Document:

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                                                                    EXHIBIT 10.4

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                              AMENDED AND RESTATED
                         ADMINISTRATIVE AGENCY AGREEMENT

                                      among

                      AerFi Administrative Services Limited

                                AerFi Group plc,
                                  as Guarantor

                                  AerCo Limited

                                AerFi Group plc,
                                   as Servicer

                                       and

                    The Entities Listed on Appendix A Hereto

                            Dated as of July 17, 2000

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                                                                  EXECUTION COPY

                                TABLE OF CONTENTS

                             ----------------------

                                                                            PAGE

                                   ARTICLE 1
                                  DEFINITIONS

SECTION 1.01.  Definitions...............................................      1

                                   ARTICLE 2
                      APPOINTMENT; ADMINISTRATIVE SERVICES

SECTION 2.01.  Appointment...............................................      9
SECTION 2.02.  Limitations...............................................      9
SECTION 2.03.  Administrative Services...................................     11
SECTION 2.04.  Accounting and Draft Accounts.............................     19
SECTION 2.05.  Additional Administrative Services........................     21
SECTION 2.06.  Additional Aircraft.......................................     22
SECTION 2.07.  New Subsidiaries..........................................     22
SECTION 2.08.  AerCo Group Responsibility................................     22

                                   ARTICLE 3
                STANDARD OF PERFORMANCE; LIABILITY AND INDEMNITY

SECTION 3.01.  Standard of Performance...................................     23
SECTION 3.02.  Liability and Indemnity...................................     23
SECTION 3.03.  Conflicts of Interest.....................................     24

                                   ARTICLE 4
                       ADMINISTRATIVE AGENT UNDERTAKINGS

SECTION 4.01.  Administrative Agent Undertakings.........................     25

                                   ARTICLE 5
                          UNDERTAKINGS OF AERCO GROUP

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SECTION 5.01.  Cooperation...............................................     28
SECTION 5.02.  Information...............................................     28
SECTION 5.03.  Scope of Services.........................................     28
SECTION 5.04.  Ratification..............................................     29
SECTION 5.05.  Covenants.................................................     29
SECTION 5.06.  Ratification by Subsidiaries..............................     31

                                   ARTICLE 6
                                   APPROVALS

SECTION 6.01.  Approvals.................................................     31

                                   ARTICLE 7
                                 EFFECTIVENESS

SECTION 7.01.  Effectiveness.............................................     31

                                   ARTICLE 8
                ADMINISTRATIVE FEES, EXPENSES AND SUBORDINATION

SECTION 8.01.  Administrative Fees.......................................     32
SECTION 8.02.  Expenses..................................................     33
SECTION 8.03.  Taxes.....................................................     33
SECTION 8.04.  Payment of Expenses.......................................     34
SECTION 8.05.  Subordination of Fees and Expenses........................     34

                                   ARTICLE 9
          TERM, REMOVAL OF OR TERMINATION BY THE ADMINISTRATIVE AGENT

SECTION 9.01.  Term......................................................     34
SECTION 9.02.  Cross-termination.........................................     34
SECTION 9.03.  Right to Terminate........................................     34
SECTION 9.04.  Consequences of Termination...............................     37
SECTION 9.05.  Survival..................................................     37

                                   ARTICLE 10
                           ASSIGNMENT AND DELEGATION

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SECTION 10.01. Assignment and Delegation.................................     38

                                   ARTICLE 11
                                   GUARANTEE

SECTION 11.01. Guarantee.................................................     38
SECTION 11.02. Absolute Obligations......................................     39
SECTION 11.03. Guarantor's Representations...............................     39
SECTION 11.04. Successors and Assigns; Amendments........................     40
SECTION 11.05. Limitations...............................................     40
SECTION 11.06. Payments; Costs of Enforcement............................     41

                                   ARTICLE 12
                                 MISCELLANEOUS

SECTION 12.01. Notices...................................................     41
SECTION 12.02. Governing Law.............................................     42
SECTION 12.03. Jurisdiction..............................................     43
SECTION 12.04. Agent for Service of Process..............................     43
SECTION 12.05. WAIVER OF JURY TRIAL......................................     43
SECTION 12.06. Counterparts; Third Party Beneficiaries...................     43
SECTION 12.07. Entire Agreement..........................................     44
SECTION 12.08. Power of Attorney.........................................     44
SECTION 12.09. Restrictions on Disclosure................................     44
SECTION 12.10. Rights of Setoff..........................................     45
SECTION 12.11. No Partnership............................................     45
SECTION 12.12. Implied Terms Excluded....................................     46
SECTION 12.13. Table of Contents; Headings...............................     46
SECTION 12.14. No Retroactive Application................................     46
SECTION 12.15. Limited Recourse..........................................     46

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                                                                            PAGE
Appendix A     Subsidiaries
Appendix B     Form of Accession Agreement

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         AMENDED AND RESTATED ADMINISTRATIVE AGENCY AGREEMENT dated as of July
17, 2000 (the "AGREEMENT"), among AerFi Administrative Services Limited, a
company incorporated under the laws of Ireland and formerly known as GPA
Administrative Services Limited (the "ADMINISTRATIVE AGENT"), AerFi Group plc, a
company incorporated under the laws of Ireland and formerly known as GPA Group
plc (the "GUARANTOR" or "AerFi GROUP"), AerCo Limited, a company incorporated
under the laws of Jersey, Channel Islands ("AerCo"), AerFi Group plc, as
Servicer (the "SERVICER"), and the entities listed on Appendix A hereto and any
other Subsidiary of AerCo which accedes to this Agreement pursuant to an
Accession Agreement (together, the "SUBSIDIARIES"). This Agreement amends and
restates in its entirety the administrative agency agreement dated as of July
15, 1998 (the "ORIGINAL AGREEMENT"), entered into among certain of the parties
hereto.

         For the consideration set forth herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree that the Original Agreement be and the same is hereby amended and restated
to read in its entirety as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings. Unless otherwise defined herein, all capitalized terms
used but not defined herein have the meanings assigned to such terms in the
Indenture.

          "ACCESSION AGREEMENT" means an accession agreement substantially in
the form of Appendix B hereto.

         "ADDITIONAL FEE" has the meaning assigned to such term in Section
8.01(a) hereof.

         "ADDITIONAL NOTES" has the meaning assigned to such term in the
Offering Memorandum.

         "ADMINISTRATIVE AGENT" has the meaning assigned to such term in the
preamble hereto.

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         "ADMINISTRATIVE FEE" has the meaning assigned to such term in Section
8.01(a) hereof.

         "ADMINISTRATIVE SERVICES" has the meaning assigned to such term in
Section 2.01(a) hereof.

         "AerCo" has the meaning assigned to such term in the preamble hereto.

         "AerCo GROUP" has the meaning assigned to such term in Section 2.01(a)
hereof.

         "AerFi GROUP" has the meaning assigned to such term in the preamble
hereto.

         "AFFILIATE" means a Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, the Person specified. The parties hereto acknowledge that each of AerCo
and its Subsidiaries, on the one part, and AerFi Group plc and its subsidiaries,
on the other part, are not Affiliates of each other.

         "AFTER-TAX BASIS" means on a basis such that any payment received,
deemed to have been received or receivable by any Person shall, if necessary, be
supplemented by a further payment to that Person so that the sum of the two
payments shall, after deduction of all U.S. Federal, state, local and Irish or
other foreign Taxes, penalties, fines, interest, additions to Tax and other
charges resulting from the receipt (actual or constructive) or accrual of such
payments imposed by or under any U.S. Federal, state, local or Irish or other
foreign law or Governmental Authority (after taking into account any current
deduction to which such Person shall be entitled with respect to the amount that
gave rise to the underlying payment) be equal to the payment received, deemed to
have been received or receivable.

         "AGREEMENT" has the meaning assigned to such term in the preamble
hereto.

         "AIRCRAFT ASSET" has the meaning assigned to such term in the Servicing
Agreement.

         "ANNUAL APPRAISED VALUE" means the average Base Value of an Aircraft at
the time acquired by a member of AerCo Group as determined annually by three
independent appraisers, which initially shall be Aircraft Information Services,
Inc., BK Associates, Inc. and Airclaims Limited, or, thereafter, be such other
independent appraisers as may be selected by the Administrative Agent and
approved by the Board of Directors of AerCo.

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         "ASSET EXPENSES BUDGET" has the meaning assigned to such term in
Section 7.04(a) of the Servicing Agreement.

         "BOARD OF DIRECTORS" means the board of directors of AerCo.

         "BUSINESS OBJECTIVES" means maximizing the present value of the cash
flows derived from the leases relating to the Aircraft over time, subject to the
constraints imposed by the Indenture and Servicing Agreement, and seeking to
achieve a balanced and diversified portfolio (including, without limitation,
with respect to lessees, geography and lease term lengths), in all cases taking
into account the then-existing and anticipated market conditions affecting the
operating leases of used aircraft and the commercial aviation industry
generally.

         "CASH MANAGEMENT AGREEMENT" means the Amended and Restated Cash
Management Agreement dated as of July 17, 2000, among the Cash Manager, the
Guarantor, AerCo, the Servicer, Bankers Trust Company, solely in its capacity as
indenture trustee and security trustee and the entities listed on Appendix A
thereto and any other Subsidiary of AerCo which accedes thereto, as amended from
time to time.

         "CASH MANAGER" means AerFi Cash Manager II Limited, a limited company
organized under the laws of Ireland and formerly known as GPA Cash Manager II
Limited.

         "CONCENTRATION THRESHOLDS" has the meaning assigned to such term in
Section 2.02(a) of Schedule 2.02(a) of the Servicing Agreement.

         "CONFLICTS STANDARD" has the meaning assigned to such term in Section
3.02(b) of the Servicing Agreement.

         "CONSOLIDATED QUARTERLY DRAFT ACCOUNTS" has the meaning assigned to
such term in Section 2.04(b)(ii) hereof.

         "CONSOLIDATING QUARTERLY DRAFT ACCOUNTS" has the meaning assigned to
such term in Section 2.04(b)(iii) hereof.

         "CONTROL" of a Person (including, with its correlative meanings,
"controlled by" and "under common control with") means possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise) of such Person.

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         "DOLLARS" or "$" means the lawful money of the United States of
America.

         "DRAFT ACCOUNTS" has the meaning assigned to such term in Section
2.04(b)(iii) hereof.

         "EU" means the European Union.

         "FEE PERIOD" has the meaning assigned to such term in Section 8.01(a)
hereof.

         "FIXED FEE" has the meaning assigned to such term in Section 8.01
hereto.

         "GOVERNMENTAL AUTHORITY" means any court, administrative agency or
commission or other governmental agency or instrumentality (or any officer or
representative thereof), national, federal, state, local or international, of
competent jurisdiction including, without limitation, the EU.

         "GUARANTEED OBLIGATIONS" has the meaning assigned to such term in
Section 11.01(a) hereof.

         "GUARANTEED PARTIES" has the meaning assigned to such term in Section
11.01(a) hereof.

         "GUARANTOR" has the meaning assigned to such term in the preamble
hereto.

         "INDENTURE" means the Indenture dated as of July 15, 1998, between
AerCo and the Trustee, as amended or supplemented from time to time.

         "INFLATION FACTOR" means with respect to any calendar year the result
(expressed as a decimal) of the following calculation:

                           IF = (X-1)  x  0.75

         where:

                  "IF" means the Inflation Factor;

                  "X" means the average of (a) the quotient (expressed as a
decimal) of (i) the U.S. CPI published in respect of the most recently ended
calendar year (the "New Year") divided by (ii) the U.S. CPI published in respect
of the calendar year immediately preceding the New Year and (b) the quotient
(expressed as a decimal) of (i) the Irish CPI

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published in respect of the New Year divided by (ii) the Irish CPI published in
respect of the immediately preceding calendar year. For the avoidance of doubt,
if X is less than 1, the Inflation Factor shall be a negative number.

         "INITIAL PERIODS" has the meaning assigned to such term in Section
7.04(b) of the Servicing Agreement.

         "IRISH CPI" means the Consumer Price Index (all items) published
quarterly by the Central Statistics Office of Ireland (current base date
November 1989 = 100) or by any other Irish governmental department or other
Person to which the publication thereof may have been transferred. If the base
date for Irish CPI is at any time revised then Irish CPI shall be calculated for
the purposes hereof as so revised.

         "LEDGERS" has the meaning assigned to such term in Section 2.04(b)(i)
hereof.

         "LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor which is not a Person within
AerCo Group under any conditional sale agreement, capital lease or title
retention agreement relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party with respect to such
securities.

         "LOSSES" means any and all liabilities (including liabilities arising
out of the doctrine of strict liability), obligations, losses, damages,
penalties, Taxes, actions, suits, judgments, costs, fees, expenses (including
reasonable legal fees, expenses and related charges and costs of investigation)
and disbursements, of whatsoever kind and nature; provided that the term
"Losses" shall not include any indemnified party's management time or overhead
expenses.

         "MAINTENANCE RESERVES" means the aggregate of

         (i)      any cash amount payable under a Lease and expressed as (a) a
                  maintenance reserve, (b) constituting a fund for application
                  towards the cost of maintenance, overhauls or repairs or (c)
                  supplemental rent payable by reference to the level of
                  utilization of such aircraft or of any engine, part or
                  complement thereof; and

         (ii)     any letters of credit, guarantees or other credit support
                  provided either as security for the cost of maintenance,
                  overhauls or repairs, or as security for the general
                  obligations of the Lessee under the Lease, but in an amount
                  calculated by reference to the level of utilization of such
                  aircraft or of any engine, part or complement thereof,

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         in respect of all of the Leases.

         "MATERIAL ADVERSE EFFECT" with respect to any Person means an event,
condition, matter, change or effect that impacts or, insofar as reasonably can
be foreseen, in the future is likely to impact, in a material adverse manner,
the condition (financial or otherwise), properties, assets, liabilities,
earnings, capitalization, shareholders' equity, licenses or franchises,
businesses, operation or prospects of such Person or the ability of such Person
to consummate the transactions contemplated by the Indenture or to perform fully
any of its obligations under any of the Related Documents.

         "NOTES OFFERING" has the meaning assigned to such term in Section 8.01
hereof.

         "OFFERING MEMORANDUM" means the Offering Memorandum dated July 12, 2000
with respect to debt securities of AerCo.

         "OPERATING BUDGET" has the meaning assigned to such term in Section
7.04(a)(i) of the Servicing Agreement.

         "ONE YEAR PERIOD" has the meaning assigned to such term in Section
2.04(a) hereof.

         "PERIOD" has the meaning assigned to such term in Section 2.04(a)
hereof.

         "QUARTER" means each fiscal quarter of AerCo or any of its
Subsidiaries, as applicable.

         "RATINGS" means the ratings assigned to the Notes by the Rating
Agencies.

         "REIMBURSABLE EXPENSES" has the meaning assigned to such term in
Section 8.02(b) of this Agreement.

         "RELATED DOCUMENTS" has the meaning assigned to such term in the
Indenture.

         "RELEVANT JURISDICTION" means, in the case of AerCo, Jersey, Channel
Islands; and, in the case of a Subsidiary of AerCo, the jurisdiction in which it
is incorporated, or if the context requires, tax resident.

         "RENTAL FEE" has the meaning assigned to such term in Section 8.01 of
this Agreement.

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         "REPRESENTATIVES" with respect to any Person means the officers,
directors, employees, advisors and agents of such Person.

         "SCHEDULE 2.02(A) OF THE SERVICING AGREEMENT" has the meaning assigned
to such term in Section 2.03(m) hereof.

         "SECURITY TRUSTEE" means Bankers Trust Company, a New York banking
corporation, not in its individual capacity, but solely as security trustee
under the Security Trust Agreement dated as of July 15, 1998, among AerCo, the
Security Trustee and the other entities specified therein, as amended or
supplemented from time to time.

         "SERVICE PROVIDERS" has the meaning assigned to such term in Section
2.02(d) hereof.

         "SERVICER" has the meaning assigned to such term in the preamble
hereto.

         "SERVICES" has the meaning assigned to such term in Section 2.02(a) of
the Servicing Agreement.

         "SERVICING AGREEMENT" means the Servicing Agreement dated as of July
17, 2000, among the Servicer, AerCo, the Cash Manager, the Administrative Agent
and the entities listed on Appendix A thereto and any other Subsidiary of AerCo
which accedes thereto, as amended from time to time.

         "SPECIAL BOARD RESOLUTION" has the meaning given to it in the Articles
of Association of AerCo; provided that references to a Special Board Resolution
shall be construed as references to an ordinary resolution of the Board of
Directors any time at which the Servicer and/or its Affiliates do not hold a
majority of the Class E Notes.

         "STANDARD OF CARE" has the meaning assigned to such term in Section
3.01 of the Servicing Agreement.

         "STANDARD OF PERFORMANCE" has the meaning assigned to such term in
Section 3.01 hereof.

         "STIPULATED INTEREST RATE" means, for any period, a rate per annum
equal to LIBOR in effect during such period plus 2% per annum.

         "SUBSIDIARIES" has the meaning assigned to such term in the preamble
hereto.

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         "THREE YEAR PERIOD" has the meaning assigned to such term in Section
2.04(a) hereof.

         "TRANSACTION COSTS" means all out-of-pocket expenses incident to any
Notes Offering (specifically excluding, except to the extent otherwise expressly
included herein, any direct or indirect commissions, discounts, fees or other
remuneration allowed or paid to any underwriters in connection with any such
Notes Offering), including the cost of printing any offering documents
(including the Offering Memorandum) and any expenses (including fees and
disbursements of counsel) incurred by any underwriters in connection with
qualification of the Notes for sale under the laws of such jurisdictions as the
underwriters designate and the printing of memoranda relating thereto, for any
fees charged by investment rating agencies for the rating of the Notes, for any
filing fees of the National Association of Securities Dealers, Inc. relating to
the Notes and for expenses incurred in distributing any Prospectuses.

         "TRUSTEE" means Bankers Trust Company, a New York banking corporation,
not in its individual capacity, but solely as trustee under the Indenture.

         "U.S. CPI" means with respect to any calendar year or any period during
any calendar year the "Consumer Price Index for All Urban Consumers (CPI-U) U.S.
City Average for All Items" published by the Bureau of Labor Statistics for the
United States Department of Labor (1982-1984=100). If the U.S. CPI shall be
converted to a different standard reference base or otherwise revised after the
date hereof, U.S. CPI shall thereafter be calculated with use of such new or
revised statistical measure published by the Bureau of Labor Statistics or, if
not so published, as may be published by any other reputable publisher of such
price index selected by Servicing Company.

         "U.K. GAAP" has the meaning assigned to such term in Section 2.04(b)(i)
hereto.

         "YEAR" means each 12 month fiscal year (or such shorter fiscal period
as agreed upon in the future) ended June 30 or as modified in the future.

                                    ARTICLE 2
                      APPOINTMENT; ADMINISTRATIVE SERVICES

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         SECTION 2.01. Appointment. (a) AerCo hereby appoints the Administrative
Agent as the provider of the administrative and related services set forth in
Sections 2.03 through 2.07 hereof (the "ADMINISTRATIVE SERVICES") to AerCo and
each Subsidiary of AerCo (collectively, "AERCO GROUP") on the terms and subject
to the conditions set forth in this Agreement.

         (b) The Administrative Agent hereby accepts such appointment and agrees
to perform the Administrative Services on the terms and subject to the
conditions set forth in this Agreement.

         (c) The Administrative Services do not include any service or matter
which is the responsibility of the Servicer under the Servicing Agreement, the
Cash Manager under the Cash Management Agreement, the Company Secretary under
the Secretarial Services Agreement or the company secretaries of AerCo Group's
Subsidiaries.

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

         SECTION 2.02. Limitations. (a) The Administrative Agent agrees (with
respect to the Administrative Services agreed by it to be carried out hereunder)
to comply with the terms of the articles of incorporation, by-laws, trust
agreements or similar constituting documents of each Person within AerCo Group
and all agreements to which any Person within AerCo Group is a party (including
all Related Documents), provided that copies of such documents and agreements
have been delivered to the Administrative Agent and, without prejudice to the
foregoing, not to enter into, on behalf of any Person within AerCo Group, any
commitments, loans or obligations or charge, mortgage, pledge, encumber or
otherwise restrict or dispose of the property or assets or expend any funds of
any Person within AerCo Group save (i) as expressly permitted by the terms of
this Agreement or (ii) upon the express direction of, as applicable, any of the
boards of directors of AerCo or any of its Subsidiaries.

          (b) Each Person within AerCo Group hereby appoints AerCo to act as its
representative and, having been duly authorized to do so by each of its
Subsidiaries, as the representative of each of its Subsidiaries with respect to
any matter in respect of which any Person within AerCo Group, or AerCo Group as
a whole, is required or permitted to take any action pursuant to the terms of
this Agreement. Accordingly, in

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connection with the performance of the Administrative Services, the
Administrative Agent shall in all cases be entitled to rely on the instructions
(or other actions) of AerCo as representative of each Person within AerCo Group.
The Administrative Agent further agrees to make reasonable efforts so as not to
take any action inconsistent with the Servicing Agreement.

          (c) In connection with the performance of the Administrative Services,
the Administrative Agent shall (i) have no responsibility for the failure of any
other Person (other than any Person acting as a delegate of the Administrative
Agent under this Agreement pursuant to Section 10.01 hereof) providing services
directly to AerCo Group to perform its obligations to AerCo Group, (ii) in all
cases be entitled to rely upon the instructions of AerCo Group or any of its
Representatives and upon notices, reports or other communications made by any
Person providing services to AerCo Group (other than any Affiliate of the
Administrative Agent) and shall not be responsible for the accuracy or
completeness of any such notices, reports or other communications except to the
extent that the Administrative Agent has actual notice of any matter to the
contrary and (iii) not be obligated to act in any manner which is reasonably
likely to (A) violate any Applicable Law, (B) lead to an investigation by any
Governmental Authority or (C) expose the Administrative Agent to any liabilities
for which, in the Administrative Agent's good faith opinion, adequate bond or
indemnity has not been provided.

         (d) Subject to the limitations set forth in Section 2.02(a) hereof, in
connection with the performance of the Administrative Services, the
Administrative Agent is expressly authorized by AerCo and each other Person
within AerCo Group (i) to engage in and conclude commercial negotiations with
the Persons providing services to AerCo Group, including, without limitation,
where the context permits, the Servicer, the Cash Manager, the Reference Agent,
the Company Secretary and other Persons performing similar services or advising
AerCo Group in each case other than an Affiliate of the Administrative Agent
(the "SERVICE PROVIDERS") and with their Representatives, and (ii) after such
consultation, if any, as the Administrative Agent deems necessary under the
circumstances, to act on such Person's behalf with regard to any and all matters
requiring any action on the part of the Administrative Agent under the Servicing
Agreement. AerCo Group agrees that it will give the Administrative Agent and the
Servicer 60 days' prior written notice of any limitation or modification of the
authority set forth in this Section 2.02(d).

          (e) The Administrative Agent may rely on the advice of any law firm,
accounting firm, risk management adviser, tax adviser, insurance adviser,
aircraft

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appraiser or other professional adviser appointed by any Person within AerCo
Group and any Person appointed in good faith by the Administrative Agent and
shall not be liable for any claim by any Person within AerCo Group to the extent
that it was acting in good faith upon the advice of any such persons.

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

         SECTION 2.03. Administrative Services. The Administrative Agent hereby
agrees to perform and provide the following services for each Person within
AerCo Group and their respective governing bodies:

          (a)   administrative services:

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

              (ii) maintaining, or monitoring the maintenance of, the books,
         records, registers and associated filings of each Person within AerCo
         Group, other than those required to be maintained by the Company
         Secretary;

              (iii) providing any administrative assistance reasonably
         necessary to assist any Person within AerCo Group in carrying out its
         obligations, including providing timely notice of decisions to be
         made, or actions to be taken, under any of the Related Documents;
         provided, that if such obligations of AerCo Group under any of the
         Related Documents are only required upon receipt of notice to AerCo
         Group or the Administrative Agent, then the

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         Administrative Agent shall provide such administrative assistance only
         to the extent it has received such notice or is otherwise aware of
         such obligations (it being understood that the Administrative Agent
         shall not be deemed to be otherwise aware of such obligations solely
         because notice has been provided to a Person within AerCo Group or to
         AerFi Group or any Affiliate of AerFi Group other than the
         Administrative Agent);

               (iv) providing information and other assistance to enable AerCo
         Group to: (a) develop its interest rate management policy and
         developing financial models, cash flow projections and forecasts, by
         proposing such policies, models, projections and forecasts to the
         relevant board of directors for approval, and, after such approval,
         implementing them to the extent required by AerCo Group, and (b) make
         its aircraft lease, sale and capital investment decisions, to the
         extent such information and assistance is not contemplated to be
         provided by the Servicer pursuant to the Servicing Agreement;

               (v) procuring, when the Administrative Agent considers in good
         faith that it is appropriate or necessary to do so, and coordinating
         the advice of, legal counsel, accounting, tax and other professional
         advisers at the expense of the relevant Person within AerCo Group, to
         assist such Person in carrying out its obligations, and supervising, in
         accordance with instructions from such Person, such legal counsel and
         other advisers;

               (vi) as frequently as is necessary for AerCo Group to comply
         with its obligations under the Related Documents and as required in
         connection with the acquisition of Additional Aircraft, arranging for
         the Appraisals to be made and providing the Appraisals to the relevant
         Service Providers;

               (vii) providing the Cash Manager with information with respect
         to the Annual Appraised Value of the Aircraft and any changes thereto;
         and

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

         (b) to monitor the performance of the Service Providers (provided
that, for the avoidance of doubt, this clause shall not preclude AerCo from
being entitled, by

                                       12
<PAGE>   18

Special Board Resolution, to appoint other Persons to perform such monitoring
function) and to report on such performance to the board of directors of AerCo
on a quarterly basis, including:

               (i)  with respect to the Servicer:

                         (A) monitoring and reviewing the information and other
                  reports provided by the Servicer pursuant to the Servicing
                  Agreement, including with respect to the status of Lease
                  payments, Lessee receivables, Maintenance Reserves, security
                  deposits, adjustments of rentals and claims against
                  Maintenance Reserves in accordance with Lease terms (to the
                  extent provided to the Administrative Agent);

                         (B) assisting in evaluating the Servicer's performance
                  relative to the Standard of Care and the Conflicts Standard;

                         (C) assisting in establishing standards for evaluating
                  the Servicer's performance relative to the terms of the
                  Servicing Agreement generally, assisting in evaluating such
                  performance against such standards and recommending action
                  with respect thereto;

                         (D) reviewing and providing advice with respect to
                  recommendations made by the Servicer for approval by any
                  Person within AerCo Group;

                         (E) monitoring the compliance of the Servicer with its
                  obligations under the Servicing Agreement; and

                         (F) authorization of payment by the Cash Manager of
                  invoices approved by the Servicer in accordance with Section
                  6.03 of Schedule 2.02(a) of the Servicing Agreement;

              (ii)  with respect to the other Service Providers:

                         (A) to the extent not provided for in the relevant
                  agreement, assisting in establishing standards for performance
                  evaluation and compliance with the terms of such agreement;

                                       13
<PAGE>   19

                          (B) assisting in evaluating the performance and
                  compliance of each Service Provider against its obligations
                  under the relevant agreement or such standards as are
                  established pursuant to subsection 2.03(b)(ii)(A) above;

                          (C) monitoring and reviewing the information and
                  reports provided by the Cash Manager to the Administrative
                  Agent and the relevant Person within AerCo Group and
                  reviewing and providing advice with respect to such reports;
                  and

                          (D) implementing any other request by Persons within
                  AerCo Group to evaluate the performance of the Service
                  Providers under the relevant agreements with such Persons
                  within AerCo Group, which shall be at the expense of such
                  Persons, to the extent services are required that are
                  materially greater in scope than those being provided pursuant
                  to the express terms of this Agreement;

          (c) to the extent that (i) the following services are not provided by
the other Service Providers, and (ii) the relevant information is provided to
the Administrative Agent by Persons within AerCo Group or the Service Providers,
to act as liaison with the Rating Agencies with respect to the rating impact of
any decisions on behalf of AerCo Group, including:

                  (i) advising the Rating Agencies from time to time of any
         material changes in the Portfolio, coordinating with AerCo Group and
         the Service Providers and providing the Rating Agencies with such
         statistical and other information as they may from time to time
         request and in connection with the acquisition of Additional Aircraft
         (such information to be provided at AerCo Group's expense to the
         extent that providing such information requires services that are
         materially greater in scope than those being provided pursuant to the
         express terms of this Agreement);

                  (ii) providing the Rating Agencies with the outstanding
         principal balances of each class or subclass of Notes and loan-to-
         value ratios (i.e., ratio of debt to Annual Appraised Value of AerCo
         Group's assets); and

                  (iii) coordinating among AerCo Group, the Servicer and the
         Appraisers to ensure that the Appraisals are received as required;

                                       14
<PAGE>   20

          (d) to provide assistance to AerCo Group in procuring lessee consents,
novations and other documentation and in taking all other actions necessary in
connection with the reissue or amendment of letters of credit under which the
current beneficiary is the Guarantor or an Affiliate of the Guarantor such that
the new beneficiary becomes a Person within AerCo Group;

          (e) to provide assistance to AerCo Group in connection with (i) the
reissue or amendment of letters of credit under which the current beneficiary is
the Guarantor or an Affiliate of the Guarantor such that the new beneficiary
becomes a Person within AerCo Group, (ii) the re-lease and/or sale of the
Aircraft, (iii) the acquisition of Additional Aircraft and issuance of
Additional Notes, (iv) the issuance of Refinancing Notes and (v) any other
financing transactions relating to AerCo Group after the Closing Date,
including:

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

              (ii) providing qualified personnel to attend and provide
         administrative support (including the preparation of any certificates
         required pursuant to the Servicing Agreement) at the closings in
         connection with sales or re-leases of the Aircraft, if required (it
         being understood that the Administrative Agent will not be obligated
         to provide legal counsel or legal or technical services to AerCo
         Group);

              (iii) coordinating with AerCo Group and the Service Providers and
         assisting in the management of the closing process so that closings
         will occur on a timely basis;

              (iv) providing all necessary administrative support to complete
         any documentation and other related matters (including assistance in
         completing registration statements, offering memoranda and other
         offering or disclosure documents in connection with financings or
         refinancings); and

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

          (f) to coordinate with the Cash Manager, including:

                                       15
<PAGE>   21

              (i) reviewing the impact on AerCo Group's operation and financial
         condition and on the Notes of any proposal for the re-lease or sale of
         an Aircraft or the acquisition of Additional Aircraft;

              (ii) establishing any sales objectives in connection with
         expected cash flow needs;

              (iii) analyzing the effect of the budgets developed pursuant to
         Section 2.04(a) below on the expected cash flows of AerCo Group with
         respect to the payment of the Notes; and

              (iv) providing written notice to the Cash Manager identifying in
         reasonable detail Expenses, Lease obligations or other liabilities of
         Persons within AerCo Group for which interim withdrawals may be made
         pursuant to Sections 3.04 and 3.05 of the Indenture;

          (g) with respect to the implementation, following Board of Directors
approval, of AerCo Group's interest rate management strategy (including hedging
strategy), (i) to obtain information and reports from, and, where it or the
Board of Directors deems such opinions appropriate, the opinion of, third party
advisers for the purpose of making decisions as to hedging strategy and swap
counterparties and to advise the Board of Directors of such opinions; (ii) to
provide assistance with respect to any closings on behalf of AerCo Group in
connection with any such hedging activities; (iii) to calculate the amount of
any broken funding costs under any swap agreements; (iv) at least every three
months following the Closing Date, to assist Persons within AerCo Group in
seeking to enter into additional swap agreements or to sell at market value or
unwind part or all of any initial or future swap agreements entered into by such
Persons, in order to rebalance the fixed and floating mix of interest
obligations and the fixed and floating mix of Rental Payments and (v) from time
to time following the Closing Date, to assist Persons within AerCo Group to sell
at market value or unwind part or all of any initial or future options on
interest rate swaps purchased by such Persons;

