Document:

Exhibit 10.4
	 

	 
		ADMINISTRATIVE SERVICES AGREEMENT
	 

	 
		 
	 

	 
		among
	 

	 
		 
	 

	 
		 
	 

	 
		BABCOCK & BROWN AIR FUNDING I
		LIMITED,
	 

	 
		as the Issuer
	 

	 
		 
	 

	 
		 
	 

	 
		THE ISSUER SUBSIDIARIES IDENTIFIED
		HEREIN,
	 

	 
		 
	 

	 
		 
	 

	 
		DEUTSCHE BANK TRUST COMPANY AMERICAS
	 

	 
		in its capacity as the Trustee and the
		Security Trustee,
	 

	 
		 
	 

	 
		 
	 

	 
		AMBAC ASSURANCE CORPORATION
	 

	 
		as the Policy Provider,
	 

	 
		 
	 

	 
		and
	 

	 
		 
	 

	 
		BABCOCK & BROWN AIR MANAGEMENT CO
		LIMITED 
	 

	 
		as the Administrative Agent
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		Dated as of _________________, 2007
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		TABLE OF CONTENTS
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  Page
				

			 
	 	 
	
				
				  ARTICLE
				  I     DEFINITIONS
				

			 	
				
				  1
				

			 
			
	
				
				  Section 1.01
				

			 	
				
				  Definitions
				

			 	
				
				  1
				

			 
			
	
				
				  ARTICLE
				  II      APPOINTMENT; ADMINISTRATIVE SERVICES
				

			 	
				
				  4
				

			 
			
	
				
				  Section 2.01
				

			 	
				
				  Appointment
				

			 	
				
				  4
				

			 
	
				
				  Section 2.02
				

			 	
				
				  Limitations
				

			 	
				
				  5
				

			 
	
				
				  Section 2.03
				

			 	
				
				  Issuer Group Services
				

			 	
				
				  6
				

			 
	
				
				  Section 2.04
				

			 	
				
				  Accounting Services
				

			 	
				
				  11
				

			 
	
				
				  Section 2.05
				

			 	
				
				  Additional Services
				

			 	
				
				  13
				

			 
	
				
				  Section 2.06
				

			 	
				
				  Additional Aircraft
				

			 	
				
				  13
				

			 
	
				
				  Section 2.07
				

			 	
				
				  New Subsidiaries
				

			 	
				
				  14
				

			 
	
				
				  Section 2.08
				

			 	
				
				  The Issuer Group
				  Responsibility
				

			 	
				
				  14
				

			 
	
				
				  Section 2.09
				

			 	
				
				  Treaty Benefits
				

			 	
				
				  14
				

			 
			
	
				
				  ARTICLE
				  III      STANDARD OF PERFORMANCE; LIABILITY AND
				  INDEMNITY
				

			 	
				
				  15
				

			 
			
	
				
				  Section 3.01
				

			 	
				
				  Standard of Performance
				

			 	
				
				  15
				

			 
	
				
				  Section 3.02
				

			 	
				
				  Liability and Indemnity
				

			 	
				
				  15
				

			 
			
	
				
				  ARTICLE
				  IV      ADMINISTRATOR UNDERTAKINGS
				

			 	
				
				  18
				

			 
			
	
				
				  Section 4.01
				

			 	
				
				  Administrative Agent
				  Undertakings
				

			 	
				
				  18
				

			 
	
				
				  Section 4.02
				

			 	
				
				  Representations of the
				  Administrative Agent
				

			 	
				
				  20
				

			 
	
				
				  Section 4.03
				

			 	
				
				  Certain Information
				

			 	
				
				  21
				

			 
	
				
				  Section 4.04
				

			 	
				
				  Access
				

			 	
				
				  21
				

			 
			
	
				
				  ARTICLE
				  V      UNDERTAKINGS OF THE ISSUER GROUP
				

			 	
				
				  22
				

			 
			
	
				
				  Section 5.01
				

			 	
				
				  Cooperation
				

			 	
				
				  22
				

			 
	
				
				  Section 5.02
				

			 	
				
				  Information
				

			 	
				
				  22
				

			 
	
				
				  Section 5.03
				

			 	
				
				  Scope of Services
				

			 	
				
				  22
				

			 
	
				
				  Section 5.04
				

			 	
				
				  Ratification
				

			 	
				
				  23
				

			 
	
				
				  Section 5.05
				

			 	
				
				  Covenants
				

			 	
				
				  23
				

			 
	
				
				  Section 5.06
				

			 	
				
				  Ratification by Subsidiaries
				

			 	
				
				  24
				

			 
	
				
				  Section 5.07
				

			 	
				
				  Organization and Standing
				

			 	
				
				  24
				

			 
			
	
				
				  ARTICLE
				  VI      ADMINISTRATION FEES AND EXPENSES
				

			 	
				
				  25
				

			 
	
				
				  Section 6.01
				

			 	
				
				  Administration Fees
				

			 	
				
				  25
				

			 
	
				
				  Section 6.02
				

			 	
				
				  Expenses
				

			 	
				
				  25
				

			 
	
				
				  Section 6.03
				

			 	
				
				  Payment of Expenses
				

			 	
				
				  26
				

			 
			
	
				
				  ARTICLE
				  VII      TERM; REPLACEMENT OF OR RESIGNATION BY THE
				  ADMINISTRATOR
				

			 	
				
				  26
				

			 
			
	
				
				  Section 7.01
				

			 	
				
				  Term
				

			 	
				
				  26
				

			 
				

 

	 
		 
	 

	 
		 
	 

	 
		i
	 

	 
		 
	 

	 
	 

	 

	 
		TABLE OF CONTENTS
	 

	 
		(continued)
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  Page
				

			 
	 	 	 
	
				
				  Section 7.02
				

			 	
				
				  Replacement or Resignation
				

			 	
				
				  26
				

			 
	
				
				  Section 7.03
				

			 	
				
				  Consequences of Replacement or
				  Resignation
				

			 	
				
				  27
				

			 
	
				
				  Section 7.04
				

			 	
				
				  Survival
				

			 	
				
				  29
				

			 
	
	
				
				  ARTICLE
				  VIII      ASSIGNMENT AND DELEGATION
				

			 	
				
				  29
				

			 
	
	
				
				  Section 8.01
				

			 	
				
				  Assignment and Delegation
				

			 	
				
				  29
				

			 
	
	
				
				  ARTICLE
				  IX     MISCELLANEOUS
				

			 	
				
				  30
				

			 
	
	
				
				  Section 9.01
				

			 	
				
				  Notices
				

			 	
				
				  30
				

			 
	
				
				  Section 9.02
				

			 	
				
				  Governing Law
				

			 	
				
				  33
				

			 
	
				
				  Section 9.03
				

			 	
				
				  Jurisdiction
				

			 	
				
				  33
				

			 
	
				
				  Section 9.04
				

			 	
				
				  WAIVER OF JURY TRIAL
				

			 	
				
				  33
				

			 
	
				
				  Section 9.05
				

			 	
				
				  Counterparts; Third Party
				  Beneficiaries
				

			 	
				
				  33
				

			 
	
				
				  Section 9.06
				

			 	
				
				  Entire Agreement
				

			 	
				
				  33
				

			 
	
				
				  Section 9.07
				

			 	
				
				  Table of Contents; Headings
				

			 	
				
				  33
				

			 
	
				
				  Section 9.08
				

			 	
				
				  Amendments
				

			 	
				
				  34
				

			 
	
				
				  Section 9.09
				

			 	
				
				  No Partnership
				

			 	
				
				  34
				

			 
	
				
				  Section 9.10
				

			 	
				
				  Concerning the Security Trustee and
				  the Trustee
				

			 	
				
				  34
				

			 
	
				
				  Section 9.11
				

			 	
				
				  Restrictions on Disclosure
				

			 	
				
				  34
				

			 
	
				
				  Section 9.12
				

			 	
				
				  Power of Attorney
				

			 	
				
				  35
				

			 
	
				
				  Section 9.13
				

			 	
				
				  No Petition
				

			 	
				
				  35
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		ii
	 

	 
		 
	 

	 
	 

	 

	 
		 
	 

	 
		 
	 

	 
		THIS ADMINISTRATIVE SERVICES AGREEMENT (this
		“Agreement”) dated as of ________________, 2007 is made among BABCOCK
		& BROWN AIR FUNDING I LIMITED (the “Issuer”), a Bermuda exempted
		company, each ISSUER SUBSIDIARY signatory to this Agreement or that becomes a
		party under Section 5.06 hereof (collectively with the Issuer, the “Issuer
		Group”), DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual
		capacity but solely as the trustee under the Indenture (the
		“Trustee”) and as the security trustee under the Security Trust
		Agreement (the “Security Trustee”), AMBAC ASSURANCE CORPORATION, as
		the policy provider (the “Policy Provider”) and BABCOCK & BROWN
		AIR MANAGEMENT CO LIMITED, in its capacity as Administrative Agent (the
		“Administrative Agent”).
	 

	 
		For the consideration set forth herein and
		other good and valuable consideration, the receipt of which is hereby
		acknowledged, the Administrative Agent, the Trustee, the Security Trustee, the
		Policy Provider, the Issuer and the other Issuer Group Members agree as
		follows:
	 

	 
		ARTICLE
		I
	 

	 
		 
	 

	 
		DEFINITIONS
	 

	 
		Section 1.01
		Definitions. For purposes of this Agreement, the following terms
		have the following meanings. Unless otherwise defined herein, all capitalized
		terms used but not defined herein have the meanings assigned to such terms in
		the Indenture.
	 

	 
		“Administrative Agent” has the
		meaning set forth in the preamble to this Agreement.
	 

	 
		“Administration Fee” has the
		meaning assigned to such term in Section 6.01 hereof.
	 

	 
		“Administrative Agent Delegate”
		has the meaning assigned to such term in Section 8.01(a) hereof.
	 

	 
		“Affiliate” means a Person that
		directly, or indirectly through one or more intermediaries, controls or is
		controlled by, or is under common control with, the Person specified; provided,
		however, that the Issuer, the other Issuer Group Members, on the one hand, and
		the Trustee, the Security Trustee and the Administrative Agent, on the other
		hand, shall not be considered to be Affiliates of each other.
	 

	 
		“After-Tax Basis” means on a basis
		such that any payment received, deemed to have been received or receivable by
		any Person shall, if necessary, be supplemented by a further payment to that
		Person so that the sum of the two payments shall, after deduction of all U.S.
		federal, state, local and foreign Taxes, penalties, fines, interest, additions
		to Tax and other charges resulting from the receipt (actual or constructive) or
		accrual of such payments imposed by or under any U.S. federal, state, 
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		local or foreign law or Governmental
		Authority (after taking into account any current deduction to which such Person
		shall be entitled with respect to the amount that gave rise to the underlying
		payment) be equal to the payment received, deemed to have been received or
		receivable.
	 

	 
		“Aircraft Asset Expenses Budget”
		has the meaning assigned to such term in Section 7.03(a)(ii) of the Servicing
		Agreement.
	 

	 
		“Aircraft Assets” has the meaning
		assigned to such term in Appendix A to the Servicing Agreement.
	 

	 
		“Approved Budget” has the meaning
		assigned to such term in Section 7.03(d) of the Servicing Agreement.
	 

	 
		“Concentration Limits” has the
		meaning assigned to such term in Section 2.2(a) of Schedule 2.02(a) of the
		Servicing Agreement.
	 

	 
		“Competitor Control” has the
		meaning assigned to such term in the Servicing Agreement.
	 

	 
		“Conflicts Standard” has the
		meaning assigned to such term in Section 3.02(b) of the Servicing
		Agreement.
	 

	 
		“Consolidated Quarterly Draft
		Accounts” has the meaning assigned to such term in Section 2.04(b)(ii)
		hereof.
	 

	 
		“Consolidating Quarterly Draft
		Accounts” has the meaning assigned to such term in Section 2.04(b)(iii)
		hereof.
	 

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

	 
		“Draft Accounts” has the meaning
		assigned to such term in Section 2.04(b)(iii) hereof.
	 

	 
		“EU” means the European
		Union.
	 

	 
		“FAA” means the Federal Aviation
		Administration or any Governmental Authority or other Person, agency or other
		authority succeeding to the functions of the Federal Aviation
		Administration.
	 

	 
		“Fee Period” has the meaning
		assigned to such term in Section 6.01 hereof.
	 

	 
		“Governmental Authority” means any
		court, administrative agency or commission or other governmental agency or
		instrumentality (or any Responsible Officer 
	 

	 
		 
	 

	 
		 
	 

	 
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		thereof), domestic, foreign or
		international, of competent jurisdiction including, without limitation, the
		EU.
	 

	 
		“Indenture” means the Trust
		Indenture dated as of ______________, 2007, among the Issuer, the Cash Manager,
		the Initial Liquidity Facility Provider, the Policy Provider, the Operating
		Bank and the Trustee.
	 

	 
		“Issuer Group Services” has the
		meaning assigned to such term in Section 2.01(a) hereof.
	 

	 
		“Lease” means any lease or other
		agreement or arrangement pursuant to which any Person (other than an Issuer
		Group Member) has the right to possession and use of any Aircraft.
	 

	 
		“Lease Operating Budget” has the
		meaning assigned to such term in Section 7.03(a)(i) of the Servicing
		Agreement.
	 

	 
		“Ledgers” has the meaning assigned
		to such term in Section 2.04(b)(i) hereof.
	 

	 
		“Loss” means any and all
		liabilities (including liabilities arising out of the doctrine of strict
		liability), obligations, losses, damages, penalties, actions, suits, judgments,
		costs, fees, expenses (including reasonable legal fees, expenses and related
		charges and costs of investigation, including in connection with enforcement of
		any indemnity) and disbursements, of whatsoever kind and nature;
		provided, however, that
		the term “Loss” shall not include any indemnified party’s
		management time or overhead expenses except for non-ordinary course management
		time or overhead expenses relating to such damage, loss, liability or
		expense.
	 

	 
		“Policy Provider Replacement
		Event” has the meaning assigned to such term in Section 7.02(d)
		hereof.
	 

	 
		“Quarter” means the fiscal quarter
		of each Issuer Group Member, as applicable. 
	 

	 
		“Ratings” means the ratings
		assigned to the Securities by the Rating Agencies.
	 

	 
		“Reimbursable Expenses” has the
		meaning assigned to such term in Section 6.02(b) hereof.
	 

	 
		“Schedule 2.02(a)” has the meaning
		assigned to such term in Section 2.03(h)(viii) hereof.
	 

	 
		“Securities Act” means the U.S.
		Securities Act of 1933, as amended.
	 

	 
		 
	 

	 
		 
	 

	 
		3
	 

	 
		 
	 

	 
	 

	 

	 
		“Service Providers” means the
		Persons providing services to the Issuer Group, including, without limitation,
		where the context admits, the Servicer and other Persons performing similar
		services or advising the Issuer Group.
	 

	 
		“Servicer Termination Event” means
		the occurrence of any of the events set forth in Section 10.02(b) of the
		Servicing Agreement subject to the cure periods set forth therein.
	 

	 
		“Standard of Care” has the meaning
		assigned to such term in Section 3.01 of the Servicing Agreement.
	 

	 
		“Standard of Performance” has the
		meaning assigned to such term in Section 3.01 hereof.
	 

