Document:

aircastle_ex10-1.htm

    Exhibit
10.1

     

    Execution
Version

     

    $713,770,123

     

    CREDIT
AGREEMENT (2008-B)

     

    dated
as of May 2, 2008

     

    by
and among

     

    ACS
2008-1 LIMITED,

    

    and

     

    ACS
AIRCRAFT FINANCE IRELAND 3 LIMITED,

    as
Borrowers,

     

    CALYON
NEW YORK BRANCH,

    As
Sole Bookrunner,

    

    HSH
NORDBANK AG, NEW YORK BRANCH

    KfW
IPEX-BANK GmbH,

    DVB
BANK AG,

    CALYON
NEW YORK BRANCH,

    as
Lenders,

    

    

    CALYON
NEW YORK BRANCH,

    as
Facility Agent,

     

    CALYON
NEW YORK BRANCH,

    HSH
NORDBANK AG, NEW YORK BRANCH

    KfW
IPEX-BANK GmbH,

    DVB
BANK AG,

    as
Joint Lead Arrangers,

    

    and

     

    THE
OTHER LENDERS PARTY HERETO FROM TIME TO TIME

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Table of Contents

     

    Page

     

    
      	
              ARTICLE I

            
	
              Definitions
      and Terms

            
	 
      	 
      	 
      
	
              1.1.

            	
              Definitions

            	
              1

            
	
              1.2.

            	
              Rules
      of Interpretation

            	
              10

            
	 
      	 
      	 
      
	
              ARTICLE
      II

            
	
              The
      Term Loan Facility

            
	 
      	 
      	 
      
	
              2.1.

            	
              Loans

            	
              11

            
	
              2.2.

            	
              Payment
      of Interest

            	
              12

            
	
              2.3.

            	
              Payment
      of Principal

            	
              12

            
	
              2.4.

            	
              Manner
      of Payment

            	
              12

            
	
              2.5.

            	
              Deficiency
      Advances

            	
              12

            
	
              2.6.

            	
              Use
      of Proceeds

            	
              12

            
	 
      	 
      	 
      
	
              ARTICLE
      III

            
	
              [RESERVED]

            
	 
      	 
      	 
      
	
              ARTICLE
      IV

            
	
              Change
      in Circumstances

            
	 
      	 
      	 
      
	
              4.1.

            	
              Requirements
      of Law

            	
              13

            
	
              4.2.

            	
              Limitation
      on Types of Loans

            	
              14

            
	
              4.3.

            	
              Illegality

            	
              14

            
	
              4.4.

            	
              Treatment
      of Affected Loans

            	
              14

            
	
              4.5.

            	
              Compensation

            	
              15

            
	
              4.6.

            	
              Taxes

            	
              15

            
	
              4.7.

            	
              Directed
      Sale

            	
              18

            
	 
      	 
      	 
      
	
              ARTICLE
      V

            
	
              Conditions
      to Making Loans

            
	 
      	 
      	 
      
	
              5.1.

            	
              Conditions
      of Making Loans

            	
              19

            
	 
      	 
      	 
      
	
              ARTICLE
      VI

            
	
              REPRESENTATIONS
      AND WARRANTIES

            
	 
      	 
      	 
      
	
              ARTICLE
      VII

            
	
              The
      Facility Agent

            
	 
      	 
      	 
      
	
              7.1.

            	
              Appointment,
      Powers, and Immunities

            	
              21

            
	
              7.2.

            	
              Reliance
      by Facility Agent

            	
              22

            
	
              7.3.

            	
              Defaults

            	
              23

            
	
              7.4.

            	
              Rights
      as Lender

            	
              23

            
	
              7.5.

            	
              Indemnification

            	
              23

            
	
              7.6.

            	
              Non-Reliance
      on Facility Agent and Other Lenders

            	
              23

            
	
              7.7.

            	
              Resignation
      of Facility Agent

            	
              24

            

    

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    

    

    
      	
              7.8.

            	
              Fees

            	
              24

            
	 
      	 
      	 
      
	
              ARTICLE
      VIII

            
	
              Miscellaneous

            
	 
      	 
      	 
      
	
              8.1.

            	
              Assignments
      and Participations

            	
              24

            
	
              8.2.

            	
              Notices

            	
              26

            
	
              8.3.

            	
              Right
      of Set-off; Adjustments

            	
              26

            
	
              8.4.

            	
              Survival

            	
              27

            
	
              8.5.

            	
              Expenses

            	
              27

            
	
              8.6.

            	
              Amendments
      and Waivers

            	
              27

            
	
              8.7.

            	
              Counterparts

            	
              28

            
	
              8.8.

            	
              Return
      of Funds

            	
              28

            
	
              8.9.

            	
              Indemnification;
      Limitation of Liability

            	
              29

            
	
              8.10.

            	
              Joint
      Lead Arrangers

            	
              29

            
	
              8.11.

            	
              Severability

            	
              30

            
	
              8.12.

            	
              Entire
      Agreement

            	
              30

            
	
              8.13.

            	
              Payments

            	
              30

            
	
              8.14.

            	
              Confidentiality

            	
              30

            
	
              8.15.

            	
              Governing
      Law; Waiver of Jury Trial

            	
              30

            
	
              8.16.

            	
              Judgment
      Currency

            	
              31

            
	
              8.17.

            	
              USA
      PATRIOT Act

            	
              32

            

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    

     

    
      	
              EXHIBITS

            	 
      
	 	 
	
              EXHIBIT
      A

            	
              Applicable
      Commitment Percentages

            
	
              EXHIBIT
      B

            	
              Form of
      Assignment and Acceptance

            
	
              EXHIBIT
      C

            	
              Warehouse
      Intercreditor Agreement

            
	
              EXHIBIT
      D

            	
              Form of
      Borrowing Notice

            
	
              EXHIBIT
      E

            	
              Irish
      Intercreditor Agreement

            
	
              EXHIBIT
      F

            	
              Bermudian
      Intercreditor Agreement

            
	
              EXHIBIT
      G

            	
              [Reserved]

            
	
              EXHIBIT
      H

            	
              Administrative
      Agency Agreement

            
	
              EXHIBIT
      I

            	
              Irish
      Remarketing Services Agreements

            
	
              EXHIBIT
      J

            	
              Bermuda
      Remarketing Services Agreement

            
	
              EXHIBIT
      K

            	
              Security
      Agreement

            
	
              EXHIBIT
      L

            	
              Initial
      Liquidity Facility

            
	
              EXHIBIT
      M

            	
              Bermudian
      Purchase Agreement

            
	
              EXHIBIT
      N

            	
              Irish
      Purchase Agreement

            
	
              EXHIBIT
      O-1

            	
              Milbank,
      Tweed, Hadley & McCloy LLP Legal Opinion

            
	
              EXHIBIT
      O-2

            	
              KPMG
      Legal Opinion

            
	
              EXHIBIT
      O-3

            	
              A&L
      Goodbody Legal Opinion

            
	
              EXHIBIT
      O-4

            	
              Conyers
      Dill & Pearman Legal Opinion

            
	
              EXHIBIT
      O-5

            	
              Conyers
      Dill & Pearman Legal Opinion

            
	
              EXHIBIT
      O-6

            	
              Daugherty,
      Fowler, Peregrin, Haught & Jensen Legal Opinion

            
	
              EXHIBIT
      O-7

            	
              Morris,
      James, Hitches & Williams Legal Opinion

            
	
              EXHIBIT
      O-8

            	
              Advokatfirman
      Hammarskiold & Co Legal Opinion

            
	
              EXHIBIT
      O-9

            	
              Ray,
      Quinney & Nebekers Legal Opinion

            
	
              EXHIBIT
      P

            	
              Letter
      Agreement

            

    

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    CREDIT
AGREEMENT

     

    THIS
CREDIT AGREEMENT (2008-B), dated as of May 2, 2008 (the “Agreement”),
made by and among ACS 2008-1 LIMITED, an exempted company incorporated and
existing under the laws of Bermuda (“ACS
Bermuda”), and ACS AIRCRAFT FINANCE IRELAND 3 LIMITED, an Irish private
limited liability company (“ACS
Ireland”) (each a “Borrower”
and collectively, the “Borrowers”),
each lender from time to time party hereto, and their successors and permitted
assigns, (a “Lender”,
collectively the “Lenders”),
CALYON NEW YORK BRANCH (“Calyon”),
as sole bookrunner, and in its capacity as Facility Agent for the Lenders (in
such capacity, and together with any successor Facility Agent appointed in
accordance with the terms of Section 7.7, the
“Facility
Agent”) and HSH NORDBANK AG, NEW YORK BRANCH, KfW IPEX-BANK GmbH, DVB
BANK AG and CALYON NEW YORK BRANCH
as joint lead arrangers (in such capacity, the “Joint
Lead Arrangers”);

     

    W I T N E S S E T
H:

     

    WHEREAS,
the Borrowers have requested that the Lenders make available to the Borrowers a
term loan facility of up to $713,770,123, the proceeds of which are to be used
solely to finance or refinance the purchase by the Borrowers of Aircraft
Interests (as defined below); and

     

    WHEREAS,
the Lenders are willing to make such term loan facility available to the
Borrowers upon the terms and conditions set forth herein;

     

    NOW,
THEREFORE, the Borrowers, the Lenders and the Facility Agent hereby agree as
follows:

     

    ARTICLE
I

     

    DEFINITIONS AND
TERMS

     

    1.1.          Definitions.   For the
purposes of this Agreement, in addition to the definitions set forth above, the
following terms shall have the respective meanings set forth below:

     

    “ACS
Bermuda” has the meaning assigned to such term in the preamble to this
Agreement.

     

    “ACS
Ireland” has the meaning assigned to such term in the preamble to this
Agreement.

     

    “ACS Group
Aircraft” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “ACS Group
Member” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Act” has
the meaning assigned to such term in Section 8.17.

     

    “Administrative
Agency Agreement” means the administrative agency agreement dated the
date hereof among ACS Ireland, ACS Bermuda, Aircastle Advisor LLC, the Facility
Agent and Collateral Agent, in the form of Exhibit H to
this Agreement.

     

    “Administrative
Agent” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Affected
Loans” has the meaning assigned to such term in Section 4.4.

     

    “Affiliate”
has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Agreement”
has the meaning given to such term in the preamble to this
Agreement.

     

    “Aircraft
Interests” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Applicable
Borrower” means, with respect to any ACS Group Aircraft, the Borrower
that has requested or received a Loan to enable such Borrower to finance or
refinance its purchase of the Aircraft Interest in such ACS Group
Aircraft.

     

    “Applicable
Commitment Percentage” means, with respect to each Lender at any time,
the percentage in the Total Credit Commitment for each Lender as set forth in
Exhibit A
hereto; provided that
the Applicable Commitment Percentage of each Lender may be increased or
decreased to reflect any assignments to or by such Lender effected in accordance
with Section 8.1.

     

    “Applicable
Law” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Applicable
Lending Office” means, for each Lender, the “Lending Office” for such
Lender (or of an Affiliate of such Lender) designated for such Loan on the
signature pages hereof or such other office of such Lender (or an Affiliate of
such Lender) as such Lender may from time to time specify to the Facility Agent
and the Borrowers by written notice in accordance with the terms hereof as the
office by which its Loans are to be maintained.

     

    “Assignment and
Acceptance” means an Assignment and Acceptance substantially in the form
of Exhibit B hereto
(with blanks appropriately filled in) delivered to the Facility Agent in
connection with an assignment of a Lender’s interest hereunder pursuant to Section 8.1.

     

    “Bankruptcy
Default” means the occurrence of an Event of Default or Default described
in Section 4.01(f) and (g) of the Intercreditor Agreements.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Base Rate”
means, for any day, the rate per annum equal to the sum of (a) the higher
of (i) the Federal Funds Rate for such day and (ii) the Prime Rate for
such day, plus (b) one-half of one percent (0.5%).  Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or Federal
Funds Rate.

     

    “Base Rate
Loan” means a Loan for which the rate of interest is determined by
reference to the Base Rate.

     

    “Benefited
Lender” has the meaning assigned to such term in Section
8.3(b).

     

    “Bermuda Aircastle
Guarantee” means the Aircastle Limited guarantee in the form of Exhibit C
to the Bermuda Purchase Agreement.

     

    “Bermuda
Intercreditor Agreement” means the intercreditor agreement, dated as of
the date hereof among ACS Ireland, ACS Bermuda, Collateral Agent, the Facility
Agent, the Administrative Agent and the Liquidity Facility Provider in the form
of Exhibit F to
this Agreement.

     

    “Bermuda
Remarketing Services Agreement” means the remarketing services agreement
dated the date hereof among ACS Ireland, the Administrative Agent, ACS Bermuda
and the Facility Agent in the form of Exhibit J to this
Agreement.

     

    “Bermudian
Purchase Agreement” means the purchase agreement between ACS Bermuda and
the sellers named therein, dated the date hereof in the form of Exhibit M to this
Agreement.

     

    “Board”
means the Board of Governors of the Federal Reserve System (or any successor
body).

     

    “Borrower”
has the meaning given to such term in the preamble to this
Agreement.

     

    “Borrowing
Notice” means the notice delivered by a Responsible Officer in connection
with the Loan under the Term Loan Facility, in the form of Exhibit D to
this Agreement.

     

    “Business
Day” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Calyon”
has the meaning assigned to such term in the preamble to this
Agreement.

     

    “Class E
Security” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Closing
Date” means the date on which the conditions set forth in Article V have
been satisfied.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Code”
means the Internal Revenue Code of 1986, as amended, and any regulations
promulgated or rulings issued thereunder.

     

    “Collateral”
has the meaning assigned to such term in the Security Agreement.

     

    “Collateral
Agent” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Commitment”
means, with respect to each Lender, the obligation of such Lender to make a Loan
to each Borrower up to an aggregate principal amount not to exceed such Lender’s
Applicable Commitment Percentage of the Total Credit Commitment.

     

    “Competitor”
has the meaning assigned to such term in the Remarketing Services
Agreements.

     

    “Credit
Outstandings” means, as of any date of determination, the aggregate
principal amount of all Loans then outstanding.

     

    “Default”
has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Deficiency
Advance” has the meaning assigned to such term in Section
2.5.

     

    “Delivered”
has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Dollars”
and the symbol “$” means dollars constituting legal tender for the payment of
public and private debts in the United States of America.

     

    “Encumbrance”
has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Engine”
has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Eurodollar
Rate” means the interest rate per annum calculated according to the
following formula:

     

    
       

      
        	 	 Eurodollar   	 	
                 Interbank Offered Rate

              	 	 1.75%	 
	 	 Rate 	
                 =  

              	
                 1- Reserve Requirement   

              	 +	 	 

      

                                                                      

    

    “Eurodollar Rate
Loan” means a Loan for which the rate of interest is determined by
reference to the Eurodollar Rate.

     

    “Event of
Default” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Facility
Agents” has the meaning given to such term in the first recital to this
Agreement.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Federal Funds
Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is
so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate charged to the Facility Agent (in its
individual capacity) on such day on such transactions as determined by the
Facility Agent.

     

    “Fiscal
Year” means the twelve-month fiscal period of the Parent and its
Subsidiaries commencing on January 1 of each calendar year and ending on
December 31 of each calendar year.

     

    “GAAP” or
“Generally
Accepted Accounting Principles” means generally accepted accounting
principles, being those principles of accounting set forth in pronouncements of
the Financial Accounting Standards Board, the American Institute of Certified
Public Accountants or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report.

     

    “Governmental
Authority” has the
meaning assigned to such term in the Intercreditor Agreements.

     

    “Hedge Breakage
Costs” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Hedge
Provider” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Holder”
has the meaning assigned to such term in the Intercreditor
Agreement.

     

    “Indemnified
Taxes” has the meaning assigned to such term in Section
4.6(a).

     

    “Individual
Aircraft Commitment Amount” has the meaning assigned to such term in the
Intercreditor Agreements.

     

    “Interbank Offered
Rate” means, with respect to any Eurodollar Rate Loan for the Interest
Period applicable thereto, the rate per annum (rounded upwards, if necessary),
to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period (or, if no
such comparable term is quoted, an interpolated rate as reasonably determined by
the Facility Agent).  If for any reason such rate is not available,
the term “Interbank Offered Rate” shall mean, with respect to any Eurodollar
Rate Loan for the Interest Period applicable thereto, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one
rate is specified on Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest
1/100 of 1%).

     

    “Intercreditor
Agreements” means each of the Irish Intercreditor Agreement and the
Bermuda Intercreditor Agreement.

     

    “Interest
Period” has the meaning set forth in the Intercreditor
Agreements.

     

    “Irish Aircastle
Guarantee” means the Aircastle Limited guarantee in the form of Exhibit C to the
Irish Purchase Agreement.

     

    “Irish
Intercreditor Agreement” means the intercreditor agreement, dated as of
the date hereof among ACS Ireland, ACS Bermuda, Collateral Agent, the Facility
Agent, the Administrative Agent and the Liquidity Facility Provider in the form
of Exhibit E to
this Agreement.

     

    “Irish Purchase
Agreement” means the purchase agreement between ACS Ireland and the
sellers named therein, dated the date hereof, in the form of Exhibit N to this
Agreement.

     

    “Irish Remarketing
Services Agreement” means the remarketing services agreement dated the
date hereof among ACS Ireland, the Administrative Agent, ACS Bermuda, Aircastle
Advisor (Ireland) Limited and the Facility Agent in the form of Exhibit I to this
Agreement.

     

    “Joint Lead
Arrangers” has the meaning given to such term in the preamble to this
Agreement.

     

    “Lender”
has the meaning given to such term in the preamble to this
Agreement.

     

    “Lending
Party” has the meaning assigned to such term in Section
8.14.

     

    “Letter
Agreement” means the letter agreement between the guarantors named
therein and the Facility Agent in the form of Exhibit P to this
Agreement.

     

    “LIBOR Break
Costs” means any loss, cost or expense incurred by any Lender as a result
of: (a) any continuation, conversion, payment or prepayment of a Eurodollar Rate
Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise), (b) any failure by a Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert a
Eurodollar Rate Loan on the date or in the amount notified by the Borrower, or
(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Borrower pursuant
to Section 4.7.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    “Liquidity
Facility” means the revolving credit agreement dated the date hereof
among the Borrowers, the Liquidity Facility Provider and the Administrative
Agent in the form of Exhibit L to
this Agreement.

     

    “Liquidity
Facility Provider” has the meaning assigned to such term in the
Intercreditor Agreements.

     

    “Loan” or
“Loans”
means each borrowing pursuant to a Loan under the Term Loan Facility in
accordance with Article II.

     

    “Material Adverse
Change” means any material adverse change (i) in the business, condition
(financial or otherwise), operations or performance or prospects of Aircastle
Limited since September 30, 2007 or (ii) any material adverse change in the
commercial aviation financing market since March 31, 2008.

     

    “Notes” has
the meaning assigned to such term in the Intercreditor Agreements.

     

    “Obligations”
has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Operating
Bank” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Operating
Circular” means an operating circular issued by the Federal Reserve
Bank.

     

    “Organizational
Documents” means with respect to any corporation, limited liability
company, partnership, limited partnership, limited liability partnership, trust
or other legally authorized incorporated or unincorporated entity, (i) the
articles of incorporation, certificate of incorporation, articles of
organization, certificate of limited partnership, trust agreement or other
applicable organizational or charter documents relating to the creation of such
entity which will, in each case, contain provisions reasonably satisfactory to
the Lenders to ensure such entity’s bankruptcy remoteness, including provisions
relating to the appointment of a special member or independent director, the
consent of which will be required to approve any decisions related to bankruptcy
matters and (ii) the bylaws, operating agreement, partnership agreement,
limited partnership agreement or other applicable documents relating to the
operation, governance or management of such entity.

     

    “Other
Taxes” has the meaning assigned to such term in Section
4.6(b).

     

    “Payment
Dates” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Person”
has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Pledged Aircraft
Interest” has the meaning assigned to such term in the Security
Agreement.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    “Pledged
Beneficial Interest” has the meaning assigned to such term in the
Security Agreement.

     

    “Pledged
Shares” has the meaning assigned to such term in the Security
Agreement.

     

    “Prime
Rate” means the per annum rate of interest established from time to time
by the Reference Bank as its prime or reference rate, which rate may not be the
lowest rate of interest charged by the Reference Bank to its
customers.

     

    “Principal
Office” means the principal office of the Facility Agent presently
located at 1301 Avenue of the Americas, New York, New York 10019 or such other
office and address as the Facility Agent may from time to time
designate.

     

    “Purchase
Agreements” means the Bermudian Purchase Agreement and the Irish Purchase
Agreement.

     

    “Qualifying
Lender” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Reference
Bank” means Calyon.

     

    “Register”
has the meaning assigned to such term in Section 8.1(b).

     

    “Regulation A”
means a Regulation A circular issued by such Federal Reserve
Bank.

     

    “Regulation D”
means Regulation D of the Board as the same may be amended or supplemented
from time to time.

     

    “Related
Documents” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Remarketing
Services Agreements” means Irish Remarketing Services Agreement and the
Bermuda Remarketing Services Agreement.

     

    “Replaced
Lender” has the meaning assigned to such term in Section
4.7.

     

    “Replacement
Notice” has the meaning assigned to such term in Section
4.7.

     

    “Required
Lenders” means, as of any date, Lenders on such date having Credit
Exposures (as defined below) aggregating more than 50% of the aggregate Credit
Exposures of all the Lenders on such date.  For purposes of the
preceding sentence, the amount of the “Credit
Exposure” of each Lender shall be equal at all times (a) other than
following the occurrence and during the continuance of an Event of Default, to
the principal amount of its Loans held during such period; and
(b) following the occurrence and during the continuance of an Event of
Default, to the aggregate principal amount of such Lender’s Applicable
Commitment Percentage of Credit Outstandings; provided that,

     

    
      
         

      

      
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    for
the purpose of this definition only, if any Lender shall have failed to fund its
Applicable Commitment Percentage of any Loan, the principal amount of such
Lender’s Loans shall be deemed reduced by the amount it so failed to fund for so
long as such failure shall continue and such Lender’s Credit Exposure
attributable to such failure shall be deemed held by any Lender making more than
its Applicable Commitment Percentage of such Loan to the extent it covers such
failure.

     

    “Requirement of
Law” means, as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

     

    “Reserve
Requirement” means, at any time, the maximum rate at which reserves
(including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against “Eurocurrency
liabilities” (as such term is used in Regulation D).  Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(i) any category of liabilities which includes deposits by reference to
which the Eurodollar Rate is to be determined, or (ii) any category of
extensions of credit or other assets which include Eurodollar Rate
Loans.  The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Reserve Requirement.

     

    “Responsible
Officer” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Scheduled
Principal Payment Amounts” has the meaning assigned to such term in the
Intercreditor Agreements.

     

    “Security
Agreement” means the security agreement dated the date hereof among the
Borrowers, the Administrative Agent, the Collateral Agent, the Operating Bank,
and the additional grantors referred to therein in the form of Exhibit K to
this Agreement.

     

    “Security
Documents” has the meaning assigned to such term in the Intercreditor
Agreements.

     

    “Sole
Bookrunner” has the meaning assigned to such term in the recitals to this
Agreement.

     

    “Taxes” has
the meaning assigned to such term in the Intercreditor Agreements.

     

    “Term Loan
Facility” means the facility described in Article II
providing for a Loan to each Borrower by the Lenders in the aggregate principal
amount of the Total Credit Commitment.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    “Total Credit
Commitment” means a principal amount equal to the lower of (i)
$713,770,123 and (ii) the sum of the Individual Aircraft Commitment Amounts of
all ACS Group Aircraft; provided that if the Closing
Date does not occur before May 31, 2008, the Total Credit Commitment shall be
reduced by the amount of the Scheduled Principal Payment Amounts payable on the
Payment Dates by each of the Borrowers following May 31, 2008.

     

    “Transfer
Price” has the meaning assigned to such term in Section 4.7.

     

    “Transferred
Interest” has the meaning assigned to such term in Section
4.7.

     

    “Warehouse
Intercreditor Agreement” means the limited release and intercreditor
agreement, dated the date hereof, among JP Morgan Chase Bank, N.A, as
administrative agent and secured party, Constitutional Aircraft Leasing
(Ireland) 4 Limited, Aircastle Investment Holdings 2 Limited, ACS Bermuda and
the Facility Agent in the form of Exhibit C to this
Agreement.

     

    1.2.          Rules of Interpretation.

     

    (a)           All
terms used in this Agreement but not defined herein shall have the respective
meanings assigned to such terms in the Intercreditor Agreements.

     

    (b)           All
accounting terms not specifically defined herein shall have the meanings
assigned to such terms and shall be interpreted in accordance with GAAP applied
on a Consistent Basis.

     

    (c)           The
headings, subheadings and table of contents used in this Agreement are solely
for convenience of reference and shall not constitute a part of any such
document or affect the meaning, construction or effect of any provision
thereof.

     

    (d)           Except
as otherwise expressly provided, references in this Agreement to articles,
sections, paragraphs, clauses, annexes, appendices, exhibits and schedules are
references to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules in or to this Agreement.

     

    (e)           All
definitions set forth herein shall apply to the singular as well as the plural
form of such defined term, and all references to the masculine gender shall
include reference to the feminine or neuter gender, and vice versa, as the
context may require.

