the order of
any such Government Entity;

 

“Sale Acceptance
Certificate”, in respect of an Aircraft, has the meaning ascribed to
the term “Acceptance Certificate” in the Sale Agreement (if any) in relation to
that Aircraft;

 

“Sale Agreement”
means, in respect of an Aircraft, the aircraft sale and purchase agreement (if
any) in respect of that Aircraft entered or to be entered into between the
Seller in relation to that Aircraft and the relevant Borrower as buyer;

 

“Scheduled Delivery Date”
means, in respect of an Aircraft, the date nominated in the relevant ECA
Utilisation Notice for the delivery of that Aircraft from the Seller to the
relevant Borrower;

 

“Scheduled Delivery Month”
means, in respect of any Aircraft and subject to clause 2.2.2, the month
specified opposite such Aircraft in Part 1 of schedule 3;

 

“Second Aircraft”
means the second Aircraft identified in Part 1 of schedule 3;

 

“Second Aircraft Borrower”
means Sunray Leasing Limited, a company incorporated under the laws of the
Cayman Islands and having its registered office at Walkers SPV Limited, Walker
House, Mary Street, PO Box 908GT, George Town, Grand Cayman, Cayman Islands

 

“Secured Loan Obligations”
means the Secured Obligations excluding the Subordinated Secured Obligations;

 

“Secured Obligations”
means any and all monies, liabilities and obligations (whether actual or
contingent, whether now existing or hereafter arising, whether or not for the
payment of money, and including any obligation or liability to pay damages and
including any interest which, but for the application of any Bankruptcy Law,
would have accrued on the amounts in question) which are now or which may at
any time and from time to time hereafter be due, owing, payable or incurred or
expressed to be due, owing, payable or incurred from or by any Obligor to any
Secured Party or any Borrower under or in connection with any of the
Transaction Documents (notwithstanding, in the case of each Borrower, that
recourse against the Borrowers is limited pursuant to and in accordance with
clause 26), and references to Secured Obligations includes references to any part thereof;

 

“Secured Parties”
means together the Finance Parties and the Lessees, and “Secured
Party” means any of them;

 

“Security Assignment”
means, in respect of any Borrower, the security assignment entered or to be
entered into between that Borrower, as assignor, and the Security Trustee, as
assignee, which shall be in substantially the form of the Security
Assignments entered or to be entered into by the Initial Borrowers on or about
the Signing Date in the agreed form or otherwise in form and
substance reasonably satisfactory to the Security Trustee;

 

“Security Documents”
means, in respect of an Aircraft, together:

 

(a)                            the Borrower Floating Charge, the Borrower Share
Charge, the Administration Agreement, the Declaration of Trust (if any) and the
Comfort Letter, in each case, entered into by the Borrower which is the owner
of that Aircraft and to the extent that it relates to that Aircraft;

 

115

 

(b)                           each Lessee Assignment (including for the
avoidance of doubt any Intermediate Lessee Assignment) and each Lessee Share
Charge, in each case, entered into by or in respect of a Lessee which is party
to a Lease for that Aircraft and to the extent that it relates to that
Aircraft;

 

(c)                            where a Lessee which is party to a Lease for
that Aircraft has its State of Incorporation in The Netherlands, the Dutch
Documents for that Lessee, to the extent that they relate to that Aircraft;

 

(d)                           the Mortgage for that Aircraft (if any) and the
English Law Mortgage for that Aircraft and the related English Law Mortgage
Letter;

 

(e)                            the Airframe Warranties Agreement for that
Aircraft and the Engine Warranties Agreement for that Aircraft;

 

(f)                              the Purchase Documents for that Aircraft;

 

(g)                           any assignment of reinsurances for that Aircraft
referred to in paragraph 10(m) of schedule 7;

 

(h)                           the Guarantee, to the extent that it relates to
that Aircraft;

 

(i)                               where that Aircraft is subject to a Sub-Lease,
the Assignment of Insurances for that Aircraft, the Deregistration Power of
Attorney for that Aircraft (if any) and the Sub-Lease Account Charge for that
Aircraft (if any);

 

(j)                               where that Aircraft is subject to a
Sub-Sub-Lease, the Subordination Acknowledgement for that Aircraft;

 

(k)                            any other instrument, document or memorandum
annexed to any of the documents referred to above or delivered pursuant
thereto, to the extent that it relates to that Aircraft;

 

(l)                               any notice or acknowledgement required pursuant
to the terms of any of the documents referred to above, to the extent that it
relates to that Aircraft;

 

(m)                         any document, instrument or memorandum which (i) is
executed and delivered in connection with a restructuring of all or any part of
any of the documents referred to in this definition (including this part (m))
and is requested or consented to by debis, (ii) debis agrees constitutes a
Security Document, or (iii) is entered into in substitution for or which
amends, supplements, varies or novates all or any part of any of the
documents referred to in this definition (including this part (m)) and is
requested or consented to by debis,

 

and means, generally,
all of the foregoing in relation to all of the Aircraft, and “Security Document” shall be construed accordingly;

 

“Security Period”
means the period commencing on the Signing Date and ending on the date upon
which the Secured Obligations shall have been satisfied in full;

 

“Security Trustee”
means Crédit Lyonnais a banking institution established under the laws of
France acting through its office at 1-3 rue des Italiens, 75009 Paris, France,
together with its successors, permitted assignees and permitted transferees;

 

“Seller” means,
in respect of an Aircraft, the Manufacturer or debis (as applicable), being the
person who sells that Aircraft to the relevant Borrower;

 

“Share Charges”
means together each of the Borrower Share Charges and each of the Lessee Share Charges,
and “Share Charge” means any of them;

 

“Share Pledge”
means the document so entitled dated on or about the Signing Date and entered
into between debis, the Principal Borrower and the Principal Dutch Lessee in
respect of the shares in the Principal Dutch Lessee;

 

116

 

“Share Repledge”
means the document so entitled dated on or about the Signing Date and entered
into between debis, the Principal Borrower, the Principal Dutch Lessee and the
Security Trustee in respect of the shares in the Principal Dutch Lessee

 

“Shareholder Funds”
means, in relation to debis at any time, the sum of Equity and debis’
Subordinated Debt;

 

“Signing Date”
means the date of this Agreement;

 

“Specified Date”
has the meaning ascribed thereto in clause 8.6.8(b);

 

“Standard”
means, in relation to any particular issue or matter, the standard which a
reputable international aircraft operating lessor would apply in the applicable
circumstances having regard, where relevant, to:

 

(a)                        the credit standing of the relevant or proposed
Sub-Lessee or Sub-Sub-Lessee;

 

(b)                       the economic terms of the relevant or proposed
Sub-Lease or Sub-Sub-Lease;

 

(c)                        the negotiating position of the relevant or
proposed Sub-Lessee or Sub-Sub-Lessee and the debis Group and taking into
account prevailing market conditions; and

 

(d)                       the rights and interests of the Export Credit
Agencies and the Lenders in and to the Aircraft and under the Transaction
Documents;

 

“State of Incorporation”
means, in respect of any person, the state or country in which that person is
incorporated and under whose laws it is existing and, if different, the state
or country in which it has its principal place of business;

 

“State of Registration”
means, in respect of any Aircraft, the state or country in which the Aircraft
is registered from time to time pursuant to paragraph 1 of schedule 7;

 

“Sub-Lease”
means each sub-lease of an Aircraft entered into by a Lessee in accordance with
clause 8.2;

 

“Sub-Lease Account”
means, in respect of an Aircraft or a Sub-Lease, the Dollar or Euro account so
designated held by the Lessee which is the lessor under that Sub-Lease with the
Sub-Lease Account Bank for that Aircraft, and includes any redesignation and
sub-accounts thereof;

 

“Sub-Lease Account Bank”
means, in respect of an Aircraft and a Sub-Lease, such bank or financial
institution as may be nominated by debis and approved by the Security
Trustee (acting on the instructions of all of the National Agents, the German
Parallel Lender and, if there is a Mismatch Loan for that Aircraft, the
Mismatch Agent), and includes its successors in title;

 

“Sub-Lease Account Charge”
means, in respect of an Aircraft or a Sub-Lease, the charge, pledge or other
Lien over the Sub-Lease Account for that Aircraft in form and substance
reasonably satisfactory to the Security Trustee granted (where required by the
terms of this Agreement) by the Lessee which is the lessor under that Sub-Lease
in favour of:

 

(a)                        where that Lessee is the lessee under the Intermediate Lease for
that Aircraft, the other Lessee which is the lessor under that Intermediate
Lease; or

 

(b)                       otherwise, the Borrower which is the lessor under the Lease for that
Aircraft,

 

together with an acknowledgment of the Sub-Lease
Account Bank thereto which shall confirm (without limitation) that only the
Security Trustee shall be entitled to withdraw or transfer monies from that
Sub-Lease Account (or direct the same) and that it waives all rights of set off
in relation to monies from time to time standing to the credit of that
Sub-Lease Account;

 

117

 

“Sub-Lease Credit Document”
means, in relation to any Sub-Lease, each letter of credit, guarantee or other
similar credit enhancement document provided by any person to support or
guarantee any of the obligations of the relevant Sub-Lessee under that
Sub-Lease;

 

“Sub-Lease Requirements”
means the requirements set out in schedule 8;

 

“Sub-Lessee” has
the meaning ascribed thereto in paragraph 1 of schedule 8;

 

“Sub-Lessee Notice and
Acknowledgement” means a notice in the form and terms of 

schedule 1 to a Security Assignment together with an acknowledgement (if
any) in the form and terms of schedule 2 to that Security Assignment;

 

“Sub-Lessee Security”
means, in respect of an Aircraft (i) any security deposit which has been
paid or which is payable in cash by the relevant Sub-Lessee pursuant to any
Sub-Lease for that Aircraft, and/or (ii) any letter of credit which any
Lessee has procured the issue of in lieu of that security deposit, in each
case, in accordance with the terms of that Sub-Lease;

 

“Subordinated Debt” means, in relation to debis at any time,
debis’ indebtedness under all subordinated loan agreements entered into by
debis, as shown in the accounts most recently provided to the Security Trustee
pursuant to clause 7.2.3;

 

“Subordinated Secured
Obligations” means the Secured Obligations to the extent owed to a
Lessee;

 

“Subordination
Acknowledgement” means each acknowledgement issued or to be issued
by a Sub-Sub-Lessee to a Lessee as contemplated and required pursuant to
paragraph 3.1.2 of schedule 8;

 

“Subsidiary”
means, in relation to any person, any other person:

 

(a)                            which is controlled, directly or indirectly, by
the first mentioned person (and, for this purpose, a person shall be treated as
being controlled by another if that other person is able to direct its affairs
and/or control the composition of its board of directors or equivalent body);

 

(b)                           more than half the issued share capital of which
is beneficially owned, directly or indirectly, by the first mentioned person;

 

(c)                            which is a Subsidiary of another Subsidiary of
the first mentioned person; or

 

(d)                           where the beneficial interest of such other
person, if it is a trust, association or other unincorporated organisation, is
more than fifty per cent (50%) owned, directly or indirectly, by the first
mentioned person;

 

“Sub-Sub-Lease”
means a sub-sub-lease of the Aircraft entered into by a Sub-Lessee in
accordance with clause 8.2;

 

“Sub-Sub-Lessee”
has the meaning ascribed thereto in paragraph 1 of schedule 8;

 

“Sub-Sub-Lessee Notice”
means a notice in the form and terms of schedule 7 to a Security
Assignment;

 