          (h) based on information produced or provided to it, to prepare, file
and/or distribute, with the assistance of outside counsel and auditors, if
appropriate, all reports to be prepared, filed and/or distributed by AerCo Group
or its governing bodies, subject to Board of Directors' approval in the case of
reports on Form 20-F and 6-K under the Exchange Act, including:

                                       16
<PAGE>   22

               (i) filings AerCo Group is required to make in various
         jurisdictions and preparing such filings or monitoring counsel and
         advisers in connection with the preparation and filing of such
         materials;

               (ii) compliance by AerCo Group with the periodic reporting
         requirements of the Exchange Act, in particular, working with
         necessary professional advisers to AerCo Group and the Service
         Providers, as appropriate, to prepare on behalf of AerCo Group and to
         arrange for the filing and distribution of an annual report on
         Form 20-F in respect of AerCo Group and any required reports on
         Form 6-K in respect of AerCo Group;

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

               (iv) reports required to be filed with any Governmental
         Authorities, and preparing on behalf of AerCo Group or arranging for
         the preparation of and arranging for the filing of any reports
         required to be filed with any other entity in order for AerCo Group
         not to be in violation of Applicable Law or any applicable covenants;

          (i) with respect to amendments,

               (i) to report on the substance of any proposed amendments to any
         Related Documents other than the Leases;

               (ii) to the extent requested by AerCo Group or by the parties to
         Related Documents and subject to approval by the appropriate board of
         directors, to coordinate with AerCo Group's legal counsel, the other
         parties thereto and their counsel the preparation and execution of any
         amendments to the Related Documents (other than amendments relating to
         the Aircraft or the Leases), and to provide assistance in the
         implementation of such amendments; and

               (iii) to the extent reasonably requested by the Servicer, to
         coordinate and provide assistance on behalf of AerCo Group with the
         Servicer and seek to obtain appropriate approvals to take any action
         which may be required to amend the terms of the Leases;

                                       17
<PAGE>   23

          (j) to the extent reasonably requested by the Servicer, to coordinate
and provide assistance on behalf of AerCo Group with the Servicer and outside
counsel in a Lessee default or repossession situation;

          (k) to authorize payment of certain bills and expenses (i) payable to
legal and professional advisers authorized to be engaged or consulted pursuant
to this Agreement or (ii) approved by the board of directors of AerCo or any of
its Subsidiaries, and remit approved invoices to the Cash Manager for payment
processing;

          (l) to provide to the Servicer periodically (but not more than once
each week) a statement of AerCo Group's interest rate hedging policies;

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

               (i) comply with Sections 6.06, 7.04 and 7.05 of the Servicing
         Agreement;

               (ii) provide such instructions to the Servicer as the Servicer
         may be entitled to receive under the Servicing Agreement, in
         interpreting the Indenture, the Concentration Thresholds and Annex 2
         to Schedule 2.02(a) of the Servicing Agreement ("SCHEDULE 2.02(A) OF
         THE SERVICING AGREEMENT");

               (iii) direct the Servicer to amend the minimum hull and liability
         insurance coverage amounts set forth in Annex 1 to Schedule 2.02(a) of
         the Servicing Agreement;

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

               (v) request periodic reports from the Servicer regarding
         insurance matters;

               (vi) grant approvals when such approvals are required by
         Section 7.05(a) hereof and Schedule 2.02(a) of the Servicing Agreement;

                                       18
<PAGE>   24

               (vii) provide the Servicer with such information as the Servicer
         may reasonably request in connection with the Concentration Thresholds;

               (viii) recommend to the Servicer fixed rates of interest to be
         considered by the Servicer in connection with negotiation by the
         Servicer of proposed leases and advise the Servicer whether AerCo
         intends to enter into any swap agreements with respect to such
         proposed leases and as to the additional costs associated with such
         swap agreements;

               (ix) take the action contemplated by Section 3.02(d) of
         Schedule 2.02(a) of the Servicing Agreement;

               (x) direct the Servicer to arrange for the sale of an Aircraft
         Asset and certify to the Servicer that such sale complies with the
         terms of the Indenture;

               (xi) direct the Servicer to arrange for the acquisition of
         Additional Aircraft;

               (xii) direct the Servicer to cooperate with any additional
         refinancings, note offerings, corporate restructurings and any
         additional issuances of debt securities to fund such acquisitions;

               (xiii) make any discretionary decisions, judgments or
         assumptions necessary in connection with the preparation of any
         projections, and provide the Servicer with any written policies and
         guidelines that the Servicer shall require in connection with such
         preparation; and

               (xiv) request valuations of Aircraft Assets in accordance with
         Section 5.01 of Schedule 2.02(a) of the Servicing Agreement;

         it is expressly acknowledged that the Administrative Agent has no
authority to issue any instructions, directions, requests, approvals,
recommendations or decisions and that its function in respect of such matters is
to provide information, advice and assistance to AerCo, which shall be entitled
to take independent advice if so determined by Special Board Resolution;

                                       19
<PAGE>   25

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

          (o) to advise the Board of Directors of AerCo as to the appropriate
levels of the Liquidity Reserve Amount.

         SECTION 2.04. Accounting and Draft Accounts. (a) Budgeting Process.
The Administrative Agent shall, in accordance with the procedures, policies and
guidelines described below and on the basis of information generated by the
Administrative Agent and information provided by the Service Providers and
AerCo Group:

               (i) in respect of the Initial Periods, each one Year period (a
         "ONE YEAR PERIOD") and each three Year Period (a "THREE YEAR PERIOD"
         and, together with a One Year Period, and an Initial Period, each a
         "PERIOD") during the term of the Servicing Agreement, and on behalf of
         AerCo Group, prepare and deliver to the Servicer, not later than 60
         days immediately preceding the commencement of each Year (other than
         with respect to the fiscal year commencing July 1, 1998), a proposed
         Operating Budget and Asset Expenses Budget for such Period together
         with reasonably detailed information regarding the assumptions
         underlying such proposed Operating Budget and Asset Expenses Budget,
         such proposed Operating Budget and Asset Expenses Budget to be based,
         in part, on the information provided by the Servicer pursuant to
         Section 7.04(f) of the Servicing Agreement;

               (ii) on behalf of AerCo Group, review and discuss with the
         Servicer the proposed Operating Budget and the Asset Expenses Budget
         prepared pursuant to Section 7.04 of the Servicing Agreement;

               (iii) submit the revised proposed Operating Budget and Asset
         Expenses Budget for each Period, no later than 30 days immediately
         preceding the commencement of each Year, to AerCo for its
         consideration and approval (other than with respect to the fiscal year
         commencing July 1, 1998); and

                                       20
<PAGE>   26

               (iv) in the event that the proposed Operating Budget and Asset
         Expenses Budget are not approved, review and revise, in consultation
         with the Servicer, the Operating Budget and Asset Expenses Budget to
         the extent possible to address the concerns of AerCo, it being
         understood that final approval of the Operating Budget and Asset
         Expenses Budget is the responsibility of AerCo.

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

               (i) establish an accounting system and maintain the accounting
         ledgers of and for each Person within AerCo Group and their
         Subsidiaries in accordance with accounting principles generally
         accepted in the United Kingdom, ("U.K. GAAP"), unless otherwise
         required by Applicable Law and specified by the relevant board of
         directors of Persons within AerCo Group (collectively, the "LEDGERS");

               (ii) prepare and deliver (within 40 days after the end of the
         relevant Quarter or, if the end of such Quarter coincides with the end
         of a Year, within 75 days after the end of such Year), with respect to
         AerCo Group, on a consolidated basis, a draft balance sheet and draft
         statement of changes in shareholders' equity or residual trust interest
         as of the end of each Quarter and Year, as applicable, and draft
         statements of income and cash flows for each Quarter and Year, as
         applicable (the "CONSOLIDATED QUARTERLY DRAFT ACCOUNTS");

               (iii) to the extent required by Applicable Law, prepare and
         deliver (within 40 days after the end of the relevant Quarter or, if
         the end of such Quarter coincides with the end of a Year, within
         90 days after the end of such Year), with respect to AerCo Group and
         such Persons within AerCo Group as specified by the relevant board of
         directors of Persons within AerCo Group in a written schedule provided
         To the Administrative Agent (which schedule may be updated by such
         board of directors to the Administrative Agent delivered at least
         30 days prior to the commencement of the relevant Quarter), on a
         consolidating company-by-company basis, a draft balance sheet and
         statement of changes in shareholders' equity or residual trust
         interest as of the end of each Quarter and Year, as applicable, with
         respect to such Person and draft

                                       21
<PAGE>   27

         statements of income and cash flows for such Quarter and Year, as
         applicable (the "CONSOLIDATING QUARTERLY DRAFT ACCOUNTS" and, together
         with the Consolidated Quarterly Draft Accounts the "DRAFT ACCOUNTS").
         The Board of Directors of AerCo shall specify the applicable legal
         requirements mandating the preparation of such Consolidating Quarterly
         Draft Accounts in the written schedule provided to the Administrative
         Agent pursuant to this Section;

               (iv) arrange for, coordinate with and assist AerCo Group's
         auditors in preparing annual audits;

               (v) prepare or arrange for the preparation of and arrange for
         the filing of AerCo Group's tax returns in conjunction with AerCo
         Group's tax advisers after submission to the Board of Directors to the
         extent required by the Board of Directors or Applicable Law; and

               (vi) compare the expected cash flows of AerCo Group, as provided
         by the Cash Manager, and the budgets to actual results.

         (c) The Administrative Agent shall be entitled to request instructions
from the Board of Directors of AerCo as to general guidelines or principles to
be followed in preparing Draft Accounts and as to amending or supplementing any
such guidelines or principles. The entry in the Ledgers of any item in
accordance with the specific instructions of AerCo Group shall always be
permitted, and the Administrative Agent shall make such entries upon
instruction.

         SECTION 2.05. Additional Administrative Services. The Administrative
Agent will provide additional Administrative Services, including (a) providing
assistance in arranging one or more refinancings of all or a portion of the
Notes, and (b) undertaking efforts to avoid any adverse change in the tax status
of any Person within AerCo Group. In addition, subject to Section 8.01(b)
hereof, upon a request by AerCo Group, the Administrative Agent will take such
other actions as may be appropriate to facilitate AerCo Group's business
operations and assist the relevant boards of directors or trustees in carrying
out their obligations; provided, however, that the Administrative Agent will not
be obligated or permitted to take any action that might reasonably be expected
to result in the business of AerCo Group ceasing to be separate and readily
identifiable from, and independent of, the Administrative Agent, the Guarantor
and any of their Affiliates.

                                       22
<PAGE>   28

         SECTION 2.06. Additional Aircraft. In the event that AerCo Group shall
acquire any Additional Aircraft and notwithstanding that AerCo Group may retain
different service providers for such Additional Aircraft, the Administrative
Agent hereby agrees to provide the same Administrative Services with respect to
all such Additional Aircraft.

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

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

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

                                       23
<PAGE>   29

                                    ARTICLE 3
                STANDARD OF PERFORMANCE; LIABILITY AND INDEMNITY

         SECTION 3.01. Standard of Performance. The Administrative Agent will
devote the same amount of time and attention to and will be required to exercise
the same level of skill, care and diligence in the performance of the
Administrative Services as it would if it were administering such services on
its own behalf (the "STANDARD OF PERFORMANCE").

         SECTION 3.02. Liability and Indemnity. (a) The Administrative Agent
shall not be liable for any Losses or Taxes to or of or payable by AerCo Group
at any time from any cause whatsoever or any Losses or Taxes directly or
indirectly arising out of or in connection with or related to the performance by
the Administrative Agent of this Agreement unless such Losses or Taxes are the
result of the Administrative Agent's own wilful misconduct or gross negligence
or that of any of its directors, officers, agents or employees, as the case may
be.

          (b) Notwithstanding anything to the contrary set forth in any other
agreement to which any Person within AerCo Group is a party, AerCo and each
other Person within AerCo Group do hereby assume liability for and do hereby
agree to indemnify and hold harmless on an After-Tax Basis the Administrative
Agent, its directors, officers, employees and agents and each of them from any
and all Losses or Taxes that may be imposed on, incurred by or asserted against
any of them arising out of, in connection with or related to the Administrative
Agent's performance under this Agreement (including any Losses or Taxes incurred
by the Administrative Agent as a result of indemnifying any Person to whom it
shall have delegated its obligations hereunder in accordance with Section 10.01
hereof, but only to the extent the Administrative Agent would have been
indemnified had it performed such obligations), except as a result of the gross
negligence or wilful misconduct of the Administrative Agent or any of its
directors, officers, employees or agents. This indemnity shall not apply to:

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

                                       24
<PAGE>   30

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

         This indemnity shall expressly inure to the benefit of any director,
officer, agent or employee of the Administrative Agent now existing or in the
future and to the benefit of any successor of the Administrative Agent and shall
survive the expiration of this Agreement.

          (c) The Administrative Agent agrees to indemnify and hold harmless on
an After-Tax Basis each Person within AerCo Group, its directors or trustees and
its agents for any Losses whatsoever which they or any of them may incur or be
subject to in consequence of the performance of the Administrative Services or
any breach of the terms of this Agreement by the Administrative Agent, but only
to the extent such Losses arise due to the gross negligence, wilful misconduct
or fraud of the Administrative Agent or any of its directors, officers or
employees, as the case may be; provided, however, that this indemnity shall not
apply and the Administrative Agent shall have no liability in respect of Losses
to the extent that they arise from (i) the wilful misconduct, recklessness or
gross negligence of any Person within AerCo Group, its directors, trustees or
agents, (ii) any breach by the Administrative Agent of its obligations under
this Agreement to the extent such breach is a result of a Service Provider's
failure to perform its obligations to AerCo Group or a failure by AerCo Group to
comply with its obligations under this Agreement, (iii) any action that AerCo
Group requires the Administrative Agent to take pursuant to a direction but only
to the extent that the Administrative Agent takes such action in accordance with
such direction and in accordance with the provisions hereof or (iv) a refusal by
AerCo Group to take action upon a recommendation made in good faith by the
Administrative Agent in accordance with the terms hereof.

         SECTION 3.03. Conflicts of Interest. (i) Each of AerCo and the
Subsidiaries acknowledges and agrees that (a) in addition to providing the
Administrative Services under this Agreement, the Administrative Agent may
provide similar services for itself and for other third parties; (b) an
Affiliate of the Administrative Agent has been appointed to act as Cash Manager
and another Affiliate of the Administrative Agent has been appointed to act as
Servicer; (c) in the course of conducting such activities, the Administrative
Agent will from time to time have conflicts of interest in

                                       25
<PAGE>   31

performing its duties on behalf of AerCo Group, itself and any other entities in
respect of which it provides such similar services; and (d) AerCo Group has
approved the transactions contemplated by this Agreement and desires that such
transactions be consummated and in giving such approval has expressly recognized
that such conflicts of interest may arise and that when such conflicts of
interest arise, the Administrative Agent shall promptly report the same to AerCo
Group and shall act in a manner that (i) treats AerCo Group equally with such
other entities, (ii) does not violate the Standard of Performance set forth in
Section 3.01 hereof or any of the covenants of the Administrative Agent set
forth in Article 4 hereof and (iii) would not be reasonably likely to have a
Material Adverse Effect on AerCo Group.

          (ii) The Directors of AerCo, by a Special Board Resolution, shall be
entitled to seek independent advice and to appoint an independent representative
in connection with the provision of the administrative and related services by
the Administrative Agent hereunder, including in connection with any conflict of
interest or any potential conflict of interest.

                                    ARTICLE 4
                        ADMINISTRATIVE AGENT UNDERTAKINGS

         SECTION 4.01. Administrative Agent Undertakings. The Administrative
Agent hereby covenants with AerCo Group that it will conduct its business such
that it is a separate and readily identifiable business from, and independent
of, AerCo Group and further covenants as follows (it being understood that these
covenants shall not prevent any Person within AerCo Group from publishing
financial statements that are consolidated with those of AerFi Group, if to do
so is required by Applicable Law or accounting principles from time to time in
effect, and that the Affiliates of the Administrative Agent and certain Persons
within AerCo Group may file a consolidated tax return for United States federal,
state and local income tax purposes):

         (a) if the Administrative Agent receives any money whatsoever, which
money belongs to AerCo Group or is to be paid to AerCo Group or into any account
pursuant to any Related Document or otherwise, it will hold such money in trust
for AerCo Group, and shall keep such money separate from all other money
belonging to the Administrative Agent and shall as promptly as practicable
thereafter pay the same into

                                       26
<PAGE>   32

the relevant account in accordance with the terms thereof without exercising any
right of setoff;

          (b) it will comply with any proper directions, orders and instructions
which AerCo Group may from time to time give to it in accordance with the
provisions of this Agreement;

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

          (d) unless to do so would be in accordance with the Indenture, it will
not take any steps for the purpose of procuring the appointment of any
administrative receiver or the making of an administrative order or for
instituting any bankruptcy, reorganization, arrangement, insolvency, winding up,
liquidation, composition or any like proceedings under the laws of any
jurisdiction in respect of any Person within AerCo Group or in respect of any of
their liabilities, including, without limitation, as a result of any claim or
interest of the Administrative Agent or any of its Affiliates;

          (e) it will promptly take or arrange (through the appointment of
counsel or accountants, as appropriate, and by coordinating with the Company
Secretary) for the taking of all steps as may be reasonable to ensure that the
Company Secretary prepares and files the application of AerCo to renew its
annual exemption from Jersey taxation, including coordinating and arranging for
the filing of all necessary papers with the appropriate Jersey fiscal and other
authorities;

          (f) it will cooperate with AerCo Group and its agents and directors,
including by providing such information as may reasonably be requested, to
permit AerCo Group or its authorized agents to monitor the Administrative
Agent's compliance with its obligations under this Agreement;

          (g) during the term of this Agreement, it will observe all corporate
formalities necessary to remain a legal entity separate and distinct from, and
independent of each Person within AerCo Group;

          (h) during the term of this Agreement, it will maintain its assets and
liabilities separate and distinct from each Person within AerCo;

          (i) during the term of this Agreement, it will maintain records,
books, accounts and minutes separate from those of each Person within AerCo
Group;

          (j) during the term of this Agreement, it will pay its obligations in
the ordinary course of its business as a legal entity separate from each Person
within AerCo Group;

                                       27
<PAGE>   33

          (k) during the term of this Agreement, it will keep its funds separate
and distinct from the funds of each Person within AerCo Group, and it will
receive, deposit, withdraw and disburse such funds separately from the funds of
such Person;

          (l) during the term of this Agreement, it will conduct its business
in its own name, and not in the name of any Person within AerCo Group;

          (m) during the term of this Agreement, it will not pay or become
liable for any debt of any Person within AerCo Group, other than to make
payments in the form of indemnity as required by the express terms of this
Agreement;

          (n) during the term of this Agreement, it will not hold out that it is
a division of any Person within AerCo Group, or that any such Person is a
division of it;

          (o) during the term of this Agreement, it will not induce any third
party to rely on the creditworthiness of any Person within AerCo Group in order
that such third party will be induced to contract with it;

          (p) during the term of this Agreement, it will not enter into any
agreements between it and any Person within AerCo Group that are more favorable
to either party than agreements that the parties would have been able to enter
into at such time on an arm's-length basis with a non-affiliated third party,
other than any agreements in effect on the date hereof (it being understood that
the parties hereto do not intend by this covenant to ratify any self-dealing
transactions);

          (q) during the term of this Agreement, it will devote at least one of
its employees to working full time on behalf of AerCo Group; and

          (r) during the term of this Agreement, it will (i) forward promptly to
the Servicer a copy of any material communication received from any Person in
relation to any Lease or Aircraft; (ii) grant such access to the Servicer to its
books of account, documents and other records and to its employees as may be
reasonably necessary for the Servicer to perform its obligations in respect of
any Lease or Aircraft under the Servicing Agreement, provided, however, that the
Servicer shall not have access to the

                                       28
<PAGE>   34

minutes of the Administrative Agent's board of directors meetings and other
confidential business information; and (iii) execute and deliver such documents
and do such acts and things as the Servicer may reasonably request in order to
effect the purposes of the Servicing Agreement.

                                    ARTICLE 5
                           UNDERTAKINGS OF AERCO GROUP

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

         SECTION 5.02.  Information.  AerCo or its agents will provide the
Administrative Agent with the following information in respect of itself and all
other Persons within AerCo Group:

          (a) copies of all Related Documents, including the articles of
incorporation, by-laws, trust agreements (or equivalent documents) of each such
Person, and copies of all books and records maintained on behalf of such
Persons;

          (b) details of all bank accounts and bank mandates maintained by any
Person within AerCo Group;

          (c) names of and contact information with respect to the board of
directors, board of trustees, company secretaries and registered offices of any
Person within AerCo Group;

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

          (e) a copy of any information provided to AerCo Group pursuant to the
Servicing Agreement;

                                       29
<PAGE>   35

         provided, that such information as is referred to in this Section 5.02
(with the exception of paragraph (e)) shall be provided to the Administrative
Agent upon execution of this Agreement and, in respect of any amendment or
changes to the information provided to the Administrative Agent upon execution
of this Agreement, promptly following the effectiveness of such amendments or
changes.

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

          (b) In the event that AerCo Group shall acquire Additional Aircraft,
AerCo Group shall so notify the Administrative Agent and the Administrative
Agent shall be obligated to provide the Administrative Services with respect to
such Additional Aircraft in accordance with Section 2.06 hereof.

         SECTION 5.04. Ratification. AerCo and the other AerCo Group Members
hereby ratify and confirm and agree to ratify and confirm (and shall furnish
written evidence thereof upon request of the Administrative Agent) any act or
omission by the Administrative Agent in accordance with this Agreement in the
exercise of any of the powers or authorities conferred upon the Administrative
Agent under the terms of this Agreement, it being expressly understood and
agreed that none of the foregoing shall have any obligation to ratify and
confirm, and expressly does not ratify and confirm, any act or omission of the
Administrative Agent in violation of this Agreement, the Standard of Performance
or for which the Administrative Agent is obligated to indemnify any AerCo Group
Member or any Subsidiary under Article 3 hereof.

                                       30
<PAGE>   36

         SECTION 5.05. Covenants. Each of AerCo and the other Persons within
AerCo Group covenants with the Administrative Agent that it will conduct its
business such that it is a separate and readily identifiable business from, and
independent of, the Administrative Agent, the Guarantor and any of its
Affiliates (it being understood that these covenants shall not prevent any
Person within AerCo Group from publishing financial statements that are
consolidated with those of AerFi Group, if to do so is required by Applicable
Law or accounting principles from time to time in effect);

          (a) during the term of this Agreement, it will observe, and will
cause its Subsidiaries to observe, all corporate formalities necessary to
remain legal entities separate and distinct from, and independent of, the
Administrative Agent, the Guarantor and any of its Subsidiaries;

          (b) during the term of this Agreement, it will maintain, and will
cause its Subsidiaries to maintain, each of their respective assets and
liabilities separate and distinct from those of the Administrative Agent;

          (c) during the term of this Agreement, it will maintain, and will
cause its Subsidiaries to maintain, records, books, accounts, and minutes
separate from those of the Administrative Agent;

          (d) during the term of this Agreement, it will pay, and will cause its
respective Subsidiaries to pay, each of their respective obligations in the
ordinary course of business as legal entities separate from the Administrative
Agent;

          (e) during the term of this Agreement, it will keep, and will cause
its Subsidiaries to keep, each of their respective funds separate and distinct
from any funds of the Administrative Agent, and will receive, deposit, withdraw
and disburse such funds separately from any funds of the Administrative Agent;

          (f) during the term of this Agreement, it will conduct, and will cause
its respective Subsidiaries to conduct, each of their respective businesses in
their own name, and not in the name of the Administrative Agent;

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

                                       31
<PAGE>   37

          (h) during the term of this Agreement, it will not hold out, and will
cause its Subsidiaries not to hold out, that any of them is a division of the
Administrative Agent, or that the Administrative Agent is a division of any of
them;

          (i) during the term of this Agreement, it will not induce, and will
cause its Subsidiaries not to induce, any third party to rely on the
creditworthiness of the Administrative Agent in order that such third party will
be induced to contract with it;

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

          (k) during the term of this Agreement, it will observe, and it will
cause its Subsidiaries to observe, all material corporate or other procedures
required under Applicable Law and under each of their respective constitutive
documents.

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

                                    ARTICLE 6

                                    APPROVALS

         SECTION 6.01. Approvals. The Administrative Agent recognizes that
certain instructions hereunder and under the other Related Documents to be given
by AerCo Group may also require the approval of an AerCo Group Subsidiary. In
such circumstances, the Administrative Agent will seek approval from the
relevant AerCo Group Subsidiary and shall report on such approval to AerCo
Group; provided,

                                       32
<PAGE>   38

however, that nothing herein shall in any way diminish any authority which may
be granted to AerCo to act as representative of each Person within the AerCo
Group.

                                    ARTICLE 7

                                  EFFECTIVENESS

         SECTION 7.01.  Effectiveness.  The effectiveness of this Agreement and
all obligations of the parties hereunder with respect to each Aircraft Asset
shall be conditional upon:

               (i) the occurrence of the Delivery Date of such Aircraft Asset;

               (ii) with respect to AerCo, the Servicer, the Administrative
         Agent, the Guarantor and the entities listed on Appendix A to this
         Agreement, the execution hereof by those parties; and

               (iii) with respect to any entity which executes and delivers an
         Accession Agreement, the execution thereof in acknowledgment and
         agreement by AerCo, the Servicer, the Administrative Agent and the
         Guarantor. The original parties hereto and each entity which becomes a
         party hereto by executing and delivering such an Accession Agreement
         agree that such Accession Agreement shall be effective without the need
         for each other party hereto to execute such Accession Agreement in
         acknowledgment and agreement.

                                    ARTICLE 8

                 ADMINISTRATIVE FEES, EXPENSES AND SUBORDINATION

         SECTION 8.01. Administrative Fees. (a) In consideration of the
Administrative Agent's performance of the Administrative Services, AerCo Group
agrees to pay to the Administrative Agent the following fees: (i) a fee (an
"ADMINISTRATIVE FEE") of 2.0% of the rental payments made by the Lessees under
the Leases received in respect of each Fee Period from AerCo in respect of its
services to AerCo (the "RENTAL FEE") subject to an annual minimum of $200,000
(the "FIXED FEE"); and

                                       33
<PAGE>   39

         (ii) a fee for participation in and cooperation with refinancings and
other public or private securities offerings ("NOTES OFFERINGS") of 0.025% of
the Net Proceeds of any such offering (the "ADDITIONAL FEE"). "NET PROCEEDS"
means the cash proceeds received by any person selling Notes (other than
underwriters) within AerCo Group or any other person in connection with any
Notes Offering, less Transaction Costs incurred by any person within AerCo Group
or any such other person in connection with any such Notes Offering (other than
the fees payable pursuant to this Section 8.01).

         The Administrative Fee shall be payable in arrears for each period
commencing on the Closing Date (or, thereafter, the most recent Calculation
Date) and ending on the next succeeding Calculation Date during the term of this
Agreement (each such period, a "FEE PERIOD"), such payment to be made no later
than the Payment Date immediately following the end of each such Fee Period.

          (b) The above fees have been calculated on the basis of estimated time
and resources having regard to the expectations of AerCo Group and the
Administrative Agent concerning the services required from the Administrative
Agent. To the extent the performance of the Administrative Services requires an
investment of time, resources or services that is materially greater or less
than anticipated, the Administrative Agent and AerCo Group shall negotiate in
good faith to arrive at an adjustment to the Administrative Fees that
appropriately reflects the work performed by the Administrative Agent.

          (c) The Fixed Fee shall be automatically adjusted as of each March 31
during the term of this Agreement commencing March 31, 1999, for inflation by
multiplying such fees in effect on such March 31 by the sum of 1.00 plus (if
positive) or minus (if negative) the Inflation Factor with respect to the
immediately preceding calendar year.

         SECTION 8.02.  Expenses.  (a) The Administrative Agent shall be
responsible for all telephone, facsimile and communications costs and expenses
directly relating to or associated with the Administrative Agent's performance
of its duties as set forth in this Agreement up to an annual amount of $200,000.

          (b) Subject to the provisions of Section 8.02(a) and Section 8.05
hereof, AerCo Group shall be responsible for the following expenses incurred by
the Administrative Agent in the performance of its obligations ("REIMBURSABLE
EXPENSES"):

                                       34
<PAGE>   40

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

               (ii) annual telephone, fax and communication costs and expenses
         necessarily and directly incurred in connection with the performance
         of the Administrative Services in excess of $200,000;

               (iii) expenses expressly authorized by (i) the board of
         directors of any Person within AerCo Group or (ii) any Person to whom
         such authority has been delegated, other than the Administrative Agent
         or its Affiliates; and

               (iv) expenses expressly authorized pursuant to other provisions
         of this Agreement.

         SECTION 8.03. Taxes. The fees specified in Section 8.01 hereof are net
of any value added tax required to be accounted for by the Administrative Agent.
Where the Administrative Agent is required to account for value added tax in
respect of any amounts payable by or on behalf of AerCo Group to the
Administrative Agent, AerCo Group shall cause to be paid to the Administrative
Agent such additional amounts as are necessary to discharge such value added tax
upon production of a valid value added tax invoice. AerCo Group and the
Administrative Agent shall cooperate in good faith to file an application for
relief from value added taxes on VAT Form 60A as soon as practicable after the
date of this Agreement.

         SECTION 8.04. Payment of Expenses. No later than each Calculation Date,
the Administrative Agent shall deliver a notice to the Cash Manager and AerCo
Group, setting forth the amounts of expenses paid by the Administrative Agent
pursuant to Section 8.02 hereof through and including such Calculation Date (it
being understood that if there are no such expenses the Administrative Agent
will be under no obligation to provide such notice). Subject to Section 8.05
hereof, on the next Payment Date following such Calculation Date, AerCo Group
agrees to pay to the Administrative Agent all such amounts.

         SECTION 8.05. Subordination of Fees and Expenses. The Administrative
Agent agrees that the fees payable to it under Section 8.01 hereof and the
Reimbursable Expenses shall be paid to it in accordance with the Indenture, and
that all such fees and Reimbursable Expenses shall be subordinated in right of
payment to

                                       35
<PAGE>   41

all other payments set forth in the Indenture as ranking higher in priority of
payment thereto.

                                    ARTICLE 9

           TERM, REMOVAL OF OR TERMINATION BY THE ADMINISTRATIVE AGENT

         SECTION 9.01. Term. This Agreement shall have a term commencing on the
Closing Date and expiring on the date of payment in full of all amounts
outstanding to be paid on the Notes (including the Class D Notes and the Class E
Notes) and any other securities issued by AerCo relating to Additional Aircraft
owned by AerCo Group.

         SECTION 9.02.  Cross-termination.  This Agreement shall terminate in
the event of a termination of either the Servicing Agreement or the Cash
Management Agreement.

