Document:

exv10w2

 

Exhibit 10.2

EXECUTION COPY

Dated l0 August 2005

CITY LEASING (CREEKSIDE) LIMITED

as Borrower

and

DEUTSCHE BANK AG, LONDON BRANCH

as Bank

LOAN FACILITY AGREEMENT

for a facility of up to £18,348,132.33

relating to the leasing of four Boeing 747-400 aircraft

Manufacturer’s Serial Numbers: 23908, 24047, 24056 and 27092

UK Registration Marks: G-BNLA, G-BNLE, G-BNLN and G-CIVA

Linklaters

One Silk Street

London EC2Y 8HQ

Telephone (44-20) 7456 2000

Facsimile (4420) 7456 2222

 

 

Contents

	 	 	 	 	 	 	 
	Clause	 	Heading	 	Page
	1.

	 	Purpose and definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	The Commitment and the Loan
	 	 	5	 
	 
	 	 	 	 	 	 
	3.

	 	Interest
	 	 	6	 
	 
	 	 	 	 	 	 
	4.

	 	Repayment and prepayment
	 	 	6	 
	 
	 	 	 	 	 	 
	5.

	 	Payments: accounts and calculations
	 	 	7	 
	 
	 	 	 	 	 	 
	6.

	 	Representations and warranties
	 	 	8	 
	 
	 	 	 	 	 	 
	7.

	 	Undertakings
	 	 	10	 
	 
	 	 	 	 	 	 
	8.

	 	Conditions
	 	 	12	 
	 
	 	 	 	 	 	 
	9.

	 	Events of Default
	 	 	12	 
	 
	 	 	 	 	 	 
	10.

	 	Indemnities
	 	 	15	 
	 
	 	 	 	 	 	 
	11.

	 	Security and set-off
	 	 	16	 
	 
	 	 	 	 	 	 
	12.

	 	Assignment and transfer
	 	 	18	 
	 
	 	 	 	 	 	 
	13.

	 	Notices and other matters
	 	 	19	 
	 
	 	 	 	 	 	 
	14.

	 	Governing law and jurisdiction
	 	 	21	 
	 
	 	 	 	 	 	 
	Schedule 1 Form of Drawdown Notice	 	 	22	 
	 
	 	 	 	 	 	 
	Schedule 2 Documents and evidence required as conditions precedent	 	 	23	 
	 
	 	 	 	 	 	 
	Schedule 3 Aircraft Specification	 	 	24	 
	 
	 	 	 	 	 	 
	Schedule 4 Repayment Schedule	 	 	25	 

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THIS AGREEMENT is dated 10 August 2005 and made BETWEEN:

	(1)	 	CITY LEASING (CREEKSIDE) LIMITED, a company incorporated and existing under the applicable
laws of England and Wales with registered number 0213288 and having it’s registered office at
23 Great Winchester Street, London EC2P 2AX (“the “Borrower”); and
	 
	(2)	 	DEUTSCHE BANK AG, acting by its London branch, having its principal place of business at
Winchester House, 1 Great Winchester Street, London EC2N 2DB (the “Bank”).

IT IS AGREED as follows:

	1.	 	Purpose and definitions

	 	1.1	 	Purpose
	 
	 	 	 	This Agreement sets out the terms and conditions upon and subject to which the Bank
agrees to make available to the Borrower a loan of £18,348,132.33 (eighteen million
three hundred and forty-eight thousand one hundred and thirty-two Pounds Sterling
and thirty-three pence) to be used by the Borrower for purpose of the repayment in
full of all amounts outstanding under a loan dated 12 April 2005 and entered into
between the Borrower as borrower and City Leasing (Donside) Limited as lender.
	 
	 	1.2	 	Definitions
	 
	 	 	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	 	“Administration Agreement” means the administration agreement dated on or about the
date of this Agreement and entered into between the Borrower, the Bank and City
Leasing Limited;
	 
	 	 	 	“Aircraft” means the aircraft described in Schedule 3 (Aircraft specification);
	 
	 	 	 	“Banking Day” means a day on which dealings in deposits in Sterling are carried on
in the London Interbank Market and (other than Saturday or Sunday) on which banks
are open for business in London (or any other relevant place of payment under Clause
5 (Payments));
	 
	 	 	 	“Closing Date” means the date on which the whole issued share capital of the
Borrower is sold by London Industrial Leasing Limited to Bookham Technology plc;
	 
	 	 	 	“Commitment” means the amount which the Bank has agreed to lend to the Borrower
under Clause 2.1 (Agreement to lend);

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	 	 	 	“Deeds of Application” means the four deeds of application of proceeds and
priorities each dated 3 December 2003 and entered into between the Security Trustee,
the Borrower as lessor, the Head Lessor as owner and the Original Owner (as defined
therein) in respect of each Aircraft;
	 
	 	 	 	“Default” means any Event of Default or any event or circumstance which with the
giving of notice or lapse of time or the satisfaction of any other condition (or any
combination thereof) would constitute an Event of Default;
	 
	 	 	 	“Drawdown Date” means the date, being a Banking Day, on which the Loan is, or is to
be, drawndown;
	 
	 	 	 	“Drawdown Notice” means a notice substantially in the terms of Schedule 1 (Form of
Drawdown Notice);
	 
	 	 	 	“Encumbrance” means any mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, trust arrangement or security interest or other
encumbrance of any kind securing any obligation of any person or any type of
preferential arrangement (including without limitation title transfer effected in
connection with any of the aforementioned and/or retention arrangements having a
similar effect);
	 
	 	 	 	“Event of Default” means any of the events or circumstances described in Clause 9.1
(Events);
	 
	 	 	 	“Fixed Rate” means 5.54 % per annum;
	 
	 	 	 	“Head Leases” means the four head lease agreements each dated 3 December 2003 and
entered into between the Head Lessor and the Borrower as head lessee in respect of
each Aircraft, as amended from time to time;
	 
	 	 	 	“Head Lessor” means Phoebus Leasing Limited;
	 
	 	 	 	“Indebtedness” means any obligation for the payment or repayment of money, whether
as principal or as surety and whether present or future, actual or contingent;
	 
	 	 	 	“Leases” means the four lease agreements each dated 3 December 2003 and entered into
between the Borrower as lessor and British Airways plc as lessee in respect of each
Aircraft, as amended from time to time;
	 
	 	 	 	“Loan” means the principal amount of £18,348,132.33 (eighteen million three hundred
and forty-eight thousand one hundred and thirty-two Pounds Sterling and thirty-three
pence) advanced or, as the case may be, to be advanced by the Bank hereunder or (as
the context may require) the principal amount owing to the Bank under this Agreement
at any relevant time;

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	 	 	 	“Month” means a period beginning in one calendar month and ending in the next
calendar month on the day numerically corresponding to the day of the calendar month
on which it started, provided that (i) if the period started on the last Banking Day
in a calendar month or if there is no such numerically corresponding day, it shall
end on the last Banking Day in such next calendar month and (ii) if such numerically
corresponding day is not a Banking Day, the period shall end on the next following
Banking Day in the same calendar month but if there is no such Banking Day it shall
end on the preceding Banking Day and “months” and “monthly” shall be construed
accordingly;
	 
	 	 	 	“Permitted Encumbrance” means:

	 	(a)	 	any Encumbrance in favour of the Security Trustee as trustee
for the Secured Parties created pursuant to the Security Documents and existing
under the Relevant Documents;
	 
	 	(b)	 	Permitted Liens; and
	 
	 	(c)	 	any Encumbrance existing under the Relevant Documents;

	 	 	 	“Permitted Liens” means any lien of a repairer, mechanic, carrier, hangar keeper or
other similar lien arising in the ordinary course of business by operation of law in
respect of obligations which are not overdue or are being contested in good faith by
appropriate proceedings, but only if such proceedings or the continued existence of
the lien, do not give rise to any likelihood of the sale, forfeiture or other loss
of the Aircraft or any interest therein;
	 
	 	 	 	“Pounds Sterling” and “£” means the lawful currency of the United Kingdom for the
time being;
	 
	 	 	 	“Rental” means the rental amounts due and payable by the Borrower as head lessee to
the Head Lessor under each Head Lease;
	 
	 	 	 	“Rental Sale Agreements” means each of four rental sale and purchase agreements
dated 12 April 2005 and entered into between the Borrower as seller and the Bank as
buyer, one such agreement in respect of each of the four Aircraft;
	 
	 	 	 	“Repayment Date” means a repayment date referred to in Schedule 4 (Repayment
schedule);
	 
	 	 	 	“Secured Parties” has the meaning given to it in the Deeds of Application;
	 
	 	 	 	“Security Documents” has the meaning given to it in the Deeds of Application;
	 
	 	 	 	“Security Trustee” has the meaning given to it in the Deeds of Application;
	 
	 	 	 	“Subsidiary” of (a) a person incorporated outside England and Wales means any
company or entity directly or indirectly controlled by such person, and for this

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	 	 	 	purpose “control” means either the ownership of more than 50 per cent of the voting
share capital (or equivalent rights or ownership) of such company or entity or the
power to direct its policies and management, whether by contract or otherwise and
(b) a person incorporated in England and Wales means a subsidiary within the meaning
of section 736 Companies Act 1985;

	 	 	 	“Termination Date” means the Closing Date or such later date as the Bank may in its
absolute discretion agree in writing; and
	 
	 	 	 	“United Kingdom” means Great Britain and Northern Ireland.
	 
	 	1.3	 	Headings
	 
	 	 	 	Clause headings and the table of contents are inserted for convenience of reference
only and shall be ignored in the interpretation of this Agreement.
	 
	 	1.4	 	Construction of certain terms
	 
	 	 	 	In this Agreement, unless the context otherwise requires:

	 	(a)	 	references to Clauses and Schedules are to be construed as
references to clauses of, and schedules to, this Agreement and references to
this Agreement include its schedules;
	 
	 	(b)	 	references to (or to any specified provision of) this Agreement
or any other document shall be construed as references to this Agreement, that
provision or that document as in force for the time being and as amended in
accordance with terms thereof, or, as the case may be, with the agreement of
the relevant parties;
	 
	 	(c)	 	references to a “regulation” include any present or future
regulation, rule, directive, requirement, request or guideline (whether or not
having the force of law) of any agency , authority, central bank or government
department or any self-regulatory or other national or supra-national
authority;
	 
	 	(d)	 	words importing the plural shall include the singular and vice
versa;
	 
	 	(e)	 	references to a time of day are to London time;
	 
	 	(f)	 	references to a person shall be construed as references to an
individual, firm, company, corporation or unincorporated body of persons;
	 
	 	(g)	 	references to a “guarantee” include references to an indemnity
or other assurance against financial loss including, without limitation, an
obligation to purchase assets or services as a consequence of a default by any
other person to pay any Indebtedness and “guaranteed” shall be construed
accordingly; and

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	 	(h)	 	references to any enactment shall be deemed to include
references to such enactment as re-enacted, amended or extended.

	2.	 	The Commitment and the Loan

	 	2.1	 	Agreement to lend
	 
	 	 	 	The Bank, relying upon each of the representations and warranties in Clause 6
(Representations and warranties), agrees to lend to the Borrower, upon and subject
to the terms of this Agreement, the principal sum of £18,348,132.33 (eighteen
million three hundred and forty-eight thousand one hundred and thirty-two Pounds
Sterling and thirty-three pence).
	 
	 	2.2	 	Drawdown
	 
	 	 	 	Subject to the terms and conditions of this Agreement, the Loan shall be made in one
single drawing following receipt by the Bank from the Borrower of a Drawdown Notice
not later than 10.00 am on the Drawdown Date specified in that Drawdown Notice (or
such lesser period as the Bank may agree) and shall be made on that Drawdown Date. A
Drawdown Notice shall be effective on actual receipt by the Bank and, once given,
shall be irrevocable.
	 