“Support Agreements”
means, in relation to an ECA Loan, together (i) the Guarantee Agreement to
be entered into between ECGD and the British Lenders, and (ii) the
Promesse de Garantie and the Police d’Assurance Crédit to be entered into
between COFACE and the French National Agent for and on behalf of the French
Lenders, and (iii) the Finanzkreditgarantie-Erklärung to be entered into
between HERMES and the German Lenders;

 

“TARGET” means
Trans-European Automated Real-time Gross Settlement Express Transfer payment
system;

 

“TARGET Day”
means any day on which TARGET is open for the settlement of payments in Euro;

 

118

 

“Taxes” and “taxes” means all present and future taxes, levies, imposts,
duties (including, without limitation, customs duties), withholdings,
assessments, fees or charges of any nature whatsoever, and wheresoever and by
whomsoever imposed, together with any penalties, additions to tax, fines or
interest with respect to any of the foregoing, and “Tax”,
“tax”, “Taxation”
and “taxation” shall be construed
accordingly;

 

“Technical Records”
means, in respect of an Aircraft, all technical data, manuals, computer
records, logbooks and other records required to be maintained pursuant to any
law or regulation or any requirement for the time being of the applicable
Aviation Authority and relating to that Aircraft or any of its Engines or any
of its Parts;

 

“Termination Amount”
means any ECA Termination Amount or any Mismatch Termination Amount;

 

“Termination Event”
means, in respect of an Aircraft, any Lease Termination Event in respect of
that Aircraft and any Borrower Termination Event in respect of that Aircraft,
and means generally any of the foregoing in relation to any of the Aircraft;

 

“Testing Date” means:

 

(a)                        the last day of each semi-annual accounting period of debis;

 

(b)                       if clause 7.2.3(d) applies or in order to enable debis to
establish that a Trigger Event is no long continuing, the last day of each
relevant calendar month; and

 

(c)                        the date of each Drawdown Notice;

 

“Third Aircraft” means the third Aircraft identified in Part 1
of schedule 3;

 

“Third Aircraft Borrower” means Sunshine Leasing Limited, a
company incorporated under the laws of the Cayman Islands and having its
registered office at Walkers SPV Limited, Walker House, Mary Street, PO Box
908GT, George Town, Grand Cayman, Cayman Islands

 

“Total Assets”
means, in relation to debis at any time, the total of debis’ assets, as shown
in the accounts most recently provided to the Security Trustee pursuant to
clause 7.2.3;

 

“Total Loss”
with respect to any Aircraft, any Airframe or any Engine means:

 

(a)                        its actual, constructive, compromised, arranged or agreed total loss
(including any damage thereto or requisition for use or hire which results in
an insurance settlement on the basis of a total loss); or

 

(b)                       its destruction, damage beyond repair or being rendered permanently
unfit for normal use for any reason whatsoever; or

 

(c)                        the requisition of title or other compulsory acquisition of that
Aircraft, Airframe or Engine by any Government Entity (whether de jure or de facto), but
excluding requisition for use or hire not involving requisition of title; or

 

(d)                       the hi-jacking, theft, disappearance, confiscation, detention,
seizure, deprivation or requisition for use or hire of that Aircraft, Airframe
or Engine which deprives any person permitted by this Agreement to have
possession and/or use of the Aircraft, the Airframe or any Engine of its
possession and/or use for more than one hundred and twenty (120) consecutive
days,

 

and a Total Loss of the Aircraft shall be
deemed to have occurred if a Total Loss occurs with respect to the Airframe;

 

“Total Loss Payment Date”
means, in respect of any Total Loss, the earlier of (a) one hundred and
eighty (180) days after that Total Loss occurs or, in the case of a Total Loss
resulting from any of the circumstances referred to in paragraph (d) of
the definition of Total Loss, sixty (60) days after that Total Loss occurs, and
(b) the date of receipt of the relevant Total Loss Proceeds;

 

119

 

“Total Loss Proceeds”
means the proceeds of the hull Insurances in respect of an Aircraft or any
compensation for a Compulsory Acquisition of an Aircraft, in each case, with
respect to a Total Loss;

 

“Transaction Documents”
means, in respect of an Aircraft, together:

 

(a)                        this Agreement, each Accession Deed, each
Transfer Certificate and the Fees Letters, in each case, to the extent that it
relates to that Aircraft;

 

(b)                       the Lease for that Aircraft, any Intermediate
Lease for that Aircraft, any Lessee Novation entered into by a Lessee which is
a party to that Lease and/or Intermediate Lease and any Borrower Novation
entered into by a Borrower which is a party to that Lease;

 

(c)                        the Security Documents for that Aircraft;

 

(d)                       the ECA Utilisation Documentation and the ECA
Drawdown Notice for the ECA Loan in respect of that Aircraft;

 

(e)                        (if any) the Mismatch Utilisation Documentation
and the Mismatch Drawdown Notice for the Mismatch Loan in respect of that
Aircraft;

 

(f)                          any document, instrument or memorandum which (i) is
executed and delivered in connection with a restructuring of all or any part of
any of the documents referred to in this definition (including this part (f))
and is requested or consented to by debis, (ii) debis agrees constitutes a
Transaction Document, or (iii) is entered into in substitution for or
which amends, supplements, varies or novates all or any part of any of the
documents referred to in this definition (including this part (f)) and is
requested or consented to by debis,

 

and means, generally,
all of the foregoing in relation to all of the Aircraft, and “Transaction Document” shall be construed accordingly;

 

“Transfer Certificate”
means a certificate in the form set out in schedule 11 or, if an
Export Credit Agency is to become an ECA Lender, in such other form as
shall be agreed by the ECA Agent and debis;

 

“Transferee”
shall have the meaning given thereto in clause 34.3.1;

 

“Transferor”
shall have the meaning given thereto in clause 34.3.1;

 

“Trigger Event”
means the occurrence of either of the following events and circumstances:

 

(a)                        the Net Worth of debis is, as at any Testing Date, less than three
hundred million Dollars ($300,000,000);

 

(b)                       the ratio of the Shareholder Funds of debis to the Total Assets of
debis is, as at any Testing Date, less than ten per cent. (10%);

 

“Trust Documents”
means, in respect of an Aircraft, each Transaction Document for that Aircraft
to which the Security Trustee is or becomes a party, other than this Agreements
and the Loan Agreement for that Aircraft, and means generally all of the
foregoing, and “Trust Document” means each or any
of them (as the context may require);

 

“Trustee” means
Walkers SPV Limited, in its capacity as trustee of the trusts created pursuant
to the Principal Declaration of Trust;

 

“Trust Property”
means (i) the Trust Documents and the security, powers, rights, titles,
benefits and interests (both present and future) constituted by and conferred
on the Security Trustee under or pursuant to the Trust Documents or the other
Transaction Documents, and (ii) all Proceeds and any other moneys,
property or other assets paid or transferred to or vested in the Security
Trustee or received or recovered by the Security Trustee pursuant to, or in
connection with, any of the Trust Documents or the other Transaction Documents;

 

120

 

 

“Unpaid Amount” has the meaning given to that term in clause
4.6.1 of the relevant ECA Loan Agreement, clause 4.6.1 of the relevant Mismatch
Loan Agreement and/or clause 8.3.1 of the relevant Lease, as applicable;

 

“Unutilised ECA Facility” means, at any time, the ECA
Facility Amount, as that amount may have been reduced by the amount of each ECA
Loan made before that time;

 

“Unutilised Mismatch Facility” means, at any time in relation
to an Aircraft:

 

(a)                        if that time
occurs before the date on which a Mismatch Loan Agreement for that Aircraft is
entered into by the parties thereto, the amount for that Aircraft determined in
accordance with paragraph (b) of the definition of Maximum Mismatch Aircraft
Amount;

 

(b)                       if that time
occurs on or after the date on which a Mismatch Loan Agreement for that
Aircraft is entered into by the parties thereto, the total of all of the
Mismatch Commitments for that Aircraft of all of the Mismatch Lenders for that
Aircraft, as that amount may have been reduced by the amount of each Mismatch
Advance for that Aircraft made before that time;

 

“US GAAP” means the accounting principles, practices and
policies generally adopted and accepted in the United States of America; and

 

“Value Added Tax” means value added tax as provided for in
the United Kingdom Value Added Tax Act 1994 and legislation (whether delegated
or otherwise) supplemental thereto or in any primary or subordinate legislation
promulgated by the European Union or any body or agency thereof and any Tax
similar or equivalent to value added tax imposed by any country other than the
United Kingdom and any similar or turnover tax replacing or introduced in
addition to any of the same.

 

121

 

Headings

 

Clause headings and the table of contents are inserted for
convenience of reference only and shall be ignored in the interpretation of
this Agreement.

 

Construction of certain terms

 

In this Agreement, unless the context otherwise requires:

 

(a)                        references to clauses and schedules are to be construed as
references to the clauses of, and schedules to, this Agreement and
references to this Agreement include its schedules;

 

(b)                       references to (or to any specified provision of) this Agreement or
any other document shall be construed as references to this Agreement, that
provision or that document as in force for the time being and as from time to
time amended in accordance with the terms thereof, or, as the case may be, with
the agreement of the relevant parties and (where that consent is, by the terms
of this Agreement or the Transaction Document, required to be obtained as a
condition to that amendment being permitted) the prior written consent of the
Security Trustee;

 

(c)                        references to a “regulation” include any present or future regulation,
rule, directive, requirement, request or guideline (whether or not having the
force of law) of any agency, authority, central bank or government department
or any self-regulatory or other national or supra-national authority;

 

(d)                       words importing the plural shall include the singular and vice
versa;

 

(e)                        references to a time of day are to Paris time;

 

(f)                          references to a person shall be construed as including references to
an individual, firm, company, corporation, unincorporated body of persons or
any state or any agency thereof;

 

(g)                       references to a “guarantee” include references to an indemnity or
other assurance against financial loss including, without limitation, an
obligation to purchase assets or services as a consequence of a default by any
other person to pay any Indebtedness and “guaranteed” shall be construed
accordingly;

 

(h)                       references to any enactment shall be deemed to include references to
that enactment as re-enacted, amended or extended; and

 

(i)                           the eiusdem generis rule shall not
apply and accordingly the interpretation of general words shall not be
restricted by being preceded by words including a particular class of acts,
matters or things or by being followed by particular examples.

 

122

 

Schedule 2

The Lenders

 

Part I - The British
Lenders

 

	
  Lender

  	
   

  	
  Lending Office

  	
   

  	
  ECA Portion expressed as

  a percentage of the British

  ECA Portion and by

  Aircraft

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Crédit
  Lyonnais

  	
   

  	
  Broadwalk
  House

  5 Appold Street

  London

  EC2A 2JP

  United Kingdom

  	
   

  	
  All
  Aircraft: 100%

  

 

123

 

Part II - The French
Lenders

 

	
  Lender

  	
   

  	
  Lending Office

  	
   

  	
  ECA Portion expressed as

  a percentage of the French

  ECA Portion and by

  Aircraft

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Crédit
  Lyonnais

  	
   

  	
  1-3 rue des
  Italiens

  75009 Paris

  France

  	
   

  	
  All
  Aircraft: 100%

  

 

124

 

Part III - The German
Lenders

 

	
  Lender

  	
   

  	
  Lending Office

  	
   

  	
  ECA Portion expressed as

  a percentage of the

  German ECA Portion and

  by Aircraft

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kreditanstalt
  für Wiederaufbau

  	
   

  	
  Palmengartenstrasse 5-9,

  60325 Frankfurt am Main

  Germany

  	
   

  	
  Initial
  Aircraft: 100%

  

  Other Aircraft: 0%

  

 

125

 

Part IV - The Mismatch
Lenders

 

	
  Lender

  	
   

  	
  Lending Office

  	
   

  	
  Mismatch Portion

  expressed as a percentage

  and by Aircraft

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Crédit
  Lyonnais

  	
   

  	
  Broadwalk
  House

  5 Appold
  Street

  London

  EC2A 2JP

  United
  Kingdom

  	
   

  	
  All
  Aircraft: Such percentage as may be agreed
  for the relevant Aircraft pursuant to clause 3.10

  

 

126

 

Schedule 3

The Aircraft

 

Part 1

 

	
  Aircraft

  number

  	
   

  	
  Scheduled
  Delivery

  Month

  	
   

  	
  Aircraft
  Purchase Price

  ($)

  	
   

  
	
  1.