     

    (f)           When
used in this Agreement, words such as “hereunder”, “hereto”, “hereof” and
“herein” and other words of like import shall, unless the context clearly
indicates to the contrary, refer to the whole of the applicable document and not
to any particular article, section, subsection, paragraph or clause
thereof.

     

    (g)           References
to “including” means including without limiting the generality of any
description preceding such term, and for purposes hereof the rule of ejusdem generis shall not be
applicable to limit a general statement, followed by or referable to an
enumeration of specific matters, to matters similar to those specifically
mentioned.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (h)           All
dates and times of day specified herein shall refer to such dates and times in
New York, New York, unless otherwise specified.

     

    (i)          
 Any reference to an officer of any Borrower or any other Person by
reference to the title of such officer shall be deemed to refer to each other
officer of such Person, however titled, exercising the same or substantially
similar functions.

     

    (j)          
 All references to any agreement or document as amended, modified or
supplemented, or words of similar effect, shall mean such document or agreement,
as the case may be, as amended, modified or supplemented from time to time only
as and to the extent permitted therein and in the Related
Documents.

     

    ARTICLE
II

     

    THE TERM LOAN
FACILITY

     

    2.1.          Loans.  (a)
Commitment.  Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make a single Loan to each Borrower under the
Term Loan Facility on the Closing Date in an aggregate principal amount equal to
such Lender’s Commitment; provided that if the Closing
Date does not occur before June 30, 2008, the obligation of each Lender to make
a single Loan in accordance with this Section 2.1 will
terminate.  Amounts borrowed and subsequently repaid shall not be
available to the Borrowers to re-borrow.

     

    (a)           Procedures.  The
Responsible Officer shall on behalf of the Borrowers give the Facility Agent at
least three (3) Business Days’ written notice of the Loan prior to
10:30 A.M. (New York City time).  Such notice shall specify the
amount equal to the Total Credit Commitment, the date of borrowing and the
amount of the Total Credit Commitment corresponding to each
Borrower.  Notice of receipt of such Borrowing Notice, together with
the amount of each Lender’s portion of a Loan requested thereunder, shall be
provided by the Facility Agent to each Lender by facsimile transmission with
reasonable promptness, but (provided the Facility Agent shall have received such
notice by 10:30 A.M. (New York City time)) not later than 12:00 P.M. (New
York City time) on the same day as the Facility Agent’s receipt of such
notice.

     

    (i)          
  Promptly (and, to the extent feasible, not later than 2:00 P.M.
(New York City time)) on the date specified for each borrowing under this
Section 2.1, each Lender shall, pursuant to the terms and subject to the
conditions of this Agreement, make the amount of each Loan to be made by it on
such day available by wire transfer to the Facility Agent in the amount of its
pro rata share, determined according to such Lender’s Applicable Commitment
Percentage of the Loan to be made on such day.  Such wire transfer
shall be directed to the Facility Agent at the Principal Office and shall be in
Dollars constituting immediately available funds.  The amount so
received by the Facility Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Applicable Borrower by delivery of the
proceeds thereof to the Collections Account.

     

    
      
         

      

      
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    (ii)      
     Each Loan will be made initially as a Eurodollar
Rate Loan.

     

    2.2.          Payment of Interest.  The
Borrowers shall pay interest to the Facility Agent for the account of each
Lender on the outstanding and unpaid principal amount of each Loan made by such
Lender in accordance with Section 3.08 of the Intercreditor
Agreements.

     

    2.3.          Payment of Principal.  The
principal amount of each Loan shall be due and payable to the Facility Agent for
the benefit of each Lender in full in accordance with Section 3.08 of the
Intercreditor Agreements.

     

    2.4.          Manner of Payment.  Each
payment of principal (including any prepayment) and payment of interest and
fees, and any other amount required to be paid to the Lenders with respect to
each Loan, shall be made in accordance with Section 2.04 of the Intercreditor
Agreements.

     

    2.5.          Deficiency Advances.  No
Lender shall be responsible for any default of any other Lender in respect to
such other Lender’s obligation to make each Loan hereunder nor shall the
Commitment of any Lender hereunder be increased as a result of such default of
any other Lender.  Without limiting the generality of the foregoing,
in the event any Lender shall fail to advance funds to any Borrower as herein
provided, the Facility Agent may in its discretion and in its capacity as a
Lender, but shall not be obligated to, advance all or any portion of such amount
or amounts (each, a “deficiency
advance”) and shall thereafter be entitled to payments of principal of
and interest on such deficiency advance in the same manner and at the same
interest rate or rates as if it had originally made such Loan; provided that, (i) such
defaulting Lender shall not be entitled to receive payments of principal,
interest or fees with respect to such deficiency advance until such deficiency
advance shall be paid by such Lender and (ii) upon payment to the Facility
Agent from such other Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest thereon, from the
most recent date or dates interest was paid to the Facility Agent by a Borrower
on each Loan comprising the deficiency advance at the interest rate per annum
for overnight borrowing by the Facility Agent from the Federal Reserve Bank,
then such payment shall be to the Facility Agent as a Lender in full payment of
such deficiency advance and such Borrower shall be deemed to have borrowed the
amount of such deficiency advance from such other Lender as of the most recent
date or dates, as the case may be, upon which any payments of interest were made
by such Borrower thereon.

     

    2.6.          Use of Proceeds.  The
proceeds of each Loan made pursuant to the Term Loan Facility hereunder shall be
used by the Applicable Borrower to (a) finance the payment of the Individual
Aircraft Commitment Amount with respect to certain of the ACS Group Aircraft
pursuant to the Purchase Agreements or (b) to fund each Aircraft Purchase
Account in an amount equal to the Individual Aircraft Commitment Amount with
respect to each other ACS Group Aircraft.

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ARTICLE
III

     

    [RESERVED]

     

    ARTICLE
IV

     

    CHANGE IN
CIRCUMSTANCES

     

    4.1.          Requirements of Law.

     

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

     

    (i)        
    shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender that is not otherwise included in the determination of the
Eurodollar Rate; or

     

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

     

    and
the result of any of the foregoing is to increase the cost (other than by reason
of a Tax) to such Lender, by an amount that such Lender deems to be material, of
continuing or maintaining or funding Eurodollar Rate Loans or to reduce any
amount receivable hereunder in respect thereof (other than by reason of any
Tax), then, in any such case, the Borrowers shall promptly pay such Lender,
within 10 Business Days after delivery of written notice to the Borrowers, any
additional amounts necessary to compensate such Lender (on an after-tax basis)
for such increased cost or reduced amount receivable.  If any Lender
becomes entitled to claim any additional amounts pursuant to this paragraph, it
shall promptly notify the Borrowers (with a copy to the Facility Agent) of the
event by reason of which it has become so entitled.

     

    (b)           If
any Lender shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority (including without
limitation, implementation of laws, directives, requirements or guidelines
arising out of the paper entitled “International Convergence of Capital
Measurement and Capital Standards, A Revised Framework” issued by the Bank of
International Settlement on 26 June 2004) made subsequent to the date hereof
shall have the effect of reducing the rate of return on such Lender’s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender’s or
such corporation’s policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, after submission
by such Lender to the Borrowers (with a copy to the Facility Agent) of a written
request therefor, the Borrowers shall pay to such

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Lender
such additional amount or amounts as will compensate such Lender or such
corporation (on an after-tax basis) for such reduction within 10 Business Days
after the delivery of such written request.

     

    (c)           Each
Lender shall promptly notify each of the Borrowers and the Facility Agent of any
event of which it has knowledge occurring after the date hereof, which will
entitle a Lender to compensation pursuant to this Section 4.1, and
such Lender shall, upon written request by any Borrower, designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole judgment of such
Lender, be otherwise disadvantageous to it.  A certificate as to any
additional amounts payable pursuant to this Section submitted by any Lender
to the Borrowers (with a copy to the Facility Agent) shall be conclusive in the
absence of manifest error; provided that any
determination and allocations by such Lender of the effect of any change in a
Requirement of Law are made on a reasonable basis.  Notwithstanding
anything to the contrary in this Section, the Borrowers shall not be required to
compensate a Lender pursuant to this Section for any amounts incurred more
than three months prior to the date that such Lender notifies the Borrowers of
such Lender’s intention to claim compensation therefor; provided that, if the
circumstances giving rise to such claim have a retroactive effect, then such
three-month period shall be extended to include the period of such retroactive
effect.  The obligations of the Borrowers pursuant to this
Section shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.

     

    4.2.          Limitation on Types of
Loans.  If on or prior to the first day of any Interest Period
for any Eurodollar Rate Loan:

     

    (a)          the
Facility Agent determines (which determination shall be conclusive) that by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period; or

     

    (b)          the
Required Lenders determine (which determination shall be conclusive) and notify
the Facility Agent that the Eurodollar Rate will not adequately and fairly
reflect the cost to the Lenders of funding Eurodollar Rate Loans for such
Interest Period;

     

    then
the Facility Agent shall give the Borrowers prompt notice thereof and the
Borrowers shall, jointly and severally, on the last day(s) of the then current
Interest Period(s) for the outstanding Loans, either prepay such Loans or
convert such Loans into Base Rate Loans in accordance with the terms of this
Agreement.

     

    4.3.          Illegality.  Notwithstanding
any other provision of this Agreement, in the event that it becomes unlawful for
any Lender or its Applicable Lending Office to maintain Eurodollar Rate Loans
hereunder, then such Lender shall promptly notify the Borrowers thereof and such
Lender’s obligation to continue Eurodollar Rate Loans shall be suspended until
such time as such Lender may maintain Eurodollar Rate Loans (in which case the
provisions of Section 4.4 shall be applicable).

     

    4.4.         
Treatment of Affected
Loans.  If the obligation of any Lender to continue a
Eurodollar Rate Loan shall be suspended pursuant to Section 4.3 hereof
(such Loans being

     

    
      
         

      

      
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    herein
called “Affected
Loans”), such Lender’s Affected Loans shall be automatically converted
into Base Rate Loans on the last day(s) of the then current Interest Period(s)
for Affected Loans (or, in the case of a conversion required by Section 4.3
hereof, on such earlier date as such Lender may specify to the Borrowers with a
copy to the Facility Agent) and, unless and until such Lender gives notice as
provided below that the circumstances specified in Section 4.3 hereof that
gave rise to such conversion no longer exist:

     

    (a)          to
the extent that such Lender’s Affected Loans have been so converted to Base Rate
Loans, all payments and prepayments of principal that would otherwise be applied
to such Lender’s Affected Loans shall be applied instead to its Base Rate Loans;
and

     

    (b)          all
Loans that would otherwise be continued by such Lender shall be continued
instead as Base Rate Loans.

     

    If
such Lender gives notice to the Borrowers (with a copy to the Facility Agent)
that the circumstances specified in Section 4.3
hereof that gave rise to the conversion of such Lender’s Affected Loans pursuant
to this Section 4.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances,
ceasing to exist) at a time when Loans made by other Lenders are outstanding,
such Lender’s Base Rate Loans shall be automatically converted into Eurodollar
Rate Loans, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans, to the extent necessary so that, after giving effect
thereto, all Loans held by the Lenders holding Loans and by such Lender are held
pro rata (as to principal amounts and Interest Periods) in accordance with their
respective Commitments.

     

    4.5.          Compensation.  Upon the
request of any Lender, the Borrowers shall pay to such Lender such amount or
amounts as shall be sufficient (in the reasonable opinion of such Lender) to
compensate it for any loss, cost, or expense incurred by it as a result
of:

     

    (a)          any
payment, prepayment, or conversion to Base Rate Loan of a Eurodollar Rate Loan
for any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 4.02 of
any Intercreditor Agreement) on a date other than the last day of the Interest
Period for such Loan; or

     

    (b)          any
failure by any Borrower for any reason (including, without limitation, the
failure of any condition precedent specified in Article V to be
satisfied) to borrow, continue, or prepay a Eurodollar Rate Loan on the date for
such borrowing, conversion or prepayment specified in the relevant notice of
borrowing, prepayment or continuation under this Agreement.

     

    4.6.          Taxes.

     

    (a)           Any
and all payments by any Borrower to or for the account of any Lender or the
Facility Agent hereunder or under any other Related Document shall be made free
and clear of and without deduction or withholding for any and all Taxes, and all
liabilities with respect thereto, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding, in the
case of each Lender and the Facility Agent, Taxes imposed on its net income or
receipts, capital, net worth or items of tax preference and
franchise,

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    doing
business and similar Taxes (imposed on it in lieu of net income taxes), imposed
on such Lender or Facility Agent that would not have been imposed but for a
present or former connection between the Facility Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising from the Facility Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Related Document).  If any such
non-excluded Taxes (“Indemnified
Taxes”) or Other Taxes (as defined below) are required to be withheld
after the date hereof from or in respect of any sum payable under this Agreement
or any other Related Document to any Lender or the Facility Agent, (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 4.6)
such Lender or the Facility Agent receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Borrower shall
make such deductions, (iii) such Borrower shall timely pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law, and (iv) such Borrower shall furnish to the Facility
Agent, at its address referred to in Section 8.2, the
original or a certified copy of a receipt evidencing payment thereof or other
evidence of payment reasonably acceptable to such Lender or the Facility Agent;
provided, however, that the Borrowers
shall not be required to increase such amounts payable to any Lender, or to
provide indemnification under paragraph (c) of this Section 4.6, with respect to
any Taxes (i) that are attributable to such Lender’s failure to comply with
the requirements of, or breach of a representation contained in,
paragraph (d) or (e) of this Section (unless such failure or breach is
due to a change in treaty, law or resolutions (or interpretation thereof))
occurring after the date that such a Lender first becomes a party to this
Agreement) or (ii) that are United States or Irish withholding taxes
imposed on amounts payable to such Lender at the time such Lender becomes a
party to this Agreement, except to the extent that such Lender’s assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrowers with respect to such Taxes pursuant to this
paragraph.

     

    (b)           In
addition, the Borrowers agree, jointly and severally, to timely pay any and all
present or future stamp or documentary taxes which arise from the execution or
delivery of this Agreement or any other Related Document or the provision of the
security interest in any Collateral required hereunder (hereinafter referred to
as “Other
Taxes”).

     

    (c)           The
Borrowers agree, jointly and severally, to indemnify each Lender and the
Facility Agent for the full amount of Indemnified Taxes and Other Taxes
(including, without limitation, any Indemnified Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 4.6)
paid by such Lender or the Facility Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom or with respect
thereto.

     

    (d)           Each
Lender, on or prior to the date of its execution and delivery of this Agreement
in the case of each Lender listed on the signature pages hereof and on or prior
to the date on which it becomes a Lender in the case of each other Lender, and
from time to time thereafter if requested in writing by any Borrower or the
Facility Agent (but only so long as legally able to do so), shall provide the
Borrowers and the Facility Agent with (i) a complete and properly executed
Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY (including
all

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    required
accompanying information), as appropriate, or any successor form prescribed by
the Internal Revenue Service (including a United States taxpayer identification
number), certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest, certifying that the Lender is eligible
for the “portfolio interest exemption” or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States or (ii) Internal Revenue Service
Form W-9 or any successor form prescribed by the Internal Revenue
Service.  In addition, each Lender and the Facility Agent agrees that
it will (i) take all actions reasonably requested by a Borrower in writing
that are consistent with applicable legal and regulatory restrictions to claim
any available reductions or exemptions from Indemnified Taxes or Other
Taxes  and (ii) otherwise cooperate with the Borrowers to
minimize any amounts payable by the Borrowers under this Section 4.6;
provided, however, that in each case,
any out-of-pocket cost relating to such action or cooperation requested by a
Borrower shall be borne by such Borrower and no Lender shall be required to take
any action that it determines in its sole good faith discretion, may be adverse
in any non-de minimis
respect to it and not indemnified to its satisfaction.  Each Lender
listed on the signature page hereto represents that it is a Qualifying Lender as
of the Closing Date and each Payment Date thereafter and each Lender and
assignee represents that any Person to whom it sells as participation in all or
a portion of its rights under this Agreement is a Qualifying Lender as of the
date of such sale and on each Payment Date thereafter, and each assignee
represents that it is a Qualifying Lender as of the date such party becomes an
assignee and on each Payment Date thereafter, unless a Lender, assignee or
participant is precluded from being a Qualifying Lender by reason of a change in
treaty, law or resolution (or interpretation thereof) occurring, in the case of
a Lender listed on the signature page hereto, after the Closing Date, or in the
case of an assignee or participant, after the effective date of the assignment
or sale of the participation.

     

    (e)           A
Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which a Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to such Borrower (with a copy to the
Facility Agent), at the time or times prescribed by applicable law or reasonably
requested by such Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender’s judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.

     

    (f)         
  If any Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 4.6,
then such Lender will agree to use reasonable efforts to change the jurisdiction
of its Applicable Lending Office so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the sole
judgment of such Lender, is not otherwise disadvantageous to such
Lender.

     

    (g)           Within
thirty (30) days after the date of any payment of Taxes, the applicable
Borrower shall furnish to the Facility Agent the original or a certified copy of
a receipt evidencing such payment or otherwise evidence of such payment as is
reasonably acceptable to the Facility Agent.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    (h)        
   If the Facility Agent or any Lender receives a refund of any
Taxes or Other Taxes as to which it has been indemnified by a Borrower or with
respect to which a Borrower has paid additional amounts pursuant to this Section 4.6, it
shall pay over such refund to such Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by a Borrower under this Section 4.6 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses (including any net increase in Taxes imposed on such
Person by reason of such refund and the payment by such Person pursuant to this
sentence) of the Facility Agent or such Lender and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund); provided, that
the Borrower, upon the request of the Facility Agent or such Lender, agrees to
repay the amount paid over to such Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the Facility
Agent or such Lender in the event the Facility Agent or such Lender is required
to repay such refund to such Governmental Authority.  This paragraph
shall not be construed to require the Facility Agent or any Lender to make
available its tax returns (or any other information relating to its taxes which
it deems confidential) to any Borrower or any other Person.

     

    (i)          
 Without prejudice to the survival of any other agreement of any Borrower
hereunder, the agreements and obligations of each Borrower contained in this
Section 4.6
shall survive the payment in full of the Loans.

     

    4.7.          Directed Sale.  If a Lender
requests payment or indemnification pursuant to Sections 4.1, 4.4, 4.5, 4.6 of
this Agreement, or if the Reserve Requirement for any Lender at anytime is
greater than 0, the Borrower may require, within 75 days from such Lender’s
request, that such Lender (the “Replaced
Lender”) transfer its Loan and all of its other rights and obligations
under this Agreement and each of the other Related Documents (collectively, the
“Transferred
Interest”) to one
or more transferees which satisfies the conditions of a Qualifying Lender at a
price equal to the Transfer Price (as defined below), such transferee(s) to be
identified by the Borrower in a notice (the “Replacement
Notice”) to the
Replaced Lender specifying the date on which such transfer is requested to
occur, the name(s) of the transferee(s) to which its Transferred Interest is to
be transferred and the portion thereof to be transferred to each, which notice
shall be given not less than 10 Business Days prior to the date on which such
transfer is to occur.  On the date of the requested transfer
(i) the Replaced Lender shall sell, assign and transfer to the
transferee(s), without recourse, representation or warranty (other than as to
title and the absence of any Encumbrance in the Transferred Interest created by
or through the Replaced Lender), and the transferee(s) shall acquire and assume
from the Replaced Lender, all of its Transferred Interest by executing and
delivering an Assignment and Acceptance and surrendering the Notes represented
by such Transferred Interest (if any) and (ii) the transferee(s) shall pay
to the Replaced Lender an amount equal to the aggregate outstanding amount of
the Loan held by the Replaced Lender, plus accrued interest owing to the
Replaced Lender in respect of its Loan plus any LIBOR Break Costs and all other
amounts then due and owing to the Replaced Lender under this Agreement and each
of the other Related Documents in respect of the Transferred Interest, as if the
relevant Loans were being prepaid in full on such date (the “Transfer
Price”),
whereupon the transferee(s) shall each become a “Lender” for all purposes of
this Agreement and the other Related Documents.

     

    
      
         

      

      
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    ARTICLE
V

     

    CONDITIONS TO MAKING
LOANS

     

    5.1.          Conditions of Making
Loans.  The obligation of the Lenders to make the Loans
hereunder is subject to the prior or concurrent satisfaction or waiver of each
of the following conditions precedent set forth in this
Article V:

     

    (a)          the
Facility Agent shall have received, as of the Closing Date, in form and
substance satisfactory to the Facility Agent and Lenders, the
following:

     

    (i)       
     executed originals of each of: each Purchase
Agreement, the Security Agreement and the other applicable Security Documents,
the Liquidity Facility, the Intercreditor Agreements, the Irish Aircastle
Guarantee, the Bermuda Aircastle Guarantee, the Letter Agreement, the Warehouse
Intercreditor Agreement, the Remarketing Servicing Agreements, the
Administrative Agency Agreement and the other Related Documents to be entered
into on or prior to the Closing Date, together with all schedules and exhibits
thereto;

     

    (ii)         
  the favorable written opinion or opinions with respect to the
Related Documents and the transactions contemplated thereby of special counsel
to the ACS Group Members dated the Closing Date (including opinions of New York
and Bermuda counsel and Irish counsel), addressed to the Facility Agent (on
behalf of itself and the Lenders), in form and substance reasonably satisfactory
to special counsel to the Facility Agent, of the following written opinions: (a)
Milbank, Tweed, Hadley & McCloy LLP, special New York counsel for the
Borrowers, the ACS Group Members and Aircastle Advisor LLC in the form of
Exhibit O-1; (b) KPMG as to certain Irish tax matters in the form of Exhibit
O-2; (c) A&L Goodbody, including certain bankruptcy matters
(non-consolidation and true sale opinion) and stamp duty, as Irish counsel to
the Borrower in the form of Exhibit O-3; (d) Conyers Dill & Pearman, as
Bermuda counsel to ACS Bermuda in the form of Exhibit O-4; (f) Conyers Dill
& Pearman as to certain bankruptcy matters (non-consolidation and true sale
opinion), as Bermuda counsel to ACS Bermuda in the form of Exhibit O-5; (g)
Daugherty, Fowler, Peregrin, Haught & Jenson, as Federal Aviation
Administration counsel to the Borrowers, to the extent that any ACS Group
Aircraft registered in the United States shall have been transferred as of the
Closing Date in the form of Exhibit O-6; (h) Morris, James, Hitchens &
Williams, as special Delaware counsel to the Borrowers in the form of Exhibit
O-7; (i) Advokatfirman Hammarskiold & Co, as special Swedish counsel to the
Borrowers in the form of Exhibit O-8 to the extent that any ACS Group Member
transferred as of the Closing Date is an entity organized under the laws of
Sweden; (j) Ray, Quinney & Nebeker, special Utah counsel to the Borrowers in
form of Exhibit O-9 to the extent that any ACS Group Member transferred as of
the Closing Date is a Utah trust; and (k) legal opinions pursuant to Section
13.3 of the Purchase Agreements in form and substance reasonable satisfactory to
the Facility Agent (other than with respect to ACS Group Aircraft not Delivered
on the Closing Date).

     

    
      
         

      

      
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    (iii)    
       resolutions of the boards of directors
or other appropriate governing body (or of the appropriate committee thereof) of
each ACS Group Member (except in the case of a ACS Group Member that is a trust
or is not executing any Security Document or Related Documents on the Closing
Date), certified by its managing member, secretary or assistant secretary as of
the Closing Date, approving and adopting the Related Documents to be executed by
such Person, and authorizing the execution and delivery thereof;

     

    (iv)           specimen
signatures of officers of each ACS Group Member executing the Related Documents
on behalf of such party, certified by a Responsible Officer of such party (other
than ACS Group Members not executing any Security Document or Related Document
on the Closing Date);

     

    (v)      
     the Organizational Documents of each ACS Group
Member (other than ACS Group Members not executing any Security Document or
Related Document on the Closing Date) certified as of a recent date by the
Secretary of State or comparable official of its jurisdiction of
organization;

     

    (vi)           certificates
issued as of a recent date by the Secretaries of State or comparable officials
of the respective jurisdictions of formation of each of the ACS Group Members
(other than trusts and ACS Group Members not executing any Security Document or
Related Document on the Closing Date) as to the due existence and good standing
(where applicable) of such Person;

     

    (vii)           the
delivery by the Borrowers of all stock certificates and other certificates, if
any, evidencing ownership of any Pledged Beneficial Interests or Pledged Shares
(other than Pledged Beneficial Interests or Pledged Shares of ACS Group Members
owning ACS Group Aircraft not Delivered on the Closing Date), accompanied in
each case by duly executed stock or transfer powers (or other appropriate
transfer documents) in blank affixed thereto;

     

    (viii)          the
delivery by the Borrowers of “control agreements” that have been executed by the
respective issuers (and consented to by the respective ACS Group Members) with
respect to any uncertificated Pledged Beneficial Interests and Pledged Shares
(other than Pledged Aircraft Interests on ACS Group Aircraft not Delivered on
the Closing Date);

     

    (ix)           evidence
that any fees payable by any ACS Group Member on the Closing Date to the
Facility Agent and the Lenders have been paid in full;

     

    (x)          
 certificates of insurance from qualified brokers of aircraft insurance or
other evidence satisfactory to the Facility Agent, evidencing all insurance
required by the Related Documents in respect of ACS Group Aircraft to be
Delivered on the Closing Date;

     

    (xi)           a
Borrowing Notice;

     

    
      
         

      

      
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    (xii)           Uniform
Commercial Code financing statements appropriate for filing in all places
required by applicable law to perfect the Encumbrances of the Facility Agent
under the Security Documents as a first priority Encumbrance as to items of
Collateral (other than Encumbrances on ACS Group Aircraft not Delivered on the
Closing Date), and such other documents and/or evidence of other actions as may
be necessary under applicable law to perfect the Encumbrances of the Facility
Agent under the Security Documents as a first priority Encumbrance in and to
such other Collateral as the Facility Agent may require (subject to the
limitations set forth in the Security Agreement);

     

    (xiii)           the
Borrowers shall have provide the Facility Agent all theinformation required
pursuant to Section 8.17 hereof;

     

    (b)          at
the time of (and after giving effect to) each Loan, no Bankruptcy Default or
Event of Default shall have occurred and be continuing;

     

    (c)          in
the good faith judgment of the Facility Agent and the Lenders, the ACS Group
Members shall have received all approvals, consents and waivers, and shall have
made or given all necessary filings and notices as shall be required to
consummate the transactions contemplated hereby without the occurrence of any
default under, conflict with or violation of (A) any applicable law, rule,
regulation, order or decree of any Governmental Authority or arbitral authority
or (B)  any agreement, document or instrument to which any of the ACS Group
Members is a party or by which any of them or their properties is
bound.