	 	2.3	 	Amount
	 
	 	 	 	The principal amount of the Loan specified in the Drawdown Notice for the borrowing
on the Drawdown Date shall be £18,348,132.33 (eighteen million three hundred and
forty-eight thousand one hundred and thirty-two Pounds Sterling and thirty-three
pence).
	 
	 	2.4	 	Availability and payment

	 	2.4.1	 	Upon receipt of a Drawdown Notice complying with the terms of
this Agreement, the Bank shall, subject to the provisions of Clause 8
(Conditions), on the relevant Drawdown Date make the amount of the Loan
specified in the Drawdown Notice available to the Borrower in accordance with
Clause 5.2 (Payment by the Bank).
	 
	 	2.4.2	 	The Borrower acknowledges that payment by the Bank to City
Leasing (Donside) Limited of £18,348,132.33 (eighteen million three hundred and
forty-eight thousand one hundred and thirty-two Pounds Sterling and
thirty-three pence) shall satisfy the obligations of the Bank to lend the
Commitment to the Borrower under this Agreement.

	 	2.5	 	Termination of Commitment
	 
	 	 	 	If the Loan is not drawn down by the Termination Date, the Commitment shall
thereupon be automatically cancelled.

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	3.	 	Interest

	 	3.1	 	Normal interest rate
	 
	 	 	 	The Borrower shall pay interest on the Loan on the Repayment Date. The rate of
interest on the Loan shall be the Fixed Rate which shall accrue and shall be paid on
the Repayment Dates (as set out in Schedule 4 (Repayment schedule)).
	 
	 	3.2	 	Default interest
	 
	 	 	 	If the Borrower fails to pay any sum (including without limitation, any sum due and
payable pursuant to this Clause 3.2) on its due date for payment under this
Agreement, the Borrower shall pay interest on such sum on demand from the due date
up to the date of actual payment (as well after as before judgment) at a rate
determined by the Bank pursuant to this Clause 3.2. The period beginning on such due
date and ending on such date of payment shall be divided into successive periods of
not more than three months as selected by the Bank each of which (other than the
first, which shall commence on such due date) shall commence on the last day of the
preceding such period. The rate of interest applicable to each such period shall be
the aggregate of two per cent per annum above the rate of interest referred to in
Clause 3.1. Such interest shall be due and payable on the last day of each such
period as determined by the Bank.

	4.	 	Repayment and prepayment

	 	4.1	 	Repayment
	 
	 	 	 	The Borrower shall repay the Loan on the Repayment Dates as set out in Schedule 4
(Repayment schedule).
	 
	 	4.2	 	Voluntary prepayment
	 
	 	 	 	Subject always to the provisions of Clause 10 (Indemnities), the Borrower may prepay
the Loan in whole on any date provided notice is given in accordance with Clause 4.4
(Notice of prepayment) below.
	 
	 	4.3	 	Amounts payable on prepayment
	 
	 	 	 	Any prepayment of all or part of the Loan under this Agreement shall be made
together with (a) accrued interest on the amount to be prepaid to the date of such
prepayment and (b) all others sums payable by the Borrower to the Bank under this
Agreement including, without limitation, any amounts payable under Clause 10
(Indemnities).
	 
	 	4.4	 	Notice of prepayment: reduction of repayment installments
	 
	 	 	 	No prepayment may be effected under Clause 4.2 unless the Borrower shall have given
the Bank at least 30 days’ written notice of its intention to make such

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	 	 	 	prepayment. The notice of prepayment shall be effective only on actual receipt of
the same by the Bank, shall be irrevocable and shall oblige the Borrower to make
such prepayment on the date specified. No amount prepaid may be reborrowed. The
Borrower may not prepay the Loan or any part thereof save as expressly provided in
this Agreement.

	5.	 	Payments: accounts and calculations

	 	5.1	 	No set-off or counterclaim
	 
	 	 	 	Subject to Clause 11.2, all payments to be made by the Borrower under this Agreement
shall, save as otherwise expressly provided therein, be made in full, without any
set-off or counterclaim whatsoever and free and clear of any deductions or
withholdings, in Pounds Sterling on the due date to the account of the Bank (with
Deutsche Bank AG for the account of Deutsche Bank AG London, Swift Code: DEUTGB2L,
Sort Code: 40-50-81) or to such other account at such other bank in such place as
the Bank may from time to time notify in writing to the Borrower.
	 
	 	5.2	 	Payment by the Bank
	 
	 	 	 	All sums to be advanced by the Bank to the Borrower under this Agreement in respect
of the Loan shall be remitted in Pounds Sterling on the Drawdown Date to the account
of City Leasing (Donside) Limited as specified in the Drawdown Notice.
	 
	 	5.3	 	Non-Banking Days
	 
	 	 	 	When any payment under this Agreement would otherwise be due on a day which is not a
Banking Day, the due date for payment shall be extended to the next following
Banking Day unless such Banking Day falls in the next calendar month in which case
payment shall be made on the immediately preceding Banking Day.
	 
	 	5.4	 	Calculations
	 
	 	 	 	All interest and other payments of an annual nature under this Agreement shall
accrue from day to day and be calculated on the basis of actual days elapsed and a
365 day year.
	 
	 	5.5	 	Loan account
	 
	 	 	 	The Bank shall maintain, in accordance with its usual practice, an account
evidencing the amounts from time to time lent by, owing to and paid to it under the
this Agreement. Such account shall, in the absence of manifest error, be conclusive
as to the amount from time to time owing by the Borrower under this Agreement.

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	6.	 	Representations and warranties

	 	6.1	 	Representations and warranties
	 
	 	 	 	The Borrower represents and warrants to the Bank as at the date of this Agreement
that:

	 	6.1.1	 	Due incorporation
	 
	 	 	 	the Borrower is duly incorporated and validly existing under the laws of
England and Wales, as a limited liability company, and has power to carry on
its business as it is now being conducted and to own its property and other
assets;
	 
	 	6.1.2	 	Corporate Power
	 
	 	 	 	the Borrower has power to execute, deliver and perform its obligations under
this Agreement and to borrow the Commitment and all necessary corporate,
shareholder and other action has been taken to authorise the execution,
delivery and performance of the same and no limitation on the powers of the
Borrower to borrow or give security will be exceeded as a result of
borrowing the Loan;
	 
	 	6.1.3	 	Binding obligations
	 
	 	 	 	this Agreement constitutes or will, upon execution thereof, constitute,
valid and legally binding obligations of the Borrower;
	 
	 	6.1.4	 	No conflict with other obligations
	 
	 	 	 	the execution and the delivery of, the performance of its obligations under,
and compliance with the provisions of this Agreement by the Borrower will
not (i) contravene any existing applicable law, statute, rule or regulation
or any judgment, decree or permit to which the Borrower is subject, (ii)
conflict with, or result in any breach of any of the terms of, or constitute
a default under, any agreement or other instrument to which the Borrower is
a party or is subject or by which it or any of its property is bound, (iii)
contravene or conflict with any provision of the memorandum and articles of
association or (iv) result in the creation or imposition of or oblige the
Borrower to create any Encumbrance on any of the undertakings, assets,
rights or revenues of the Borrower;
	 
	 	6.1.5	 	No litigation
	 
	 	 	 	no litigation, arbitration or administrative proceeding is taking place,
pending or, to the knowledge of the officers of the Borrower, threatened
against the Borrower which could have a material adverse effect on the
business, assets or financial condition of the Borrower;

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	 	6.1.6	 	No filings required
	 
	 	 	 	it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of the Agreement that it or any other instrument
be notarised, flied, recorded, registered or enrolled in any court, public
office or elsewhere in England and Wales or that any stamp, registration or
similar tax or charge be paid in England and Wales on or in relation to this
Agreement for its enforcement in the courts of England and Wales;
	 
	 	6.1.7	 	Choice of law
	 
	 	 	 	the choice of English law to govern this Agreement and the submission by the
parties to the non-exclusive jurisdiction of the English courts are valid
and binding;
	 
	 	6.1.8	 	No immunity
	 
	 	 	 	neither the Borrower nor any of its assets is entitled to immunity on the
grounds of sovereignty or otherwise from any legal action or proceeding
(which shall include, without limitation, suit, attachment prior to
judgement, execution or other enforcement);
	 
	 	6.1.9	 	Consents obtained
	 
	 	 	 	every consent, authorisation, licence or approval of, or registration with
or declaration to, governmental or public bodies or authorities or courts
required by the Borrower to authorise, or required by the Borrower in
connection with, the execution, delivery, validity, enforceability or
admissibility in evidence of this Agreement or the performance by the
Borrower of its respective obligations under this Agreement has been
obtained or made and is in full force and effect and there has been no
default in the observance of any of the conditions or restrictions (if any)
imposed in, or in connection with, any of the same.
	 
	 	6.1.10	 	Pari passu
	 
	 	 	 	the obligations of the Borrower under this Agreement are direct, general and
unconditional obligations of the Borrower and rank at least pari passu with
all other present and future unsecured and unsubordinated Indebtedness of
the Borrower;
	 
	 	6.1.11	 	No default under other indebtedness
	 
	 	 	 	the Borrower is not (nor would with the giving of notice or lapse of time or
the satisfaction of any other condition or combination thereof be) in breach
of or in default under any agreement relating to Indebtedness to which it is
a party or by which it may be bound;

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	 	6.1.12	 	No Default
	 
	 	 	 	no Default has occurred and is continuing; and
	 
	 	6.1.13	 	Copies true and complete
	 
	 	 	 	the copies of the documents delivered or to be delivered to the Bank
pursuant to Clause 8.1 (Documents and evidence) are or will when delivered
be, true and complete copies of such documents; each of such documents will
when delivered constitute valid and binding obligations of the parties
thereto enforceable in accordance with its terms and there will have been no
amendments or variations thereof or defaults thereunder.

	7.	 	Undertakings

	 	7.1	 	General
	 
	 	 	 	The Borrower undertakes with the Bank that, from the date of this Agreement and so
long as any moneys are owing under this Agreement and while all or any part of the
Commitment remains outstanding, it will:

	 	7.1.1	 	Notice of Default
	 
	 	 	 	promptly inform the Bank of any occurrence of which it becomes aware which
might adversely affect the ability of any party to perform its obligations
under this Agreement and, without limiting the generality of the foregoing,
will inform the Bank of any Default forthwith upon becoming aware thereof
and will from time to time, if so reasonably requested by the Bank in
writing that, save as otherwise stated in such confirmation, no Default has
occurred and is continuing;
	 
	 	7.1.2	 	Use of proceeds
	 
	 	 	 	use the Loan exclusively for the respective purpose specified in Clause 1.1
(Purpose);
	 
	 	7.1.3	 	Pari passu
	 
	 	 	 	ensure that its obligations under this Agreement shall, at all times rank at
least pari passu with all its other present and future unsecured and
unsubordinated Indebtedness with the exception of any obligations which are
mandatorily preferred by law and not by contract; and
	 
	 	7.1.4	 	Provision of further information
	 
	 	 	 	provide the Bank with such financial and other information concerning the
Borrower and its affairs as the Bank may from time to time reasonably
require.