  	
   

  	
  February 2003

  	
   

  	
  49,114,154

  	
   

  
	
  2.

  	
   

  	
  March 2003

  	
   

  	
  49,291,722

  	
   

  
	
  3.

  	
   

  	
  April 2003

  	
   

  	
  48,756,347

  	
   

  
	
  4.

  	
   

  	
  April 2003

  	
   

  	
  49,424,277

  	
   

  
	
  5.

  	
   

  	
  June 2003

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  February 2004

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  February 2004

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  February 2004

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  March 2004

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  June 2004

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  July 2004

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  November 2004

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  January 2005

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  January 2005

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  March 2005

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  March 2005

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  April 2005

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  August 2005

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  September 2005

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  October 2005

  	
   

  	
   

  	
   

  

 

127

 

Part 2

 

(a)                        Maximum
ECA Aircraft Amount

 

In
respect of any Aircraft, the amount referred to in paragraph (b) of the
definition of Maximum ECA Aircraft Amount shall be determined by reference to
the following table:

 

	
  Aircraft type

  	
   

  	
  2003

  	
   

  	
  2004

  	
   

  	
  2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A319

  	
   

  	
   

  	
  31 983 673

  	
   

  	
  33 263 019

  	
   

  	
  34 593 540

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A320

  	
   

  	
   

  	
  37 416 516

  	
   

  	
  38 913 176

  	
   

  	
  40 469 703

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A321

  	
   

  	
   

  	
  43 375 118

  	
   

  	
  45 829 201

  	
   

  	
  47 082 895

  	
   

  

 

 

(b)                       Maximum
Mismatch Aircraft Amount

 

In
respect of any Aircraft, the amount referred to in paragraph (b) of the
definition of Maximum Mismatch Aircraft Amount shall be determined by reference
to the following table:

 

	
  Aircraft type

  	
   

  	
  2003

  	
   

  	
  2004

  	
   

  	
  2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A319

  	
   

  	
  To be agreed
  in the context of the procedure under clause 3.10

  	
   

  	
  11 232 000

  	
   

  	
  11 681 280

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A320

  	
   

  	
  To be agreed
  in the context of the procedure under clause 3.10

  	
   

  	
  13 322 400

  	
   

  	
  13 855 296

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A321

  	
   

  	
  To be agreed
  in the context of the procedure under clause 3.10

  	
   

  	
  15 690 185

  	
   

  	
  16 119 403

  	
   

  

 

(c)                        British
ECA Portion, French ECA Portion and German ECA Portion

 

In
respect of any Aircraft, the British ECA Portion, the French ECA Portion and
the German ECA Portion respectively shall be determined by reference to the
following table:

 

	
  Aircraft and Engine

  type

  	
   

  	
  British ECA Portion

  	
   

  	
  French ECA Portion

  	
   

  	
  German ECA Portion

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A319-CFM

  	
   

  	
  18

  	
  %

  	
  51

  	
  %

  	
  31

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A319-IAE

  	
   

  	
  28

  	
  %

  	
  39

  	
  %

  	
  33

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A320-CFM

  	
   

  	
  20

  	
  %

  	
  49

  	
  %

  	
  31

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A320-IAE

  	
   

  	
  32

  	
  %

  	
  32

  	
  %

  	
  36

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A321-CFM

  	
   

  	
  17

  	
  %

  	
  52

  	
  %

  	
  31

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A321-IAE

  	
   

  	
  33

  	
  %

  	
  32

  	
  %

  	
  35

  	
  %

  

 

128

 

Schedule 4

ECA Utilisation Notice

 

	
  To:

  	
  Crédit
  Lyonnais

  	
   

  
	
   

  	
  1 rue des Italiens

  	
   

  
	
   

  	
  75009 Paris

  	
   

  
	
   

  	
  France

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No:

  	
  +33 1 42 95 11 81

  
	
   

  	
  Attention:

  	
  DGRE/Head of Transportation Group

  
	
   

  	
   

  	
   

  
	
  From:

  	
  debis
  AirFinance B.V. (“debis”)

  

 

Facility Agreement dated [   ]
April 2003 and made between, amongst others, you and debis, as amended,
supplemented or acceded to from time to time (the “Agreement”)

 

debis hereby
gives notice in accordance with clause 4.1.1 of the Agreement that it wishes to
utilise an ECA Loan and that:

 

(a)                        the proposed ECA Drawdown Date for that ECA Loan is [                        ];

 

(b)                       the proposed
Final ECA Repayment Date for that ECA Loan is [                              ];

 

(c)                        the amount and
currency of the proposed ECA Loan is [                                  ];

 

(d)                       the details of
the relevant Aircraft are: [type], [manufacturer’s serial number], [proposed
registration mark], [Engine Manufacturer],
[Engine type], [Engine
manufacturer’s serial numbers];

 

(e)                        [the proposed Sub-Lessee of that Aircraft is [                      ]
and its principal place of business is
[                     ]
[and the proposed Sub-Sub-Lessee of that Aircraft is [                      ]
and its principal place of business is [                       ]];

 

(f)                          that Aircraft will initially be registered in [                          ]
and it is [not] proposed that there will be a Mortgage over that Aircraft;

 

(g)                       the anticipated
Aircraft Purchase Price for that Aircraft is [        ];

 

(h)                       the identity of
each Borrower and Lessee to be party to the Transaction Documents for that
Aircraft are [name and jurisdiction and any other relevant
information]; and

 

(i)                           [we attach hereto a Certified Copy of the [latest draft]/[executed
version] of the proposed Sub-Lease for that Aircraft].

 

Terms used herein defined in the Agreement have the
same meanings herein.

 

DEBIS AIRFINANCE B.V.

 

By:

Name:

Title:

 

129

 

Schedule 5

Mismatch Utilisation Notice

 

	
  To:

  	
  Crédit
  Lyonnais

  
	
   

  	
  1 rue des Italiens

  
	
   

  	
  75009 Paris

  
	
   

  	
  France

  
	
   

  	
  Facsimile No:

  	
  +33 1 42 95 11 81

  
	
   

  	
  Attention:

  	
  DGRE/Head of Transportation Group

  
	
   

  	
   

  	
   

  
	
  From:

  	
  debis
  AirFinance B.V. (“debis”)

  

 

Facility Agreement dated [   ]
April 2003 and made between, amongst others, you and debis, as amended,
supplemented or acceded to from time to time (the “Agreement”)

 

debis hereby
gives notice in accordance with clause 5.1.1 of the Agreement that it wishes to
utilise a Mismatch Loan and that:

 

(a)                        the proposed [ECA Drawdown Date for the ECA Loan for the relevant
Aircraft]/[First Mismatch Advance Date] is [              ]
and the amount of that ECA Loan is $[                     ];

 

(b)                       the
[proposed]/[actual] Final ECA Repayment Date for that ECA Loan is [            ];

 

(c)                        the amount of
the proposed Mismatch Loan is $[            ];

 

(d)                       the details of
the relevant Aircraft are: [type], [manufacturer’s serial number], [proposed
registration mark], [Engine Manufacturer],
[Engine type], [Engine
manufacturer’s serial numbers];

 

(e)                        [the proposed Sub-Lessee of that Aircraft is [            ]
and its principal place of business is [            ]
[and the proposed Sub-Sub-Lessee of that Aircraft is [            ]
and its principal place of business is [            ]];

 

(f)                          that Aircraft will initially be registered in [            ]
and it is [not] proposed that there will be a Mortgage over that Aircraft;

 

(g)                       the anticipated
Aircraft Purchase Price for that Aircraft is [            ];

 

(h)                       the identity of
each Borrower and Lessee to be party to the Transaction Documents for that
Aircraft are [name and jurisdiction and any other relevant
information]; and

 

(i)                           [we attach hereto a Certified Copy of the [latest draft]/[executed
version] of the proposed Sub-Lease for that Aircraft].

 

Terms used herein defined in the Agreement have the
same meanings herein.

 

DEBIS AIRFINANCE B.V.

 

By:

Name:

Title:

 

130

 

Schedule 6

ECA Loan Agreement

 

131

 

Schedule 7

Operational Undertakings

 

1          Registration,
title and nameplates

 

(a)              The
Lessee shall:

 

(i)                           ensure that
Aircraft is registered with the Aviation Authority in a country which is not,
at the time of that registration, a Prohibited Country;

 

(ii)                        ensure that
the relevant Borrower’s ownership interest in the Aircraft is registered,
recorded and noted in the register maintained by the Aviation Authority to the
fullest extent possible in accordance with Applicable Laws of the State of
Registration;

 

(iii)                     subject to
paragraph 1(c) below, ensure that a Mortgage is executed and that that Mortgage
is registered and/or the interest of the Security Trustee in the Aircraft is
registered, in each case, in the register (if any) maintained by the Aviation
Authority and, in each case, to the fullest extent possible in accordance with
Applicable Laws of the State of Registration, and the Borrower agrees, as soon
as reasonably practicable following a written request by the Lessee, to execute
that Mortgage; and

 

(iv)                    ensure that the
Aircraft is habitually based in a Habitual Base which is not, at the time of
entering into the related Sub-Lease, a Prohibited Country.

 

(b)             There
shall be no change in the State of Registration of the Aircraft unless and
until the Lessee provides an opinion of counsel acceptable to the Security
Trustee (acting reasonably), in form and substance reasonably satisfactory to
the Security Trustee, addressed to the Security Trustee, with respect to the
laws of the new State of Registration, subject to customary qualifications and
assumptions.

 

(c)              If:

 

(i)                           the Taxes,
fees, costs and expenses referred to in clauses 16.4 and 16.5 would, in
relation to any individual Mortgage for an Aircraft and/or any registration
contemplated by paragraph 1(h) below, exceed ten thousand Dollars ($10,000);
and

 

(ii)                        the Security
Trustee has received (in a reasonably satisfactory form) a legal opinion from
counsel acceptable to the Security Trustee (acting reasonably) in the State of
Incorporation of the relevant Sub-Lessee and (if applicable) Sub-Sub-Lessee
and, if different, the Habitual Base for that Aircraft demonstrating that the
rights of the Security Trustee to terminate the relevant Sub-Lease and (if
applicable) Sub-Sub-Lease and repossess that Aircraft pursuant to the Security
Documents for that Aircraft give at least equivalent protection as the rights
the Security Trustee would have enjoyed if (A) in the case of a Mortgage, a
Mortgage had been executed and registered, and/or (as applicable) (B) in the
case of any registration contemplated by paragraph 1(h) below, that
registration had been effected (in each case, subject to customary exclusions
and qualifications),

 

then, unless any of the Finance Parties elect to pay
the amount by which such Taxes, fees, costs and expenses exceed ten thousand
Dollars ($10,000), the Lessee shall not be required to procure the execution
and/or registration of a Mortgage for that Aircraft and/or (as applicable) the
relevant registration contemplated by paragraph 1(h) below.