         SECTION 9.03.  Right to Terminate.  (a) At any time during the term of
this Agreement, AerCo Group by a Special Board Resolution shall be entitled to
terminate this Agreement on 120 days' written notice if:

               (i) the Administrative Agent shall materially breach any of its
         obligations under this Agreement and, after written notice from AerCo
         the Administrative Agent has failed to cure such breach within 30 days;
         or

               (ii) an involuntary proceeding shall be commenced or an
         involuntary petition shall be filed in a court of competent
         jurisdiction seeking relief in respect of the Administrative Agent, or
         of a substantial part of the property or assets of the Administrative
         Agent, under Title 11 of the United States Code, as now constituted or
         hereafter amended, or any other U.S. Federal or state or foreign
         bankruptcy, insolvency, receivership or similar law, and such
         proceeding or petition shall continue undismissed for 60 days or an
         order or decree approving or ordering any of the foregoing shall be
         entered or the Administrative Agent, shall go into liquidation, suffer
         a receiver or mortgagee to take possession of all or substantially all
         of its assets or have an examiner appointed over it or if a petition
         or proceeding is presented for any of the foregoing and not discharged
         within 60 days; or

                                       36
<PAGE>   42

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

          (b) At any time during the term of this Agreement the Administrative
Agent shall be entitled to terminate this Agreement on 60 days' written notice
if:

               (i) any AerCo Group entity shall fail to pay in full when due
         (A) any Administrative Fee within 30 days or any Reimbursable Expenses
         in an aggregate amount in excess of $750,000 within 30 days, in either
         case, after the effectiveness of written notice from the
         Administrative Agent of such failure or (B) any other amount payable
         to the Administrative Agent hereunder, within 60 days after written
         notice from the Administrative Agent of such failure;

               (ii) any Person within AerCo Group shall fail to perform or
         observe or shall violate in any material respect any material term,
         covenant, condition or agreement to be performed or observed by it in
         respect of this Agreement for 30 days after AerCo Group shall have
         received notice of such failure (other than with respect to payment
         obligations referred to in clause (b)(i) of this Section 9.03);

               (iii) an involuntary proceeding shall be commenced or an
         involuntary petition shall be filed in a court of competent
         jurisdiction seeking relief in respect of AerCo or any other Person
         within AerCo Group, or of a substantial part of the property or assets
         of any of AerCo or any other Person within AerCo Group under Title 11
         of the United States Code, as now constituted or hereafter amended, or
         any other U.S. Federal or state or foreign bankruptcy, insolvency,
         receivership or similar law, and such proceeding or petition shall
         continue undismissed for 60 days or an order or decree approving or
         ordering any of the foregoing shall be entered or AerCo or any other
         Person within AerCo Group shall go into liquidation, suffer a receiver
         or mortgagee to take possession of all or substantially all of its
         assets or have an examiner

                                       37
<PAGE>   43

         appointed over it or if a petition or proceeding is presented for any
         of the foregoing and not discharged within 60 days; or

               (iv) AerCo or any other Person within AerCo Group shall
         (A) voluntarily commence any proceeding or file any petition seeking
         relief under any U.S. Federal or state or foreign bankruptcy,
         insolvency, receivership or similar law, (B) consent to the
         institution of, or fail to contest the filing of, any petition
         described in clause 9.03(b)(iii) above, (C) file an answer admitting
         the material allegations of a petition filed against it in any such
         proceeding or (D) make a general assignment for the benefit of its
         creditors.

          (c) Notwithstanding anything to the contrary in this Article 9, no
termination of this Agreement pursuant to Section 9.02 hereof, no termination of
this Agreement by AerCo Group pursuant to Section 9.03(a) hereof and no
termination of this Agreement by the Administrative Agent pursuant to Section
9.03(b) hereof shall become effective prior to the date of appointment by AerCo
Group of a successor Administrative Agent and the acceptance of such appointment
by such successor Administrative Agent; provided, however, that in the event
that a successor Administrative Agent shall not have been appointed within 90
days after the date upon which this Agreement would otherwise have terminated,
the Administrative Agent may petition any court of competent jurisdiction for
the appointment of a successor Administrative Agent. Upon action by either party
pursuant to the provisions of this Section 9.03(c), the Administrative Agent
shall be entitled to the payment of any compensation owed to it hereunder and to
the reimbursement of all Reimbursable Expenses incurred in connection with all
services rendered by it hereunder, as provided in Article 8 hereof, and for so
long as the Administrative Agent is continuing to perform any of the
Administrative Services for any Person within AerCo Group, the Administrative
Agent shall be entitled to continue to be paid all amounts due to it hereunder,
net of any amounts that shall have been finally adjudicated by a court of
competent jurisdiction to be owed by the Administrative Agent to AerCo Group or
not to be due to the Administrative Agent, until a successor Administrative
Agent shall have been appointed and shall have accepted such appointment in
accordance with the provisions of Section 9.04(c) hereof.

          (d) The parties hereto agree not to amend this Agreement to reduce the
scope of the Administrative Services to be provided by the Administrative Agent
hereunder unless a third party reasonably acceptable to the parties hereto and
to the Servicer becomes a party to this Agreement and agrees to provide such
Administrative Services in the place of the Administrative Agent.

                                       38
<PAGE>   44

         SECTION 9.04.  Consequences of Termination.  (a) Notices. (i) Following
the termination of this Agreement pursuant to Section 9.02 hereof or by AerCo
Group or by the Administrative Agent pursuant to Section 9.03 hereof, the
Administrative Agent will promptly forward to AerCo Group any notices received
by it during the year immediately after termination.

              (ii) AerCo Group will notify promptly any relevant third party,
         including each Rating Agency, the Trustee, and the Servicer, of the
         termination of this Agreement by AerCo Group or by the Administrative
         Agent and will request that any such notices and accounting reports and
         communications thereafter be made or given directly to the entity
         engaged to serve as Administrative Agent, and to AerCo Group.

          (b) Accrued Rights. A termination of this Agreement by AerCo Group or
by the Administrative Agent hereunder shall not affect the respective rights and
liabilities of any party accrued prior to such termination in respect of any
prior breaches hereof or otherwise.

          (c) Replacement. If this Agreement is terminated under Section 9.02
hereof or by the Administrative Agent or AerCo Group under Section 9.03 hereof,
the Administrative Agent will cooperate with any person appointed to perform the
Administrative Services, including providing such person with all information
and documents reasonably requested.

         SECTION 9.05. Survival. Notwithstanding any termination or the
expiration of this Agreement, the obligations of AerCo Group and the
Administrative Agent under Section 3.02 hereof shall survive such termination or
expiration, as the case may be.

                                   ARTICLE 10

                            ASSIGNMENT AND DELEGATION

         SECTION 10.01. Assignment and Delegation. (a) No party to this
Agreement shall assign or delegate or otherwise subcontract this Agreement or
all or any part of its rights or obligations hereunder to any Person without the
prior written consent of the other parties, such consent not to be unreasonably
withheld.

                                       39
<PAGE>   45

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

                                   ARTICLE 11

                                    GUARANTEE

         SECTION 11.01. Guarantee. (a) The Guarantor absolutely, irrevocably and
unconditionally guarantees for the benefit of AerCo Group and the Servicer (the
"GUARANTEED PARTIES"), as primary obligor and not merely as a surety, the
following (which are collectively referred to as the "GUARANTEED OBLIGATIONS"):
the full and punctual payment by the Administrative Agent when due of any and
all amounts that are or may become due and payable by the Administrative Agent
to the Guaranteed Parties under the Administrative Agency Agreement and the
timely performance of all other obligations owed by the Administrative Agent to
the Guaranteed Parties hereunder. The Guarantor hereby further agrees that if
the Administrative Agent shall fail to pay or perform any Guaranteed Obligation
when the same shall become due and payable or is required to be performed, the
Guarantor will pay or perform, as the case may be, such Guaranteed Obligation
promptly upon receipt of notice stating that such Guaranteed Obligation was not
paid when due or performed when required, as the case may be. To the extent that
the Guarantor performs under this Guarantee, the rights of the Guarantor will be
subrogated to the rights of the Administrative Agent under the Administrative
Agency Agreement. The obligations of the Guarantor under this Guarantee are
expressly subject to any defenses that the Administrative Agent may have against
the Guaranteed Parties under the terms of the Administrative Agency Agreement,
including any and all claims, defenses, rights and set-offs available to the
Administrative Agent, except any thereof arising out of, based on or otherwise
described in clause (i) or (ii) of Section 11.02(b) hereof. The performance
obligation of the Guarantor under this Guarantee will be deemed satisfied when
and to the extent that the Administrative Agent performs its obligations under
the Administrative Agency Agreement. The foregoing guarantee of the Guarantor is
given solely to the Guaranteed Parties and, except as expressly permitted by
Section 11.05 hereof, the Guarantor undertakes no liability or responsibility
hereby to any Person other than the Guaranteed Parties.

                                       40
<PAGE>   46

          (b) The Guarantor hereby waives (i) notice of acceptance hereof and
(ii) presentment to, demand of payment from or protest to the Administrative
Agent of any of the Guaranteed Obligations. This Guarantee shall be a continuing
guarantee of payment and performance and not of collection only, and shall
remain operative and in full force and effect until the earlier of such time as
(i) the Guaranteed Obligations shall have been paid and performed in full, (ii)
the Administrative Agency Agreement shall have been terminated in accordance
with its terms or (iii) the Administrative Agency Agreement shall have been
assigned pursuant to its terms by the Administrative Agent to a third party
which is not affiliated with the Guarantor; provided, however, that the
obligations of the Guarantor under this Guarantee shall not terminate with
respect to those provisions that expressly survive the termination of the
Administrative Agency Agreement, as set forth in Section 9.05 hereof, until the
obligations of the Administrative Agent hereunder shall have been performed in
full.

          (c) If any Guaranteed Obligation paid by any Person is at any time
repaid by the recipient thereof in compliance with any court order pertaining to
any bankruptcy or insolvency proceedings relating to the Administrative Agent,
the amount so repaid shall not be deemed to have been paid and shall be deemed
to be outstanding, and the obligation of the Guarantor hereunder to pay such
Guaranteed Obligation shall remain in full force and effect.

         SECTION 11.02. Absolute Obligations. The obligations of the Guarantor
hereunder shall be absolute and unconditional and shall not be affected by any
circumstances other than (a) any claims, defenses, rights and set-offs available
to the Administrative Agent under the Administrative Agency Agreement or
otherwise (except those set forth in clauses (i) and (ii) of Section 11.02(b))
and (b) performance by the Administrative Agent of its obligations under the
Administrative Agency Agreement, including (i) any lack of genuineness,
authorization, validity, legality or enforceability of the bankruptcy,
reorganization or similar proceeding by or against the Administrative Agent or
any other Person or the appointment of a receiver or examiner with respect
thereto or (ii) any amendment, waiver or other modification of the
Administrative Agency Agreement that shall have been entered into with the
consent of the Administrative Agent.

         SECTION 11.03.  Guarantor's Representations.  The Guarantor represents
and warrants as of the date hereof to the Guaranteed Parties that:

                                       41
<PAGE>   47

          (a) the Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of Ireland, and has full power, authority
and legal right to execute and deliver, and to perform its obligations under,
this Guarantee;

          (b) the Guarantor has taken all necessary corporate and legal action
to authorize the guarantee hereunder on the terms and conditions of this
Guarantee and to authorize its execution, delivery and performance;

          (c) this Guarantee has been duly executed and delivered by a duly
authorized officer or representative of the Guarantor, and constitutes the
legal, valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms;

          (d) the execution, delivery and performance of this Guarantee will not
constitute a default under or violate any provision of any law or regulation, or
any judgment or order of any court, arbitrator or governmental authority, in
each case applicable to the Guarantor, or the certificate of incorporation or
by-laws of the Guarantor, or any agreement to which the Guarantor is a party;
and

          (e) no consent of any other Person, and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority, bureau or
agency is required in connection with the execution delivery, performance,
validity or enforceability with respect to the Guarantor of this Guarantee.

         SECTION 11.04. Successors and Assigns; Amendments. (a) This Guarantee
shall be binding upon and inure to the benefit of the Guarantor and the
Guaranteed Parties and their respective permitted successors and assigns. The
Guarantor may not assign its rights or obligations under this Guarantee to any
Person. The Guaranteed Parties may assign their rights under this Guarantee only
to such person as it shall assign its rights under this Agreement and only on
the terms set forth in Section 10.01 hereof.

          (b) This Guarantee may not be amended in any material respect without
first obtaining the written permission of the Guaranteed Parties and the
Guarantor.

         SECTION 11.05. Limitations. Except as expressly provided in Section
11.06 hereof and without limiting the provisions of Section 11.02 hereof, the
Guarantor shall have no greater obligations or liabilities under this Guarantee
than does the

                                       42
<PAGE>   48

Administrative Agent under this Agreement. Without limiting the foregoing, the
Guarantor shall be entitled to the benefits of Section 3.02 of this Agreement
and the Guarantor, so long as it shall have any obligation under this Guarantee,
shall be entitled to the benefit of all indemnities to which the Administrative
Agent is entitled under this Agreement as if the Guarantor were named as a
party thereto and shall be bound by the provisions thereof to the same extent.

         SECTION 11.06. Payments; Costs of Enforcement. (a) All payments to be
made by the Guarantor hereunder shall be made in United States Dollars and in
such funds and in such manner as the Administrative Agent is required to make
such payments under this Agreement, and all such payments shall be free and
clear of and without deduction or withholding for or on account of any and all
Taxes.

          (b) The Guarantor agrees to reimburse the Guaranteed Parties for any
reasonable cost or expense (including the reasonable fees and disbursements of
counsel for the Guaranteed Parties) which may be reasonably incurred by or
behalf of the Guaranteed Parties in connection with the failure of the Guarantor
to perform any of its obligations hereunder and any enforcement proceedings
resulting therefrom.

                                   ARTICLE 12

                                  MISCELLANEOUS

         SECTION 12.01. Notices. Subject to paragraph (d) below, all notices,
consents, directions, approvals, instructions, requests and other communications
required or permitted by such agreement to be given to any Person shall be in
writing, and any such notice shall become effective five Business Days after
being deposited in the mail, certified or registered, return receipt requested,
with appropriate postage prepaid for first class mail, or if delivered by hand
or courier service or in the form of a facsimile, when received (and, in the
case of a facsimile, receipt of such facsimile is confirmed to the sender), and
shall be directed to the address or facsimile number of such Person set forth
below (with a copy to the Administrative Agent):

         If to the Administrative Agent, to:

         AerFi Administrative Services Limited
         c/o AerFi Group plc
         Aviation House
         Shannon

                                       43
<PAGE>   49

         Co. Clare, Ireland
         Attention:        Company Secretary
         Telephone:        353-61-360000
         Facsimile:        353-61-360113

         If to the Guarantor, to:

         AerFi Group plc
         Aviation House
         Shannon
         Co. Clare, Ireland
         Attention:        Company Secretary
         Telephone:        353-61-360000
         Facsimile:        353-61-360220

         If to AerCo or its Subsidiaries, to:

         AerCo Limited
         22 Grenville Street
         St. Helier
         Jersey JE4 8PX, Channel Islands
         Attention:        Mourant & Co. Secretaries Limited,
                           Company Secretary
         Telephone:        44-1534-609-000
         Facsimile:        44-1534-609-333

         If to the Servicer, to:

         AerFi Group plc
         Aviation House
         Shannon
         Co. Clare, Ireland
         Attention:        Company Secretary
         Telephone:        353-61-360000
         Facsimile:        353-61-360113

         If a notice or communication is mailed in the manner provided above
within the time prescribed, it is conclusively presumed to have been duly given,
whether or not the addressee receives it.

                                       44
<PAGE>   50

         From time to time any party to such agreement may designate a new
address or number for purposes of notice thereunder by notice to each of the
other parties thereto.

         SECTION 12.02.  Governing Law.  This Agreement shall be governed by
and construed in accordance with the law of the State of New York.

         SECTION 12.03. Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 12.01 or 12.04 hereof
shall be deemed effective service of process on such party.

         SECTION 12.04. Agent for Service of Process. Each of AerCo and its
Subsidiaries hereby appoint Corporation Service Company, 80 State Street, 6th
Floor, Albany, N.Y., 12207, U.S.A. as its nonexclusive agent for service of
process in the United States in connection with this Agreement. The parties may
use any legally available means of service of process. Each of AerCo and its
Subsidiaries will promptly notify the other persons listed in Section 12.01
hereof of any change in the address of the respective agents; provided, however,
that each of AerCo and its Subsidiaries will at all times maintain an agent
located within New York State for service of process in connection with this
Agreement, the identity of any successor agent to be reasonably satisfactory to
the Administrative Agent.

         SECTION 12.05.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL

                                       45
<PAGE>   51

BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

         SECTION 12.06. Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto where upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.

         SECTION 12.07. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.

         SECTION 12.08. Power of Attorney. Each of AerCo and the Subsidiaries
shall appoint the Administrative Agent and its successors, and its permitted
designees and assigns, as their true and lawful attorney-in-fact. All services
to be performed and actions to be taken by the Administrative Agent pursuant to
this Agreement shall be performed to and on behalf of each of AerCo and the
Subsidiaries. The Administrative Agent shall be entitled to seek and obtain from
each of AerCo and the Subsidiaries a power of attorney in respect of the
execution of any specific action as the Administrative Agent deems appropriate.

         SECTION 12.09. Restrictions on Disclosure. The Administrative Agent
agrees that it shall not, prior to the termination or expiration of this
Agreement or within the three years after such termination or expiration,
disclose to any Person any confidential or proprietary information, whether of a
technical, financial, commercial or other nature, received directly or
indirectly from AerCo Group regarding AerCo Group or its business or the
Aircraft, except as authorized in writing by AerCo Group or otherwise permitted
by this Agreement, and except:

          (a) to Representatives of the Administrative Agent and any of its
Affiliates in furtherance of the purposes of this Agreement, provided that any
such Representatives shall have agreed to be bound by the restrictions on
disclosure set forth in this Section 12.09;

          (b) to the extent (i) required by Applicable Law or by judicial or
administrative process, including pursuant to any subpoena, civil investigative
demand

                                       46
<PAGE>   52

or similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which the Administrative Agent or an affiliate thereof is a
party, or (ii) reasonably necessary in order to enable the Administrative Agent
to perform the Administrative Agent Services, but in the case of clause (i)
above, in the event of proposed disclosure, the Administrative Agent shall seek
the assistance of AerCo Group to protect information in which AerCo Group has
an interest to the maximum extent achievable;

         (c) to the extent such information is required to be included in any
preliminary or final offering circular, registration statement or contract or
other document pertaining to the transactions contemplated by the Indenture
approved in advance by AerCo;

          (d)   to the extent that the information:

               (i) was generally available in the public domain;

               (ii) was lawfully obtained from a source under no obligation of
         confidentiality, directly or indirectly, to any Person within AerCo
         Group;

               (iii) was disclosed to the general public with the approval of
         any Person within AerCo Group; or

               (iv) was developed independently by the Administrative Agent or
         any Affiliates of the Administrative Agent; and

          (e) to the extent the Administrative Agent reasonably deems necessary
to protect and enforce its rights and remedies under this Agreement; provided,
however, that in such an event the Administrative Agent shall act in a manner
reasonably designed to prevent disclosure of such confidential information; and
provided further, that prior to disclosure of such information the
Administrative Agent shall inform AerCo of such disclosure.

         SECTION 12.10. Rights of Setoff. To the extent permitted by Applicable
Law, the Administrative Agent hereby waives any right it may have under
Applicable Law to exercise any rights of setoff it has under Applicable Law with
respect to any assets it holds owned by, or money or monies it owns to, any
Person within AerCo Group pursuant to and in accordance with the terms and
conditions of this Agreement; provided, however, that this Section 12.10 shall
not affect any rights of setoff or other

                                       47
<PAGE>   53

rights that the Administrative Agent has or may have under the express terms
and conditions of this Agreement.

         SECTION 12.11. No Partnership. (a) It is expressly recognized and
acknowledged that this Agreement is not intended to create a partnership, joint
venture or other similar arrangement between any AerCo Group member or members
on the one part and the Administrative Agent on the other part. It is also
expressly understood that any actions taken on behalf of any AerCo Group member
by the Administrative Agent shall be taken as agent for AerCo Group, either
naming the relevant AerCo Group entity, or naming the Administrative Agent as
agent for an undisclosed principal. No AerCo Group member shall hold itself out
as a partner of the Administrative Agent, and the Administrative Agent will not
hold itself out as a partner of any AerCo Group member.

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

         SECTION 12.12.  Implied Terms Excluded.  For the avoidance of doubt,
the provisions of Section 39 of the Sale of Goods and Supply of Services Act,
1980 of Ireland are hereby expressly excluded.

         SECTION 12.13. Table of Contents; Headings. The table of contents and
headings of the various articles, sections and other subdivisions of this
Agreement are for convenience and reference only and shall not modify, define or
limit any of the terms or provisions of this Agreement.

         SECTION 12.14. No Retroactive Application. This Agreement amends and
restates the Original Agreement with no intention of retroactive application.
The Original Agreement has been restated for the convenience of the parties and
such amendment and restatement is not intended to waive or modify the
obligations of any party which accrued or were to have been performed on or
prior to the effective date hereof or to deprive any party of its rights and
remedies in respect thereof.

         SECTION 12.15. Limited Recourse. (a) In the event that the assets of
AerCo are insufficient, after payment of all other claims, if any, ranking in
priority to the claims of the Administrative Agent hereunder, to pay in full
such claims of the Administrative Agent, then the Administrative Agent shall
have no further claim against AerCo in respect of any such unpaid amounts.

                                       48
<PAGE>   54

          (b) No recourse under any obligation, covenant or agreement of any
party contained in this Agreement shall be had against any shareholder, officer
or director of the relevant party as such, by the enforcement of any assessment
or by any proceeding, by virtue of any statue or otherwise; it being expressly
agreed and understood that this Agreement is a corporate obligation of the
relevant party and no personal liability shall attach to or be incurred by the
shareholders, officers, agents or directors of the relevant party as such, or
any of them under or by reason of any of the obligations, covenants or
agreements of such relevant party contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by such party of
any of such obligations, covenants or agreements, either at law or by statute or
constitution, of every such shareholder, officer, agent or director is hereby
expressly waived by the other parties as a condition of and consideration for
the execution of this Agreement.

          (c) The Administrative Agent hereby agrees that it shall not, until
the expiry of one year and one day after the payment of all sums outstanding and
owing under the latest maturing Note then rated, take any corporate action or
other steps or legal proceedings for the winding-up, dissolution or
re-organization or for the appointment of a receiver, administrator,
administrative receiver, trustee, liquidator, sequestrator or similar officer
of AerCo or of any or all of AerCo's revenues and assets.

                                       49
<PAGE>   55

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

                                    AERFI ADMINISTRATIVE SERVICES LIMITED,
                                    as Administrative Agent

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    AERFI GROUP PLC,
                                    as Guarantor

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    AERCO LIMITED

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    AERFI GROUP PLC,
                                    as Servicer

                                    By: ___________________________________
                                        Name:

                                       50
<PAGE>   56

                                       Title:

                                       51
<PAGE>   57

                                       AERCO IRELAND LIMITED

                                       By: ___________________________________
                                           Name:
                                           Title:

                                       AERCO IRELAND II LIMITED

                                       By: ___________________________________
                                           Name:
                                           Title:

                                       AERFI BELGIUM N.V.

                                       By: ___________________________________
                                           Name:
                                           Title:

                                       AERCOUSA INC.

                                       By: ___________________________________
                                           Name:
                                           Title:

                                       AIRCRAFT LEASE PORTFOLIO
                                       SECURITIZATION 94-1 LIMITED

                                       52
<PAGE>   58

                                       By: ___________________________________
                                           Name:
                                           Title:

                                       53
<PAGE>   59

                                       ALPS 94-1 (BELGIUM) N.V.

                                       By: ___________________________________
                                           Name:
                                           Title:

                                       PERGOLA LIMITED

                                       By: ___________________________________
                                           Name:
                                           Title:

                                       54
<PAGE>   60

                                   APPENDIX A

                                  SUBSIDIARIES

AerCo Ireland Limited
AerCo Ireland II Limited
AerCoUSA Inc.
AerFi Belgium N.V.
Aircraft Lease Portfolio Securitization 94-1 Limited
ALPS 94-1 (Belgium) N.V.
Pergola Limited

                                      A-1

<PAGE>   61

                                   APPENDIX B

                           FORM OF ACCESSION AGREEMENT

                                            [DATE]

         We refer to the Amended and Restated Administrative Agency Agreement
dated as of July 17, 2000, among AerFi Administrative Services Limited, AerFi
Group plc, as Guarantor, AerCo Limited, AerFi Group plc, as Servicer, the
entities listed on Appendix A thereto and all other Subsidiaries which have
heretofore signed an Accession Agreement in substantially the form of this
Accession Agreement (the "ADMINISTRATIVE AGENCY AGREEMENT").

         We agree, as of the date of this Accession Agreement, to be considered
a party to the Administrative Agency Agreement for all purposes, as if an
original signatory to the Administrative Agency Agreement, and to be bound by
the terms of the Administrative Agency Agreement.

         This Accession Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

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

                                            [                        ]

                                            By:__________________________
                                               Name:
                                               Title:

                                       B-1

<PAGE>   62

ACCEPTED AND ACKNOWLEDGED:

AERFI ADMINISTRATIVE SERVICES LIMITED,
as Administrative Agent

By: __________________________
    Name:
    Title:

AERFI GROUP PLC,
as Guarantor

By: __________________________
    Name:
    Title:

AERCO LIMITED

By: __________________________
    Name:
    Title:

AERFI GROUP PLC,
as Servicer

By: __________________________
    Name:
    Title:

                                       B-2<PAGE>   1

                                                                    EXHIBIT 10.5

               --------------------------------------------------

                               SERVICING AGREEMENT

                                      among

                                 AerFi Group plc

                      AerFi Administrative Services Limited

                          AerFi Cash Manager II Limited

                                  AerCo Limited

                                       and

                    The Entities Listed on Appendix A Hereto

                            Dated as of July 17, 2000

               --------------------------------------------------

<PAGE>   2

                               TABLE OF CONTENTS

                                                                            PAGE
                                   ARTICLE 1
                                  DEFINITIONS

SECTION 1.01.  Definitions...................................................  1

                                    ARTICLE 2
                              APPOINTMENT; SERVICES

SECTION 2.01.  Appointment................................................... 14
SECTION 2.02.  Services...................................................... 14
SECTION 2.03.  Compliance with Applicable Laws............................... 14
SECTION 2.04.  Standby Servicer.............................................. 14

                                    ARTICLE 3
                     STANDARD OF CARE; CONFLICTS OF INTEREST

SECTION 3.01.  Standard of Care.............................................. 15
SECTION 3.02.  Conflicts of Interest......................................... 15
SECTION 3.03.  Standard of Liability......................................... 16
SECTION 3.04.  Waiver of Implied Standard.................................... 17

                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

SECTION 4.01.  Aircraft Assets............................................... 18
SECTION 4.02.  Aircraft Assets Related Documents............................. 18
SECTION 4.03.  Accounts and Cashflow......................................... 19
SECTION 4.04.  Organization and Standing..................................... 19
SECTION 4.05.  Authority..................................................... 20
SECTION 4.06.  No Conflicts.................................................. 20
SECTION 4.07.  Compliance with Applicable Laws............................... 21

                                    ARTICLE 5
                              SERVICER UNDERTAKINGS

SECTION 5.01.  Staff and Resources........................................... 22
SECTION 5.02.  Access........................................................ 22
SECTION 5.03.  Compliance with Law........................................... 22
SECTION 5.04.  Commingling................................................... 22

<PAGE>   3

SECTION 5.05.  Notes Offering................................................ 22
SECTION 5.06.  Performance Objectives........................................ 26
SECTION 5.07.  Management.................................................... 26
SECTION 5.08.  Limitations................................................... 26
SECTION 5.09.  Location of Performance of Services........................... 26
SECTION 5.10.  Prior Servicer Fees........................................... 27

                                    ARTICLE 6
                   UNDERTAKINGS OF AERCO AND THE SUBSIDIARIES

SECTION 6.01.  Cooperation................................................... 27
SECTION 6.02.  No Representation with Respect to Third Parties............... 27
SECTION 6.03.  Related Document Amendments................................... 27
SECTION 6.04.  Other Services................................................ 28
SECTION 6.05.  Ratification.................................................. 28
SECTION 6.06.  Execution, Amendment, Modification or Termination of
               Aircraft Assets Related Documents............................. 28
SECTION 6.07.  AerCo Group Accounts and Cash Arrangements.................... 28
SECTION 6.08.  Notification of Bankruptcy.................................... 29
SECTION 6.09.  Further Assurances............................................ 29
SECTION 6.10.  Communications................................................ 29

                                    ARTICLE 7
                       AERCO GROUP RESPONSIBILITY; BUDGETS

SECTION 7.01.  AerCo Group Responsibility.................................... 30
SECTION 7.02.  Instructions by AerCo Group................................... 30
SECTION 7.03.  Request for Authority......................................... 30
SECTION 7.04.  Operating Budget; Aircraft Asset Expenses Budget.............. 31
SECTION 7.05.  Transaction Approval Requirements............................. 34
SECTION 7.06.  Approved Budgets and Transaction Approval
               Requirements.................................................. 35
SECTION 7.07.  Communication with AerCo...................................... 36

                                    ARTICLE 8
                                  EFFECTIVENESS

SECTION 8.01.  Effectiveness................................................. 36

                                    ARTICLE 9
                            SERVICING FEES; EXPENSES

SECTION 9.01.  Servicing Fees................................................ 37
<PAGE>   4

SECTION 9.02.  Retainer Fee.................................................. 37
SECTION 9.03.  Rental Fee.................................................... 38
SECTION 9.04. [Reserved]..................................................... 38
SECTION 9.05.  Base Sales Fee................................................ 38
SECTION 9.06.  Expenses...................................................... 38

                                   ARTICLE 10
                           TERM; TERMINATION; SURVIVAL

SECTION 10.01.  Term......................................................... 41
SECTION 10.02.  Right to Terminate........................................... 41
SECTION 10.03.  Consequences of Termination.................................. 46
SECTION 10.04.  Survival..................................................... 47

                                   ARTICLE 11
                                 INDEMNIFICATION

SECTION 11.01.  Indemnity.................................................... 47
SECTION 11.02.  Procedures for Defense of Claims............................. 48
SECTION 11.03.  Reimbursement of Costs....................................... 49

                                   ARTICLE 12
                            ASSIGNMENT AND DELEGATION

SECTION 12.01.  Assignment and Delegation.................................... 49

                                   ARTICLE 13
                                  MISCELLANEOUS

SECTION 13.01.  Notices...................................................... 50
SECTION 13.02.  Governing Law................................................ 51
SECTION 13.03.  Jurisdiction................................................. 51
SECTION 13.04.  Waiver of Jury Trial......................................... 51
SECTION 13.05.  Counterparts; Third Party Beneficiaries...................... 52
SECTION 13.06.  Entire Agreement............................................. 52
SECTION 13.07.  Power of Attorney............................................ 52
SECTION 13.08.  Restrictions on Disclosure................................... 52
SECTION 13.09.  Rights of Setoff............................................. 53
SECTION 13.10.  Reliance..................................................... 53
SECTION 13.11.  Limited Recourse............................................. 53

<PAGE>   5
                                                                            Page

                                       iv

<PAGE>   6

                                    SCHEDULES

Appendix A                 Subsidiaries
Appendix B                 Form of Accession Agreement
Schedule 2.02(a)           Services
Schedule 8 to
Schedule 2.02(a)           Weekly, Monthly and Quarterly Reports
Schedule 4.01              Aircraft
Schedule 4.02              Aircraft Asset Related Documents
Schedule 4.03              Bank Accounts
Schedule 7.04(b)(1)        One Year Initial Period Asset Expenses Budget
Schedule 7.04(b)(2)        Three Year Initial Period Asset Expenses Budget

                                     ANNEXES

Annex 1                    Insurance
Annex 2                    Indenture Covenants

                                    EXHIBITS

Exhibit A                  Pro Forma Lease

                                       v

<PAGE>   7

         SERVICING AGREEMENT dated as of July 17, 2000 (the "AGREEMENT"), among
AerFi Group plc, an Irish limited liability company (the "SERVICER"), AerCo
Limited, a Jersey limited liability company ("AERCO"), AerFi Administrative
Services Limited, as Administrative Agent (the "ADMINISTRATIVE AGENT"), AerFi
Cash Manager II Limited, as Cash Manager (the "CASH MANAGER"), and the entities
listed on Appendix A hereto and any other Subsidiary of AerCo which accedes to
this Agreement pursuant to an Accession Agreement (together, the
"SUBSIDIARIES").

         For the consideration set forth herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings. Unless otherwise defined herein, all capitalized terms
used but not defined herein have the meanings assigned to such terms in the
Indenture.

         "ACCESSION AGREEMENT" means an accession agreement substantially in the
form of Appendix B hereto.

         "ADDITIONAL AIRCRAFT" means any aircraft (i.e., the airframe and
associated engines whether or not installed on such airframe and any engine
subsequently substituted for any such associated engine) (other than the
Offering Memorandum Aircraft) acquired after the Closing Date by AerCo or any of
its Subsidiaries for which the Servicer is appointed to provide Services
pursuant to Section 2.01(d) of this Agreement.