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	 	7.2	 	Negative undertakings
	 
	 	 	 	The Borrower undertakes with the Bank that, from the date of this Agreement and so
long as any moneys are owing under this Agreement and while all or any part of the
Commitment remains outstanding, it will not, without the prior written consent of
the Bank:

	 	7.2.1	 	Negative pledge
	 
	 	 	 	permit any Encumbrance (other than a Permitted Encumbrance) to subsist,
arise or be created or extended over all or any part of its present or
future undertaking, assets, rights or revenues;
	 
	 	7.2.2	 	No merger
	 
	 	 	 	merge or consolidate with any other person;

	 
	 
	 	7.2.3	 	Other business
	 
	 	 	 	
undertake any business other than the leasing of the Aircraft;

	 
	 	7.2.4	 	Subsidiaries
	 
	 	 	 	
form or acquire any Subsidiaries;

	 
	 	7.2.5	 	 Disposals
	 
	 	 	 	assign, novate, transfer or otherwise terminate the Head Leases or the
Leases otherwise than in accordance with the provisions for termination
under the Head Leases and Leases;
	 
	 	7.2.6	 	Leasing
	 
	 	 	 	enter into any other leasing arrangements other than the Head Leases and
Leases and rights arising under contracts entered into by or on behalf of
the Borrower in the ordinary course of its business of leasing the Aircraft;
	 
	 	7.2.7	 	Other obligations
	 
	 	 	 	incur any material obligations except for obligations arising under this
Agreement, the Head Leases, the Leases, the Security Documents or contracts
entered into in the ordinary course of its business of leasing the Aircraft;
	 
	 	7.2.8	 	No borrowing
	 
	 	 	 	incur any Indebtedness except for Indebtedness pursuant to this Agreement
and its existing Indebtedness pursuant to the Relevant Documents (as defined
in the Deeds of Application);

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	 	7.2.9	 	Guarantees
	 
	 	 	 	issue any guarantees or indemnities or otherwise become directly or
contingently liable for the obligations of any person, firm, or corporation
(except for guarantees or indemnities from time to time required to procure
the release of such Aircraft from any arrest, detention, attachment or levy
or guarantees or undertakings required for the salvage of the Aircraft);
	 
	 	7.2.10	 	Loans
	 
	 	 	 	make any loans or grant any credit (save for normal trade credit in the
ordinary course of business) to any person or agree to do so; or
	 
	 	7.2.11	 	Bank Account
	 
	 	 	 	open any bank account with any bank other than the Bank.

	8.	 	Conditions

	 	8.1	 	Documents and evidence
	 
	 	 	 	The obligation of the Bank to make the Loan available shall be subject to the
condition that the Bank, or its duly authorised representative, shall have received
the documents and evidence specified Schedule 2 (Conditions precedent) in form and
substance satisfactory to the Bank prior to delivery of the Drawdown Notice.
	 
	 	8.2	 	General condition precedent
	 
	 	 	 	The obligation of the Bank to make the Loan shall be subject to the further
condition that, at the time of the making of the Loan, the whole of the issued share
capital of the Borrower shall not be owned by London Industrial Leasing Limited.
	 
	 	8.3	 	Waiver of conditions precedent
	 
	 	 	 	The conditions specified in this Clause 8 are inserted solely for the benefit of the
Bank and may be waived by the Bank in whole or in part and with or without
conditions.

	9.	 	Events of Default

	 	9.1	 	Events
	 
	 	 	 	There shall be an Event of Default if:

	 	9.1.1	 	Non-payment: subject to Clause 11.2, the Borrower fails to
pay any sum payable by it under this Agreement at the time, in the currency and
in the manner stipulated in this Agreement; or

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	 	9.1.2	 	Breach of other obligations: the Borrower commits any
material breach of or omits to observe any of its obligations or undertakings
expressed to be assumed by it under any of the Relevant Documents (as defined
in the Deeds of Application) to which it is a party and, in respect of any such
breach or omission which in the opinion of the Bank is capable of remedy, such
action as the Bank may require shall not have been taken within 15 days of the
Bank notifying the Borrower of such default and of such required action, save
where such breach or omission is as a result of any actions of the Bank or any
subsidiary of the Bank pursuant to the Administration Agreement or otherwise;
or
	 
	 	9.1.3	 	Legal process: any judgment or order made against the
Borrower is not stayed or complied with within seven days or a creditor
attaches or takes possession of, or a distress, execution, sequestration or
other process is levied or enforced upon or sued out against, any of the
undertakings, assets, rights or revenues of the Borrower and is not discharged
within seven days; or
	 
	 	9.1.4	 	Insolvency: the Borrower becomes insolvent or stops or
suspends making payments (whether of principal or interest) with respect to all
or any class of its debts or announces an intention do so; or
	 
	 	9.1.5	 	Winding up: any petition is presented or other step is taken
for the purpose of winding up the Borrower or an order is made or resolution
passed for the winding up of the Borrower or a notice is issued convening a
meeting for the purpose of passing any such resolution; or
	 
	 	9.1.6	 	Administration: any petition is presented or other step is
taken for the purpose of the appointment of an administrator of the Borrower or
the Bank believes that any such petition or other step is imminent or an
administration order is made in relation to the Borrower; or
	 
	 	9.1.7	 	Appointment of receivers and managers: any administrative or
other receiver is appointed of the Borrower or any material part of its assets
and/or undertaking or any other steps are taken to enforce any Encumbrance over
all or any part of the assets of the Borrower; or
	 
	 	9.1.8	 	Compositions: any steps are taken, or negotiations commenced,
by the Borrower or by any of its creditors with a view to the general
readjustment or rescheduling of all or part of its indebtedness or to proposing
any kind of composition, compromise or arrangement involving such company and
any of its creditors; or
	 
	 	9.1.9	 	Analogous proceedings: there occurs, in relation to the
Borrower, in any country or territory in which it carries on business or to the
jurisdiction of whose courts any part of its assets is subject, any event
which, in the reasonable opinion of the Bank, appears in that country or
territory to

-13-

 

	 	 	 	correspond with, or have an effect equivalent or similar to, any of those
mentioned in Clauses 9.1.6 to 9.1.11 (inclusive) or the Borrower or
otherwise becomes subject, in any such country or territory, the operation
of any law relating to insolvency, bankruptcy or liquidation; or
	 
	 	9.1.10	 	Cessation of business: the Borrower suspends or ceases or threatens to
suspend or cease to carry on its business; or
	 
	 	9.1.11	 	Seizure: all or a material part of the undertakings, assets, rights or
revenues of the Borrower are seized, nationalised, expropriated or compulsorily
acquired by or under the authority of any government; or
	 
	 	9.1.12	 	Invalidity: this Agreement shall at any time and for any reason become
invalid or unenforceable or otherwise cease to remain in full force and effect,
or if the validity or enforceability of this Agreement shall at any time and
for any reason be contested by the Borrower which is a party thereto; or
	 
	 	9.1.13	 	Unlawfulness: it becomes impossible or unlawful at any time for the
Borrower, to fulfil any of the covenants and obligations expressed to be
assumed by it in this Agreement or for the Bank to exercise the rights or any
of them vested in it under any of the this Agreement or otherwise; or
	 
	 	9.1.14	 	Repudiation: the Borrower repudiates this Agreement or does or causes or
permits to be done any act or thing evidencing an intention to repudiate this
Agreement.

	 	9.2	 	Acceleration
	 
	 	 	 	The Bank may, without prejudice to any other rights of the Bank, at any time after
the happening of an Event of Default so long as the same is continuing by notice to
the Borrower declare that the Loan and all interest accrued and all other sums
payable under this Agreement have become due and payable, whereupon the same shall,
immediately or in accordance with the terms of such notice, become due and payable.
	 
	 	9.3	 	Demand basis
	 
	 	 	 	If, pursuant to Clause 9.2 (Acceleration), the Bank declares the Loan to be due and
payable on demand, the Bank may by written notice to the Borrower:

	 	9.3.1	 	call for repayment of the Loan on such date as may be
specified whereupon the Loan shall become due and payable on the date so
specified together with all interest accrued and all other sums payable under
this Agreement; or
	 
	 	9.3.2	 	without prejudice to the Bank’s rights at law, in equity or
otherwise, declare that such amounts which have become immediately due and

-14-

 

	 	 	 	payable under this Agreement be set off against the Bank’s obligations to
make payments of deferred consideration to the Borrower under and pursuant
to each Rental Sale Agreement, and failure by the Bank to deliver such a
declaration and notice shall not prejudice its rights under Clause 11.2 (Set
off); or
	 
	 	9.3.3	 	withdraw such declaration with effect from the date specified
in such notice.

	10.	 	Indemnities

	 	10.1	 	Miscellaneous indemnities

	 	10.1.1	 	The Borrower shall on demand indemnify the Bank against any loss or expense
which the Bank shall certify as sustained or incurred by it as a consequence
of:

	 	(i)	 	any default in payment by the Borrower of any
sum under this Agreement when due;
	 
	 	(ii)	 	the occurrence of any other Event of Default;
	 
	 	(iii)	 	any repayment or prepayment of the Loan or
part thereof being made otherwise than on the Repayment Date; or
	 
	 	(iv)	 	the Loan (or any part thereof) not being made
for any reason (excluding any default by the Bank) after the Drawdown
Notice for the Loan has been given,

	 	 	 	including, in any such case, but not limited to, any loss or expense
sustained or incurred in maintaining or funding the Loan or any part thereof
(in each case) or in liquidating or re-employing deposits from third parties
acquired to effect or maintain the Loan or any part thereof (in each case);
and
	 
	 	10.1.2	 	without prejudice to the generality of Clause 10.1.1(iii) the Borrower shall
indemnify the Bank against and pay promptly on demand to the Bank from time to
time, all amounts which the Bank certifies to be necessary to compensate it for
any broken funding costs in relation to any interest exchange or hedging
arrangements entered into in connection with its advancing the Loan or any part
thereof (including any costs incurred in liquidating deposits, re-employing
funds taken or borrowed to make or maintain the Loan or in prepaying such funds
to the source from which they were borrowed or mobilised) which the Bank may
sustain or incur as a consequence of or in connection with:

	 	(i)	 	any default in punctual payment by the Borrower
of any sums payable by it under this Agreement;

-15-

 

	 	(ii)	 	the occurrence or continuance of any Event of
Default; or
	 
	 	(iii)	 	any prepayment of the Loan or any part thereof
or any interest accrued thereon other than as permitted hereunder.

	 	10.2	 	Currency indemnity
	 
	 	 	 	If any sum due from the Borrower under this Agreement or any order of judgment given
or made in relation thereto has to be converted from the currency (the “first
currency”) in which the same is payable under this Agreement or under such order or
judgment into another currency (the “second currency”) for the purpose of:

	 	10.2.1	 	making or filing a claim or proof against the Borrower;
	 
	 	10.2.2	 	obtaining an order or judgment in any court or other tribunal; or
	 
	 	10.2.3	 	enforcing any order or judgment given or made in relation to this Agreement,
the Borrower shall indemnify and hold harmless the Bank from and against any
loss suffered as a result of any difference between: (i) the rate of exchange
used for such purpose to convert the sum in question from the first currency
into the second currency; and (ii) the rate or rates of exchange at which the
Bank may in the ordinary course of business purchase the first currency with
the second currency upon receipt of a sum paid to it in satisfaction, in whole
or in part, of any such order, judgment, claim or proof. Any amount due from
the Borrower under this Clause 10.2 shall be due as a separate debt and shall
not be affected by judgment being obtained for any other sums due under or in
respect of this Agreement and the term “rate of exchange” includes any premium
and costs of exchange payable in connection with the purchase of the first
currency with the second currency.

	11.	 	Security and set-off

	 	11.1	 	Application of moneys
	 
	 	 	 	All moneys received by the Bank either under or pursuant to this Agreement following
an Event of Default after the exercise by the Bank of its rights under Clause 9.2
(Acceleration) and expressed to be applicable in accordance with the provisions of
this Clause 11.1 shall be applied by the Bank in the following manner:

	 	11.1.1	 	first in or towards payment of all unpaid expenses which may be owing to the
Bank under this Agreement;
	 
	 	11.1.2	 	secondly in or towards payment of any arrears of interest owing in respect of
the Loan or any part thereof;

-16-

 

	 	11.1.3	 	thirdly in or towards repayment of the Loan (whether the same is due and
payable or not);
	 
	 	11.1.4	 	fourthly in or towards payment to the Bank for any loss suffered by reason of
any such payment in respect of principal not being effected on the Repayment
Date relating to the part of the Loan repaid; and
	 
	 	11.1.5	 	fifthly in or towards payment to the Bank of any other sums owing to it under
this Agreement.