 

132

 

(d)             The
Lessee shall not do or knowingly permit to be done anything that would jeopardise
the rights of the relevant Borrower as owner of the Aircraft (or of the
Security Trustee as mortgagee) or that would prejudice or cancel any
registration required by this Agreement and shall cause to be taken all actions
necessary or reasonably requested by the Security Trustee to prevent the rights
of the relevant Borrower as owner of the Aircraft (or of the Security Trustee
as mortgagee) from being jeopardised, and shall not do or permit to be done
anything which, or omit to do anything the omission of which, would or would be
likely to prejudice any material right that the relevant Borrower or the
Security Trustee may have against the Manufacturer, the relevant Engine
Manufacturer, any maintenance provider or any supplier or manufacturer of the Aircraft
or any part thereof under the Purchase Documents, the documents constituting
the Engine Warranties (as defined in the relevant Engine Warranties Agreement)
or any other agreement in respect of the Aircraft or any part thereof.  Subject always to clause 16.6, at the
reasonable request of the Security Trustee, the Lessee will do all acts and
things (including making any filing, registration or recording with the
Aviation Authority or any other Government Entity or as required to comply with
any Applicable Law) and execute, notarise, file, register and record all
documents as may be required by the Security Trustee and which it is possible
for the Lessee to do under Applicable Laws of the State of Registration to
establish, maintain, perfect, protect and preserve the rights and interests of
the relevant Borrower or of the Security Trustee as mortgagee and in the
Aircraft.

 

(e)              The
Lessee shall affix, maintain and shall not cover up (or permit to be covered
up) a fireproof plate (having dimensions of not less than 10 cm. x 7 cm.) in a
prominent position on the flight-deck or cockpit of the Aircraft and in a
prominent position on each of its Engines stating:

 

“THIS AIRCRAFT
IS OWNED BY [  ], IS LEASED TO [  ], IS SUBLEASED TO [INSERT NAME OF
SUB-LESSEE] AND IS MORTGAGED TO CREDIT LYONNAIS.”

 

(f)                The
Lessee shall not hold itself out to any third party as owner of the Aircraft or
any part of it, and when any third party inquires as to the ownership of the
Aircraft or any part thereof, it will make clear to that third party that title
to the same is held by the relevant Borrower subject to the Mortgage for the
Aircraft (if any) and the English Law Mortgage for the Aircraft.  The Lessee shall not at any time represent or
hold out any Indemnitee as carrying goods or passengers on the Aircraft or as
being in any way connected or associated with any operation of carriage
(whether for hire or reward, or gratuitously) that may be undertaken by the
Lessee, any Sub-Lessee or any Sub-Sub-Lessee.

 

(g)             The
Lessee has no authority to pledge, and shall not pledge, the credit of any
Indemnitee for any fees, costs or expenses connected with any maintenance,
overhaul, repairs, replacements or modifications to the Aircraft or any part
thereof or otherwise connected with the use or operation of the Aircraft or any
part thereof.

 

(h)             Subject
to paragraph 1(c) above, at any time the Geneva Convention and/or the Cape Town
Convention is or becomes ratified by, or recognised or made applicable in, the
State of Registration for the Aircraft and/or the Habitual Base for the
Aircraft, the Lessee shall, at its own cost, do all such acts and things, and
provide, execute and deliver any documents, requested by the Security Trustee
and which are necessary or advisable in order to register any interest under
the Transaction Documents or any interest in the Aircraft or any part thereof
permitted by the Geneva Convention and/or the Cape Town Convention.

 

2          Liens

 

The Lessee shall not create or permit to arise or
subsist any Lien (other than Permitted Liens) over or with respect to the
Aircraft or any part thereof and shall as soon as reasonably practicable, at
its own expense, discharge or procure the discharge of any such Lien if the
same shall exist at any time. The Lessee shall not attempt or hold itself out
as having any power to

 

133

 

sell, charge, lease or otherwise dispose of or
encumber the Aircraft or any of its Engines or Parts other than as permitted
under this Agreement or any other Transaction Document.

 

3          Information
and records

 

(a)              The
Lessee shall keep, or procure that there are kept, the Technical Records and
shall keep as part thereof accurate, complete and current records of all
flights made by the Aircraft, each of its Engines and each of its Parts, and of
all maintenance and repairs carried out on the Aircraft, each of its Engines
and each of its Parts, in accordance with the Standard.  During any Off-Lease Period, the Technical
Records shall be kept and maintained in English.  In addition, if, upon the expiry or other
termination of any Sub-Lease, the Technical Records are then not wholly in
English, the Lessee shall procure that they are as soon as reasonably
practicable translated into English. 
Except as required by Applicable Law, the Technical Records shall be the
property of the relevant Borrower and shall be subject to the Mortgage (if any)
for the Aircraft and the English Law Mortgage for the Aircraft.

 

(b)             The
Lessee shall as soon as reasonably practicable on becoming aware of the same
notify the Security Trustee of:

 

(i)                           any Total
Loss with respect to the Aircraft, its Airframe or any of its Engines;

 

(ii)                        any loss,
theft, damage or destruction of or to the Aircraft or any part thereof if the
potential cost of repairs or replacement could reasonably be expected to exceed
the Damage Notification Threshold or its equivalent in any other currency; and

 

(iii)                     any loss, arrest,
hijacking, confiscation, seizure, requisition, impound, taking in execution,
detention or forfeiture of the Aircraft.

 

4          Lawful
and safe operation

 

The Lessee will:

 

(a)              ensure
that each Sub-Lease contains provisions in relation to the lawful and safe
operation of the Aircraft that are consistent with the Standard; and

 

(b)             not
permit the Aircraft to be operated or used at any time for any illegal purpose
or in an illegal manner, or operated or located in an area excluded from
coverage by the Insurances.

 

5          Inspections

 

(a)              During
the course of formulating a Sub-Lease, the Lessee, based on its knowledge and
experience, will define intervals at which it will inspect the Aircraft.  At the commencement of any Sub-Lease, the
Lessee shall inform the Security Trustee of such inspection interval.  In the event that there is any change in the
inspection intervals during the term of such Sub-Lease, the Lessee shall as
soon as reasonably practicable inform the Security Trustee of such change.  Upon completion of such inspections, the
Lessee shall provide a copy of the inspection report to the Security Trustee,
together with any conclusions that might (i) impact on or indicate a change to
the Lessee’s ability to repossess the Aircraft; or (ii) result in
non-compliance with the terms of the Sub-Lease; or (iii) in the Lessee’s sole
opinion have a substantive effect on the market value or marketability of the
Aircraft.

 

(b)             Where
the inspection report indicates any of the above, the Lessee shall inform the
Security Trustee of what action the Lessee is taking to rectify the situation
and shall continue to inform the Security Trustee of any actions until the
Lessee, in its sole opinion, is satisfied that such conclusions are no longer
relevant.

 

134

 

(c)              If
the Security Trustee (acting reasonably) wishes to inspect the Aircraft (i) at
any time when a Trigger Event has occurred and is continuing, outside the
intervals referred to in paragraph (a) above, and/or (ii) because it is not
satisfied with any information provided to it pursuant to paragraph (a) and/or
paragraph (b) above, the Lessee shall procure that the Security Trustee or its
duly authorised agent is provided with access to the Aircraft for such purpose.

 

(d)             The
Lessee shall ensure that it is entitled under the terms of the relevant
Sub-Lease, on receiving notice from the Security Trustee, to require that the
relevant Sub-Lessee permits the Security Trustee or its duly authorised agent
to inspect the relevant Aircraft, its Technical Records and/or its Engines
whenever the Security Trustee is entitled to do so pursuant to paragraph (c)
above but subject to reasonable notice and no interruption of the operation of
the Aircraft.  To the extent practicable,
any such inspection shall be co-ordinated so as to take place at the same time
as the Lessee is conducting its inspection. 
The Security Trustee shall have no duty to make any such inspection and
shall not incur any liability or obligation by reason of not making any such
inspection.

 

(e)              All
inspections undertaken by the Security Trustee or its duly authorised agent as
contemplated by this paragraph 5 shall be at the cost of the Borrowers.

 

6          Prevention
of arrest

 

The Lessee will not do, and will use all reasonable
endeavours to prevent, any act which could reasonably be expected to result in
the Aircraft or any of its Engines being arrested, confiscated, seized, taken
in execution, impounded, forfeited, detained in exercise or purported exercise
of any possessory Lien or other claim or otherwise taken from the possession of
the Lessee, any Sub-Lessee or any Sub-Sub-Lessee and, if any such arrest,
confiscation, seizure, taking, impounding, forfeiture or detention occurs, the
Lessee will give the Security Trustee written notice thereof as soon as
reasonably practicable, and will make all reasonable efforts to procure the
prompt release of the Aircraft and each of its Engines.

 

7          Maintenance
and repair - general

 

The Lessee shall procure that the Aircraft is not
operated in any manner whatsoever other than by (a) a Sub-Lessee or
Sub-Sub-Lessee in possession of a valid, current and up to date Air Operator’s
Certificate for aircraft of the same type as the Aircraft, or (b) during any
Off-Lease Period, duly qualified pilots and crew employed by the Lessee and
possessing all certificates and licenses required by Applicable Law.  The Lessee shall perform or cause to be
performed all service, inspection, maintenance, modification, storage, repair
and overhaul in accordance with the Maintenance Programme and in a maintenance
facility approved by debis in accordance with the Standard.

 

8          Parts;
Engines; modifications and related matters

 

The Lessee shall be entitled to, and may permit any
Sub-Lessee or Sub-Sub-Lessee to:

 

(a)              substitute
and/or replace Parts, on a temporary or permanent basis;

 

(b)             pool
Parts;

 

(c)              make
modifications to the Aircraft; and

 

(d)             remove,
interchange, pool, install, substitute and/or replace any Engine, on a
temporary or permanent basis,

 

provided, in each case, that:

 

(i)                           such action
is consistent with the Standard; and

 

135

 

(ii)                        title to any
Engine or Part is retained by the Borrower and subject to the Mortgage (if any)
and the English Law Mortgage, unless the Borrower has obtained title to a
replacement Engine or Part having the same or higher standard in terms of serviceability,
airworthiness and fitness for use as the Engines or Part that it replaced.  Upon such a transfer, such replaced Engine or
Part shall, without further act, become subject to the Mortgage (if any) and
the English Law Mortgage, and title to the replaced Engine or Part shall vest
in the Lessee free from Borrower’s Liens, Finance Party Liens and the Liens
constituted by the Security Documents.

 

9          Title

 

From the time when the relevant Borrower acquires
title to the Aircraft from the Seller pursuant to the Purchase Documents, title
to the Aircraft shall remain vested in the relevant Borrower subject to the
Mortgage and Permitted Liens and any assignment, charge, transfer of title,
sale or disposal the relevant Borrower may make in accordance with this
Agreement.  Save as aforesaid, the
relevant Borrower gives no condition, warranty or representation in respect of
title to or its interest in the Aircraft, and all such conditions, warranties
or representations, expressed or implied, statutory or otherwise, are hereby
expressly excluded.

 

10        Insurances
- obligation to insure

 

(a)              General

 

The Lessee shall effect and maintain or cause to be
effected and maintained in full force and effect insurances on and with respect
to the Aircraft that comply with the provisions of this Agreement. The Lessee
further agrees that such insurances shall reflect prudent industry practice in
the international aviation insurance market for air carriers comparable to the
relevant operator operating the same type of aircraft as the Aircraft on
similar routes and shall be effected and maintained with insurers and
reinsurers and/or through brokers, in each case, of recognised standing in the
London, Paris or New York market or otherwise reasonably satisfactory in all
respects to the Security Trustee.

 

The insurances will be effected either:

 

(i)                           on a direct
basis with insurers of recognised standing who normally participate in aviation
insurances in the leading international insurance markets and led by
internationally recognised and reputable underwriter(s); or

 

(ii)                        with a single
internationally recognised and reputable insurer or group of internationally
recognised and reputable insurers who does not retain the risk but effects
substantial reinsurance with reinsurers in the leading international insurance
markets and through brokers each of internationally recognised standing in the
international aviation insurance markets for a percentage which is consistent
with prudent market practice (the “Reinsurances”).