         "ADMINISTRATIVE AGENCY AGREEMENT" means the Amended and Restated
Administrative Agency Agreement dated as of July 17, 2000, among the
Administrative Agent, AerFi Group plc, AerCo, the Servicer and the entities
listed on Appendix A thereto and any other Subsidiary of AerCo which accedes
thereto, as amended from time to time.

         "ADMINISTRATIVE AGENT" has the meaning assigned to such term in the
preamble hereto.

         "AERCO" has the meaning assigned to such term in the preamble hereto.

<PAGE>   8
         "AERCO GROUP" has the meaning assigned to such term in Section 2.01 of
this Agreement.

         "AERFI GROUP" means AerFi Group plc and its subsidiaries and
Affiliates.

         "AFFILIATE" means a Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, the Person specified. The parties hereto acknowledge that each of AerCo
and its Subsidiaries, on the one part, and AerFi Group plc and its subsidiaries,
on the other part, are not Affiliates of each other.

         "AFTER-TAX BASIS" means on a basis such that any payment received,
deemed to have been received or receivable by any Person shall, if necessary, be
supplemented by a further payment to that Person so that the sum of the two
payments shall, after deduction of all U.S. Federal, state, local or other
foreign Taxes, penalties, fines, interest, additions to Tax and other charges
resulting from the receipt (actual or constructive) or accrual of such payments
imposed by or under any U.S. Federal, state, local or other foreign law or
Governmental Authority (after taking into account any current deduction to which
such Person shall be entitled with respect to the amount that gave rise to the
underlying payment), be equal to the payment received, deemed to have been
received or receivable.

         "AGREEMENT" has the meaning assigned to such term in the preamble
hereto.

         "AIRCRAFT" means the Initial Aircraft, the Offering Memorandum Aircraft
and any Additional Aircraft.

         "AIRCRAFT ASSETS" means all Initial Aircraft, the Offering Memorandum
Aircraft, any Additional Aircraft, any spare parts, spare engines or ancillary
equipment or devices furnished therewith and related lease interests and options
owned by any Person within AerCo Group; provided however, that Aircraft Assets
shall not include any Aircraft Asset (x) that shall have ceased to be an
Aircraft Asset pursuant to this Agreement, or (y) in respect of which the
Servicer or AerCo shall have terminated the Servicer's obligation to provide
Services in accordance with Article 10 of this Agreement.

         "AIRCRAFT ASSET EXPENSES" has the meaning assigned to such term in
Section 9.06(b) of this Agreement.

<PAGE>   9
         "AIRCRAFT ASSETS RELATED DOCUMENTS" means all Lease related documents
and other contracts and agreements of Persons within AerCo Group the terms of
which relate to or affect any of the Aircraft Assets.

         "ANNUAL REVIEW" has the meaning assigned to such term in Section
3.02(c) of Schedule 2.02(a) to this Agreement.

         "APPLICABLE LAW" with respect to any Person means any law, statute,
ordinance, rule or regulation or code of conduct or practice of any national,
Federal, state, local or international Governmental Authority that applies to
such Person or any of its properties or assets.

         "APPROVED BUDGET" has the meaning assigned to such term in Section
7.04(g) of this Agreement.

         "APPROVED BUDGET TARGET" for any Year means the approved budget target
determined annually by AerCo reasonably, consistently and in good faith
following discussions with the Servicer and review of and reliance on the
information provided by the Servicer in the Operating Budget and the Asset
Expenses Budget.

         "ASSET EXPENSES BUDGET" has the meaning assigned to such term in
Section 7.04(a)(ii) of this Agreement.

         "BANK ACCOUNTS" has the meaning assigned to such term in Section
6.01(b) of Schedule 2.02(a) to this Agreement.

         "BASE SALES FEE" has the meaning assigned to such term in Section
9.01(c) of this Agreement.

         "BOARD OF DIRECTORS" means the board of directors of AerCo.

         "BUSINESS DAY" means a day on which U.S. dollar deposits may be dealt
on the London inter-bank market and commercial banks and foreign exchange
markets are open in New York, New York, U.S.A. and London, England.

         "CALCULATION DATE" means the calculation date as defined in the
Indenture.

         "CASH MANAGEMENT AGREEMENT" means the Amended and Restated Cash
Management Agreement dated as of July 17, 2000, among the Cash Manager, AerFi
Group plc, AerCo, the Servicer, Bankers Trust Company, solely in its capacity as
indenture trustee and security trustee and the entities listed on Appendix A
thereto and any other Subsidiary of AerCo which accedes thereto, as amended from
time to time.

                                       3
<PAGE>   10
        "CASH MANAGER" has the meaning assigned to such term in the preamble
hereto.

         "CHANGED CIRCUMSTANCE" means any material event, circumstance or
condition that shall have occurred or arisen and be continuing that is
reasonably likely to result in the current cash flow projections in any Year
being materially less favorable than the forecast which is the most current at
the time that the Approved Budget is finalized for that Year in accordance with
this Agreement.

         "CHANGE OF CONTROL" has the meaning assigned to such term in Section
10.02(a)(iv) of this Agreement.

         "CHANGE OF CONTROL RATING DECLINE" has the meaning assigned to such
term in Section 10.02(a)(iv) of this Agreement.

         "CLOSING DATE" means the date of the closing of the Offering.

         "CONCENTRATION THRESHOLDS" has the meaning assigned to such term in
Section 2.02(a) of Schedule 2.02(a).

         "CONFLICTS STANDARD" has the meaning assigned to such term in Section
3.02(b) of this Agreement.

         "CONTROL" (including, with its correlative expressions, "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH") means possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise).

         "CORE LEASE PROVISIONS" has the meaning assigned to such term in the
Indenture.

         "DELIVERY DATE" means, with respect to each Aircraft and the related
Aircraft Assets, the date as of which AerCo Group directly or indirectly
acquires ownership of such Aircraft and related Aircraft Assets.

         "DIRECTORS" means the directors of AerCo at the relevant time.

         "DISCLOSURE DOCUMENT" has the meaning assigned to such term in Section
5.05(a) of this Agreement.

         "EFFECTIVENESS DATE" has the meaning assigned to such term in Section
10.02(e)(ii) of this Agreement.

         "EU" means The European Union.

                                       4
<PAGE>   11

         "EXTRAORDINARY PLAN" has the meaning assigned to such term in Section
7.04(i) of this Agreement.

         "GROUP" has the meaning assigned to such term in Section 10.02(a)(iv)
of this Agreement.

         "GOVERNMENTAL AUTHORITY" means any court, administrative agency or
commission or other governmental agency or instrumentality (or any officer or
representative thereof), national, federal, state, local or international, of
competent jurisdiction including the EU.

         "INDEMNIFIED PARTY" has the meaning assigned to such term in Section
11.01(b) of this Agreement.

         "INDEMNIFYING PARTY" has the meaning assigned to such term in Section
11.01(b) of this Agreement.

         "INDENTURE" means the Indenture dated as of July 15, 1998, between
AerCo and Bankers Trust Company, as amended or supplemented from time to time.

         "INDEPENDENT REPRESENTATIVE" has the meaning assigned to such term in
Section 3.02(c) of this Agreement.

         "INITIAL AIRCRAFT" means the aircraft specified in the 1998 Offering
Memorandum and owned by AerCo Group as of the date hereof.

         "INITIAL APPRAISED VALUE" means (i) for all the Initial Aircraft in
aggregate, $817,814,000.00 and, for each Initial Aircraft, means the dollar
amount specified opposite such Aircraft on Schedule 4.01 hereto, (ii) for all
the Offering Memorandum Aircraft in aggregate, $724,053,000.00 and, for each
Offering Memorandum Aircraft, means the dollar amount specified opposite such
Aircraft on Schedule 4.01 hereto and (iii) for the Additional Aircraft, the
"Initial Appraised Value" of such Additional Aircraft as such term is defined in
the Indenture.

         "INITIAL APPROVED BUDGETS" has the meaning assigned to such term in
Section 7.04(b) of this Agreement.

         "INITIAL PERIODS" has the meaning assigned to such term in Section
7.04(b) of this Agreement.

         "LEASE" means any lease agreement with respect to an Aircraft including
any and all amendments, side letters and other supplements thereto.

                                       5

<PAGE>   12

         "LESSEE DOCUMENTATION" has the meaning assigned to such term in Section
1.08(b) of Schedule 2.02(a) to this Agreement.

         "LESSOR" means AerCo or the relevant Subsidiary of AerCo which directly
or indirectly leases an Aircraft to a Lessee and includes any such lessor of
Additional Aircraft.

         "LESSEE" means each lessee as defined in the Indenture, including
lessees of Additional Aircraft.

         "LOSS" (together with "LOSSES") means any and all damage, loss,
liability and expense (including reasonable legal fees, expenses and related
charges and costs of investigation); provided however, the terms "LOSS" and
"LOSSES" shall not include any Indemnified Party's management time or overhead
expenses.

         "MAINTENANCE RESERVES" means the maintenance reserves under each of the
Leases.

         "MONTHLY PAYMENT PERIOD" has the meaning assigned to such term in
Section 6.03(a) of Schedule 2.02(a) to this Agreement.

         "NET CASH PROCEEDS" has the meaning assigned to such term in Section
9.05 of this Agreement.

         "NEW ACCOUNTS" has the meaning assigned to such term in Section 6.01(b)
of Schedule 2.02(a) to this Agreement.

         "1998 OFFERING MEMORANDUM" means the offering memorandum dated June 23,
1998 with respect to debt securities of AerCo.

         "NON TERMINATING PARTY" has the meaning assigned to such term in
Section 10.02(e)(i) of this Agreement.

         "NOTE TRANSFER RATING DECLINE" has the meaning assigned to such term in
Section 10.02(a)(vii) of this Agreement.

         "NOTES" has the meaning assigned to such term in Section 1.01 of the
Indenture.

         "NOTES OFFERING" has the meaning assigned to such term in Section
5.05(a) of this Agreement.

         "OFFERING" means the offering of debt securities contemplated in the
Offering Memorandum.

                                       6
<PAGE>   13
         "OFFERING MEMORANDUM" means the Offering Memorandum dated July 12, 2000
with respect to debt securities of AerCo.

         "OFFERING MEMORANDUM AIRCRAFT" means, as of any date, the Aircraft
specified in the Offering Memorandum which AerCo Group intends to acquire on or
after the Closing Date and which have not been deleted, as of such date, from
Schedule 4.01 by an amendment thereto as contemplated by Section 4.01 of this
Agreement.

         "OFFICER'S CERTIFICATE" means, as to any Person, a certificate of the
President, any Vice President or Assistant Vice President, the Treasurer or any
Assistant Treasurer or such other equivalent officer.

         "ONE YEAR INITIAL PERIOD" has the meaning assigned to such term in
Section 7.04(b) of this Agreement.

         "ONE YEAR PERIOD" has the meaning assigned to such term in Section
7.04(a) of this Agreement.

         "OPERATING BUDGET" has the meaning assigned to such term in Section
7.04(a)(i) of this Agreement.

         "OPERATING GUIDELINES" has the meaning assigned to such term in Section
5.09 of this Agreement.

         "OPERATIVE AGREEMENTS" means this Agreement and all other agreements,
instruments or other documents which are required by the terms of this Agreement
to be delivered in connection herewith.

         "OTHER ASSETS" has the meaning assigned to such term in Section 3.02(a)
of this Agreement.

         "OVERHEAD EXPENSES" has the meaning assigned to such term in Section
9.06(a) of this Agreement.

         "OWN BUSINESS" has the meaning assigned to such term in Section 2.01(e)
of this Agreement.

         "PAYMENT DATE" has the meaning assigned to such term in the Indenture.

         "PERFORMANCE OBJECTIVES" has the meaning assigned to such term in
Section 5.06 of this Agreement.

         "PERIOD" has the meaning assigned to such term in Section 7.04(a) of
this Agreement.

                                       7
<PAGE>   14

         "PERMITTED ENCUMBRANCE" has the meaning assigned to such term in the
Indenture.

         "PERSON" means an individual, corporation, partnership, limited
liability company, association, statutory business trust, common law trust or
other entity or organization, including a government or political subdivision or
an agency or instrumentality thereof.

         "PRECEDENT LEASE" has the meaning assigned to such term in Section
3.02(a)(ii) of Schedule 2.02(a) to this Agreement.

         "PRO FORMA LEASE" has the meaning assigned to such term in Section
3.02(a)(i) of Schedule 2.02(a) to this Agreement.

         "QUARTERLY MEETING" has the meaning assigned to such term in Section
7.07(b) of this Agreement.

         "RATING DECLINE" has the meaning assigned to such term in Section
10.02(a)(iv) of this Agreement.

         "REFERRAL NOTICE" means a notice of the type described in Section
7.03(d) of this Agreement.

         "REIMBURSABLE EXPENSES" has the meaning assigned to such term in
Section 9.06(c) of this Agreement.

         "RELATED PERSON" has the meaning assigned to such term in Section
10.02(a)(iv) of this Agreement.

         "RENT" has the meaning assigned to such term in Section 9.03 of this
Agreement.

         "RENTAL FEE" has the meaning assigned to such term in Section 9.01(b)
of this Agreement.

         "RENTAL FEE PERCENTAGE" has the meaning assigned to such term in
Section 9.03 of this Agreement.

         "REPRESENTATIVE" with respect to any Person means the officers,
directors, employees, advisors and agents of such Person.

         "RETAINER FEE" has the meaning assigned to such term in Section 9.01(a)
of this Agreement.

                                       8
<PAGE>   15
         "SEC" has the meaning assigned to such term in Section 5.05(a) of this
Agreement.

         "SECURITY DEPOSITS" means, at the time of calculation, with respect to
each Aircraft, all cash amounts, prepayments of rent, letters of credit and
guarantees paid by or issued on behalf of the Lessee for the benefit of the
lessor under the relevant Lease as security for obligations of such Lessee under
such Lease and related Lease Documents.

         "SERVICER" has the meaning assigned to such term in the preamble
hereto.

         "SERVICER PROPOSAL" has the meaning given to it in Section 7.03(d) of
this Agreement.

         "SERVICER REPRESENTATIVE" means any officer, director, employee,
partner, consultant, advisor or agent of the Servicer or any of its Affiliates.

         "SERVICES" has the meaning assigned to such term in Section 2.02(a) of
this Agreement.

         "SERVICING FEES" has the meaning assigned to such term in Section 9.01
of this Agreement.

         "SPECIAL BOARD RESOLUTION" has the meaning given to it in the Articles
of Association of AerCo; provided that references to a Special Board Resolution
shall be construed as references to an ordinary resolution of the Board of
Directors any time at which the Servicer and/or its Affiliates do not hold a
majority of the Class E Notes.

         "STANDARD OF CARE" has the meaning assigned to such term in Section
3.01 of this Agreement.

         "STANDARD OF LIABILITY" has the meaning assigned to such term in
Section 3.03(c) of this Agreement.

         "STANDBY SERVICER" means the Standby Servicer under the Standby
Servicing Agreement or another servicer acceptable to AerCo and the Rating
Agencies.

         "STANDBY SERVICING AGREEMENT" means the Standby Servicing,
Administrative Agency and Cash Management Agreement dated as of July 17, 2000,
among AerCo, debis Aircraft Leasing Limited, as Standby Servicer, and debis
AirFinance B.V., as Guarantor, as amended from time to time.

                                       9

<PAGE>   16

         "START DATE" has the meaning assigned to such term in the Standby
Servicing Agreement.

         "STATED SERVICES OBLIGATION" has the meaning assigned to such term in
Section 6.03(a) of Schedule 2.02(a) to this Agreement.

         "SUBSIDIARIES" has the meaning assigned to such term in the preamble
hereto.

         "TARGET SALES PRICE" has the meaning assigned to such term in Section
9.05 of this Agreement.

         "TAX" or "TAXES" means (i) any net income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, license, registration, recording, documentary,
conveyancing, gains, withholding on amounts paid to or by any Person, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom duty or other tax, governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest, penalty, addition to tax or additional amount imposed by any
governmental authority responsible for the imposition of any such tax (domestic
or foreign) (a "TAXING AUTHORITY"), or (ii) liability for the payment of any
amounts of the type described in (i) as a result of being party to any agreement
or any express or implied obligation to indemnify any other Person.

         "TECHNICAL MANAGEMENT EXPENSES" has the meaning assigned to such term
in Section 9.06(b)(i) of this Agreement.

         "TECHNICAL MANAGEMENT EXPENSES RESERVE AMOUNT" has the meaning assigned
to such term in Section 7.04(f) of this Agreement.

         "TERMINATING PARTY" has the meaning assigned to such term in Section
10.02(e)(i) of this Agreement.

         "TERMINATION NOTICE" has the meaning assigned to such term in Section
10.02(e)(i) of this Agreement.

         "THIRD PARTY CLAIM" means a claim by a third party arising out of a
matter for which an Indemnified Party is entitled to be indemnified pursuant to
the indemnity provisions of this Agreement.

         "THREE YEAR INITIAL PERIOD" has the meaning assigned to such term in
Section 7.04(b) of this Agreement.

                                       10
<PAGE>   17
         "THREE YEAR PERIOD" has the meaning assigned to such term in Section
7.04(a) of this Agreement.

         "TRANSACTION APPROVAL REQUIREMENTS" has the meaning assigned to such
term in Section 7.05(c) of this Agreement.

         "YEAR" means each twelve month fiscal year (or such shorter fiscal
period as agreed upon by the parties hereto in the future) ended June 30 or as
modified by agreement of the parties hereto in the future.

                                    ARTICLE 2
                              APPOINTMENT; SERVICES

         SECTION 2.01. Appointment. Each of AerCo and the Subsidiaries hereby
appoints the Servicer as the exclusive provider of the Services (as defined in
Section 2.02 below) to AerCo and the Subsidiaries (collectively, "AERCO GROUP")
in respect of the Aircraft Assets on the terms and subject to the conditions set
forth in this Agreement.

          (a) The Servicer hereby accepts such appointment and agrees to perform
the Services on the terms and subject to the conditions set forth in this
Agreement.

                  (i)      In all of its dealings with third parties (including,
                           without limitation, lessees, potential lessees,
                           sellers, purchasers and service providers) in
                           connection with its provision of the Services, the
                           Servicer shall (and shall procure that persons to
                           whom it delegates performance of any of the Services
                           shall) at all times so far as it is within its power
                           to do so:

                           (1)      make it clear that it is acting solely in
                                    its capacity as Servicer for AerCo and/or
                                    any applicable Subsidiaries under this
                                    Agreement and not in its own right
                                    (including, without limitation, by use of
                                    letterhead (or equivalent, in the case of
                                    email correspondence) showing its name as
                                    "AerFi Group plc as servicer for AerCo group
                                    companies" or similar language);

                           (2)      where relevant make clear that the Aircraft
                                    Assets are the property of AerCo Group or
                                    the relevant Person therein; and

                                       11
<PAGE>   18

                           (3)      enter into contractual arrangements only as
                                    disclosed agent for AerCo and/or any
                                    applicable Subsidiaries.

                  (ii)     The Servicer shall ensure that its Own Business is
                           kept entirely separate, identifiable and segregated
                           from the services performed on behalf of AerCo Group,
                           and shall in particular (but without limiting the
                           foregoing) (a) keep and maintain records and
                           documents relating to the Aircraft Assets and its
                           activities as Servicer hereunder separate from those
                           relating to its Own Business, and (b) ensure that all
                           third parties from whom money will become due to
                           AerCo Group will be required to make the relevant
                           payments into the accounts required under this
                           Agreement and the Indenture and shall use all
                           commercially reasonable endeavors to ensure that such
                           payment directions are complied with; but if
                           notwithstanding such endeavors any payments are
                           received in an account of an AerFi Group company, the
                           Servicer shall comply with the provisions of
                           Section 5.08(b) of this Agreement in relation
                           thereto.

                  (iii)    The Servicer shall under no circumstances during the
                           term of this Agreement pledge the credit of, or
                           suggest to third parties that it is acting on behalf
                           of, any member of the AerCo Group in connection with
                           the Servicer's Own Business.

                  (iv)     The Servicer shall not pledge its own credit for any
                           amounts due by AerCo or members of the AerCo Group
                           (but this paragraph (iv) shall not restrict the
                           Servicer from discharging amounts due in connection
                           with the Aircraft Assets for which the Servicer is
                           entitled to be reimbursed by AerCo Group under this
                           Agreement).

                  (v)      Subject to the Servicer's obligations having regard
                           to relevant accounting regulations, the Servicer
                           shall at no time represent or suggest to any third
                           party that it forms part of the AerCo Group, that any
                           member of the AerCo Group forms part of the AerFi
                           Group, or that the Servicer or any member of the
                           AerFi Group has any title to or interest in the
                           Aircraft Assets.

If, notwithstanding the foregoing, the Servicer shall not have contracted for or
otherwise obtained any goods and services from third party providers in

                                       12
<PAGE>   19
connection with the Services in the name of or as disclosed agent for AerCo or
the relevant Subsidiary, as the case may be, the Servicer shall use commercially
reasonable efforts to cause AerCo or the relevant Subsidiary, as the case may
be, to be in a position to have direct recourse against any such third party
provider providing goods and services for AerCo or the relevant Subsidiary, as
the case may be, for any breaches by such third party provider related to the
provision of such goods and services. Any third party provider discount or
rebate related directly or indirectly to the Aircraft Assets shall be made
available to AerCo Group.

          (b) AerCo and the Servicer acknowledge that each Person within AerCo
Group has appointed the Administrative Agent to undertake certain functions on
its behalf to the extent set out in, and subject to the terms of, the
Administrative Agency Agreement. Accordingly, unless earlier notified in writing
by AerCo that the Administrative Agent's appointment to act on behalf of AerCo
has been revoked or terminated, the Servicer agrees to liaise with the
Administrative Agent in respect of those matters for which the Administrative
Agent has responsibility under the Administrative Agency Agreement; provided
that nothing in this Section 2.01(b) shall permit the Administrative Agent to
issue any instructions or directions to the Servicer (other than by transmitting
instructions or directions of the Board of Directors) or detract from the
provisions of Section 2.02(b).

          (c) AerCo has advised the Servicer that the Cash Manager has been
appointed to perform certain cash management services on behalf of AerCo Group
in accordance with the terms of the Cash Management Agreement. In connection
with the performance of the Services required to be performed by the Servicer
pursuant to Sections 6.01, 6.02 and 6.03 of Schedule 2.02(a) to this Agreement,
the Servicer shall in all cases be entitled to rely on instructions (or other
actions) of the Cash Manager as regards those matters delegated to the Cash
Manager pursuant to the Cash Management Agreement unless earlier notified in
writing by AerCo that the Cash Management Agreement has been terminated, in
which case the Servicer shall be entitled to rely upon the instructions (or
other actions) of AerCo in accordance with Section 2.02(b). The Servicer shall
not be liable to any Person within AerCo Group or any other Person for any
action taken or omission to act in accordance with instructions (or other
actions) of the Cash Manager for purposes of Sections 6.01, 6.02 and 6.03 of
Schedule 2.02(a)

          (d) AerCo, at its sole option, may appoint the Servicer to provide
Services under the terms of this Agreement to any aircraft or engines acquired
by AerCo and its Subsidiaries additional to the Offering Memorandum Aircraft and
the Initial Aircraft.

                                       13
<PAGE>   20
          (e) In this Section 2.01, references to the Servicer's "OWN BUSINESS"
are to the business(es) carried on by AerFi Group and its subsidiaries,
including any business of providing services to other parties (not being members
of AerCo Group), other than any business consisting of the provision of services
to members of AerCo Group under this Agreement, the Administrative Agency
Agreement and the Cash Management Agreement.

         SECTION 2.02.  Services.  (a)  The services to be provided by the
Servicer in respect of the Aircraft Assets (the "SERVICES") are as set forth
in Schedule 2.02(a).

          (b) In connection with the performance of the Services, except where
discretion has been given to the Servicer under this Agreement, the Servicer
shall in all cases only be obliged to act upon, and shall be entitled to rely
on, the instructions, directions or other actions of AerCo or, if applicable as
set forth in Section 2.01(c) above, the Cash Manager on behalf of AerCo Group.
The Servicer shall not be liable to any of AerCo, the Subsidiaries or any other
Person for any action taken by the Servicer, or which the Servicer omitted to
take, in accordance with such instructions, directions or other actions.

          (c) References in this Agreement (including the Schedules) to
notifications to, and directions, consents, agreements and approvals of, AerCo
are to be construed, except where expressly stated otherwise, as references to
notifications to, and directions, consents, agreements and approvals of, the
Directors and not of any agent of AerCo.

         SECTION 2.03. Compliance with Applicable Laws. Notwithstanding anything
to the contrary in this Agreement, the Servicer shall not be obligated to take
or refrain from taking any action which would violate any Applicable Law.

         SECTION 2.04. Standby Servicer. AerCo has advised the Servicer that
AerCo has entered into the Standby Servicing Agreement with the Standby Servicer
pursuant to which AerCo may, upon notice to the Standby Servicer, instruct the
Standby Servicer to perform certain services on behalf of AerCo Group, including
the Services, in accordance with the terms of the Standby Servicing Agreement
upon a termination of this Agreement pursuant to Section 10.02 hereof. AerCo
agrees, so long as it maintains a Standby Servicer pursuant to the Standby
Servicing Agreement during the term of this Agreement, to pay the costs of such
appointment and the ongoing fees of such Standby Servicer.

                                    ARTICLE 3
                     STANDARD OF CARE; CONFLICTS OF INTEREST

                                       14
<PAGE>   21

         SECTION 3.01. Standard of Care. The Servicer shall use reasonable care
and diligence at all times in the performance of the Services as if it were the
owner of the Aircraft Assets (subject to the terms and conditions of this
Agreement and the Indenture) and at all times in a manner at least consistent
with customary commercial practice of a prudent international aircraft lessor in
the management, servicing and marketing of commercial jet aircraft and related
assets (the "STANDARD OF CARE").

         SECTION 3.02. Conflicts of Interest. (a) Each of AerCo and the
Subsidiaries acknowledges and agrees that: (i) in addition to managing,
servicing and marketing the Aircraft Assets under this Agreement, the Servicer
may manage, service or market and shall be entitled to manage, service or market
from time to time, the separate assets and businesses of the Servicer, its
Affiliates and third parties ("OTHER ASSETS"); (ii) nothing in this Agreement
will prevent the Servicer from carrying on its normal investment banking,
advisory or aircraft or lease management businesses; (iii) notwithstanding
3.02(b) below, in the course of conducting such activities, the Servicer may
from time to time have conflicts of interest in performing its duties on behalf
of AerCo on the one hand and the various entities to whom it provides
management, servicing or marketing services and with respect to the various
assets it may own or in respect of which it provides management, servicing or
marketing services on the other hand; and (iv) the Directors of AerCo have
approved the transactions contemplated by this Agreement and desire that such
transactions be consummated and, in giving such approval, the Directors of AerCo
have expressly recognized that such conflicts of interest may arise and that
when such conflicts of interest arise the Servicer shall perform the Services in
accordance with the Standard of Care and, to the extent applicable, the
Conflicts Standard.

          (b) If conflicts of interest arise regarding the management, servicing
or marketing of (i) a particular Aircraft Asset, on the one hand, and another
Aircraft Asset, on the other hand, or (ii) any Aircraft Assets, on the one hand,
and Other Assets, on the other hand, the Servicer shall (A) notify AerCo as
provided in Section 3.02(c), and (B) perform the Services in good faith and to
the extent (i) such Aircraft Assets or (ii) such Aircraft Asset and such Other
Asset are substantially similar in terms of objectively identifiable
characteristics relevant for purposes of the particular Services to be
performed, the Servicer shall not discriminate among such Aircraft Assets or
between such Aircraft Assets and such Other Assets, respectively, on an
unreasonable basis (the standard set forth in this Section 3.02(b) shall be
referred to collectively as the "CONFLICTS STANDARD").

          (c) If the Servicer determines in good faith that a conflict of
interest exists with AerCo then, as soon as practicable after becoming aware of
the

                                       15
<PAGE>   22
conflict of interest, the Servicer shall inform AerCo of the existence of
the conflict of interest and shall promptly propose to AerCo a method of
resolving the conflict of interest, including one or more of the following: (i)
a proposal to disregard the conflict of interest on the basis of lack of
materiality; (ii) an agreement by the Servicer to give preference to the
particular Aircraft Asset; (iii) a proposal to form separate teams within the
Servicer and its Affiliates which will act at all times at arm's length and each
of which will be bound by a strict duty of confidentiality towards its
respective client; or (iv) a proposal that the Servicer withdraw from acting as
Servicer with respect to the negotiation of the issue giving rise to such
conflict of interest regarding the particular Aircraft Asset and that AerCo
appoint an independent representative (the "INDEPENDENT REPRESENTATIVE") to act
on behalf of AerCo with respect thereto. If AerCo does appoint an Independent
Representative, the Servicer will not receive fees pursuant to Section 9.02 or
9.03 in respect of the Aircraft Asset or Aircraft Assets giving rise to such
conflict of interest for so long as such Independent Representative is engaged.
The Independent Representative's fee will be paid by AerCo.

          (d) If AerCo does not find one of the Servicer's proposed resolutions
of the conflict to be acceptable, then AerCo may propose an alternative method
of resolution to the Servicer. If the conflict cannot be resolved to the
satisfaction of AerCo in its sole discretion after negotiation in good faith
with the Servicer, then AerCo shall in accordance with Section 10.02(a) be
entitled to terminate this Agreement in respect of such Aircraft Asset.

          (e) The Directors of AerCo, by a Special Board Resolution, shall be
entitled to seek independent advice and to appoint an independent representative
in connection with the provision of the Services by the Servicer hereunder,
including in connection with any conflict of interest or any potential conflict
of interest.

                SECTION 3.03.  Standard of Liability.  (a)  The Servicer shall
not be liable to AerCo or any of the Subsidiaries or any other Person under any
circumstances for any Losses directly or indirectly arising out of, or in
connection with or related to: (i) an Aircraft Asset being sold, leased or
purchased on less favorable terms than might have been achieved at any time,
provided such transactions were entered into on the basis of a commercial
decision or recommendation of the Servicer in accordance with the Standard of
Care; (ii) the Servicer's obligation to apply the Conflicts Standard in respect
of its performance of the Services, except, in either of case (i) or (ii), where
such Losses are finally adjudicated to have been caused directly by the
negligence, recklessness, wilful misconduct or fraud of the Servicer or any
Servicer Representative; (iii) the ownership, operation, maintenance,
acquisition, leasing, financing, refinancing or sale of any of the Aircraft
Assets, or any action or failure to act on the part of any

                                       16
<PAGE>   23
Person at any time, prior to the effectiveness of this Agreement; (iv) any
action taken, limited or terminated by the Servicer in accordance with the
instructions of AerCo pursuant to Section 7.02 of this Agreement, or as
contemplated by this Agreement, the instructions of the Cash Manager or the
Administrative Agent; (v) a refusal by AerCo or any of the Subsidiaries to take
any action recommended by the Servicer; or (vi) the gross negligence,
recklessness, fraud or wilful misconduct of any person within AerCo Group.

          (b) The Servicer shall indemnify, reimburse and hold harmless AerCo
and the Subsidiaries on an After-Tax Basis in accordance with the provisions of
Article 11 for any Loss arising as a result of the performance of any of the
Services where (i) such Loss is finally adjudicated to have been caused directly
by the negligence, recklessness, fraud or wilful misconduct of the Servicer or
any of its Affiliates or any Servicer Representative in respect of its
obligations to apply the Standard of Care or the Conflicts Standard in
connection with the performance of the Services; or (ii) such Loss is finally
adjudicated to have directly resulted from a breach by the Servicer of the
express terms and conditions of this Agreement. The parties agree that under no
circumstances shall the foregoing provision provide for or permit any
duplicative payment to or recovery by AerCo Group. In the event that the
Servicer shall have made an indemnity payment with respect to a Loss to AerCo or
a Subsidiary and any member of AerCo Group subsequently is paid or otherwise
recovers an amount in respect of such Loss from any other person, then AerCo
shall repay such amount to the Servicer.