     

    (d)          the
representations and warranties of the ACS Group Members set forth in each of the
Related Documents shall be true and correct in all material respects on and as
of the Closing Date;

     

    (e)          no
Material Adverse Change has occurred;

     

    ARTICLE
VI

     

    REPRESENTATIONS
AND WARRANTIES

     

    Each
Borrower represents and warrants with respect to itself and each of the ACS
Group Members (which representations and warranties shall survive the delivery
of the documents mentioned herein and in the Related Documents and the making of
the Loans), the representations and warranties contained in Section 5.01 of the
Intercreditor Agreements.

     

    ARTICLE
VII

     

    THE FACILITY
AGENT

     

    7.1.          Appointment, Powers, and
Immunities.  Each Lender hereby irrevocably appoints and
authorizes the Facility Agent to act as its Facility Agent under this Agreement
and the other Related Documents, as “Mortgagee”, or Collateral Agent under each
Security

     

    
      
         

      

      
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    Agreement
(references in this Article VII to the term “Facility Agent” being deemed
to include as well such other capacities), with such powers and discretion as
are specifically delegated to the Facility Agent by the terms of this Agreement
and the other Related Documents, together with such other powers as are
reasonably incidental thereto. The Facility Agent (which term as used in this
sentence and in Section 7.5 and the first sentence of Section 7.6
hereof shall include its Affiliates and its own and its Affiliates’ officers,
directors, employees, and Facility Agents):

     

    (a)          shall
not have any duties or responsibilities except those expressly set forth in the
Related Documents and shall not be a trustee or fiduciary for any
Lender;

     

    (b)          shall
not be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Related
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Related Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Related
Document, or any other document referred to or provided for therein or for any
failure by any ACS Group Member or any other Person to perform any of its
obligations thereunder;

     

    (c)          shall
not be responsible for or have any duty to ascertain, inquire into, or verify
the performance or observance of any covenants or agreements by any ACS Group
Member or the satisfaction of any condition or to inspect the property
(including the books and records) of any ACS Group Member or any of its
Subsidiaries or Affiliates;

     

    (d)          shall
not be required to initiate or conduct any litigation or collection proceedings
under any Related Document; and

     

    (e)          shall
not be responsible for any action taken or omitted to be taken by it under or in
connection with any Related Document, except for its own gross negligence or
willful misconduct.

     

    The
Facility Agent may employ Facility Agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such Facility Agents or
attorneys-in-fact selected by it with reasonable care.

     

    7.2.          Reliance by Facility
Agent.  The Facility Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or facsimile) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any ACS Group Member), independent accountants, and other
experts selected by the Facility Agent.  As to any matters not
expressly provided for by the Related Documents, the Facility Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that the
Facility Agent shall not be required to take any action that exposes the
Facility Agent to personal liability or that is contrary to any Related Document
or applicable law or unless it shall first be

     

    
      
         

      

      
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    indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking any such action.

     

    7.3.          Defaults.  The Facility
Agent shall not be deemed to have knowledge or notice of the occurrence of a
Default or Event of Default unless the Facility Agent has received written
notice from a Lender or a Borrower specifying such Default or Event of Default
and stating that such notice is a “Notice of Default”.  In the event
that the Facility Agent receives such a notice of the occurrence of a Default or
Event of Default, the Facility Agent shall give prompt notice thereof to the
Lenders.  The Facility Agent shall (subject to Section 7.2
hereof) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders, provided that, unless and
until the Facility Agent shall have received such directions, the Facility Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.

     

    7.4.          Rights as Lender.  With
respect to its Commitment and the Loans made by it, Calyon (and any successor
acting as Facility Agent) in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as the Facility Agent, and the term “Lender” or
“Lenders” shall, unless the context otherwise indicates, include the Facility
Agent in its individual capacity.  The Facility Agent and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any ACS
Group Member or any of its Affiliates as if it were not acting as Facility
Agent, and Calyon (and any successor acting as Facility Agent) and its
Affiliates may accept fees and other consideration from any ACS Group Member or
any of its or Affiliates for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.

     

    7.5.          Indemnification.  The
Lenders agree to indemnify the Facility Agent (to the extent not reimbursed
under Section 8.9 hereof, but without limiting the obligations of any
Borrower under such Section) ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including reasonable
attorneys’ fees), or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Facility Agent (including by any
Lender) in any way relating to or arising out of any Related Document or the
transactions contemplated thereby or any action taken or omitted by the Facility
Agent under any Related Document; provided that no Lender shall
be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be
indemnified.  Without limitation of the foregoing, each Lender agrees
to reimburse the Facility Agent promptly upon demand for its ratable share of
any costs or expenses payable by any Borrower under Section 8.5, to the
extent that the Facility Agent is not promptly reimbursed for such costs and
expenses by any Borrower.  The agreements contained in this
Section 7.5 shall survive payment in full of the Loans and all other
amounts payable under this Agreement.

     

    7.6.          Non-Reliance on Facility Agent and Other
Lenders.  Each Lender agrees that it has, independently and
without reliance on the Facility Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own
credit

     

    
      
         

      

      
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    analysis
of the ACS Group Members and decision to enter into this Agreement and that it
will, independently and without reliance upon the Facility Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under the Related Documents.  Except for notices,
reports, and other documents and information expressly required to be furnished
to the Lenders by the Facility Agent hereunder, the Facility Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any ACS
Group Member or any of its Subsidiaries or Affiliates that may come into the
possession of the Facility Agent or any of its Affiliates.

     

    7.7.          Resignation of Facility
Agent.  The Facility Agent may resign at any time by giving
notice thereof to the Lenders and the Borrowers.  Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Facility Agent in consultation with the Borrowers.  If no successor
Facility Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Facility Agent’s giving of notice of resignation, then the retiring Facility
Agent may, on behalf of the Lenders, appoint a successor Facility Agent which
shall be a commercial bank organized under the laws of the United States of
America having combined capital and surplus of at least
$500,000,000.  Upon the acceptance of any appointment as Facility
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Facility Agent, and the retiring Facility Agent shall be discharged
from its duties and obligations hereunder.  After any retiring
Facility Agent’s resignation hereunder as Facility Agent, the provisions of this
Article VII shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Facility
Agent.

     

    7.8.          Fees.  The Borrowers agree
to pay to the Facility Agent, for its individual account, a Facility Agent’s fee
as from time to time agreed to by any Borrower and the Facility Agent in
writing.

     

    ARTICLE
VIII

     

    MISCELLANEOUS

     

    8.1.          Assignments and
Participations.  i)  Each Lender may assign to one or
more Qualifying Lenders who are not a Competitor (and does not have direct or
indirect subsidiaries who are a Competitor) of Aircastle Limited all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Loans and its Commitment); provided, however, that

     

    (i)           except
in the case of an assignment to another Lender or an assignment of all of a
Lender’s rights and obligations under this Agreement, any such partial
assignment shall be in an amount at least equal to $5,000,000 or an integral
multiple of $1,000,000 in excess thereof; provided that no minimum
shall apply if an Event of Default has occurred and is continuing at the time of
such partial assignment;

     

    (ii)          each
such assignment by a Lender shall be of a constant, and not
varying,

     

    
      
         

      

      
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    percentage
of all of its rights and obligations under this Agreement; and

     

    (iii)         the
parties to such assignment shall execute and deliver to the Facility Agent for
its acceptance an Assignment and Acceptance in the form of Exhibit B
hereto, together with a processing fee of $3,000 (which amount shall not be
payable by any Borrower); and

     

    (iv)         none
of the Borrowers shall incur any greater expense or liabilities (including,
without limitation, indemnities, increased costs and Indemnified Taxes) than it
would have incurred had such assignment not taken place; provided that the
foregoing limitation shall not apply if (a) such assignment occurs on or prior
to September 30, 2008, (b) the assignor is one of the four initial Lenders under
this Credit Agreement and (c) the assignee is a Qualifying Lender.

     

     Upon
execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement.  If
the assignee is a Non-U.S. Lender, it shall deliver to the Borrowers and the
Facility Agent certification as to exemption from deduction or withholding of
Taxes in accordance with Section 4.6.

     

    (b)           The
Facility Agent shall maintain at its Principal Office a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time (the
“Register”).  The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Facility Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement.  The Register shall be available for
inspection by any Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

     

    (c)           Upon
its receipt of an Assignment and Acceptance executed by the parties thereto,
together with payment of the processing fee, the Facility Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit B
hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.

     

    (d)           Each
Lender may sell participations to one or more Persons in all or a portion of its
rights, obligations or rights and obligations under this Agreement (including
all or a portion of its Commitment or its Loans); provided, however, that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) subject to clause (iv) below, the
participant shall be entitled to the benefit of the yield protection provisions
contained in Article IV and
the right of set-off contained in Section 8.3,
(iv) none of the Borrowers shall have any greater obligation to a
participant than it would have had to such Lender in the absence of the
existence of such participant and (v) each Borrower shall continue to deal
solely and directly

     

    
      
         

      

      
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    with
such Lender in connection with such Lender’s rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of any Borrower relating to its Loans and to approve any amendment,
modification, or waiver of any provision of this Agreement (other than
amendments, modifications, or waivers decreasing the amount of principal of or
the rate at which interest or fees are payable on such Loans, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Loans, releasing all or substantially all of the Collateral).

     

    (e)           Notwithstanding
any other provision set forth in this Agreement, any Lender may at any time
assign and pledge all or any portion of its Loans to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank.  No such assignment shall release
the assigning Lender from its obligations hereunder.

     

    (f)           
Any Lender may furnish any information concerning any Borrower or any of its
Subsidiaries in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants), subject,
however, to the provisions of Section 8.14.

     

    8.2.          Notices.  All
notices, requests and demands to or upon the respective parties hereto to be
effective shall be made to the address set forth, and in the manner and with the
effect, specified in Section 13.05 of the Intercreditor
Agreements.

     

    8.3.          Right of
Set-off; Adjustments.

     

    (a)           Upon
the occurrence and during the continuance of any Event of Default, each Lender
(and each of its Affiliates) is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender (or any of its
Affiliates) to or for the credit or the account of any Borrower against any and
all of the obligations of any Borrower now or hereafter existing under this
Agreement, irrespective of whether such Lender shall have made any demand under
this Agreement and although such obligations may be unmatured.  Each
Lender agrees promptly to notify the applicable Borrower after any such set-off
and application made by such Lender; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and
application.  The rights of each Lender under this Section 8.3 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.

     

    (b)           If
any Lender (a “benefited
Lender”) shall at any time receive any payment of all or part of the
Loans owing to it, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender’s Loans owing to it, or interest
thereon, such benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender’s Loans owing
to it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the

     

    
      
         

      

      
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    Lenders;
provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without
interest.  Each Borrower agrees that any Lender so purchasing a
participation from a Lender pursuant to this Section 8.3 may,
to the fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Person were the direct creditor of the Borrowers in the amount of such
participation.

     

    8.4.          Survival.  All covenants,
agreements, representations and warranties made herein shall survive the making
by the Lenders of the Loans and the execution and delivery to the Lenders of
this Agreement and shall continue in full force and effect so long as any of
Obligations remain outstanding or any Lender has any Loan hereunder or any
Borrower has continuing obligations hereunder unless otherwise provided
herein.  Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of any Borrower which are contained in the Related Documents shall
inure to the benefit of the successors and permitted assigns of the Lenders or
any of them.

     

    8.5.          Expenses.  Each Borrower
agree to pay on demand (subject, in the case of preparation, execution, delivery
and administration costs, to the Fee Letter), all reasonable costs and expenses
of the Facility Agent and the Joint Lead Arrangers in connection with the
preparation, execution, delivery, administration, modification, and amendment of
this Agreement, the other Related Documents, subject to any cap that may have
otherwise been agreed, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Facility Agent (excluding the cost of internal counsel) with respect thereto
and with respect to advising the Facility Agent as to its rights and
responsibilities under the Related Documents.  Each Borrower further
agree to pay on demand all costs and expenses of the Facility Agent and the
Lenders, if any (including, without limitation, reasonable external attorneys’
fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Related Documents and the
other documents to be delivered hereunder.  Notwithstanding anything
to the contrary in this Section 8.5, the Borrowers shall only be obligated
to pay the fees and expenses of one counsel in any jurisdiction on behalf of the
Facility Agent, the Joint Lead Arrangers and the Lenders.

     

    8.6.          Amendments and
Waivers.  Neither this Agreement, any other Related Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 8.6.  The
Required Lenders and each ACS Group Member to the relevant Related Document may,
or, with the written consent of the Required Lenders, the Facility Agent and
each ACS Group Member to the relevant Related Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and
to the other Related Documents for the purpose of adding any provisions to this
Agreement or the other Related Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the Facility Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Related Documents or any Default or Event of Default and
its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall
(i) forgive the principal amount or

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    extend
the final scheduled date of maturity of any Loan, reduce the stated rate of any
interest or fee payable hereunder or under any other Related Document (except
that any amendment or modification of defined terms used in the financial
covenants in any Intercreditor Agreement shall not constitute a reduction in the
rate of interest or fees for purposes of this clause (i)) or extend the
scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender’s Commitment, in each case without the written
consent of each Lender directly affected thereby; (ii) eliminate or reduce
the voting rights of any Lender under this Section 8.6 without the written
consent of such Lender; (iii) reduce any percentage specified in the
definition of Required Lenders, consent to the assignment or transfer by any
Borrower of any of their respective rights and obligations under this Agreement
and the other Related Documents, release all or substantially all of the
Collateral, in the case of clauses (i) through (iii) without the
written consent of all Lenders; or (iv) amend, modify or waive any
provision of Article VII without the written consent of the Facility
Agent.  Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the ACS Group Members, the Lenders, the Facility Agent and all future
holders of the Loans.  In the case of any waiver, the ACS Group
Members, the Lenders and the Facility Agent shall be restored to their former
position and rights hereunder and under the other Related Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon;

     

    No
notice to or demand on any Borrower in any case shall entitle such Borrower or
any other Borrower to any other or further notice or demand in similar or other
circumstances, except as otherwise expressly provided herein.  No
delay or omission on any Lender’s or the Facility Agent’s part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any Default or Event of Default.

     

    8.7.          Counterparts.  This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such fully-executed counterpart.

     

    8.8.          Return of Funds.  If after
receipt of any payment of all or any part of the Obligations, any Lender is for
any reason compelled to surrender such payment to any Person because such
payment is determined to be void or voidable as a preference, impermissible
setoff, a diversion of trust funds or for any other reason, this Agreement shall
continue in full force and each Borrower shall be liable to, and shall indemnify
and hold the Facility Agent or such Lender harmless for, the amount of such
payment surrendered until the Facility Agent or such Lender shall have been
finally and irrevocably paid in full.  The provisions of the foregoing
sentence shall be and remain effective notwithstanding any contrary action which
may have been taken by the Facility Agent or the Lenders in reliance upon such
payment, and any such contrary action so taken shall be without prejudice to the
Facility Agent or the Lenders’ rights under this Agreement and shall be deemed
to have been conditioned upon such payment having become final and
irrevocable.

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    8.9.          Indemnification; Limitation of
Liability.

     

    (a)           Each
Borrower agrees to indemnify and hold harmless the Facility Agent, Collateral
Agent (which term for purposes of this Section 8.9
includes the “Mortgagee”) under each Security Agreement), the Joint Lead
Arrangers and each Lender and each of their Affiliates and their respective
officers, directors, employees, Facility Agents, and advisors (each, an “Indemnified
Party”) from and against any and all claims, damages, losses,
liabilities, costs, and expenses  (including, without limitation,
reasonable external attorneys’ fees, but excluding principal and accrued
interest on any Loan) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in connection therewith) the
Related Documents, any of the transactions contemplated herein, any ACS Group
Aircraft, Engine or other Collateral, any possession, performance,
transportation, management, sale, ownership, registration, mortgage, charging,
control, maintenance, service, repair, design, testing, defect, overhaul,
purchase, bearing, use or operation of any ACS Group Aircraft, Engine or other
Collateral, or the actual or proposed use of the proceeds of the Loans, except
to the extent such claim, damage, loss, liability, cost, or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful
misconduct.  In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.9
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Borrower, its directors, shareholders
or creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated.  Each Borrower agrees that no
Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to it, any of its Subsidiaries or any security
holders or creditors thereof arising out of, related to or in connection with
the transactions contemplated in any Related Document, except to the extent that
such liability directly results from such Indemnified Party’s gross negligence
or willful misconduct.  Each Borrower agrees not to assert any claim
against the Facility Agent, the Joint Lead Arrangers, any Lender, any of their
Affiliates, or any of their respective directors, officers, employees,
attorneys, Facility Agents, and advisers, on any theory of liability, for
special, indirect, consequential, or punitive damages arising out of or
otherwise relating to the Related Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Loans.

     

    (b)           All
payments made under Sections 4.1, .4.4, 4.6 or 8.9(a) shall be paid as Special
Indemnity Payments pursuant to the flow of funds set forth in Section 3.08 of
the Intercreditor Agreements.

     

    (c)           Without
prejudice to the survival of any other agreement of any Borrower hereunder, the
agreements and obligations of each Borrower contained in this Section 8.9
shall survive the payment in full of the Loans and all other amounts payable
under this Agreement.

     

    8.10.        Joint Lead Arrangers.  The
Joint Lead Arrangers shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than the rights to receive
reimbursement or payment of costs or expenses incurred by them as provided in
Section 8.5 and the right to indemnity under Section 8.9.

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    8.11.        Severability.  If any
provision of this Agreement or the other Related Documents shall be determined
to be illegal or invalid as to one or more of the parties hereto, then such
provision shall remain in effect with respect to all parties, if any, as to whom
such provision is neither illegal nor invalid, and in any event all other
provisions hereof shall remain effective and binding on the parties
hereto.

     

    8.12.        Entire Agreement.  This
Agreement, together with the other Related Documents, constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all previous proposals, negotiations, representations, and other
communications between or among the parties, both oral and written, with respect
thereto.

     

    8.13.        Payments.  All principal,
interest, and other amounts to be paid by any Borrower under this Agreement and
the other Related Documents shall be paid to the Facility Agent at the Principal
Office in Dollars and in immediately available funds, without setoff, deduction
or counterclaim.  Subject to the definition of “Interest Period” in
Annex A, whenever any payment under this Agreement or any other Related
Document shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time in such case shall be included in the computation of interest and fees, as
applicable, and as the case may be.

     

    8.14.        Confidentiality.  The
Facility Agent and each Lender (each, a “Lending
Party”) agrees to keep confidential any information furnished or made
available to it by any Borrower or any other ACS Group Member or any Affiliate
thereof, pursuant to or in connection with this Agreement or the other Related
Documents; provided
that nothing herein shall prevent any Lending Party from disclosing such
information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, Facility Agent, or advisor of any
Lending Party or Affiliate or any Lending Party, (b) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any law, rule, or regulation, (d) upon the
order of any court or administrative agency, (e) upon the request or demand
of any regulatory agency or authority, (f) that is or becomes available to
the public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Agreement,
(g) in connection with any litigation to which such Lending Party or any of
its Affiliates may be a party, (h) to the extent necessary in connection
with the exercise of any remedy under this Agreement or any other Related
Document, and (i) subject to provisions substantially similar to those
contained in this Section, to any actual or proposed participant or
assignee.

     

    8.15.        Governing Law; Waiver of Jury
Trial.

     

    (a)           This
Agreement shall in all respects be governed by, and construed in accordance
with, the laws of the State of New York, including all matters of construction,
validity and performance.

     

    (b)           Each
of the parties hereto agrees that the United States federal and New York State
courts located in The City of New York shall have jurisdiction to hear and
determine any suit, action or proceeding, and to settle any disputes, which may
arise out of or in connection with this Agreement and, for such purposes,
submits to the jurisdiction of such courts.  Each of

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    the
parties hereto waives any objection which it might now or hereafter have to the
United States federal or New York State courts located in The City of New York
being nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in connection
with this Agreement and agrees not to claim that any such court is not a
convenient or appropriate forum.  Each Borrower agrees that the
process by which any suit, action or proceeding is begun may be served on it by
being delivered in connection with any suit, action or proceeding in The City of
New York to Corporation Service Company, with an office on the date hereof at
1133 Avenue of the Americas, Suite 3100, New York, New York 10036 and each of
the parties hereby appoints Corporation Service Company, its designee, appointee
and Facility Agent to receive, accept and acknowledge for and on its behalf such
service of legal process, with the exception of the Facility Agent, Sole
Bookrunner, Joint Lead Arrangers and Lenders, who hereby consents to receive any
such service of process directly at the address set forth in Section 13.05
of the Intercreditor Agreements. Each party hereto irrevocably consents to
service of any and all legal process, summons, notices and documents in any
suit, action or proceeding brought in the United States of America arising out
of or in connection with this Agreement or any other Relevant Document by
mailing (by registered or certified mail, postage prepaid) or delivering of a
copy of such process to such party at its address specified in Section 8.05 of
the Intercreditor Agreements.

     

    (c)           The
submission to the jurisdiction of the courts referred to in Section 8.15(b)
hereof shall not (and shall not be construed so as to) limit the right of the
Facility Agent to take proceedings against the Borrowers in any other court of
competent jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not.

     

    (d)           Each
of the parties hereto hereby consents generally in respect of any legal action
or proceeding arising out of or in connection with this Agreement to the giving
of any relief or the issue of any process in connection with such action or
proceeding, including the making, enforcement or execution against any property
whatsoever (irrespective of its use or intended use) of any order or judgment
which may be made or given in such action or proceeding.

     

    (f)         
  IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO ANY RELEVANT DOCUMENT OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION THEREWITH, THE BORROWERS, THE FACILITY AGENT AND THE LENDERS HEREBY
AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY
IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH
PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.

     

    8.16.        Judgment Currency.

     

    (a)           To
the extent permitted by applicable law, if for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder in United
States Dollars

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be determined in
accordance with Section 8.16(b) hereof on the Business Day preceding that
on which final judgment is given.

     

    (b)           To
the extent permitted by applicable law, the obligation of each ACS Group Member
in respect of any sum due in United States Dollars from it to any Lender or the
Facility Agent hereunder shall, notwithstanding any judgment in a currency other
than United States Dollars, be discharged only to the extent that on the
Business Day following receipt by such Lender or the Facility Agent (as the case
may be) of any sum adjudged to be so due in such other currency, such Lender or
the Facility Agent (as the case may be) may in accordance with normal banking
procedures purchase United States Dollars with such other currency; if the
United States Dollars so purchased are less than such sum due to such Lender or
the Facility Agent (as the case may be) in United States Dollars, each ACS Group
Member agrees, to the extent permitted by applicable law, as a separate
obligation and notwithstanding any such judgment, to indemnify such Lender or
the Facility Agent (as the case may be) against such loss, and if the United
States Dollars so purchased exceed such sum due to any Lender or the Facility
Agent (as the case may be) in United States Dollars, such Lender or the Facility
Agent (as the case may be) agrees to remit to each such ACS Group Member such
excess.

     

    8.17.        USA PATRIOT Act.  Each
Lender hereby notifies each Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “Act”), it
is required to obtain, verify and record information that identifies each
Borrower, which information includes the name and address of such Borrower and
other information that will allow such Lender to identify each Borrower in
accordance with the Act.