 

(b)             Hull
insurance with respect to the Aircraft

 

The Lessee shall obtain and maintain, or cause to be
obtained and maintained, with respect to the Aircraft the following insurance
coverage:

 

(i)                           “Hull
All-Risks” of loss or damage while flying and on the ground with respect to the
Aircraft on an “agreed value” basis for an amount not less than the Required
Insurance Value;

 

(ii)                        “All-Risks”
(including “War and Allied Risk” except when on the ground or in transit other
than by air) property insurance on all Engines and Parts when not

 

136

 

installed
on the Aircraft on an “agreed value” basis for their full replacement value and
including engine test and running risks; and

 

(iii)                     “Hull War and
Allied Perils” as per and as wide as LSW555B including if generally available
at a commercially reasonable rate and otherwise permitted confiscation and
requisition by the State of Registration on an “agreed value” basis for an
amount not less than the Required Insurance Value,

 

and all such insurance coverage shall be in Dollars
or, if the relevant ECA Loan is denominated in Euro, Euro or Dollars (unless
otherwise agreed by the Security Trustee, such agreement not to be unreasonably
withheld).

 

(c)              Terms specific to hull
insurance

 

The Insurances required under paragraph 10(b) above
shall be provided on an agreed value basis and the policies shall, to the
extent not in conflict with AVN 67B or any replacement or equivalent thereof:

 

(i)                           include the
relevant Borrower, the relevant Lessee(s) and the Security Trustee acting on
behalf of the Finance Parties as additional insureds for their respective
rights and interests (the “Hull Additional Insureds”);

 

(ii)                        include a loss
payable section that provides that all insurance proceeds in respect of a Total
Loss shall be settled in Dollars or Euro (as applicable) and paid to the
Security Trustee or its designee;

 

(iii)                     be subject to
such exclusions and deductibles as are consistent with prudent market practice;

 

(iv)                    not contain any
right on the part of the insurers to replace the Aircraft,

 

and the certificate of insurance will show all
aggregate or overall limits applicable to war risks and spares insurance.

 

In the event that separate insurances are arranged to
cover the “Hull All-Risks” insurance and the “Hull War-Risks” and related
insurances, the underwriters subscribing to that insurance agree that, in the
event of any dispute as to whether a claim is covered by the “Hull All-Risks”
or “Hull War-Risks” policies, that claim be settled on a 50/50 claim funding
basis in accordance with AVS103 (or similar).

 

(d)             Liability
insurance with respect to the Aircraft

 

(i)                           The Lessee
shall obtain and maintain or cause to be obtained and maintained a policy or
policies of comprehensive insurance covering third party legal liability,
bodily injury and property damage, passenger legal liability, baggage, cargo
and mail for a combined single limit of not less than $500,000,000 (or the
equivalent amount expressed in Euro, if expressly approved by the Security
Trustee), for any one accident, that policy or policies to cover war risks and
allied perils in accordance with extended coverage endorsement AVN.52(D) with
an extended aggregate coverage limit of not less than $750,000,000 any one
occurrence and in the annual aggregate.

 

(ii)                        The policies
evidencing the Insurance required under paragraph 10(d)(i) above shall, to the
extent not in conflict with AVN 67B or any replacement or equivalent thereof:

 

(A)                    include each of the Indemnitees as additional insureds (the “Liability Additional Insureds”) for their respective rights
and interests;

 

137

 

(B)                      provide that all the provisions thereof, except the limits of
liability, shall operate to give each of the Liability Additional Insureds the
same protection as if there were a separate policy issued to, and covering,
each of the Liability Additional Insureds; and

 

(C)                      be primary and without right of contribution from other insurance
that may be available to any of the other Liability Additional Insureds.

 

(e)              Provisions
relating to all Insurances

 

The policies evidencing any of the Insurances required
under this Agreement shall, to the extent not in conflict with AVN 67B or any
replacement or equivalent thereof:

 

(i)                           provide
that the Insurances shall not be invalidated, so far as concerns any of the
Hull Additional Insureds and the Liability Additional Insureds (collectively
the “Additional Insureds” and each an “Additional Insured”), by any action or inaction or omission
(including misrepresentation and nondisclosure) by the Lessee, any Sub-Lessee
or any other person that results in a breach of any term, condition or warranty
of that policy, provided that the Additional Insured so protected has not
caused, contributed to or knowingly condoned the action, inaction or omission,
as the case may be;

 

(ii)                        specifically
reference this Agreement and the other relevant Transaction Documents;

 

(iii)                     provide for
worldwide coverage (subject only to such exceptions as are customary in
insurance coverage carried by the relevant operator);

 

(iv)                    provide that, upon
payment of any loss or claim to or on behalf of any Additional Insured, the
respective insurer shall to the extent and in respect of that payment be
thereupon subrogated to all legal and equitable rights of that Additional
Insured indemnified hereby (but not against any other Additional Insured),
provided that that insurer shall not exercise such rights without the consent
of the indemnified Additional Insured;

 

(v)                       provide that
none of the Additional Insureds shall be liable for any premiums in respect
thereof and that the insurers shall waive any right of set-off or counterclaim
against the Additional Insureds except in respect of unpaid premiums in respect
of the Aircraft;

 

(vi)                    provide that the
insurers shall as soon as reasonably practicable notify the Security Trustee in
the event of cancellation of, or any material change in, the Insurances or any
act, omission or event that might invalidate or render unenforceable the
Insurances, or in the event that any premium or instalment of premium shall not
have been paid when due, and that the Insurances shall continue unaltered for
the benefit of each Additional Insured for at least thirty (30) days after
written notice by registered mail of that cancellation, change, act, omission,
event or non-payment of premium or instalment thereof shall have been sent by
the Insurer to the Security Trustee except in the case of War Risks for which
seven (7) days notice (or such period as may be customarily available in
respect of War Risks or Allied Perils) will be given; and

 

(vii)                 provide coverage with
respect to losses and claims in connection with any change of year, date or
time to the fullest extent as customary in the worldwide aviation insurance
market, including date recognition limited coverage clauses AVN 2001 and AVN
2002.

 

138

 

(f)                Information

 

On or before the Delivery Date for the Aircraft and as
soon as reasonably practicable after each renewal of the Insurances, the Lessee
shall provide the Security Trustee with (in each case, in English or
accompanied by a certified translation into English) certificates of insurance
and a broker’s or insurer’s letter of undertaking that (i) evidence to the
satisfaction of the Security Trustee that the insurances are and will continue
in full force after the Delivery Date or the renewal date (as the case may be)
for such period as shall then be stipulated, and (ii) contain such other
certifications and undertakings as are customarily provided to lessors and
secured financiers by the relevant insurance brokers.

 

(g)             Other
insurance; no Lien

 

(i)                           The Lessee
shall not, and shall procure that no Sub-Lessee or other person shall, without
the prior written consent of the Security Trustee, maintain insurances with
respect to the Aircraft or any of its Engines other than as required under this
Agreement if the maintenance thereof would adversely affect any Indemnitee’s
interests hereunder or under any of the Insurances in any material respect.

 

(ii)                        The Lessee
shall not, and shall procure that no Sub-Lessee or other person shall, sell,
assign, dispose of or create or permit to exist any Lien over the Insurances,
or its interest therein, save as may be constituted by this Agreement and the
other Transaction Documents.

 

(h)             Failure
to insure

 

If at any time insurances are not in full force and
effect in compliance with all provisions of this Agreement, the Security
Trustee shall be entitled but not bound (without prejudice to any other rights
that it may have or acquire under this Agreement by reason of that failure):

 

(i)                           to pay any
premiums due or to effect or maintain insurances satisfactory to the Security
Trustee, or otherwise remedy that failure in such manner as the Security
Trustee consider appropriate, and the Lessee shall as soon as reasonably
practicable reimburse the Security Trustee in full for any amount so expended
by the Security Trustee; and/or

 

(ii)                        at any time
while that failure is continuing, to require the Aircraft to remain at any
airport, or to proceed to and remain at any airport, designated by the Security
Trustee until that failure is remedied.

 

(i)                 Settlement
of claims

 

Where AVN67B or any replacement or equivalent thereof
does not apply, the Lessee will not settle or permit settlement of any claims
arising under any of the Insurances in excess of an amount in any currency
equal to $10,000,000 or make or permit any payment in connection therewith
without the prior written consent of the Security Trustee.  Subject to AVN67B or any replacement or
equivalent thereof, the proceeds of insurances in respect of a Total Loss of
the Aircraft or the Airframe shall be paid to the Security Trustee for
application in accordance with this Agreement. 
The proceeds of insurances in respect of any loss other than a Total
Loss of the Aircraft or the Airframe shall (a) if that loss is less than
$10,000,000 be paid to such parties as may be necessary to repair the Aircraft
or to the Lessee in reimbursement of the cost of repair of the Aircraft, or (b)
if that loss is greater than $10,000,000 be paid to such parties as may be
necessary to repair the Aircraft or to the Security Trustee for application in
accordance with clause 15.3.

 

(j)                 Self-insurance

 

The Lessee and any Sub-Lessee or Sub-Sub-Lessee shall
be entitled to self-insure the amount of any deductible under the Insurances.

 

139

 

(k)              Post-termination

 

With effect from the expiry or termination of the
leasing of the Aircraft under the relevant Lease, for a period ending on the
earlier of (i) the second anniversary of the date of that expiry or
termination, and (ii) the date of completion of the first Heavy Maintenance
Check for the Aircraft after the date of that expiry or termination, the Lessee
shall effect and maintain (or procure) for the benefit of the relevant
Borrower, each Finance Party and any other Indemnitee requested by the Security
Trustee, as additional named insureds, the Insurance required by this
Agreement. The obligation of the Lessee to effect and maintain (or procure)
that Insurance shall continue notwithstanding the Lessee ceasing to be a user,
operator and/or owner of the Aircraft.

 

(l)                 Reinsurance

 

If and for so long as the Insurances required by this
Agreement are effected through reinsurances, such reinsurances will be on the
same terms as the original insurances.

 

(m)           Cut-through clause

 

If and for so long as the Insurances required by this
Agreement are effected through reinsurances, such reinsurances shall, if
available, contain a “cut-through” clause in a form consistent with prudent
market practice and, if the same is customarily required and/or obtained by the
debis Group from the relevant Insurer, debis shall procure that that Insurer
shall execute, for the ultimate benefit of the Security Trustee, an assignment
of reinsurances for the Aircraft in form and substance satisfactory to the
Security Trustee.

 

(n)             Change
in insurance practice

 

(i)                           If there is
a material change in the generally accepted industry-wide practice with
regard to the insurance of aircraft or any material change with respect to the
insurance of aircraft based or operated in any jurisdiction in which the
Aircraft may then be based or operated such that the Security Trustee shall be
of the reasonable opinion (based upon the advice (the “Advice”)
of reputable international insurance advisers of good standing and repute,
experienced in the field of commercial aviation insurances and (as applicable)
experienced and reputable legal advisers qualified in the relevant
jurisdictions to opine on matters related to commercial aviation, in each case
as appointed by the Security Trustee with the Borrowers being responsible for
the cost of that Advice) that the Insurances required pursuant to this Agreement
are insufficient (bearing in mind the interests of the Additional Insureds and
generally adopted practice in the aviation industry), the insurance
requirements set forth in this Agreement shall be amended so as to include such
additional or varied requirements as may be agreed between the Lessee and the
Security Trustee, each acting reasonably.