	 	11.2	 	Set-off

	 	11.2.1	 	The Borrower authorises the Bank (without prejudice to any of the Bank’s
rights at law, in equity or otherwise), at any time and without notice to the
Borrower, to set off any amounts then owing by the Bank to the Borrower in or
towards satisfaction of any sum due and payable from the Borrower to the Bank
under this Agreement. For this purpose, the Bank may effect such currency
exchange as may be necessary to effect such application. The Bank shall not be
obliged to exercise any right given to it by this Clause.
	 
	 	11.2.2	 	The Bank authorises the Borrower (without prejudice to any of the Borrower’s
rights at law, in equity or otherwise), at any time and without notice to the
Bank, to set off any amounts then owing by the Bank under the Rental Sales
Agreements to the Borrower in or towards satisfaction of any sum due and
payable from the Borrower to the Bank under this Agreement. For this purpose,
the Borrower may effect such currency exchange as may be necessary to effect
such application. The Borrower shall not be obliged to exercise any right given
to it by this Clause.

	 	11.3	 	Notification of set-off
	 
	 	 	 	The Bank shall notify the Borrower and the Borrower shall notify the Bank upon the
exercise or purported exercise of any right of set-off giving full details in
relation thereto provided always that failure by the Bank or the Borrower (as the
case may be) to deliver such notice, or to delay in delivering such notice, to the
other party shall not prejudice its rights under Clause 11.2 (Set-off).
	 
	 	11.4	 	Further assurance
	 
	 	 	 	The Borrower undertakes that this Agreement shall at the date of execution and
delivery thereof and so long as any moneys are owing under this Agreement be valid
and binding obligations of the respective parties thereto and rights of the Bank
enforceable in accordance with their respective terms.

-17-

 

	12.	 	Assignment and transfer

	 	12.1	 	Benefit and burden
	 
	 	 	 	This Agreement shall be binding upon, and enure for the benefit of, the Bank and the
Borrower and their respective successors.
	 
	 	12.2	 	No assignment by Borrower
	 
	 	 	 	The Borrower may not assign or transfer any of its rights or obligations under this
Agreement.
	 
	 	12.3	 	Assignment by Bank
	 
	 	 	 	The Bank may not assign all or any part of its rights or transfer by novation any of
its rights and obligations under this Agreement to any other person (an “Assignee”)
without the prior written consent of the Borrower.
	 
	 	12.4	 	Transfer

	 	12.4.1	 	The Bank may transfer all or any part of its rights or transfer by novation
any of its rights and obligations under this Agreement to any Subsidiary or the
holding company of the Bank (a “Transferee”) without the prior written consent
of the Borrower (the Borrower consenting to any such transfer by its execution
of this Agreement).
	 
	 	12.4.2	 	The Bank agrees to notify the Borrower in writing of any transfer made
pursuant to Clause 12.4.1.

	 	12.5	 	Documenting assignments and transfers
	 
	 	 	 	If the Bank assigns all or any part of its rights or transfers all or any part of
its rights, benefits and/or obligations as provided in Clause 12.3 (Assignment by
the Bank) or 12.4 (Transfer) the Borrower undertakes, immediately on being requested
to do so by the Bank and at the cost of the Bank, to enter into, such documents as
may be necessary or desirable to transfer to the Assignee or Transferee all or the
relevant part of the Bank’s interest in this Agreement and all relevant references
in this Agreement to the Bank shall thereafter be construed as a reference to the
Bank and/or its Assignee or Transferee (as the case may be) to the extent of their
respective interests.
	 
	 	12.6	 	Lending office
	 
	 	 	 	The Bank shall lend through its office at the address specified above or through any
other office of the Bank selected from time to time by it through which the Bank
wishes to lend for the purposes of this Agreement. If the office through which the
Bank is lending is changed pursuant to this Clause 12.6, the Bank shall notify the
Borrower promptly of such change.

-18-

 

	 	12.7	 	Disclosure of information
	 
	 	 	 	The Bank may disclose to a prospective assignee or transferee who may propose
entering into contractual relations with the Bank in relation to this Agreement such
information about the Borrower as the Bank shall consider appropriate, subject
always to the Bank agreeing with such prospective assignee or transferee, in such
form as the Borrower may reasonably require, to keep all such disclosed information
confidential.

	13.	 	Notices and other matters

	 	13.1	 	Notices
	 
	 	 	 	Every notice, request, demand or other communication under this Agreement shall:

	 	13.1.1	 	be in writing delivered personally or by first-class prepaid letter (airmail
if available) or facsimile transmission or other means of telecommunication in
permanent written form;
	 
	 	13.1.2	 	be deemed to have been received in the case of a letter, when delivered
personally or two Banking Days after posting if delivered by pre-paid first
class post or five Banking Days after posting if delivered by airmail and, in
the case of a facsimile transmission or other means of telecommunication in
permanent written form, at the time of despatch (provided that if the date of
despatch is not a business day in the country of the addressee or if the time
of despatch is after the close of business in the country of the addressee it
shall be deemed to have been received at the opening of business on the next
such business day); and
	 
	 	13.1.3	 	be sent:

	 	(i)	 	to the Borrower at:
	 
	 	 	 	Forthaven Limited

c/o Bookham Technology plc

Caswell

Towcester

Northamptonshire, NN12 8EQ
	 
	 	 	 	Attention: Chief Executive Officer

Fax no:    01327 356 775

-19-

 

	 	(ii)	 	with a copy to: Bookham, Inc.
	 
	 	 	 	Ottawa (Kanata) Office

10 Brewer Hunt Way

Kanata, Ontario

Canada, K2K 2B5
	 
	 	 	 	Attention: Thomas Kelley

Fax no:     +1 613 270 4002
	 
	 	 	 	Bookham Technology plc Brixham Road

Paignton

Devon

TQ4 7BE
	 
	 	 	 	Attention: Keith Border

Fax no:     01803 662 100
	 
	 	 	 	Wilmer Cutler Pickering Hale and Dorr LLP

Alder Castle

10 Noble Street

London

EC2V 7QJ
	 
	 	 	 	Attention: Struan Penwarden

Fax no:   020 7645 2424

	 
	 	(iii)	 	to the Bank at:
	 
	 	 	 	Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London

EC2N 2DB
	 
	 	 	 	Attention: Nathalie Whybrow and Nicola Butcher

Fax no:     020 7545 4638

	 	 	 	or to such other address and/or numbers as is notified by one party to the
other party under this Agreement.

	 	 	In proving service of a notice or a document it shall be sufficient to prove that
delivery was made or that the notice or document was properly addressed and posted
as a prepaid first class or airmail letter.

-20-

 

	 	13.2	 	No implied waivers, remedies cumulative
	 
	 	 	 	No failure or delay on the part of the Bank to exercise any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by the Bank of any power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or remedy. The
remedies provided in this Agreement are cumulative and are not exclusive of any
remedies provided by law.
	 
	 	13.3	 	English language
	 
	 	 	 	All certificates, instruments and other documents to be delivered under or supplied
in connection with this Agreement shall be in the English language or shall be
accompanied by a certified English translation upon which the Bank shall be entitled
to rely.
	 
	 	13.4	 	Variation
	 
	 	 	 	The Parties agree that any term, provision or condition of this Agreement may be
amended and shall only be valid if evidenced in writing and signed by or on behalf
of each of the Parties to this Agreement.

	14.	 	Governing law and jurisdiction

	 	14.1	 	Law
	 
	 	 	 	This Agreement is governed by and shall be construed in accordance with English law.
	 
	 	14.2	 	Submission to jurisdiction
	 
	 	 	 	The parties irrevocably agree that the courts of England are to have exclusive
jurisdiction to settle any disputes which may arise out of or in connection with
this Agreement.

The parties to this Agreement have caused this Agreement to be duly executed on the date first
above written.

-21-

 

Schedule 1

Form of Drawdown Notice

(referred to in Clause 2.2)

To: Deutsche Bank AG, London Branch

We refer to the above Loan Facility Agreement (the “Loan Agreement”) and hereby give you notice
that we wish to draw down the Loan in the amount of £18,348,132.33 on August 2005. The funds should
be credited to City Leasing (Donside) Limited, account number 0110857-0000-GBP-000-LDN with
Deutsche Bank AG London.

For the purposes of confirming the satisfaction of the condition at Clause 8.2 of the Loan
Agreement, we acknowledge that the whole of the issued share capital in City Leasing (Creekside)
Limited shall be owned by Bookham Technology plc at the time at which the above mentioned funds are
credited to the above mentioned account.

Words and expressions defined in the Loan Agreement shall have the same meanings where used herein.

For and on behalf of

City
Leasing (Creekside) Limited

-22-

 

Schedule 2

Documents and evidence required as conditions precedent

(referred to in Clause 8.1)

	1.	 	Constitutional documents
	 
	 	 	Copies, certified by an officer of the Borrower as true, complete and up to date copies of
all documents which contain or establish or relate to the constitution of the Borrower; and
	 
	2.	 	Corporate authorisations
	 
	 	 	Copies of resolutions of the directors of the Borrower approving this Agreement to which
each may be a party and authorising the signature, delivery and performance of the
Borrower’s obligations thereunder, certified by an officer of the Borrower, as the case may
be, as:

	 	2.1	 	being true and correct;
	 
	 	2.2	 	being duly passed at a meeting of the directors of the Borrower duly convened
and held;
	 
	 	2.3	 	not having been amended, modified or revoked; and
	 
	 	2.4	 	being in full force and effect,

	 	 	together with originals or certified copies of any powers of attorney issued by the Borrower
pursuant to such resolutions; and

	3.	 	Documents

	 	3.1	 	This Agreement, duly executed by all parties to it.
	 
	 	3.2	 	The Share Purchase Agreement, in a form agreed by the parties to it and by the
parties to this Agreement, to be entered into between London Industrial Leasing Limited
as seller, Bookham Technology PLC as purchaser and Deutsche Bank AG, London Branch
relating to the sale and purchase of the whole of the issued share capital of the
Borrower.

-23-

 

Schedule 3

Aircraft Specification

	 	 	 
	Aircraft 1:

	 	Boeing 747-400

Manufacturer’s Serial Number: 23908

UK Registration Mark: G-BNLA
	 
	 	 
	Aircraft 2:

	 	Boeing 747-400

Manufacturer’s Serial Number: 24047

UK Registration Mark: G-BNLE
	 
	 	 
	Aircraft 3:

	 	Boeing 747-400

Manufacturer’s Serial Number: 24056

UK Registration Mark: G-BNLN
	 
	 	 
	Aircraft 4:

	 	Boeing 747-400

Manufacturer’s Serial Number: 27092

UK Registration Mark: G-CIVA

-24-

 

Schedule 4

Repayment Schedule

Anticipated Drawdown:      £18,348,132.33

	 	 	 	 	 	 	 	 	 
	Repayment Date	 	Principal (£)	 	Interest (£)
	14.10-2005

	 	 	18,348,132.33	 	 	 	181,018.15	 

-25-

 

FIRST DB LONDON LOAN AGREEMENT EXECUTION PAGE

	 	 	 	 	 
	The Borrower

	 	 	 	 
	 
	 	 	 	 
	SIGNED by

	 	/s/ illegible	 	 
	 
	 	 	 	 
	duly authorised for and on behalf of
	 	 	 	 
	 
	 	 	 	 
	CITY LEASING (CREEKSIDE) LIMITED
	 	 	 	 
	 
	 	 	 	 
	The Bank
	 	 	 	 
	 
	 	 	 	 
	SIGNED by

	 	/s/ illegible	 	 
	 
	 	 	 	 
	duly authorised for and on behalf of
	 	 	 	 
	 
	 	 	 	 
	DEUTSCHE BANK AG, acting through its
	 	 	 	 
	LONDON BRANCH
	 	 	 	 

-26-exv10w3

 