          (c) The liability standards set forth in this Section 3.03 shall be
the "STANDARD OF LIABILITY").

         SECTION 3.04. Waiver of Implied Standard. Except as expressly stated
above in this Article 3, all other warranties, conditions and representations,
express or implied, statutory or otherwise, arising under U.S. Federal, New
York, Jersey, Channel Islands, Irish or other Applicable Law in relation to
either the skill, care, diligence or otherwise in respect of any service to be
performed hereunder or to the quality or fitness for any particular purpose of
any goods are hereby excluded and the Servicer shall not be liable in contract,
tort or otherwise under U.S. Federal, New York, Jersey, Channel Islands, Irish
or other Applicable Law for any loss, damage, expense or injury of any kind
whatsoever, arising out of or in connection with the Services to be supplied
pursuant to this Agreement or any goods to be provided or sold in conjunction
with such Services.

                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

                                       17
<PAGE>   24

         Each of AerCo and each Subsidiary jointly and severally represents and
warrants to the Servicer as follows (except to the extent the following is with
respect to a Subsidiary or Aircraft which is owned directly or indirectly at the
date hereof by the Servicer or is with respect to a matter under the control of
the Servicer):

         SECTION 4.01. Aircraft Assets. Schedule 4.01 contains a true and
complete list of all Aircraft Assets, the Initial Appraised Value of each
Aircraft and the Person within AerCo Group that owns directly or indirectly such
Aircraft Asset (or, in the case of the Offering Memorandum Aircraft, the AerFi
company whose stock is contemplated by the Offering Memorandum to be acquired by
AerCo on or following the Closing Date and which has contracted to acquire such
Offering Memorandum Aircraft), in each case as of the date hereof. Except as set
forth on Schedule 4.01 or as disclosed in the Offering Memorandum, each Person
listed within AerCo Group as an owner of the Aircraft Asset on Schedule 4.01 has
good and marketable title to such Aircraft Asset, free and clear of all liens
other than Permitted Encumbrances. If, following the Offering, less than all of
the Offering Memorandum Aircraft are acquired by AerCo Group, the parties hereto
will agree to an amended Schedule 4.01 to reflect the Offering Memorandum
Aircraft actually acquired by AerCo Group. In addition, the Servicer will
furnish to AerCo, upon request of AerCo, information necessary for AerCo to
furnish to the Standby Servicer a complete list of all Aircraft Assets, the
Initial Appraised Value of each Aircraft Asset and the Person within AerCo Group
that owns such Aircraft Asset, the jurisdiction in which such Person is legally
organized and its officers, directors and shareholders, in each case as of the
Start Date.

         SECTION 4.02. Aircraft Assets Related Documents. Each Aircraft Assets
Related Document provided by the previous servicer to AerFi Group plc or
subsequently delivered to the Servicer is (or at the time of such delivery will
be) in full force and effect and a legal, valid and binding agreement of the
Person in AerCo Group, whether such Person became or becomes a member of AerCo
Group prior to, on or after the Closing Date, that is a party thereto and, to
the best knowledge of such Person within AerCo Group, each such other party
thereto, and is (or at the time of such delivery will be) enforceable against
such Person within AerCo Group that is a party thereto and, to the best
knowledge of such Person within AerCo Group, against each such other party
thereto in accordance with its terms subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws affecting
creditors' rights and remedies and to general equity principles. To the best
knowledge of AerCo after due inquiry (it being understood that such due inquiry
shall consist of a review of the Aircraft Assets Related Documents obtained by
AerCo and the Subsidiaries from the previous servicer of the Initial Aircraft),
none of the Aircraft Assets Related Documents listed on Schedule 4.02 or
subsequently delivered to the Servicer has been modified, amended or terminated
except as disclosed therein.

                                       18
<PAGE>   25
To the best knowledge of AerCo after due inquiry (it being understood that such
due inquiry shall consist of a review of the Aircraft Assets Related Documents
obtained by AerCo and the Subsidiaries from the previous servicer of the Initial
Aircraft), except as set forth in the Aircraft Assets Related Documents with
respect to specific potential defaults, each Person within AerCo Group (and each
predecessor-in-interest of any Person) has performed or is performing all
material obligations required to be performed by it under the applicable
Aircraft Assets Related Documents and is not (with or without notice or lapse of
time or both) in breach or default in any material respect thereunder and, to
the best knowledge of AerCo, no other party to any of the Aircraft Assets
Related Document is or at the time of the delivery of such Aircraft Assets
Related Document to the Servicer will be (with or without notice or lapse of
time or both) in breach or default in any material respect thereunder.

         SECTION 4.03. Accounts and Cashflow. Schedule 4.03 hereto sets forth a
true and complete list as of the date hereof of all AerCo Group's bank or other
similar accounts relating to the Aircraft Assets.

         SECTION 4.04. Organization and Standing. (a) Each Person in AerCo
Group, whether such Person became or becomes a member of AerCo Group prior to,
on or after the Closing Date, is or when it becomes a member of the AerCo Group
will be, a corporation, limited liability company or business trust, as
applicable, duly organized and validly existing and, if applicable, in good
standing under the laws of the jurisdiction in which it is legally organized and
possesses all franchises, licenses, permits, authorizations and approvals
necessary to enable it to use its corporate or other name and to own, lease or
otherwise hold its properties and assets and to carry on its business as
presently conducted and as proposed to be conducted except for such
jurisdictions where the failure to be so qualified could not, individually or in
the aggregate, have a material adverse effect on the ability of such Person
within AerCo Group or the Servicer to perform their respective obligations under
this Agreement. Appendix A sets forth a true and complete list as of the date
hereof of each Person within AerCo Group other than a Person being acquired on
the date hereof, the jurisdiction in which each such Person within AerCo Group
is legally organized, and its officers, directors and shareholders.

          (b) Each Person within AerCo Group is duly qualified to do business as
a foreign corporation, limited liability company or business trust, as
applicable, in each jurisdiction in which the nature of its business or the
ownership, leasing or holding of its properties or assets requires
qualification, except for such jurisdictions where the failure to be so
qualified could not, individually or in the aggregate, have a material adverse
effect on the ability of such Person within AerCo Group or the Servicer to
perform their respective obligations under this Agreement.

                                       19
<PAGE>   26
          (c) No Person within AerCo Group is subject to any actual or, to the
best of its knowledge, contingent liability that could individually or in the
aggregate (i) have a material adverse effect on the ability of such Person
within AerCo Group or the Servicer to perform their respective obligations under
this Agreement or (ii) materially adversely affect the ownership, operation,
leasing, financing, refinancing or sale of any Aircraft Asset.

         SECTION 4.05. Authority. (a) Each of AerCo and each other Person within
AerCo Group which is a party to an Operative Agreement has all requisite power
and authority to execute each Operative Agreement to which it is or will be a
party and to consummate the transactions and to perform its obligations
contemplated thereby. All corporate acts and other proceedings required to be
taken by each Person within AerCo Group to authorize the execution, delivery and
performance of each Operative Agreement to which it is or will be a party and
the consummation of the transactions and the performance of its obligations
contemplated thereby have been on or before the date of entering into the
relevant Operative Agreements or will have been duly and properly taken.

          (b) Each of the Operative Agreements to which each Person within AerCo
Group is or will be a party has been or will be duly and validly executed and
delivered by such Person, as applicable, and each such Operative Agreement is,
or upon such execution and delivery will be, a legal, valid and binding
obligation of such Person, as applicable, and enforceable against it in
accordance with its terms subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws affecting creditors'
rights and remedies and to general equity principles.

         SECTION 4.06. No Conflicts. Neither the execution and delivery of any
Operative Agreement with respect to which any Person within AerCo Group is a
party nor the consummation of the transactions contemplated thereby or the
performance by any Person within AerCo Group of any of its obligations
thereunder will (i) violate any provision of the constituent documents of any
such Person within AerCo Group, (ii) violate any order, writ, injunction,
judgment or decree applicable to any Person within AerCo Group or any of their
respective properties or assets, (iii) violate in any material respect any
Applicable Law or (iv) result in any conflict with, breach of or default (or
give rise to any right of termination, cancellation or acceleration) under any
note, bond, mortgage, indenture, warrant or similar instrument or any licence,
permit, material agreement or other material obligation to which any Person
within AerCo Group or by which any Person within AerCo Group or any of their
respective properties or assets may be bound, except such violations, breaches,
conflicts or defaults which could not individually or in the aggregate have a
material adverse effect on the ability of AerCo Group or the Servicer to perform
their respective obligations

                                       20

<PAGE>   27
under this Agreement. No action, consent or approval by or filing with any
Governmental Authority or any other Person is required in connection with the
execution, delivery or performance by any Person within AerCo Group of the
Operative Agreements to which it is a party or the consummation by any Person
within AerCo Group of the transactions contemplated thereby which has not
already been obtained.

         SECTION 4.07. Compliance with Applicable Laws. (a) Each of AerCo and
each other Person within AerCo Group and their respective properties, assets,
operations and businesses have been operated and are in compliance with all
Applicable Laws and any filing requirements relating thereto, except where any
non-compliance could not individually or in the aggregate have a material
adverse effect on the ability of AerCo Group or the Servicer to perform their
respective obligations under this Agreement.

          (b) Each of AerCo and each other Person within AerCo Group has
obtained all permits, licenses and other authorizations which are required with
respect to the operation of their respective businesses and the ownership of
their respective assets and properties under all Applicable Laws, other than any
permits, licenses or authorizations which the failure to obtain could not
individually or in the aggregate have a material adverse effect on the ability
of AerCo Group or the Servicer to perform their respective obligations under
this Agreement. Each Person within AerCo Group is in compliance with all terms
and conditions of such permits, licenses and authorizations, except where any
non- compliance could not individually or in the aggregate have a material
adverse effect on the ability of AerCo Group or the Servicer to perform their
respective obligations under this Agreement.

                                    ARTICLE 5
                              SERVICER UNDERTAKINGS

         SECTION 5.01. Staff and Resources. The Servicer shall employ or
otherwise engage such staff (including in-house legal staff) and maintain such
supporting resources as the Servicer shall reasonably deem necessary, both in
number and in quality, to enable the Servicer to perform the Services in
accordance with the terms of this Agreement.

         SECTION 5.02.  Access.  The Servicer at such times as AerCo may
reasonably request shall grant to AerCo Group and its agents (including
auditors):

                                       21
<PAGE>   28
          (a) "READ ONLY" (including by way of hard copy) and reporting access
regarding the Servicer's management information systems, but only to that part
of such systems that relates to the Aircraft Assets and AerCo Group's business;

          (b)   access to the related programs for review and testing purposes
                only;
and

          (c) access to the ledgers, documents and other records related to the
Aircraft Assets or AerCo Group's business (copies of which AerCo Group shall be
entitled to take) and to officers and employees of the Servicer, to enable AerCo
Group to monitor the performance by the Servicer under this Agreement and
otherwise for the purposes of AerCo Group's business.

         SECTION 5.03. Compliance with Law. The Servicer shall, in connection
with the performance of the Services, comply in all material respects with all
laws, rules and regulations applicable to the Servicer and with the laws, rules
and regulations of Jersey, Channel Islands, Ireland and the United States and
other Governmental Authorities applicable to the Aircraft Assets and, where
applicable, the relevant Person within AerCo Group; provided, however, that this
Section 5.03 shall not limit the obligation of the Servicer to monitor the
performance of the obligations of Lessees under the Leases as set forth in
Article 1 of Schedule 2.02(a).

         SECTION 5.04.  Commingling.  The Servicer shall not commingle with its
own funds any funds of any Person within AerCo Group.

         SECTION 5.05. Notes Offering. (a) The Servicer agrees to use
commercially reasonable efforts to cooperate, in its capacity as Servicer, with
AerCo and its Affiliates in connection with the public or private offering and
sale after the date hereof of any securities of AerCo or any of its Affiliates
(a "NOTES OFFERING") including participation in preparation of any offering
memorandum, prospectus or other offering materials (but assuming no
responsibility for the preparation, form or content thereof, provided, however,
that the Servicer will assume responsibility for the content of any information
therein provided by the Servicer regarding it), participating, on reasonable
notice and with representatives of AerCo, in customary marketing activities
relating to a Notes Offering solely in the Servicer's capacity as Servicer of
the Aircraft Assets (including road shows and investor meetings); attending, on
reasonable prior notice, all meetings with rating agencies relating to any Notes
Offering; providing AerCo and its Affiliates, underwriters, rating agencies and
other advisors with reasonable opportunities to conduct legal and business due
diligence with respect to the Servicer and its provision of Services and with
respect to the Aircraft Assets and Leases

                                       22
<PAGE>   29
(including, for this purpose any future lease) including providing, to the
extent that such data is in the Servicer's possession or within its knowledge,
any historical Lease and Aircraft Assets related data, including access to and
information regarding all Leases for due diligence purposes; procuring, at
AerCo's expense, opinions of counsel with respect to matters requested by the
rating agencies and relating to the Aircraft Assets, Leases and related
documents and related collateral and payments thereunder; assisting with respect
to the preparation of financial statements for AerCo Group; and (to the extent
that such data is in the Servicer's possession or within its knowledge)
providing, reviewing and, if the Servicer so chooses, commenting on information
regarding the Aircraft Assets and provision of Services for inclusion in any
offering memorandum, prospectus or other offering document or any periodic
report required to be filed or furnished by AerCo with or to the United States
Securities and Exchange Commission (the "SEC") or any other Governmental
Authority (any such document or report, a "DISCLOSURE DOCUMENT"). The Servicer
also shall provide information regarding the Servicer for inclusion in any
Disclosure Document and shall provide customary indemnities against material
misstatements or omissions with respect to such information regarding the
Servicer; provided that AerCo agrees that the Servicer has the right to approve
any information in any Disclosure Document relating to the Servicer or any
Affiliate thereof and that AerCo will not permit the inclusion in any Disclosure
Document of (i) any financial statements or financial data relating to the
Servicer or any Affiliate thereof, (ii) any performance or related data with
respect to the Servicer's management of (y) aircraft directly or indirectly
owned by AerCo (it being understood that such data shall not include financial
or other data relating to the Aircraft Assets, the Leases and the Lessees where
the principal purpose for including such data in the Disclosure Document is not
to provide a measurement or other assessment of the Servicer's performance in
managing the Aircraft Assets) or (z) any other Person's aircraft or other assets
or (iii) information relating to aircraft that do not comprise Aircraft Assets
which are owned or managed by the Servicer or any of its Affiliates (except and
to the extent that the quantities and types of aircraft currently owned or
managed by the Servicer are disclosed in summary form, which summary shall be
subject to the prior approval of the Servicer), except, in the case of clauses
(ii) and (iii), to the extent reasonably required by the SEC or other
Governmental Authority or otherwise under Applicable Law; provided that, before
including any such information so required, AerCo shall have used commercially
reasonable efforts to have (or to have caused its Representatives to have) such
requirement withdrawn or otherwise satisfied and to limit the information
required to be included. AerCo also will provide the Servicer with copies of,
and an opportunity to review and comment on, marketing materials produced in
connection with any Notes Offering. AerCo will not distribute any such marketing
materials or disseminate the information contained therein, where such materials
or information includes

                                       23
<PAGE>   30
information relating to the Servicer or any of its Affiliates, without the
Servicer's prior written consent, which consent shall not be unreasonably
withheld.

          (b) AerCo agrees that it will not submit to any rating agency any
materials relating to the Servicer or any of its Affiliates without the
Servicer's prior written consent, which consent shall not be unreasonably
withheld.

          (c) AerCo acknowledges and agrees that neither the Servicer nor any of
its Affiliates will be a party to any underwriting agreement or any letter to,
representation to, indemnity or other agreement with, any underwriter in
connection with any Notes Offering, and shall not assume any responsibility for
any information set forth in any Disclosure Document related thereto except for
information provided by the Servicer regarding the Servicer.

          (d) Except to the extent required by law, AerCo agrees, and shall
cause each other Person within AerCo Group to agree, not to issue any press
release or make any other public announcement relating to the Servicer or any of
its Affiliates and their respective involvement in any Notes Offering without
the Servicer's prior written consent, which consent shall not be unreasonably
withheld. In the event a press release or other public announcement is required
by law, AerCo shall consult with the Servicer prior to issuing or making any
such press release or public announcement to the extent that any such press
release or public announcement relates to the Servicer or any of its Affiliates
and their respective involvement in any Notes Offering.

         (e) Neither the Servicer nor any of its Affiliates shall be required to
sign any registration statement (or any similar document) in connection with any
Notes Offering or to take any other action that could reasonably be expected to
result in the Servicer or any of its Affiliates being or being deemed to be a
"control person" with respect to the applicable issuer of any securities issued
in connection with any such financing transaction under applicable securities
laws in connection with any such financing or an "underwriter" of any such
securities. The obligations of the Servicer under this Section 5.05 shall be
subject to the reasonable satisfaction of the Servicer with all the terms and
conditions of the applicable Notes Offering that relate to the Servicer or any
of its Affiliates including the customary indemnities in favor of the Servicer
and its Affiliates.

         (f) At the request of the Servicer, AerCo agrees to request that its
legal, accounting and other technical advisors include the Servicer and such
Affiliates of the Servicer as the Servicer may designate as addressees of any
opinions and/or comfort letters being provided to AerCo in connection with any
Notes Offering.

                                       24
<PAGE>   31
         (g) In the case of any Notes Offering, none of the Servicer, its
Affiliates or its Representatives shall have any liability for, and AerCo and
the Subsidiaries jointly and severally shall hold, and shall cause each other
Person, if any, for whom a Notes Offering was conducted to hold, the Servicer,
its Affiliates and its Representatives harmless from, and indemnify on an
After-Tax Basis, the Servicer, its Affiliates and its Representatives against,
any and all Losses that may be imposed on, incurred by or asserted against
(including with respect to any such claims, suits, actions or proceedings by
third parties, including the underwriters and purchasers of any securities
issued in connection with any such Notes Offering) the Servicer, its Affiliates
or its Representatives directly arising out of, in connection with or related to
the Servicer's performance of the obligations set forth in this Section 5.05
with respect to any Notes Offering (except to the extent, but only to the
extent, of any such Losses directly arising out of, in connection with or
related to the content of any information in any offering memorandum or
prospectus provided by the Servicer in writing expressly for use therein
regarding the Servicer). The joint and several obligations of AerCo and the
Subsidiaries under this Section 5.05(g) shall be in addition to any liability
that such Persons may otherwise have to the Servicer, its Affiliates or its
Representatives and shall not be limited or reduced with respect to the
Servicer, its Affiliates or its Representatives by any other rights to
indemnification that may be available to the Servicer, its Affiliates or its
Representatives.

         (h) The foregoing provisions of this Section 5.05 relate to the
Servicer solely in its capacity as such and not in any other capacity.

         (i) The Servicer agrees to notify AerCo promptly of a proposed Change
of Control of which it has actual knowledge or a proposed Note Transfer and to
cooperate with AerCo in notifying the credit rating agencies then rating the
Notes of such proposed Change of Control or proposed Note Transfer. AerCo
undertakes to notify such rating agencies thereof as promptly as practicable
after receipt of any such notice from the Servicer.

         (j) The Servicer will provide directly to the Standby Servicer such of
the information in its possession from time to time which AerCo is required
under Section 3.03 of the Standby Servicing Agreement to provide to the Standby
Servicer at the times required thereby.

         SECTION 5.06. Performance Objectives. The Servicer will perform the
Services in a manner that is intended to be consistent with maximizing the
present value of the cash flows derived from the lease or sale of the Aircraft
over time, subject to the constraints imposed by the Indenture and this
Agreement and by seeking to achieve a balanced and diversified portfolio
(including with respect to lessees, geography and lease expiries), in all cases
taking into account the then- existing and anticipated market conditions
affecting the operating lease of used

                                       25
<PAGE>   32
aircraft and the commercial aviation industry generally (the "PERFORMANCE
OBJECTIVES").

         SECTION 5.07. Management. The Servicer warrants that it is not under
any obligation to a third party owner or lessor of aircraft to give preference
to such aircraft in the management or remarketing of such aircraft over any
Aircraft Assets.

         SECTION 5.08. Limitations. (a) Notwithstanding any other provision of
this Agreement, the Servicer shall not be obligated either initially or on a
continuing basis to provide any Person within AerCo Group or any of their
respective Representatives any confidential or proprietary information regarding
the Servicer's or any of its Affiliates' business or the business or finances of
any Person, other than any Person within AerCo Group, whose assets it manages
from time to time.

          (b) The relationship of the Servicer is an agency relationship and,
except in relation to any money erroneously received by the Servicer into any of
the Servicer's or any of its Affiliates' bank accounts on behalf of any Person
within AerCo Group, which the Servicer will hold in trust for such Person and
deposit into one or more accounts in accordance with the instructions of the
Cash Manager as soon as reasonably practicable, neither the Servicer nor any of
its Affiliates or Representatives shall be under any fiduciary duty or other
implied obligation or duty to any Person within AerCo Group or any holder of any
equity or debt security issued by any Person within AerCo Group, any Lessee or
any other Person arising out of this Agreement.

         SECTION 5.09. Location of Performance of Services. The Servicer shall
manage and control the performance of the Services exclusively from within
Ireland. In this regard, the Servicer shall in no event (1) execute any letter
of intent, new lease agreement, amendment to an existing lease or any agreement
in respect of a sale of an Aircraft Asset outside Ireland (except pursuant to a
specific power of attorney issued on a case-by-case basis in Ireland), or (2)
make any material Operational Decision outside Ireland. For the purpose of this
Section 5.09, an "OPERATIONAL DECISION" is any decision with respect to (a) a
new lease or an amendment to a lease that concerns (i) lease rental, (ii) lease
term, (iii) the amount of security deposits and maintenance accruals, or (iv)
the terms of delivery and redelivery conditions, or (b) the sale of Aircraft
Assets. The Servicer shall adopt operating guidelines (as adopted from time to
time, the "OPERATING GUIDELINES") to carry out the purpose of this Section 5.09.
The Servicer shall provide a copy of its Operating Guidelines to AerCo for
approval. Nothing in this Section 5.09 shall in any way entitle the Servicer to
make any Operational Decision unless permitted under Section 7.05 hereof.

                                       26
<PAGE>   33

         SECTION 5.10. Prior Servicer Fees. The Servicer shall, promptly
following demand therefor by AerCo, pay, or reimburse AerCo for, all fees
payable by AerCo to Babcock & Brown Limited in connection with termination of
the Servicing Agreement dated as of July 15, 1998 among Babcock & Brown Limited,
AerCo and the Subsidiaries specified therein.

                                    ARTICLE 6
                   UNDERTAKINGS OF AERCO AND THE SUBSIDIARIES

         SECTION 6.01. Cooperation. Each of AerCo and the Subsidiaries shall at
all times reasonably cooperate with the Servicer to enable the Servicer to
provide the Services, including providing the Servicer with all powers of
attorney or other required documentation as may be reasonably necessary or
appropriate to perform the Services.

         SECTION 6.02. No Representation with Respect to Third Parties. Each of
AerCo and the Subsidiaries agrees that as between the Servicer in its capacity
as such, on the one hand, and any Person within AerCo Group, on the other hand,
no representation is made as to the financial condition and affairs of any
Lessee of, or purchaser of, any Aircraft Asset or any vendor or supplier
utilized by the Servicer in connection with its performance of the Services.

         SECTION 6.03. Related Document Amendments. Each of AerCo and the
Subsidiaries shall not take any action that would increase in any material
respect the scope, nature or level of the Services to be provided under this
Agreement or that would affect the Servicer's rights, obligations or liabilities
(or potential liabilities) under this Agreement or with respect to the Cash
Management Agreement or otherwise, in each case without the Servicer's prior
written consent.

         SECTION 6.04.  Other Services.  Except as provided in this Agreement
without the prior written consent of the Servicer, AerCo and the Subsidiaries
shall not:

          (a) enter into, or cause or permit any Person (other than the
Servicer) to enter into on their behalf, any transaction for the lease or sale
of any Aircraft Asset in respect of which the Servicer is at such time
performing Services; or

          (b)   employ any Person other than the Servicer to perform any of the
Services.

                                       27
<PAGE>   34
         SECTION 6.05. Ratification. Each of AerCo and the Subsidiaries hereby
ratifies and confirms and agrees to ratify and confirm whatever the Servicer
does in accordance with this Agreement in the exercise of any of the powers or
authorities conferred upon the Servicer under the terms of this Agreement.

         SECTION 6.06. Execution, Amendment, Modification or Termination of
Aircraft Assets Related Documents. No later than ten Business Days after the
date that (i) any agreement, instrument or other document becomes an Aircraft
Assets Related Document or (ii) any Aircraft Assets Related Document shall have
been amended, modified or terminated, AerCo shall deliver written notice thereof
to the Servicer together with (A) in the case of any newly executed Aircraft
Assets Related Document, a true and complete copy of such Aircraft Assets
Related Document, a list of all Aircraft Assets to which it relates and a
description, in reasonable detail, of the relevance of such Aircraft Assets
Related Document to such assets or (B) in the case of any amendment,
modification or termination, a true and complete copy of the agreement,
instrument or other document as so amended, modified or terminated; provided
however, that such notice or such document shall not be required to be delivered
if the Servicer was substantially involved in the preparation and execution of
such new, amended, modified or terminated agreement, instrument or other
document. The Servicer shall not be obligated to perform any Services with
respect to or in accordance or connection with any Aircraft Assets Related
Document or any amendment, modification or termination thereof unless and until
AerCo shall have provided it with a copy thereof in accordance with the
foregoing sentence.

         SECTION 6.07. AerCo Group Accounts and Cash Arrangements. AerCo shall
promptly notify the Servicer of any new bank or similar account established by
or on behalf of AerCo or any of the Subsidiaries or otherwise relating to the
Aircraft Assets and of any such account relating to any Aircraft Assets that
become Aircraft Assets after the date of this Agreement and the closing of any
such account. No Person within AerCo Group shall modify any arrangement with
respect to any bank or similar account or the flow of cash in connection with
the Aircraft Assets other than in accordance with the Cash Management Agreement.

         SECTION 6.08.  Notification of Bankruptcy.  If any of AerCo or the
Subsidiaries shall consider taking any action to:

          (a) file any petition or application, commence any proceeding, pass
any resolution or convene a meeting with respect to itself or any of its
Affiliates under any Jersey, Irish, United States Federal, State or foreign or
international law relating to the appointment of a trustee in bankruptcy,
liquidator or receiver with respect to any of AerCo or the Subsidiaries or over
the whole or any part of any properties or assets of any of AerCo or the
Subsidiaries or any bankruptcy,

                                       28
<PAGE>   35
reorganization, compromise arrangements or insolvency of any of AerCo or the
Subsidiaries; or

          (b)   make an assignment for the benefit of its creditors generally;

then AerCo shall notify the Servicer, to the extent practicable, of such
consideration a reasonable period of time prior to taking any such action, but
in any event, prior to taking any such action (it being understood that the
foregoing notice requirement shall not be construed to prohibit or restrain the
taking of any action described in (a) or (b) above). If any of AerCo or the
Subsidiaries becomes aware of the intent or action of any Person (whether a
creditor or member of any of AerCo or the Subsidiaries) to appoint a trustee in
bankruptcy, liquidator or receiver, AerCo shall promptly notify the Servicer.

         SECTION 6.09. Further Assurances. Each of AerCo and the Subsidiaries
agrees that at any time and from time to time upon the written request of the
Servicer, that it will execute and deliver such further documents and do such
further acts and things as the Servicer may reasonably request in order to
effect the purposes of this Agreement.

         SECTION 6.10.  Communications.  (a)  Upon the occurrence of any change
in the officers, directors or shareholders of any Person within AerCo Group,
AerCo shall provide prompt written notice thereof to the Servicer.

          (b) Each of AerCo and each other Person within AerCo Group shall, and
shall cause the Administrative Agent and the Cash Manager to, forward promptly
to the Servicer a copy (or, if such communication is oral, notify the Servicer
by prompt written notice) of any communication received from any Person which
relates to the Services to be provided with respect to any Aircraft Asset.

                                    ARTICLE 7
                       AERCO GROUP RESPONSIBILITY; BUDGETS

         SECTION 7.01. AerCo Group Responsibility. Notwithstanding the
appointment of the Servicer to perform the Services and the related delegation
of authority and responsibility to the Servicer pursuant to this Agreement, each
of AerCo and the Subsidiaries shall remain responsible for all matters related
to its business, operations, assets and liabilities.

         SECTION 7.02. Instructions by AerCo Group. If AerCo, by Special Board
Resolution, determines that an action being taken by the Servicer under this

                                       29

<PAGE>   36

Agreement is not in the best interests of AerCo Group, then AerCo shall deliver
written notice to the Servicer directing the Servicer to limit or terminate such
action or to take other action authorized or contemplated by this Agreement
(including leases, sales or disposals of any Aircraft Asset) or the applicable
Lease which is described in reasonable detail in such notice and, upon receipt
of such written notice, the Servicer shall comply with the terms thereof.

         SECTION 7.03. Request for Authority. (a) Subject to Section 7.03(b), if
the Servicer wishes to take or approve any action which it is not expressly
authorized under this Agreement to take or approve, it shall request authority
from AerCo to take or approve the action. The Servicer's request for authority
shall be in writing, and shall include a reasonably detailed explanation of the
reason for the request. If on or prior to the earlier of (i) the last day for a
response by AerCo as specified by the Servicer in its request (being not less
than 5 Business Days after the request) or (ii) the day following the next
meeting of the Directors following the request, AerCo does not expressly refuse
such request and no Referral Notice has issued in respect of it, the Servicer
shall be deemed to be authorized in writing to take or to approve such action on
behalf of AerCo Group following notification in writing to AerCo of the
Servicer's intention to proceed in accordance with its request. For the
avoidance of doubt, this Section 7.03 does not permit the Servicer to take or
approve any action which it is expressly required not to take or approve under
this Agreement.

          (b) If the Servicer reasonably determines that an action to protect
the interests of AerCo Group is required before the expiration of the relevant
time period specified in Section 7.03(a), then the Servicer shall notify the
Directors of such determination and, unless otherwise directed by the Directors
and provided no Referral Notice has issued, the action proposed may be deemed to
be authorized in writing on behalf of AerCo Group following notification in
writing to AerCo of the Servicer's intention to proceed in accordance with its
request.

          (c) In relation to each payment required to be made in relation to an
Aircraft Asset and not authorized under any other provision of this Agreement,
the Servicer will submit a certificate to the Administrative Agent with a copy
to the Directors giving reasonable details and confirming that any required
authorization for such payment pursuant to this Agreement has been obtained.

         (d) In relation to any proposal, or proposed action, compromise,
restructuring or incurring of expenses ("SERVICER PROPOSAL") which is referred
or notified to AerCo by the Servicer under Section 7.03(a), 7.03(b) or 7.04(h)
of this Agreement, or under Sections 1.01(c)(iv) or 1.05 of Schedule 2.02(a),
any Director may issue a notice (a "REFERRAL NOTICE") requiring the relevant
matter to be determined by the Board of Directors. If a Referral Notice is
issued in relation

                                       30
<PAGE>   37
to a Servicer Proposal, the Servicer Proposal may not be carried out by the
Servicer unless it has been approved by the Board of Directors.

         SECTION 7.04. Operating Budget; Aircraft Asset Expenses Budget. (a)
AerCo, on behalf of AerCo Group, shall adopt with respect to the Initial
Periods, each one Year period (a "ONE YEAR PERIOD") and each three Year period
(a "THREE YEAR PERIOD" and, together with a One Year Period, each a "PERIOD")
during the term of this Agreement, the following projected budgets which are to
be prepared by the Administrative Agent on behalf of AerCo.:

          (i) a separate lease operating budget with respect to the Aircraft
         Assets distinguishing between cash and non-cash items (an "OPERATING
         BUDGET"); and

         (ii) a separate budget with respect to Aircraft Asset Expenses related
         to the Aircraft Assets distinguishing between cash and non-cash items
         (an "ASSET EXPENSES BUDGET").