 

(ii)                        If, at any
time, the Insurances required under this Agreement in relation to third party
war and allied perils liability risks cease, or will cease, to be available in
the leading aviation insurance market on a per occurrence basis, then if there
occurs any event that gives rise to a claim under such Insurances in relation
to the Aircraft or any other aircraft operated by the Lessee which reduces the
remaining aggregate cover applicable to such Insurances below the required
liability coverage amount of not less than $500,000,000 the Lessee shall, if
requested by the Security Trustee, either (a) cause to be reinstated in an
amount at least equal to the required liability coverage amount of not less
than $500,000,000 the coverage in relation to such Insurances, or (b) take
steps available to it to ground the Aircraft and ensure that the Aircraft is
covered by such ground risk coverage as is customary in accordance with normal
industry practice in an amount at least equal to that required under this
Agreement.

 

140

 

(iii)                     If, at any time,
any of the Insurances required by this Agreement cease, or will cease, to be
available on commercially reasonable terms in the leading aviation insurance
market, the Security Trustee and the Lessee agree to hold good faith
discussions at that time for a period of up to seven (7) Banking Days (or such
longer period as the parties may agree) to ascertain what alternatives (if any)
to such Insurances exist which can be obtained by the Lessee on commercially
reasonable terms and which protect the respective interests of the relevant
Borrower and the Finance Parties having regard to market practice at the
relevant time.  Neither the relevant
Borrower nor any Finance Party shall be under any obligation to take any
action, grant consents or waivers or take other steps if to do so (a) would or
would be likely to involve it in any unlawful activity or would involve it in
any Loss or Tax disadvantage unless indemnified to its satisfaction by the
Borrowers, who shall have been counter-indemnified by the Lessees with such
counter-indemnity being guaranteed by debis under the Guarantee, or (b) would
or might reasonably be expected to result in the rights, title and interests of
the Finance Parties and the Borrowers (or any of them) in and to the Aircraft
and/or under any Transaction Document being materially adversely affected.

 

141

 

Schedule 8

Sub-Lease requirements

 

1          Sub-Lessee
or Sub-Sub-Lessee

 

Each sub-lessee (“Sub-Lessee”)
and each sub-sub-lessee (“Sub-Sub-Lessee”)
shall be a person:

 

1.1                      holding all relevant certificates and consents for the operation of
the Aircraft whose State of Incorporation is not located in a Prohibited
Country and which is not subject to any Lessee Insolvency Event, in each case,
as at the time of entering into such Sub-Lease or Sub-Sub-Lease; or

 

1.2                      otherwise approved in writing by the ECA Agent (acting on the
instructions of all of the National Agents, the German Parallel Lender and (if
the Aircraft is a Mismatch Aircraft) the Mismatch Agent).

 

2          Sub-Lease
terms

 

2.1       Payments

 

Each Sub-Lease shall require the payment of rent in
Dollars or Euros in such amounts which are either:

 

(a)             sufficient
(assuming no change in prevailing interest and/or exchange rates from the date
on which the determination of that sufficiency is made) to enable the relevant
Borrower to pay to the Agent in aggregate (x) on each ECA Repayment Date for
the ECA Loan for the Aircraft an amount equal to not less than seventy five per
cent. (75%) of the relevant ECA Repayment Instalment payable on that ECA
Repayment Date and (y) on each Mismatch Interest Payment Date for the Mismatch
Loan (if any) for the Aircraft an amount equal to not less than seventy five
per cent. (75%) of the amount of interest payable pursuant to clause 4.1 of the
Mismatch Loan Agreement for the Aircraft on that Mismatch Interest Payment
Date; or

 

(b)            provided that the term of
the Sub-Lease does not exceed three (3) years and no Trigger Event has occurred
and is continuing, reflective of rents generally available in the operating
lease market for new leases of the same type and age of aircraft as the
Aircraft for the same or a similar term and to operators of the same or a
similar standing to the relevant Sub-Lessee.

 

2.2       Operational
Undertakings

 

Each
Sub-Lease shall contain provisions corresponding in all material respects with
(or imposing more onerous obligations on the Sub-Lessee than) the Operational
Undertakings, other than:

 

(a)                        any covenants
or undertakings which relate to the execution, registration, perfection,
filing, notarising, recording or the taking of any other action in respect of
any Mortgage, any English Law Mortgage, any Security Document or the rights and
interests of the Security Trustee or any Finance Party under any Transaction
Document; or

 

(b)                       any covenants
or undertakings which relate to the reimbursement or indemnification of the
Security Trustee in respect of any costs or expenses of the type referred to in
the Operational Undertakings or to the giving of any notice to the Security
Trustee; or

 

142

 

(c)                        any provisions which contain references to the exercise by the
Security Trustee of any discretion or which refer or relate to any act, matter
or thing being acceptable to, consented to, by or approved by the Security
Trustee.

 

In addition, the definition of Permitted Lien (or the
equivalent thereof) in any Sub-Lease may include any Liens created or arising
by or through, or as a result of any act or omission of, any person other than
the Sub-Lessee, except any such Liens which are created or arise as a result of
matters for which the Sub-Lessee is responsible under the terms of the
Sub-Lease, by way of any formulation thereof which is consistent with the
Standard.

 

2.3       Governing
law

 

The relevant Lessee shall use all reasonable efforts
to procure that the governing law of the Sub-Lease shall be English law or New
York law. However, the governing law may be the law of another country if the
legal opinion (of counsel qualified in that country) states that the Sub-Lease
constitutes binding and enforceable obligations of the Sub-Lessee under that
law (that opinion may be subject to qualifications acceptable to the Lessee,
acting in accordance with the Standard).

 

2.4       Additional
documents

 

Any ancillary documents or letter agreements entered
into by the relevant Lessee with the Sub-Lessee shall not contain any
provisions which conflict with or qualify the provisions of this schedule 8.

 

2.5       Language

 

Each Sub-Lease shall be in English.

 

2.6       No
sale

 

No Sub-Lease shall confer any ownership right, title
or interest to or in the Aircraft, including, without limitation, by means of a
purchase option at a nominal price unless any purchase option is expressly
subject to the Lessee obtaining title to the Aircraft under the Lease.

 

3          Sub-Sub-Leases

 

The following conditions shall be satisfied in
relation to any Sub-Sub-Lease which is not a wet lease which satisfies the
requirements of paragraph 5 below:

 

3.1                The
Sub-Sub-Lease shall provide that:

 

3.1.1                                 the Sub-Sub-Lease is subject and subordinate to the then current
Sub-Lease in all respects and the rights of the Sub-Sub-Lessee under the
Sub-Sub-Lease are subject and subordinate in all respects to the rights of the
relevant Lessee under then current Sub-Lease; and

 

3.1.2                                 prior to delivery of the Aircraft to the Sub-Sub-Lessee (as a
condition precedent thereto), the Sub-Sub-Lessee shall provide an
acknowledgement to the relevant Lessee (in a form satisfactory to the Security
Trustee, acting reasonably) confirming its agreement to this provision and
confirming that its rights to possession of the Aircraft under the
Sub-Sub-Lease will terminate immediately upon the termination of the then
current Sub-Lease, and that it will redeliver the Aircraft to the relevant
Lessee upon notification from that Lessee that an event of default (howsoever
described) under the then current Sub-Lease has occurred and that it has, as a
result thereof, terminated the Sub-Lessee’s right to possession of the Aircraft
under the then current Sub-Lease (the “Subordination
Acknowledgement”),

 

and, in each case, the same shall be valid and
enforceable as a matter of all Applicable Laws, subject to customary exclusions
and qualifications.

 

143

 

3.2                      Notwithstanding the Sub-Sub-Lease, the relevant Sub-Lessee shall
remain fully liable and responsible for performing, and procuring observance of
and compliance with, all of its obligations under the relevant Sub-Lease.

 

3.3                      The relevant Lessee shall or shall procure that the relevant
Sub-Lessee shall deliver a Sub-Sub-Lessee Notice forthwith to the
Sub-Sub-Lessee and evidence to the reasonable satisfaction of the Security
Trustee that:

 

3.3.1                             that Sub-Sub-Lessee Notice has been served on and received by the
Sub-Sub-Lessee; and

 

3.3.2                             if the assignments contemplated by the Lessee Assignment(s) which
relates to the Aircraft and/or the Security Assignment which relates to the
Aircraft respectively would otherwise not be permitted, the Sub-Sub-Lessee
shall have consented to such assignments.

 

3.4                      As soon as reasonably practicable after its execution, the Lessee
shall provide the Security Trustee with a copy of the signed Sub-Sub-Lease.

 

4                              Additional Sub-Lease
requirements

 

The following conditions shall be satisfied in
relation to any Sub-Lease:

 

4.1                      There is executed and delivered by the relevant Lessee and the
Sub-Lessee an Assignment of Insurances and, where the same is available and
advisable under Applicable Law, a Deregistration Power of Attorney, together
with such other documents and/or authorisations as may be necessary or advisable
as a matter of Applicable Law of the State of Registration of the Aircraft to
ensure that the Security Trustee is able to exercise that Lessee’s rights
thereunder at all times when a Lease Termination Event has occurred and is
continuing.

 

4.2                      The relevant Lessee shall execute and deliver a Sub-Lessee Notice
and Acknowledgement forthwith to the Sub-Lessee and shall:

 

4.2.1                                 evidence to the reasonable satisfaction of the Security Trustee
that:

 

(a)              that
Sub-Lessee Notice and Acknowledgement has been served on and received by the
Sub-Lessee; and

 

(b)             if
the assignments contemplated by the Lessee Assignment(s) which relates to the
Aircraft and/or the Security Assignment which relates to the Aircraft
respectively would otherwise not be permitted, the Sub-Lessee shall have
consented to such assignments; and

 

4.2.2                                 use all reasonable endeavours to procure that the Sub-Lessee issues
the Sub-Lessee Notice and Acknowledgement to, amongst others, the Security
Trustee in return for the issue to the Sub-Lessee of the Quiet Enjoyment
Undertaking.

 

4.3                      The Lessee shall execute and deliver an Insurance Notice forthwith
to the Insurer and shall:

 

4.3.1                                 evidence to the reasonable satisfaction of the Security Trustee
that:

 

(a)              that
Insurance Notice has been served on and received by the Insurer; and

 

(b)             if
the assignments contemplated by the Lessee Assignment(s) which relates to the
Aircraft and/or the Security Assignment which relates to the Aircraft
respectively would otherwise not be permitted, the Insurer shall have consented
to such assignments; and

 

4.3.2                                 use all reasonable endeavours to procure that the Insurer issues an
Insurance Acknowledgement to, amongst others, the Security Trustee.

 

144

 

4.4                      The Lessee provides opinions of counsel satisfactory to the Security
Trustee (acting reasonably), in form and substance reasonably satisfactory to
the Security Trustee, addressed to the Security Trustee, with respect to the
laws of the State of Incorporation of the Sub-Lessee, subject to customary
qualifications and assumptions.

 

4.5                      The Lessee shall put, or shall permit the Security Trustee to put,
to such legal counsel such further questions, including by way of a
jurisdictional questionnaire, as the Security Trustee may, acting reasonably
and after having consulted with in-house counsel of debis, wish to have
answered in connection with the proposed leasing of the Aircraft into such
jurisdictions and the rights and interests of the Finance Parties and the
Borrowers in connection therewith.

 

4.6                      As soon as reasonably practicable after its execution, the relevant
Lessee shall provide the Security Trustee with a copy of the signed Sub-Lease.

 

5                              Wet Leases

 

A Sub-Sub-Lease of the Aircraft which is a wet lease
shall satisfy the following conditions:

 

5.1                      The Aircraft shall be operated solely by regular employees of the
relevant Sub-Lessee possessing all certificates and licenses that are required
by Applicable Law.