Exhibit 10.3

Dated 10 August 2005

CITY LEASING (CREEKSIDE) LIMITED

as Borrower

and

DEUTSCHE BANK AG, LONDON BRANCH

as Bank

LOAN FACILITY AGREEMENT

for a facility of up to £42,500,000

relating to the leasing of four Boeing 747-400 aircraft

Manufacturer’s Serial Numbers: 23908, 24047, 24056 and 27092

UK Registration Marks: G-BNLA, G-BNLE, G-BNLN and G-CIVA

Linklaters

One Silk Street

London EC2Y 8HQ

Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222

Ref SG/ARP

 

 

Contents

	 	 	 	 	 	 	 
	Clause Heading	 	Page

	 
	 	 	 	 	 	 
	1

	 	Purpose and definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	2

	 	The Commitment and the Loan
	 	 	5	 
	 
	 	 	 	 	 	 
	3

	 	Interest
	 	 	6	 
	 
	 	 	 	 	 	 
	4

	 	Repayment and prepayment
	 	 	6	 
	 
	 	 	 	 	 	 
	5

	 	Payments: accounts and calculations
	 	 	7	 
	 
	 	 	 	 	 	 
	6

	 	Representations and warranties
	 	 	8	 
	 
	 	 	 	 	 	 
	7

	 	Undertakings
	 	 	10	 
	 
	 	 	 	 	 	 
	8

	 	Conditions
	 	 	12	 
	 
	 	 	 	 	 	 
	9

	 	Events of Default
	 	 	12	 
	 
	 	 	 	 	 	 
	10

	 	Indemnities
	 	 	15	 
	 
	 	 	 	 	 	 
	11

	 	Security and set-off
	 	 	16	 
	 
	 	 	 	 	 	 
	12

	 	Assignment and transfer
	 	 	17	 
	 
	 	 	 	 	 	 
	13

	 	Notices and other matters
	 	 	19	 
	 
	 	 	 	 	 	 
	14

	 	Governing law and jurisdiction
	 	 	21	 
	 
	 	 	 	 	 	 
	Schedule 1 Form of Drawdown Notice	 	 	22	 
	 
	 	 	 	 	 	 
	Schedule 2 Documents and evidence required as conditions precedent	 	 	23	 
	 
	 	 	 	 	 	 
	Schedule 3 Aircraft Specification	 	 	24	 
	 
	 	 	 	 	 	 
	Schedule 4 Repayment Schedule	 	 	25	 

i

 

THIS AGREEMENT is dated 10 August 2005 and made BETWEEN:

	(1)	 	CITY LEASING (CREEKSIDE) LIMITED, a company incorporated and existing under the applicable
laws of England and Wales with registered number 0213288 and having it’s registered office at
23 Great Winchester Street, London EC2P 2AX (the “Borrower”); and
	 
	(2)	 	DEUTSCHE BANK AG, acting by its London branch, having its principal place of business at
Winchester House, 1 Great Winchester Street, London EC2N 2DB (the “Bank”).

IT IS AGREED as follows:

	1	 	Purpose and definitions

	 	1.1	 	Purpose
	 
	 	 	 	This Agreement sets out the terms and conditions upon and subject to which the Bank
agrees to make available to the Borrower a loan of £42,500,000 (forty-two million
five hundred thousand Pounds Sterling) to be used by the Borrower for purpose of
prepaying part of its Rental obligations under the Head Leases.
	 
	 	1.2	 	Definitions
	 
	 	 	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	 	“Administration Agreement” means the administration agreement dated on or about the
date of this Agreement and entered into between the Borrower, the Bank and City
Leasing Limited;
	 
	 	 	 	“Aircraft” means the aircraft described in Schedule 3 (Aircraft specification);
	 
	 	 	 	“Banking Day” means a day on which dealings in deposits in Sterling are carried on
in the London Interbank Market and (other than Saturday or Sunday) on which banks
are open for business in London (or any other relevant place of payment under Clause
5 (Payments));
	 
	 	 	 	“Closing Date” means the date on which the whole issued share capital of the
Borrower is sold by London Industrial Leasing Limited to Bookham Technology plc;
	 
	 	 	 	“Commitment” means the amount which the Bank has agreed to lend to the Borrower
under Clause 2.1 (Agreement to lend);
	 
	 	 	 	“Deeds of Application” means the four deeds of application of proceeds and
priorities each dated 3 December 2003 and entered into between the Security Trustee,
the Borrower as lessor, the Head Lessor as owner and the Original Owner (as defined
therein) in respect of each Aircraft;

1

 

	 	 	 	“Default” means any Event of Default or any event or circumstance which with the
giving of notice or lapse of time or the satisfaction of any other condition (or any
combination thereof) would constitute an Event of Default;
	 
	 	 	 	“Drawdown Date” means the date, being a Banking Day, on which the Loan is, or is to
be, drawndown;
	 
	 	 	 	“Drawdown Notice” means a notice substantially in the terms of Schedule 1 (Form of
Drawdown Notice);
	 
	 	 	 	“Encumbrance” means any mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, trust arrangement or security interest or other
encumbrance of any kind securing any obligation of any person or any type of
preferential arrangement (including without limitation title transfer effected in
connection with any of the aforementioned and/or retention arrangements having a
similar effect);
	 
	 	 	 	“Event of Default” means any of the events or circumstances described in Clause 9.1
(Events);
	 
	 	 	 	“Fixed Rate” means 5.68 % per annum;
	 
	 	 	 	“Head Leases” means the four head lease agreements each dated 3 December 2003 and
entered into between the Head Lessor and the Borrower as head lessee in respect of
each Aircraft, as amended from time to time;
	 
	 	 	 	“Head Lessor” means Phoebus Leasing Limited;
	 
	 	 	 	“Indebtedness” means any obligation for the payment or repayment of money, whether
as principal or as surety and whether present or future, actual or contingent;
	 
	 	 	 	“Leases” means the four lease agreements each dated 3 December 2003 and entered into
between the Borrower as lessor and British Airways plc as lessee in respect of each
Aircraft, as amended from time to time;
	 
	 	 	 	“Loan” means the principal amount of £42,500,000 (forty-two million five hundred
thousand Pounds Sterling) advanced or, as the case may be, to be advanced by the
Bank hereunder or (as the context may require) the principal amount owing to the
Bank under this Agreement at any relevant time;
	 
	 	 	 	“month” means a period beginning in one calendar month and ending in the next
calendar month on the day numerically corresponding to the day of the calendar month
on which it started, provided that (i) if the period started on the last Banking Day
in a calendar month or if there is no such numerically corresponding day, it shall
end on the last Banking Day in such next calendar month and (ii) if such numerically
corresponding day is not a Banking Day, the period shall end on the next following
Banking Day in the same calendar month but if there is no

2

 

	 	 	 	such Banking Day it shall end on the preceding Banking Day and “months” and
“monthly” shall be construed accordingly;
	 
	 	 	 	“Permitted Encumbrance” means:

	 	(a)	 	any Encumbrance in favour of the Security Trustee as trustee
for the Secured Parties created pursuant to the Security Documents and existing
under the Relevant Documents;
	 
	 	(b)	 	Permitted Liens; and
	 
	 	(c)	 	any Encumbrance existing under the Relevant Documents;

	 	 	 	“Permitted Liens” means any lien of a repairer, mechanic, carrier, hangar keeper or
other similar lien arising in the ordinary course of business by operation of law in
respect of obligations which are not overdue or are being contested in good faith by
appropriate proceedings, but only if such proceedings or the continued existence of
the lien, do not give rise to any likelihood of the sale, forfeiture or other loss
of the Aircraft or any interest therein;
	 
	 	 	 	“Pounds Sterling” and “£” means the lawful currency of the United Kingdom for the
time being;
	 
	 	 	 	“Rental” means the rental amounts due and payable by the Borrower as head lessee to
the Head Lessor under each Head Lease;
	 
	 	 	 	“Rental Sale Agreements” means each of four rental sale and purchase agreements
dated 12 April 2005 and entered into between the Borrower as seller and the Bank as
buyer, one such agreement in respect of each of the four Aircraft;
	 
	 	 	 	“Repayment Date” means a repayment date referred to in Schedule 4 (Repayment
schedule);
	 
	 	 	 	“Secured Parties” has the meaning given to it in the Deeds of Application; “Security
Documents” has the meaning given to it in the Deeds of Application; “Security
Trustee” has the meaning given to it in the Deeds of Application;
	 
	 	 	 	“Subsidiary” of (a) a person incorporated outside England and Wales means any
company or entity directly or indirectly controlled by such person, and for this
purpose “control” means either the ownership of more than 50 per cent of the voting
share capital (or equivalent rights or ownership) of such company or entity or the
power to direct its policies and management, whether by contract or otherwise and
(b) a person incorporated in England and Wales means a subsidiary within the meaning
of section 736 Companies Act 1985;
	 
	 	 	 	“Termination Date” means the Closing Date or such later date as the Bank may in its
absolute discretion agree in writing; and

3

 

	 	 	 	“United Kingdom” means Great Britain and Northern Ireland.
	 
	 	1.3	 	Headings
	 
	 	 	 	Clause headings and the table of contents are inserted for convenience of reference
only and shall be ignored in the interpretation of this Agreement.
	 
	 	1.4	 	Construction of certain terms
	 
	 	 	 	In this Agreement, unless the context otherwise requires:

	 	(a)	 	references to Clauses and Schedules are to be construed as
references to clauses of, and schedules to, this Agreement and references to
this Agreement include its schedules;
	 
	 	(b)	 	references to (or to any specified provision of) this Agreement
or any other document shall be construed as references to this Agreement, that
provision or that document as in force for the time being and as amended in
accordance with terms thereof, or, as the case may be, with the agreement of
the relevant parties;
	 
	 	(c)	 	references to a “regulation” include any present or future
regulation, rule, directive, requirement, request or guideline (whether or not
having the force of law) of any agency , authority, central bank or government
department or any self-regulatory or other national or supra-national
authority;
	 
	 	(d)	 	words importing the plural shall include the singular and vice
versa;
	 
	 	(e)	 	references to a time of day are to London time;
	 
	 	(f)	 	references to a person shall be construed as references to an
individual, firm, company, corporation or unincorporated body of persons;
	 
	 	(g)	 	references to a “guarantee” include references to an indemnity
or other assurance against financial loss including, without limitation, an
obligation to purchase assets or services as a consequence of a default by any
other person to pay any Indebtedness and “guaranteed” shall be construed
accordingly; and
	 
	 	(h)	 	references to any enactment shall be deemed to include
references to such enactment as re-enacted, amended or extended.

4

 

	2	 	The Commitment and the Loan

	 	2.1	 	Agreement to lend
	 
	 	 	 	The Bank, relying upon each of the representations and warranties in Clause 6
(Representations and warranties), agrees to lend to the Borrower, upon and subject
to the terms of this Agreement, the principal sum of £42,500,000 (forty-two million
five hundred thousand Pounds Sterling).
	 
	 	2.2	 	Drawdown
	 
	 	 	 	Subject to the terms and conditions of this Agreement, the Loan shall be made in one
single drawing following receipt by the Bank from the Borrower of a Drawdown Notice
not later than 10.00 am on the Drawdown Date specified in that Drawdown Notice (or
such lesser period as the Bank may agree) and shall be made on that Drawdown Date. A
Drawdown Notice shall be effective on actual receipt by the Bank and, once given,
shall be irrevocable.
	 
	 	2.3	 	Amount
	 
	 	 	 	The principal amount of the Loan specified in the Drawdown Notice for the borrowing
on the Drawdown Date shall be £42,500,000 (forty-two million five hundred thousand
Pounds Sterling).
	 
	 	2.4	 	Availability and payment

	 	2.4.1	 	Upon receipt of a Drawdown Notice complying with the terms of
this Agreement, the Bank shall, subject to the provisions of Clause 8
(Conditions), on the relevant Drawdown Date make the amount of the Loan
specified in the Drawdown Notice available to the Borrower in accordance with
Clause 5.2 (Payment by the Bank).
	 