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

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

     

    

    
      	 
      	
              ACS
      2008-1 LIMITED

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 	 	 
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 	 
	 	 
	 
      	 
      
	 
      	
              ACS
      AIRCRAFT FINANCE IRELAND 3 LIMITED

            
	 	 	 	 
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 	 	 
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      

    

    

    

    

    
      
        Signature
Page to Credit Agreement (2008-B)

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    
      	 
      	
              CALYON
      NEW YORK BRANCH, as Facility Agent, Joint Lead Arranger and as a
      Lender

            
	 	 	 	 
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 	 	 	 
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 	 
	 
      	 
      
	 
      	
              HSH
      NORDBANK AG, NEW YORK BRANCH, as Joint Lead Arranger and as a
      Lender

            
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      
	 	 
	 
      	 
      
	 
      	
              KfW
      IPEX-BANK GmbH, as Joint Lead Arranger and as a Lender

            
	 	 	 	 
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 	 	 	 
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      

    

    

    

    

    

    
      
        Signature
Page to Credit Agreement (2008-B)

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    
      	 
      	
              DVB
      BANK AG, as Joint Lead Arranger and as a Lender

            
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 	 	 	 
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            	 
      
	 
      	 
      	
              Title:

            	 
      
	 
      	 
      	 
      	 
      

    

    

    
 

     

     

     

     

     

     

     

     

     Signature
Page to Credit Agreement (2008-B)aircastle_ex10-2.htm

     

    Exhibit
10.2

     

    EXECUTION
TEXT

     

    

     

    

     

    

     

    INTERCREDITOR
AGREEMENT

    dated
as of May 2, 2008

     

     

    among

     

     

    ACS
2008-1 LIMITED,

     

    as
the Borrower

     

    ACS AIRCRAFT FINANCE IRELAND 3
LIMITED,

     

    as
the Guarantor

     

    AIRCASTLE
ADVISOR, LLC,

     

    as
the Administrative Agent

     

    CALYON
NEW YORK BRANCH,

     

    as
the Facility Agent, the Collateral Agent and the Liquidity Facility
Provider

     

    and

     

    DEUTSCHE
BANK TRUST COMPANY AMERICAS,

     

    as
the Operating Bank

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
OF CONTENTS

     

    Page

    

    
      	
              Article
      I DEFINITIONS

            	
              1

            
	 
    	 
    
	
              Section
      1.01

            	
              Definitions

            	
              1

            
	
              Section
      1.02

            	
              Rules
      of Construction

            	
              37

            
	 
    	 
    	 
    
	
              Article
      II THE SECURITIES

            	
              39

            
	 
    	 
    
	
              Section
      2.01

            	
              Interest
      Rate; Securities; Terms; Form; Execution and Delivery

            	
              39

            
	
              Section
      2.02

            	
              Evidence
      of Debt.

            	
              39

            
	
              Section
      2.03

            	
              [intentionally
      omitted]

            	
              39

            
	
              Section
      2.04

            	
              Method
      of Payment

            	
              40

            
	
              Section
      2.05

            	
              [intentionally
      omitted]

            	
              41

            
	
              Section
      2.06

            	
              Transfer
      of Loans

            	
              41

            
	
              Section
      2.07

            	
              [intentionally
      omitted]

            	
              41

            
	
              Section
      2.08

            	
              [intentionally
      omitted]

            	
              41

            
	
              Section
      2.09

            	
              Delivery
      of Remaining Aircraft

            	
              41

            
	
              Section
      2.10

            	
              [intentionally
      omitted]

            	
              41

            
	
              Section
      2.11

            	
              Statements
      to Holders

            	
              41

            
	
              Section
      2.12

            	
              Holder
      Representations and Covenants

            	
              43

            
	 
    	 
    	 
    
	
              Article
      III ACCOUNTS; PRIORITY OF PAYMENTS

            	
              43

            
	 
    	 
    
	
              Section
      3.01

            	
              Accounts

            	
              43

            
	
              Section
      3.02

            	
              Investments
      of Cash

            	
              48

            
	
              Section
      3.03

            	
              Closing
      Date Deposits, Withdrawals and Transfers

            	
              49

            
	
              Section
      3.04

            	
              Interim
      Deposits, Transfers and Withdrawals

            	
              50

            
	
              Section
      3.05

            	
              Withdrawals
      and Transfers Relating to the  Acquisition of Aircraft and
      Interim Deposits and Withdrawals for Aircraft Sales.

            	
              52

            
	
              Section
      3.06

            	
              Calculation
      Date Calculations

            	
              53

            
	
              Section
      3.07

            	
              Payment
      Date First Step Withdrawals and Transfers

            	
              57

            
	
              Section
      3.08

            	
              Payment
      Date Second Step Withdrawals

            	
              59

            
	
              Section
      3.09

            	
              Certain
      Repayments; Certain Premiums

            	
              63

            
	
              Section
      3.10

            	
              Liquidity
      Facility

            	
              64

            
	
              Section
      3.11

            	
              Contributions

            	
              68

            
	
              Section
      3.12

            	
              Conversion
      Contributions

            	
              68

            
	
              Section
      3.13

            	
              DSCR
      Failure

            	
              68

            
	 
    	 
    	 
    
	
              Article
      IV DEFAULT AND REMEDIES

            	
              69

            
	 
    	 
    
	
              Section
      4.01

            	
              Events
      of Default

            	
              69

            
	
              Section
      4.02

            	
              Acceleration,
      Rescission and Annulment

            	
              71

            
	
              Section
      4.03

            	
              Other
      Remedies

            	
              71

            

    

     

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

     

    
      	
              Section
      4.04

            	
              Waiver;
      Cure of Existing Defaults

            	
              72

            
	
              Section
      4.05

            	
              Restoration
      of Rights and Remedies

            	
              72

            
	
              Section
      4.06

            	
              Remedies
      Cumulative

            	
              72

            
	
              Section
      4.07

            	
              Authority
      of Courts Not Required

            	
              73

            
	
              Section
      4.08

            	
              Rights
      of Holders to Receive Payment

            	
              73

            
	
              Section
      4.09

            	
              Facility
      Agent May File Proofs of Claim

            	
              73

            
	
              Section
      4.10

            	
              Undertaking
      for Costs

            	
              73

            
	
              Section
      4.11

            	
              Control
      by Holders

            	
              73

            
	 
    	 
    	 
    
	
              Article
      V REPRESENTATIONS, WARRANTIES AND COVENANTS

            	
              74

            
	 
    	 
    
	
              Section
      5.01

            	
              Representations
      and Warranties

            	
              74

            
	
              Section
      5.02

            	
              General
      Covenants

            	
              78

            
	
              Section
      5.03

            	
              Operating
      Covenants

            	
              92

            
	
              Section
      5.04

            	
              Compliance
      Through Agents

            	
              97

            
	
              Section
      5.05

            	
              Consent
      of Administrative Agent

            	
              97

            
	 
    	 
    	 
    
	
              Article
      VI SUBORDINATION

            	
              97

            
	 
    	 
    
	
              Section
      6.01

            	
              Subordination
      of the Securities and Other Subordinated Obligations

            	
              97

            
	
              Section
      6.02

            	
              Rights
      of Subrogation.

            	
              99

            
	
              Section
      6.03

            	
              Further
      Assurances of Subordinated Representatives

            	
              99

            
	
              Section
      6.04

            	
              Enforcement

            	
              99

            
	
              Section
      6.05

            	
              Continued
      Effectiveness

            	
              99

            
	
              Section
      6.06

            	
              Senior
      Claims and Subordinated Claims Unimpaired

            	
              99

            
	
              Section
      6.07

            	
              Ranking
      of the Guarantee

            	
              99

            
	 
    	 
    	 
    
	
              Article
      VII GUARANTEE

            	
              99

            
	 
    	 
    
	
              Section
      7.01

            	
              Guarantee

            	
              99

            
	
              Section
      7.02

            	
              Reinstatement

            	
              101

            
	
              Section
      7.03

            	
              Unconditional
      Nature of Guarantee

            	
              101

            
	 
    	 
    	 
    
	
              Article
      VIII MISCELLANEOUS

            	
              102

            
	 
    	 
    
	
              Section
      8.01

            	
              Right
      of Facility Agent to Perform

            	
              102

            
	
              Section
      8.02

            	
              Waiver

            	
              102

            
	
              Section
      8.03

            	
              Severability

            	
              103

            
	
              Section
      8.04

            	
              Restrictions
      on Exercise of Certain Rights

            	
              103

            
	
              Section
      8.05

            	
              Notices

            	
              103

            
	
              Section
      8.06

            	
              Assignments;
      Third Party Beneficiary

            	
              105

            
	
              Section
      8.07

            	
              Currency
      Conversion

            	
              106

            
	
              Section
      8.08

            	
              Application
      to Court

            	
              107

            
	
              Section
      8.09

            	
              Governing
      Law

            	
              107

            
	
              Section
      8.10

            	
              Jurisdiction

            	
              107

            
	
              Section
      8.11

            	
              Integration

            	
              108

            
	
              Section
      8.12

            	
              Waiver
      of Jury Trial

            	
              108

            
	
              Section
      8.13

            	
              Counterparts

            	
              108

            

    

     

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
              Section
      8.14

            	
              Table
      of Contents, Headings, Etc.

            	
              108

            
	
              Section
      8.15

            	
              Compliance
      with Applicable Anti-Terrorism and Anti-Money Laundering
      Regulations.

            	
              108

            
	
              Section
      8.16

            	
              Rights
      of the Operating Bank.

            	
              109

            

    

     

     

    
 

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

     

    Schedules

    

    
      	
              Schedule
      1

            	
              -

            	
              Aircraft

            
	
              Schedule
      2

            	
              -

            	
              ACS
      Bermuda Subsidiaries

            
	
              Schedule
      3

            	
              -

            	
              Initial
      Appraised Values; Individual Aircraft Commitment Amount; Scheduled
      Principal Payment Amount

            
	
              Schedule
      4

            	
              -

            	
              Initial
      Leases – Current War Risk Coverage Amounts

            
	
              Schedule
      5

            	
              -

            	
              Aircraft
      With Assumed Useful Life of 30 Years

            
	
              Schedule
      6

            	
              -

            	
              Disclosures

            
	
              Schedule
      7

            	
              -

            	
              Excluded
      Aircraft

            

    

     

     

    Exhibits

     

    
      	
              Exhibit
      A

            	
              -

            	
              Form
      of Note

            
	
              Exhibit
      B

            	
              -

            	
              Intentionally
      Omitted

            
	
              Exhibit
      C

            	
              -

            	
              Concentration
      Limits

            
	
              Exhibit
      D

            	
              -

            	
              Insurance
      Provisions

            
	
              Exhibit
      E

            	
              -

            	
              Form
      of Monthly Report to Each Holder

            
	
              Exhibit
      F

            	
              -

            	
              Core
      Lease Provisions

            
	
              Exhibit
      G

            	
              -

            	
              Form
      of Quarterly Report to Facility
Agent

            

    

    

    

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    This
INTERCREDITOR AGREEMENT, dated as of May 2, 2008 (this “Agreement” or this
“Intercreditor
Agreement”), is made among ACS 2008-1 LIMITED, a Bermuda exempted company
(the “Borrower”), ACS AIRCRAFT FINANCE IRELAND 3
LIMITED, an Irish private limited liability company (the “Guarantor”),
AIRCASTLE ADVISOR, LLC, in its capacity as the Administrative Agent, CALYON, a
société anonyme organized under the laws of France, acting through its NEW YORK
BRANCH (“Calyon”), in its
capacity as the person accepting appointment as the Facility Agent and in its
capacity as the person accepting appointment as the Collateral Agent under the
Credit Agreement and in its capacity as Liquidity Facility Provider under the
Liquidity Facility Agreement, and DEUTSCHE BANK TRUST COMPANY AMERICAS (“DBTCA”), in its
capacity as the person accepting appointment as the Operating Bank under the
Security Agreement.

     

    The
parties to this Intercreditor Agreement hereby agree as follows.

     

    ARTICLE
I

    DEFINITIONS

     

    Section
1.01         Definitions.  For
purposes of this Intercreditor Agreement, the following terms have the meanings
indicated below:

     

    “Acceleration” means,
with respect to the principal, interest and other amounts payable in respect of
the Loans, such amounts becoming immediately due and payable by declaration or
otherwise.  “Accelerate,” “Accelerated” and “Accelerating” have
meanings correlative to the foregoing.

     

    “Acceleration Default”
means any Event of Default of the type described in Section 4.01(f) or
4.01(g) hereof.

     

    “Account” means any
or, in its plural form, all of the accounts established pursuant to
Section 3.01(a) hereof and any ledger accounts and ledger subaccounts
maintained therein in accordance with this Intercreditor Agreement.

     

    “Acquisition Date”
means, with respect to any Aircraft Interest (and the ACS Group Aircraft subject
to that Aircraft Interest), the Delivery Date with respect to such ACS Group
Aircraft.

     

    “ACS Bermuda Group”
means, collectively, the Borrower and each ACS Bermuda Subsidiary.

     

    “ACS Bermuda Group
Member” means the Borrower or an ACS Bermuda Subsidiary, as
applicable.

     

    “ACS Bermuda
Subsidiary” means each subsidiary of the Borrower (including each trust
of which the Borrower or another ACS Bermuda Subsidiary is the holder of the
beneficial interest) listed on Schedule 2 hereto and any other subsidiary from
time to time (including any trust of which the Borrower or another ACS Bermuda
Subsidiary shall be from time to time the holder of the beneficial interest) of
the Borrower.

     

    
      
        
        

      

      
        -
1 -

        
          

        

      

      
        
        

      

    

     

    “ACS Group” means,
collectively, the ACS Ireland Group and the ACS Bermuda Group.

     

    “ACS Group Aircraft”
means, collectively, the Aircraft and the Guarantor Aircraft.

     

    “ACS Group Aircraft
Agreement” means an Aircraft Agreement or a Guarantor Aircraft Agreement,
as applicable.

     

    “ACS Group Aircraft
Conversion” means an Aircraft Conversion or a Guarantor Aircraft
Conversion, as applicable.

     

    “ACS Group Conversion
Payments” means, collectively, Conversion Payments and Guarantor
Conversion Payments.

     

    “ACS Group Leases”
means, collectively, the Leases and the Guarantor Leases.

     

    “ACS Group Loans”
means, collectively, the Loans and the Guarantor Loans.

     

    “ACS Group Members”
means, collectively, the ACS Bermuda Group Members and the ACS Ireland Group
Members.

     

    “ACS Group Modification
Payments” means, collectively, Modification Payments and Guarantor
Modification Payments.

     

    “ACS Group Portfolio”
means, as of any date of determination, all ACS Group Aircraft owned by the ACS
Group as of such date.

     

    “ACS Group Purchase
Agreements” means, collectively, the Purchase Agreement and the Guarantor
Purchase Agreement.

     

    “ACS Group Remaining
Aircraft” means, collectively, the Remaining Aircraft and the Guarantor
Remaining Aircraft.

     

    “ACS Group
Subsidiaries” means, collectively, the ACS Bermuda Subsidiaries and the
ACS Ireland Subsidiaries.

     

    “ACS Ireland Group”
means, collectively, the Guarantor and each ACS Ireland Subsidiary.

     

    “ACS Ireland Group
Member” means the Guarantor or an ACS Ireland Subsidiary, as
applicable.

     

    “ACS Ireland
Subsidiary” means each subsidiary of the Guarantor (including each trust
of which the Guarantor or another ACS Ireland Subsidiary is the holder of the
beneficial interest) listed on Schedule 2 to the Guarantor Intercreditor
Agreement and any other subsidiary from time to time (including any trust of
which the Guarantor or another ACS Ireland Subsidiary shall be from time to time
the holder of the beneficial interest) of the Guarantor.

     

    
      
        
        

      

      
        -
2 -

        
          

        

      

      
        
        

      

    

     

    “Actual Initial LTV”
means the ratio obtained from dividing (i) the Initial Outstanding Balance
of the ACS Group Loans minus the sum of 110% of the Individual Aircraft
Commitment Amounts and Guarantor Individual Aircraft Commitment Amounts for all
ACS Group Remaining Aircraft not acquired by the ACS Group on or prior to the
Delivery Expiry Date by (ii) the sum of the Initial Appraised Values of all
ACS Group Aircraft Delivery which was made to the ACS Group on or prior to the
Delivery Expiry Date.

     

     “Adjusted Appraised
Value” means, as of any Payment Date and in respect of any Aircraft, the
lower of (a) the maintenance adjusted current market value of such Aircraft
(plus 75% of amounts on deposit in the Lessee Funded Account or Maintenance
Reserve Account in respect of such Aircraft) and (b) the maintenance adjusted
base value of such Aircraft (plus 75% of amounts on deposit in the Lessee Funded
Account or Maintenance Reserve Account in respect of such Aircraft), in each
case as determined in the most recent annual Appraisal prepared by the Appraiser
in accordance with Section 5.03(i) hereof, as each such value (but not such
deposits) shall be reduced by 0.50% for each full month since the date of such
Appraisal.

     

    “Administrative Agency
Agreement” means the Administrative Agency Agreement dated as of the
Initial Closing Date among the Administrative Agent, the Facility Agent, the
Collateral Agent and the Borrowers.

     

    “Administrative Agent”
means the Person acting, at the time of determination, in the capacity of the
administrative agent of the Borrowers and the ACS Group Subsidiaries under the
Administrative Agency Agreement or any replacement agreement
therefor.  The initial Administrative Agent is Aircastle Advisor
LLC.

     

    “Affiliate” has the
meaning given to such term in Section 5.02(b) hereof.

     

    “Aggregate Scheduled
Principal Payment Amount” means, for any Payment Date, the sum of (1) the
aggregate unpaid Scheduled Principal Payment Amount, if any, with respect to the
previous Payment Dates (less any amounts transferred to the Securities Account
or the Shareholders Account pursuant to Section 3.06(h) hereof to reimburse the
Holders of the Class E Securities, the Shareholders and the Borrowers for ACS
Group Conversion Payments made by the Borrowers in connection with one or more
Conversion Elections) plus (2) the Scheduled
Principal Payment Amount for such Payment Date minus.(3) the excess, if
any, of an amount (not to exceed the sum of the amounts in clauses (1) and (2)
above) equal to the sum of the Supplemental Principal Payment Amounts
distributed since the Initial Closing Date pursuant to Section 3.08 over an amount equal
to the sum of all amounts deducted from Aggregate Scheduled Principal Payment
Amounts since the Initial Closing Date pursuant to this clause (3).

     

    “Agreed Currency” has
the meaning given to such term in Section 8.07(a) hereof.

     

    “Agreed Value Payment”
means a payment to be made by or on behalf of a Lessee under an ACS Group Lease
upon or following a Total Loss of an ACS Group Aircraft with respect to such
Total Loss.

     

    “Agreement” has the
meaning given to such term in the preamble hereof.

     

    
      
        
        

      

      
        -
3 -

        
          

        

      

      
        
        

      

    

     

    “Aircastle Entity”
means, collectively, the Remarketing Servicers, the Administrative Agent, the
Irish Seller and any other Aircastle Related Entity (other than any ACS Group
Member).

     

    “Aircastle Related
Entity” means Aircastle Limited, any Shareholder or any Affiliate of any
such Person.

     

    “Aircraft” means as of
any time each of the aircraft identified in Schedule 1 hereto (including any
related Engines and Parts and any Remaining Aircraft) and any Substitute
Aircraft, excluding any such aircraft (or related Aircraft Interest) sold or
disposed of (directly or indirectly) by way of a completed Aircraft Sale and any
Remaining Aircraft (i) for which a Substitute Aircraft is Delivered or (ii)
which is not Delivered by the Delivery Expiry Date to the ACS
Group.

     

    “Aircraft Agreement”
means any lease, sublease, conditional sale agreement, finance leases, hire
purchase agreement or other agreement (other than an agreement relating to
maintenance, modification or repairs) or any purchase option granted to a Person
(other than a Purchase Option granted to an ACS Bermuda Group Member) to
purchase an Aircraft, in each case pursuant to which any Person acquires or is
entitled to acquire legal title, or the economic benefits of ownership of, such
Aircraft.

     

    “Aircraft Allocation
Amount” with respect to each ACS Group Aircraft, has the meaning given to
such term in the applicable ACS Group Purchase Agreement for such ACS Group
Aircraft.

     

    “Aircraft Assets Related
Documents” means all ACS Group Leases and related documents and other
contracts and agreements including any side letters, assignments of warranties
or option agreements of ACS Group Members the terms of which relate to or affect
any of the ACS Group Aircraft.

     

    “Aircraft Conversion”
has the meaning given to such term in Section 5.02(i) hereof.

     

    “Aircraft Conversion
Account” has the meaning given to such term in Section 3.01(a)
hereof.

     

    “Aircraft Interest”
means (a) the Ownership Interest or Guarantor Ownership Interest in any Person,
including without limitation a trust, that owns an ACS Group Aircraft or (b) the
Ownership Interest or Guarantor Ownership Interest in any Person that holds,
directly or indirectly, the interest referred to in clause (a)
above.  The acquisition or disposition of all of the Aircraft Interest
with respect to an ACS Group Aircraft constitutes, respectively, the acquisition
or disposition of that ACS Group Aircraft.

     

    “Aircraft Purchase
Account” has the meaning given to such term in Section 3.01(a)
hereof.

     

    “Aircraft Purchase
Price”, with respect to any ACS Group Aircraft, means the “Purchase
Price” (as defined in the applicable Purchase Agreement or the Guarantor
Purchase Agreement,
as applicable) for the entity owning such ACS Group
Aircraft.

     

    
      
        
        

      

      
        -
4 -

        
          

        

      

      
        
        

      

    

     

    “Aircraft Sale” means
any sale or other disposition of any ACS Group Aircraft, including by reason of
such ACS Group Aircraft suffering a Total Loss.

     

    “Allocable Debt
Amount” means, on any date of determination thereof and in respect of any
individual Aircraft, an amount obtained by multiplying the Outstanding Principal
Balance of all ACS Group Loans by the ratio obtained from dividing (i) the
Monthly Principal Payment Amount of such individual Aircraft by (ii) the sum of
the Monthly Principal Payment Amounts for the ACS Group Aircraft.

     

    “Allocable Principal
Conversion Amount” means, for any Payment Date, with respect to any ACS
Group Aircraft Conversion, an amount equal to product of 65.2% and the lesser of
(x) the aggregate ACS Group Conversion Payments made in respect of such ACS
Group Aircraft Conversion and (y) $6,000,000.

     

    “Allowed
Restructuring” has the meaning given to such term in Section 5.02(e)
hereof.

     

    “Annual Report” has
the meaning given to such term in Section 2.11(c) hereof.

     

    “Anti-Money Laundering
Laws” means any laws or regulations relating to money laundering or
terrorist financing, including, without limitation, the Bank Secrecy Act, 31
U.S.C. sections 5301 et
seq.; the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56
(a/k/a the USA Patriot Act); Laundering of Monetary Instruments, 18 U.S.C.
section 1956; Engaging in Monetary Transactions in Property Derived from
Specified Unlawful Activity, 18 U.S.C. section 1957; the Financial Recordkeeping
and Reporting of Currency and Foreign Transactions Regulations, 31 C.F.R. Part
103; and any similar laws or regulations currently in force or hereafter
enacted.

     

    “Applicable Allocation
Percentage” means, as of any Payment Date, in the case of (i) the Holders
of the Class E Securities, a fraction, the numerator of which is the aggregate
Adjusted Appraised Values of the ACS Group Aircraft then owned by the ACS
Ireland Group and the denominator of which is the aggregate Adjusted Appraised
Values of the ACS Group Aircraft then in the ACS Group Portfolio and (ii) the
Shareholders, a fraction, the numerator of which is the aggregate Adjusted
Appraised Values of the ACS Group Aircraft then owned by the ACS Bermuda Group
and the denominator of which is the aggregate Adjusted Appraised Values of the
ACS Group Aircraft then in the ACS Group Portfolio.

     

    “Applicable Aviation
Authority” means, in relation to any Aircraft, each governmental or
regulatory authority that has responsibility for the supervision of civil
aviation and/or the registration and operations of civil aircraft in the State
of Registration of such Aircraft.

     

    “Applicable Governmental
Program” has the meaning given to such term in Exhibit D
hereto.

     

    “Applicable Law”
means, with respect to any Person, all laws, rules, regulations and orders of
governmental regulatory authorities applicable to such Person, including,
without limitation,
the regulations of each Applicable Aviation Authority applicable to such Person
or the Aircraft owned or operated by it or as to which it has a contractual
responsibility.

     

    
      
        
        

      

      
        -
5 -

        
          

        

      

      
        
        

      

    

     

    “Applicable Lending
Office” has the meaning given to such term in the Credit
Agreement.

     

     “Applicable
Regulations” has the meaning given to such term in Section 8.15
hereof.

     

    “Appraisal” means, in
respect of any Aircraft, a desktop Base Value and “current market value” (as
defined by the Appraiser) appraisal performed at least once a year and in no
event later than May 31 of each year (commencing in 2009) by the
Appraiser.

     

    “Appraiser” means
Ascend Limited or, if an Appraiser Event shall have occurred, upon the request
of the Borrower and Guarantor and upon receipt of the consent of the Lenders
having Credit Exposure aggregating more than 66-2/3% of the aggregate Credit
Exposures of all Lenders, any other independent appraiser that is a member of
the International Society of Transport Aircraft Trading or any similar
organization.

     

    “Appraiser Event”
means, the occurrence of Ascend Limited either (a) being subject to a proceeding
of the type specified in Section 4.01(f) or (g) of this Intercreditor Agreement
or (b) ceasing to conduct the business of appraising aircraft.