          (b) The initial Operating Budget for the period from the Closing Date
through March 31, 2001 (the "ONE YEAR INITIAL PERIOD") and through March 31,
2003 (the "THREE YEAR INITIAL PERIOD" and, together with the One Year Initial
Period, the "INITIAL PERIODS"), and the initial Asset Expenses Budget for the
One Year Initial Period and the Three Year Initial Period shall be substantially
in the forms attached hereto as Schedule 7.04(b)(1) and Schedule 7.04(b)(2) (the
"INITIAL APPROVED BUDGETS"). The format for the Operating Budget and Asset
Expenses Budget for future Years may be modified by AerCo with the consent of
the Servicer, which consent shall not be unreasonably withheld.

          (c) Operating Budgets and Asset Expenses Budgets for each Period
during the term of this Agreement shall be adopted by AerCo Group in accordance
with Section 7.04(a).

          (d) The Servicer shall use reasonable commercial efforts to manage the
Aircraft Assets in accordance with this Agreement so as to achieve the Initial
Approved Budget and the Approved Budget for any Period; provided that the
Servicer shall have no liability for any Losses that may be imposed on, incurred
by or asserted against any Indemnified Party arising out of a failure by the
Servicer to achieve either the Initial Approved Budgets or the Approved Budget
for any Period.

          (e) In respect of each Period during the term of this Agreement after
the Initial Periods, the Administrative Agent shall prepare, and deliver to
AerCo for its consideration no later than 30 days immediately preceding the
commencement

                                       31
<PAGE>   38
of each Year, a proposed Operating Budget and a proposed Asset Expenses Budget
for such Period together with reasonably detailed supporting information and the
assumptions underlying such proposed Operating Budget and Asset Expenses Budget.
The proposed Operating Budget and Asset Expenses Budget for each Year shall, if
approved by AerCo, supercede prior Years' budgets.

          (f) In connection with AerCo's consideration of such proposed
Operating Budget and Asset Expenses Budget for each Period, the Servicer shall
provide AerCo and the Administrative Agent, not later than 90 days immediately
preceding the commencement of each Year, information on a monthly basis in a
form to be agreed relating to (i) Aircraft lease rates, (ii) Aircraft downtime,
(iii) direct technical expenditures (including any costs to be capitalized)
relating to the Aircraft Assets, (iv) indirect costs relating to insurance,
legal, consulting and other similar expenses and (v) such other Aircraft Assets
expense-related information (including, in the case of the Asset Expenses Budget
for any One Year Period, an estimate of the Technical Management Expenses to be
incurred during such Period (such estimate, the "TECHNICAL MANAGEMENT EXPENSES
RESERVE AMOUNT")) as may be reasonably required to prepare such budgets, in each
case including the assumptions relating thereto. The Servicer will cooperate in
good faith with the Administrative Agent to answer the Administrative Agent's
inquiries with respect to the above items and other items in connection with
preparation of the Operating Budget and the Asset Expenses Budget. The
Administrative Agent shall prepare such proposed Operating Budget and Asset
Expenses Budget and shall, where reasonable, incorporate, use and rely upon the
information and assumptions provided by the Servicer.

         (g) During the 20-day period following its receipt of the
Administrative Agent's proposed Operating Budget and Asset Expenses Budget,
AerCo shall consult with the Servicer in good faith regarding the contents of
the final Operating Budget and Asset Expenses Budget for each applicable One
Year Period and Three Year Period. The Servicer shall have the right to attend
and make representations at any meetings of the Directors held for the purpose
of considering and approving the final Operating Budget and Asset Expenses
Budget for each applicable One Year Period and Three Year Period. Not later than
the 10 days immediately preceding the commencement of each Year, the Board of
Directors shall adopt a final Operating Budget and Asset Expenses Budget for
each applicable One Year Period and Three Year Period which shall, where
reasonable, incorporate, use and rely upon the information and assumptions
provided by the Servicer (the "APPROVED BUDGET").

          (h) If at any time the Servicer reasonably believes that the
incurrence of any Aircraft Asset Expense is reasonably likely to result in the
actual aggregate Aircraft Asset Expenses of the same category as such Aircraft
Asset Expense

                                       32
<PAGE>   39
(taking into account all Aircraft Asset Expenses of such category incurred to
date) exceeding 120% of the line item amount included in the then applicable
Approved Budget for such Year for such category of Aircraft Asset Expenses, the
Servicer shall not incur such Aircraft Asset Expense unless 5 Business Days'
prior notification to AerCo has been made and AerCo has not determined that such
expense should not be incurred and no Referral Notice has issued. In connection
with the foregoing, the Servicer may request that the related line item amount
included in the then applicable Approved Asset Expenses Budget be increased to
the reasonably anticipated level of Aircraft Asset Expenses in such category for
the balance of the Period.

          (i) If, at any time during any Period, AerCo, in its reasonable
opinion, determines that any Changed Circumstance shall have occurred and be
continuing, AerCo may notify the Servicer that such Changed Circumstance has
occurred, and AerCo may modify the Approved Budget in a manner reasonably
necessary or appropriate to reflect such Changed Circumstance, provided that any
such modification shall not become effective unless and until AerCo shall have
given the Servicer at least 15 days prior written notice of such modification,
provided further that during the 15 day period following the effectiveness of
such notice, the Servicer shall have the opportunity to express any objections
it may reasonably have to the proposed modification and AerCo shall negotiate in
good faith with the Servicer to agree on such modification (it being understood
that AerCo shall not be obligated to alter its proposed modification). In
addition, if AerCo notifies the Servicer that a Changed Circumstance has
occurred, then upon the request of AerCo, the Servicer shall develop, in
consultation with AerCo, within the 30 days following such request, an
extraordinary plan (an "EXTRAORDINARY PLAN"). The Servicer shall implement such
Extraordinary Plan.

          (j)   Notwithstanding the foregoing, the Approved Budgets shall not be
modified in any manner (including pursuant to an Extraordinary Plan) unless: (i)
AerCo Group shall have funds available to satisfy fully any financial obligation
that may arise from compliance with such modification; (ii) such modification
shall be consistent with, and shall not in any manner reduce, limit or
circumscribe, the delegation to the Servicer pursuant to this Agreement of a
practicable and workable level of autonomy, authority and responsibility with
respect to the performance of the Services; and (iii) such modification shall be
consistent with the express terms of this Agreement and any Aircraft Assets
Related Document then applicable to any of the Aircraft Assets.

         SECTION 7.05. Transaction Approval Requirements. (a) Consistent with
the overall business objectives of AerCo Group with respect to the Aircraft
Assets, and with the delegation to the Servicer by AerCo Group of a practicable
and workable level of autonomy, responsibility and authority regarding the

                                       33
<PAGE>   40
performance of the Services, the Servicer shall not do any of the following
without the express prior written approval of AerCo:

         (i) except as required in accordance with the terms of any Lease
         existing as of the date hereof, sell (or enter into any agreement to
         sell or grant any option for a Lessee or any other party to acquire) or
         otherwise dispose of any Aircraft or any engine;

         (ii) enter into any new Lease (or any renewal or extension of an
         existing Lease) of an Aircraft Asset if such Lease shall not comply
         with the covenants of the Indenture (as summarized or set forth in
         Annex 2 hereto) and any amendments, modifications or supplements
         thereto or such other covenants specifically relating to Leases as
         AerCo shall identify to the Servicer in writing and provide the
         Servicer with copies thereof or with any express direction issued by
         AerCo as contemplated by this Agreement;

         (iii) terminate any Lease or Leases to any single Lessee or related
         Lessees with respect to any Aircraft having an aggregate depreciated
         net book value on the books of the relevant Person in AerCo Group in
         excess of $100,000,000;

         (iv) unless provided for in the then current Approved Budget, enter
         into any contract for the modification, maintenance or refurbishment of
         any Aircraft (A) if the costs to be incurred thereunder by AerCo Group
         exceed the greater of (1) the estimated aggregate cost of a heavy
         maintenance "D" check for the airframe and the equivalent for engines
         for Aircraft of the type in question and (2) the amount of the
         available maintenance reserve or other collateral received and
         available under the applicable Lease or (B) if such modification or
         maintenance shall be outside the ordinary course of AerCo Group's
         business;

         (v) enter into on behalf of AerCo or any of the Subsidiaries, any
         capital commitment or confirm any order or commitment to acquire, or
         acquire on behalf of AerCo Group, Aircraft or engines with any aircraft
         or engine manufacturers or other third party;

         (vi) issue any guarantee on behalf of, or otherwise pledge the credit
         of any Person within, AerCo Group other than guarantees by a member of
         AerCo Group of the Lease obligations of another member of AerCo Group
         and other than with respect to trade payables in the ordinary course of
         AerCo Group's business;

                                       34
<PAGE>   41
         (vii) enter into any agreement for a particular service costing in
         excess of $50,000 for such service to be provided in respect of
         Aircraft Assets by third parties, the cost of which is to be borne by
         AerCo Group, except in each case to the extent that the same is an
         Aircraft Asset Expense provided for in the then applicable Approved
         Budget;

         (viii) on behalf of any Person within AerCo Group enter into, amend or
         grant a waiver with respect to any transaction with the Servicer or any
         of its Affiliates including without limitation for the acquisition,
         sale or lease of any Aircraft Assets from or to, or the obtaining or
         provision of services by, any such Person; or

         (ix) enter into any agreement or commitment which is inconsistent with
         any express direction issued by AerCo as contemplated by this
         Agreement.

          (b) Any transaction entered into by the Servicer on behalf of any
Person or Persons within AerCo Group (other than with another Person within
AerCo Group) shall be on an arm's length basis and on fair market value terms,
unless otherwise agreed by AerCo or directed by AerCo in accordance with Section
7.02.

          (c) The transaction approval requirements (the "TRANSACTION APPROVAL
REQUIREMENTS") set forth in this Section 7.05 may only be amended by mutual
agreement of the parties, and shall not in any event be amended to reduce or
circumscribe the delegation to the Servicer of the level of autonomy, authority
and responsibility contemplated by the Transaction Approval Requirements with
respect to the performance of the Services.

         SECTION 7.06. Approved Budgets and Transaction Approval Requirements.
Except as set forth in Section 7.05(a), no transaction entered into by the
Servicer on behalf of any Person within AerCo Group in connection with the
performance by the Servicer of the Services shall require the approval of any
Person within AerCo Group or their respective Directors or committees thereof.

         SECTION 7.07. Communication with AerCo. (a) The Servicer shall, on a
weekly basis, notify AerCo of any potential leasing opportunities identified by
it and shall comply with any directions which AerCo may issue in respect
thereof.

          (b) The Servicer shall arrange to meet with the Board of Directors in
each financial quarter (each such meeting being a "QUARTERLY MEETING") in order
to discuss the weekly, monthly and quarterly reports presented during the
preceding quarter in accordance with Article 8 of Schedule 2.02(a).

                                       35
<PAGE>   42
          (c) At any time, including at or after a Quarterly Meeting, AerCo may
issue such directions as it may see fit and believes to be in the interests of
AerCo Group (provided such directions are not inconsistent with market practice,
the Core Lease Provisions, the provisions of the Indenture and this Agreement),
in relation to the manner in which leasing and other services contemplated by
this Agreement are to be carried out, including without limitation as to the
identity of permitted lessees, targets for rental levels, parameters as to
security to be required from lessees, and terms as to maintenance, modification
and replacement of parts and redelivery condition. The Servicer shall endeavor
to carry out such directions and shall notify AerCo as to whether it has been
possible to carry them out; and, in any event, the Servicer shall not take any
action which is inconsistent with any such directions.

                                    ARTICLE 8
                                  EFFECTIVENESS

         SECTION 8.01. Effectiveness. (a) The effectiveness of this Agreement
and all obligations of the parties hereunder with respect to each Aircraft Asset
shall be conditional upon:

         (i)  the occurrence of the Delivery Date of such Aircraft Asset,

         (ii) with respect to AerCo, the Servicer and the entities listed on
         Appendix A to this Agreement, the execution hereof by those parties;
         and

         (iii) with respect to any entity which executes and delivers an
         Accession Agreement, the execution thereof in acknowledgment and
         agreement by AerCo, the Servicer, the Cash Manager and the
         Administrative Agent. The original parties hereto and each entity which
         becomes a party hereto by executing and delivering such an Accession
         Agreement agree that such Accession Agreement shall be effective
         without the need for each other party hereto to execute such Accession
         Agreement in acknowledgment and agreement.

         (b) With respect to any Aircraft Assets that AerCo Group shall purchase
pursuant to any firm order, order subject to cancellation, option or other
arrangement (including any Aircraft Asset purchased through the acquisition of
stock or other equity interest in a corporation or other entity formed to hold
such Aircraft Asset), the Servicer shall, at the request of AerCo, take such
reasonable commercial actions as the Servicer shall deem reasonably necessary or
appropriate to accept delivery of any such Aircraft Assets on behalf of AerCo
Group, in accordance with the terms of such order, option or other arrangement
(including, without limitation,

                                       36
<PAGE>   43
conducting such pre-delivery inspections as the Servicer deems reasonably
appropriate); provided, however, that the Servicer shall have no obligation to
make any payments to any manufacturer or seller of such Aircraft Assets.

                                    ARTICLE 9
                            SERVICING FEES; EXPENSES

         SECTION 9.01. Servicing Fees. In consideration of the Servicer's
performance of the Services, AerCo shall pay to the Servicer servicing fees
consisting of the fees set forth in the sections listed below (collectively, the
"SERVICING FEES"):

          (a)   Section 9.02 (the "RETAINER FEE");

          (b)   Section 9.03 (the "RENTAL FEE"); and

          (c)   Section 9.05 (the "BASE SALES FEE").

         SECTION 9.02. Retainer Fee. (a) A Retainer Fee of ten basis points per
annum of the Initial Appraised Value of the Aircraft with respect to which the
Delivery Date therefor has occurred will be payable to the Servicer monthly in
arrears in twelve equal installments on or before the Payment Date in the
succeeding month. Ten percent (10%) of such Retainer Fee will relate to the
provision of technical services under Section 1.02 of Schedule 2.02(a) to this
Agreement.

         (b) If and when an Aircraft is sold, the Initial Appraised Value of the
Aircraft on which the Retainer Fee is calculated will be reduced by the Initial
Appraised Value of such Aircraft; provided that, solely for purposes of
calculating the Retainer Fee, the Initial Appraised Value shall not be reduced
below $250 million unless and until all of the Aircraft shall have been sold.

         SECTION 9.03. Rental Fee. A Rental Fee shall be payable for each month
during the term of this Agreement by AerCo to the Servicer equal to 1.00% (the
"RENTAL FEE PERCENTAGE") of the aggregate amount of the "RENT" (as defined in
each Lease) actually paid by each Lessee in such month or portion of a month the
related Aircraft (and Additional Aircraft in the event the Servicer has been
appointed to provide the Services to such Additional Aircraft) is owned by AerCo
Group. All payments of the Rental Fee shall be payable in arrears on the Payment
Date immediately preceding the commencement of the second month following each
such month or portion of a month.

         SECTION 9.04. [Reserved].

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<PAGE>   44
         SECTION 9.05. Base Sales Fee. A Base Sales Fee shall be payable by
AerCo to the Servicer at any time during the term of this Agreement on the
actual date of sale of any of the Aircraft in the amount of (i) 1.25% multiplied
by (ii) the Target Sales Price for the sale of any Aircraft, net of transaction
expenses, provided that no Base Sales Fee shall be payable with respect to a
sale in connection with a refinancing, restructuring, reorganization or tax
based financing with respect to AerCo Group or the Aircraft if, after such
sales, the Servicer (i) remains as Servicer of such Aircraft, (ii) continues to
receive a Retainer Fee and a Rental Fee with respect to such Aircraft and (iii)
remains eligible to earn a Base Sales Fee with respect to such Aircraft in the
future. "TARGET SALES PRICE" means, with respect to a sale of any Aircraft, an
amount initially equal to 90% of the Initial Appraised Value of the relevant
Aircraft, such valuations, in accordance with the appraisals of the Aircraft, to
be adjusted annually by AerCo, subject to any restrictions imposed by any
indenture or similar agreement binding AerCo Group. To the extent that the Net
Cash Proceeds from a sale exceed the Target Sales Price, then transaction
expenses shall not be deducted from the Target Sales Price for the purpose of
calculating the Base Sales Fee. "NET CASH PROCEEDS" means the gross cash
proceeds of any sale of Aircraft net of any break funding gains or losses
directly associated with the sale of such Aircraft and transaction costs
(including transaction taxes and Servicer's out-of-pocket expenses) and
brokerage commissions.

         SECTION 9.06. Expenses. (a) The Servicer shall be responsible for, and
shall not be entitled to reimbursement for, the Servicer's overhead expenses
("OVERHEAD EXPENSES") which shall include, without limitation:

         (i)    salary, bonuses and benefits of the Servicer's employees;

         (ii)   travel and entertainment expenses of the Servicer's
         employees;

         (iii)  office, office equipment and rental expenses other than those
         incurred by third-party independent advisors hired in relation to the
         Aircraft;

         (iv)   telecommunications expenses;

         (v)    advertising and promotional expenses;

         (vi)   legal fees and costs, other than those relating to (A) local
         law, jurisdictional and tax issues, (B) the provision of legal
         opinions, (C) enforcement actions, (D) litigation or (E) other matters
         outside the ordinary course of business, but including, for the
         avoidance of doubt, the

                                       38
<PAGE>   45
         costs associated with providing the legal services set out in
         Section 7.01(a) of Schedule 2.02(a);

         (vii)  taxes on the income, receipts, profits, gains, net worth or
         franchise of the Servicer and payroll, employment and social security
         taxes for employees of the Servicer;

         (viii) costs of negotiating and managing the insurance arrangements for
         each Aircraft Asset under the Leases, in connection with sales of
         Aircraft Assets or otherwise, including all insurance renewals; and

         (ix)   costs in respect of technical management services provided with
         respect to any Aircraft Assets as set forth in Section 1.02 of Schedule
         2.02(a) (other than any such costs described in clause (b)(i) below).

         (b)    AerCo Group shall be responsible for all costs and expenses
relating to or associated with the Aircraft Assets other than Overhead Expenses
("AIRCRAFT ASSET EXPENSES") which shall include, without limitation:

         (i)    storage, maintenance, fees and expenses in connection with
         non-ordinary course technical management services, repossession
         (whether or not successful) and repair expenses (all the foregoing fees
         and expenses, "TECHNICAL MANAGEMENT EXPENSES") and reconfiguration and
         refurbishment expenses related to Aircraft Assets, including, in each
         case, any expenses incurred by the Servicer relating to compliance with
         airworthiness directives and service bulletins, which includes the fees
         and expenses of independent technicians and other experts (in each case
         as approved by the Administrative Agent on behalf of AerCo, except in
         the case of any Technical Management Expenses to the extent that the
         aggregate amount of such expenses incurred during the applicable One
         Year Period does not exceed the Technical Management Expenses Reserve
         Amount for such One Year Period) retained for any of the foregoing
         purposes;

         (ii)   insurance expenses related to Aircraft Assets, including all
         fees and expenses of insurance advisors and brokers;

         (iii)  fees and expenses of third-party independent advisors hired in
         relation to the Aircraft and approved by the Administrative Agent on
         behalf of AerCo;

         (iv)   outside legal counsel fees and expenses and other professional
         expenses related to the Aircraft Assets in connection with the

                                       39
<PAGE>   46
         provision of advice on local law, jurisdictional and tax issues, the
         provision of legal opinions, enforcement actions, litigation and other
         matters outside the ordinary course of business; and

          (v) third-party fees and expenses incurred in connection with the
         negotiation and execution of this Agreement and any amendments thereto,
         the preparation of the Offering Memorandum, any Notes Offering, any
         financing, restructuring or re-financing efforts, any SEC-registered
         public offering and any disclosure in public filings.

          (c) The Servicer shall use commercially reasonable efforts to ensure
that Aircraft Asset Expenses shall be paid directly by the Person within AerCo
Group that owns the relevant Aircraft Assets. In the event that AerCo does not
approve the payment of any Aircraft Asset Expense, the Servicer shall be
entitled to make such payment on behalf of AerCo Group and to the extent the
Servicer does so, the funds so advanced ("REIMBURSABLE EXPENSES") shall be
repaid by AerCo to the Servicer in accordance with paragraph (b) of this Section
9.06, provided that:

         (i) the Servicer believes that failure to make such payment is
         reasonably likely to prejudice or otherwise adversely affect the
         Servicer or its Affiliates' business relationship with the relevant
         payee;

         (ii) the relevant Aircraft Asset Expense (when added to all the
         Aircraft Asset Expenses of the same category incurred to date during
         such Year) shall not exceed 120% of the line item amount in the
         applicable Approved Asset Expenses Budget for such Year or the Asset
         Expense shall otherwise have been approved by AerCo; and

         (iii) the Servicer shall have contracted for or otherwise committed for
         such Aircraft Asset Expense prior to such time.

          (d) Reimbursable Expenses shall be payable by AerCo to the Servicer
reasonably promptly following the payment of such Reimbursable Expenses by the
Servicer.

                                   ARTICLE 10

                           TERM; TERMINATION; SURVIVAL

         SECTION 10.01. Term. This Agreement shall have a term commencing on the
Closing Date and expiring on the date of payment in full of all amounts
outstanding to be paid on the Notes (including the Class D Notes and the Class E
Notes) and any other securities issued by AerCo as relating to Additional
Aircraft

                                       40
<PAGE>   47
owned by AerCo Group. During such term, this Agreement shall not be terminable
by either party except as expressly provided in this Article 10.

         SECTION 10.02. Right to Terminate. (a) At any time during the term of
this Agreement, AerCo and the Subsidiaries by a Special Board Resolution shall
in accordance with this Section 10.02(a) be entitled to terminate this Agreement
with respect to one or more of the Aircraft Assets if:

         (i)  the Servicer shall materially breach any of its obligations under
         this Agreement (including, but not limited to, a breach of its
         obligation not to execute lease documents or make other operational
         decisions outside Ireland or any other material breach of the Operating
         Guidelines, as set out in Section 5.09 of this Agreement) and, after
         written notice from AerCo, the Servicer has failed to cure such breach
         pursuant to Section 10.02(e); or

         (ii) the Servicer ceases, or the Servicer gives notice that it intends
         to cease, to be actively involved in the aircraft advisory and
         management business; or

         (iii) all of the public or private debt securities of AerCo are repaid,
         refinanced or defeased in full in accordance with the terms of any
         indenture or similar agreement binding AerCo; or

         (iv) a Change of Control of the Servicer has occurred or may occur and
         as a result thereof a Change of Control Rating Decline occurs. A
         "CHANGE OF CONTROL" will be deemed to have occurred at such time as
         either (A) any Person or any Persons acting together that would
         constitute a "group" (a "GROUP") for purposes of Section 13(d) of the
         Securities Exchange Act of 1934, or any successor provision thereto,
         together with any Affiliates or Related Persons thereof, shall
         beneficially own (within the meaning of Rule 13d-3 under the Securities
         Exchange Act of 1934, or any successor provision thereto) at least 50%
         of the aggregate voting power of all classes of voting stock of the
         Servicer; or (B) any Person or Group, together with any Affiliates or
         Related Persons thereof, shall succeed in having a sufficient number of
         its nominees elected to the Board of Directors of the Servicer such
         that such nominees, when added to any existing director remaining on
         the Board of Directors of the Servicer after such election who was a
         nominee of or is an Affiliate or Related Person of such Person or
         Group, will constitute a majority of the Board of Directors of the
         Servicer; provided that any event described in clause (A) or (B) above
         will not constitute a "CHANGE OF CONTROL" where the relevant Person or
         Group, together with any relevant Affiliates or Related Persons,
         consists exclusively of the Servicer, any Affiliate or any Person who
         is an

                                       41
<PAGE>   48
         officer, director, shareholder, employee or partner of the Servicer or
         any Affiliate (or an entity controlled by any of the foregoing) as of
         the date of this Agreement. A "RELATED PERSON" of any Person means any
         other Person directly or indirectly owning (A) 5% or more of the
         outstanding common stock of such Person, (or, in the case of a Person
         that is not a corporation, 5% or more of the equity interest in such
         Person) or (B) 5% or more of the combined voting power of the voting
         stock of such Person. A "CHANGE OF CONTROL RATING DECLINE" will be
         deemed to have occurred if, at any time between (a) the date of public
         notice of a Change of Control or of the intention of the Servicer or of
         any Person to effect a Change of Control and (b) 90 days after the
         occurrence of the Change in Control (which period shall in either event
         be extended so long as the rating of any of the Notes (other than the
         Class E Notes) is under publicly announced consideration for possible
         downgrade by a credit rating agency), any credit rating agency which
         then rates the Notes notifies or confirms to AerCo that it intends to
         decrease, is decreasing or has decreased the rating of any of the Notes
         (other than the Class E Notes);

         (v) an involuntary proceeding shall be commenced or an involuntary
         petition shall be filed in a court of competent jurisdiction seeking
         relief in respect of the Servicer or in respect of a substantial part
         of the property or assets of the Servicer, under Title 11 of the United
         States Code, as now constituted or hereafter amended, or any other U.S.
         Federal or state or foreign bankruptcy, insolvency, receivership or
         similar law, and such proceeding or petition shall continue undismissed
         for 100 days or an order or decree approving or ordering any of the
         foregoing shall be entered or the Servicer shall go into liquidation,
         suffer a receiver or mortgagee to take possession of all or
         substantially all of its assets or have an examiner appointed over it
         or if a petition or proceeding is presented for any of the foregoing
         and not discharged within 100 days; or the Servicer shall (A)
         voluntarily commence any proceeding or file any petition seeking relief
         under Title 11 of the United States Code, as now constituted or
         hereafter amended, or any other U.S. Federal or state or foreign
         bankruptcy, insolvency, receivership or similar law, (B) consent to the
         institution of, or fail to contest the filing of, any petition
         described in clause (A) above, (C) file an answer admitting the
         material allegations of a petition filed against it in any such
         proceeding, or (D) make a general assignment for the benefit of its
         creditors;

         (vi)   the Servicer and AerCo shall fail to resolve a conflict as
         provided in Section 3.02(d) of this Agreement; or

                                       42
<PAGE>   49
         (vii)  AerFi Group transfers, or intends to transfer, more than 50% of
         the outstanding Class E Notes to a Person who is not an Affiliate (a
         "NOTE TRANSFER") and as a result thereof a Note Transfer Rating Decline
         occurs. A "NOTE TRANSFER RATING DECLINE" will be deemed to have
         occurred if at any time between (a) the date of notice by AerCo to any
         rating agency of a Note Transfer, or of the intention of the Servicer
         or of any of its Affiliates to effect a Note Transfer, and (b) 90 days
         after the occurrence of the Note Transfer (which period shall in either
         event be extended so long as the rating of any of the Notes (other than
         the Class E Notes) is under publicly announced consideration for
         possible downgrade by a credit rating agency), any credit rating agency
         which then rates the Notes notifies or confirms to AerCo that it
         intends to decrease, is decreasing or has decreased the rating of any
         of the Notes (other than the Class E Notes);

         (b)    Subject to the following conditions, at any time during the term
of this Agreement, AerCo and the Subsidiaries by a Special Board Resolution
shall, in accordance with this Section 10.02(b), be entitled to terminate this
Agreement in respect of any Aircraft to which one or more of the following
conditions apply:

         (i)    in the case of marketing for re-lease of an Aircraft, such
         Aircraft has been off-lease and is reasonably available for re-lease
         for more than 180 days after expiry of the agreed lease marketing
         period; or

         (ii)   the Servicer fails, within a reasonable period of time (not to
         exceed 180 days), to submit to AerCo a bona fide third party offer to
         purchase an Aircraft after written direction from AerCo to arrange such
         a sale; or

         (iii)  the Servicer recommends a course of action in respect of an
         Aircraft Asset to AerCo which AerCo does not approve and, after
         negotiation in good faith, the Servicer refuses to amend, withdraw or
         replace such recommendation with one that is consistent with the
         performance of the Services pursuant to this Agreement.

         (c)    At any time during the term of this Agreement, the Servicer
shall in accordance with this Section 10.02(c) be entitled to terminate this
Agreement if:

         (i)    AerCo shall fail to pay in full when due (A) any Servicing Fees
         within five Business Days after delivery of written notice from the
         Servicer of such failure or (B) any other amount payable by any Person
         within AerCo Group hereunder or under any other Operative Agreement,

                                       43
<PAGE>   50
         within ten Business Days after delivery of written notice from the
         Servicer to AerCo of such failure; or

         (ii)   any Person within AerCo Group shall fail to perform or observe
         or shall violate in any material respect any material term, covenant,
         condition or agreement to be performed or observed by it in respect of
         this Agreement or any other Operative Document (other than with respect
         to the payment obligations of AerCo referred to in clause (c)(i) of
         this Section 10.02); or

         (iii)  an involuntary proceeding shall be commenced or an involuntary
         petition shall be filed in a court of competent jurisdiction seeking
         relief in respect of AerCo or any Subsidiary or in respect of a
         substantial part of the property or assets of AerCo or any Subsidiary
         under Title 11 of the United States Code, as now constituted or
         hereafter amended, or any other U.S. Federal or state or foreign
         bankruptcy, insolvency, receivership or similar law, and such
         proceeding or petition shall continue undismissed for 100 days or an
         order or decree approving or ordering any of the foregoing shall be
         entered or AerCo or any Subsidiary shall go into liquidation, suffer a
         receiver or mortgagee to take possession of all or substantially all of
         its assets or have an examiner appointed over it or if a petition or
         proceeding is presented for any of the foregoing and not discharged
         within 100 days; or AerCo or any Subsidiary shall (A) voluntarily
         commence any proceeding or file any petition seeking relief under Title
         11 of the United States Code, as now constituted or hereafter amended,
         or any other U.S. Federal or state or foreign bankruptcy, insolvency
         receivership or similar law, (B) consent to the institution of, or fail
         to contest the filing of, any petition described in clause (A) above,
         (C) file an answer admitting the material allegations of a petition
         filed against it in any such proceeding or (D) make a general
         assignment of the benefit of its creditors; or

         (iv)   the Servicer or any of its Affiliates becomes obligated to pay
         (or indemnify for) Taxes as a result of its provision of the Services
         (other than taxes on the income, receipts, profits, gains, net worth or
         franchise of the Servicer and payroll, employment and social security
         taxes for employees of the Servicer), which Taxes it is unable to avoid
         using reasonable commercial efforts, and AerCo fails to indemnify the
         Servicer or its Affiliate for such Taxes; or

         (v)    the Servicer reasonably determines that directions given by
         AerCo or any Subsidiary are, or if carried out would be, unlawful under
         Applicable Law.

                                       44
<PAGE>   51
         (d)    Subject to the first proviso in subsection (e)(i) of this
Section 10.02, this Agreement shall terminate in the event of a termination of
either the Cash Management Agreement or the Administrative Agency Agreement.

         (e) (i) Either AerCo or the Servicer, as applicable (the "TERMINATING
PARTY") may, at any time during the term of this Agreement, by written notice
("TERMINATION NOTICE") to the other (the "NON TERMINATING PARTY"), set forth its
determination to terminate this Agreement pursuant to this Section 10.02;
provided however, that, this Agreement shall not terminate until and unless the
Standby Servicer shall have been appointed and shall have accepted such
appointment in accordance with Section 10.03(d); provided further that failure
by the Terminating Party to provide such Termination Notice shall not affect
such party's rights under this Section 10.02. Any Termination Notice shall set
forth in reasonable detail the basis for such termination.