	 	2.4.2	 	The Borrower acknowledges that payment by the Bank of the Loan
less £400,000 (four hundred thousand Pounds Sterling) to the Head Lessor in
accordance with Clause 5.2 (Payment by the Bank) and the payment by the Bank of
£400,000 (four hundred thousand Pounds Sterling) to the Borrower shall satisfy
the obligation of the Bank to lend the Commitment to the Borrower under this
Agreement.

	 	2.5	 	Termination of Commitment
	 
	 	 	 	If the Loan is not drawn down by the Termination Date, the Commitment shall
thereupon be automatically cancelled.

5

 

	3	 	Interest

	 	3.1	 	Normal interest rate
	 
	 	 	 	The Borrower shall pay interest on the Loan on the Repayment Date. The rate of
interest on the Loan shall be the Fixed Rate which shall accrue and shall be paid on
the Repayment Dates (as set out in Schedule 4 (Repayment schedule)).
	 
	 	3.2	 	Default interest
	 
	 	 	 	If the Borrower fails to pay any sum (including without limitation, any sum due and
payable pursuant to this Clause 3.2) on its due date for payment under this
Agreement, the Borrower shall pay interest on such sum on demand from the due date
up to the date of actual payment (as well after as before judgment) at a rate
determined by the Bank pursuant to this Clause 3.2. The period beginning on such due
date and ending on such date of payment shall be divided into successive periods of
not more than three months as selected by the Bank each of which (other than the
first, which shall commence on such due date) shall commence on the last day of the
preceding such period. The rate of interest applicable to each such period shall be
the aggregate of two per cent per annum above the rate of interest referred to in
Clause 3.1. Such interest shall be due and payable on the last day of each such
period as determined by the Bank.

	4	 	Repayment and prepayment

	 	4.1	 	Repayment
	 
	 	 	 	The Borrower shall repay the Loan on the Repayment Dates as set out in Schedule 4
(Repayment schedule).
	 
	 	4.2	 	Voluntary prepayment
	 
	 	 	 	Subject always to the provisions of Clause 10 (Indemnities), the Borrower may prepay
the Loan in whole on any date provided notice is given in accordance with Clause 4.4
(Notice of prepayment) below.
	 
	 	4.3	 	Amounts payable on prepayment
	 
	 	 	 	Any prepayment of all or part of the Loan under this Agreement shall be made
together with (a) accrued interest on the amount to be prepaid to the date of such
prepayment and (b) all others sums payable by the Borrower to the Bank under this
Agreement including, without limitation, any amounts payable under Clause 10
(Indemnities).
	 
	 	4.4	 	Notice of prepayment: reduction of repayment instalments
	 
	 	 	 	No prepayment may be effected under Clause 4.2 unless the Borrower shall have given
the Bank at least 30 days’ written notice of its intention to make such

6

 

	 	 	 	prepayment. The notice of prepayment shall be effective only on actual receipt of
the same by the Bank, shall be irrevocable and shall oblige the Borrower to make
such prepayment on the date specified. No amount prepaid may be reborrowed. The
Borrower may not prepay the Loan or any part thereof save as expressly provided in
this Agreement.

	5	 	Payments: accounts and calculations

	 	5.1	 	No set-off or counterclaim
	 
	 	 	 	Subject to Clause 11.2, all payments to be made by the Borrower under this Agreement
shall, save as otherwise expressly provided therein, be made in full, without any
set-off or counterclaim whatsoever and free and clear of any deductions or
withholdings, in Pounds Sterling on the due date to the account of the Bank (with
Deutsche Bank AG for the account of Deutsche Bank AG London, Swift Code: DEUTGB2L,
Sort Code: 40-50-81 ) or to such other account at such other bank in such place as
the Bank may from time to time notify in writing to the Borrower.
	 
	 	5.2	 	Payment by the Bank
	 
	 	 	 	All sums to be advanced by the Bank to the Borrower under this Agreement in respect
of the Loan shall be remitted in Pounds Sterling on the Drawdown Date to the account
of the Head Lessor and the Borrower as specified in the Drawdown Notice.
	 
	 	5.3	 	Non-Banking Days
	 
	 	 	 	When any payment under this Agreement would otherwise be due on a day which is not a
Banking Day, the due date for payment shall be extended to the next following
Banking Day unless such Banking Day falls in the next calendar month in which case
payment shall be made on the immediately preceding Banking Day.
	 
	 	5.4	 	Calculations
	 
	 	 	 	All interest and other payments of an annual nature under this Agreement shall
accrue from day to day and be calculated on the basis of actual days elapsed and a
365 day year.
	 
	 	5.5	 	Loan account
	 
	 	 	 	The Bank shall maintain, in accordance with its usual practice, an account
evidencing the amounts from time to time lent by, owing to and paid to it under the
this Agreement. Such account shall, in the absence of manifest error, be conclusive
as to the amount from time to time owing by the Borrower under this Agreement.

7

 

	6	 	Representations and warranties

	 	6.1	 	Representations and warranties
	 
	 	 	 	The Borrower represents and warrants to the Bank as at the date of this Agreement
that:

	 	6.1.1	 	Due incorporation
	 
	 	 	 	the Borrower is duly incorporated and validly existing under the laws of
England and Wales, as a limited liability company, and has power to carry on
its business as it is now being conducted and to own its property and other
assets;
	 
	 	6.1.2	 	Corporate Power
	 
	 	 	 	the Borrower has power to execute, deliver and perform its obligations under
this Agreement and to borrow the Commitment and all necessary corporate,
shareholder and other action has been taken to authorise the execution,
delivery and performance of the same and no limitation on the powers of the
Borrower to borrow or give security will be exceeded as a result of
borrowing the Loan;
	 
	 	6.1.3	 	Binding obligations
	 
	 	 	 	this Agreement constitutes or will, upon execution thereof, constitute,
valid and legally binding obligations of the Borrower;
	 
	 	6.1.4	 	No conflict with other obligations
	 
	 	 	 	the execution and the delivery of, the performance of its obligations under,
and compliance with the provisions of this Agreement by the Borrower will
not (i) contravene any existing applicable law, statute, rule or regulation
or any judgment, decree or permit to which the Borrower is subject, (ii)
conflict with, or result in any breach of any of the terms of, or constitute
a default under, any agreement or other instrument to which the Borrower is
a party or is subject or by which it or any of its property is bound, (iii)
contravene or conflict with any provision of the memorandum and articles of
association or (iv) result in the creation or imposition of or oblige the
Borrower to create any Encumbrance on any of the undertakings, assets,
rights or revenues of the Borrower;
	 
	 	6.1.5	 	No litigation
	 
	 	 	 	no litigation, arbitration or administrative proceeding is taking place,
pending or, to the knowledge of the officers of the Borrower, threatened
against the Borrower which could have a material adverse effect on the
business, assets or financial condition of the Borrower;

8

 

	 	6.1.6	 	No filings required
	 
	 	 	 	it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of the Agreement that it or any other instrument
be notarised, filed, recorded, registered or enrolled in any court, public
office or elsewhere in England and Wales or that any stamp, registration or
similar tax or charge be paid in England and Wales on or in relation to this
Agreement for its enforcement in the courts of England and Wales;
	 
	 	6.1.7	 	Choice of law
	 
	 	 	 	the choice of English law to govern this Agreement and the submission by the
parties to the non-exclusive jurisdiction of the English courts are valid
and binding;
	 
	 	6.1.8	 	No immunity
	 
	 	 	 	neither the Borrower nor any of its assets is entitled to immunity on the
grounds of sovereignty or otherwise from any legal action or proceeding
(which shall include, without limitation, suit, attachment prior to
judgment, execution or other enforcement);
	 
	 	6.1.9	 	Consents obtained
	 
	 	 	 	every consent, authorisation, licence or approval of, or registration with
or declaration to, governmental or public bodies or authorities or courts
required by the Borrower to authorise, or required by the Borrower in
connection with, the execution, delivery, validity, enforceability or
admissibility in evidence of this Agreement or the performance by the
Borrower of its respective obligations under this Agreement has been
obtained or made and is in full force and effect and there has been no
default in the observance of any of the conditions or restrictions (if any)
imposed in, or in connection with, any of the same.
	 
	 	6.1.10	 	Pari passu
	 
	 	 	 	the obligations of the Borrower under this Agreement are direct, general and
unconditional obligations of the Borrower and rank at least pari passu with
all other present and future unsecured and unsubordinated Indebtedness of
the Borrower;
	 
	 	6.1.11	 	No default under other Indebtedness
	 
	 	 	 	the Borrower is not (nor would with the giving of notice or lapse of time or
the satisfaction of any other condition or combination thereof be) in breach
of or in default under any agreement relating to indebtedness to which it is
a party or by which it may be bound;

9

 

	 	6.1.12	 	No Default
	 
	 	 	 	no Default has occurred and is continuing; and
	 
	 	6.1.13	 	Copies true and complete
	 
	 	 	 	the copies of the documents delivered or to be delivered to the Bank
pursuant to Clause 8.1 (Documents and evidence) are or will when delivered
be, true and complete copies of such documents; each of such documents will
when delivered constitute valid and binding obligations of the parties
thereto enforceable in accordance with its terms and there will have been no
amendments or variations thereof or defaults thereunder.

	7	 	Undertakings

	 	7.1	 	General
	 
	 	 	 	The Borrower undertakes with the Bank that, from the date of this Agreement and so
long as any moneys are owing under this Agreement and while all or any part of the
Commitment remains outstanding, it will:

	 	7.1.1	 	Notice of Default
	 
	 	 	 	promptly inform the Bank of any occurrence of which it becomes aware which
might adversely affect the ability of any party to perform its obligations
under this Agreement and, without limiting the generality of the foregoing,
will inform the Bank of any Default forthwith upon becoming aware thereof
and will from time to time, if so reasonably requested by the Bank in
writing that, save as otherwise stated in such confirmation, no Default has
occurred and is continuing;
	 
	 	7.1.2	 	Use of proceeds
	 
	 	 	 	use the Loan exclusively for the respective purpose specified in Clause 1.1
(Purpose);
	 
	 	7.1.3	 	Pari passu
	 
	 	 	 	ensure that its obligations under this Agreement shall, at all times rank at
least pari passu with all its other present and future unsecured and
unsubordinated Indebtedness with the exception of any obligations which are
mandatorily preferred by law and not by contract; and
	 
	 	7.1.4	 	Provision of further information
	 
	 	 	 	provide the Bank with such financial and other information concerning the
Borrower and its affairs as the Bank may from time to time reasonably
require.

10

 

	 	7.2	 	Negative undertakings
	 
	 	 	 	The Borrower undertakes with the Bank that, from the date of this Agreement and so
long as any moneys are owing under this Agreement and while all or any part of the
Commitment remains outstanding, it will not, without the prior written consent of
the Bank:

	 	7.2.1	 	Negative pledge
	 
	 	 	 	permit any Encumbrance (other than a Permitted Encumbrance) to subsist,
arise or be created or extended over all or any part of its present or
future undertaking, assets, rights or revenues;
	 
	 	7.2.2	 	No merger
	 
	 	 	 	merge or consolidate with any other person;
	 
	 	7.2.3	 	Other business

	 
	 	 	 	undertake any business other than the leasing of the Aircraft;
	 
	 	7.2.4	 	Subsidiaries

	 
	 	 	 	
form or acquire any Subsidiaries;
	 
	 	7.2.5	 	Disposals
	 
	 	 	 	assign, novate, transfer or otherwise terminate the Head Leases or the
Leases otherwise than in accordance with the provisions for termination
under the Head Leases and Leases;
	 
	 	7.2.6	 	Leasing
	 
	 	 	 	enter into any other leasing arrangements other than the Head Leases and
Leases and rights arising under contracts entered into by or on behalf of
the Borrower in the ordinary course of its business of leasing the Aircraft;
	 
	 	7.2.7	 	Other obligations
	 
	 	 	 	incur any material obligations except for obligations arising under this
Agreement, the Head Leases, the Leases, the Security Documents or contracts
entered into in the ordinary course of its business of leasing the Aircraft;
	 
	 	7.2.8	 	No borrowing
	 
	 	 	 	incur any Indebtedness except for Indebtedness pursuant to this Agreement
and its existing Indebtedness pursuant to the Relevant Documents (as defined
in the Deeds of Application);

11

 

	 	7.2.9	 	Guarantees
	 
	 	 	 	issue any guarantees or indemnities or otherwise become directly or
contingently liable for the obligations of any person, firm, or corporation
(except for guarantees or indemnities from time to time required to procure
the release of such Aircraft from any arrest, detention, attachment or levy
or guarantees or undertakings required for the salvage of the Aircraft);
	 
	 	7.2.10	 	Loans
	 
	 	 	 	make any loans or grant any credit (save for normal trade credit in the
ordinary course of business) to any person or agree to do so; or
	 
	 	7.2.11	 	Bank Account
	 
	 	 	 	open any bank account with any bank other than the Bank.