     

    “Assignment and
Assumption” has the meaning given to such term in the Credit
Agreement.

     

    “Available Amount”
means, as of any date of determination, an amount equal to the Liquidity
Facility Amount less the aggregate amount of the Liquidity Facility Drawings
theretofore made by the Liquidity Facility Provider under the Liquidity
Facility, prior to such date, which has not been reimbursed as of such date;
provided that,
following a Non-Extension Drawing or a Final Drawing, the Available Amount shall
be zero.

     

    “Available
Collections” means, as of any Calculation Date, amounts on deposit in the
Collections Account.  The Available Collections with respect to any
specific payment to be made therefrom shall be determined after giving effect to
all payments, if any, having priority to such payment under Section 3.08
hereof.

     

    “Available Holder
Amount” has the meaning given to such term in Section 3.06(g)
hereof.

     

    “Available Refinancing
Amount” has the meaning given to such term in Section 3.06(h)
hereof.

     

    “Available Scheduled
Principal Amount” has the meaning given to such term in Section 3.06(h)
hereof.

     

    “Base Rate” has the
meaning given to such term in the Credit Agreement.

     

    
      
        
        

      

      
        -
6 -

        
          

        

      

      
        
        

      

    

     

    “Base Value” means the
value of an ACS Group Aircraft in an open, unrestricted, stable market
environment with a reasonable balance of supply and demand, and with full
consideration of the ACS Group Aircraft’s “highest and best use”, presuming an
arm’s-length, cash transaction between willing, able and knowledgeable parties,
acting prudently, with an absence of duress and with a reasonable period of time
available for marketing, adjusted to account for the maintenance status of such
ACS Group Aircraft (with such assumptions as to use since the last reported
status as may be reasonably stated in the appraisal setting forth such Base
Value).

     

    “Bermudian Remarketing
Servicer’s Pro Forma Lease” has the meaning given to such term in
Section 5.03(e) hereof.

     

    “Bermudian Remarketing
Servicer” means the Person acting, at the time of determination, in the
capacity of the remarketing servicer under the Bermudian Remarketing Services
Agreement.  The initial Bermudian Remarketing Servicer is Aircastle
Advisor LLC.

     

    “Bermudian Remarketing
Services Agreement” means the Remarketing Services Agreement dated as of
the Initial Closing Date among the Bermudian Remarketing Servicer, the Borrower,
the Guarantor, the Facility Agent and the Administrative Agent.

     

    “Bermudian Rental
Account” has the meaning given to such term in Section 3.01(a)
hereof.

     

    “Bermudian Secretarial
Services Provider” means the Person acting, at the time of determination,
in the capacity of the local administrator of the Guarantor under the local
administration agreement with the Guarantor dated as of the Initial Closing Date
(or any successor agreement).  The initial Bermudian Secretarial
Services Provider is Codan Services Limited.

     

    “Bermudian Sellers”
means Aircastle Investment Holdings 2 Limited and Aircastle Investment Holdings
3 Limited and “Bermudian Seller”
means any one of the foregoing.

     

    “Board” means the
board of directors of the Borrower.

     

    “Board Resolution”
means a copy of a resolution certified as having been duly adopted by the Board
and being in full force and effect on the date of such
certification.

     

    “Borrower” has the
meaning given to such term in the preamble hereof.

     

    “Borrowers” means,
collectively, the Borrower and the Guarantor.

     

    “Business Day” means a
day on which commercial banks and foreign exchange markets are authorized to be
open in New York, New York and Frankfurt, Germany, and on which U.S. dollar
deposits may be dealt in on the London inter-bank market and, with respect to
payments to or withdrawals from the Non-Agent Accounts, a day on which the
financial institution at which such account is located is open for
business.

     

    
      
        
        

      

      
        -
7 -

        
          

        

      

      
        
        

      

    

     

    “Calculation Date”
means the sixth Business Day immediately preceding a Payment Date.

     

    “Calyon” has the
meaning given to such term in the preamble hereof.

     

    “Cape Town Convention”
means the Convention on International Interests in Mobile Equipment and its
Protocol on Matters Specific to Aircraft Equipment, concluded in Cape Town on 16
November 2001.

     

    “Charitable Trust”
means the charitable trust established under the laws of Ireland which owns 100%
of the issued shares of the Irish Parent.

     

    “Charitable Trust
Dividend” means, if an annual dividend has been declared by the Guarantor
Board, $1,500 per
annum.

     

    “Charitable Trustee”
means the trustee of the Charitable Trust.

     

    “Class E Securities”
means, collectively, all securities designated as Class E Securities
pursuant to the Guarantor Intercreditor Agreement.  The aggregate
principal amount of Class E Securities issued pursuant to the Guarantor
Intercreditor Agreement shall not exceed the sum of (a) $23,947,767.78 and
(b) the amount of any Class E Securities issued to fund a Conversion
Payment.

     

    “Closing Date” means
in the case of the ACS Group Loans, the initial Class E Securities and the ACS
Group Aircraft (other than any Remaining Aircraft or Substitute Aircraft), the
Initial Closing Date or, in the case of Class E Securities issued in connection
with a delivery of the Remaining Aircraft, the applicable Acquisition
Date.

     

    “Code” means the
Internal Revenue Code of 1986, as amended.

     

    “Codified Banking
Directive” means Directive 2000/12/EC of the European Parliament and the
Council dated 20 March 2000 (as amended).

     

    “Collateral” has the
meaning given to such term in the Security Agreement.

     

    “Collateral Agent”
means the Person appointed, at the time of determination, as the Facility Agent
for the benefit of the Secured Parties pursuant to Section 7.1 of the
Credit Agreement.  The initial Collateral Agent is Calyon, acting
through its New York Branch.

     

    “Collections” means
without duplication (a) Rental Payments and all other amounts received by
any ACS Group Member pursuant to any ACS Group Lease or Related Collateral
Document (including any amount of Maintenance Reserves or letter of credit
proceeds transferred to the Collections Account pursuant to Section 3.07(l) of
this Intercreditor Agreement), (b) amounts transferred from the Maintenance
Reserve Account to the Collections Account pursuant to Section 3.05,
(c) amounts received in respect of claims for damages or claims in respect
of any breach of contract, (d) amounts received by an ACS Group Member in
connection with any Aircraft Sale or otherwise received under any ACS Group
Aircraft Agreement, including sale proceeds, Total Loss Proceeds, Agreed Value
Payments, proceeds of 

     

    
      
        
        

      

      
        -
8 -

        
          

        

      

      
        
        

      

    

     

    Repossession
Insurance, Requisition Compensation and all Partial Loss Proceeds, less, in each
case, any expenses payable by such ACS Group Member to any Person that is not an
ACS Group Member in connection therewith, (e) amounts received by any ACS
Group Member from insurance with respect to any ACS Group Aircraft, (f) any
amounts transferred from a Lessee Funded Account or from the Security Deposit
Account into the Collections Account in accordance with Section 3.07
hereof, (g) any Hedge Payments, (h) the proceeds of any Investments of
the funds in the Accounts (except (i) to the extent that any such proceeds
are required to be paid over to any Lessee under an ACS Group Lease or
(ii) the proceeds of any Investments of the funds in the Aircraft Purchase
Accounts or the Liquidity Payment Account), (i) any amounts transferred
from the Aircraft Purchase Account into the Collections Account in accordance
with Section 3.05 hereof, (j) any amounts received by an ACS Group
Member under an ACS Group Purchase Agreement, including any loss proceeds and
other amounts under the ACS Group Purchase Agreements, and (k) any other
amounts received by any ACS Group Member (including any amounts received from
any other ACS Group Member, whether by way of distribution, dividend, repayment
of a loan or otherwise, and any proceeds received in connection with any Allowed
Restructuring under this Intercreditor Agreement and the Guarantor Intercreditor
Agreement (as defined herein and therein)); provided that Collections
shall not include (i) Segregated Funds transferred to a Lessee Funded Account,
(ii) security deposits under any ACS Group Lease that are not Segregated
Funds transferred to the Security Deposit Account, (iii) amounts deposited
in the Repayment Account in connection with a Repayment hereunder or a Guarantor
Repayment , (iv) except as provided above with respect to any amounts
transferred therefrom to the Collections Account, amounts in any Maintenance
Reserve Account and any Aircraft Purchase Account, (v) amounts to be paid
to any Person not an ACS Group Member or expenses incurred in connection with
the receipt of any Collections or amounts otherwise not to be included as
Collections pursuant to any Related Document, in each case subject to the
restrictions set forth in this Intercreditor Agreement and the Guarantor
Intercreditor Agreement, (vi) payments under the Liquidity Facility and
(vii) any amounts received by an ACS Group Member in connection with an Excluded
Lease.

     

    “Collections Account”
has the meaning given to such term in Section 3.01(a) hereof.

     

    “Commitment” has the
meaning given to such term in the Credit Agreement.

     

    “Commitment Letter”
means that certain Commitment Letter dated March 31, 2008, between Calyon New
York Branch and Aircastle Limited as the same has been and from time to time
shall have been supplemented.

     

    “Company” has the
meaning given to such term in the Purchase Agreement.

     

    “Competitor” has the
meaning given to such term in the Remarketing Services Agreements.

     

    “Concentration
Default” means an Event of Default under Section 4.01(e) as a result of a
breach under Section 5.03(a) hereof which would arise if effect were given
to any sale, transfer or other disposition or any purchase or other acquisition
pursuant to an Aircraft Agreement as of the date of such Aircraft Agreement
regardless of whether such sale, transfer or other
disposition or purchase or other acquisition is scheduled or expected to occur
after the date of such Aircraft Agreement.

     

    
      
        
        

      

      
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    “Concentration Limits”
has the meaning given to such term in Section 5.03(a) hereof.

     

    “Contracting State”
has the meaning given to such term in the Security Agreement.

     

    “Contribution Amounts”
has the meaning given to such term in Section 3.11 hereof.

     

    “Control” has the
meaning given to such term in Section 5.02(b)
hereof.  “Controlled” and “Controlling” have meanings correlative to
the foregoing.

     

    “Controlling Party”
means, as of any date of determination, the Facility Agent; provided, that, in the case of the
Liquidity Facility Provider, or for any other Eligible Provider of an Eligible
Liquidity Facility if and only if so provided in the Board Resolution and
Guarantor Board Resolution providing for the related Eligible Liquidity
Facility, at any time from and including the date that is 30 months after the
earlier to occur of (a) the date on which the entire amount available under such
Eligible Liquidity Facility shall have been drawn (except as a result of a
Non-Extension Drawing not applied to pay expenses, hedge payments or interest in
accordance with the terms hereof) and remain unreimbursed and (b) the date on
which the Loans shall have been Accelerated, the provider of such Eligible
Liquidity Facility shall have the right to elect, by at least 15 Business Days’
prior Written Notice to the Facility Agent, to become the Controlling Party, or,
if there is more than one such provider, such providers shall have the right to
elect, by at least 15 Business Days’ prior Written Notice to the Facility Agent,
to become the Controlling Party acting jointly (in each case, in place of the
Facility Agent) thereafter but only for so long as any Liquidity Facility
Obligations due to each such provider remain unpaid. At any time after such
30-month period, if a provider of such Eligible Liquidity Facility does not
elect to be the Controlling Party or if no Liquidity Facility Obligations remain
outstanding, then the Facility Agent shall continue to be the Controlling
Party.

     

    “Conversion Agreement”
means any agreement entered into from time to time between the Borrower or
Guarantor (or their respective agents) and any maintenance facility with respect
to the conversion of an ACS Group Aircraft to a freighter or mixed-use
aircraft.

     

    “Conversion Completion
Certificate” means a certificate signed by the Borrower attaching
evidence from the conversion performer of the completion of the applicable ACS
Group Aircraft Conversion.

     

    “Conversion Election”
has the meaning given to such term in Section 3.06(g) hereof.

     

    “Conversion Payment”
has the meaning given to such term in Section 5.02(i) hereof.

     

    “Core Lease
Provisions” has the meaning given to such term in Section 5.03(e)
hereof.

    
      
        
        

      

      
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    “Corporate Office”
means the Principal Office of the Facility Agent (as such term is defined in the
Credit Agreement).

     

    “Costs” means
liabilities, obligations, damages, judgments, settlements, penalties, claims,
actions, suits, costs, expenses and disbursements (including, without
limitation, reasonable fees and disbursements of legal counsel and costs of
investigation).

     

    “Credit Agreement”
means that certain Credit Agreement dated May 2, 2008 among the Borrower, the
Guarantor, the Facility Agent and the “Lenders” referred to
therein.

     

    “Credit Exposure” has
the meaning given to such term in the Credit Agreement.

     

    “Current War Risk Coverage
Amount” has the meaning given to such term in Exhibit D
hereto.

     

    “DBTCA” has the
meaning given to such term in the preamble hereof.

     

    “Default” means a
condition, event or act that, with the giving of notice or the lapse of time or
both, would constitute an Event of Default.

     

    “Default Notice” means
a notice given pursuant to Section 4.02 hereof, declaring all outstanding
principal of, and accrued and unpaid interest on the Loans and Class E
Securities to be immediately due and payable.

     

    “Default Rate” has the
meaning given to such term in Section 2.01(b) hereof.

     

    “Delivery” means, with
respect to any ACS Group Aircraft, the transfer of the beneficial interest or
shares of the ACS Group Member that has title to such ACS Group Aircraft in
accordance with the Purchase Agreement or the Guarantor Purchase Agreement, as
applicable.  The term “Deliver” or “Delivered” used as verbs have a
correlative meaning.

     

    “Delivery Date” means,
with respect to any ACS Group Aircraft, the date on which Delivery therefor
occurs in accordance with the Purchase Agreement or the Guarantor Purchase
Agreement, as applicable.

     

    “Delivery Expiry Date”
means, as to the ACS Group Aircraft, the meaning given to such term in the
Purchase Agreement or the Guarantor Purchase Agreement, as
applicable.

     

    “Developed Markets”
has the meaning determined, from time to time, in accordance with Note (3) to
Exhibit C hereof.

     

    “Director” means a
member of the board of directors of the Borrower.

     

    “DSCR” means, as of
any Calculation Date, the amount obtained by dividing (a) the amount of DSCR
Available Cash as of such Calculation Date by (b) the sum of (i) the DSCR
Aggregate Interest Amount for the related Payment Date and (ii) the DSCR
Aggregate Scheduled Principal Amount for such Payment Date.

     

    
      
        
        

      

      
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    “DSCR Aggregate Interest
Amount” means, with respect to any Payment Date, the sum of (a) the
Interest Amount on the ACS Group Loans for such Payment Date plus the net
amounts payable (or minus the net amounts receivable) by the Borrower and the
Guarantor under any Hedge Agreement on such Payment Date (whether or not
actually paid or received on such Payment Date) and (b) (without duplication)
the aggregate Interest Amount on the ACS Group Loans for the previous five
Payment Dates plus the net amounts payable (or minus the net amounts receivable)
by the Borrower and the Guarantor under any Hedge Agreement on the related
Payment Date (whether or not actually paid or received on such Payment
Date).

     

    “DSCR Aggregate Scheduled
Principal Amount” means, with respect to any Payment Date, the sum of (a)
the Scheduled Principal Payment Amount for such Payment Date and (b) (without
duplication) the Scheduled Principal Payment Amount for the previous five
Payment Dates.

     

    “DSCR Available Cash”
means, as of any Calculation Date, an amount equal to the excess of (a) the sum
of the aggregate Rental Payments (not including any Maintenance Reserves which
may be Rental Payments) actually received by the ACS Group during the six-month
period ending on such Calculation Date over (b) the sum of the aggregate
Re-leasing Expenses incurred by the ACS Group during the six-month period ending
on such Calculation Date.

     

    “DSCR Failure” means
the occurrence on two consecutive Payment Dates, each occurring after the
12th
month after the Initial Closing Date, of the amount of DSCR for each such
Payment Date equaling less than 1.32.

     

    “Eligible Account”
means (a) a segregated trust account or demand deposit account maintained on the
books and records of an Eligible Institution in the name of the Collateral Agent
as a Securities Account under, and as defined in, the Security Agreement (except
with respect to any demand deposit account, which shall not be a Securities
Account), (b) a deposit or other account maintained on the books and records of
an Eligible Institution in the name of an ACS Bermuda Group Member as a
Non-Agent Account, in compliance with the terms of the Security Agreement and
(c) the Irish VAT Refund Account and the Irish Rental Account.

     

    “Eligible Institution”
means (a) Calyon New York Branch; (b) any Irish Bank in respect of the
Irish VAT Refund Account and the Irish Rental Account or other bank not
organized under the laws of the United States of America or any state thereof or
the District of Columbia (or any branch of a foreign bank licensed under any
such laws) so long as it has either (i) a long-term unsecured debt rating
of A or better by Standard & Poor’s or A2 or better by Moody’s or
(ii) a short-term unsecured debt rating of A-1+ by Standard & Poor’s
and P-1 by Moody’s; and (c) Deutsche Bank Trust Company Americas, in its
capacity as the Operating Bank or any bank organized under the laws of the
United States of America or any state thereof, or the District of Columbia (or
any branch of a foreign bank licensed under any such laws) appointed as the
Operating Bank in respect of any Eligible Account, so long as it (i) has
either (A) a long-term unsecured debt rating of AA or better by Standard
& Poor’s or Aa2 or better by 

     

    
      
        
        

      

      
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    Moody’s
by each Rating Agency or (B) a short-term unsecured debt rating of A-l+ by
Standard & Poor’s and P-1 by Moody’s and (ii) can act as a securities
intermediary under the New York Uniform Commercial Code, including a Person
providing an Eligible Liquidity Facility so long as such Person shall otherwise
so qualify and shall have waived all rights of set-off and counterclaim with
respect to the account to be maintained as an Eligible Account.

     

    “Eligible Liquidity
Facility” means (a) the Liquidity Facility or (b) any credit
agreement, letter of credit, guarantee, credit or liquidity enhancement facility
or other liquidity facility provided by, or guaranteed by a further such
liquidity facility provided by, an Eligible Provider in favor of any ACS Group
Member and that is, in any such case, subject to the lien of the Security
Agreement and designated by a Board Resolution and Guarantor Board Resolution as
an Eligible Liquidity.

     

    “Eligible Provider”
means a Person (other than any ACS Group Member or any Affiliate thereof) whose
credit rating satisfies the Threshold Rating or who is otherwise designated as
an Eligible Provider by the Board and Guarantor Board subject to the prior
written consent of the Facility Agent.

     

    “Employee Benefit
Plan” means any employee benefit plan within the meaning of
Section 3(3) of ERISA, whether or not covered by ERISA and in respect
of which any Guarantor or any Borrower or any of their respective ERISA
Affiliates is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

     

    “Encumbrance” has the
meaning given to such term in Section 5.02(b) hereof.

     

    “Engine” means each
engine installed (or constituting a spare for an engine installed) on any ACS
Group Aircraft, including any engine replacing a previously installed engine
under the relevant ACS Group Lease, and any and all Parts incorporated in,
installed on or attached to any such engine.

     

    “Environmental Laws”
means any federal, state or local statute, law, ordinance, code, rule,
regulation, order, decree, permit or license regulating, relating to, or
imposing liability or standards of conduct concerning, any environmental matters
or conditions, environmental protection or conservation, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization Act of
1986, as amended; the Resource Conservation and Recovery Act, as amended; the
Toxic Substances Control Act, as amended; the Clean Air Act, as amended; the
Clean Water Act, as amended; together with all regulations promulgated
thereunder, and any other “Superfund” or “Superlien” law.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and the regulations promulgated and the rulings issued thereunder.

     

    “ERISA Affiliate”
means an entity, whether or not incorporated, that is under common control with
any ACS Group Member within the meaning of Section 4001 of ERISA or is part
of a group that includes any ACS Group Member and that is treated as a single
employer within the meaning of Section 414 of the Code.

     

    
      
        
        

      

      
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    “Eurodollar Rate” has
the meaning given to such term in the Credit Agreement.

     

    “Event of Default” has
the meaning, with respect to the Loans or Class E Securities, given to such term
in Section 4.01 hereof.

     

    “Excluded Accounts”
has the meaning given to such term in the Security Agreement.

     

    “Excluded Aircraft”
means each of the aircraft identified in Schedule 7 hereto.

     

    “Excluded Leases” has
the meaning given to such term in the Security Agreement.

     

    “Expense Account” has
the meaning given to such term in Section 3.01(a) hereof.

     

    “Expenses” means,
collectively, any fees, costs or expenses Incurred by an ACS Group Member in the
course of the business activities permitted under Section 5.02(e),
including, without limitation, (i) any fees, expenses and indemnification
amounts (including, without limitation, any and all claims, expenses,
obligations, liabilities, losses, damages and penalties) of, or owing to, the
Facility Agent, any Director, any Guarantor Director, the Collateral Agent, the
Operating Bank, the Charitable Trustee, and any other Service Provider,
(ii) any premiums on the liability insurance required to be maintained for
the benefit of the Directors and the Guarantor Directors, (iii) all Taxes
payable by the ACS Group Members by reason of the business activities permitted
under Section 5.02(e) and the other activities described in and permitted
under the Related Documents, (iv) any Liquidity Facility Expenses, (v) any
payment obligation (including, without limitation, any indemnity payments) or
other amount payable by any ACS Group Member to any lessee pursuant to a Lease,
and (vi) (subject to a limit of 2% of the average monthly Rental Payments with
respect to the relevant ACS Group Aircraft (or other amount approved by a Board
Resolution or Guarantor Board Resolution, as applicable, with the prior written
consent of the Facility Agent with respect thereto) with respect to each ACS
Group Subsidiary entitled thereto), the shortfall between Rental Payments
received by or on behalf of such ACS Group Subsidiary in respect of an ACS Group
Lease of an ACS Group Aircraft and the amount payable by such ACS Group
Subsidiary, as head lease rent with respect of such ACS Group Aircraft, to
another ACS Group Member; provided, however, that, except as
expressly provided herein, Expenses shall not include (i) any amount payable on
the ACS Group Loans, the Class E Securities or under any Hedge Agreement, any
Special Indemnity Payment or any Liquidity Facility Advance Obligations or (ii)
to the extent there would otherwise be a deduction for an Expense of an amount
already deducted in the determination of “Collections”, any expense referred to
in clause (d) of the definition of “Collections”.

     

    “Facility Agent” means
the Person appointed, at the time of determination, as the Facility Agent in
accordance with the Credit Agreement.  The initial Facility Agent is
Calyon, acting through its New York Branch.

     

    “Federal Funds Rate”
has the meaning given to such term in the Credit Agreement.

     

    “Fee Letter” means the
fee letter between Calyon New York Branch and Aircastle Limited dated March 31,
2008.

     

    
      
        
        

      

      
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    “Final Drawing” has
the meaning given to such term in Section 3.10(h) hereof.

     

    “Final Maturity Date”
means the seventh anniversary of the Initial Closing Date.

     

    “Future Lease” means,
with respect to each Aircraft, any aircraft lease agreement as may be in effect
at any time after the relevant Closing Date between an ACS Bermuda Group Member
and a Person not an ACS Bermuda Group Member (as lessee or purchaser), in each
case other than any Initial Lease; provided that if, under any
sub-leasing arrangement with respect to an Aircraft, the lessor thereof agrees
to receive payments or collateral directly from, or is to make payments directly
to, the sub-lessee in any such case to the exclusion of the related Lessee, then
the relevant sub-lease shall constitute the “Lease”, and the sub-lessee shall
constitute the related “Lessee” with respect to such Aircraft, but only to the
extent of the provisions of such sub-lease agreement relevant to such payments
and collateral and to the extent agreed by the relevant lessor.

     

    “Governmental
Authority” means any Federal, state, municipal, national or other
government (whether foreign or domestic and including the European Union) or
governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state or local government of the U.S., the U.S., or a foreign
entity or foreign government.

     

    “guarantee” has the
meaning given to such term in Section 5.02(f) hereof.

     

    “Guarantee” has the
meaning given to such term in Section 7.01 hereof.

     

    “Guaranteed
Obligations” has the meaning given to such term in Section 7.01
hereof.

     

    “Guaranteed Parties”
has the meaning given to such term in Section 7.01 hereof.

     

    “Guarantor” has the
meaning given to such term in the preamble hereof.

     

    “Guarantor Aircraft”
means as of any time each of the aircraft identified in Schedule 1 to the
Guarantor Intercreditor Agreement (including any related Engines and Parts and
any Guarantor Remaining Aircraft) and any Substitute Aircraft, excluding any
such aircraft (or related Aircraft Interest) sold or disposed of (directly or
indirectly) by way of a completed Aircraft Sale and any Guarantor Remaining
Aircraft (i) for which a Substitute Aircraft is Delivered or (ii) which is not
Delivered by the Delivery Expiry Date to the Guarantor.

     

    “Guarantor Aircraft
Agreement” means any lease, sublease, conditional sale agreement, finance
lease, hire purchase agreement or other agreement (other than an agreement
relating to maintenance, modification or repairs) or any purchase option (other
than a Purchase Option granted to an ACS Ireland Group Member) to purchase a
Guarantor Aircraft, in each case pursuant to which any Person acquires or is
entitled to acquire legal title to, or the economic benefits of ownership of,
such Guarantor Aircraft.