         (ii)   No later than the fifth Business Day following delivery of the
Termination Notice (the "EFFECTIVENESS DATE"), the Non Terminating Party shall
advise the Terminating Party in writing whether the Non Terminating Party (A)
intends to cure the basis for such termination and, if so, the action it intends
to take to effectuate such cure or (B) does not intend to cure the basis for
such termination (it being understood that failure of the Non Terminating Party
to deliver such notice by such day shall be deemed to constitute notice that it
does not intend to cure the basis for termination). In the event that the Non
Terminating Party notifies (or is deemed to have notified) the Terminating Party
that it does not intend to cure the basis for such termination, then this
Agreement shall terminate immediately or on such later date as the Terminating
Party shall have indicated in the Termination Notice. In the event that the Non
Terminating Party notifies the Terminating Party by such fifth day that it
intends to cure the basis for such termination, then the Non Terminating Party
shall (A) have 30 days from the Effectiveness Date to effectuate such cure to
the satisfaction of the Terminating Party or (B) if such cure cannot reasonably
be expected to be effectuated within a 30 day period, (1) demonstrate to the
satisfaction of the Terminating Party that substantial progress is being made
toward the effectuation of such cure and (2) effectuate such cure to the
reasonable satisfaction of the Terminating Party no later than the sixtieth day
following the Effectiveness Date. Upon the failure of the Non Terminating Party
to effectuate a cure in accordance with the immediately preceding sentence, this
Agreement shall terminate on the later of (A) the day immediately following the
expiration of such 30 or 60 day period, as the case may be, (B) such later date
as shall be indicated in the Termination Notice or (C) the date as of which the
Standby Servicer has been engaged to perform the Services with respect to the
Aircraft and has accepted such appointment in accordance with the provisions of
Section 10.03(d).

                                       45
<PAGE>   52
         SECTION 10.03. Consequences of Termination. (a) Upon the expiration or
termination of this Agreement in accordance with this Article 10, or upon the
removal of the Servicer with respect to the performance of the Services for any
Aircraft, the Servicer will promptly forward to AerCo any notices, reports and
communications received by it from any relevant Lessee within 30 days after
termination or expiration.

          (b) AerCo will notify promptly each relevant Lessee and any relevant
third party of the termination or expiration of the Servicer under this
Agreement in relation to any of the Aircraft and will request that all such
notices, reports and communications thereafter be made or given directly to or
as directed by AerCo.

          (c) A termination or resignation in relation to any or all Aircraft
shall not affect the respective rights and liabilities of either party accrued
prior to such termination in respect of any prior breaches hereof or otherwise.

          (d) (i) Upon the expiration or termination of this Agreement in
accordance with this Article 10, or upon the removal of the Servicer with
respect to the performance of the Services for any Aircraft, the Servicer will
cooperate with the Standby Servicer, including providing all information,
documents and records relating to the Aircraft for a 12 month period following
the termination or expiration.

         (ii) This Agreement may not be terminated with respect to the Servicer,
in either case in whole or in part, unless the Standby Servicer has been
appointed and has accepted such appointment; provided that in the event that the
Standby Servicer shall not have been appointed within 90 days after the date on
which this Agreement would otherwise have terminated, or the removal of the
Servicer with respect to the performance of the Services for any Aircraft, the
Servicer may petition any court of competent jurisdiction for the appointment of
a Standby Servicer.

          (e) Upon the termination of this Agreement in accordance with this
Article 10, or upon the removal of the Servicer with respect to the performance
of the Services for any Aircraft, AerCo shall continue to pay the Servicing Fees
and Reimbursable Expenses to the Servicer until the Standby Servicer shall have
been appointed and shall have accepted such appointment in accordance with the
provisions of Section 10.03(d).

          (f) Upon the termination of this Agreement in accordance with this
Article 10, or upon the removal of the Servicer with respect to the performance
of the Services for any Aircraft, the Servicer shall promptly (but no later than
30

                                       46
<PAGE>   53
days after the appointment and acceptance of the Standby Servicer) return the
originals (and all copies) within its possession of all applicable Aircraft
Assets Related Documents and other documents related to the Aircraft Assets to
AerCo and shall provide access to other documentation and information relating
to the business of AerCo Group (and, to the extent practicable, copies thereof)
within its possession as is reasonably necessary to the conduct of the services
to be provided by the Standby Servicer.

         SECTION 10.04. Survival. Notwithstanding any termination or the
expiration of this Agreement, the obligations of AerCo and the Subsidiaries
under Article 9, Section 10.03, this Section 10.04, Article 11 and Section 13.08
of this Agreement and the Servicer's obligations or limitations on liability
under Sections 3.03, 10.03, this Section 10.04, Article 11 and Section 13.08 and
the limitations on Servicer's liability under Sections 2.01(c), 2.02, 3.03,
3.04, 5.05, 5.08, 7.04(d), 13.10 and Schedule 2.02(a) shall survive such
termination or expiration, as the case may be.

                                   ARTICLE 11

                                 INDEMNIFICATION

         SECTION 11.01. Indemnity. (a) Notwithstanding anything to the contrary
set forth herein or in any other Operative Agreement, AerCo and the Subsidiaries
do hereby jointly and severally assume liability for, and do hereby jointly and
severally agree to indemnify, reimburse and hold harmless on an After-Tax Basis,
the Servicer, its Affiliates and the Servicer Representatives from any and all
Losses that may be imposed on, incurred by or asserted against any such Person,
directly or indirectly, arising out of, in connection with or related to (i) the
Servicer's performance under this Agreement, errors in judgment or omissions by
the Servicer under this Agreement or any action which the Servicer is requested
to take or requested to refrain from taking by AerCo, or as contemplated by this
Agreement, by the Cash Manager or the Administrative Agent; provided that the
indemnity pursuant to this clause (i) shall not extend to (A) any Loss which is
finally adjudicated to have been caused directly by the negligence,
recklessness, fraud or wilful misconduct of the Servicer or any Servicer
Representatives in respect of its obligations to apply the Standard of Care or
the Conflicts Standard in respect of the performance of the Services or (B) any
other Loss for which the Servicer has agreed to indemnify AerCo and its
Affiliates pursuant to this Agreement or (ii) any of the circumstances described
in clauses (iii) - (vi) of Section 3.03(a).

                                       47
<PAGE>   54
          (b) Any person who may seek indemnification pursuant to Section 3.03
or Section 11.01(a), (such person the "INDEMNIFIED PARTY") agrees to give the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY")
prompt notice of any action, claim, demand, discovery of fact, proceeding or
suit for which the Indemnified Party intends to assert a right to
indemnification under this Agreement; provided, however, that failure to give
such notification shall not affect the Indemnified Party's entitlement to
indemnification under this Section 11.01 unless and only to the extent such
failure results in actual irreparable prejudice to the Indemnifying Party.

         SECTION 11.02. Procedures for Defense of Claims. (a) If a Third Party
Claim is made against the Indemnified Party, the Indemnified Party shall
promptly notify the Indemnifying Party in writing of such claim (which notice
shall include all relevant information reasonably necessary for the Indemnifying
Party to understand such claim which is in the possession or under the control
of, or can be obtained by, the Indemnified Party at the time of such notice,
subject to Applicable Laws and confidentiality obligations), and the Indemnified
Party or the Indemnifying Party (as agreed between them) will undertake the
defense thereof. The failure to notify the Indemnifying Party promptly shall not
relieve the Indemnifying Party of its obligations under Section 3.03 or Section
11.01(a) unless such failure results in actual prejudice to the Indemnifying
Party.

          (b) If agreed and accepted by the Indemnified Party, the Indemnifying
Party shall within 30 days, undertake the conduct and control, through counsel
of its own choosing (subject to the consent of the Indemnified Party, such
consent not to be unreasonably withheld or delayed) and at the Indemnifying
Party's sole risk and expense, the good faith settlement or defense of such
claim, and the Indemnified Party shall cooperate fully with the Indemnifying
Party in connection therewith; provided that (i) at all times the Indemnified
Party shall be entitled to participate in such settlement or defense through
counsel chosen by it, and the fees and expenses of such counsel shall be borne
by the Indemnified Party, and (ii) the Indemnifying Party shall not be entitled
to settle such claims unless it shall have confirmed in writing the obligation
of the Indemnifying Party to indemnify the Indemnified Party for the liability
asserted in such claim.

          (c) So long as the Indemnifying Party is reasonably contesting any
such claim in good faith, the Indemnified Party shall fully cooperate with the
Indemnifying Party in the defense of such claim as is reasonably required by the
Indemnifying Party. Such cooperation shall include the retention and the
provision of records and information which are reasonably relevant to such Third
Party Claim and the availability on a mutually convenient basis of directors,
officers and employees to provide additional information. The Indemnified Party
shall not settle or compromise any claim without the written consent of the

                                       48
<PAGE>   55
Indemnifying Party unless the Indemnified Party agrees in writing to forego any
and all claims for indemnification from the Indemnifying Party with respect to
such claims.

          (d) If, within ten days after notice of any such claim, the
Indemnified Party and the Indemnifying Party are unable to agree on which of
them will defend such Third Party Claim, the Indemnified Party will have the
right to undertake the defense, compromise or settlement of such claim.

         SECTION 11.03. Reimbursement of Costs. The costs and expenses,
including fees and disbursements of counsel (except as provided in Section
11.02(b)(i)) and expenses of investigation, incurred by the Indemnified Party in
connection with any Third Party Claim, shall be reimbursed on a quarterly basis
by the Indemnifying Party upon the submission of evidence reasonably
satisfactory to the Indemnifying Party that such expenses have been incurred,
without prejudice to the Indemnifying Party's right to contest the Indemnified
Party's right to indemnification and subject to refund in the event that the
Indemnifying Party is ultimately held not to be obligated to indemnify the
Indemnified Party.

                                   ARTICLE 12
                            ASSIGNMENT AND DELEGATION

         SECTION 12.01. Assignment and Delegation. (a) No party to this
Agreement shall assign or delegate this Agreement or all or any part of its
rights or obligations hereunder to any Person without the prior written consent
of each of the other parties hereto; provided however that (i) the Servicer may
delegate any portion of its obligations to any company which is, and for so long
as it is, a subsidiary of AerFi Group plc and (ii) the foregoing provisions on
assignment and delegation shall not limit the ability of the Servicer to
contract with any Person, including any of its Affiliates, for services in
respect of Aircraft Assets. Any assignment or delegation pursuant to this
Section 12.01(a) shall not require any approval pursuant to Section 7.05 as long
as such assignment or delegation is at the cost of the Servicer.

          (b) Without limiting the foregoing, any Person who shall become a
successor by assignment or otherwise of any of AerCo, the Subsidiaries or the
Servicer (or any of their respective successors) in accordance with this Section
12.01 shall be required as a condition to the effectiveness of any such
assignment or other arrangement to become a party to this Agreement.

                                       49
<PAGE>   56

                                   ARTICLE 13

                                  MISCELLANEOUS

         SECTION 13.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,

         If to the Servicer, to:

         AerFi Group plc
         Aviation House
         Shannon
         Co. Clare, Ireland
         Attention:        Company Secretary
         Telephone:        353-61-360000
         Facsimile:        353-61-360113

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

                                       50
<PAGE>   57

                                       51
<PAGE>   58

         AerCo Limited
         22 Grenville Street
         St. Helier
         Jersey, JE4 8PX
         Channel Islands
         Attention:        Mourant & Co. Secretaries Limited, Company Secretary
         Facsimile:        44-1534-609-333

         with a copy to:

         AerFi Administrative Services Limited
         Aviation House
         Shannon

                                       52

<PAGE>   59

                                       53
<PAGE>   60

         Co. Clare Ireland
         Attention:        Company Secretary
         Copy:             General Counsel
         Facsimile:        353-61-360-503

         and

                                       54
<PAGE>   61

         Davis Polk & Wardwell
         99 Gresham Street
         London EC2V 7NG
         England
         Attention:        Ms. Juliet Cain
         Facsimile:        44-207-418-1400

         All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding business day in the place of
receipt.

         SECTION 13.02.  Governing Law.  This Agreement shall be governed by
and construed in accordance with the law of the State of New York.

         SECTION 13.03. Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 13.01 shall be deemed
effective service of process on such party.

         SECTION 13.04.  Waiver of Jury Trial.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

                                       55
<PAGE>   62
         SECTION 13.05. Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.

         SECTION 13.06. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.

         SECTION 13.07. Power of Attorney. Each of AerCo and the Subsidiaries
shall appoint the Servicer and its successors, and its permitted designees and
assigns, as their true and lawful attorney-in-fact. All services to be performed
by the Servicer pursuant to this Agreement shall be performed on behalf of AerCo
and any relevant Subsidiaries. The Servicer shall be entitled to seek and obtain
from each of AerCo and the Subsidiaries a power of attorney or such other
appropriate documentation in respect of the execution of any specific action as
the Servicer deems appropriate.

         SECTION 13.08. Restrictions on Disclosure. The Servicer agrees that it
shall not, prior to the termination or expiration of this Agreement or within
the three years after such termination or expiration, disclose to any Person any
confidential or proprietary information, whether of a technical, financial,
commercial or other nature, received directly or indirectly from any Person
within AerCo Group regarding AerCo Group's business or the Aircraft Assets or
the Leases, except as authorized in writing by AerCo, and except:

          (a)   To Representatives of the Servicer and any of its Affiliates in
furtherance of the purpose of this Agreement;

          (b) To the extent required by Applicable Law or by judicial or
administrative process, but in the event of proposed disclosure, the Servicer
shall seek the assistance of AerCo to protect information in which AerCo has an
interest to the maximum extent achievable;

         (c) To the extent that the information: (i) was generally available in
the public domain; (ii) was, to the Servicer's knowledge, lawfully obtained from
a source under no obligation of confidentiality, directly or indirectly, to any
Person within AerCo Group; (iii) was disclosed to the general public with the
approval of any Person within AerCo Group; or (iv) was developed independently
by the Servicer or any of the Servicer's Affiliates; and

                                       56
<PAGE>   63
          (d) To the extent the Servicer deems necessary to protect and enforce
its rights and remedies under this Agreement.

         SECTION 13.09. Rights of Setoff. To the extent permitted by Applicable
Law, the Servicer hereby waives any right it may have under Applicable Law to
exercise any rights of setoff it has under Applicable Law with respect to any
assets it holds owned by, or money or monies it owes to, any Person within AerCo
Group pursuant to and in accordance with the terms and conditions of this
Agreement; provided however that this Section 13.09 shall not affect any rights
of setoff or other rights that the Servicer has or may have under the express
terms and conditions of this Agreement.

         SECTION 13.10. Reliance. The Servicer shall be entitled to rely on the
provisions of this Agreement, including Schedule 2.02(a), any Approved Budget,
any direction of, or certification by, AerCo or the Directors (or any duly
appointed committee thereof) or the Administrative Agent or the Cash Manager, to
the extent set forth in Sections 2.01(b) and 2.01(c), respectively, and the
Transaction Approval Requirements in carrying out its obligations hereunder, and
each of AerCo and each other Person within AerCo Group hereby waives any rights
to challenge any action taken by the Servicer that is consistent with the
provisions of this Agreement (including the Standard of Care and the Conflict
Standard) including Schedule 2.02(a), any Approved Budget, any such direction or
certification or the Transaction Approval Requirements or which has been
approved by the Directors of AerCo or a Subsidiary or a duly appointed committee
thereof, the Administrative Agent or the Cash Manager.

         SECTION 13.11. Limited Recourse. (a) In the event that the assets of
AerCo are insufficient, after payment of all other claims, if any, ranking in
priority to the claims of the Servicer hereunder, to pay in full such claims of
the Servicer, then the Servicer shall have no further claim against AerCo in
respect of any such unpaid amounts.

                  (b) No recourse under any obligation, covenant or agreement of
any party contained in this Agreement shall be had against any shareholder,
officer or director of the relevant party as such, by the enforcement of any
assessment or by any proceeding, by virtue of any statue or otherwise; it being
expressly agreed and understood that this Agreement is a corporate obligation of
the relevant party and no personal liability shall attach to or be incurred by
the shareholders, officers, agents or directors of the relevant party as such,
or any of them under or by reason of any of the obligations, covenants or
agreements of such relevant party contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by such party of
any of such obligations, covenants

                                       57
<PAGE>   64
or agreements, either at law or by statute or constitution, of every such
shareholder, officer, agent or director is hereby expressly waived by the other
parties as a condition of and consideration for the execution of this Agreement.

                  (c) The Servicer hereby agrees that it shall not, until the
expiry of one year and one day after the payment of all sums outstanding and
owing under the latest maturing Note then rated, take any corporate action or
other steps or legal proceedings for the winding-up, dissolution or
re-organization or for the appointment of a receiver, administrator,
administrative receiver, trustee, liquidator, sequestrator or similar officer of
AerCo or of any or all of AerCo's revenues and assets.

                                       58
<PAGE>   65

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

         AERFI GROUP PLC,
as Servicer

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    AERFI ADMINISTRATIVE
                                    SERVICES LIMITED,
                                    as Administrative Agent

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    AERFI CASH MANAGER II LIMITED,
                                    as Cash Manager

                                    By: ___________________________________
                                        Name:
                                        Title:

                                       59
<PAGE>   66

                                    AERCO LIMITED

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    AERCO IRELAND LIMITED

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    AERCO IRELAND II LIMITED

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    AERCOUSA INC.

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    AERFI BELGIUM N.V.

                                    By: ___________________________________
                                           Name:
                                           Title:

                                       60
<PAGE>   67

                                    AIRCRAFT LEASE PORTFOLIO
                                    SECURITIZATION 94-1 LIMITED

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    ALPS 94-1 (BELGIUM) N.V.

                                    By: ___________________________________
                                        Name:
                                        Title:

                                    PERGOLA LIMITED

                                    By: ___________________________________
                                        Name:
                                        Title:

                                       61

<PAGE>   68

                                   APPENDIX A

                                  SUBSIDIARIES

AerCo Ireland Limited
AerCo Ireland II Limited
AerCoUSA Inc.
AerFi Belgium N.V.
Aircraft Lease Portfolio Securitization 94-1 Limited
ALPS 94-1 (Belgium) N.V.
Pergola Limited

                                       A-1

<PAGE>   69

                                   APPENDIX B

                           FORM OF ACCESSION AGREEMENT

                                     [DATE]

         We refer to the Servicing Agreement dated as of July 17, 2000, among
AerFi Group plc, AerFi Administrative Services Limited, AerFi Cash Manager II
Limited, AerCo Limited, the entities listed on Appendix A thereto and all other
Subsidiaries which have heretofore signed an Accession Agreement in
substantially the form of this Accession Agreement (the "SERVICING AGREEMENT").

         We agree, as of the date of this Accession Agreement, to be considered
a party to the Servicing Agreement for all purposes, as if an original signatory
to the Servicing Agreement, and to be bound by the terms of the Servicing
Agreement.

         This Accession Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

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

                                                [                     ]

                                                By:__________________________
                                                   Name:
                                                   Title:

                                       B-1

<PAGE>   70

ACCEPTED AND ACKNOWLEDGED:

AERCO LIMITED

By: __________________________
    Name:
    Title:

AERFI GROUP PLC,
as Servicer

By: __________________________
    Name:
    Title:

AERFI ADMINISTRATIVE
SERVICES LIMITED,
as Administrative Agent

By: __________________________
    Name:
    Title:

AERFI CASH MANAGER II LIMITED,
as Cash Manager

By: __________________________
    Name:
    Title:

                                       B-2

<PAGE>   71

                                SCHEDULE 2.02(A)

                            AIRCRAFT ASSETS SERVICES

         The provision of the Services set forth in this Schedule 2.02(a) will
be subject in all cases to such approval as may be required or such limitations
as may be imposed pursuant to Sections 2.02, 7.04 and 7.05 of this Agreement and
the provisions of this Schedule 2.02(a) shall be deemed to be so qualified.

           Unless otherwise defined herein or in this Agreement, all capitalized
terms used in this Schedule 2.02(a) have the meanings assigned to such terms in
the Indenture.

                                    ARTICLE 1
                                 LEASE SERVICES

         SECTION 1.01. Collections and Disbursements. In connection with each
Lease of an Aircraft Asset under which any Person within AerCo Group is the
Lessor, the Servicer will:

          (a) Invoice the Lessee or otherwise arrange, as the Servicer deems
reasonably appropriate on behalf of such Person within AerCo Group, for all
payments due from the Lessee, including Rents, Security Deposits, Maintenance
Reserves, late payment charges and any payments in respect of Taxes and other
payments (including technical, engineering, insurance and other charges) due
under the relevant lease, use commercially reasonable efforts to direct the
Lessee, subject to the terms of the Lease, to make such payments to such
accounts as are specified in writing by the Cash Manager and use commercially
reasonable efforts to enforce the payment thereof in the event of a nonpayment
by the relevant due date;

          (b) Review from time to time, as deemed necessary by the Servicer, the
level of Rents, Security Deposits, Maintenance Reserves and other amounts that
may be adjusted under the Leases and propose to the relevant Lessee or make such
adjustments to the Rents, Security Deposits, Maintenance Reserves and other
amounts as are required under the terms of the relevant Lease or that the
Servicer otherwise deems reasonably appropriate considering, among other things,
practices that the Servicer believes are prevalent in the operating lease
market, provided that such adjustment is not contrary to any direction issued by
AerCo or to the terms of the Indenture or any other documents notified to the
Servicer with which AerCo Group must comply;

<PAGE>   72

          (c)  Maintain appropriate records regarding payments under the Leases;

          (d) Subject to the terms of any applicable Aircraft Asset Related
Document, take such actions as are necessary to apply any payments of any type
received from any Lessee on a basis consistent with the directions of such
Lessee and, to the extent that any such payments are made to an account other
than the account to which such payment should have been directed pursuant to
such Lessee's direction, to take such further actions as are necessary to give
effect to such directions; and

          (e) Provide for the safekeeping and recording of any letters of
credit, guarantees or other credit support (other than cash and cash
equivalents) held as part of Security Deposits or Maintenance Reserves and the
timely renewal or drawing on or disbursement thereof as provided under the
applicable Lease or other Aircraft Asset Related Document or otherwise in
accordance with Section 1.05 of this Schedule 2.02(a).

         SECTION 1.02. Technical Services. The Servicer will perform the
following technical services relating to the management of the technical
condition of the Aircraft Assets and using commercially reasonable efforts to
apply the Standard of Care and the Performance Objectives:

          (a) Monitor the performance of maintenance obligations by Lessees
under all Leases relating to the Aircraft by including the Aircraft in the
Servicer's technical audit program (which shall include inspection of each
Aircraft at least every 18 months, attendance at major checks or inspections and
maintenance of a record of written reports generated in connection with such
inspections) consistent with practices employed from time to time by the
Servicer and its Affiliates with respect to their own aircraft and other
aircraft which they manage. The Servicer shall advise AerCo as to the content of
such technical audit program and shall advise AerCo as to any material change to
such technical audit program from time to time;

          (b) Determine the air authority approval status of a proposed
maintenance program and proposed maintenance performer under any new Lease of
any Aircraft under which any Person within AerCo Group is the Lessor;

          (c) Manage aircraft deliveries and re-deliveries in connection with
the commencement or termination or expiration of a Lease under which any Person
within AerCo Group is the Lessor; and

<PAGE>   73
          (i) arrange for the appropriate technical inspection of the Aircraft
         Assets and records for the purpose of determining if the re-delivery
         conditions under the Lease have been satisfied and integrated into the
         maintenance program of the new lessee;

         (ii) maintain a record of all material reports and other written
         materials (including any relevant reconciliation statements) received
         or generated by the Servicer in connection with such inspection and
         provide reasonable access to such reports and written materials to the
         relevant Person within AerCo Group;

         (iii) on the basis of inspection and available records, determine
         whether the Lessee has complied with all required airworthiness
         directives and mandatory modifications and establish the status of
         compliance with airframe and engine manufacturer service bulletins and
         Lessee-originated modifications undertaken, in each case with respect
         to the Aircraft Assets and as required by the Lease;

         (iv) (A) determine whether the Lessee has satisfied the re-delivery
         conditions applicable to the Aircraft Assets specified in the Lease and
         negotiate any modifications, repairs, refurbishments, inspections or
         overhauls to or compromises of such conditions that the Servicer deems
         reasonably necessary or appropriate; provided that the Servicer keeps
         AerCo notified of material compromises on a weekly basis (or as the
         Board of Directors may otherwise decide) and, if practicable, notifies
         AerCo of any specific material compromise (if not previously notified)
         prior to entering into any proposal binding on AerCo in relation
         thereto and that the Servicer shall comply with any direction of AerCo
         in relation thereto and if any Referral Notice is issued in relation
         thereto the provisions of Section 7.03(d) shall apply; (B) determine,
         in accordance with the Lease, the application of any available Security
         Deposits, Maintenance Reserves or other payments under the Lease; and
         (C) maintain a record of the satisfaction of such conditions and
         recommend whether AerCo should accept redelivery of the Aircraft
         Assets; and

         (v) determine the need for and procure and monitor the performance of
         any maintenance and refurbishment of the Aircraft Assets upon
         redelivery, including compliance with applicable airworthiness
         directives, service bulletins and other modifications which the
         Servicer may deem reasonably necessary or appropriate for the marketing
         of the Aircraft;

                                       3
<PAGE>   74
          (d) Consider and, to the extent the Servicer deems reasonably
necessary or appropriate, approve any Lessee-originated modifications to any
Aircraft Assets submitted by any Lessee:

          (i)   to the extent authorized by the terms of the relevant Lease; or

          (ii)   which the Servicer reasonably determines would not result in a
          material diminution in value of the Aircraft Assets or the interests
          of any Person within AerCo Group; or

          (iii)  which are approved by AerCo.

          (e) Determine the amount (if any) that the relevant Person within
AerCo Group is obliged to contribute pursuant to the provisions of a Lease
(taking into account the amount of Maintenance Reserves available with respect
to such Lease and the receivables position of the related Lessee) to maintenance
work performed, the cost of complying with any modification requirements,
airworthiness directives and similar requirements; and

          (f) Arrange and supervise appropriate storage and any required
on-going maintenance of any Aircraft Assets, at the expense of the relevant
Person within AerCo Group, following termination of a Lease for any reason and
redelivery of the Aircraft Asset thereunder and prior to delivery of such
Aircraft Assets to a new lessee or purchaser, on the most economic basis
reasonably commercially available and appropriate under the circumstances.

         The Servicer shall generally provide the technical management services
set forth in this Section 1.02 through the use of its own staff and the use of
qualified third parties. Technical management services will be provided at the
Servicer's expense except as specified in Section 9.06(b) of the Servicing
Agreement.

         SECTION 1.03.  Insurance.  (a)  The Servicer will provide the following
insurance services:

          (i) negotiate the insurance provisions of any proposed lease or other
          agreement affecting any of the Aircraft Assets, with such provisions
          to include such minimum coverage amounts with respect to hull and
          liability insurance as are set forth on Annex 1 to this Agreement, as
          the same may be amended from time to time at the direction of AerCo,
          and such other terms as AerCo may require from time to time consistent
          with the terms reasonably available in the market;

          (ii) monitor the performance of the obligations of Lessees relating to
          insurance under Leases of any Aircraft Assets and ensuring that

                                       4
<PAGE>   75
         appropriate evidence of insurance exists with respect to any Aircraft
         Assets maintenance providers;

         (iii) procure a group aviation insurance program covering the Aircraft
         Assets (it being understood that any savings resulting from a group
         policy covering both Aircraft Assets and Other Assets shall be shared
         equitably based on the amount of insurance obtained and premium paid
         thereunder with respect to the covered Aircraft Assets, on the one
         hand, and the Other Assets, on the other hand), with such minimum
         coverage amounts with respect to hull and liability insurance as are
         set forth on Annex 1 to this Agreement, as the same may be amended from
         time to time at the direction of AerCo;

         (iv) procure such political risk insurance for Aircraft Assets
         habitually based or registered in those countries listed on Annex 1 to
         this Agreement (which list has been established by AerCo and may be
         modified from time to time by AerCo) and such other insurance related
         thereto from the sources and with such minimum coverage amounts with
         respect to hull insurance as are set forth on Annex 1 to this
         Agreement, as the same may be amended from time to time at the
         direction of AerCo, and such other terms as AerCo may require from time
         to time consistent with the terms reasonably available in the market;

         (v) review the "Agreed Values" set forth on Annex 1 to this Agreement
         by reference to market valuations and advise AerCo as to whether the
         insurance levels should be modified;

         (vi) if at any time any Aircraft Asset ceases to be insured or any
         Person within AerCo Group requires insurance coverage relating to an
         Aircraft for any reason, including default by the Lessee or an Aircraft
         not being leased upon termination of a Lease, the Servicer will
         promptly procure, at the expense of the relevant Person within AerCo
         Group, alternative insurance coverage, with such minimum coverage
         amounts with respect to hull and liability insurance as are set forth
         on Annex 1 to this Agreement, as the same may be amended from time to
         time at the direction of AerCo; and

         (vii) advise AerCo of any settlement offers received by the Servicer
         with respect to any claim of damage or loss in excess of $1,000,000
         with respect to an Aircraft Asset, provide AerCo with copies of all
         relevant documentation related thereto and such other additional
         information and advice as AerCo may reasonably request and, upon
         direction from AerCo that any settlement offer related thereto is
         acceptable, prepare the appropriate documentation, including releases
         and

                                       5
<PAGE>   76
         any indemnities required in connection with such releases, to give
         effect to such settlement offer and procure the execution of such
         documentation by AerCo (it being understood that settlement offers with
         respect to any such claims up to and including $1,000,000 may be
         settled by the Servicer independently);

provided however, that in each case where insurance is to be obtained by the
Servicer, such insurance is reasonably available in the relevant insurance
market and the Servicer shall have used reasonable sourcing techniques prior to
obtaining such insurance. The foregoing provisions shall apply to any
arrangements in which Persons other than Lessees have possession of, or
insurance responsibility for, an Aircraft Asset (including in the event that an
Aircraft Asset has been sold pursuant to a mortgage, deferred payment agreement
or any similar arrangement).

          (b) The Servicer shall provide to AerCo such periodic reports
regarding insurance matters relating to the Aircraft Assets as AerCo shall
reasonably request.

          (c) The Servicer may engage, with the approval of AerCo, and, at
AerCo's expense, one or more insurance advisors to advise on insurance related
issues. The Servicer shall be entitled to rely reasonably on actions taken by or
recommendations of any such advisor, subject to the terms of the relevant Lease.
Any such insurance advisor may also act in the same or similar capacities for
the Servicer or its Affiliates.

         SECTION 1.04. Administration. The Servicer shall administer each Lease
in accordance with its terms and as otherwise specifically addressed herein.

         SECTION 1.05. Enforcement. The Servicer shall take commercially
reasonable steps to enforce the obligations to the relevant Person within AerCo
Group of the Lessee and any other parties under each Lease and under any
ancillary agreements thereto delivered by AerCo to the Servicer (including any
guarantees of the obligations of the Lessee). Following any default by a Lessee
under the applicable Lease, the Servicer will take all steps as it deems
reasonably necessary or appropriate to preserve and enforce the rights of the
relevant Person within AerCo Group under the applicable Lease, including
entering into negotiations with such Lessee with respect to the restructuring of
such Lease (provided that the Servicer keeps AerCo notified of material proposed
restructurings on a weekly basis (or as the Board of Directors may otherwise
decide) and, if practicable, notifies AerCo of any specific material proposed
restructuring (if not previously notified) prior to entering into any proposal
binding on AerCo in relation thereto and that the Servicer shall comply with any
direction of AerCo in relation thereto and if any Referral Notice is issued in
relation thereto the provisions of Section 7.03(d) shall apply) or declaration
of an event of default under the applicable Lease, providing for the drawing on
or

                                       6
<PAGE>   77
making disbursement of any Security Deposits, Maintenance Reserves or any
letters of credit, guarantees or other credit support thereunder, voluntary or
involuntary termination of the Lease and repossession of the Aircraft Asset that
is the subject of the Lease, and pursuing such legal action with respect thereto
as the Servicer deems reasonably necessary or appropriate.

         SECTION 1.06. Lease Modifications. (a) The Servicer shall be authorized
to make such amendments and modifications to any Lease as it shall deem
reasonably necessary or appropriate; provided however, that such amendment or
modification shall require the approval of AerCo pursuant to Section 7.05 of
this Agreement if the provisions of such amendment or modification, were they to
be included in a new Lease to be entered into after the date hereof, would, on
their own, cause the entering into of such new Lease to require the approval of
AerCo pursuant to Section 7.05(a) of this Agreement. Such amendments or
modifications may be made without regard to whether there is a default by the
Lessee or other party under or with respect to any such Lease.