	 
		“Subsidiary” means, with respect
		to any Person, a corporation, company or other entity (i) more than 50% of
		whose outstanding shares or securities (representing the right to vote for the
		election of directors or other managing authority) are, or (ii) which does not
		have outstanding shares or securities (as may be the case in a partnership,
		joint venture or unincorporated association), but more than 50% of whose
		ownership interest representing the right to make decisions for such other
		entity is, now or hereafter owned or controlled, directly or indirectly, by
		such Person, but such corporation, company or other entity shall be deemed to
		be a Subsidiary only so long as such ownership or control exists.
	 

	 
		“U.S. Bankruptcy Code” has the
		meaning assigned to such term in Section 7.02(b)(iii) hereof.
	 

	 
		“Year” has the meaning assigned to
		such term in the Servicing Agreement.
	 

	 
		ARTICLE
		II
	 

	 
		 
	 

	 
		APPOINTMENT; ADMINISTRATIVE
		SERVICES
	 

	 
		Section 2.01
		Appointment. (a) Each Issuer Group Member hereby appoints the
		Administrative Agent as the provider of the administrative and related services
		set forth in Section 2.03 hereof, the accounting services set forth in Section
		2.04 hereof and the additional administrative services set forth in Sections
		2.04, 2.05 and 2.06 hereof (collectively, the “Issuer Group
		Services”) to each Issuer Group Member on the terms and subject to the
		conditions set forth in this Agreement. In the event the Trustee or the
		Security Trustee receives any notice or instruction from the Administrative
		Agent with regard to any Issuer Group Services, the Trustee or the Security
		Trustee, as applicable, may regard such notice or instruction as given by the
		Issuer or any other Issuer Group Member unless previously notified otherwise in
		writing by the Issuer.
	 

	 
		(b) The Administrative Agent hereby accepts
		such appointments and agrees to perform the Issuer Group Services on behalf of
		the Issuer Group Members 
	 

	 
		 
	 

	 
		 
	 

	 
		4
	 

	 
		 
	 

	 
	 

	 

	 
		identified to the Administrative Agent by
		the Issuer Group on the terms and subject to the conditions set forth in this
		Agreement.
	 

	 
		(c) The Issuer Group Services do not include
		any service or matter that is the responsibility of the Servicer under the
		Servicing Agreement, the Reference Agent under the Reference Agency Agreement,
		the Cash Manager under the Cash Management Agreement (except as otherwise
		provided in the Cash Management Agreement or the Indenture) or the company
		secretaries of any Issuer Group Member.
	 

	 
		(d) The
		Issuer Group Services do not include any service or matter that falls under the
		categories of “investment business services” or “investment
		advice” under the Investment Intermediaries Act, 1995 or any other
		applicable provision of Irish law that would require such services to be
		performed by an entity that has obtained prior authorization from the Central
		Bank of Ireland.
	 

	 
		Section 2.02
		Limitations. (a) The Administrative Agent agrees (with respect to the
		Issuer Group Services) to comply with the terms of the articles of
		incorporation, by-laws, trust agreements, operating agreements or similar
		constituting documents of each Issuer Group Member and all agreements to which
		any Issuer Group Member is a party (including all Related Documents);
		provided that copies of such documents and agreements are in the
		possession of, or can reasonably be obtained by, the Administrative Agent and,
		without prejudice to the foregoing, not to enter into, on behalf of any Issuer
		Group Member, any commitments, loans or obligations or charge, mortgage,
		pledge, encumber or otherwise restrict or dispose of the property or assets or
		expend any funds of any Issuer Group Member save, subject to the Indenture, (i)
		as expressly permitted by the terms of this Agreement or (ii) upon a Board
		Resolution.
	 

	 
		(b) In connection with the performance of
		the Issuer Group Services (i) the Administrative Agent shall (A) have no
		responsibility for the failure of any other Person (other than any Person,
		other than the Trustee or Security Trustee, acting as a delegate of the
		Administrative Agent under this Agreement pursuant to Section 8.01 hereof)
		providing services directly to the Issuer Group to perform its obligations to
		the Issuer Group and (B) in all cases be entitled to rely upon the instructions
		of the Issuer Group with respect to any Issuer Group Services and upon notices,
		reports or other communications made by any Person providing services to the
		Issuer Group (other than any Affiliate of the Administrative Agent, except
		solely for this purpose Babcock & Brown Aircraft Management (Europe)
		Limited shall not be an Affiliate of the Administrative Agent) and shall not be
		responsible for the accuracy or completeness of any such notices, reports or
		other communications except to the extent that the Administrative Agent has
		actual notice of any matter to the contrary and (ii) the Administrative Agent
		shall not be obligated to act in any manner that the Administrative Agent,
		acting reasonably, determines might (A) violate any Applicable Law or (B)
		expose the Administrative Agent to any liabilities for which, in the
		Administrative Agent’s good faith opinion, adequate bond or indemnity has
		not been provided.
	 

	 
		 
	 

	 
		 
	 

	 
		5
	 

	 
		 
	 

	 
	 

	 

	 
		(c) Subject to the limitations set forth in Section 2.02(a),
		in connection with the performance of the Issuer Group Services, the
		Administrative Agent is expressly authorized by the Issuer and each other
		Issuer Group Member, (i) to engage in and conclude commercial negotiations with
		the Persons providing services to the Issuer Group, including, without
		limitation, where the context admits, the Servicer, the Cash Manager, the
		Reference Agent and other Persons performing similar services or advising the
		Issuer Group (the “Service Providers”) and with their Responsible
		Officers, and (ii) after such consultation, if any, as the Administrative Agent
		deems necessary under the circumstances, to act on such Issuer Group
		Member’s behalf with regard to any and all matters requiring any action on
		the part of the Administrative Agent under the Servicing Agreement. The Issuer
		agrees that it will give the Administrative Agent and the Servicer 60
		day’s prior Written Notice of any limitation or modification of the
		authority set forth in this Section 2.02(c).
	 

	 
		(d) The Administrative Agent may rely on the
		advice of any law firm, accounting firm, risk management adviser, tax adviser,
		insurance adviser, technical adviser, aircraft appraiser or other professional
		adviser appointed by the Issuer and any Person appointed in good faith by the
		Administrative Agent and shall not be liable for any claim by any Issuer Group
		Member to the extent that the Administrative Agent was acting in good faith
		upon the advice of any such persons.
	 

	 
		(e) Notwithstanding the appointment of, and
		the delegation of authority and responsibility to, the Administrative Agent
		with respect to the Issuer Group Services, the Issuer and each other Issuer
		Group Member shall continue to have and exercise through its respective
		controlling trustees or board real and effective central control and management
		of all matters related to its ongoing business, operations, assets and
		liabilities, subject to matters that are expressly the responsibility of the
		Administrative Agent in accordance with the terms of this Agreement, and each
		Issuer Group Member shall at all times conduct its separate ongoing business in
		such a manner as the same shall at all times be readily identifiable from the
		separate business of the Administrative Agent, and none of the Issuer Group
		Members is merely lending its name to decisions taken by others.
	 

	 
		(f) Each Issuer Group Member hereby appoints
		the Issuer to act as its representative and, having been duly authorized to do
		so by each of its Subsidiaries, as the representative of each of its
		Subsidiaries with respect to any matter in respect of which any Issuer Group
		Member, or the Issuer Group as a whole, is required to or permitted to take any
		action pursuant to the terms of this Agreement. Accordingly, in connection with
		the performance of the Issuer Group Services, the Administrative Agent shall in
		all cases be entitled to rely on the instructions (or other actions) of the
		Issuer as representative of each Issuer Group Member.
	 

	 
		Section 2.03
		Issuer Group Services. The Administrative Agent hereby agrees to perform and
		provide the following services for each Issuer Group Member and its respective
		governing bodies:
	 

	 
		 
	 

	 
		 
	 

	 
		6
	 

	 
		 
	 

	 
	 

	 

	 
		(a) administrative services:
	 

	 
		(i) except in such instances in which such
		preparation and distribution is required to be done by another party by
		Applicable Law or by another Service Provider under the Indenture or the
		Related Documents, preparation and distribution, at such time as shall be
		agreed with the Administrative Agent, of draft trustees, members or board
		meeting agendas and any other papers required in connection with such
		meetings;
	 

	 
		(ii) maintaining, or monitoring the
		maintenance of, the books, records, registers and associated filings of each
		Issuer Group Member, other than those required under Applicable Law to be
		maintained by the officers, members, directors or trustees of the
		Issuer;
	 

	 
		(iii) providing any administrative
		assistance reasonably necessary to assist any Issuer Group Member in carrying
		out its obligations under the Indenture or the Related Documents, including
		providing timely notice of decisions to be made, or actions to be taken, under
		any of the Related Documents; provided that if
		the obligations of any Issuer Group Member under any of the Related Documents
		are only required upon receipt of notice to such Issuer Group Member or the
		Administrative Agent, then the Administrative Agent shall provide such
		administrative assistance only to the extent it has received such notice or is
		otherwise aware of such obligations and shall provide a copy of such notice to
		the Policy Provider;
	 

	 
		(iv) assisting the Issuer in arranging for
		directors and officers liability insurance for and on behalf of the Issuer and,
		where appropriate, each other Issuer Group Member;
	 

	 
		(v) (A) procuring, at the direction of the
		Board, and coordinating the advice of, legal counsel, accounting, tax and other
		professional advisers at the expense of the relevant Issuer Group Member, to
		assist such Issuer Group Member in carrying out its obligations and (B)
		supervising, in accordance with instructions from such Issuer Group Member,
		such legal counsel, accounting, tax and other advisers; and
	 

	 
		(vi) providing assistance to the Servicer
		with respect to matters for which such assistance is contemplated by the
		Servicing Agreement or is reasonably necessary in order for the Servicer to
		perform its duties in accordance with the Servicing Agreement;
	 

	 
		(b) to the extent that (i) the following
		services are not provided by the other Service Providers, and (ii) the relevant
		information is in the possession of, or can be reasonably obtained by, the
		Administrative Agent to act as liaison with each of the Rating Agencies and the
		Policy Provider with respect to any decisions on behalf of the Issuer Group
		requiring a Rating Agency Confirmation or the consent of the Policy Provider,
		including, without limitation, informing each of the Rating Agencies and the
		Policy Provider from time to time of any material changes in the Portfolio,
		coordinating with the 
	 

	 
		 
	 

	 
		 
	 

	 
		7
	 

	 
		 
	 

	 
	 

	 

	 
		Issuer Group and the Service Providers and
		providing each of the Rating Agencies and the Policy Provider with such
		statistical and other information as they may from time to time reasonably
		request and to provide any notice to each of the Rating Agencies and the Policy
		Provider that the Issuer is required to provide pursuant to the Servicing
		Agreement or the Indenture (such information to be provided at the Issuer
		Group’s expense to the extent that providing such information requires
		services that are materially greater in scope than those being provided
		pursuant to the express terms of this Agreement);
	 

	 
		(c) providing assistance to the Issuer Group
		in procuring Lessee consents, novations and other documentation and in taking
		all other actions necessary in connection with the reissue or amendment of
		letters of credit;
	 

	 
		(d) providing assistance to the Issuer Group
		in the execution of (1) the acquisition of Pledged Shares, Pledged Beneficial
		Interests, Pledged Membership Interests and/or Aircraft under the Asset
		Purchase Agreement, (2) the re-lease and/or sale of the Aircraft, (3) the
		acquisition of Additional Aircraft, (4) Aircraft Conversions permitted under
		the Indenture, (5) Refinancing Notes and (6) financing transactions relating to
		the Issuer Group after the Initial Closing Date, including:
	 

	 
		(i) coordinating with the Service Providers,
		legal and other professional advisers to monitor the protection of the Issuer
		Group’s interests and rights and coordinating the execution of
		documentation required at closings;
	 

	 
		(ii) providing qualified personnel to
		provide administrative support (including the preparation of any certificates
		required pursuant to the Servicing Agreement and the Indenture) at the closings
		in connection with the acquisition of Pledged Shares, Pledged Beneficial
		Interests, Pledged Membership Interests and/or Aircraft under the Asset
		Purchase Agreement, sales or re-leases of the Aircraft and the acquisition of
		any Additional Aircraft, if required (it being understood that the
		Administrative Agent will not be obligated to provide legal counsel or legal or
		technical services to the Issuer Group);
	 

	 
		(iii) coordinating with the Issuer Group and
		the Service Providers and assisting in the management of the closing process
		with the goal of having closings occur on a timely basis;
	 

	 
		(iv) providing all necessary administrative
		support to complete any documentation and other related matters; and
	 

	 
		(v) appointing counsel and other
		professional advisers to represent the Issuer Group in connection with any such
		closings;
	 

	 
		(e) based on information produced or
		provided to it, preparing, filing and/or distributing, with the assistance of
		outside counsel and auditors or other professional advisors, if appropriate,
		all reports to be prepared, filed and/or distributed by any Issuer Group Member
		or its governing bodies, subject to the approval of the Board in 
	 

	 
		 
	 

	 
		 
	 

	 
		8
	 

	 
		 
	 

	 
	 

	 

	 
		the case of any annual information statement
		or quarterly information statement, including:
	 

	 
		(i) filings (including, without limitation,
		Uniform Commercial Code filings, filings with the FAA and filings pursuant to
		the Cape Town Convention) that, to the knowledge of the Administrative Agent,
		any Issuer Group Member is required to make in various jurisdictions and
		preparing such filings or monitoring counsel and advisers in connection with
		the preparation and filing of such materials;
	 

	 
		(ii) reports required or recommended by the
		Board to be distributed to investors (including press releases), and managing
		investor relations on behalf of the Issuer Group, and preparing or arranging
		for the preparation and distribution of such reports at the Issuer Group’s
		expense; and
	 

	 
		(iii) reports, that, to the knowledge of the
		Administrative Agent after reasonable inquiry, are required to be filed with
		any Governmental Authorities, and preparing on behalf of any Issuer Group
		Member, or arranging for the preparation of, and arranging for the filing of
		any reports that, to the knowledge of the Administrative Agent, are required to
		be prepared for, and/or filed with, any other entity in order for such Issuer
		Group Member not to be in violation of Applicable Law or any applicable
		covenants;
	 

	 
		(f) with respect to amendments:
	 

	 
		(i) reporting to the Board on the substance
		of any proposed amendments to any Related Documents known to the Administrative
		Agent; and
	 

	 
		(ii) subject to approval by the appropriate
		controlling trustees or board, coordinating with the Issuer Group’s legal
		counsel, the other parties thereto and their counsel the preparation and
		execution of any amendments to the Related Documents (other than amendments
		relating to the Aircraft or the Lease Documents);
	 

	 
		(g) to the extent reasonably requested by
		the Servicer, coordinating and providing assistance on behalf of the Issuer
		Group with the Servicer in the performance of the Servicer’s obligations
		under the Servicing Agreement;
	 

	 
		(h) providing assistance to the Issuer with
		respect to matters for which action by the Issuer is required under the
		Servicing Agreement or the Indenture, including such assistance that may be
		necessary for the Issuer to:
	 

	 
		(i) comply with Sections 6.08, 7.03(a)(i)
		and 7.04 of the Servicing Agreement;
	 

	 
		(ii) comply with Sections 5.02, 5.03 and
		6.11 of the Indenture;
	 

	 
		(iii) provide such instructions to the
		Servicer as the Servicer may require in interpreting the Indenture, the
		Concentration Limits and Annex 2 to the Servicing Agreement;
	 

	 
		 
	 

	 
		 
	 

	 
		9
	 

	 
		 
	 

	 
	 

	 

	 
		(iv) direct the Servicer to amend the
		minimum hull and liability insurance coverage amounts in accordance with Annex
		l to the Servicing Agreement;
	 

	 
		(v) direct the Servicer as to whether
		settlement offers received by the Servicer with respect to claims for damage or
		loss in excess of $2,000,000 with respect to an Aircraft Asset are
		acceptable;
	 

	 
		(vi) review and request such periodic and
		other reports as the Servicer is obligated to provide under the Servicing
		Agreement;
	 

	 
		(vii) provide the Servicer with such
		information as the Servicer may reasonably request in connection with the
		Concentration Limits and certify to the Servicer whenever the proposed
		Aircraft-related transactions will result in the violation of such
		Concentration Limits; and;
	 

	 
		(viii) advise the Servicer as required by
		Section 3(c) of Schedule 2.02(a) of the Servicing Agreement (“Schedule
		2.02(a)”).
	 