     

    
      
        
        

      

      
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    “Guarantor Aircraft
Conversion” has the meaning given to “Aircraft Conversion” in Section
5.02(i) of the Guarantor Intercreditor Agreement.

     

    “Guarantor Board”
means the board of directors of the Guarantor.

     

    “Guarantor Board
Resolution” means a copy of a resolution certified as having been duly
adopted by the Guarantor Board and being in full force and effect on the date of
such certification.

     

    “Guarantor Conversion
Payments” has the meaning given to “Conversion Payments” in Section
5.02(i) of the Guarantor Intercreditor Agreement.

     

    “Guarantor Director”
means a member of the board of directors of the Guarantor.

     

    “Guarantor Future
Lease” means, with respect to each Guarantor Aircraft, any aircraft lease
agreement as may be in effect at any time after the relevant Closing Date
between an ACS Ireland Group Member and a Person not an ACS Ireland Group Member
(as lessee or purchaser), in each case other than any Guarantor Initial Lease;
provided that if, under
any sub-leasing arrangement with respect to a Guarantor Aircraft, the lessor
thereof agrees to receive payments or collateral directly from, or is to make
payments directly to, the sub-lessee in any such case to the exclusion of the
related Lessee, then the relevant sub-lease shall constitute the “Guarantor
Lease”, and the sub-lessee shall constitute the related “Lessee” with respect to
such Guarantor Aircraft, but only to the extent of the provisions of such
sub-lease agreement relevant to such payments and collateral and to the extent
agreed by the relevant lessor.

     

    “Guarantor Individual
Aircraft Commitment Amount” means, with respect of any Aircraft, the
“Commitment Amount” specified for such Aircraft on Schedule 3 to the Guarantor
Intercreditor Agreement.

     

    “Guarantor Initial
Lease” means, with respect to each Guarantor Aircraft, each aircraft
lease agreement, conditional sale agreement, hire purchase agreement or other
similar arrangement subject to a written agreement with respect to such
Guarantor Aircraft in existence as of the date of this Intercreditor Agreement
that is listed in Schedule 7 to the Guarantor Purchase Agreement or with respect
to any Substitute Aircraft, each aircraft lease agreement, conditional sale
agreement, hire purchase agreement or other similar arrangement subject to a
written agreement with respect to such Substitute Aircraft in existence as of
the relevant Acquisition Date with respect to such Substitute Aircraft, as such
agreement or arrangement may be amended, modified, extended, supplemented,
assigned or novated from time to time.

     

    “Guarantor Intercreditor
Agreement” means the intercreditor agreement dated as of the Initial
Closing Date among the Guarantor as borrower of the Guarantor Loans issued
thereunder, the Borrower, as guarantor of the Guarantor Loans issued thereunder,
Aircastle Advisor LLC as the Administrative Agent, Calyon, acting through its
New York Branch as the Facility Agent, the Collateral Agent and the Liquidity
Facility Provider, DBTCA as the Operating Bank.

     

    
      
        
        

      

      
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    “Guarantor Leases”
means the Guarantor Initial Leases and the Guarantor Future Leases.

     

    “Guarantor Loans”
means all Loans advanced to the Guarantor pursuant to Section 2.1 of the Credit
Agreement.

     

    “Guarantor Modification
Payments” has the meaning given to “Modification Payments” in
Section 5.02(i) of the Guarantor Intercreditor Agreement.

     

    “Guarantor Ownership
Interest” has the meaning given to “Ownership Interest” in
Section 5.02(b) of the Guarantor Intercreditor Agreement.

     

    “Guarantor Purchase
Agreement” means the purchase agreement dated as of the Initial Closing
Date between the Irish Seller and the Guarantor.

     

    “Guarantor Remaining
Aircraft” has the meaning given to such term in the Purchase Agreement or
the Guarantor Purchase Agreement, as applicable.

     

    “Guarantor Repayment”
has the meaning given to “Repayment” in Section 3.09(a) of the Guarantor
Intercreditor Agreement.

     

    “Guarantor Repayment
Date” means the date, which shall in each case be a Payment Date, on
which Guarantor Loans are repaid pursuant to Section 3.09 of the Guarantor
Intercreditor Agreement.

     

    “Guarantor Repayment
Price” has the meaning given to “Repayment Price” in the Guarantor
Intercreditor Agreement.

     

    “Hazardous Material”
means and includes any pollutant, contaminant, or hazardous, toxic or dangerous
waste, substance or material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling, storage,
transportation, disposal, treatment, release, discharge or emission of which is
subject to any Environmental Law.

     

    “Hedge Agreement”
means any interest rate or currency hedge, swap, cap, floor, Swaption, or other
interest rate or currency hedging agreement between the applicable ACS Group
Member and any Hedge Provider existing on the Initial Closing Date (including
the Initial Hedge Agreements) or entered into in accordance with
Section 5.02(e)(iv) hereof.

     

    “Hedge Breakage Costs”
means any amounts payable by any ACS Group Member to a Hedge Provider as a
result of any early termination (however described or defined therein) of any
Hedge Agreement.

     

    “Hedge Guarantee” has
the meaning given to such term in any Hedge Agreement.

     

    “Hedge Payment” means
a net payment to be made by a Hedge Provider into the Collections Account under
a Hedge Agreement and includes any such payment made by a guarantor under any
related Hedge Guarantee or any termination payment received from any counterparty
to a Hedge Agreement.

     

    
      
        
        

      

      
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    “Hedge Provider” means
any counterparty to any ACS Group Member under any Hedge Agreement.

     

    “Hedge Termination
Payments” means any amounts payable by any ACS Group Member to a Hedge
Provider (including Hedge Breakage Costs) due to an early termination of the
related Hedge Agreement.

     

    “Holder” means (a) in
the case of any ACS Group Loan any Person in whose name an ACS Group Loan is
registered from time to time in the Register for such Indebtedness and (b) in
the case of any Class E Security, any Person who is the holder of such Class E
Security.

     

    “Incur” has the
meaning given to such term in Section 5.02(f) hereof.

     

    “Indebtedness” means,
with respect to any Person at any date of determination (without duplication),
(a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto), (d) all the obligations of such Person
to pay the deferred and unpaid purchase price of property or services, which
purchase price is due more than six months after the date of purchasing such
property or service or taking delivery and title thereto or the completion of
such services, and payment deferrals arranged primarily as a method of raising
finance or financing the acquisition of such property or service, (e) all
obligations of such Person under a lease of (or other agreement conveying the
right to use) any property (whether real, personal or mixed) that is required to
be classified and accounted for as a capital lease obligation under U.S. GAAP,
(f) all Indebtedness of other Persons secured by a lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person, and
(g) all Indebtedness of other Persons guaranteed by such
Person.

     

    “Independent Director”
means a Person that is not at the time of his appointment or at any time when
such Person is serving as an Independent Director and has not been for the five
years prior to its appointment as an Independent Director (i) an employee,
officer, director, consultant, customer or supplier, or the beneficial holder
(directly or indirectly) of more than 5% of any Ownership Interest, of any
Aircastle Related Entity; provided, however, that any such
Person may serve as a trustee, manager or director of another special purpose
vehicle that is an Affiliate of the Borrower or Aircastle Limited, or
(ii) except in the case of Joe Clarkin, a spouse of, or Person related to
(but not more remote than first cousins), a Person referred to in
(i) above.

     

    “Individual Aircraft
Commitment Amount” means, with respect of any Aircraft, the “Commitment
Amount” specified for such Aircraft on Schedule 3 to this Intercreditor
Agreement.

     

    “Initial Appraised
Value” means, with respect to each Aircraft, the “Initial Appraised
Value” set forth on Schedule 3 of this Intercreditor Agreement and, in the case
of any Substitute Aircraft, the Base Value established by the Appraiser for such
Substitute Aircraft as of a date not more than six months prior to the date of
the delivery of such Substitute Aircraft.

     

    
      
        
        

      

      
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    “Initial Closing Date”
means the Closing Date (as such  term is defined in the Credit
Agreement).

     

    “Initial Expenses”
means Expenses related to the issuance of the ACS Group Loans, the Class E
Securities and the acquisition of the ACS Group Aircraft (other than Expenses
related to the acquisition of the Remaining Aircraft incurred after the Initial
Closing Date).

     

    “Initial Hedge
Agreements” means each initial ISDA Master Agreement in form and
substance reasonably satisfactory to the Facility Agent between the Borrower and
an initial Hedge Provider.

     

    “Initial Hedge
Schedule” means the Schedule to each initial ISDA 2002 Master Agreement
in form and substance reasonably satisfactory to the Facility Agent between an
initial Hedge Provider and the Borrower.

     

    “Initial Holders”
means (a) the “Lenders” party to the Credit Agreement and (b) each Person
whose name a Class E Security is initially registered in the Class E Security
Authenticator.

     

    “Initial Lease” means,
with respect to each Aircraft, each aircraft lease agreement, conditional sale
agreement, hire purchase agreement or other similar arrangement subject to a
written agreement with respect to such Aircraft that is in existence as of the
date of this Intercreditor Agreement listed in Schedule 7 to the Purchase
Agreement or with respect to any Substitute Aircraft , each aircraft lease
agreement, conditional sale agreement, hire purchase agreement or other similar
arrangement subject to a written agreement with respect to such Substitute
Aircraft in existence as of the relevant Acquisition Date with respect to such
Substitute Aircraft, as such agreement or arrangement may be amended, modified,
extended, supplemented, assigned or novated from time to time.

     

    “Initial Outstanding
Balance” means, (a) with respect to the Loans, $713,769,142.07,
(b) with respect to the Guarantor Loans, $72,365,857.93, and (c) with
respect to the Class E Securities the initial Outstanding Principal Balance
thereof on the date of issuance of such Class E Securities.

     

    “Insolvency
Proceeding” means any proceeding of the type referred to in
Section 4.01(f) or (g) hereof in respect of the Borrower.

     

    “Intercompany Loan”
has the meaning given to such term in Section 5.02(f)(vi)
hereof.

     

    “Intercreditor
Agreement” has the meaning given to such term in the preamble
hereof.

     

    “Interest Amount”
means, with respect to the ACS Group Loans, on any Payment Date, (a) the amount
of interest accrued and unpaid to such Payment Date at the Stated Rate of
Interest with respect to the ACS Group Loans for the Interest Period ending on
such Payment Date, plus (b) the amount of interest accrued to such Payment
Date at the Default Rate on any Interest
Amount due but not paid on any prior Payment Date.

     

    
      
        
        

      

      
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    “Interest Period”
means, each of the following periods: (a) the period commencing on (and
including) the Initial Closing Date and ending on (but excluding) the first
Payment Date thereafter and (b) each successive period beginning on (and
including) a Payment Date and ending on (but excluding) the next succeeding
Payment Date; provided
that the final “Interest Period” with respect to the ACS Group Loans or the
Class E Securities, as the case may be, shall end on but exclude the date such
ACS Group Loans or the Class E Securities, as the case may be, are repaid in
full.  Account balances with respect to each “Interest Period” ending
on a Payment Date shall be determined by reference to the balances of funds on
deposit in the Accounts as of the close of business on the Calculation Date
immediately preceding such Payment Date.

     

    “Investment” has the
meaning given to such term in Section 5.02(c) hereof.

     

    “Investment Earnings”
means investment earnings on funds on deposit in any Account net of losses and
investment expenses of the Administrative Agent in making such
investments.

     

    “Irish Account Charge”
has the meaning given to such term in Section 3.01(a) hereof.

     

    “Irish Bank” means any
bank duly authorized under the laws of Ireland.

     

    “Irish Parent” means
Rogallo Limited, a holding company incorporated under the laws of Ireland which
beneficially owns 95% of the issued shares of the Borrower.

     

    “Irish Remarketing
Servicer” means the Person acting, at the time of determination, in the
capacity of the remarketing servicer under the Irish Remarketing Services
Agreement.  The initial Irish Remarketing Servicer is Aircastle
Advisor (Ireland) Limited.

     

    “Irish Remarketing Services
Agreement” means the Remarketing Services Agreement dated as of the
Initial Closing Date among the Irish Remarketing Servicer, the Borrower, the
Guarantor, the Facility Agent and the Administrative Agent.

     

    “Irish Rental Account”
has the meaning given to such term in Section 3.01(a) hereof.

     

    “Irish Secretarial Services
Provider” means the Person providing, at the time of determination,
secretarial services to the Guarantor under the secretarial services letter with
the Guarantor dated as of the Initial Closing Date (or any successor
agreement).  The initial Irish Secretarial Services Provider is
Goodbody Secretarial Limited.

     

    “Irish Seller” means
Aircastle Ireland No. 1 Limited.

     

    “Irish VAT Refund
Account” has the meaning given to such term in Section 3.01(a)
hereof.

     

    
      
        
        

      

      
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    “Leases” means the
Initial Leases and the Future Leases.

     

    “Lender” has the
meaning given to such term in the Credit Agreement.

     

    “Lessee” means each
Person who is the lessee of an ACS Group Aircraft from time to time leased from
an ACS Group Member pursuant to an ACS Group Lease.

     

    “Lessee Funded
Account” has the meaning given to such term in Section 3.01(a)
hereof.

     

    “Letter Agreement”
means the letter agreement dated as of the Initial Closing Date among Aircastle
Limited, Aircastle Holding Corporation Limited, Aircastle Ireland Holding
Limited and Aircastle Investment Holdings 2 Limited, as consented to and agreed
to by the Borrower, the Guarantor and the Facility Agent.

     

    “LIBOR Break Costs”
has the meaning given to such term in the Credit Agreement.

     

    “Liquidity Facility”
means the revolving credit agreement dated as of the Initial Closing Date among
the Liquidity Facility Provider, the Borrower, the Guarantor and the
Administrative Agent, as amended, supplemented or otherwise modified from time
to time in accordance with its terms and as so replaced and so designated
pursuant to Section 3.10(e)(iii) hereof.

     

    “Liquidity Facility Advance
Obligations” means all Liquidity Facility Obligations other than (i)
Liquidity Facility Expenses and (ii) Special Indemnity Payments.

     

    “Liquidity Facility
Amount” means, on the Closing Date, $15,804,200 and for any date of
determination thereafter, an amount equal to 2% of the then Outstanding
Principal Balance of the ACS Group Loans.

     

    “Liquidity Facility
Drawing” has the meaning given to such term in Section 3.10(a)
hereof.

     

    “Liquidity Facility Event of
Default” has the meaning given to such term in the Liquidity
Facility.

     

    “Liquidity Facility
Expenses” means all Liquidity Facility Obligations other than (i) the
principal amounts under, or the principal amount of any drawings under, any
Eligible Liquidity Facility, (ii) interest accrued on Liquidity Facility
Obligations and (iii) Special Indemnity Payments to the Liquidity Facility
Provider.

     

    “Liquidity Facility Interest
Shortfall” has the meaning given to such term in Section 3.06(f)
hereof.

     

    “Liquidity Facility
Non-Consent Event” means the occurrence of the following: (i) the
termination of the Liquidity Facility and (ii) the payment of all Liquidity
Facility Obligations owed to the Liquidity Facility Provider in
full.

     

    
      
        
        

      

      
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    “Liquidity Facility
Obligations” means all principal, interest, fees and other amounts
(including indemnity payments or expenses or costs incurred by the providers of
Eligible Liquidity Facilities) owing to the providers of Eligible Liquidity
Facilities.

     

    “Liquidity Facility
Provider” means Calyon, acting through its New York Branch or any
provider of an Eligible Liquidity Facility so designated by a Board Resolution
and a Guarantor Board Resolution.

     

    “Liquidity Facility Reserve
Account” has the meaning given to such term in Section 3.01(a)
hereof.

     

    “Liquidity Payment
Account” has the meaning given to such term in Section 3.01(a)
hereof.

     

    “Loans” means,
collectively, all Loans advanced to the Borrower pursuant to Section 2.1 of the
Credit Agreement.  The aggregate principal amount of Loans advances
pursuant to the Credit Agreement shall not exceed the Total Credit
Commitment.

     

    “Loans Account” has
the meaning given to such term in Section 3.01(a) hereof.

     

    “Maintenance Reimbursement
Expenditure” means any expenditure in respect of which Maintenance
Reserves, lessor airworthiness directive cost sharing amounts, or other lessor
maintenance contributions are payable under a Lease of a Delivered Aircraft and
which is not, under the terms of the relevant Lease, to be paid out of
Segregated Funds.

     

    “Maintenance Reserve
Account” has the meaning given to such term in Section
3.01(a).

     

    “Maintenance Reserves”
means rent (whether called maintenance reserves, additional rent, supplemental
rent, utilization rent or any similar term) that is in addition to a base rent
for the Aircraft (regardless of how such base rent is calculated) payable under
a Lease based on hours or cycles of operation of the airframe, engines,
life-limited engine parts, landing gear and/or auxiliary power unit of an
Aircraft, with respect to maintenance of which the lessor under the Lease
customarily has a maintenance contribution obligation measured in part by or
with reference to such Maintenance Reserves.

     

    “Material Adverse
Effect” means a material adverse effect on (i) the ability of the
ACS Group Members, taken as a whole, to pay or perform their respective
obligations, liabilities and Indebtedness under the Related Documents as such
payment or performance becomes due in accordance with the terms thereof, or
(ii) the rights, powers and remedies of the Facility Agent or any Holder of
any Loan under any Related Document or the validity, legality or enforceability
thereof.

    

     

    “Material Hedge Agreement
Terms” means events of default, termination events, additional
termination events, Facility Agent consent rights to amendments, assignments and
transfers, provisions relating to the obligation of the Hedge Provider to any
ACS Group Member to post collateral, find a replacement counterparty or take
other remedial action upon a downgrade
in its credit rating (together with the associated ratings thresholds) and any
provision stating that the Facility Agent is an intended third-party
beneficiary.

     

    
      
        
        

      

      
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22 -

        
          

        

      

      
        
        

      

    

     

    “Maximum Commitment”
has the meaning given to such term in the Liquidity Facility.

     

    “Modification Payment”
has the meaning given to such term in Section 5.02(i) hereof.

     

    “Monthly Principal Payment
Amount” means, in respect of each Aircraft, the amount set forth under
“Monthly Principal Payment Amount” opposite the description of such Aircraft on
Schedule 3.

     

    “Monthly Report” has
the meaning given to such term in Section 2.11(a) hereof.

     

    “Moody’s” means
Moody’s Investors Service, Inc.

     

    “Multiemployer Plan”
means an Employee Benefit Plan that is a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which any ACS Group Member or any ERISA
Affiliate thereof is making, or is accruing an obligation to make, contributions
or has made, or been obligated to make, contributions within the preceding six
(6) Fiscal Years.

     

    “Net Allocation
Amount” means, for any Remaining Aircraft, an amount equal to the
Aircraft Allocation Amount for such Remaining Aircraft less the aggregate amount
of any Monthly Principal Payment Amounts previously transferred pursuant to
Section 3.07(j) hereof.

     

    “Net Maintenance Reserves
Amount” means, with respect to any ACS Group Aircraft, an amount equal to
the difference (if positive) between the aggregate of all payments constituting
Maintenance Reserves from the applicable Lessee in respect of such Aircraft paid
to the relevant Seller on or after the Initial Closing Date and the amount of
Maintenance Reimbursement Expenditures paid by the relevant Seller on or after
the Initial Closing Date.

     

    “Net Sale Proceeds”
means, with respect to any sale or other disposition of any assets, the
aggregate amount of cash received by or on behalf of the seller on or prior to
the date of such sale or other disposition in connection with such transaction
after deducting therefrom (without duplication) (a) reasonable and customary
brokerage commissions and other similar fees and commissions (including fees
received by the Bermudian Remarketing Servicer under the Bermudian Remarketing
Services Agreement) and (b) the amount of Taxes payable in connection with or as
a result of such transaction, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of such cash,
actually paid to a Person that is not an Affiliate of the seller and are
properly attributable to such transaction or to the asset that is the subject
thereof.

     

    “Non-Agent Account”
has the meaning given to such term in Section 3.01(g) hereof.

     

    “Non-Delivery Event”
has the meaning given to such term in Section 3.05(b) hereof.

     

    
      
        
        

      

      
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    “Non-Extended
Facility” has the meaning given to such term in Section 3.10(c)
hereof.

     

    “Non-Extension
Drawing” has the meaning given to such term in Section 3.10(c)
hereof.

     

    “Non-Significant
Subsidiary” means a direct or indirect subsidiary of the Borrower or
Guarantor with respect to which an order or decree described in Section 4.01(f)
has been entered or an event described in Section 4.01(g) or 4.01(h) has
occurred if, as of the date of the entry of such order or decree or of such
event, as the case may be, such subsidiary does not own or lease any ACS Group
Aircraft.

     

    “Note” means each note
evidencing a Loan issued pursuant to Section 2.02(a) hereof.

     

    “Notices” has the
meaning given to such term in Section 8.05 hereof.

     

    “Obligations” means
the Secured Obligations and payments to be made to either the Borrower or any
Holder of a Class E Security or any Shareholder under Section 3.08
hereof.

     

    “OFAC” means the
United States Department of Treasury Office of Foreign Assets
Control.

     

    “OFAC Laws” means any
laws, regulations, and Executive Orders relating to the economic sanctions
programs administered by OFAC, including without limitation, the International
Emergency Economic Powers Act, 50 U.S.C. sections 1701 et seq.; the Trading with the
Enemy Act, 50 App. U.S.C. sections 1 et seq.; and the Office of
Foreign Assets Control, Department of the Treasury Regulations, 31 C.F.R. Parts
500 et seq.
(implementing the economic sanctions programs administered by
OFAC).

     

    “OFAC SDN List” means
the list of “Specially Designated Nationals and Blocked Persons” maintained by
OFAC.

     

    “OFAC Violation” has
the meaning assigned to such term in Section 5.02(t)(v) hereof.

     

    “Officer’s
Certificate” means a certificate signed by, with respect to the Borrower,
any Director and, with respect to any other Person, any authorized officer,
director, executive, trustee or equivalent representative.

     

    “Operating Bank” means
the Person acting, at the time of determination, as the Operating Bank under the
Security Agreement.  The initial Operating Bank is DBTCA.

     

    “Optional Repayment”
means a whole or partial Repayment of Loans pursuant to Section 3.09(a)
hereof.

     

    
      
        
        

      

      
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    “Outstanding” means on
any date of determination (a) with respect to the ACS Group Loans, all or a
portion of such ACS Group Loans that remain unpaid and (b) with respect to the
Class E Securities, all Class E Securities theretofore authenticated and
delivered by the Facility Agent, except any such Class E Securities cancelled
by, or delivered for cancellation to, the Facility Agent.

     

    “Outstanding Principal
Balance” means, (a) with respect to any ACS Group Loans, the total
principal amount of such ACS Group Loans unpaid and outstanding at any time as
determined in accordance with Section 3.06 hereof and Section 3.06 of
the Guarantor Intercreditor Agreement and (b) with respect to any Class E
Securities, the total principal amount evidenced by such Class E Securities
unpaid and outstanding at any time as determined in accordance with Section 3.06
of the Guarantor Intercreditor Agreement.

     

    “Ownership Interest”
has the meaning given to such term in Section 5.02(b) hereof.

     

    “Part” means any part,
component, appliance, accessory, instrument or other item of equipment (other
than any Engine) installed in or attached to (or constituting a spare for any
such item installed in or attached to) any ACS Group Aircraft (other than any
Engine).

     

    “Partial Loss” means,
with respect to any ACS Group Aircraft, any event or occurrence of loss, damage,
destruction or the like which is not a Total Loss.

     

    “Partial Loss
Proceeds” means, with respect to any ACS Group Aircraft, the total
proceeds of the insurance or reinsurance (other than in respect of liability
insurance) paid in respect of any Partial Loss to any ACS Group
Member.

     

    “Payment Date” means
the 10th day of each month, commencing on June 10, 2008; provided that (a) if any
Payment Date would otherwise fall on a day that is not a Business Day, such
Payment Date shall be the first following day that is a Business Day and (b) the
Payment Date in May 11, 2015 shall be the Final Maturity Date.

     

    “PBGC” means the
Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title
IV of ERISA and any successor thereto.