          (b) The Servicer may waive, in its absolute discretion, overdue
interest due from any Lessee under any Lease on any default in payment of rent,
Maintenance Reserves or other amount thereunder if any such default is cured
within seven days of the date on which such payment was due.

         SECTION 1.07.  Options and Other Rights.  The Servicer shall be
authorized to take such action as it shall deem reasonably necessary or
appropriate with respect to:

          (a) The exercise by any Lessee or other party of any option or right
affecting the applicable Aircraft Asset or the applicable Lease, consistent with
the terms of any such option or right; and

          (b) The exercise on behalf of any Person within AerCo Group of any
right or option that such Person may have with respect to any of the Aircraft
Assets or the Leases, but subject to any directions in that respect which may
previously have been issued by AerCo.

         SECTION 1.08. Lessee Solicitations. Upon AerCo's request, with respect
to the Aircraft Assets, the Servicer shall provide assistance to the relevant
Persons within AerCo Group with respect to:

          (a) Obtaining Lessee consents, novations, assignments, amendments and
related documentation (including insurance certificates, title transfer
documents and legal opinions); and

                                       7
<PAGE>   78

         (b) The issue (or reissue) or amendment of letters of credit,
guarantees and related documentation (the documents referred to in clauses (a)
and (b) above are, collectively, the "LESSEE DOCUMENTATION");

         SECTION 1.09. Tax Based Financings. The Servicer will cooperate with
AerCo and its advisors to structure any tax based financings, including
assisting with lessee solicitations in accordance with Section 1.08 to this
Schedule 2.02(a), if so requested by AerCo.

                                    ARTICLE 2
                            COMPLIANCE WITH COVENANTS

         SECTION 2.01. Compliance Generally. (a) The Servicer shall take such
actions as it shall deem reasonably necessary or appropriate to keep AerCo in
compliance with its obligations and covenants under any indenture or similar
agreements binding it from time to time (including the Indenture) solely to the
extent that such obligations and covenants specifically relate to the status,
insurance, maintenance or operation of the relevant Aircraft Assets excluding,
in any case, (i) any reporting obligations in respect of any of the foregoing
and (ii) any rental or other payment or monetary obligations under such. AerCo
shall provide to the Servicer any instructions the Servicer may require in the
interpretation of the Indenture, on which instructions the Servicer shall be
entitled to rely in all respects.

          (b) Nothing in this Schedule 2.02(a) or elsewhere in the Servicing
Agreement shall be deemed to constitute or be construed as (i) a delegation or
other transfer to, or an assumption by, the Servicer or any of its Affiliates of
any obligations of any Person within AerCo Group to make any payment to any
Lessee or other Person, or to comply with any other monetary obligation, under
any Lease or (ii) a transfer to the Servicer or any of its Affiliates of any
right, title and interest in any Lease or related agreement or any Aircraft
Asset covered thereby.

         SECTION 2.02. Certain Matters Relating to Concentration Thresholds. (a)
The Servicer shall comply with any covenants specifically relating to
limitations on Lessee concentration set forth in the Indenture ("CONCENTRATION
THRESHOLDS") to the extent commercially reasonable. If compliance is not
commercially reasonable, the Servicer shall promptly inform AerCo of any
proposed transaction that it reasonably determines may result in such
Concentration Thresholds being exceeded, and AerCo shall promptly provide to
the Servicer any information that the Servicer may reasonably require in
connection with such Concentration Thresholds in order to comply with the

                                       8
<PAGE>   79
provisions of this Section 2.02. The Servicer shall not enter into any such
transaction other than pursuant to the terms of Section 2.02(c) below.

          (b) AerCo and each Person within AerCo Group hereby, jointly and
severally, represent and warrant to the Servicer that set forth in Annex 2 to
this Schedule 2.02(a) are summaries of the Concentration Thresholds (including,
following each provision summarised in such Annex, the relevant section
references for each such provision from the Indenture) presently imposed under
the Indenture, which Concentration Thresholds (together with the definitions for
any capitalised terms used therein) are set forth in a full copy of the
Indenture delivered by AerCo to the Servicer, certified by AerCo as a true and
complete copy thereof (and AerCo shall promptly provide the Servicer with all
amendments, supplements and waivers thereto, so certified) and AerCo shall
provide to the Servicer any instructions the Servicer may require in the
interpretation of such Concentration Thresholds, on which instructions the
Servicer shall be entitled to rely in all respects.

          (c) The Servicer shall not enter into any transaction with respect to
which it has provided notice pursuant to Section 2.02(a) until AerCo has
provided a written certification to the Servicer to the effect that such
transaction will not result in any violation of the Concentration Thresholds and
the Servicer shall be entitled to rely upon such certification for all purposes
of this Agreement and this Section 2.02.

                                    ARTICLE 3
                                 LEASE MARKETING

         SECTION 3.01. Lease Marketing Services. The Servicer shall provide and
perform lease marketing services with respect to the Aircraft Assets on a basis
consistent with any directions of AerCo and in connection therewith is
authorised:

         (a) To negotiate and enter into any commitment for a Lease of an
Aircraft Asset, provided that such commitment does not (unless expressly
approved by AerCo) commit AerCo Group to any terms which conflict with Section
7.05 of this Agreement, or with Section 2.01 of this Schedule, or any other
provision of this Agreement or any direction of AerCo on behalf of and (through
a power of attorney) in the name of the relevant Person within AerCo Group; and

         (b) To include within any commitment for a Lease of an Aircraft Asset
any intermediate Lease or Leases through any Person within AerCo Group that the
Servicer deems reasonably necessary or appropriate.

                                       9
<PAGE>   80
         SECTION 3.02. Form of Lease. (a) The Servicer shall commence the
negotiation of any commitment for a Lease or Leases of Aircraft Assets in a
manner consistent with the practices employed by the Servicer with respect to
its aircraft operating leasing services business generally and shall commence
the drafting of, and negotiation with respect to, any Leases for Aircraft Assets
on the following basis:

         (i)  in the case of any proposed Lessee that is not and has not been a
         lessee of an aircraft managed or serviced by the Servicer, the Servicer
         shall commence the drafting of, and negotiation with respect to, a
         Lease for Aircraft Assets based on the form of lease agreement or
         agreements then used by the Servicer in connection with its aircraft
         operating leasing services business generally (as such form of lease
         shall be amended from time to time by the Servicer, subject to Section
         3.02(c) below, the "PRO FORMA LEASE"); and

         (ii) in the case of any proposed Lessee that is or was a lessee of an
         aircraft managed or serviced by the Servicer, the Servicer may commence
         the drafting of, and negotiation with respect to, a Lease for Aircraft
         Assets based on a form of lease substantially similar to the lease
         previously used with respect to such Lessee (the "PRECEDENT LEASE").

         (b)  Provided that the Servicer commences the negotiation of a Lease of
any Aircraft Asset in accordance with clauses (a)(i) and (a)(ii) above, the
terms of any executed Lease may vary from the terms of the Pro Forma Lease or
the Precedent Lease employed by the Servicer in accordance with such clauses.
Subject to compliance with the terms and conditions of this Agreement, the
Servicer is authorized to execute and deliver binding Leases and related
agreements on behalf of the relevant Person within AerCo Group. It is the
intention of the parties that following the execution and delivery of any Lease
with respect to Aircraft Assets the Servicer shall deliver a copy of the
executed Lease, together with a copy thereof marked to reflect changes from the
precedent employed in accordance with the foregoing procedures, to AerCo within
20 Business Days of such execution and delivery.

         (c)  In good time prior to each anniversary of the Closing Date for
purposes of the annual review of the Pro Forma Lease (the "ANNUAL REVIEW"), the
Servicer shall provide AerCo with a copy of its then current pro forma lease as
used in its Own Business, together with a copy thereof marked to reflect the
differences between it and the then current Pro Forma Lease, indicating any
which are inconsistent with the Core Lease Provisions, the Indenture and any
AerCo direction(s).

         (d)  On or prior to each anniversary of the Closing Date and following
the Annual Review, AerCo shall advise the Servicer in writing whether any

                                       10
<PAGE>   81
provisions in the Servicer's then current pro forma lease may be adopted in the
Pro Forma Lease, and shall also advise the Servicer of any other amendments it
proposes to the Pro Forma Lease (together the "REVISIONS"). AerCo may not
propose amendments which would require the Servicer to obtain lease terms which
are not reasonably commercially available. The Servicer shall amend the Pro
Forma Lease to incorporate the Revisions (adjusted to take account of any
amendments required by AerCo) and shall commence the negotiation of any Lease
thereafter with the Pro Forma Lease as so amended in respect of any such
provision. Nothing in this Section 3.02 shall authorize the Servicer or AerCo to
propose or make any Revisions which conflict with the Core Lease Provisions or
any provision of the Indenture. AerCo may take independent advice as to whether
any Revisions should be made.

         SECTION 3.03. Deliveries. The Servicer shall take commercially
reasonable action to deliver any Aircraft Asset pursuant to the terms of the
documentation of the Lease or Leases of such Aircraft Asset, including upon an
extension of such Leases.

         SECTION 3.04. Management. The Servicer shall generally manage the
marketing services set forth in this Article 3 through the use of its own
marketing staff.

                                    ARTICLE 4
                         SALES AND PURCHASES OF AIRCRAFT

         SECTION 4.01. Sales Services And Authority. (a) The Servicer shall
provide and perform sales services with respect to the Aircraft Assets at, and
on a basis consistent with, the directions from time to time of AerCo, and, in
connection therewith, is authorized;

         (i)  to enter into any commitment for a sale of an Aircraft Asset on
         behalf and (through a power of attorney) in the name of the relevant
         Person within AerCo Group; and

         (ii) to include within any sale any intermediate Lease or Leases
         through any Person within AerCo Group that the Servicer deems
         reasonably necessary or appropriate; provided however, that, except as
         otherwise required in accordance with the terms of a Lease, the
         Servicer shall not enter into any sale of any Aircraft Asset or
         agreement to sell any Aircraft Assets without obtaining the approval of
         AerCo pursuant to Section 7.05(a) of this Agreement.

                                       11
<PAGE>   82
          (b) The Servicer shall negotiate documentation of any sale and,
subject to Section 4.01(a) of this Schedule 2.02(a), is authorized to execute
and deliver binding agreements on behalf and (through a power of attorney) in
the name of the relevant Person within AerCo Group.

          (c) The Servicer shall take commercially reasonable efforts to deliver
any Aircraft Asset pursuant to the terms of the documentation of the sale.

          (d) In the event that AerCo directs the Servicer to arrange for the
sale of any Aircraft Asset, the Servicer will not be required to take any such
action until AerCo shall provide the Servicer with an Officer's Certificate
certifying that such sale complies with the terms of the Indenture and that the
Servicer is entitled to rely upon such certification for all purposes of this
Agreement and this Schedule 2.02(a).

          (e) Notwithstanding any other provision in Section 7.05 of the
Servicing Agreement to the contrary, the Servicer shall be permitted to
purchase, sell or exchange any engine relating to an Aircraft or any part or
components thereof or spare parts or ancillary equipment or devices furnished
with an Aircraft at such times and on such terms and conditions as the Servicer
deems reasonably necessary or appropriate in connection with its performance of
the Services; provided however, the Servicer shall not be permitted to purchase,
or enter any order to purchase, engines or spare parts in a quantity in excess
of that quantity then required to enable the Aircraft Assets to be leased
without obtaining the prior written consent of AerCo.

         SECTION 4.02. Tax Based Financings. Subject to satisfaction of the
conditions set forth in clauses (i) and (ii) and (iii) of the provisos in
Sections 9.05(a) and 9.05(b) of the Servicing Agreement, the transfer of title
shall not be deemed to be a sale for the purpose of calculation of Sales Fees
pursuant to Section 9.05 of the Servicing Agreement if such transfer of title is
part of a tax based financing or a refinancing. The transfer of title shall be
deemed to be a sale for the purpose of obtaining approvals pursuant to Section
7.05 if such transfer of title is part of a tax based financing or a
refinancing.

                                    ARTICLE 5
                            MARKET AND OTHER RESEARCH

         SECTION 5.01. Valuations. From time to time, but in any event at least
annually:

                                       12
<PAGE>   83
          (a) AerCo will request, and the Servicer shall, upon such request, use
commercially reasonable efforts to obtain, current or projected valuations of
the Aircraft; and

          (b) The Servicer shall use commercially reasonable efforts to arrange
for such valuation services with respect to the Aircraft as shall be reasonably
necessary or appropriate in connection with the performance of the Services, in
each case from any internationally recognized independent appraiser chosen by
AerCo.

         SECTION 5.02. Regulatory Changes. The Servicer shall:

          (a) Advise AerCo on a timely basis in summary form of such information
regarding legal, regulatory and manufacturer material changes and developments
with respect to each Aircraft Asset after the relevant Delivery Date, of which
the Servicer has knowledge, which legal, regulatory and manufacturer
developments are likely to, or will, be applicable to the Aircraft Assets; and

          (b) Take such commercially reasonable action as may be necessary or
appropriate to comply therewith.

         SECTION 5.03. Market Research. The Servicer shall maintain research
capability and shall provide commercial aviation market industry research
reports to AerCo on a regular basis using internal and external resources where
appropriate to keep AerCo adequately informed regarding developments in the
commercial aviation industry. The reports shall include market information with
respect to commercial aviation demand in terms of traffic growth, new Aircraft
requirements and other information relevant to AerCo Group's long-term planning
with respect to Leases, purchases and sales, market conditions, industry trends
and the Aircraft Assets.

         SECTION 5.04. Lessee Information. The Servicer shall provide on a
timely basis in summary form such information regarding default history, audit
analysis or other material Lessee information of which the Servicer has
knowledge.

         SECTION 5.05. Confidentiality. Nothing in this Article 5 or in Article
8 hereof shall require the Servicer to reveal information which is confidential
to its other clients or its business generally.

                                    ARTICLE 6
                          AIRCRAFT ASSET CASH SERVICES

                                       13
<PAGE>   84
         SECTION 6.01. Accounts and Account Information. (a) EXISTING ACCOUNTS.
In the event that the Cash Manager desires to modify any of the arrangements
relating to any of the bank accounts set forth on Schedule 4.03 to this
Agreement (the "EXISTING ACCOUNTS") in accordance with the Cash Management
Agreement, the Cash Manager shall deliver a certificate to the Servicer
specifying in reasonable detail the modifications to be made with respect to any
such Existing Accounts and certifying that any such modifications are in
accordance with the applicable provisions of the Indenture and the Cash
Management Agreement and the Servicer shall notify the relevant Lessees of such
modifications and shall take such other actions as are incidental thereto in
order to give effect to the foregoing.

          (b) NEW ACCOUNTS. The Servicer shall notify the Cash Manager in the
event that any new bank accounts need to be established on behalf of any Person
within AerCo Group in connection with the execution of a new Lease and shall set
forth in reasonable detail the (i) identity of the new Lessee, (ii) Aircraft
Assets subject to such Lease and (iii) the jurisdiction in which such Aircraft
Assets are to be registered, and shall take such other actions as are incidental
thereto in order to give effect to the establishment of the new accounts (the
"NEW ACCOUNTS"); and, together with the Existing Accounts, the "BANK ACCOUNTS").

         SECTION 6.02. Cash Transfers. In the event that the Cash Manager is
required to transfer funds from any Bank Account to the account of another
Person (other than any Person within AerCo Group) in order to give effect to the
directions of any Lessee in accordance with Section 1.01(d) of this Schedule
2.02(a), the Servicer shall provide the Cash Manager with written notice setting
forth (i) the name of the transferor, (ii) the name of the transferee, (iii) the
accounts from and to which funds are to be transferred, (iv) the amounts to be
transferred, (v) the amount of the initial payment from the Lessee and (vi) the
anticipated date of transfer. No later than the next following Business Day, the
Cash Manager shall notify the Servicer in writing whether the proposed transfer
is approved or disapproved. If approved, the Cash Manager shall cause such
transfer to be made in accordance with the terms of such written notice. If not
approved, the Cash Manager shall advise the Servicer in writing as to the
reasons therefor.

         SECTION 6.03. Payments. (a) ANTICIPATED PAYMENTS. For purposes of the
calculation of the required expenses by the Cash Manager pursuant to the Cash
Management Agreement, not less than one Business Day prior to each Calculation
Date, the Servicer shall deliver to the Cash Manager a written projection of
payment obligations (including projected expenditures, or return to Lessees, of
Security Deposits or Maintenance Reserves in accordance with the terms of any
Lease) reasonably anticipated by the Servicer to be necessary to be paid in
connection with the Servicer's performance of the Services under this Agreement
during the period extending from the Payment Date immediately following such
Calculation Date through to the next succeeding Payment Date

                                       14
<PAGE>   85
(the "MONTHLY PAYMENT PERIOD"). Not less than five Business Days prior to the
first Business Day of each week, the Servicer shall deliver to the Cash Manager
a list specifying each cash payment projected to be made during such week
(whether or not such cash payment was reflected in the projection referred to in
this Section 6.03(a)), and shall state (i) the anticipated date of such payment,
(ii) the payee, (iii) the amount of such payment, (iv) the obligation in respect
of which such payment is to be made (the "STATED SERVICES OBLIGATION") and (v)
the account from which such payment should be made. Not later than two Business
Days prior to the date of each payment set forth on such list, the Cash Manager
shall deliver to the Servicer a written notice of such proposed payment,
restating the date, payee and amount relating to such payment. Not later than
the Business Day prior to the date of such proposed payment, the Cash Manager
shall notify the Servicer in writing whether the proposed payment is approved or
disapproved. If such payment is approved, the Cash Manager shall pay or cause
such payment to be made to the payee for the Stated Services Obligation from the
funds then available in the relevant account, as the case may be. If such
payment is not approved, the Cash Manager shall advise the Servicer in writing
as to reasons therefor and the Cash Manager shall not proceed with such
transfer.

         (b) UNANTICIPATED PAYMENTS. During any Monthly Payment Period the
Servicer may request in writing the Cash Manager's approval to pay or cause to
be paid expenses that had not been reasonably anticipated by the Servicer at the
time the projection required to be provided to the Cash Manager pursuant to
Section 6.03(a) with respect to such Monthly Payment Period was delivered to the
Cash Manager (whether or not such expense was reflected in the weekly list of
projected payments referenced in Section 6.03(a)). Any such request shall
specify for each such payment obligation (i) the anticipated date of such
payment, (ii) the payee, (iii) the amount of such payment, (iv) the Stated
Services Obligation and (v) the account from which such payment should be made.
Not later than the Business Day next following such request by the Servicer, the
Cash Manager shall notify the Servicer in writing whether such payment request
is approved or disapproved. If approved, the Cash Manager shall pay or cause
such payment to be made to the payee for the Stated Services Obligation from the
funds then available in the relevant account. In the event that the funds then
available in such account are insufficient to make any such payment, pursuant to
the Cash Management Agreement, the Cash Manager shall take such actions as are
necessary to cause funds sufficient to make any such payments to be transferred
as soon as practicable from the Collection Account to such account. Following
the transfer of such funds, the Cash Manager shall pay or cause such payments to
be made in accordance with the foregoing provisions. If such payment is not
approved, the Cash Manager shall advise the Servicer in writing as to reasons
therefor and the Cash Manager shall not proceed with such transfer.

                                    ARTICLE 7

                                       15
<PAGE>   86

                      PROFESSIONAL AND OTHER SERVICES

         SECTION 7.01. Legal Services. (a) The Servicer shall provide or procure
legal services, in all relevant jurisdictions, on behalf of the relevant Persons
within AerCo Group with respect to the lease or sale of the Aircraft Assets, any
amendment or modification of any Lease, the enforcement of the rights of any
Person within the Group under any Lease, any disputes that arise with respect to
the Aircraft Assets or for any other purpose that the Servicer reasonably
determines is necessary in connection with the performance of the Services.

          (b) The Servicer shall provide such legal services by using its in
house legal staff where it shall deem appropriate and shall authorise outside
counsel to provide such legal services where it shall deem appropriate (it being
understood that while the obligations set forth in this Section 7.01 are, to the
extent possible, generally anticipated to be discharged by the Servicer without
resorting to outside counsel, the Servicer retains the flexibility to engage
outside counsel as it determines in its sole discretion to be necessary). The
cost of any outside counsel shall be borne or reimbursed and apportioned as set
forth in Section 9.06 of the Servicing Agreement. AerCo recognises, and shall
cause each other Person within AerCo Group to recognise, that from time to time
the Servicer will retain legal counsel to provide legal services on behalf of
Persons within AerCo Group and, in the event that a conflict of interest or
potential conflict of interest arises between any Person within AerCo Group and
the Servicer, AerCo agrees, and shall cause each other Person within AerCo Group
to agree, to waive any conflict of interest any such counsel may have with
respect thereto or otherwise to enable the Servicer to retain such counsel on
its own behalf.

         SECTION 7.02. Accounting And Tax Services. The Servicer shall arrange
for such accounting and tax services and advice (which may be provided by the
Servicer's internal staff, to the extent available) as shall be reasonably
necessary or appropriate in connection with the structuring of lease or sale
transactions with respect to the Aircraft Assets or for any other purpose that
the Servicer reasonably determines is necessary in connection with the
performance of the Services.

                                    ARTICLE 8
                          INFORMATION: REPORTS; CUSTODY

         SECTION 8.01. Management Information Systems. (a) The Servicer will, so
long as and to the extent it maintains the following, provide to AerCo, the
Administrative Agent and the Cash Manager access to Servicer's management

                                       16
<PAGE>   87
information storage and systems, provided that such reasonable access shall only
be granted with respect to information related to the Aircraft Assets.

          (b)  The Servicer will from time to time, as it reasonably deems
necessary, update the management information systems with (i) data and
information on a basis consistent with the type of data and information
available on such systems as of the first Delivery Date and (ii) such other data
and information as the Servicer shall deem necessary or appropriate in
connection with the performance of the Services.

         SECTION 8.02. Weekly Reports. On the last Business Day of each week the
Servicer will provide to AerCo and the Administrative Agent a report in the form
of a weekly report attached hereto as part of Schedule 8 to Schedule 2.02(a).

         SECTION 8.03. Monthly Reports. Five Business Days after the first
Business Day of each month, the Servicer shall provide to AerCo and the
Administrative Agent a report in the form of a monthly report attached hereto as
part of Schedule 8 to Schedule 2.02(a).

         SECTION 8.04. Quarterly Reports. Thirty Business Days after the end of
each calendar quarter the Servicer shall provide to AerCo and the Administrative
Agent a report in the form of a quarterly report attached hereto as part of
Schedule 8 to Schedule 2.02(a).

         SECTION 8.05. Other Information. (a) To the extent the Servicer is in
possession of the relevant information, the Servicer shall prepare and submit to
AerCo the following information with respect to each Person within AerCo Group:

         (i)   information with respect to transactions relating to Aircraft
         Assets necessary for each Person within AerCo Group to prepare value
         added tax and other tax returns;

         (ii)  promptly after the occurrence thereof, notify AerCo of any
         accident or incident of which the Servicer has notice involving any
         Aircraft Asset where (A) the potential loss in connection therewith
         exceeds the higher of the damage notification threshold under the
         relevant Lease, if any, and $1,000,000 or (B) the potential liability
         in connection therewith exceeds $1,000,000; and

         (iii) information with respect to transactions relating to Aircraft
         Assets necessary for any Person within AerCo Group to prepare statutory
         returns with respect to contractors engaged by the Servicer on behalf
         of such Person, to the extent such information is reasonably available
         to the Servicer.

                                       17

<PAGE>   88
          (b) The Servicer will make available to AerCo and its advisers and
designees, at reasonable times and upon reasonable notice, the Servicer
Representatives in order to provide to AerCo and its advisers and designees
information with regard to the Aircraft Assets and Leases (including in response
to inquiries with respect to the reports provided to AerCo by the Servicer
pursuant to Sections 8.02, 8.03 and 8.04 hereof) which may reasonably be
required by AerCo. In furtherance thereof, in order to facilitate each Person
within AerCo Group carrying out its responsibilities upon the request of AerCo,
the Servicer shall make available (through physical attendance or telephonic
conference) such officers and employees as AerCo shall reasonably deem
appropriate for Board of Directors meetings of AerCo and the Subsidiaries and
meetings with AerCo's representatives to provide to AerCo information, and
response to inquiries, with respect to the reports provided to AerCo by the
Servicer pursuant to Sections 8.02, 8.03 and 8.04 or otherwise.

         SECTION 8.06. Ratings Information. Upon request by AerCo, the Servicer
shall provide to AerCo such information and data about the Aircraft Assets and
other commercially reasonable assistance relating to the Aircraft Assets as
AerCo shall deem reasonably necessary or appropriate in connection with
providing information to the rating agencies for AerCo's debt ratings.

         SECTION 8.07. Custody Of Documents. The Servicer agrees to hold all
original documents of any Person within AerCo Group that relate to the Aircraft
Assets in the possession of the Servicer in safe custody and according to the
commercially reasonable instructions of AerCo.

         SECTION 8.08. Public Filing Information. (a) The Servicer shall provide
to AerCo such information and data relating to the Servicer, the Services and
the Aircraft Assets as AerCo shall reasonably request to comply with its public
or statutory reporting and filing obligations.

          (b) Notwithstanding anything herein to the contrary, each of AerCo and
each Person within AerCo Group, jointly and severally, acknowledges and agrees
that it shall be responsible for, and the Servicer shall not have any
responsibility for: (i) any reporting or compliance obligations to any holders
of outstanding Notes, any liquidity facility providers or any Governmental
Authorities and (ii) the preparation of any forecasts (except for the mechanical
preparation thereof to the extent expressly specified in Section 8.03 of this
Schedule 2.02(a)) and for all instructions, discretion and judgments related to
such reporting or compliance obligations and forecasts, and each of AerCo and
each Person within AerCo Group, jointly and severally, agrees to indemnify the
Servicer and its Affiliates in respect of the foregoing as further provided in
Article 11 of the Servicing Agreement.

                                       18
<PAGE>   89

                                  SCHEDULE 8 TO

                                SCHEDULE 2.02(A)

                      WEEKLY, MONTHLY AND QUARTERLY REPORTS

                                       19

<PAGE>   90
                                  SCHEDULE 4.01

                                    AIRCRAFT

         Initial Aircraft

         Offering Memorandum Aircraft

<PAGE>   91

                                  SCHEDULE 4.03

                                  BANK ACCOUNTS

          Bankers Trust Accounts

1.        RENTAL ACCOUNTS                                    TRUSTEE ACCOUNT NO

          (a)  Bankers Trust Company, as Trustee for AerCo        00-377-799
          (b)  Bankers Trust Company, as Trustee for AerCo        00-377-801

2.        EXPENSE ACCOUNT

          Bankers Trust Company, as Trustee for AerCo             00-377-828

3.        OTHER ACCOUNTS PURSUANT TO THE CASH
          MANAGEMENT AND INDENTURES

          AerCo Expense Account                                   26071
          AerCo Purchase Account                                  26076
          AerCo Note Account                                      26070
          AerCo Lessee Funded Account                             26072
          AerCo Collection Account                                26073
          AerCo Defeasance/Redemption Account                     26075
          AerCo Refinancing Account                               26074

4.       ADDITIONAL BANK ACCOUNTS

         Account Name:              ALPS 1994-- 1 Belgium NV
         Bank:                      Generale de Bank, Brussels

<PAGE>   92
         Account No.:               210-0079736-54
         Currency:                  Belgian Franc

<PAGE>   93

         Account Name:              AerFi Belgium NV
         Bank:                      Citibank Brussels
         Account No.:               570-1192500-40
         Currency:                  Belgian Franc

         Account Name:              AerFi Belgium NV
         Bank:                      Citibank Brussels
         Account No.:               570-1192510-50
         Currency:                  US Dollar

         Account Name:              AerCo Group
         Bank:                      AIB Shannon
         Account No.:               01659-053
         Currency:                  Irish Pounds

                                       3
<PAGE>   94

                               SCHEDULE 7.04(B)(1)

                             ONE YEAR INITIAL PERIOD
                   OPERATING BUDGET AND ASSET EXPENSES BUDGET

<PAGE>   95

                               SCHEDULE 7.04(B)(2)

                            THREE YEAR INITIAL PERIOD
                   OPERATING BUDGET AND ASSET EXPENSES BUDGET

<PAGE>   96

                                     ANNEX 1

                                    INSURANCE

           1.   MINIMUM COVERAGE AMOUNTS:

           (a)   HULL INSURANCE: With respect to any Aircraft, hull insurance
and political risk insurance, if necessary, shall be maintained in an amount
equal to the greatest of:

           (i)   the Note Target Price for such Aircraft (as such Note Target
Price is defined in any Indenture and as set forth on Schedule 1 hereto, as the
same shall be amended in writing from time to time by AerCo);

           (ii)  the appraised value for such Aircraft (as such appraised value
is set forth in Schedule 1 hereto, as the same shall be amended in writing from
time to time by AerCo;

           (iii) the Agreed Value of such Aircraft;

           (iv)  110% of the net book value of such Aircraft (as such net book
value is set forth in Schedule 1 attached hereto, as the same shall be amended
in writing from time to time by AerCo ); and

           (v)   such greater amounts as may be directed in writing by AerCo
from time to time; provided however, that in the event that an agreement with
respect to hull insurance or political risk insurance, if necessary, cannot be
reached with any particular Lessee pursuant to which such Lessee will pay the
premiums to procure such insurance in amounts consistent with the foregoing,
hull insurance shall be maintained in an amount equal to the greater of the
amounts described in clause (i) above and this clause (v). Spare engines and
parts, if any, shall be insured on the basis of their "replacement costs".

           (b)   LIABILITY INSURANCE: Liability insurance shall be maintained
for each Aircraft Asset and occurrence in an amount equal to that set forth
below, as the same shall be amended in writing from time to time by AerCo.

MODEL                                    MINIMUM LIMIT
F100                                     US $300 million
B737                                     US $400 million
MD83                                     US $400 million

<PAGE>   97
A320                                     US $400 million
A300                                     US $550 million
B767                                     US $550 million
B757                                     US $450 million
B747                                     US $750 million
DC8                                      US $450 million

           2.  INSURANCE DEDUCTIBLES:

           (a) Deductibles and self-insurance for Aircraft Assets subject to a
Lease may be maintained in an amount pursuant to deductible and self-insurance
arrangements (taking into account, inter alia, the creditworthiness and
experience of the Lessee, the type of aircraft and market practices in the
aircraft insurance industry generally) consistent with the Servicer's
commercially reasonable practices for its own aircraft.

           (b) Deductibles for Aircraft Assets off-lease shall be maintained in
respect of any one occurrence in respect of such Aircraft Assets in an amount
consistent with the Servicer's commercially reasonable practice for its own
aircraft with any difference between such amount and $200,000 (or such other
amount as AerCo may direct in writing from time to time), taking into account
any deductible insurance procured, to be notified to AerCo by the Servicer.

           3.  OTHER INSURANCE MATTERS:

         Apart from the matters set forth above, the coverage and terms of any
insurance with respect to any Aircraft Assets not subject to a Lease shall be
substantially consistent with the reasonable commercial practices of the
Servicer with respect to its own aircraft.

           4.  ADDITIONAL INSUREDS:

         Any insurance arrangements entered into with respect to any Aircraft
Assets shall include as named insureds such persons as are reasonably requested
by AerCo.

           5.  CURRENCIES:

         Any insurance requirement stated in U.S. dollar terms shall be
interpreted to include the foreign currency equivalent thereto from time to time
if any such insurance related thereto is denominated in a currency other than
U.S. dollars.

           6.  AVAILABILITY:

<PAGE>   98
         The insurance guidelines set forth herein are subject to such insurance
being generally available in the relevant insurance market at commercially
reasonable rates from time to time.

                                       3
<PAGE>   99
                                     ANNEX 2

                               INDENTURE COVENANTS

<PAGE>   100

                                    EXHIBIT A

                                 PRO FORMA LEASE

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