	 
		(i) informing the Board and the Policy
		Provider as soon as is reasonably practicable if the Administrative Agent
		believes that (i) net revenues generated by the Leases will be insufficient to
		satisfy the payment obligations of the Issuer Group and (ii) an Event of
		Default will result from such insufficiency, and to advise the Board as to any
		appropriate action to be taken (subject to the provisions of the Related
		Documents) with respect to such insufficiency to avoid an Event of Default, if
		it is possible to do so, and informing the Policy Provider of any action
		proposed to be taken;
	 

	 
		(j) determining whether it is necessary or
		appropriate at any time that the Issuer make a drawing under any back-up letter
		of credit of which the Issuer is the beneficiary and, if so, to administer such
		drawing on the Issuer’s behalf;
	 

	 
		(k) assisting in compliance by each Issuer
		Group Member with its obligations under Section 2.07 of the Security Trust
		Agreement with respect to the Non-Trustee Accounts, including notifying and
		instructing each Obligor (as defined in the Security Trust Agreement) to make
		payments directly to a Non-Trustee Account and seeking to procure bank consent
		letters in respect of such Non-Trustee Account; 
	 

	 
		(l) providing all necessary assistance and
		information reasonably available to the Administrative Agent to legal and other
		professional advisers to the Issuer Group in connection with any claim, action,
		proceeding or petition brought against any Issuer Group Member;
	 

	 
		(m) establishing and maintaining on behalf
		of the Issuer a website and arrange for the publication thereon of all reports
		and other documents required or recommended by the Board to be distributed to
		investors;
	 

	 
		 
	 

	 
		 
	 

	 
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		(n) preparing, in a timely manner, the
		reports required by Section 2.14 of the Indenture based upon information
		supplied to the Administrative Agent by the Service Providers, where
		applicable, and providing such reports to the Trustee and the other Persons
		indicated in that section;
	 

	 
		(o) preparing and providing to Moody’s
		and Fitch on the fifth Business Day immediately following each Payment Date (or
		to the extent impracticable, promptly thereafter) a written report
		substantially in the form of Exhibit A attached hereto covering the period from
		the end of the last such report (or, with respect to the initial report, the
		Closing Date) to such Payment Date, based upon information supplied to the
		Administrative Agent by the Servicer under the Servicing Agreement; and
	 

	 
		(p) preparing and providing to the Policy
		Provider written reports on a monthly basis, covering the period from the last
		Calculation Date preceding the last such report, if any, through such
		Calculation Date, setting forth (i) the debt service coverage ratio computation
		(applicable to months 37 through 60) and (ii) the amount of monies being held
		for aircraft conversions and the portion related to debt contribution and the
		amount related to equity contribution, as well as written reports on a
		quarterly basis, within forty-five days after the end of each calendar quarter
		with respect to such calendar quarter, setting forth swap details, including
		the relevant notional amounts, start dates, expiry dates, and swap rates. So
		long as the Administrative Agent is an affiliate of the Servicer, the
		obligation of the Administrative Agent under this item (p) can be satisfied by
		inclusion of this information in a report by the Servicer.
	 

	 
		Section 2.04
		Accounting Services. The Administrative Agent hereby agrees to perform and
		provide the following accounting services:
	 

	 
		(a) Budgeting Process. The Administrative Agent shall, in accordance with the
		procedures, policies and guidelines described below and on the basis of
		information generated by the Administrative Agent and information provided by
		the Service Providers and the Issuer Group and subject to the review and
		direction of the relevant Issuer Group Member:
	 

	 
		(i) in respect of each Year during the term
		of the Servicing Agreement (other than with respect to the fiscal year
		commencing on the Initial Closing Date), and on behalf of the Issuer Group,
		prepare and deliver to the Issuer and the Servicer, no later than the November
		30th immediately preceding the commencement of such Year a proposed Lease
		Operating Budget and a proposed Aircraft Asset Expenses Budget for such Year
		together with reasonably detailed supporting information and the assumptions
		underlying such proposed Lease Operating Budget and Aircraft Asset Expenses
		Budget, such proposed Lease Operating Budget and Aircraft Asset Expenses Budget
		to be based, in part, on the information provided by the Servicer pursuant to
		Section 7.03(c) of the Servicing Agreement;
	 

	 
		(ii) on behalf of the Issuer Group, review,
		discuss and negotiate with the Servicer such proposed Lease Operating Budgets
		and Aircraft Asset Expenses 
	 

	 
		 
	 

	 
		 
	 

	 
		11
	 

	 
		 
	 

	 
	 

	 

	 
		Budgets, and make such adjustments proposed
		by the Servicer as the Administrative Agent, in consultation with the Board and
		with due regard for current market conditions, may deem appropriate; and

	 

	 
		(iii) submit to the Servicer promptly
		following approval by the Issuer the Approved Budgets together with reasonably
		detailed information regarding the Issuer’s underlying assumptions and
		provide a copy of such Approved Budgets to the Policy Provider.
	 

	 
		(b) Management Accounts and Financial
		Statements. The Administrative Agent
		shall, in accordance with the procedures, policies and guidelines described
		below and on the basis of information generated by the Administrative Agent and
		information provided by the Service Providers and the Issuer Group:
	 

	 
		(i) establish an accounting system and
		maintain the accounting ledgers of and for each Issuer Group Member in
		accordance with GAAP unless otherwise required by Applicable Law and specified
		by the Board (collectively, the “Ledgers”);
	 

	 
		(ii) prepare and deliver to the Issuer,
		Policy Provider and the Initial Liquidity Facility Provider (within 40 days
		after the end of the relevant Quarter or, if the end of such Quarter coincides
		with the end of a Year, within 90 days after the end of such Year), with
		respect to the Issuer Group, on a consolidated basis, a draft balance sheet and
		draft statement of changes in shareholders’ equity or residual trust
		interest as of the end of each Quarter and Year, as applicable, and draft
		statements of income and cash flows for each Quarter and Year, as applicable
		(the “Consolidated Quarterly Draft Accounts”);
	 

	 
		(iii) prepare and deliver to the Issuer,
		Policy Provider and the Initial Liquidity Facility Provider (within 40 days
		after the end of the relevant Quarter or, if the end of such Quarter coincides
		with the end of a Year, within 90 days after the end of such Year), with
		respect to the Issuer Group on a combined basis and such of the Issuer Group
		Members as specified by the Board in a written schedule provided to the
		Administrative Agent (which schedule may be updated by the Board to the
		Administrative Agent delivered at least 30 days prior to the commencement of
		the relevant Quarter) a draft balance sheet and statement of changes in
		shareholders’ equity or residual trust interest as of the end of each
		Quarter and Year, as applicable, with respect to such Issuer Group Member and
		draft statements of income and cash flows for such Quarter and Year, as
		applicable (the “Consolidating Quarterly Draft Accounts” and,
		together with the Consolidated Quarterly Draft Accounts the “Draft
		Accounts”). The Board shall specify the applicable legal requirements
		mandating the preparation of such Consolidating Quarterly Draft Accounts in the
		written schedule provided to the Administrative Agent pursuant to this section;
		
	 

	 
		(iv) as required by the Board, arrange and
		manage the quarterly review of the Draft Accounts by the Issuer Group’s
		auditors;
	 

	 
		 
	 

	 
		 
	 

	 
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		(v) arrange for, coordinate with and assist
		the Issuer Group’s auditors in preparing annual audits;
	 

	 
		(vi) arrange for the preparation of and
		arrange for the filing of the Issuer Group’s tax returns in conjunction
		with the Issuer Group’s tax advisers after submission to the Board to the
		extent required by the Board or Applicable Law;
	 

	 
		(vii) liaise with the Servicer for the
		purpose of preparing the monthly and quarterly reports in accordance with
		Section 9 of Schedule 2.02(a) to the Servicing Agreement;
	 

	 
		(viii) compare the expected cash flows of
		the Issuer Group and the budgets to actual results; and
	 

	 
		(ix) review and approve all disbursements
		requested by the Servicer under Section 7.3 of Schedule 2.02(a) of the
		Servicing Agreement.
	 

	 
		(c) Other Reports.
		The Administrative Agent shall prepare the Draft Accounts in accordance with
		GAAP unless otherwise required by Applicable Law and specified by the Board. In
		connection with the preparation of the Consolidated Quarterly Draft Accounts,
		the Administrative Agent will, provide to the Board, at such times as the Board
		may require, a review report (as defined by the Statements on Standards for
		Accounting and Review Services issued by the American Institute of Certified
		Public Accountants) of the Issuer Group’s independent public accountants
		with respect to the financial statements of such Issuer Group Members for, or
		as of the end of, such Quarter, including in such report such accountants’
		statement that, based on its review of such financial statements, it is not
		aware of any material modifications that should be made to such financial
		statements in order for them to be in conformity with GAAP or other applicable
		accounting principles; [provided that,
		with respect to such financial statements for, or as of the end of, any Quarter
		(other than the last Quarter of any Year), in the event that the Issuer Group
		does not include (or cause to be included) any material disclosure required by
		GAAP or other applicable accounting principles to be included within footnotes
		to such financial statements, such review report may be qualified solely by
		stating that the only modification that should be made to such financial
		statements in order for them to be in conformity with GAAP or other applicable
		accounting principles is the inclusion of such disclosure.]
	 

	 
		(d) Instructions.
		The Administrative Agent shall be entitled to request instructions from the
		Board as to general guidelines or principles to be followed in preparing Draft
		Accounts and as to amending or supplementing any such guidelines or
		principles.
	 

	 
		Section 2.05
		Additional Services. The Administrative Agent will provide additional
		Issuer Group Services reasonably requested by the Board, including (a)
		providing assistance to the Hedge Provider as reasonably requested and (b)
		undertaking efforts to avoid any adverse change in the tax status of any Issuer
		Group 
	 

	 
		 
	 

	 
		 
	 

	 
		13
	 

	 
		 
	 

	 
	 

	 

	 
		Member. In addition, upon a request by any
		Issuer Group Member, the Administrative Agent will take such other actions as
		may be appropriate to facilitate such Issuer Group Member’s business
		operations and assist the relevant board of directors or controlling trustees
		in carrying out their obligations; provided that
		the Administrative Agent will not be obligated or permitted to take any action
		that might reasonably be expected to result in the business of such Issuer
		Group Member ceasing to be separate and readily identifiable from, and
		independent of, the Administrative Agent, and any of its Affiliates. The
		obligation to provide such additional services shall be subject to reaching an
		agreement on compensation therefor and to the consent of the Policy
		Provider.
	 

	 
		Section 2.06
		Additional Aircraft. In the event that the Issuer Group shall acquire any
		Additional Aircraft, the Board may request that the Administrative Agent
		provide the same Issuer Group Services with respect to all such Additional
		Aircraft.
	 

	 
		Section 2.07
		New Subsidiaries. The Administrative Agent shall be responsible for
		coordinating with outside legal counsel, auditors, tax advisers and other
		professional advisers with respect to all company and administrative matters
		relating to the formation, operation, company affairs and related matters with
		respect to all Subsidiaries which are or may become members of the Issuer
		Group, including identifying such outside advisers, a potential company
		secretary and candidates for director or trustee to the extent necessary, and
		shall be permitted to incur expenses in respect of such Subsidiaries without
		the Issuer Group’s consent up to such aggregate amount as shall be
		authorized by the Board from time to time. To the extent that the
		Administrative Agent shall deem it necessary or desirable (or shall have been
		instructed by the Servicer that it is necessary or advisable) in order for the
		Issuer Group to carry on its business, the Administrative Agent shall have the
		authority to assist in the formation of new Subsidiaries of the Issuer. The
		Administrative Agent and its personnel may act as company secretary for any
		Subsidiary of the Issuer.
	 

	 
		Section 2.08
		The Issuer Group
		Responsibility. (a) The obligations of
		the Administrative Agent hereunder are limited to those matters that are
		expressly the responsibility of the Administrative Agent in accordance with the
		terms of this Agreement. Notwithstanding the appointment of the Administrative
		Agent to perform the Issuer Group Services, each Issuer Group Member shall
		remain responsible for all matters and decisions related to its business,
		operations, assets and liabilities.
	 

	 
		(b) Without derogating from the authority
		and responsibility of the Administrative Agent with respect to the performance
		of certain of the Issuer Group Services as set forth in this Agreement, it is
		hereby expressly agreed and acknowledged that the Administrative Agent is not
		authorized or empowered to make or enter into any agreement, contract or other
		legally binding arrangement, in respect of or relating to the business or
		affairs of any Issuer Group Member, or pledge the credit of, incur any
		indebtedness on behalf of or expend any funds of any Issuer Group Member other
		than as expressly permitted in accordance with the terms of this Agreement, all
		such authority and power being reserved to the appropriate Issuer Group Member
		or the Security Trustee, as the case may be.
	 

	 
		 
	 

	 
		 
	 

	 
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		Section 2.09 Treaty Benefits.
		The Administrative Agent hereby agrees that in the event that as of [October
		31] of each year, the aggregate number of Babcock & Brown Air
		Limited’s (“B&B Air”) common shares (including ADSs) traded
		(the “Trading Activity”) during that year on one or more recognized
		stock exchanges (within the meaning of Article 23 (the “LOB Article”)
		of the income tax treaty between the United States and Ireland (the
		“Treaty”)) is reasonably expected to be less than [7]% of the average
		number of common shares outstanding during that year, the Administrative Agent
		shall, to the extent feasible and to the extent such action does not cause a
		breach under the Indenture or any Related Document, take all commercially
		reasonable efforts on behalf of the Issuer (in its capacity as Administrative
		Agent) necessary to cause the Issuer and its subsidiaries to be entitled to the
		benefit of the Treaty with respect to rental income from U.S. sources;
		provided that if B&B Air or the Issuer or other applicable
		subsidiary of B&B Air has received a determination by the U.S. competent
		authority (within the meaning of the LOB Article) to the effect that the Issuer
		and its subsidiaries are entitled to the benefit of the Treaty with respect to
		rental income from U.S. sources ( a “Determination”), the
		Administrative Agent shall not be required to take any such efforts. The
		Administrative Agent shall monitor, or cause to be monitored, the Trading
		Activity as of the end of each calendar quarter and reflect the results of such
		monitoring in the quarterly reports of the Issuer prepared under Section 2.14
		of the Indenture. It is expected such efforts shall include, without
		limitation, the following: (i) BBAM transfers or seconds to B&B Air a
		sufficient number of employees to perform the following functions with respect
		to aircraft of the Issuer or its subsidiaries that are on lease for use within
		the United States as well as, potentially, other aircraft of the Issuer and its
		subsidiaries: (A) sales, marketing and lease management; (B) technical,
		maintenance and inspection services; and (C) financial and valuation services;
		and (ii) BBAM makes available administrative personnel for recordkeeping and
		other ministerial functions, to B&B Air, in each case, for arm’s
		length consideration and otherwise on arm’s length terms. Following the
		implementation of the efforts outlined above, the Administrative Agent shall
		deliver to the Issuer, the Rating Agencies and the Policy Provider, an opinion
		of recognized U.S. federal income tax counsel that the Issuer and its
		subsidiaries should be treated as entitled to the benefit of the Treaty with
		respect to rental income from U.S. sources. Any action taken by the
		Administrative Agent pursuant to this Section 2.09 to cause the Issuer to be
		entitled to the benefits of the Treaty shall be subject to Rating Agency
		Confirmation (as defined in the Indenture). This section shall apply to any
		successor Administrative Agent appointed under Article VII hereunder.
	 