     

    “Permitted Account
Investments” means, in each case, book-entry securities, negotiable
instruments or securities in bearer or registered form that
evidence:

     

    (a)  direct
obligations of, and obligations fully guaranteed as to timely payment by, the
United States of America (having original maturities of no more than 365 days,
or such lesser time as is required for the distribution of funds);

     

    (b)  demand
deposits, time deposits or certificates of deposit of the Operating Bank or of
depository institutions or trust companies organized under the laws of the
United States of America or any state thereof, or the District of Columbia (or
any domestic branch of a foreign bank) (i) having original maturities of no
more than 365 days, or such lesser time as is required for the distribution of
funds; provided that at
the time of Investment or contractual commitment to invest therein, the
short-term debt rating of such depository institution or trust 

     

    
      
        
        

      

      
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    company
shall be at least A-1 by Standard & Poor’s, P-1 by Moody’s or
(ii) having maturities of more than 365 days and, at the time of the
Investment or contractual commitment to invest therein, a rating of AA by
Standard & Poor’s and Aa2 by Moody’s; provided that, during any
applicable period, not more than 20% of the Borrowers’ aggregate Permitted
Account Investments may be made in investments described under this clause
(b);

     

    (c)  corporate
or municipal debt obligations (including, without limitation, commercial paper)
(i) having remaining maturities of no more than 365 days, or such lesser time as
is required for the distribution of funds, having, at the time of the Investment
or contractual commitment to invest therein, a rating of at least A-1+ or AA by
Standard & Poor’s and P-1 or Aa2 by Moody’s or (ii) having maturities
of more than 365 days and, at the time of the Investment or contractual
commitment to invest therein, a rating of AA by Standard & Poor’s and Aa2 by
Moody’s;

     

    (d)  Investments
in money market funds (including funds in respect of which the Facility Agent or
the Operating Bank or any of their Affiliates is investment manager or advisor)
having a rating of at least AA by Standard & Poor’s and Aa2 by Moody’s;
or

     

    (e)  notes
or bankers’ acceptances (having original maturities of no more than 365 days, or
such lesser time as is required for the distribution of funds) issued by any
depository institution or trust company referred to in (b) above;

     

    provided, however, that no Investment
shall be made in any obligations of any depository institution or trust company
which has a contractual right to set off and apply any deposits held, and other
indebtedness owing, by any ACS Group Member to or for the credit or the account
of such depository institution or trust company; provided further that if, at any time,
the rating of any of the foregoing investments falls below “BBB” by Standard
& Poor’s or “Baa2” by Moody’s, such downgraded investment shall no longer
constitute a “Permitted Account Investment”.

     

    “Permitted Accruals”
has the meaning given to such term in Section 3.08(a) hereof and in Section
3.08(a) of the Guarantor Intercreditor Agreement.

     

    “Permitted
Encumbrance” has the meaning given to such term in Section 5.02(b)
hereof.

     

    “Permitted Maintenance
Reimbursement Expenditure Accrual” means, with respect to any Payment
Date, the amount of any Maintenance Reimbursement Expenditures that the
Remarketing Servicer reasonably anticipates to be payable by any ACS Group
Member before the third succeeding Payment Date the accrual of which the
Remarketing Servicer reasonably believes to be prudent in light of (i) the size
and timing of such Maintenance Reimbursement Expenditure and (ii) the amount of
Maintenance Reserves in, and expected to be collected in, the Maintenance
Reserve Account.

     

    “Person” means any
natural person, firm, corporation, limited liability company, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any political subdivision thereof or any other legal entity,
including public bodies.

     

    
      
        
        

      

      
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    “Pledged Beneficial
Interest” has the meaning given to such term in the Security
Agreement.

     

    “Pledged Debt” has the
meaning given to such term in the Security Agreement.

     

    “Pledged Share” has
the meaning given to such term in the Security Agreement.

    

     “PMREA Shortfall” has
the meaning given to such term in Section 3.06(f).

     

    “Post-Petition
Interest” has the meaning given to such term in Section 6.01(f)
hereof.

     

    “Precedent Lease” has
the meaning given to such term in Section 5.03(e) hereof.

     

    “Premium” means in
respect of any Loan being repaid in an Optional Repayment on any date, the
Premium indicated for such Security with respect to such date in the table
below:

    

    
      	 	
              Repayment
      Date

            	
              Loans

            	 
	 	 
    	 
    	 
	 	
              On
      or after the Initial Closing Date but prior to the date 12 months after
      the Initial Closing Date

            	
              1%

            	 
	 	
              On
      or after the date that is 12 months after the Initial Closing Date but
      prior to the date 24 months after the Initial Closing Date

            	
              0.5%

            	 
	 	
              On
      or after the date that is 24 months after the Initial Closing
      Date

            	
              0%

            	 
	 	 
    	 
    	 

    

     

    “Primary Expenses”
means all Expenses other than ACS Group Modification Payments.

     

    “Prior Ranking
Amounts” has the meaning given to such term in Section 3.08(a)
hereof.

     

    “Prohibited Country”
has the meaning determined, from time to time, in accordance with
Section 5.03(a) hereof.

     

    “Purchase Agreement”
means the Purchase Agreement dated as of the Initial Closing Date between the
Bermudian Sellers and the Borrower.

     

    “Purchase Option”
means a contractual option granted by the lessor or owner under an ACS Group
Aircraft Agreement (including pursuant to a conditional sale agreement) as to
the purchase of the applicable ACS Group Aircraft.

     

    “Qualifying Lender”
means a Lender, which is beneficially entitled to the interest payable on a Loan
and which is:

     

     

    
      
        
        

      

      
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    (a)           an
entity which is, pursuant to Section 9 of the Central Bank Act, 1971 of
Ireland, licensed to carry on banking business in Ireland and is located
in Ireland and which is carrying on a bona fide banking business in Ireland for
the purposes of Section 246(3)(a) of the Taxes Act except where such interest is
paid to that entity in connection with a trade or business which is carried on
outside Ireland by the entity through a branch or agency; or

     

    (b)           an
authorized credit institution under the terms of the Codified Banking Directive
that has duly established a branch in Ireland or has made all necessary
notifications to its home state competent authorities required thereunder in
relation to its intention to carry on banking business in Ireland and carries on
a bona fide banking business in Ireland for the purposes of Section 246(3)(a) of
the Taxes Act and is located in Ireland and the lending is made through the
branch of the authorized credit institution in Ireland; or

     

    (c)           a
company (within the meaning of Section 4 of the Taxes Act) which is a resident
of a territory (other than Ireland) with which Ireland has a double taxation
treaty (under the terms of that treaty) or which is resident in a member state
of the European Communities (other than Ireland) (as residency is defined under
the laws of that member state) provided such company does not provide its
Commitment through or in connection with a branch or agency in Ireland and
provided further that where the Lender is:

     

    (i)           a
company incorporated under United States law or in a State of the United States
and where the Lender has provided written confirmation to the Borrower that it
is incorporated in the United States and taxed in the United States on its
worldwide income; or

     

    (ii)           an
LLC established under the laws of a State of the United States where the
ultimate recipients of the interest have provided written confirmation to the
Borrower that they themselves would qualify for exemption from withholding tax
in respect of the payment of such interest under Section 246(3)(ccc) or
246(3)(h) of the Taxes Act and that the business is conducted through the LLC
for market reasons and not for tax avoidance purposes; or

     

    (d)           a
company (within the meaning of Section 4 of the Taxes Act):

     

    (i)           which
advances money in the ordinary course of a trade which includes the lending of
money, and

     

    (ii)           in
whose hands any interest payable in respect of monies so advanced is taken into
account in computing the trading income of such Borrower;

     

    (iii)           which
has made the appropriate notifications under Section 246(5)(a) of the Taxes Act
to the Irish Revenue Authorities and the Company; or

     

    
      
        
        

      

      
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    (e)           a
qualifying company within the meaning of Section 110 of the Taxes Act where such
Lender has given written confirmation of the foregoing to the
Borrower.

     

    “Quarter” has the
meaning given to such term in the Administrative Agency Agreement.

     

    “Quarterly Report” has
the meaning given to such term in Section 2.11(b) hereof.

     

    “Received Currency”
has the meaning given to such term in Section 8.07(a) hereof.

     

    “Receiver” means any
Person or Persons appointed as (and any additional Person or Persons appointed
or substituted as) administrative receiver, receiver, manager or receiver and
manager.

     

    “Register” has the
meaning given to such term in the Credit Agreement.

     

    “Regulation” has the
meaning given to such term in Section 2.13 hereof.

     

    “Related Collateral
Document” means any letter of credit, third-party or bank guarantee or
cash collateral provided by or on behalf of a Lessee to secure such Lessee’s
obligations under an ACS Group Lease.

     

    “Related Documents”
means the Administrative Agency Agreement, the Credit Agreement, each Eligible
Liquidity Facility, this Intercreditor Agreement, the Guarantor Intercreditor
Agreement, each Class E Security, each Security Document, each Note, the
Commitment Letter, the Fee Letter, the Remarketing Services Agreements, the ACS
Group Purchase Agreements, the Warehouse Intercreditor Agreement, the Letter
Agreement, any Hedge Agreements and any Hedge Guarantees.

     

    “Re-leasing Expenses”
means, with respect to any period, all out-of-pocket costs and expenses incurred
by the ACS Group in connection with the re-leasing of ACS Group Aircraft during
such period, including but not limited to the following:

     

    (a)    
storage, maintenance, test flight, navigation, landing, ferry flights, shipping,
fuel, reconfiguration, modification, refurbishment and repair expenses incurred
in connection with the re-leasing of such ACS Group Aircraft during such
period;

     

    (b)    
insurance premiums, fees and expenses incurred by or on behalf of the ACS Group
for possessed hull and liability insurance while such ACS Group Aircraft is
off-lease during such period;

     

    (c)    
expenses incurred in connection with the acceptance of delivery, and in
connection with the transition of such ACS Group Aircraft, to such re-lease
during such period; and

     

    (d)    
outside legal counsel fees and expenses and other professional fees and

     

    
      
        
        

      

      
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    expenses,
and all court costs, filing fees, bonding costs and other expenses, and other
governmental fees and costs related to any re-lease of such ACS Group Aircraft
during such period; provided that Re-leasing
Expenses shall not include those expenses against which, under leases that
require Maintenance Reserves to be paid, lessees customarily pay Maintenance
Reserves.

     

    “Relevant Information”
means any information provided to the Administrative Agent by any Service
Provider or any other service provider retained from time to time by an ACS
Group Member pursuant to the Related Documents.

     

    “Remaining Aircraft”
has the meaning given to such term in the Purchase Agreement or the Guarantor
Purchase Agreement, as applicable.

     

    “Remaining Aircraft
Allocation Amount” has the meaning given to such term in
Section 2.09 hereof.

     

    “Remarketing
Servicers” means, collectively, the Irish Remarketing Servicer and the
Bermudian Remarketing Servicer.

     

    “Remarketing Services
Agreements” means, collectively, the Irish Remarketing Services Agreement
and the Bermudian Remarketing Services Agreement.

     

    “Renewal Lease” has
the meaning given to such term in Section 5.03(e) hereof.

     

    “Rental Account” has
the meaning given to such term in Section 3.01(a) hereof.

     

    “Rental Payments”
means all rental payments and other amounts equivalent to a rental payment
payable by or on behalf of a Lessee under an ACS Group Lease, including payments
under any Purchase Option.

     

    “Repayment” has the
meaning given to such term in Section 3.09(a) hereof.

     

    “Repayment Account”
has the meaning given to such term in Section 3.01(a) hereof.

     

    “Repayment Date” means
the date, which shall in each case be a Payment Date, on which the Loans are
repaid in whole or in part pursuant to Section 3.09(a) hereof.

     

    “Repayment Price”
means an amount (determined as of the Calculation Date for the Repayment Date
for any Repayment pursuant to Section 3.09(a) hereof) equal
to:

     

    (a)  with
respect to any Loans being repaid in part the Outstanding Principal Balance
being repaid plus an amount equal to, the product of the applicable Premium and
the portion of the Outstanding Principal Balance being repaid

     

    (b)  with
respect to any Loans being repaid in whole the Outstanding Principal Balance
being repaid plus an amount equal to, the product of the applicable Premium and
the portion of the Outstanding Principal Balance;

     

    
      
        
        

      

      
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    (c)  with
respect to any Loans being repaid under Section 3.09(a) hereof after the giving
of a Default Notice or the Acceleration of any of the Loans, the then
Outstanding Principal Balance thereof together with all other amounts then due
and payable.

     

    “Replacement Liquidity
Facility” means, for the Liquidity Facility, an irrevocable revolving
credit agreement (or agreements) in substantially the form of the Liquidity
Facility, including reinstatement provisions, or in such other form or forms
acceptable to the Facility Agent in a face amount equal to the then Maximum
Commitment for the replaced Liquidity Facility and issued by an Eligible
Provider.  Without limitation of the form that a Replacement Liquidity
Facility otherwise may have pursuant to the preceding sentence, a Replacement
Liquidity Facility may have a stated expiration date earlier than 15 days
after the Final Maturity Date of the ACS Group Loans so long as such Replacement
Liquidity Facility provides for a Non-Extension Drawing as contemplated by
Section 3.10(c).

     

    “Replacement Liquidity
Facility Provider” means a Liquidity Facility Provider who issues a
Replacement Liquidity Facility.

     

    “Reportable Event”
means any of the events set forth in Section 4043(c) of ERISA or the regulations
thereunder with respect to a Single Employer Plan, other than those events as to
which the thirty day notice period has been waived.

     

    “Repossession
Insurance” has the meaning given to such term in Section 5.03(g) hereof
and Section 5.03(g) of the Guarantor Intercreditor Agreement.

     

    “Required Amount”
means, (a) initially with respect to the Liquidity Facility, zero; provided that, if a
Non-Extension Drawing or (for the purposes of Section 3.10(e)(ii) hereof
and Article II of the Liquidity Facility only) a Final Drawing shall have
occurred, the “Required Amount” shall be the Maximum Commitment, and
(b) thereafter, on any Payment Date, with respect to any other Eligible
Liquidity Facility, such amounts as designated in a Board Resolution and
Guarantor Board Resolution (and for which the prior written consent of the
Facility Agent and Liquidity Facility Agent has been obtained).

     

    “Required Conditions
Precedent” means in respect of the relevant ACS Group Aircraft (or
related Aircraft Interest) receipt (in form and substance reasonably acceptable)
by the Facility Agent of (a) an insurance certificate,  (b) a lessee
notice and acknowledgment, and (c) an opinion from counsel in the jurisdiction
in which the lessee is domiciled or the State of Registration, whichever is
applicable.

     

    “Required Expense
Amount” means, with respect to each Payment Date, and the Initial Closing
Date, the amount of Expenses of the ACS Group due and payable on the Calculation
Date relating to such Payment Date or reasonably anticipated to become due and
payable before the next succeeding Payment Date, the accrual of which would be
prudent in light of the size and timing of such Expenses to the extent such
Expenses consist of (a) Primary Expenses, and (b) any ACS Group Modification
Payments in respect of which a Permitted Accrual was previously effected by a
deposit in the Expense Account (whether or not any such deposit has been
previously used to pay any other Primary Expense but excluding any portion of
such deposit previously used to pay any ACS Group Modification Payments) in each
case after 

     

    
      
        
        

      

      
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    giving
effect to any withdrawal from any Lessee Funded Account or any drawing upon a
Related Collateral Document that is then available for the payment of any such
Expense; provided,
however, that the
Required Expense Amount shall not include any Initial Expenses or any amounts
required to pay Maintenance Reimbursement Expenditures.

     

    “Required Expenses
Shortfall” has the meaning given to such term in Section 3.06(f)
hereof.

     

    “Required Lenders” has
the meaning given to such term in the Credit Agreement.

     

    “Required LTV” means
the product of (a) 75% and (b) the Actual Initial LTV divided by
65.2%.

     

    “Requisition
Compensation” means all monies or other compensation receivable by any
ACS Group Member from any government, whether civil, military or de facto, or
public or local authority in relation to an ACS Group Aircraft in the event of
its requisition for title, confiscation, restraint, detention, forfeiture or
compulsory acquisition or seizure or requisition for hire by or under the order
of any government or public or local authority.

     

    “Responsible Officer”
means (a) with respect to the Facility Agent, any officer within the
Corporate Office, including any Vice President, Managing Director, Assistant
Vice President, Director or any other officer of the Facility Agent customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge and familiarity
with the particular subject, (b) with respect to the Borrower, any Director
and (c) with respect to any Person providing an Eligible Liquidity Facility, the
Facility Agent, the Administrative Agent or any other Service Provider, any
authorized officer of such Person.

     

    “Scheduled Principal Payment
Amount”  means, with respect to the ACS Group Loans, as of any
Payment Date the sum of (a) an amount equal to the sum of the Monthly Principal
Payment Amounts, for each ACS Group Aircraft, (b) an amount equal to 110% the
Allocable Debt Amount for any ACS Group Aircraft subject to an Aircraft Sale
since the Calculation Date with respect to the Payment Date immediately
preceding such Payment  Date and (c) in the case of the Payment Date
immediately following the occurrence of a Non-Delivery Event in respect of any
ACS Group Aircraft, an amount equal to 110% of the Allocable Debt Amount for
such Aircraft.

     

    “Secured Obligations”
has the meaning given to such term in the Security Agreement.

     

    “Secured Parties” has
the meaning given to such term in the Security Agreement.

     

    “Securities Account”
has the meaning given to such term in Section 3.01(a) hereof.

     

    “Securities Act” means
the Securities Act of 1933.

     

    
      
        
        

      

      
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    “Security Agreement”
means the Security Agreement dated as of the Initial Closing Date, among the
Borrowers, the Collateral Agent, the Administrative Agent, the Operating Bank
and each other party thereto.

     

    “Security Deposit
Account” has the meaning given to such term in Section 3.01(a)
hereof.

     

    “Security Documents”
means the Security Agreement and any document executed pursuant thereto, or
otherwise, for the purpose of granting a security interest in any Collateral to
the Collateral Agent for the benefit of the Secured Parties or for the purpose
of perfecting such security interest.

     

    “Security Interests”
means the security interests granted or expressed to be granted in the
Collateral pursuant to the Security Agreement.

     

    “Segregated Funds”
means, with respect to each ACS Group Lease, (a) all security deposits provided
for under such ACS Group Lease that have been received from the relevant Lessee
or pursuant to the relevant ACS Group Purchase Agreement with respect to such
ACS Group Lease, (b) any security deposit pledged to the relevant Lessee by an
ACS Group Member and (c) all other funds, including any Maintenance Reserves,
received from the relevant Lessee or pursuant to the relevant ACS Group Purchase
Agreement with respect to such ACS Group Lease and in each case of
clause (a), (b) and (c) not permitted, pursuant to the terms of such
ACS Group Lease, to be commingled with the funds of the ACS Group.

     

    “Sellers” means the
Irish Seller and the Bermudian Sellers and any Affiliates thereof that are
sellers of a Company or U.S. Trust to an ACS Group Member.

     

    “Senior Claim” means,
with respect to any Obligations (other than Expenses), all other Obligations the
payment of which constitutes a Prior Ranking Amount with respect
thereto.

     

    “Senior Claimant”
means the holder of a Senior Claim.

     

    “Senior Class” means
(a) with respect to the Obligations of the Borrower, (i) so long as any Loans
are Outstanding, the Loans and (b) with respect to the Obligations of the
Guarantor, so long as any
Guarantor Loans are Outstanding, the Guarantor Loans and (ii) after the
Guarantor Loans have been paid in full, the Class E
Securities.

     

    “Senior Hedge Payment”
means, on any Payment Date, a net payment to a Hedge Provider by any ACS Group
Member, other than any Hedge Termination Payment.

     

    “Senior Hedge Payments
Shortfall” has the meaning given to such term in Section 3.06(f)
hereof.

     

    “Service Provider”
means each of the Operating Bank, the Remarketing Servicers, the Facility Agent,
the Collateral Agent, the Administrative Agent, the Bermudian Secretarial
Services Provider and the Irish Secretarial Services Provider.

     

    “Servicer Termination
Event” means a “Servicer Termination Event” under either the Remarketing
Services Agreement, Guarantor Remarketing Servicer Agreement or the
Administrative Agency Agreement.

     

    
      
        
        

      

      
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    “Shareholders” means
the holder(s) of the shares of the Borrower as shall be notified from time to
time by the Borrower to the Facility Agent.

     

    “Shareholders Account”
has the meaning given to such term in Section 3.01(a) hereof.

     

    “Single Employer Plan”
means any Employee Benefit Plan covered by Title IV of ERISA that is maintained
by any Credit Party (as defined in the Credit Agreement) or any ERISA Affiliate,
other than a Multiemployer Plan.

     

    “Special Indemnity
Payments” means (a) any increased cost, indemnity or other amounts owing
at any time and from time to time by the Borrower or Guarantor to the Holders
pursuant to Sections 4.1, 4.4, 4.5 and 4.6 of the Credit Agreement, to the
Remarketing Servicer under Section 12.01 of the applicable Remarketing Services
Agreement or to the Liquidity Facility Provider under Sections 3.01 and 3.09 of
the Liquidity Facility Agreement, (b) any other indemnity amounts owing at
any time and from time to time to any other Person party to a Related Document
which arise from violations of the Securities Act, the U.S. Securities Exchange
Act of 1934, as amended or any other securities law and (c) any
indemnification payment owed to any Seller under the ACS Group Purchase
Agreements.

     

    “Standard &
Poor’s” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc.

     

    “State of
Registration” means, in relation to an Aircraft at any time, the country
or state on whose national register such Aircraft is registered at that time
under the laws of such country or state in accordance with the applicable
provisions of any Lease relating to such Aircraft or, in the absence of any such
provisions, Applicable Law.

     

    “Stated Expiration
Date” has the meaning given to such term in Section 3.10(c)
hereof.

     

    “Stated Rate of
Interest” means, with respect to any Interest Period, (a) with respect to
any Loan accruing interest at the Base Rate, the Base Rate and (b) with respect
to any Loan accruing interest at the Eurodollar Rate, the Eurodollar
Rate.

     

    “Subordinated Claim”
means a claim that is subordinate in right of payment to each Senior Claim as
provided in Section 3.08 hereof.

     

    “Subordinated
Claimant” means the holder of a Subordinated Claim.

     

    “Subordinated
Representative” means the Facility Agent with respect to any Subordinated
Claim consisting of any Loans.

     

    “Substitute Aircraft”
has the meaning given to such term in the Purchase Agreement or the Guarantor
Purchase Agreement, as applicable, and that has been approved by 

      the
Facility Agent.

    

     

    
      
        
        

      

      
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    “Supplemental Principal
Payment Amount” means, with respect to any Payment Date occurring after
the twelfth Payment Date following the Initial Closing Date, an amount equal to
the excess of (a) the sum of the Outstanding Principal Balance of the ACS Group
Loans (assuming that the Aggregate Scheduled Principal Payment Amount for such
Payment Date has been paid) plus the aggregate outstanding principal amount
under any Eligible Liquidity Facility over (b) the Required
LTV of the sum of the Adjusted Appraised Values of all ACS Group Aircraft as of
such Payment Date minus any amounts transferred to the Securities Account or the
Shareholders Account pursuant to Section 3.06(h) to reimburse the Holders of the
Class E Securities, the Shareholders and the Borrowers for ACS Group Conversion
Payments made by the Borrowers in connection with one or more Conversion
Elections.

     

    “Swaption” means any
option agreement with respect to a Hedge Agreement.

     

    “Taxes” mean any and
all taxes, fees, levies, duties, tariffs, imposts, and other charges of any kind
(together with any and all interest, penalties, loss, damage, liability,
expense, additions to tax and additional amounts or costs Incurred or imposed
with respect thereto) imposed or otherwise assessed by any Governmental
Authority, including, without limitation:  taxes or other charges on
or with respect to income, franchises, windfall or other profits, gross
receipts, property, sales, use, capital stock, payroll, employment, social
security, workers’ compensation, unemployment compensation, or net worth and
similar charges; taxes or other charges in the nature of excise, withholding,
ad valorem, stamp,
transfer, value added, taxes on goods and services, gains taxes, license,
registration and documentation fees, customs duties, tariffs, and similar
charges.

     

    “Taxes Act” means the
Taxes Consolidation Act 1997.

     

    “Termination Event”
means:  (i) a “Reportable Event”; (ii) the filing, pursuant
to Section 412 of the Code or Section 302 of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Single Employer Plan, the failure to make by its due date a required installment
with respect to any Single Employer Plan, or the failure by any ACS Group Member
or any of its ERISA Affiliates to make any required contribution to a
Multiemployer Plan; (iii) the incurrence by any ACS Group Member or any of
its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Single Employer Plan; (iv) the receipt by any ACS
Group Member or any of its ERISA Affiliates from the PBGC of any notice relating
to an intention to terminate any Single Employer Plan or to appoint a trustee to
administer any Single Employer Plan under Section 4042 of ERISA or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a Trustee to
administer, such Single Employer Plan; (v) the provision by the plan
administrator of any Single Employer Plan of a notice of intent to terminate
such Single Employer Plan, pursuant to Section 4041(a)(2) of ERISA; (vi) the
conditions for imposition of a Encumbrance under Section 303(k) of ERISA shall
have been met with respect to any Single Employer Plan; (vii) a
determination that any Single Employer Plan is, or is expected to be, in “at
risk” status (within the meaning of Title IV of ERISA); (viii) the
incurrence by any ACS Group Member or any of its ERISA Affiliates of any
liability with respect to the partial or complete withdrawal from any Single
Employer Plan or Multiemployer 

     

    
      
        
        

      

      
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    Plan;
or (ix) the receipt by any ACS Group Member or any of its ERISA Affiliates
of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent, in
Reorganization or in endangered or critical status, within the meaning of
Section 432 of the Code or Section 305 or Title IV of
ERISA.

     

    “Termination Notice”
has the meaning given to such term in the Liquidity Facility.

     

    “Third Party Event”
has the meaning given to such term in Section 5.03(b) hereof.

    

    “Threshold Rating”
means the short-term issuer credit rating of A-1 by Standard & Poor's (or,
in the absence of a short-term issuer credit rating by Standard & Poor's, a
long-term issuer credit rating of A+ by Standard & Poor's) and a short-term
unsecured debt rating of P-1 by Moody's (or, in the absence of a short-term
unsecured debt rating by Moody's, a long-term unsecured debt rating of A1 by
Moody's).