	8	 	Conditions

	 	8.1	 	Documents and evidence
	 
	 	 	 	The obligation of the Bank to make the Loan available shall be subject to the
condition that the Bank, or its duly authorised representative, shall have received
the documents and evidence specified Schedule 2 (Conditions precedent) in form and
substance satisfactory to the Bank prior to delivery of the Drawdown Notice.
	 
	 	8.2	 	General condition precedent
	 
	 	 	 	The obligation of the Bank to make the Loan shall be subject to the further
condition that, at the time of the making of the Loan, the whole of the issued share
capital of the Borrower shall not be owned by London Industrial Leasing Limited.
	 
	 	8.3	 	Waiver of conditions precedent
	 
	 	 	 	The conditions specified in this Clause 8 are inserted solely for the benefit of the
Bank and may be waived by the Bank in whole or in part and with or without
conditions.

	9	 	Events of Default

	 	9.1	 	Events
	 
	 	 	 	There shall be an Event of Default if:

	 	9.1.1	 	Non-payment: subject to Clause 11.2, the Borrower fails to pay
any sum payable by it under this Agreement at the time, in the currency and in
the manner stipulated in this Agreement; or

12

 

	 	9.1.2	 	Breach of other obligations: the Borrower commits any material
breach of or omits to observe any of its obligations or undertakings expressed
to be assumed by it under any of the Relevant Documents (as defined in the
Deeds of Application) to which it is a party and, in respect of any such breach
or omission which in the opinion of the Bank is capable of remedy, such action
as the Bank may require shall not have been taken within 15 days of the Bank
notifying the Borrower of such default and of such required action, save where
such breach or omission is as a result of any actions of the Bank or any
subsidiary of the Bank pursuant to the Administration Agreement or otherwise;
or
	 
	 	9.1.3	 	Legal process: any judgment or order made against the Borrower
is not stayed or complied with within seven days or a creditor attaches or
takes possession of, or a distress, execution, sequestration or other process
is levied or enforced upon or sued out against, any of the undertakings,
assets, rights or revenues of the Borrower and is not discharged within seven
days; or
	 
	 	9.1.4	 	Insolvency: the Borrower becomes insolvent or stops or
suspends making payments (whether of principal or interest) with respect to all
or any class of its debts or announces an intention do so; or
	 
	 	9.1.5	 	Winding up: any petition is presented or other step is taken
for the purpose of winding up the Borrower or an order is made or resolution
passed for the winding up of the Borrower or a notice is issued convening a
meeting for the purpose of passing any such resolution; or
	 
	 	9.1.6	 	Administration: any petition is presented or other step is
taken for the purpose of the appointment of an administrator of the Borrower or
the Bank believes that any such petition or other step is imminent or an
administration order is made in relation to the Borrower; or
	 
	 	9.1.7	 	Appointment of receivers and managers: any administrative or
other receiver is appointed of the Borrower or any material part of its assets
and/or undertaking or any other steps are taken to enforce any Encumbrance over
all or any part of the assets of the Borrower; or
	 
	 	9.1.8	 	Compositions: any steps are taken, or negotiations commenced,
by the Borrower or by any of its creditors with a view to the general
readjustment or rescheduling of all or part of its indebtedness or to proposing
any kind of composition, compromise or arrangement involving such company and
any of its creditors; or
	 
	 	9.1.9	 	Analogous proceedings: there occurs, in relation to the
Borrower, in any country or territory in which it carries on business or to the
jurisdiction of whose courts any part of its assets is subject, any event
which, in the reasonable opinion of the Bank, appears in that country or
territory to

13

 

	 	 	 	correspond with, or have an effect equivalent or similar to, any of those
mentioned in Clauses 9.1.6 to 9.1.11 (inclusive) or the Borrower or
otherwise becomes subject, in any such country or territory, the operation
of any law relating to insolvency, bankruptcy or liquidation; or
	 
	 	9.1.10	 	Cessation of business: the Borrower suspends or ceases or threatens to
suspend or cease to carry on its business; or
	 
	 	9.1.11	 	Seizure: all or a material part of the undertakings, assets, rights or
revenues of the Borrower are seized, nationalised, expropriated or compulsorily
acquired by or under the authority of any government; or
	 
	 	9.1.12	 	Invalidity: this Agreement shall at any time and for any reason become
invalid or unenforceable or otherwise cease to remain in full force and effect,
or if the validity or enforceability of this Agreement shall at any time and
for any reason be contested by the Borrower which is a party thereto; or
	 
	 	9.1.13	 	Unlawfulness: it becomes impossible or unlawful at any time for the Borrower,
to fulfil any of the covenants and obligations expressed to be assumed by it in
this Agreement or for the Bank to exercise the rights or any of them vested in
it under any of the this Agreement or otherwise; or
	 
	 	9.1.14	 	Repudiation: the Borrower repudiates this Agreement or does or causes or
permits to be done any act or thing evidencing an intention to repudiate this
Agreement.

	 	9.2	 	Acceleration
	 
	 	 	 	The Bank may, without prejudice to any other rights of the Bank, at any time after
the happening of an Event of Default so long as the same is continuing by notice to
the Borrower declare that the Loan and all interest accrued and all other sums
payable under this Agreement have become due and payable, whereupon the same shall,
immediately or in accordance with the terms of such notice, become due and payable.
	 
	 	9.3	 	Demand basis
	 
	 	 	 	If, pursuant to Clause 9.2 (Acceleration), the Bank declares the Loan to be due and
payable on demand, the Bank may by written notice to the Borrower:

	 	9.3.1	 	call for repayment of the Loan on such date as may be
specified whereupon the Loan shall become due and payable on the date so
specified together with all interest accrued and all other sums payable under
this Agreement; or
	 
	 	9.3.2	 	without prejudice to the Bank’s rights at law, in equity or
otherwise, declare that such amounts which have become immediately due and

14

 

	 	 	 	payable under this Agreement be set off against the Bank’s obligations to
make payments of deferred consideration to the Borrower under and pursuant
to each Rental Sale Agreement, and failure by the Bank to deliver such a
declaration and notice shall not prejudice its rights under Clause 11.2
(Set-off); or
	 
	 	9.3.3	 	withdraw such declaration with effect from the date specified
in such notice.

	10	 	Indemnities

	 	10.1	 	Miscellaneous indemnities

	 	10.1.1	 	The Borrower shall on demand indemnify the Bank against any loss or expense
which the Bank shall certify as sustained or incurred by it as a consequence
of:

	 	(i)	 	any default in payment by the Borrower of any
sum under this Agreement when due;
	 
	 	(ii)	 	the occurrence of any other Event of Default;
	 
	 	(iii)	 	any repayment or prepayment of the Loan or
part thereof being made otherwise than on the Repayment Date; or
	 
	 	(iv)	 	the Loan (or any part thereof) not being made
for any reason (excluding any default by the Bank) after the Drawdown
Notice for the Loan has been given, including, in any such case, but
not limited to, any loss or expense sustained or incurred in
maintaining or funding the Loan or any part thereof (in each case) or
in liquidating or re-employing deposits from third parties acquired to
effect or maintain the Loan or any part thereof (in each case); and

	 	10.1.2	 	without prejudice to the generality of Clause 10.1.1(iii) the Borrower shall
indemnify the Bank against and pay promptly on demand to the Bank from time to
time, all amounts which the Bank certifies to be necessary to compensate it for
any broken funding costs in relation to any interest exchange or hedging
arrangements entered into in connection with its advancing the Loan or any part
thereof (including any costs incurred in liquidating deposits, re-employing
funds taken or borrowed to make or maintain the Loan or in prepaying such funds
to the source from which they were borrowed or mobilised) which the Bank may
sustain or incur as a consequence of or in connection with:

	 	(i)	 	any default in punctual payment by the Borrower
of any sums payable by it under this Agreement;
	 
	 	(ii)	 	the occurrence or continuance of any Event of
Default; or

15

 

	 	(iii)	 	any prepayment of the Loan or any part thereof
or any interest accrued thereon other than as permitted hereunder.

	 	10.2	 	Currency indemnity
	 
	 	 	 	If any sum due from the Borrower under this Agreement or any order of judgment given
or made in relation thereto has to be converted from the currency (the “first
currency”) in which the same is payable under this Agreement or under such order or
judgment into another currency (the “second currency”) for the purpose of:

	 	10.2.1	 	making or filing a claim or proof against the Borrower;
	 
	 	10.2.2	 	obtaining an order or judgment in any court or other tribunal; or
	 
	 	10.2.3	 	enforcing any order or judgment given or made in relation to this Agreement,
the Borrower shall indemnify and hold harmless the Bank from and against any
loss suffered as a result of any difference between: (i) the rate of exchange
used for such purpose to convert the sum in question from the first currency
into the second currency; and (ii) the rate or rates of exchange at which the
Bank may in the ordinary course of business purchase the first currency with
the second currency upon receipt of a sum paid to it in satisfaction, in whole
or in part, of any such order, judgment, claim or proof. Any amount due from
the Borrower under this Clause 10.2 shall be due as a separate debt and shall
not be affected by judgment being obtained for any other sums due under or in
respect of this Agreement and the term “rate of exchange” includes any premium
and costs of exchange payable in connection with the purchase of the first
currency with the second currency.

	11	 	Security and set-off

	 	11.1	 	Application of moneys
	 
	 	 	 	All moneys received by the Bank either under or pursuant to this Agreement following
an Event of Default after the exercise by the Bank of its rights under Clause 9.2
(Acceleration) and expressed to be applicable in accordance with the provisions of
this Clause 11.1 shall be applied by the Bank in the following manner:

	 	11.1.1	 	first in or towards payment of all unpaid expenses which may be owing to the
Bank under this Agreement;
	 
	 	11.1.2	 	secondly in or towards payment of any arrears of interest owing in respect of
the Loan or any part thereof;
	 
	 	11.1.3	 	thirdly in or towards repayment of the Loan (whether the same is due and
payable or not);

16

 

	 	11.1.4	 	fourthly in or towards payment to the Bank for any loss suffered by reason of
any such payment in respect of principal not being effected on the Repayment
Date relating to the part of the Loan repaid; and
	 
	 	11.1.5	 	fifthly in or towards payment to the Bank of any other sums owing to it under
this Agreement.

	 	11.2	 	Set-off

	 	11.2.1	 	The Borrower authorises the Bank (without prejudice to any of the Bank’s
rights at law, in equity or otherwise), at any time and without notice to the
Borrower, to set off any amounts then owing by the Bank to the Borrower in or
towards satisfaction of any sum due and payable from the Borrower to the Bank
under this Agreement. For this purpose, the Bank may effect such currency
exchange as may be necessary to effect such application. The Bank shall not be
obliged to exercise any right given to it by this Clause.
	 
	 	11.2.2	 	The Bank authorises the Borrower (without prejudice to any of the Borrower’s
rights at law, in equity or otherwise), at any time and without notice to the
Bank, to set off any amounts then owing by the Bank under the Rental Sales
Agreements to the Borrower in or towards satisfaction of any sum due and
payable from the Borrower to the Bank under this Agreement. For this purpose,
the Borrower may effect such currency exchange as may be necessary to effect
such application. The Borrower shall not be obliged to exercise any right given
to it by this Clause.