	 
		ARTICLE
		III
	 

	 
		 
	 

	 
		STANDARD OF PERFORMANCE; LIABILITY AND
		INDEMNITY
	 

	 
		Section 3.01
		Standard of Performance. The Administrative Agent will devote the same amount
		of time and attention to, and will be required to exercise the same level of
		skill, care and diligence in the performance of, its services as it would if it
		were administering such services on its own behalf and perform the services
		required hereunder consistent with customary practices of an administrative
		agent that provides 
	 

	 
		 
	 

	 
		 
	 

	 
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		comparable services for a securitization of
		commercial jet aircraft and related assets (the “Standard of
		Performance”).
	 

	 
		Section 3.02
		Liability and Indemnity. (a) The Administrative Agent shall not be liable for
		any Losses or Taxes to or of, or payable by any Issuer Group Member at any time
		from any cause whatsoever or any Losses or Taxes directly or indirectly arising
		out of or in connection with or related to the performance by the
		Administrative Agent of this Agreement unless (i) such Losses or Taxes are the
		result of the Administrative Agent’s (or any Administrative Agent
		Delegate’s) own gross negligence, recklessness, willful misconduct, deceit
		or fraud or that of any of its directors, officers or employees, as the case
		may be or (ii) such Losses are directly caused by any representation or
		warranty by the Administrative Agent set forth in Section 4.02 having proven to
		be false on the date hereof or a breach by the Administrative Agent of the
		express terms of this Agreement.
	 

	 
		(b) Notwithstanding anything to the contrary
		set forth in any other agreement to which any Issuer Group Member is a party,
		the Issuer and the other Issuer Group Members do hereby assume liability for
		and do hereby jointly and severally agree to indemnify, reimburse and hold
		harmless on an After-Tax Basis the Administrative Agent and each Administrative
		Agent Delegate and their respective directors, officers, employees and agents
		and each of them from any and all Losses or Taxes that may be imposed on,
		incurred by or asserted against any of them arising out of, in connection with
		or related to the Administrative Agent’s performance under this Agreement
		(including any Losses or Taxes incurred by any of them as a result of
		indemnifying any Person to whom it shall have delegated its obligations
		hereunder in accordance with Section 8.01 hereof, but only to the extent the
		Administrative Agent would have been indemnified had it performed such
		obligations), except as a result of the gross negligence, recklessness, willful
		misconduct, deceit or fraud of the Administrative Agent (or any Administrative
		Agent Delegate) or any of its directors, officers or employees or as a result
		of any representation or warranty by the Administrative Agent set forth in
		Section 4.02 having proven to be false on the date hereof or a breach by the
		Administrative Agent of the express terms of this Agreement. This indemnity
		shall expressly inure to the benefit of any director, officer, agent or
		employee of the Administrative Agent now existing or in the future and to the
		benefit of any successor of the Administrative Agent and shall survive the
		expiration of this Agreement. This indemnity shall not apply to:
	 

	 
		(i) Taxes imposed on net income by the
		revenue authorities of Ireland or Bermuda in respect of any payment by any
		Issuer Group Member to the Administrative Agent due to the performance of the
		Issuer Group Services; and
	 

	 
		(ii) Taxes imposed on net income of the
		Administrative Agent by any Government Authority other than the revenue
		authorities of Bermuda or Ireland to the extent such Taxes would not have been
		imposed in the absence of any connection of the Administrative Agent with such
		jurisdiction imposing such Taxes other than any connection that results from
		the performance by the Administrative Agent of its obligations under this
		Agreement.
	 

	 
		 
	 

	 
		 
	 

	 
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		(c) The Administrative Agent agrees to
		indemnify, reimburse and hold harmless on an After-Tax Basis the Policy
		Provider and the Holders of the Notes for any Losses whatsoever which they or
		any of them may incur or be subject to in consequence of (x) the performance of
		the Issuer Group Services to the extent such Losses arise due to the willful
		misconduct, recklessness, gross negligence, deceit or fraud of the
		Administrative Agent (or any Administrative Agent Delegate) or any of its
		directors, officers or employees, as the case may be, (y) a breach by the
		Administrative Agent (or any Administrative Agent Delegate) of the express
		terms of this Agreement (other than the performance of the Issuer Group
		Services but including the undertakings in Section 4.01 hereof) and (z) any
		representation or warranty by the Administrative Agent set forth in Section
		4.02 hereof having proven to be false on the date hereof; provided that this indemnity shall not apply and the
		Administrative Agent shall have no liability in respect of Losses to the extent
		that they arise from (i) the gross negligence, willful misconduct, deceit or
		fraud of any Issuer Group Members or their respective directors, trustees or
		agents, (ii) any breach by the Administrative Agent of its obligations under
		this Agreement to the extent such breach is a result of a Service
		Provider’s failure to perform its obligations to the Issuer Group or a
		failure by the Issuer Group to comply with its obligations under this
		Agreement, (iii) any action that the Issuer Group requires the Administrative
		Agent to take pursuant to a direction but only to the extent that the
		Administrative Agent takes such action in accordance with such direction and in
		accordance with the provisions hereof, (iv) a refusal by the Issuer Group to
		take action upon a recommendation made in good faith by the Administrative
		Agent in accordance with the terms hereof or (v) in the case of Losses incurred
		by the Holders of the Notes, this indemnity shall be only for Losses that
		adversely affect the timing or amount of payments on the Notes.
	 

	 
		(d) The Administrative Agent agrees to
		indemnify, reimburse and hold harmless on an After-Tax Basis each of the
		Trustee, the Security Trustee and the Operating Bank and their respective
		trustees, directors, officers and agents for any Losses whatsoever which they
		or any of them may incur or be subject to in consequence of any breach of the
		terms of this Agreement by the Administrative Agent (or any Administrative
		Agent Delegate), the failure of any representation or warranty of the
		Administrative Agent set forth in Section 4.02 hereof to be true and correct on
		the date hereof or the willful misconduct, recklessness, gross negligence,
		deceit or fraud of the Administrative Agent (or any Administrative Agent
		Delegate) or any of its directors, officers or employees, as the case may be;
		provided, however, that this indemnity shall not apply and the Administrative
		Agent shall have no liability in respect of Losses to the extent that they
		arise from (i) the gross negligence, willful misconduct, deceit or fraud of the
		Trustee or Security Trustee, or their respective directors, trustees or agents,
		(ii) any breach by the Administrative Agent of its obligations under this
		Agreement to the extent such breach is solely a result of a Service
		Provider’s failure to perform its obligations to the Issuer Group or a
		failure solely by the Issuer Group to comply with its obligations under this
		Agreement, (iii) any action that the Trustee or the Security Trustee requires
		the Administrative Agent to take pursuant to a direction but only to the extent
		that the Administrative Agent takes such action in accordance with such
		direction and in 
	 

	 
		 
	 

	 
		 
	 

	 
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		accordance with the provisions hereof or
		(iv) a refusal by the Trustee or the Security Trustee to take action upon a
		recommendation made in good faith and consistent with the provisions relating
		to the Trustee or the Security Trustee under the Related Documents by the
		Administrative Agent in accordance with the terms hereof.
	 

	 
		(e) The Administrative Agent, the Issuer and
		the other Issuer Group Members, the Trustee and the Security Trustee
		acknowledge and agree that the terms of this Agreement contemplate that the
		Administrative Agent shall receive the Relevant Information in order for the
		Administrative Agent to make required credit and debit entries and to make the
		calculations and supply the information and reports required herein, and that
		the Administrative Agent will do the foregoing if and to the extent such
		information is so provided by such relevant parties and on the basis of such
		information, without undertaking any independent verification or recalculation
		of such information.
	 

	 
		ARTICLE
		IV
	 

	 
		 
	 

	 
		ADMINISTRATOR UNDERTAKINGS
	 

	 
		Section 4.01
		Administrative Agent
		Undertakings. The Administrative Agent
		hereby covenants with the Issuer Group that during the term of this Agreement
		it will conduct its business such that it is a separate and readily
		identifiable business from, and independent of, each Issuer Group Member and
		further covenants as follows:
	 

	 
		(a) if the Administrative Agent receives any
		money whatsoever, which money belongs to any Issuer Group Member, the Trustee
		or the Security Trustee or is to be paid to any Issuer Group Member, the
		Trustee or the Security Trustee or into any account pursuant to any Related
		Document or otherwise, it will hold such money in trust for such Issuer Group
		Member, the Trustee or the Security Trustee, as the case may be, and shall keep
		such money separate from all other money belonging to the Administrative Agent
		and shall as promptly as practicable thereafter pay the same into the relevant
		account in accordance with the terms thereof without exercising any right of
		setoff it may have;
	 

	 
		(b) it will comply with any proper
		directions, orders and instructions which any Issuer Group Member may from time
		to time give to it in accordance with the provisions of this Agreement and the
		Indenture; provided that during the continuance of any Event of Default of
		which the Administrative Agent has received written notice from any party to a
		Related Document or of which the Administrative Agent is otherwise aware, the
		Administrative Agent shall comply only with the instructions of the Security
		Trustee as to all Issuer Group Services;
	 

	 
		(c) it will not knowingly fail to comply
		with any legal requirements in any material respect in the performance of the
		Issuer Group Services;
	 

	 
		(d) it will make all payments required to be
		made by it at any time and from time to time pursuant to this Agreement on the
		required date for payment thereof 
	 

	 
		 
	 

	 
		 
	 

	 
		18
	 

	 
		 
	 

	 
	 

	 

	 
		and shall turn over any amounts owed to the
		Security Trustee, the Issuer, any other Issuer Group Member or the Trustee
		without set-off or counterclaim;
	 

	 
		(e) it will not take any steps for the
		purpose of procuring the appointment of any administrative receiver or the
		making of an administrative order or for instituting any bankruptcy,
		reorganization, arrangement, insolvency, winding up, liquidation, composition
		or any like proceedings under the laws of any jurisdiction in respect of any
		Issuer Group Member or in respect of any of their respective liabilities,
		including, without limitation, as a result of any claim or interest of the
		Administrative Agent;
	 

	 
		(f) it will cooperate with each Issuer Group
		Member and its respective trustees, directors, officers and agents (with
		respect to the Issuer Group Services when no Event of Default, of which the
		Administrative Agent has received written notice from any party to a Related
		Document or of which the Administrative Agent is otherwise aware, has occurred
		and is continuing) and the Policy Provider, the Security Trustee and the
		Trustee (with respect to the Issuer Group Services during the continuance of an
		Event of Default of which the Administrative Agent has received written notice
		from any party to a Related Document or of which the Administrative Agent is
		otherwise aware), including by providing such information as may reasonably be
		requested, to permit such Persons to monitor the Administrative Agent’s
		compliance with its obligations under this Agreement;
	 

	 
		(g) it will observe all corporate
		formalities necessary to remain a legal entity separate and distinct from, and
		independent of, each Issuer Group Member;
	 

	 
		(h) it will maintain its assets and
		liabilities separate and distinct from each Issuer Group Member in such a
		manner that is not difficult to segregate, identify or ascertain such assets
		and liabilities;
	 

	 
		(i) it will maintain records, books,
		accounts and minutes separate from those of each Issuer Group Member;
	 

	 
		(j) it will pay its obligations in the
		ordinary course of its business as a legal entity separate from each Issuer
		Group Member, except as otherwise required or permitted under the Indenture and
		the Security Trust Agreement;
	 

	 
		(k) it will keep its funds separate and
		distinct from the funds of each Issuer Group Member, and it will receive,
		deposit, withdraw and disburse such funds separately from the funds of each
		Issuer Group Member;
	 

	 
		(l) it will conduct its business in its own
		name, and not in the name of any Issuer Group Member;
	 

	 
		 
	 

	 
		 
	 

	 
		19
	 

	 
		 
	 

	 
	 

	 

	 
		(m) it will not pay, assume, guarantee or
		become liable for any debt of, or otherwise pledge its assets for the benefit
		of, any Issuer Group Member, except as otherwise permitted under the Related
		Documents;
	 

	 
		(n) it will not hold out that it is a
		division of any Issuer Group Member or that any Issuer Group Member is a
		division of it;
	 

	 
		(o) it will not induce any third party to
		rely on the creditworthiness of any Issuer Group Member in order that such
		third party will be induced to contract with the Administrative Agent;
	 

	 
		(p) it will correct any misunderstanding
		known to it regarding its separate identity;
	 

	 
		(q) it will maintain adequate capital in
		light of its contemplated business purpose, transactions and
		liabilities;
	 

	 
		(r) except with respect to any grantor
		trust, it will cause its board of directors or managers or its members, as
		applicable, to meet at least annually or act pursuant to written consent and
		keep minutes of such meetings and actions;
	 

	 
		(s) it will not enter into any agreements
		between it and any Issuer Group Member that are more favorable to either party
		than agreements that the parties would have been able to enter into at such
		time on an arm’s-length basis with a non-affiliated third party, other
		than any Related Documents in effect on the date hereof;
	 

	 
		(t) it will (i) forward promptly to the
		Servicer a copy of any material communication received from any Person in
		relation to any Lease or Aircraft; (ii) grant such access to the Servicer to
		its books of account, documents and other records and to its employees as may
		be reasonably necessary for the Servicer to perform its obligations in respect
		of any Lease or Aircraft under the Servicing Agreement; provided that
		the Servicer shall not have access to the minutes of the Administrative
		Agent’s board meetings and other confidential business information; and
		(iii) execute and deliver such documents and do such acts and things as the
		Servicer may reasonably request in order for the Servicer to perform its
		obligations under the Servicing Agreement;
	 

	 
		(u) it shall perform all services in respect
		of the Aircraft Assets subject to, and in compliance with, the constraints and
		restrictions set forth in Sections 5.02 and 5.03 of the Indenture;
		provided that, for the avoidance of doubt, the Administrative
		Agent shall not be required to meet any of the financial obligations of the
		Issuer under the Indenture; and 
	 

	 
		(v) in the case of Babcock & Brown
		Aircraft Management LLC, it shall cause each of its Affiliates to comply with
		the covenants contained in clauses (g) through (p), (q), (r) and (s) above
		fully and with the same force and effect as if such Affiliate were the party
		making such covenants.
	 