 

5.2                      The Aircraft shall be subject to insurance coverage which complies
with the requirements of this Agreement and the relevant Sub-Lease.

 

5.3                      The Aircraft shall be maintained by the relevant Sub-Lessee in
accordance with requirements of the relevant Sub-Lease.

 

5.4                      The Aircraft shall not be subject to any change in the State of
Registration.

 

145

 

Schedule 9

Quiet Enjoyment Undertaking

 

[Insert name and address of Sub-Lessee]

 

Dated:
[   ]

 

Dear Sirs

 

One (1) Airbus
[   ] Aircraft msn [   ] (the “Aircraft”)

 

Reference is
made to:

 

1                                an aircraft lease agreement dated
[   ] between you, as lessee, and [   ], as
lessor (the “Operating Lessor”), in respect of
the Aircraft (the “Lease Agreement”);

 

2                                [a lease agreement dated [   ]
between the Operating Lessor, as lessee, and [   ], as lessor
(the “Intermediate Lessor”) in respect of the
Aircraft (the “Intermediate Lease Agreement”);]

 

3                                a lease agreement dated [   ]
between the [Operating Lessor]/[Intermediate Lessor], as lessee, and
[   ], as lessor (the “Lessor”) in
respect of the Aircraft (the “Head Lease Agreement”);

 

4                                [the lessee assignment dated of even date
herewith between the Operating Lessor, as assignor, and the Intermediate
Lessor, as assignee, pursuant to which the Operating Lessor has assigned
absolutely by way of security to the Intermediate Lessor all its right, title
and interest in and to, inter alia, the
Lease Agreement (the “Intermediate Lessee
Assignment”);]

 

5                                the lessee assignment dated of even date
herewith between the [Operating Lessor]/[Intermediate Lessor], as assignor, and
the Lessor, as assignee, pursuant to which the [Operating Lessor]/[Intermediate
Lessor] has assigned absolutely by way of security to the Lessor all its right,
title and interest in and to, inter alia,
[the Lease Agreement]/[the Intermediate Lease Agreement and the Intermediate
Lessee Assignment] (the “Lessee Assignment”);
and

 

6                                the security assignment dated
[   ] between the Lessor, as assignor, and Crédit Lyonnais as
security trustee (the “Security Trustee”),
as assignee, pursuant to which the Lessor has assigned absolutely by way of
security to the Security Trustee all its right, title and interest in and to, inter alia, the Head Lease Agreement and the Lessee
Assignment.

 

[The
Intermediate Lessor hereby undertakes that, subject to no [Event of Default]
(as that term is defined in the Lease Agreement) having occurred and being
continuing, neither the Intermediate Lessor, nor any person lawfully claiming
through the Intermediate Lessor, will disturb your lawful use, possession and quiet
enjoyment of the Aircraft during the [Term] (as that term is defined in the
Lease Agreement).]

 

The Lessor
hereby undertakes that, subject to no [Event of Default] (as that term is
defined in the Lease Agreement) having occurred and being continuing, neither
the Lessor, nor any person lawfully claiming through the Lessor, will disturb
your lawful use, possession and quiet enjoyment of the Aircraft during the
[Term] (as that term is defined in the Lease Agreement).

 

The Security
Trustee hereby undertakes that, subject to no [Event of Default] (as that term
is defined in the Lease Agreement) having occurred and being continuing,
neither the Security Trustee, nor any person lawfully claiming through the
Security Trustee, will disturb your lawful use, possession and quiet enjoyment
of the Aircraft during the [Term] (as that term is defined in the Lease
Agreement).

 

This letter will be governed by and construed in
accordance with English law.

 

Please countersign this letter in order to confirm
your agreement to the arrangements contained herein.

 

146

 

Yours
faithfully

 

[For and on behalf of

[ • ]

as Intermediate Lessor

Name:

Title:]

 

For and on behalf of

[ • ]

as Lessor

Name:

Title:

 

For and on behalf of

CRÉDIT LYONNAIS

as Security Trustee

Name:

Title:

 

Agreed and accepted.

For and on behalf of

[•]

Name:

Title

 

147

 

Schedule 10

Part I : Conditions precedent - initial

 

1.              Principal documents

 

(a)                        An original of this Agreement duly executed by
the parties thereto;

 

(b)                       a duly executed original of the Guarantee;

 

(c)                        a duly executed original of each of the Fees
Letters;

 

(d)                       a duly executed
original of each Principal Lessee Share Charge, together with originals of the
share certificates of each Principal Lessee, as referred to therein, and duly
executed originals of the letters of resignation, irrevocable proxy, undated
share transfer forms and other ancillary documents referred to therein;

 

(e)                        a duly executed original of each Principal
Borrower Share Charge, together with originals of the share certificates of
each Initial Borrower, as referred to therein, and duly executed originals of
the letters of resignation, irrevocable proxy, undated share transfer forms and
other ancillary documents referred to therein;

 

(f)                          a duly executed original of each Initial
Borrower Floating Charge, together with duly executed originals of the notices
and acknowledgements referred to therein;

 

(g)                       a duly executed original of the Initial Administration
Agreement;

 

(h)                       a duly executed original of each of the
Principal Declaration of Trust;

 

(i)                           a duly executed original of the Initial Comfort
Letter;

 

(j)                           a duly executed original of a Security
Assignment for each initial Borrower, together with duly executed originals of
the notices and acknowledgements referred to therein.

 

2.              Corporate documents

 

For each
debis Obligor and each Borrower, a certificate signed by a director or the
company secretary setting out the specimen signature of those persons
authorised to sign the Transaction Documents to which it is or is to be a party
and attaching, and certifying as true copies of the originals, copies of:

 

(a)            its
certificate of incorporation and constitutional documents;

 

(b)           the resolutions of its board
of directors approving the execution and performance of each Transaction
Document to which it is or is to be a party;

 

(c)            if required, the
resolutions of its shareholders approving the execution and performance of each
Transaction Document to which it is or is to be a party;

 

(d)           a power of attorney
appointing those persons authorised to sign on its behalf each Transaction
Document to which it is or is to be a party.

 

3.              Cayman Islands Tax exemption

 

A
certificate of tax exemption in respect of each Initial Borrower from the
appropriate Cayman Islands authorities.*

 

148

 

4.              Process agent letters

 

(a)                        Letters from Freshfields Bruckhaus Deringer
accepting its appointment as agent for service of process in England for each
Principal Lessee and debis; and

 

(b)                       letters from Norose Notices Limited accepting
its appointment as agent for service of process in England for each Initial
Borrower.

 

5.              Legal opinions

 

Legal
opinions from:

 

(a)                        Norton Rose, English, French and Dutch counsel
to the Lenders;

 

(b)                       Walkers, Cayman Islands counsel, in relation to
each Initial Borrower and the Initial Manager;

 

(c)                        McCann
FitzGerald, Irish counsel, in relation to the Principal Irish Lessee;

 

(d)                       Freshfields
Bruckhaus Deringer, with respect to the governing law of the Engine Warranties
Agreements.

 

149

 

Part II: Conditions
precedent to each Loan

 

1.              Representations and warranties

 

All
representations and warranties made (or deemed repeated) by or on behalf of the
relevant Borrower and each relevant Lessee in clause 6, by debis in the
Guarantee and by any Alternative Obligor under the relevant Accession Deed
shall be true and accurate on the ECA Drawdown Date with reference to the
circumstances and facts existing on the ECA Drawdown Date.

 

2.              Principal documents

 

Duly executed
originals of all ECA Utilisation Documentation for the relevant Aircraft and,
if that Aircraft is to be a Mismatch Aircraft, duly executed originals of all
Mismatch Utilisation Documentation for that Aircraft.

 

3.              Support Agreements

 

The
Support Agreements of each of ECGD, COFACE and HERMES each of which shall be in
full force and effect.

 

4.              Corporate documents

 

The
documents referred to in paragraph 2 of Part I, in relation to each Obligor
which is a party to any ECA Utilisation Documentation and/or Mismatch
Utilisation Documentation for the Aircraft.

 

5.              Process agent letters

 

The
documents referred to in paragraph 4 of Part I, in relation to each Obligor
which is a party to any ECA Utilisation Documentation and/or Mismatch
Utilisation Documentation for the Aircraft.

 

6.              Insurances

 

A
certificate of the applicable Insurer in respect of the Insurances together
with a letter of undertaking to the extent that the Insurances are placed
through an insurance broker, and, if the Aircraft is reinsured, a reinsurance
broker’s letter of undertaking and a certificate of reinsurance, evidencing
compliance with the requirement of this Agreement or otherwise in form and
substance reasonably acceptable to the Security Trustee.

 

7.              Aircraft registration documents

 

Evidence
of registration of the Aircraft with the applicable Aviation Authority.

 

8.              Documents and evidence relating to the
purchase and delivery of the Aircraft

 

(a)                        Evidence that
the Aircraft has not suffered a Total Loss;

 

(b)                       a commercial
invoice for the Aircraft (including the installed Buyer Furnished Equipment
and, if applicable, lessee furnished equipment) issued by the Seller specifying
the net final contract price for the Aircraft and, if the Seller is not Airbus,
from Airbus respectively;

 

(c)                        confirmation
that a letter from the applicable Engine Manufacturer has been sent to the
Export Credit Agencies setting out the credit memoranda deductible from the
purchase price of the Aircraft in respect of the relevant Engines;

 

(d)                       written
confirmation from the Seller that the Purchase Documents are in full force and
effect;

 

(e)                        written
confirmation from Airbus that the Airbus Purchase Agreement is in full force
and effect;

 

150

 

(f)                          a
certificate from the Seller addressed to the Security Trustee confirming that
the identification plates required to be affixed on the Aircraft and the
relevant Engines pursuant to this Agreement have been affixed;*

 

(g)                       a certificate
from Airbus or, in the case of the Initial Aircraft, the Initial Sub-Lessee
confirming that the Buyer Furnished Equipment has been installed on the
Aircraft.

 

9.              Payments

 

(a)                        Evidence that the initial rental payment due on
the Delivery Date by the relevant Lessee under the relevant Lease has been
paid; and

 

(b)                       the receipt by
the relevant payees of all fees referred to in the Fees Letters which are
payable on or prior to the ECA Drawdown Date.

 

10.       Legal opinions

 

The legal
opinions referred to in paragraph 5 of Part I (other than the opinion referred
to in paragraph (d) thereof), together with legal opinions from:

 

(a)                        the Manufacturer;

 

(b)                       the Engine Manufacturer;*

 

(c)                        independent counsel acceptable to the Finance
Parties and the Export Credit Agencies with respect to the lex situs of the
Aircraft at the time at which title to the Aircraft is transferred to the
relevant Borrower and at the time at which the English Law Mortgage and (if
any) Mortgage respectively become effective.

 

 

*                               The
conditions precedent marked with an asterisk in this schedule 10 have been
waived by the Finance Parties in respect of the Initial Aircraft only on terms
that they will be fulfilled to the satisfaction of the ECA Agent by no later
than the date falling sixty (60) days after the relevant ECA Drawdown Date,
failing which paragraph (a) of the definition of Mandatory Prepayment Event
shall forthwith apply.