	 	11.3	 	Notification of set-off
	 
	 	 	 	The Bank shall notify the Borrower and the Borrower shall notify the Bank upon the
exercise or purported exercise of any right of set-off giving full details in
relation thereto provided always that failure by the Bank or the Borrower (as the
case may be) to deliver such notice, or to delay in delivering such notice, to the
other party shall not prejudice its rights under Clause 11.2 (Set-off).
	 
	 	11.4	 	Further assurance
	 
	 	 	 	The Borrower undertakes that this Agreement shall at the date of execution and
delivery thereof and so long as any moneys are owing under this Agreement be valid
and binding obligations of the respective parties thereto and rights of the Bank
enforceable in accordance with their respective terms.

	12	 	Assignment and transfer

	 	12.1	 	Benefit and burden
	 
	 	 	 	This Agreement shall be binding upon, and enure for the benefit of, the Bank and the
Borrower and their respective successors.

17

 

	 	12.2	 	No assignment by Borrower
	 
	 	 	 	The Borrower may not assign or transfer any of its rights or obligations under this
Agreement.
	 
	 	12.3	 	Assignment by Bank
	 
	 	 	 	The Bank may not assign all or any part of its rights or transfer by novation any of
its rights and obligations under this Agreement to any other person (an “Assignee”)
without the prior written consent of the Borrower.
	 
	 	12.4	 	Transfer

	 	12.4.1	 	The Bank may transfer all or any part of its rights or transfer by novation
any of its rights and obligations under this Agreement to any Subsidiary or the
holding company of the Bank (a “Transferee”) without the prior written consent
of the Borrower (the Borrower consenting to any such transfer by its execution
of this Agreement).
	 
	 	12.4.2	 	The Bank agrees to notify the Borrower in writing of any transfer made
pursuant to Clause 12.4.1.

	 	12.5	 	Documenting assignments and transfers
	 
	 	 	 	If the Bank assigns all or any part of its rights or transfers all or any part of
its rights, benefits and/or obligations as provided in Clause 12.3 (Assignment by
the Bank) or 12.4 (Transfer) the Borrower undertakes, immediately on being requested
to do so by the Bank and at the cost of the Bank, to enter into, such documents as
may be necessary or desirable to transfer to the Assignee or Transferee all or the
relevant part of the Bank’s interest in this Agreement and all relevant references
in this Agreement to the Bank shall thereafter be construed as a reference to the
Bank and/or its Assignee or Transferee (as the case may be) to the extent of their
respective interests.
	 
	 	12.6	 	Lending office
	 
	 	 	 	The Bank shall lend through its office at the address specified above or through any
other office of the Bank selected from time to time by it through which the Bank
wishes to lend for the purposes of this Agreement. If the office through which the
Bank is lending is changed pursuant to this Clause 12.6, the Bank shall notify the
Borrower promptly of such change.
	 
	 	12.7	 	Disclosure of information
	 
	 	 	 	The Bank may disclose to a prospective assignee or transferee who may propose
entering into contractual relations with the Bank in relation to this Agreement such
information about the Borrower as the Bank shall consider appropriate, subject
always to the Bank agreeing with such prospective assignee or transferee,

18

 

	 	 	 	in such form as the Borrower may reasonably require, to keep all such disclosed
information confidential.

	13	 	Notices and other matters

	 	13.1	 	Notices
	 
	 	 	 	Every notice, request, demand or other communication under this Agreement shall:

	 	13.1.1	 	be in writing delivered personally or by first-class prepaid letter (airmail
if available) or facsimile transmission or other means of telecommunication in
permanent written form;
	 
	 	13.1.2	 	be deemed to have been received in the case of a letter, when delivered
personally or two Banking Days after posting if delivered by pre-paid first
class post or five Banking Days after posting if delivered by airmail and, in
the case of a facsimile transmission or other means of telecommunication in
permanent written form, at the time of despatch (provided that if the date of
despatch is not a business day in the country of the addressee or if the time
of despatch is after the close of business in the country of the addressee it
shall be deemed to have been received at the opening of business on the next
such business day); and
	 
	 	13.1.3	 	be sent:

	 	(i)	 	to the Borrower at:
	 	 	 	Forthaven Limited
	 	 	 	c/o Bookham Technology plc
	 	 	 	Caswell
	 	 	 	Towcester
	 	 	 	Northamptonshire, NN12 8EQ
	 
	 	 	 	Attention: Chief Executive Officer
	 	 	 	Fax no: 01327 356 775
	 
	 	 	 	with a copy to:
	 
	 	 	 	Bookham, Inc.
	 	 	 	Ottawa (Kanata) Office
	 	 	 	10 Brewer Hunt Way
	 	 	 	Kanata, Ontario
	 	 	 	Canada, K2K 2B5
	 
	 	 	 	Attention: Thomas Kelley
	 	 	 	Fax no: +1 613 270 4002

19

 

	 	 	 	Bookham Technology plc
	 	 	 	Brixham Road
	 	 	 	Paignton
	 	 	 	Devon
	 	 	 	TQ4 7BE
	 
	 	 	 	Attention: Keith Border
	 	 	 	Fax no: 01803 662 100
	 
	 	 	 	Wilmer Cutler Pickering Hale and Dorr LLP
	 	 	 	Alder Castle
	 	 	 	10 Noble Street
	 	 	 	London
	 	 	 	EC2V 7QJ
	 
	 	 	 	Attention: Struan Penwarden
	 	 	 	Fax no: 020 7645 2424
	 
	 	(ii)	 	to the Bank at:
	 
	 	 	 	Deutsche Bank AG, London Branch
	 	 	 	Winchester House
	 	 	 	1 Great Winchester Street
	 	 	 	London
	 	 	 	EC2N 2DB
	 
	 	 	 	Attention: Nathalie Whybrow and Nicola Butcher
	 	 	 	Fax no: 020 7545 4638

or to such other address and/or numbers as is notified by one party to the
other party under this Agreement.

In proving service of a notice or a document it shall be sufficient to prove that
delivery was made or that the notice or document was properly addressed and posted
as a prepaid first class or airmail letter.

	 	13.2	 	No implied waivers, remedies cumulative
	 
	 	 	 	No failure or delay on the part of the Bank to exercise any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by the Bank of any power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or remedy. The
remedies provided in this Agreement are cumulative and are not exclusive of any
remedies provided by law.

20

 

	 	13.3	 	English language
	 
	 	 	 	All certificates, instruments and other documents to be delivered under or supplied
in connection with this Agreement shall be in the English language or shall be
accompanied by a certified English translation upon which the Bank shall be entitled
to rely.
	 
	 	13.4	 	Variation
	 
	 	 	 	The Parties agree that any term, provision or condition of this Agreement may be
amended and shall only be valid if evidenced in writing and signed by or on behalf
of each of the Parties to this Agreement.

	14	 	Governing law and jurisdiction

	 	14.1	 	Law
	 
	 	 	 	This Agreement is governed by and shall be construed in accordance with English law.
	 
	 	14.2	 	Submission to jurisdiction
	 
	 	 	 	The parties irrevocably agree that the courts of England are to have exclusive
jurisdiction to settle any disputes which may arise out of or in connection with
this Agreement.

The parties to this Agreement have caused this Agreement to be duly executed on the date first
above written.

21

 

Schedule 1

Form of Drawdown Notice

(referred to in Clause 2.2)

To: Deutsche Bank AG, London Branch

We refer to the above Loan Facility Agreement (the “Loan Agreement”) and hereby give you notice
that we wish to draw down the Loan in the amount of £42,500,000
on ___ August 2005. The funds
should be credited to (i) Phoebus Leasing Limited to the value of £41,015,026.30, account number
0248018-0000-GBP-000-LDN with Deutsche Bank AG London, (ii) City Leasing (Creekside) Limited to a
value of £400,000, account number 0128446-0000-GBP-005-LDN with Deutsche Bank AG London and (iii)
City Leasing (Creekside) Limited to a value of £1,084,973.70, account number
0128446-0000-GBP-000-LDN with Deutsche Bank AG London.

For the purposes of confirming the satisfaction of the condition at Clause 8.2 of the Loan
Agreement, we acknowledge that the whole of the issued share capital in City Leasing (Creekside)
Limited shall be owned by Bookham Technology plc at the time at which the above mentioned funds are
credited to the above mentioned accounts.

Words and expressions defined in the Loan Agreement shall have the same meanings where used herein.

For and on behalf of

 

City Leasing (Creekside) Limited

22

 

Schedule 2

Documents and evidence required as conditions precedent

(referred to in Clause 8.1)

	1	 	Constitutional documents
	 
	 	 	Copies, certified by an officer of the Borrower as true, complete and up to date copies of
all documents which contain or establish or relate to the constitution of the Borrower; and
	 
	2	 	Corporate authorisations
	 
	 	 	Copies of resolutions of the directors of the Borrower approving this Agreement to which
each may be a party and authorising the signature, delivery and performance of the
Borrower’s obligations thereunder, certified by an officer of the Borrower, as the case may
be, as:

	 	2.1	 	being true and correct;
	 
	 	2.2	 	being duly passed at a meeting of the directors of the Borrower duly convened
and held;
	 
	 	2.3	 	not having been amended, modified or revoked; and
	 
	 	2.4	 	being in full force and effect,
	 
	 	together with originals or certified copies of any powers of attorney issued by the Borrower
pursuant to such resolutions; and

	3	 	Documents

	 	3.1	 	This Agreement, duly executed by all parties to it.
	 
	 	3.2	 	The Share Purchase Agreement, in a form agreed by the parties to it and by the
parties to this Agreement, to be entered into between London Industrial Leasing Limited
as seller, Bookham Technology PLC as purchaser and Deutsche Bank AG, London Branch
relating to the sale and purchase of the whole of the issued share capital of the
Borrower.

23

 

Schedule 3

Aircraft Specification

	 	 	 	 	 
	 

	 	Aircraft 1:
	 	Boeing 747-400
	 

	 	 	 	Manufacturer’s Serial Number: 23908
	 

	 	 	 	UK Registration Mark: G-BNLA
	 
	 	 	 	 
	 

	 	Aircraft 2:
	 	Boeing 747-400
	 

	 	 	 	Manufacturer’s Serial Number: 24047
	 

	 	 	 	UK Registration Mark: G-BNLE
	 
	 	 	 	 
	 

	 	Aircraft 3:
	 	Boeing 747-400
	 

	 	 	 	Manufacturer’s Serial Number: 24056
	 

	 	 	 	UK Registration Mark: G-BNLN
	 
	 	 	 	 
	 

	 	Aircraft 4:
	 	Boeing 747-400
	 

	 	 	 	Manufacturer’s Serial Number: 27092
	 

	 	 	 	UK Registration Mark: G-CIVA

24

 

Schedule 4

Repayment Schedule

Anticipated Drawdown:                £42,500,000.00

	 	 	 	 	 
	 	 	Principal	 	Interest
	Repayment Dates	 	(£)	 	(£)
	14-Jul-06
	 	21,250,000.00	 	2,235,430.14
	 
	 	 	 	 
	16-Jul-07
	 	21,250,000.00	 	1,213,613.70

25

 

SECOND DB LONDON LOAN AGREEMENT EXECUTION PAGE

	 	 	 
	The Borrower
	 	 
	 
	 	 
	SIGNED by

	 	/s/ illegible
	 
	 	 
	duly authorised for and on behalf of
	 	 
	 
	 	 
	CITY LEASING (CREEKSIDE) LIMITED
	 	 
	 
	 	 
	 
	 	 

	 	 	 
	The Bank
	 	 
	 
	 	 
	SIGNED by

	 	/s/ illegible
	 
	 	 
	duly authorised for and on behalf of
	 	 
	 
	 	 
	DEUTSCHE BANK AG, acting through its LONDON

BRANCH
	 	 

26

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