	 
		 
	 

	 
		 
	 

	 
		20
	 

	 
		 
	 

	 
	 

	 

	 
		Section 4.02 Representations of the Administrative
		Agent. The Administrative Agent
		represents and warrants to the Issuer as follows:
	 

	 
		(a) Authority. The
		Administrative Agent is duly organized and is validly existing and has all
		requisite power and authority to execute this Agreement and to consummate the
		transactions contemplated by this Agreement and to perform its obligations
		under this Agreement. All corporate acts and other proceedings required to be
		taken by the Administrative Agent to authorize the execution, delivery and
		performance of this Agreement and the consummation of the transactions
		contemplated by this Agreement and the performance of its obligations
		contemplated under this Agreement have been or on or before the date of
		entering into this Agreement will have been duly and properly taken.
	 

	 
		(b) Due Execution and Delivery. This Agreement has been duly and validly executed and
		delivered by the Administrative Agent and constitutes a legal, valid and
		binding obligation of the Administrative Agent, enforceable against it in
		accordance with its terms, except as such enforceability may be limited by (a)
		bankruptcy, insolvency, reorganization, moratorium or similar laws of general
		applicability affecting the enforcement of creditors’ rights and (b) the
		application of general principles of equity (regardless of whether such
		enforceability is considered in a proceeding in equity or at law).
	 

	 
		(c) No Conflict.
		None of the execution and delivery of this Agreement by the Administrative
		Agent or the consummation of the transactions contemplated by this Agreement or
		performance by the Administrative Agent of any of its obligations under this
		Agreement, except in each case where such execution, consummation or
		performance could not reasonably be expected to result in a material adverse
		effect on the ability of the Administrative Agent to perform its obligations
		hereunder will (i) violate any provisions of the constituent documents of the
		Administrative Agent, (ii) violate any order, writ, injunction, judgment or
		decree applicable to the Administrative Agent or any of its properties or
		assets, (iii) violate in any material respect any Applicable Law or (iv) result
		in any conflict with, breach of or default (or give rise to any right of
		termination, cancellation or acceleration) under, any of the terms, conditions
		or provisions of any note, bond, mortgage, indenture, warrant or other similar
		instrument or any license, permit, material agreement or other material
		obligation to which the Administrative Agent is a party or by which the
		Administrative Agent or any of its properties or assets may be bound. 
	 

	 
		(d) No Necessary Approval. No action, consent or approval by, or filing with, any
		Governmental Authority or any other regulatory or self-regulatory body, or any
		other Person, is required in connection with the execution, delivery or
		performance by the Administrative Agent of this Agreement or the consummation
		by the Administrative Agent of the transactions contemplated by this
		Agreement.
	 

	 
		 
	 

	 
		 
	 

	 
		21
	 

	 
		 
	 

	 
	 

	 

	 
		Section 4.03
		Certain Information. The Administrative Agent agrees to be bound by and
		perform the obligations of the Administrative Agent set forth in Section 13.04
		of the Servicing Agreement.
	 

	 
		Section 4.04
		Access. The Administrative Agent, at such times as the Policy
		Provider may reasonably request (in any event not more than an aggregate of one
		(1) time per Year prior to an Event of Default, and four (4) times per Year
		after and during the continuance of an Event of Default) shall grant, and shall
		cause any Administrative Agent delegate to grant, to the Policy Provider and
		its agents to the extent party to confidentiality agreements reasonably
		acceptable to the Administrative Agent, access to the documents and other
		records generated by the Administrative Agent (and in its possession) as part
		of its services hereunder (exclusive of internal correspondence, approval
		materials, internal evaluations and similar documents or other records
		developed by the Administrative Agent or any of its Affiliates for their own
		use) or by a Lessee and delivered to the Administrative Agent, and related to
		the Aircraft Assets (copies of which the Policy Provider shall (at its expense)
		be entitled to take), to enable the Policy Provider and its agents to monitor
		the performance by the Administrative Agent under this Agreement or to
		otherwise discharge the Policy Provider’s obligations under Applicable
		Law. Prior to the occurrence of an Event of Default, the Policy Provider shall
		pay its own costs and expenses incurred pursuant to this Section 4.04. After
		the occurrence and during the continuance of an Event of Default, the
		Administrative Agent shall promptly pay the Policy Provider’s
		out-of-pocket costs and expenses incurred pursuant to this Section 4.04 upon
		receipt of a written invoice therefor from the Policy Provider. Upon reasonable
		prior written notice and at reasonable times (in any event not more than an
		aggregate of one (1) time per Year prior to an Event of Default, and four (4)
		times per Year after and during the continuance of an Event of Default), the
		Administrative Agent shall make one or more (such number to be determined by
		the Administrative Agent in good faith but sole discretion) members of its
		staff (including one or more members of its senior management) available to
		attend (including by telephone) meetings with representatives of the Policy
		Provider.
	 

	 
		ARTICLE
		V
	 

	 
		 
	 

	 
		UNDERTAKINGS OF THE ISSUER
		GROUP
	 

	 
		Section 5.01
		Cooperation. The Issuer and the other Issuer Group Members shall
		use commercially reasonable efforts to cause any Service Provider to at all
		times cooperate with the Administrative Agent to enable the Administrative
		Agent to provide the Issuer Group Services, including providing the
		Administrative Agent with all powers of attorney as may be reasonably necessary
		or appropriate for the Administrative Agent to perform the Issuer Group
		Services in accordance with this Agreement.
	 

	 
		Section 5.02
		Information. The Issuer will provide the Administrative Agent with
		the following information in respect of itself and each other Issuer Group
		Member:
	 

	 
		 
	 

	 
		 
	 

	 
		22
	 

	 
		 
	 

	 
	 

	 

	 
		(a) copies of all Related Documents,
		including the articles of incorporation, operating agreement, by-laws, trust
		agreement (or equivalent documents) of each Issuer Group Member, and copies of
		all books and records maintained on behalf of each such Issuer Group
		Member;
	 

	 
		(b) details of all bank accounts and bank
		mandates maintained by any Issuer Group Member;
	 

	 
		(c) names of and contact information with
		respect to the Board or board for each Issuer Group Member;
	 

	 
		(d) such other information as is necessary
		to the Administrative Agent’s performance of the Issuer Group Services;
		and
	 

	 
		(e) a copy of any information provided to
		the Issuer Group pursuant to the Servicing Agreement.
	 

	 
		Section 5.03
		Scope of Services. (a) In the event that any Issuer Group Member shall
		enter into any agreement, amendment or other modification of any Lease or any
		Related Document or shall take any other action that has the effect of
		increasing in any material respect the scope, nature or level of the Issuer
		Group Services to be provided under this Agreement (including pursuant to
		Section 2.05 hereof) without the Administrative Agent’s express prior
		written consent, the Issuer Group shall so notify the Administrative Agent and
		the Administrative Agent shall not be obligated to perform the affected Issuer
		Group Service to the extent of such increase unless and until the
		Administrative Agent and the Issuer Group shall agree on the terms of such
		increased Issuer Group Service and the compensation therefor (it being
		understood that (i) the Administrative Agent shall have no liability to any
		Issuer Group Member directly or indirectly arising out of, in connection with
		or related to the Administrative Agent’s failure to perform such increased
		Issuer Group Service prior to any such agreement and (ii) the Issuer Group
		shall not be permitted to engage another Person to perform the affected Issuer
		Group Service without the prior written consent of the Administrative Agent
		unless the Administrative Agent has indicated it is unable or unwilling to act
		in respect of the affected Issuer Group Service on the terms offered.
	 

	 
		(b) In the event that the Issuer Group shall
		acquire Additional Aircraft, the Issuer Group shall so notify the
		Administrative Agent and the Administrative Agent shall be obligated to provide
		the Issuer Group Services with respect to such Additional Aircraft in
		accordance with Section 2.06 hereof subject to reaching agreement on additional
		compensation therefor.
	 

	 
		Section 5.04
		Ratification. The Issuer and the other Issuer Group Members hereby
		ratify and confirm and agree to ratify and confirm (and shall furnish written
		evidence thereof upon request of the Administrative Agent) any act or omission
		by the Administrative Agent with respect to any Issuer Group Services in
		accordance with this Agreement in the exercise of any of the powers or
		authorities conferred upon 
	 

	 
		 
	 

	 
		 
	 

	 
		23
	 

	 
		 
	 

	 
	 

	 

	 
		the Administrative Agent under the terms of
		this Agreement, it being expressly understood and agreed that none of the
		foregoing shall have any obligation to ratify and confirm, and expressly does
		not ratify and confirm, any act or omission of the Administrative Agent in
		violation of this Agreement, the Standard of Performance or for which the
		Administrative Agent is obligated (or would be obligated had any Issuer Group
		Member incurred any Losses) to indemnify any Issuer Group Member under Article
		III hereof.
	 

	 
		Section 5.05
		Covenants. Each of the Issuer and the other Issuer Group Members
		covenants with the Administrative Agent that, during the term of this
		Agreement, it will conduct its business such that it is a separate and readily
		identifiable business from, and independent of, the Administrative Agent and
		any of its Affiliates and further covenants as follows (it being understood
		that these covenants shall not prevent the Issuer Group from publishing
		financial statements that are consolidated with those of BABCOCK & BROWN
		Air Funding I Limited, if to do so is required by Applicable Law or accounting
		principles from time to time in effect):
	 

	 
		(a) it will observe all corporate
		formalities necessary to remain legal entities separate and distinct from, and
		independent of, the Administrative Agent, and any of its Affiliates;
	 

	 
		(b) it will maintain its assets and
		liabilities separate and distinct from those of the Administrative Agent in
		such a manner that is not difficult to segregate, identify or ascertain such
		assets and liabilities
	 

	 
		(c) it will maintain records, books,
		accounts and minutes separate from those of the Administrative Agent;
	 

	 
		(d) it will pay its obligations in the
		ordinary course of business as a legal entity separate from the Administrative
		Agent;
	 

	 
		(e) it will keep its funds separate and
		distinct from any funds of the Administrative Agent, and will receive, deposit,
		withdraw and disburse such funds separately from any funds of the
		Administrative Agent;
	 

	 
		(f) it will conduct its business in its own
		name, and not in the name of the Administrative Agent;
	 

	 
		(g) it will not agree to pay or become
		liable for any debt of the Administrative Agent, other than to make payments in
		the form of indemnity as required by the express terms of this
		Agreement;
	 

	 
		(h) it will not hold out that it is a
		division of the Administrative Agent, or that the Administrative Agent is a
		division of it;
	 

	 
		 
	 

	 
		 
	 

	 
		24
	 

	 
		 
	 

	 
	 

	 

	 
		(i) it will not induce any third party to
		rely on the creditworthiness of the Administrative Agent in order that such
		third party will be induced to contract with it;
	 

	 
		(j) it will not enter into any transaction
		between it and the Administrative Agent that are more favorable to either party
		than transactions that the parties would have been able to enter into at such
		time on an arm’s-length basis with a non-affiliated third party, other
		than any agreements in effect on the date hereof (it being understood that the
		parties hereto do not intend by this covenant to ratify any self-dealing
		transactions);
	 

	 
		(k) it will correct any misunderstanding
		known to it regarding its separate identity;
	 

	 
		(l) it will maintain adequate capital in
		light of its contemplated business purpose, transactions and
		liabilities;
	 

	 
		(m) it will observe all material corporate
		or other procedures required under Applicable Law and under its constitutive
		documents;
	 

	 
		(n) except with respect to any grantor
		trust, cause its board of directors or managers, as applicable, to meet at
		least annually or act pursuant to written consent and keep minutes of such
		meetings and actions; and
	 

	 
		(o) it will observe all material corporate
		or other formalities necessary to keep its business separate and readily
		identifiable from, and independent of, each other Issuer Group Member,
		including keeping the funds, assets and liabilities of each Issuer Group Member
		separate and distinct from those of each other Issuer Group Member and by
		maintaining separate records, books, accounts and minutes for each Issuer Group
		Member.
	 

	 
		Section 5.06
		Ratification by
		Subsidiaries. The Issuer hereby
		undertakes to procure that, if so requested by the Administrative Agent, any
		subsidiary of the Issuer formed or acquired after the date hereof, shall
		execute an agreement with the Administrative Agent adopting and confirming, as
		regards such subsidiary, the terms of this Agreement, and agreeing to ratify
		anything done by the Administrative Agent in connection herewith on the terms
		of Section 5.04.
	 

	 
		Section 5.07
		Organization and
		Standing. The Issuer is duly
		incorporated under the laws of Bermuda, and each other Issuer Group Member is
		duly formed and validly existing and, if relevant, in good standing under the
		laws of the jurisdiction in which it is legally created or formed. Each of the
		Issuer and each other Issuer Group Member is in compliance in all material
		respects with all terms of such Person’s constituent documents.
	 

	 
		 
	 

	 
		 
	 

	 
		25
	 

	 
		 
	 

	 
	 

	 

	 
		ARTICLE VI
	 

	 
		 
	 

	 
		ADMINISTRATION FEES AND
		EXPENSES
	 

	 
		Section 6.01
		Administration Fees. In consideration of the Administrative Agent’s
		performance of the Issuer Group Services, the Issuer agrees to pay to the
		Administrative Agent a per annum amount equal to $750,000 (the
		“Administration Fee”) payable in arrears in equal monthly
		installments on each Payment Date (until the resignation or removal of the
		Administrative Agent) for each period commencing on and including the Initial
		Closing Date (or, thereafter, the last of day of the immediately preceding
		period) and ending on but excluding the Calculation Date immediately preceding
		such Payment Date (each such period, a “Fee Period”). If on the
		Delivery Expiry Date the Sellers have delivered to the Issuer Group fewer than
		42 Aircraft, then the Administration Fee for Fee Periods commencing after the
		Delivery Expiry Date will be a per annum amount equal to the greater of (a) the
		product of $750,000 and a fraction the numerator of which is the number of
		Aircraft delivered to the Issuer Group and the denominator of which is 47, and
		(b) $400,000. The Administration Fee shall be adjusted on each anniversary of
		the Initial Closing Date for annual cost of living adjustments (based on the
		consumer price index for the home office of the Administrative Agent) not to
		exceed 5% in any given year.
	 

	 
		Section 6.02
		Expenses. (a) The Administrative Agent shall be responsible for
		all telephone, facsimile and communications costs and expenses directly
		relating to or associated with the Administrative Agent’s performance of
		its duties as set forth in this Agreement.
	 

	 
		(b) Subject to the provisions of Section
		6.02(a), the Issuer Group shall be responsible for the following expenses
		incurred by the Administrative Agent in the performance of its obligations
		hereunder (“Reimbursable Expenses”):
	 

	 
		(i) reasonable out-of-pocket expenses,
		including travel, accommodation and subsistence and approved expenditures in
		respect of insurance coverage for the Administrative Agent;
	 

	 
		(ii) expenses expressly authorized by (i)
		the Board or (ii) any Person to whom such authority has been delegated, other
		than the Administrative Agent or its Affiliates; and
	 

	 
		(iii) expenses expressly authorized pursuant
		to other provisions of this Agreement including Section 2.04(iv), (v) and
		(vi).
	 