 

151

 

Schedule 11

Transfer Certificate

 

To:      [Security Trustee]

 

Transfer Certificate -
Airbus [                   ] Aircraft msn [            ]
(the “Aircraft”) - [ECA]/[Mismatch] Loan

 

This transfer
certificate (“Transfer Certificate”) relates to
a Facility Agreement dated [   ] April 2003 between (1) the
banks and financial institutions referred to therein as ECA Lenders; (2) the
banks and financial institutions referred to therein as the Mismatch Lenders;
(3) Crédit Lyonnais and (4) Kreditanstalt für Wiederaufbau as the National
Agents; (5) Kreditanstalt für Wiederaufbau as the German Parallel Lender; (6)
Crédit Lyonnais as the ECA Agent, (7) Crédit Lyonnais as the Mismatch Agent;
(8) Crédit Lyonnais as the Security Trustee; (9) Sunrise Leasing Limited as
Principal Borrower; (10) Sundance Leasing Limited as First Aircraft Borrower;
(11) Sunglow Leasing Limited as Second Aircraft Borrower; (12) Sunray Leasing
Limited as Third Aircraft Borrower; (13) Sunshine Leasing Limited as Fourth
Aircraft Borrower; (14) Sunflower Aircraft Leasing Limited as Principal Irish Lessee;
(15) debis Aircraft Leasing XXX B.V. as Principal Dutch Lessee and (16) debis
AirFinance B.V. (the “Agreement”
which term shall include any amendments or supplements thereto).

 

Terms
defined or incorporated by reference in the Agreement shall, unless otherwise
defined, have the same meanings when used in this Transfer Certificate.

 

1                                [Details of the Transferor]
(the “Transferor”):

 

(a)                        confirms that the details in Part 1 of the
schedule to this Transfer Certificate in respect of the Aircraft are accurate;

 

(b)                       requests [Details of Transferee]
(the “Transferee”) to accept and procure, in
accordance with clause 34.3 of the Agreement, the substitution of the
Transferor by the Transferee in respect of the amounts and percentages in
respect of the Aircraft specified in Part 2 of the schedule hereto by signing
this Transfer Certificate.

 

2                                The Transferee hereby requests each of the
Obligors and each of the Finance Parties to accept this executed Transfer
Certificate as being delivered under and for the purposes of clause 34.3 of the
Agreement so as to take effect in accordance with the terms thereof on the
transfer date specified in Part 3 of the schedule hereto or such later date as
may be determined in accordance with the terms thereof.

 

3                                The Transferee:

 

(a)                        represents that it has received a copy of the
Agreement and each relevant Loan Agreement together with such other documents
and information as it has requested in connection with this transaction;

 

(b)                       represents that it has not relied and will not
rely on the Transferor or any of the other Finance Parties to check or enquire
on its behalf into the legality, validity, effectiveness, adequacy, accuracy or
completeness of any such documents or information;

 

(c)                        agrees that it has not relied and will not rely
on the Transferor or any of the other Finance Parties to assess or keep under
review on its behalf the financial condition, creditworthiness, condition,
affairs, status or nature of any party to any of the Transaction Documents or
the legality, validity, priority, adequacy, effectiveness or enforceability of
any of the Transaction Documents; and

 

152

 

 

(d)                       agrees that it will be bound by the provisions
of the Agreement and the other Transaction Documents and will perform in
accordance with the terms of the Agreement and the other Transaction Documents
the obligations which by their terms are required to be performed by a [British
Lender][French Lender][German Lender][ECA Lender][Mismatch Lender] for the
Aircraft.

 

4                                With effect from the transfer date specified in
Part 3 of the schedule hereto, the parties to the Agreement (including in
particular but without limitation the Transferee) agree that, in relation to
the Aircraft and to the extent of the amounts and percentages in respect of the
Aircraft specified in Part 2 of the schedule hereto, the rights, benefits and
obligations of the Transferor shall be transferred by way of novation to the
Transferee in accordance with clause 34.3 of the Agreement.

 

5                                The Transferee confirms that its Lending Office
and address for notices for the purposes of the Agreement are as set out in
Part 4 of the schedule hereto.

 

6                                The Transferor agrees that nothing herein or in
any Transaction Document shall oblige the Transferee to (i) accept a
re-transfer from the Transferee of the whole or any part of its rights,
benefits and/or obligations transferred pursuant hereto or (ii) support any
losses directly or indirectly sustained or incurred by the Transferee for any
reason whatsoever including, without limitation, the non-performance by any
other party to the Transaction Documents of its obligations under any
Transaction Document.  The Transferee
hereby acknowledges the absence of any such obligation as is referred to in (i)
or (ii) above.

 

7                                This Transfer Certificate shall be governed by
and construed in accordance with English law.

 

153

 

	
  [Transferee]

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Transferor]

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Security
  Trustee on behalf of itself and all other parties to the Agreement (other
  than the Transferor).

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:[                               ]

  	
   

  	
   

  

 

154

 

SCHEDULE

 

	
  Part 1 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Transferor’s
  [ECA]/[Mismatch]

  Commitment
  for the Aircraft

  	
   

  	
  $[                  ]

  
	
   

  	
   

  	
   

  
	
  Transferor’s
  [ECA]/[Mismatch]

  Portion for
  the Aircraft

  	
   

  	
  [                  ]%

  
	
   

  	
   

  	
   

  
	
  Transferor’s
  [ECA]/[Mismatch]

  Contribution
  for the [ECA]/[Mismatch] Loan for the Aircraft

  	
   

  	
  $[                  ]]

  
	
   

  	
   

  	
   

  
	
  Part 2 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Amount of
  Transferor’s [ECA]/[Mismatch]

  Commitment
  for the Aircraft to be transferred to Transferee

  	
   

  	
  $[                  ]

  
	
   

  	
   

  	
   

  
	
  Amount of
  Transferor’s [ECA]/[Mismatch]

  Portion for
  the Aircraft to be transferred to Transferee

  	
   

  	
  [                  ]%

  
	
   

  	
   

  	
   

  
	
  Amount of
  Transferor’s [ECA]/[Mismatch]

  Contribution
  for the [ECA]/[Mismatch] Loan for the Aircraft to be transferred to
  Transferee

  	
   

  	
  $[                  ]]

  
	
   

  	
   

  	
   

  
	
  Part 3 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Transfer
  date

  	
   

  	
  [                  ]

  
	
   

  	
   

  	
   

  
	
  Part 4

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Lending
  Office of Transferee:

  	
   

  	
  Notice
  details:

  
	
   

  	
   

  	
   

  
	
  [                  ]

  	
   

  	
  [                  ]

  

 

155

 

Schedule 12

English Law Mortgage Letter

 

	
  To:

  	
  Norton Rose

  	
   

  
	
   

  	
  Washington
  Plaza

  	
   

  
	
   

  	
  42, rue
  Washington

  	
   

  
	
   

  	
  75408 Paris
  Cedex 08

  	
   

  
	
   

  	
  France

  	
   

  
	
   

  	
   

  	
   

  
	
  and:

  	
  Crédit
  Lyonnais

  	
   

  
	
   

  	
  1, rue des Italiens

  	
   

  
	
   

  	
  75009 Paris

  	
   

  
	
   

  	
  France

  	
   

  

 

 

[                               ]

 

Dear Sirs

 

Financing of one Airbus [               ]
Aircraft msn [               ]
(the “Aircraft”)

 

We refer to
the Facility Agreement relating to the Aircraft dated [               ]
April 2003 between, inter alia, [Borrower] (the “Relevant Borrower”), [Lessee] (the “Relevant Lessee”) and Crédit Lyonnais as Security Trustee
(the “Facility Agreement”).

 

In this
letter, unless otherwise defined herein, words and expressions defined in the
Facility Agreement (whether expressly or by reference to another document)
shall bear the same respective meanings when used herein.

 

In order to
secure the Borrowers’ obligations under the Transaction Documents, the Relevant
Borrower has agreed to grant in favour of Crédit Lyonnais in its capacity as
Security Trustee for and on behalf of the Secured Parties an English Law
Mortgage over the Aircraft (the “English Law  Mortgage”).

 

The Relevant
Borrower hereby irrevocably authorises Norton Rose to date and deliver the
English Law Mortgage as a deed as from the time that the Relevant Lessee
notifies Norton Rose, pursuant to the following paragraph, that the English Law
Mortgage should be so dated and delivered.

 

The Relevant
Lessee hereby undertakes to Crédit Lyonnais in its capacity as Security Trustee
to procure that the Aircraft enters England or English airspace or another
location the laws of which in all respects recognise the English Law Mortgage
as creating a first priority English law mortgage over the Aircraft whilst the
Aircraft is located in that jurisdiction no later than the date falling sixty
(60) days after [the Delivery Date for the Aircraft]/[the time at which the
Mortgage over the Aircraft ceases to be registered on the register of mortgages
maintained by the aviation auhority in the State of Registration for the
Aircraft] and to notify each of Crédit Lyonnais and Norton Rose in writing
promptly thereupon.

 

This letter is
to be treated as a Transaction Document for the purposes of the Facility
Agreement and the other Transaction Documents.

 

This letter
shall be governed by, and construed in accordance with, English law.

 

 

	
   

  	
   

  	
   

  	
   

  
	
  duly
  authorised, for and on behalf of

  	
  duly
  authorised, for and on behalf of

  
	
  [Relevant
  Borrower]

  	
  [Relevant
  Lessee]

  

 

156

 

EXECUTION PAGES

 

	
  THE
  SECURITY TRUSTEE

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  CRÉDIT
  LYONNAIS

  	
  )

  
	
  (acting
  through its Paris head office)

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE ECA
  AGENT

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  CRÉDIT
  LYONNAIS

  	
  )

  
	
  (acting
  through its Paris head office)

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  MISMATCH AGENT

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on behalf
  of

  	
  )

  
	
  CRÉDIT
  LYONNAIS

  	
  )

  
	
  (acting
  through its Paris head office)

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  NATIONAL AGENTS

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  CRÉDIT
  LYONNAIS

  	
  )

  
	
  (acting
  through its London branch)

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  CRÉDIT
  LYONNAIS

  	
  )

  
	
  (acting
  through its Paris head office)

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  

 

157

 

	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  KREDITANSTALT
  FÜRWIEDERAUFBAU

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE FRENCH LENDERS

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  CRÉDIT
  LYONNAIS

  	
  )

  
	
  (acting
  through its Paris head office)

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  BRITISH LENDERS

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  CRÉDIT
  LYONNAIS

  	
  )

  
	
  (acting
  through its London branch)

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  GERMAN LENDERS

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  KREDITANSTALT
  FÜRWIEDERAUFBAU

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  MISMATCH LENDERS

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  CRÉDIT
  LYONNAIS

  	
  )

  
	
  (acting
  through its London branch)

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  

 

158

 

	
  DEBIS

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  DEBIS
  AIRFINANCE B.V.

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  PRINCIPAL BORROWER

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  SUNRISE
  LEASING LIMITED

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  FIRST AIRCRAFT BORROWER

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  SUNDANCE
  LEASING LIMITED

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  SECOND AIRCRAFT BORROWER

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  SUNRAY
  LEASING LIMITED

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  THIRD AIRCRAFT BORROWER

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  SUNSHINE
  LEASING LIMITED

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the presence
  of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  FOURTH AIRCRAFT BORROWER

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  SUNGLOW
  LEASING LIMITED

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  

 

159

 

	
  THE
  PRINCIPAL DUTCH LESSEE

  	
   

  
	
  EXECUTED as a DEED and DELIVERED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  DEBIS
  AIRCRAFT LEASING XXX B.V.

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE
  PRINCIPAL IRISH LESSEE

  	
   

  
	
  SIGNED,
  SEALED and DELIVERED

  	
  )

  
	
  as a DEED

  	
  )

  
	
  for and on
  behalf of

  	
  )

  
	
  SUNFLOWER
  AIRCRAFT LEASING LIMITED

  	
  )

  
	
  by

  	
  )

  
	
  its duly
  authorised attorney-in-fact

  	
  )

  
	
  in the
  presence of

  	
  )

  

 

160

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