	 
		Section 6.03
		Payment of Expenses. No later than each Calculation Date, the
		Administrative Agent shall deliver a notice to the Issuer Group, setting forth
		the amounts of Reimbursable Expenses owed to the Administrative Agent pursuant
		to Section 6.02 of this Agreement through and including such Calculation Date
		(it being 
	 

	 
		 
	 

	 
		 
	 

	 
		26
	 

	 
		 
	 

	 
	 

	 

	 
		understood that if there are no such
		expenses the Administrative Agent will be under no obligation to provide such
		notice). 
	 

	 
		All fees, expenses (including Reimbursable
		Expenses) and indemnity payments shall be paid in accordance with the priority
		of payments set forth in the Indenture. The parties hereto agree that they will
		have no recourse or claims against the assets of the Issuer Group to the extent
		that collections and other available funds are insufficient.
	 

	 
		ARTICLE
		VII
	 

	 
		 
	 

	 
		TERM; REPLACEMENT OF OR RESIGNATION BY
		THE ADMINISTRATOR
	 

	 
		Section 7.01
		Term. This Agreement shall have a term commencing on the
		Initial Closing Date and expiring on the later of (y) the first date on which
		there shall have been paid in full all amounts outstanding to be paid under the
		Notes and any similar obligations of the Issuer issued pursuant to any other
		indenture or similar agreement, including all obligations then due and payable
		under the Indenture and all Policy Provider Obligations and (z) the Final
		Maturity Date.
	 

	 
		Section 7.02
		Replacement or
		Resignation. (a) At any time during the
		term of this Agreement, the Issuer by a Board Resolution, the Security Trustee
		or the Policy Provider shall be entitled to replace the then existing
		Administrative Agent, if any of the following events occur:
	 

	 
		(i) the termination of the Servicing
		Agreement pursuant to Section 10.01(b) thereof;
	 

	 
		(ii) the Administrative Agent shall fail in
		any material respect to perform any material Issuer Group Services in
		accordance with the Standard of Performance or otherwise materially breach any
		of its obligations under this Agreement and such failure or breach shall have a
		material adverse effect on the party seeking to replace the Administrative
		Agent or the Issuer;
	 

	 
		(iii) any representation or warranty made by
		the Administrative Agent under this Agreement or any Related Document to which
		it is a party shall prove to have been false or misleading in any material
		respect when made and such misrepresentation shall have a material adverse
		effect on the party seeking to replace the Administrative Agent or the Issuer
		or a material adverse effect on the ability of the Administrative Agent to
		perform its obligations under this Agreement;
	 

	 
		(iv) an involuntary proceeding shall be
		commenced or an involuntary petition shall be filed in a court of competent
		jurisdiction seeking relief in respect of the Administrative Agent or in
		respect of a substantial part of the property or assets of the Administrative
		Agent, under Title 11 of the United States Code, as now constituted or
		hereafter amended, or any other U.S. federal or state or foreign bankruptcy,
		
	 

	 
		 
	 

	 
		 
	 

	 
		27
	 

	 
		 
	 

	 
	 

	 

	 
		insolvency, receivership or similar law, and
		such proceeding or petition shall continue undismissed for 60 days or an order
		or decree approving or ordering any of the foregoing shall be entered or the
		Administrative Agent shall go into liquidation, suffer a receiver or mortgagee
		to take possession of all or substantially all of its assets or have an
		examiner appointed over it or if a petition or proceeding is presented for any
		of the foregoing and not discharged within 60 days;
	 

	 
		(v) the Administrative Agent shall (A)
		voluntarily commence any proceeding or file any petition seeking relief under
		Title 11 of the United States Code, as now constituted or hereafter amended, or
		any other U.S. federal or state or foreign bankruptcy, insolvency, receivership
		or similar law, (B) consent to the institution of, or fail within 60 days to
		contest the filing of, any petition described in clause (iv) of this
		definition, (C) file an answer admitting the material allegations of a petition
		filed against it in any such proceeding or (D) make a general assignment for
		the benefit of its creditors; or 
	 

	 
		(vi) the Administrative Agent ceases, or the
		Administrative Agent gives notice that it intends to cease, to be actively
		involved in the aircraft, advisory and management business (whether for
		aircraft owned by it or its Affiliates or owned by others).
	 

	 
		(b) At any time during the term of this
		Agreement, the Administrative Agent shall be entitled to resign as the
		Administrative Agent performing the Issuer Group Services on 120 days’
		Written Notice to the Issuer, the Security Trustee, the Policy Provider and the
		Trustee if:
	 

	 
		(i) any Issuer Group Member shall fail to
		pay in full when due (A) any Administration Fee or any Reimbursable Expenses
		and such failure continues for a period of 30 days, in either case, after the
		effectiveness of Written Notice from the Administrative Agent of such failure
		or (B) any other amount payable to the Administrative Agent hereunder, and such
		failure continues for a period of 60 days after Written Notice from the
		Administrative Agent of such failure; provided that,
		in the event the Policy Provider shall timely pay in full the amounts set forth
		in clauses (A) and (B) hereof (in which case it shall be subrogated to the
		rights of the Administrative Agent thereto), the Administrative Agent shall not
		resign pursuant to this clause (i);
	 

	 
		(ii) any Issuer Group Member shall fail to
		perform or observe or shall violate in any material respect any material term,
		covenant, condition or agreement to be performed or observed by it in this
		Agreement and such failure continues for a period of 30 days after the Issuer
		Group and the Policy Provider shall have received notice of such failure (other
		than with respect to payment obligations referred to in clause (b)(i) of this
		Section 7.02) and such failure is reasonably likely to have a material adverse
		effect on the Administrative Agent; or 
	 

	 
		(iii) the Issuer shall become subject to
		Competitor Control.
	 

	 
		 
	 

	 
		 
	 

	 
		28
	 

	 
		 
	 

	 
	 

	 

	 
		(c) No replacement of the Administrative
		Agent pursuant to Section 7.02(a) and no resignation by the Administrative
		Agent pursuant to Section 7.02(b) shall become effective prior to the date on
		which a successor Administrative Agent, that is not subject to Competitor
		Control and has otherwise been appointed in accordance with the provisions of
		this Agreement and the Servicing Agreement, shall have become a party to this
		Agreement and accepted appointment with respect to all the rights and
		obligations of the Administrative Agent hereunder as such successor
		Administrative Agent; provided that in
		the event that a successor Administrative Agent shall not have been appointed
		within 90 days after such resignation, the Administrative Agent may petition
		any court of competent jurisdiction for the appointment of a successor
		Administrative Agent that is not subject to Competitor Control and has
		otherwise been appointed in accordance with the provisions of this Agreement
		and the Servicing Agreement. Upon any such replacement or resignation, the
		Administrative Agent shall be entitled to the payment of any compensation owed
		to it hereunder and to the reimbursement of all Reimbursable Expenses incurred
		in connection with all services rendered by it hereunder, as provided in
		Section 6 hereof, and for so long as the Administrative Agent is continuing to
		perform any of the Issuer Group Services, the Administrative Agent shall be
		entitled to continue to be paid all amounts due to it hereunder, net of any
		amounts that shall have been finally adjudicated by a court of competent
		jurisdiction to be owed by the Administrative Agent to the Issuer Group or not
		to be due to the Administrative Agent, until a successor Administrative Agent
		shall have been appointed and shall have accepted such appointment.
	 

	 
		Section 7.03
		Consequences of Replacement or
		Resignation. (a) Notices. (i)
		Following the replacement or resignation of the Administrative Agent pursuant
		to Section 7.01 or 7.02, the Administrative Agent will promptly forward to the
		Issuer Group any notices in respect of the Issuer Group Services received by it
		during the year immediately following the replacement and resignation of the
		Administrative Agent pursuant to this Agreement.
	 

	 
		(ii) The Issuer Group will notify promptly
		any relevant third party, including each Rating Agency, the Policy Provider,
		the Security Trustee, the Trustee, the Cash Manager and the Servicer, of the
		replacement and resignation of the Administrative Agent pursuant to this
		Agreement and will request that any such notices and accounting reports and
		communications thereafter be made or given directly to the entity engaged to
		serve as Administrative Agent, and to the other parties hereto.
	 

	 
		(b) Accrued Rights.
		The replacement and resignation of the Administrative Agent pursuant to this
		Agreement shall not affect the respective rights and liabilities of any party
		accrued prior to such termination in respect of any prior breaches hereof or
		otherwise.
	 

	 
		(c) Replacement. If
		the Administrative Agent is replaced or resigns, the Administrative Agent will
		cooperate with any person appointed to perform the relevant Issuer Group
		Services, including providing such person with all information and documents
		reasonably requested.
	 

	 
		 
	 

	 
		 
	 

	 
		29
	 

	 
		 
	 

	 
	 

	 

	 
		Section 7.04 Survival.
		Notwithstanding any replacement or resignation of the Administrative Agent or
		the expiration of this Agreement, the obligations of the Issuer Group and the
		Administrative Agent under Section 3.02, of the Administrative Agent under
		Section 4.01(e) (so long as the Notes are outstanding or any amounts owed to
		the Policy Provider remain outstanding), 4.01(a), (g) through (s) and the first
		paragraph of such section, 7.03 and 9.11, and of the Issuer Group Members under
		Section 5.05 shall survive such replacement or resignation of the
		Administrative Agent or expiration, as the case may be.
	 

	 
		ARTICLE
		VIII
	 

	 
		 
	 

	 
		ASSIGNMENT AND DELEGATION
	 

	 
		Section 8.01
		Assignment and
		Delegation. (a) Except as provided in
		subsection (b) below, no party to this Agreement shall assign or delegate or
		otherwise subcontract this Agreement or all or any part of its rights or
		obligations hereunder to any Person without the prior written consent of the
		other parties hereto (such consent not to be unreasonably withheld) and, in the
		case of an assignment or delegation by the Administrative Agent, the consent of
		the Servicer (which consent shall not be unreasonably withheld); provided that
		the Issuer Group Members may assign their rights hereunder to the Security
		Trustee for the benefit of the Secured Parties under the terms of the Security
		Trust Agreement. Notwithstanding the foregoing, the Administrative Agent is
		entitled to delegate or subcontract all or a portion of the Issuer Group
		Services to any entity (a “Administrative Agent Delegate”);
		provided that the Administrative Agent shall remain primarily
		liable hereunder. The Servicer and the Policy Provider shall be notified of any
		delegation or subcontracting to a Administrative Agent Delegate, and shall be
		entitled to deal with and rely upon such Administrative Agent Delegate as the
		Administrative Agent in respect of the portion of the Issuer Group Services so
		delegated to such Administrative Agent Delegate.
	 

	 
		(b) The Administrative Agent may assign its
		right to receive compensation for the performance of all or any part of the
		Issuer Group Services.
	 

	 
		(c) Without limiting the foregoing, any
		Person who shall become a successor by assignment or otherwise of any party
		hereto shall be required as a condition to the effectiveness of any such
		assignment or other arrangement to become a party to this Agreement.
	 

	 
		(d) The Administrative Agent hereby
		acknowledges that the Issuer and the other Issuer Group Members have granted a
		security interest to the Security Trustee under the Security Trust Agreement in
		all of the Issuer Group’s rights, title and interest in, to and under this
		Agreement, and agrees that all of the Issuer Group’s rights may be
		exercised by the Security Trustee at the direction of the Controlling Party, to
		the exclusion of the Issuer and any other person in the Issuer Group following
		written notice to the Administrative Agent by the Trustee or the Policy
		Provider of the occurrence and continuance of an Event of Default (whether or
		not any other remedial action is or has 
	 

	 
		 
	 

	 
		 
	 

	 
		30
	 

	 
		 
	 

	 
	 

	 

	 
		been taken, including, but not limited to,
		the delivery of a Default Notice under the Indenture) and such right shall
		continue so long as such Event of Default shall continue. The Administrative
		Agent hereby consents to such grant of a security interest.
	 

	 
		ARTICLE
		IX
	 

	 
		 
	 

	 
		MISCELLANEOUS
	 

	 
		Section 9.01
		Notices. All notices, consents, directions, approvals,
		instructions, requests and other communications required or permitted by this
		Agreement to be given to any Person shall be in writing, and any such notice
		shall become effective ten (10) days after being deposited in the mails,
		certified or registered, return receipt requested, with appropriate postage
		prepaid for first class mail, or if delivered by hand or courier service or in
		the form of a facsimile, when received (and, in the case of a facsimile,
		receipt of such facsimile is confirmed to the sender), and shall be directed to
		the address or facsimile number of such Person set forth below:
	 

	 
		If to the Issuer and the other Issuer Group
		Members, to:
	 

	 
		Babcock & Brown Air Funding I
		Limited  
	 

	 
		c/o Babcock & Brown Aircraft Management
		(Europe) Limited
	 

	 
		West Pier
	 

	 
		Dun Laoghaire
	 

	 
		County Dublin
	 

	 
		Ireland
	 

	 
		Attention: Company Secretary
	 

	 
		Fax: (353) 1-231-1901 
	 

	 
		Telephone: (353) 1-231-1900
	 

	 
		 
	 

	 
		 
	 

	 
		31
	 

	 
		 
	 

	 
	 

	 

	 
		if to the Administrative Agent, to:
	 

	 
		Babcock & Brown Air Management Co
		Limited
	 

	 
		West Pier, Dun Laoghaire
	 

	 
		County Dublin
	 

	 
		Ireland
	 

	 
		Fax: (353) 1-231-1901 
	 

	 
		Telephone: (353) 1-231-1900
	 

	 
		if to the Trustee or the Security Trustee,
		to:
	 

	 
		Deutsche Bank Trust Company Americas 

	 

	 
		60 Wall Street, 26th Floor
	 

	 
		MSNYC60-2606
	 

	 
		New York, NY 10005
	 

	 
		Attention: Lou Bodi
	 

	 
		Fax: 212-797-8606
	 

	 
		if to the Policy Provider, to:
	 

	 
		[AMBAC Assurance Corporation
	 

	 
		One State Street Plaza
	 

	 
		New York, NY 10004
	 

	 
		Attention: Surveillance
	 

	 
		Fax: (212) 208-3527
	 

	 
			
				
				   
				

			 	
				
				  and if to the Servicer,
				  to:                               ]
				

			 

 

	 
		Babcock & Brown Aircraft Management
		(Europe) Limited
	 

	 
		West Pier
	 

	 
		Dun Laoghaire
	 

	 
		County Dublin
	 

	 
		Ireland
	 

	 
		Attention: Company Secretary
	 

	 
		Fax: (353) 1-231-1901 
	 

	 
		Telephone: (353) 1-231-1900
	 

	 
		and to:
	 

	 
		Babcock & Brown Aircraft Management LLC
		
	 

	 
		6th Floor
	 

	 
		2 Harrison Street
	 

	 
		San Francisco, California 74106
	 

	 
		Attention: General Counsel
	 

	 
		Fax: (415) 512-1515
	 

	 
		Telephone: (415) 267-1500 
	 

	 
		 
	 

	 
		 
	 

	 
		32
	 

	 
		 
	 

	 
	 

	 

	 
		From time to time any party to such
		agreement may designate a new address or number for purposes of notice
		thereunder by notice to each of the other parties thereto. In connection with
		the performance of their respective duties under the Related Documents, the
		Administrative Agent, the Cash Manager and the Servicer may give notices,
		consents, directions, approvals, instructions and requests to, and otherwise
		communicate with, each other using electronic means, including email
		transmission to such email addresses as each such party shall designate to the
		other parties, and, if necessary or if requested by the other party or parties,
		with an “electronic signature” or other “electronic record”
		(as such terms are defined in the New York State Electronic Signatures and
		Records Act).
	 

	 
		Section 9.02
		Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY,
		AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING
		ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
	 

	 
		Section 9.03
		Jurisdiction. Except as otherwise expressly provided in this
		Agreement, the parties hereto agree that any suit, action or proceeding seeking
		to enforce any provision of, or based on any matter arising out of or in
		connection with, this Agreement or the transactions contemplated hereby may be
		brought in the United States District Court for the Southern District of New
		York or any other New York State court sitting in New York City, and each of
		the parties hereby consents to the jurisdiction of such courts (and of the
		appropriate appellate courts therefrom) in any such suit, action or proceeding
		and irrevocably waives, to the fullest extent permitted by law, any objection
		which it may now or hereafter have to the laying of the venue of any such suit,
		action or proceeding in any such court or that any such suit, action or
		proceeding which is brought in any such court has been brought in an
		inconvenient forum. Process in any such suit, action or proceeding may be
		served on any party anywhere in the world, whether within or without the
		jurisdiction of any such court. Without limiting the foregoing, each party
		agrees that service of process on such party as provided in Section 9.01 shall
		be deemed effective service of process on such party.
	 

	 
		Section 9.04
		WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
		ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
		RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
	 

	 
		Section 9.05
		Counterparts; Third Party
		Beneficiaries. This Agreement may be
		signed in any number of counterparts, each of which shall be an original, with
		the same effect as if the signatures thereto and hereto were upon the same
		instrument. This Agreement shall become effective when each party hereto shall
		have received a counterpart hereof signed by the other party hereto. No
		provision of this Agreement is intended to confer upon any Person other than
		the parties hereto any rights or remedies hereunder. The Servicer is an express
		third party beneficiary of this Agreement and may enforce the provisions hereof
		directly for its benefit.
	 

	 
		 
	 

	 
		 
	 

	 
		33
	 

	 
		 
	 

	 
	 

	 

	 
		Section 9.06 Entire Agreement. This Agreement constitutes the entire agreement among
		the parties with respect to the subject matter of this Agreement and supersedes
		all prior agreements and understandings, both oral and written, between the
		parties with respect to the subject matter of this Agreement.
	 

	 
		Section 9.07
		Table of Contents;
		Headings. The table of contents and
		headings of the various articles, sections and other subdivisions of such
		agreement are for convenience of reference only and shall not modify, define or
		limit any of the terms or provisions of such agreement.
	 

	 
		Section 9.08
		Amendments. This Agreement may not be amended, supplemented or
		otherwise modified except in a writing executed by all parties hereto. To the
		extent that so doing would, directly or indirectly, affect the Servicer’s
		rights, obligations or liabilities (or potential liabilities) under this
		Agreement or the Servicing Agreement, this Agreement may not be amended without
		the consent of the Servicer. Prior to the execution of any such amendment,
		supplement or modification, the Security Trustee, the Policy Provider and the
		Trustee shall be entitled to receive an Officer’s Certificate to the
		effect that all conditions precedent to such amendment, modification or
		supplement, if any, have been satisfied.
	 

	 
		Section 9.09
		No Partnership. (a) It is expressly recognized and acknowledged that
		this Agreement is not intended to create a partnership, joint venture or other
		similar arrangement between any Issuer Group Member or Members on the one part
		and the Administrative Agent on the other part. It is also expressly understood
		that any actions taken on behalf of any Issuer Group Member by the
		Administrative Agent shall be taken as agent for such Issuer Group Member,
		either naming the relevant Issuer Group Member, or naming the Administrative
		Agent as agent for an undisclosed principal. No Issuer Group Member shall hold
		itself out as a partner of the Administrative Agent, and the Administrative
		Agent will not hold itself out as a partner of any Issuer Group Member.
	 

	 
		(b) The Administrative Agent shall not have
		any fiduciary duty or other implied obligations or duties to any Issuer Group
		Member, any Lessee or any other Person arising out of this Agreement.
	 

	 
		Section 9.10
		Concerning the Security Trustee and the
		Trustee. It is expressly understood and
		agreed that neither the Security Trustee nor the Trustee shall have any
		liability in respect of the appointment, performance or nonperformance of the
		Administrative Agent, all such liability, if any, being expressly waived by the
		parties hereto and by any Person claiming by, through or under such
		parties.
	 

	 
		Section 9.11
		Restrictions on
		Disclosure. The Administrative Agent
		agrees that it shall not, prior to the termination or expiration of this
		Agreement or within the three (3) years after such termination or expiration,
		disclose to any Person any information stated in writing by an Issuer Group
		Member or the Servicer to be confidential or proprietary, whether of a
		technical, financial, commercial or other nature, 
	 

	 
		 
	 

	 
		 
	 

	 
		34
	 

	 
		 
	 

	 
	 

	 

	 
		received directly or indirectly from the
		Issuer Group or the Servicer regarding the Issuer Group or the Servicer or
		their respective businesses or the Aircraft.
	 

	 
		Notwithstanding anything herein to the
		contrary, the foregoing shall not be construed to prohibit (i) disclosure of
		any and all information that is or becomes publicly known, or information
		obtained by the Administrative Agent from sources other than an Issuer Group
		Member or the Servicer, (ii) disclosure of any and all information (A) if
		required to do so by any Applicable Law, (B) to any government agency or
		regulatory body having or claiming authority to regulate or oversee any
		respects of the Administrative Agent’s business or that of its affiliates,
		(C) pursuant to any subpoena, civil investigative demand or similar demand or
		request of any court, regulatory authority, arbitrator or arbitration to which
		the Administrative Agent or an affiliate or an officer, director, employer or
		shareholder thereof is a party, (D) in any preliminary or final offering
		circular, registration statement (including, for the avoidance of doubt, the
		Form F-1 Registration Statement under the Securities Act of 1933 on behalf of
		Babcock & Brown Air Limited No.
		333-[               ]
		filed on June 15, 2007 as amended) or contract or other document pertaining to
		the transactions contemplated by this Agreement approved in advance by any
		Issuer Group Member or (E) to any affiliate, independent or internal auditor,
		agent, employee or attorney of the Administrative Agent having a need to know
		the same, provided that the Administrative Agent advises such recipient of the
		confidential nature of the information being disclosed, or (iii) any other
		disclosure authorized by any Issuer Group Member or the Servicer. 
	 

	 
		Section 9.12
		Power of Attorney. The Issuer shall, on its behalf and on behalf of each
		of the Issuer Group Members, appoint the Administrative Agent and its
		successors, and its permitted designees and assigns, as its and each of the
		relevant Issuer Subsidiaries’ true and lawful attorney-in-fact pursuant to
		the form of Power of Attorney attached as Schedule 2 to this Agreement (with
		such modifications as are necessary under the laws of the jurisdictions in
		which such Persons are organized). The Administrative Agent shall be entitled
		to seek and obtain from the Issuer (and/or any other Issuer Group Member as
		appropriate) a power of attorney in respect of the execution of any specific
		action as the Administrative Agent requests which is required in connection
		with the Issuer Group Services.
	 

	 
		Section 9.13
		No Petition. The Administrative Agent shall not take any steps for
		the purposes of procuring the appointment of any administrative receiver or the
		making of any administrative insolvency order or for instituting any
		bankruptcy, organization, arrangement, insolvency, winding up, liquidation,
		composition or any like proceeding under the insolvency laws of any
		jurisdiction in respect of the Issuer or any other Issuer Group Member.
	 

	 
		 
	 

	 
		 
	 

	 
		35
	 

	 
		 
	 

	 
	 

	 

	 
		IN WITNESS WHEREOF, this Agreement has been
		duly executed on the date first written above.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED,
 as the Issuer
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 
 By: 
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name:

				  Title: 
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  
 DEUTSCHE BANK TRUST 

				  COMPANY AMERICAS,

				  not in its individual capacity but solely as the
				  Security Trustee and the Trustee
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 
 By: 
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: Eileen M. Hughes

				  Title: Vice President
				

			 

 

	 
		 
	 

	 
			
				
				

			 	
				
				   
				

			 	
				
				  
 By: 
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: Louis Bodi

				  Title: Vice President
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  
 BABCOCK & BROWN

				  AIR MANAGEMENT CO LIMITED, 

				  as the Administrative Agent
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 
 By: 
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name:

				  Title: 
				

			 

 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  AMBAC ASSURANCE CORPORATION,
				  
 as the Policy Provider
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 
 By: 
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name:

				  Title: 
				

			 

 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  
 [Name of Issuer
				  Subsidiary]
 
 
 By: WELLS FARGO
				  BANK NORTHWEST, NATIONAL ASSOCIATION
 not in its individual capacity but solely as Owner
				  Trustee
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  
 
 By: 
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name:

				  Title: 
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		SCHEDULE I
	 

	 
		ACCOUNTS
	 

	 
		 
	 

	 
			
				
				  ACCOUNT
				  NAME
				

			 	
				
				   
				

			 	
				
				  ACCOUNT
				  NUMBER
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 COLLECTION ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 LESSEE FUNDED ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 SECURITY DEPOSIT ACCOUNT

				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 EXPENSE ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 CLASS G1 NOTE ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 AIRCRAFT PURCHASE
				  ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 CAPITAL ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 LIQUIDITY FACILITY
				  ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 CLASS B SHARE ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 LIMITED BUDGETED CASH
				  ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 INITIAL LIQUIDITY PAYMENT
				  ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 LIMITED RENTAL ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 AIRCRAFT CONVERSION
				  ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 REDEMPTION ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 REFINANCING ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 BUDGETED CASH ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  BABCOCK & BROWN AIR FUNDING I
				  LIMITED
 CASH COLLATERAL ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  IRISH VAT REFUND ACCOUNT
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		SCHEDULE 2
	 

	 
		ISSUER GROUP SERVICES
	 

	 
		 
	 

	 
		POWER OF ATTORNEY
	 

	 
		 
	 

	 
		OF
	 

	 
		 
	 

	 
		[GRANTOR]
	 

	 
		WHEREAS [GRANTOR], having its [registered]
		office at [insert address] (hereinafter called the “Grantor”) desires
		to appoint BABCOCK & BROWN AIRCRAFT MANAGEMENT LLC having its office at
		___________ (the “Attorney”) as the true and lawful attorney of the
		Grantor for and in the name of and on behalf of the Grantor in such
		Attorney’s absolute discretion to execute each and every Requisite
		Document and Requisite Act as defined below and do all or any of the acts or
		things hereinafter mentioned.
	 

	 
		KNOW ALL MEN BY THESE PRESENTS that in
		consideration for the mutual promises and benefits set forth in the Management
		Agreement (defined below) the Grantor does hereby make, constitute and
		irrevocably and unconditionally appoint for the period (the “Term”)
		as and from the date hereof until termination or expiry of the Administrative
		Services Agreement among the Grantor, other Issuer Group Members, Deutsche Bank
		Trust Company Americas, AMBAC Assurance Corporation, as the policy provider and
		the Attorney, dated as of _____________, 2007 (the “Administrative
		Services Agreement”) in accordance with its terms the Attorney as a true
		and lawful attorney of the Grantor for and in the name of and on behalf of the
		Grantor with absolute discretion to exercise, do, execute and/or deliver all or
		any of the acts, documents and things hereinafter mentioned that in to
		say:     
	 

	 
			 	
				
				  1.
				

			 	
				
				  To negotiate, approve, settle the
				  terms of, agree, make, sign, execute (whether under hand or seal) and deliver
				  all deeds, agreements, documents, commitments, arrangements, instruments,
				  applications, oaths, affidavits, declarations, notices, confirmations,
				  certificates, approvals, acceptances, deliveries and to do all other acts,
				  matters and things whatsoever which are in each case necessary or desirable for
				  the Attorney to do for and on behalf of the Grantor in respect of the provision
				  of the Issuer Group Services (as defined in and contemplated by the
				  Administrative Services Agreement) (each such document a “Requisite
				  Document” and each such act a “Requisite Act”).
				

			 

 

	 
			 	
				
				  2.
				

			 	
				
				  To make such amendments,
				  modifications and variations to the Requisite Documents and to enter into
				  ancillary documentation in respect thereof, all on such terms as any such
				  Attorney may, in its sole discretion, determine from time to time for and on
				  behalf of the Grantor; and to make, give, sign, execute and do all things
				  including, without limitation, any material 
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		acts which may be necessary in order to
		effect the terms of such Requisite Documents or in connection with the making,
		signature, executions and delivery of the Requisite Documents or any other
		documents required to be executed by the Grantor in connection therewith or the
		performance of any acts, matters and things contemplated thereby or by the
		Requisite Acts as may be necessary in accordance with the provision of the
		Issuer Group Services.
	 

	 
			 	
				
				  3.
				

			 	
				
				  To nominate and appoint one or more
				  substitutes as attorney or attorneys under it for all and any of the purposes
				  aforesaid and the appointment of same with liberty to revoke.
				

			 

 

	 
			 	
				
				  4.
				

			 	
				
				  To acknowledge this Power of
				  Attorney as the act and deed of the Grantor and generally to do all other acts
				  which may be necessary and desirable for carrying the purpose of this Power of
				  Attorney into effect.
				

			 

 

	 
		IT IS HEREBY DECLARED THAT: 
	 

	 
		

			 	
				
				  (A) 
				

			 	
				
				   The Grantor hereby ratifies and
				  confirms and agrees to ratify and confirm whatsoever any Attorney shall do or
				  cause to be done in, or by virtue of this Power of Attorney as long an such act
				  is not inconsistent with the terms of the Administrative Services Agreement or
				  this Power of Attorney or in violation of Applicable Law.
				

			 

 

	 
			 	
				
				  (B) 
				

			 	
				
				   This Power of Attorney shall be
				  irrevocable for the Term and at all times both before and after the Term shall
				  be conclusive and binding upon the Grantor and no person or corporation having
				  dealings with any Attorney under this Power of Attorney shall be under any
				  obligation to make any inquiries as to whether or not this Power of Attorney
				  has been revoked and all acts hereunder shall be valid and binding on the
				  Grantor unless express notice of its revocation shall have been received by
				  such person or corporation.
				

			 

 

	 
			 	
				
				  (C) 
				

			 	
				
				   Subject to the provisions of the
				  Administrative Services Agreement the Grantor unconditionally undertakes to
				  indemnify and keep indemnified each Attorney and his agents, and their
				  respective successors and estates, against all actions, proceedings, claims,
				  costs, expenses and liabilities of whatsoever nature arising from the exercise
				  or purported exercise in good faith of any of the powers conferred on each
				  Attorney by this Power of Attorney.
				

			 

 

	 
			 	
				
				  (D) 
				

			 	
				
				   The particular powers enumerated
				  above shall be given the widest interpretation.
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
			
				
				   
				

			 	
				
				  (E)
				

			 	
				
				  THIS POWER OF ATTORNEY SHALL BE
				  GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
				  YORK.
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		IN WITNESS WHEREOF the Grantor has caused
		this Power of Attorney duly executed by the Grantor this ____ day of ______,
		200_.
	 

	 
		SIGNED BY: _______________________
	 

	 
		For and on behalf of
	 

	 
		[GRANTOR]
	 

	 
		in the presence of:
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		EXHIBIT A
	 

	 
		FORM OF MONTHLY REPORT TO
	 

	 
		MOODY’S INVESTORS SERVICES, INC.

	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  XXX 2007-1
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  No.
				

			 	
				
				   
				

			 	
				
				  Lessee Name
				

			 	
				
				   
				

			 	
				
				  Aircraft
 Type
				

			 	
				
				   
				

			 	
				
				  Manufact-
 ured Year
				

			 	
				
				   
				

			 	
				
				  Reg. No.
				

			 	
				
				   
				

			 	
				
				  MSN
 (Serial
 Number)
				

			 	
				
				   
				

			 	
				
				  Payment
 Date
				

			 	
				
				   
				

			 	
				
				  Amount
 Due
				

			 	
				
				   
				

			 	
				
				  Amount
 Received
				

			 	
				
				   
				

			 	
				
				  Lease
 Start
				

			 	
				
				   
				

			 	
				
				  Lease
 Expiration
				

			 	
				
				   
				

			 	
				
				  Note
				

			 	
				
				   
				

			 
	
				
				  1
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  2
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  3
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  4
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  5
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  6
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  7
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  8
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  9
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  10
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  11
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  12
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  13
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  14
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  15
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  16
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  17
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  18
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  19
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  20
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  21
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  22
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  23
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  24
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  25
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  26
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  27
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  28
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  29
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  30
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  31
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  32
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  33
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  34
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  35
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  36
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  37
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		 
	 

	 
			
				
				  Deal
				

			 	
				
				   
				

			 	
				
				  Payment
 Date
				

			 	
				
				   
				

			 	
				
				  Lessee
 Name
				

			 	
				
				   
				

			 	
				
				  Aircraft
 Type
				

			 	
				
				   
				

			 	
				
				  MSN
 (Serial
 Number)
				

			 	
				
				   
				

			 	
				
				  1-30
				

			 	
				
				   
				

			 	
				
				  31-60
				

			 	
				
				   
				

			 	
				
				  61-90
				

			 	
				
				   
				

			 	
				
				  90-120
				

			 	
				
				   
				

			 	
				
				  120+
				

			 	
				
				   
				

			 	
				
				  Total
				

			 	
				
				   
				

			 	
				
				  Note
				

			 
	
				
				  XXX 2007-1
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				 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				  0.00Exhibit 10.5
	 

PRIVATE PLACEMENT AGREEMENT 

PRIVATE PLACEMENT AGREEMENT dated as of July 19, 2007, by and among Babcock & Brown Air Limited, a Bermuda exempted company (the “Company”), and Credit Suisse Securities (USA) LLC (“Credit Suisse”).

WHEREAS, the Company intends to offer American Depositary Shares (“ADSs”) representing its common shares, par value $0.001 per share (“Common Shares”), in an initial public offering of the Company (the “IPO”); and 

WHEREAS, the Company proposes to issue and sell to Credit Suisse the number of ADSs (the “Shares”) set forth on Schedule I hereto at a price per Share equal to the price per ADS to be paid by public investors in the IPO (the “IPO Price”), and Credit Suisse desires, subject to the terms and conditions set forth herein, to subscribe for the Shares at a price per Share equal to the IPO Price;

WHEREAS, the Company proposes to agree to provide Credit Suisse and certain other investors with registration rights as set forth in the form of registration rights agreement attached hereto as Exhibit A (the “Registration Rights Agreement”); and

WHEREAS, Credit Suisse proposes to agree to be bound by lock-up restrictions as set forth herein with respect to the Shares to be purchased by it hereby, together with any securities issued with respect to such Shares by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed: 

ARTICLE 1

ISSUANCE, SALE AND PURCHASE OF SHARES 

SECTION 1.01. Issuance, Sale and Purchase of Shares. On the basis of the representations, warranties and covenants contained in this Private Placement Agreement, and subject to the terms and conditions contained herein, the Company agrees to issue and sell to Credit Suisse, and Credit Suisse agrees to subscribe for, the number of Shares set forth in Schedule I hereto at a price per Share equal to the IPO Price.

Credit Suisse and transferees of the Shares and certain other investors shall have the registration rights set forth in the Registration Rights Agreement to be executed on and dated as of the Closing (as defined below).

SECTION 1.02. Closing. Subject to the terms and conditions contained in this Private Placement Agreement, the closing of the subscription for the Shares (the “Closing”) shall take 

 

 

place at the time and on the date that the IPO is consummated. Delivery of the Shares shall be made to Credit Suisse against payment to the Company by wire transfer of immediately available funds of the aggregate subscription price for the Shares to be subscribed for by Credit Suisse, together with the additional payment to be made to the Company pursuant to Section 1.03. 

SECTION 1.03. Additional Payment Obligation. In consideration of the arrangement of the transactions occurring in connection with the IPO, Credit Suisse agrees to pay to the Company $334,425.08 upon the Closing by wire transfer of immediately available funds.

SECTION 1.04. Conditions. The obligations of Credit Suisse to subscribe for the Shares and to pay the subscription price at the Closing shall be subject to the satisfaction of each of the following conditions as of the Closing: 

	
                         
 	
                        a)
 	
                        the representations and warranties contained in Section 2 hereof being true and correct at and as of the Closing as though then made, and the Company having performed all of the covenants to be performed by it hereunder prior to the Closing;
 

	
                         
 	
                        b)
 	
                        the Company having executed the Registration Rights Agreement and Credit Suisse having received an original copy thereof, duly executed by the Company; and
 

	
                         
 	
                        c)
 	
                        the closing of the IPO occurring simultaneously with the Closing.
 

ARTICLE 2

REPRESENTATIONS BY THE COMPANY 

The Company represents and warrants to, and agrees with, Credit Suisse as follows: 

SECTION 2.01. Corporate Existence and Power. The Company has been duly incorporated and is an exempted company in good standing under the laws of Bermuda with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct is business. 

SECTION 2.02. Authority, Approval and Enforceability. This Private Placement Agreement has been duly authorized, executed and delivered by the Company and constitutes its valid and binding agreement, enforceable against it in accordance with its terms. The Common Shares represented by the Shares have been duly and validly authorized for issue.

ARTICLE 3

REPRESENTATIONS OF CREDIT SUISSE

Credit Suisse represents and warrants to, and agrees with, the Company as follows: 

 

 

SECTION 3.01. Corporate Power. Credit Suisse has the corporate power and authority to enter into this Private Placement Agreement. 

SECTION 3.02. Authority, Approval and Enforceability. This Private Placement Agreement has been duly authorized, executed and delivered by Credit Suisse and constitutes its valid and binding agreement, enforceable against it in accordance with its terms.

SECTION 3.03. Private Placement. 

	
                         
 	
                        a)
 	
                        Credit Suisse understands that the offering and sale of the Shares to it as contemplated hereby are intended to be exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”), pursuant to Section 4(2) thereunder. 
 

	
                         
 	
                        b)
 	
                        The Shares to be acquired by Credit Suisse pursuant to this Private Placement Agreement are being acquired for its own account for investment and without a view to the public distribution of such Shares or any interest therein; provided that nothing contained herein shall prevent Credit Suisse and subsequent holders of the Restricted Securities, as defined in Section 4.06 below, from transferring such securities in compliance with the provisions of Article 4 hereof. 
 

	
                         
 	
                        c)
 	
                        Credit Suisse has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Shares, and Credit Suisse is capable of bearing the economic risks of such investment, including a complete loss of its investment in the Shares. 
 

	
                         
 	
                        d)
 	
                        Credit Suisse has been given the opportunity to ask questions of and receive answers from the Company concerning the Company, the Shares and other related matters. Credit Suisse further represents and warrants to the Company that it has been furnished with all information it deems necessary or desirable to evaluate the merits and risks of the acquisition of the Shares and that the Company has made available to Credit Suisse or its agents all documents and information relating to an investment in the Shares requested by or on behalf of Credit Suisse. In evaluating the suitability of an investment in the Shares, Credit Suisse has not relied upon any other representations or other information (other than as contemplated by the preceding sentences), whether oral or written, made by or on behalf of the Company. 
 

	
                         
 	
                        e)
 	
                        Credit Suisse is an “Accredited Investor” as such term is defined in Regulation D under the 1933 Act. 
 

ARTICLE 4

LOCK-UP PERIOD; TRANSFER OF RESTRICTED SECURITIES 

 

 

SECTION 4.01. Lock-Up Period. If the IPO closes, Credit Suisse will not, without the prior consent of the Company, offer, sell, contract to sell, pledge, or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by Credit Suisse or any affiliate of Credit Suisse or any person in privity with Credit Suisse or any affiliate of Credit Suisse), directly, or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder, with respect to, the Shares to be purchased by Credit Suisse or any securities convertible into, or exercisable or exchangeable for, such Shares, for a period of 180 days after the date of the final prospectus for the IPO, other than (i) transfers to affiliates of Credit Suisse, provided that the affiliate transferee agrees to be bound by the terms of the restrictions contained in this Section 4.01 for the remaining portion of such period, and (ii) pledges of Shares to a financial institution that extends a “margin” loan to finance the undersigned’s acquisition of such Shares, provided that the agrees to be bound by the terms of the restrictions contained in this Section 4.01 for the remaining portion of such period. 

SECTION 4.02. General Provisions. Restricted Securities are transferable only pursuant to (i) public offerings registered under the 1933 Act, (ii) Rule 144 under the 1933 Act (or any similar rule or rules then in force) if such rule is available, or (iii) subject to the conditions specified in Section 4.02 below, any other applicable exemption from registration legally available under the 1933 Act; and only to the extent set forth in this Article 4. 

SECTION 4.03. Opinion Delivery. In connection with the transfer of any Restricted Securities pursuant to Section 4.02(iii), the holder thereof shall deliver written notice to the Company describing in reasonable detail the transfer or proposed transfer, together with an opinion of Weil, Gotshal & Manges LLP or other counsel that, to the Company’s reasonable satisfaction, is knowledgeable in securities law matters to the effect that such transfer of Restricted Securities may be effected without registration of such Restricted Securities under the 1933 Act. 

In addition, if the holder of the Restricted Securities delivers to the Company an opinion of Weil, Gotshal & Manges LLP or other counsel that no subsequent transfer of such Restricted Securities shall require registration under the 1933 Act, the Company shall, promptly upon such contemplated transfer, deliver new certificates for such Restricted Securities that do not bear the 1933 Act legend set forth below in Section 4.04. If the Company is not required to deliver new certificates for such Restricted Securities bearing such legend, the holder thereof shall not transfer the same until the prospective transferee has confirmed to the Company in writing its agreement to be bound by the conditions contained in this Section 4.03. Notwithstanding anything to the contrary herein, transfers to or among affiliates of Credit Suisse shall not require delivery of the opinion required
in this Section 4.03. 

 

 

SECTION 4.04. Legend. Each certificate or instrument representing Restricted Securities shall be imprinted with a legend in substantially the following form: 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, BY ANY STATE SECURITIES COMMISSION OR BY ANY OTHER REGULATORY AUTHORITY OF ANY OTHER JURISDICTION. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.” 

SECTION 4.05. Legend Removal. If any Restricted Securities become eligible for sale pursuant to Rule 144(k), the Company shall, upon the request of the holder of such Restricted Securities, remove the legend set forth in Section 4.04 from the certificates for such Restricted Securities. 

SECTION 4.06. Definition of Restricted Securities. For the purposes of this Private Placement Agreement, “Restricted Securities” means (i) the Shares issued hereunder and (ii) any securities issued with respect to the Shares by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular Restricted Securities, such securities shall cease to be Restricted Securities when they have (a) been effectively registered for sale under the 1933 Act and disposed of in accordance with the registration statement covering them, (b) been distributed to the public through
a broker, dealer or market maker pursuant to Rule 144 (or any similar provision then in force) under the 1933 Act or become eligible for sale pursuant to Rule 144(k) (or any similar provision then in force) under the 1933 Act or (c) been otherwise transferred and new stock certificates not bearing the 1933 Act legend set forth in Section 4.04 have been delivered by the Company in accordance with Section 4.03. Whenever any particular securities cease to be Restricted Securities, the holder thereof shall be entitled to receive from the Company, without expense, new certificates representing securities of like tenor not bearing a 1933 Act legend of the character set forth in Section 4.04. 

ARTICLE 5

MISCELLANEOUS 

SECTION 5.01. Notices. All notices and other communications required or permitted under this Private Placement Agreement shall be deemed to have been duly given and made if in writing and if served by personal delivery to the party for whom intended, by facsimile transmission, by telegram or telex or by registered or certified mail (postage prepaid, return receipt requested), sent to the following addresses (or such other address for a party as shall be specified by like notice): 

 

 

If to the Company:

Babcock & Brown Air Limited

West Pier

Dun Laoghaire

County Dublin, Ireland

Facsimile: +353 1 231-1900

Attention: Chief Executive Officer

with a copy to:

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Facsimile: +1 (212) 310-8007

Attention: Boris Dolgonos, Esq.

If to Credit Suisse:

Facsimile: 

Attention: 

SECTION 5.02. Amendments and Waivers. Any provision of this Private Placement Agreement may be amended, modified, supplemented or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Private Placement Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. 

SECTION 5.03. Successors and Assigns. The provisions of this Private Placement Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Private Placement Agreement without the consent of each other party hereto, and provided further that, notwithstanding the foregoing, Credit Suisse may assign, delegate or otherwise transfer any of its rights or obligations under this Private Placement Agreement to any of its affiliates (as
such term is defined in Rule 144 under the 1933 Act). Notwithstanding the foregoing, it is understood that subsequent transferees of Shares shall be entitled to the registration rights set forth in the Registration Rights Agreement. 

 

 

SECTION 5.04. Severability. Any provision of this Private Placement Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Private Placement Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 

SECTION 5.05. Counterparts; Effectiveness; Third-Party Beneficiaries. This Private Placement Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Private Placement Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. No provision of this Private Placement Agreement is intended to confer upon any person other than the parties hereto any rights or remedies hereunder. 

SECTION 5.06. Entire Agreement. This Private Placement Agreement constitutes the entire agreement among the parties with respect to the subject matter of this Private Placement Agreement and supersedes and preempts all prior agreements and understandings, both oral and written, among the parties with respect to the subject matter of this Private Placement Agreement in any way. 

SECTION 5.07. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. 

SECTION 5.08. Governing Law. This Private Placement Agreement shall be governed by and construed in accordance with laws of the State of New York. 

[Signature Page Follows]

 

 

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

 

	
                         
 	
                         
 	
                        BABCOCK & BROWN AIR LIMITED
 
	 	 	 	 
	
                          
 	
                         
 	
                        By: 
 	
                        
  
 
	
                         
 	
                         
 	
                        Name:
 Title:
 

 

 

	
                         
 	
                         
 	
                        CREDIT SUISSE SECURITIES (USA) LLC
 
	 	 	 	 
	
                          
 	
                         
 	
                        By: 
 	
                        
  
 
	
                         
 	
                         
 	
                        Name:
 Title:
 

 

 

SCHEDULE I

Number of Shares: 747,613

 

 

EXHIBIT A

Form of Registration Rights Agreement

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