    

    “Total Credit
Commitment” has the meaning given to such term in the Credit
Agreement.

     

    “Total Loss” means,
with respect to any ACS Group Aircraft (a) if the same is subject to an ACS
Group Lease, a Casualty Occurrence, Total Loss or Event of Loss (each as defined
in such ACS Group Lease) or the like (however so defined); or (b) if the same is
not subject to an ACS Group Lease, (i) its actual, constructive, compromised,
arranged or agreed total loss, (ii) its destruction, damage beyond repair or
being rendered permanently unfit for normal use for any reason whatsoever, (iii)
its requisition for title, confiscation, restraint, detention, forfeiture or any
compulsory acquisition or seizure or requisition for hire (other than a
requisition for hire for a temporary period not exceeding 180 days) by or under
the order of any government (whether civil, military or de facto) or public or
local authority or (iv) its hijacking, theft or disappearance, resulting in loss
of possession by the owner or operator thereof for a period of 30 consecutive
days or longer.  A Total Loss with respect to any ACS Group Aircraft
shall be deemed to occur on the date on which such Total Loss is deemed pursuant
to the relevant ACS Group Lease to have occurred or, if such Lease does not so
deem or the relevant ACS Group Aircraft is not subject to an ACS Group Lease,
(A) in the case of an actual total loss or destruction, damage beyond repair or
being rendered permanently unfit, the date on which such loss, destruction,
damage or rendering occurs (or, if the date of loss or destruction is not known,
the date on which the relevant ACS Group Aircraft was last heard of); (B) in the
case of a constructive, compromised, arranged or agreed total loss, the earlier
of (1) the date 30 days after the date on which notice claiming such total loss
is issued to the insurers or brokers and (2) the date on which such loss is
agreed or compromised by the insurers; (C) in the case of requisition for title,
confiscation, restraint, detention, forfeiture, compulsory acquisition or
seizure, the date on which the same takes effect; (D) in the case of a
requisition for hire, the expiration of a period of 180 days from the date on
which such requisition commenced (or, if earlier, the date upon which insurers
make payment on the basis of a Total Loss); or (E) in the case of
clause (iv) above, the final day of the period of 30 consecutive days
referred to therein.

     

    “Total Loss Proceeds”
means, in relation to an ACS Group Aircraft, the total net proceeds of the
insurance and reinsurance paid in respect of a Total Loss thereof and includes,
in 

     

    
      
        
        

      

      
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    the
case of a Total Loss of an airframe which does not involve the Total Loss of all
Engines or Parts installed thereon at the time when such Total Loss occurred,
the net sale proceeds of any such surviving Engines or Parts.

     

    “Undelivered Aircraft”
means, with respect to any Payment Date occurring on or prior to the Delivery
Expiry Date, any Aircraft that has yet to be acquired by an ACS Group Member as
of such Payment Date.

     

    “U.S.” means the
United States of America.

     

    “U.S. GAAP” means
generally accepted accounting principles in the United States.

     

    “U.S. Trust” has the
meaning given to such term in the Purchase Agreement.

     

    “Warehouse Intercreditor
Agreement” shall have the meaning given to such term in the Credit
Agreement.

     

    “War Risk Coverage”
has the meaning given to such term in Exhibit D hereto.

     

    “Written Notice”
means, with reference to the Borrower, the Facility Agent, the Administrative
Agent, the Operating Bank or the provider of any Eligible Liquidity Facility, a
written instrument executed by a Responsible Officer of such
Person.

     

    Section
1.02         Rules of
Construction.  Unless
the context otherwise requires:

     

    (a)              A
term has the meaning assigned to it and an accounting term not otherwise defined
has the meaning assigned to it in accordance with U.S. GAAP.

     

    (b)              The
terms “herein”, “hereof” and other words of similar import refer to this
Intercreditor Agreement as a whole and not to any particular Article,
Section or other subdivision.

     

    (c)              Unless
otherwise indicated in context, all references to Articles, Sections, Schedules
or Exhibits refer to an Article or Section of, or a Schedule or Exhibit to, this
Intercreditor Agreement.

     

    (d)              Words
of the masculine, feminine or neuter gender shall mean and include the
correlative words of other genders, and words in the singular shall include the
plural, and vice versa.

     

    (e)              The
terms “include”, “including” and similar terms shall be construed as if followed
by the phrase “without limitation”.

     

    (f)              References
in this Intercreditor Agreement to any Note includes the Loans made by the
applicable Holder pursuant to the Credit Agreement evidenced by such
Note.

     

    
      
        
        

      

      
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    (g)              References
in this Intercreditor Agreement to an agreement or other document (including
this Intercreditor Agreement) include references to such agreement or document
as amended, replaced or otherwise modified (without, however, limiting the
effect of the provisions of this Intercreditor Agreement with regard to any such
amendment, replacement or modification), and the provisions of this
Intercreditor Agreement apply to successive events and
transactions.  References to any Person shall include such Person’s
successors in interest and permitted assigns.

     

    (h)              References
in this Intercreditor Agreement to Section 3.01 through Section 3.08 and Section
3.10 through Section 3.13 shall include reference to the equivalent Section 3.01
through Section 3.08 and Section 3.10 through Section 3.13 of the Guarantor
Intercreditor Agreement.

     

    (i)              References
in this Intercreditor Agreement to any statute or other legislative provision
shall include any statutory or legislative modification or re-enactment thereof,
or any substitution therefor, and references to any governmental Person shall
include reference to any governmental Person succeeding to the relevant
functions of such Person.

     

    (j)              References
in this Intercreditor Agreement to the Loans or Class E Securities include the
conditions applicable to such Loans or Class E Securities; and any reference to
any amount of money due or payable by reference to the Loans or Class E
Securities shall include any sum covenanted to be paid by the Borrower under
this Intercreditor Agreement.

     

    (k)              References
in this Intercreditor Agreement to any action, remedy or method of judicial
proceeding for the enforcement of the rights of creditors or of security shall
be deemed to include, in respect of any jurisdiction other than the State of New
York, references to such action, remedy or method of judicial proceeding for the
enforcement of the rights of creditors or of security available or appropriate
in such jurisdiction as shall most nearly approximate such action, remedy or
method of judicial proceeding described or referred to in this Intercreditor
Agreement.

     

    (l)              Where
any payment is to be made, funds applied or any calculation is to be made
hereunder on a day which is not a Business Day, unless any Related Document
otherwise provides, such payment shall be made, funds applied and calculation
made on the next succeeding Business Day, and payments shall be adjusted
accordingly.

     

    (m)              Where
the Bermudian Remarketing Servicer or any replacement remarketing servicer or
the Administrative Agent or any replacement administrative agent are performing
or may perform lease management and/or remarketing services pursuant to a
Related Document in relation to one or more different Aircraft at the same time,
a reference in this Intercreditor Agreement to the “Remarketing Servicer” or the
“Administrative Agent”, as applicable, shall be construed as a reference to each
of the Bermudian Remarketing Servicer or replacement remarketing servicer, as
the case may be, or Administrative Agent or replacement administrative agent, as
applicable, and the rights and obligations of the parties hereto shall be
construed accordingly.

     

    
      
        
        

      

      
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    ARTICLE
II

    THE
SECURITIES

     

    Section
2.01         Interest
Rate; Securities; Terms; Form; Execution and Delivery.

     

    (a)              The
Borrower shall pay interest on the unpaid principal amount of the Loan owing to
each Holder from the date of such Loan until such principal amount shall be
repaid in full, at a rate per annum equal at all times during each Interest
Period to the Stated Rate of Interest for such Loan then in effect, payable in
arrears on the last day of such Interest Period and on the date such Loan shall
be paid in full.

     

    (b)              The
Borrower shall pay Scheduled Principal Payment Amount and Supplemental Principal
Payment Amount on each Payment Date to the extent that there are, on such
Payment Date, amounts available to pay such amounts (and all Prior Ranking
Amounts) in the Collections Account.  Any unpaid principal of the
Loans on the Final Maturity Date shall become due and payable on the Final
Maturity Date.  The Borrower shall pay interest on the interest that
is not paid when due, from the date such amount shall be due until such amount
shall be paid in full, at a rate per annum equal at all times to 2% per annum
above the Stated Rate of Interest (the “Default
Rate”).

     

    (c)              Upon
the occurrence and during the continuance of a Default under Section 4.01(b),
the Borrower shall pay interest on the Aggregate Scheduled Principal Payment
Amount and Supplemental Principal Payment Amount not paid when due, from the
date of such Default until such amount shall be paid in full, at a rate per
annum equal at all times to the Default Rate.

     

    (d)              Upon
the occurrence and during the continuance of an Event of Default under Section
4.01(c) or the issuance of a Default Notice, the Borrower shall pay interest on
all amounts not paid as of the Final Maturity Date, from the Final Maturity Date
until such amount shall be paid in full, at a rate per annum equal at all times
to the Default Rate.

     

    Section
2.02         Evidence of
Debt.  Each Holder of a Loan shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Holder resulting from the Loan owing to
such Holder, including the amounts of principal and interest payable and paid to
such Holder from time to time hereunder.  The Borrower agrees that
upon notice by any Holder to the Borrower (with a copy of such notice to the
Facility Agent) to the effect that a promissory note or other evidence of
indebtedness is required or appropriate in order for such Holder to evidence
(whether for purposes of pledge, enforcement or otherwise) the Loan owing to, or
to be made by, such Holder, the Borrower shall promptly execute and deliver to
such Holder, with a copy to the Facility Agent, a Note in substantially the form
of Exhibit A hereto, respectively, payable to the order of such Holder in a
principal amount equal to the Commitment of such Holder.

     

    Section
2.03         [intentionally
omitted]

     

    
      
        
        

      

      
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    Section
2.04         Method of
Payment

    .  i)On
each Payment Date the Borrower shall make each payment hereunder and under the
other Relevant Documents to the extent of the Available Collections therefor,
irrespective of any right of counterclaim or set-off, in U.S. dollars to the
Facility Agent for the account of the Holders of each ACS Group Loan, by credit
to the Loans Account in same day funds.  The Facility Agent will
promptly thereafter cause like funds to be distributed (i) if such payment by
the Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the other Relevant Documents to more
than one such Holder, to such Holders for the account of their respective
Applicable Lending Offices ratably in accordance with the amounts of such
respective Obligations then payable to such Holders and (ii) if such payment by
the Borrower is in respect of any Obligation then payable hereunder to one such
Holder, to such Holder for the account of its Applicable Lending Office, in each
case to be applied in accordance with the terms of this Intercreditor Agreement
and the other Related Documents.  Upon its acceptance of an Assignment
and Assumption and recording of the information contained therein in the
Register pursuant to Section 8.1 of the Credit Agreement, from and after the
effective date of such Assignment and Assumption, the Facility Agent shall make
all payments hereunder and under the other Relevant Documents in respect of the
interest assigned thereby to the assignee thereunder, and the parties to such
Assignment and Assumption shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between
themselves.

     

    (b)              All
computations of interest based on the Eurodollar Rate and of fees shall be made
by the Facility Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are
payable.

     

    (c)              All
computations of interest based on the Base Rate and of fees shall be made by the
Facility Agent on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed (including the first day but excluding the last
day).  Each determination by the Facility Agent of an interest rate or
fee hereunder and under clause (b above shall be conclusive and binding for all
purposes, absent manifest error.

     

    (d)              Whenever
any payment hereunder or under the other Related Documents shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment or letter of
credit fee or commission, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of Loans bearing
interest at the Eurodollar Rate to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.

     

    (e)              Unless
the Facility Agent shall have received notice from the Borrower prior to the
date on which any payment is due to any Holder hereunder that the Borrower will
not make such payment in full, the Facility Agent may assume that the Borrower
has made such payment in full to the Facility Agent on such date and the
Facility Agent may, in reliance upon such assumption, cause to be distributed to
each such Holder on such due date an amount equal to the amount then due to such
Holder.  If and to the extent the Borrower shall not have so made

     

    
      
        
        

      

      
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    such
payment in full to the Facility Agent, each such Holder shall repay to the
Facility Agent forthwith on demand such amount distributed to such Holder
together with interest thereon, for each day from the date such amount is
distributed to such Holder until the date such Holder repays such amount to the
Facility Agent, at the greater of the Federal Funds Rate and a rate determined
by the Facility Agent in accordance with banking industry practices on interbank
compensation.

     

    (f)              If
the Facility Agent receives funds for application to the ACS Group Loans of the
Borrower and the Guarantor under or in respect of the Related Documents under
circumstances for which the Related Documents do not specify the Loans to which,
or the manner in which, such funds are to be applied, the Facility Agent may,
but shall not be obligated to, elect to distribute such funds to each of the
Holders in accordance with such Holder’s pro rata share of the sum of the
aggregate principal amount of all Loans outstanding at such time, in repayment
or prepayment of such of the outstanding Loans or other Obligations then owing
to such Holder for application to such principal repayment installments thereof,
as the Facility Agent shall direct.

     

    Section
2.05         [intentionally
omitted]

     

    Section
2.06         Transfer of
Loans.  Any
assignment or participation of a Loan shall be made only to a Qualifying Lender
and otherwise in accordance with Section 8.1 of the Credit
Agreement.

     

    Section
2.07         [intentionally
omitted]

     

    Section
2.08         [intentionally
omitted]

     

    Section
2.09         Delivery of
Remaining Aircraft.  Upon
receipt by the Facility Agent of a certificate executed by a Director stating
(i) that a Remaining Aircraft has been delivered under and in accordance
with the Purchase Agreement, (ii) that no waiver of the conditions
specified in Clauses 3.1.1, 3.1.2, 3.1.3, 3.2, 13.2 and 13.3 of the
Purchase Agreement has occurred with respect to such Remaining Aircraft (or the
relevant Company) without the receipt of the prior written consent of the
Facility Agent and the Liquidity Facility Provider and (iii) the amount of
cash payable from the Aircraft Purchase Account allocable to such Remaining
Aircraft, equal to the Net Allocation Amount for such Remaining Aircraft, net of
the amounts provided for in the Purchase Agreement (any such amount, a “Remaining Aircraft
Allocation Amount”), and wire instructions for the payment of such funds,
the Facility Agent shall transfer funds in the amount of the Remaining Aircraft
Allocation Amount for such Remaining Aircraft from the relevant Aircraft
Purchase Account in the amount so certified and in accordance with the written
instructions provided by the Administrative Agent in accordance with
Section 3.05(a).

     

    Section
2.10         [intentionally
omitted]

     

    Section
2.11         Statements
to Holders.  (a) 
On the second Business Day before each Payment Date, the Borrowers shall
distribute or make available to the Facility Agent, the Directors, the Liquidity
Facility Provider and each Holder of record with respect to such Payment Date
which may be delivered by posting such report on an agreed 

     

    
      
        
        

      

      
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    website,
a report substantially in the form attached as Exhibit E hereto prepared by the
Administrative Agent and setting forth the information described therein after
giving effect to such payment (each, a “Monthly Report”) in
respect of the Calculation Date immediately preceding such Payment Date and the
month then ended.

     

    (b)              No
later than 30 days after the Calculation Date occurring in March, June,
September and December the Borrowers shall deliver to the Facility Agent, the
Liquidity Facility Provider, the Directors and each Holder of record of any
Obligations as of such date (which delivery may occur by posting such report on
an agreed website) a report substantially in the form attached as Exhibit H
hereto prepared by the Administrative Agent and setting forth the information
described therein (each, a “Quarterly
Report”).  Commencing with the first full fiscal Quarter after
the Initial Closing Date, no later than 75 days after the end of each of the
first three fiscal Quarters in any year, the Borrower shall cause the
Administrative Agent to deliver (which delivery may occur by posting such
statement on an agreed website) to the Facility Agent, the Liquidity Facility
Provider, the Directors and each Holder of record of any Obligations as of such
date consolidated unaudited financial statements of the Borrower and Guarantor
for such Quarter.

     

    (c)              No
later than 150 days after the end of each calendar year, the Borrower shall
cause the Administrative Agent to deliver (which delivery may occur by posting
such statement or report on an agreed website) to the Facility Agent, the
Liquidity Facility Provider, the Directors and each Holder of record of any
Obligations as of such date: (A) consolidated audited financial statements and
reports of each of the Borrower and the Guarantor for such year together with
(B) a report containing the following: (x) a statement setting forth an
analysis of the Collections Account activity for the year ended on the
Calculation Date occurring in the immediately preceding January, (y) a
discussion and analysis of such activity and of any significant developments
affecting the ACS Group in such year and (z) updated information with
respect to the ACS Group Aircraft in the ACS Group Portfolio as of the end of
such year (each, an “Annual
Report”).  Each Annual Report shall contain a listing of the
ACS Group Aircraft that are not subject to any ACS Group Lease.

     

    (d)              After
the end of each calendar year but not later than the latest date permitted by
law, the Borrower shall cause the Administrative Agent to deliver (which
delivery may occur by posting such statement on an agreed website) to the
Facility Agent, the Liquidity Facility Provider, the Directors and each Person
who at any time during such calendar year was a Holder of record of any
Obligations a statement prepared by the Administrative Agent containing the sum
of the amounts determined pursuant to Exhibit E hereto with respect to the type
of Obligations for such calendar year or, in the event such Person was a Holder
of record of any class during only a portion of such calendar year, for the
applicable portion of such calendar year, and such other items as are readily
available to the Administrative Agent and which a Holder shall reasonably
request as necessary for the purpose of such Holder’s preparation of its U.S.
federal income or other tax returns.

     

    (e)              Ten
Business Days after each Calculation Date the Borrowers shall distribute or make
available to the Facility Agent, the Directors, the Liquidity Facility Provider
and each Holder of record with respect to such Payment Date (which delivery may
occur by posting
such report on an agreed website) a copy of the monthly report provided to the
Borrower pursuant to Section 6.01 of Schedule 3.01(a) to the Remarketing
Services Agreement.

     

    
      
        
        

      

      
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    Section
2.12         Holder
Representations and Covenants. 
(a)  Each Holder and beneficial owner of a Loan, by the making or holder of
such Loan or beneficial interest therein, covenants and agrees that it will
treat such Loan as indebtedness for all purposes and will not take any action
contrary to such characterization, including, without limitation, filing any tax
returns or financial statements inconsistent therewith.

     

    (b)              On
the Initial Closing Date (or, in respect of any Holder other than an Initial
Holder, on the date such Holder acquires a Loan) each such Holder represents and
warrants that it is (a) a Qualifying Lender and (b) not a Competitor (nor does
it have any direct or indirect subsidiaries who are a Competitor) of Aircastle
Limited.

     

    ARTICLE
III

    ACCOUNTS;
PRIORITY OF PAYMENTS

     

    Section
3.01         Accounts.

     

    (a)              Establishment of
Accounts.  The Collateral Agent shall direct the Operating Bank
in writing to establish and maintain on its books and records in the name of the
Collateral Agent the following non-interest bearing accounts: (i) a
collections account (the “Collections
Account”), a rental account for the Borrower (the “Bermudian Rental
Account”), an aircraft purchase account (each, an “Aircraft Purchase
Account”) with respect to each ACS Group Aircraft not acquired on the
Initial Closing Date, a maintenance reserve account (the “Maintenance Reserve
Account”), an aircraft conversion account (the “Aircraft Conversion
Account”), a security deposit account (the “Security Deposit
Account”), an expense account (the “Expense Account”),
one loan account for the ACS Group Loans (a “Loans Account”), an
account for the Shareholders (the “Shareholders
Account”), an account for the Class E Securities (the “Securities Account”)
a liquidity reserve account (the “Liquidity Facility Reserve
Account”) and a payment account for the Liquidity Facility (the “Liquidity Payment
Account”) in each case on or before the Initial Closing Date and
(ii) one or more rental accounts (each (including the Bermudian Rental
Account and the Irish Rental Account (defined below)), a “Rental Account” and
collectively, the “Rental Accounts”),
one or more lessee funded accounts (each, a “Lessee Funded
Account”), a Repayment Account (the “Repayment Account”),
and any other Account the establishment of which is set forth in a Board
Resolution or Guarantor Board Resolution, as applicable, delivered to the
Facility Agent, the Collateral Agent and the Administrative Agent, in each case
at such time as is set forth in this Section 3.01 or in such Board
Resolution or such Guarantor Board Resolution.  The Guarantor shall
establish a rental account (the “Irish Rental
Account”) and an Irish collections account (the “Irish VAT Refund
Account”) in its name at an Eligible Institution.  Each Account
shall be established and maintained as an Eligible Account in accordance with
the terms of the Security Agreement (or, in the case of the Irish VAT Refund
Account and the Irish Rental Account, a charge over bank
account  governed by Irish law with respect thereto (the “Irish Account
Charge”)) so as to create, perfect and establish the priority of the
security interest of the Collateral Agent in such Account and all cash,
Investments and other property therein under the Security Agreement (or, in the
case of the Irish Rental Account and the Irish VAT Refund Account, the Irish
Account Charge) and otherwise to effectuate the 

     

    
      
        
        

      

      
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    Security
Agreement (or, in the case of the Irish Rental Account and Irish VAT Refund
Account, the Irish Account Charge).  Each new Account established
pursuant to Section 2.03(c) of the Administrative Agency Agreement shall,
when so established, be the Account of such name and purposes for all purposes
of this Intercreditor Agreement.

     

    (b)              Withdrawals and Transfers
Generally.  Any provision of this Intercreditor Agreement
relating to any deposit to, withdrawal from, or any transfer to or from, any
Account by the Administrative Agent shall mean any such deposit, withdrawal or
transfer effected by the Operating Bank at the Written Notice of the
Administrative Agent (such direction to be provided to the Operating Bank by
1:00 p.m. (New York City time) on the date of such deposit, transfer or
withdrawal) given in accordance with the terms of this Intercreditor Agreement,
the Administrative Agency Agreement and, where applicable, the Security
Agreement.  Each such Written Notice to the Operating Bank shall be
also communicated in computer file
format or in such other form as the Administrative Agent, the Operating Bank,
the Facility Agent and the Collateral Agent agree, provided that, in the case of communication in
computer file format or any other form other than a written tangible form, a
written tangible form thereof shall promptly thereafter be sent to the Operating
Bank.  No deposit to, withdrawal from or transfer from or to
any Account shall be made except in accordance with the terms of this
Intercreditor Agreement, the Security Agreement and the Administrative Agency
Agreement or by any Person other
than the Administrative Agent (or, upon the written direction of the
Administrative Agent, the Operating Bank) or, in the case of the Loans Accounts,
the Facility Agent  (or, upon the written direction of the
Facility Agent, the Operating Bank, in which respect the Facility Agent or
the Operating Bank, as applicable, agrees it is acting as the agent of the
Collateral Agent).  Each of the parties to this
Intercreditor Agreement acknowledges that the terms of this Intercreditor
Agreement contemplate that the Administrative Agent will receive certain
information from other parties to this Intercreditor Agreement and the Related
Documents in order for the Administrative Agent to be able to perform all or any
part of its obligations hereunder, that the Administrative Agent will be able to
perform its obligations hereunder only to the extent such information is
provided to the Administrative Agent by the relevant parties and that the
Administrative Agent may conclusively rely, absent manifest error, on such
information as it receives without undertaking any independent verification of
that information.  The Administrative Agent agrees that if it does not
receive any such information expected to be received by it, it will promptly
notify the Facility Agent that it has not received such information and which
party who was to provide such information of such failure.

     

    (c)              Collections
Account.  All Collections (including amounts transferred from
the Rental Accounts) shall be, when received, deposited in the Collections
Account, and all cash, Investments and other property in the Collections Account
shall be transferred from the Collections Account in accordance with the terms
of this Intercreditor Agreement.

     

    (d)              Lessee Funded
Account.  Any Segregated Funds received from time to time from
any Lessee or pursuant to any Purchase Agreement shall be transferred by the
Operating Bank at the written direction of the Administrative Agent from the
Collections Account into the related Lessee Funded Account.  The
Administrative Agent shall not make any withdrawal from, or transfer from or to,
any Lessee Funded Account in respect of (i) any portion of the Segregated Funds
therein consisting of a security
deposit except, upon the termination of the related ACS Group Lease, as provided
in such ACS Group Lease or (ii) any Segregated 

     

    
      
        
        

      

      
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    Funds that is contrary to the
requirements of the respective ACS Group Leases as to Segregated Funds and the
requirements of the Security Agreement (including the agreement of the
Collateral Agent that it designate on its account records that it holds its
interest in each Lessee Funded Account for the benefit of the respective Lessee
in respect of whom such Segregated Funds are held).  Without limiting
the foregoing, no cash, Investment and other property in a Lessee Funded Account
may be used to make payments, other than as permitted under Section 3.07
hereof, in respect of the ACS Group Loans or the Class E Securities at any time,
including after the delivery of a Default Notice.  Any Segregated
Funds relating to an expired ACS Group Lease that remain in a Lessee Funded
Account after expiration or termination of such ACS Group Lease and that are not
due and owing to the relevant Lessee under such expired or terminated ACS Group
Lease shall, if so required under the terms of a subsequent ACS Group Lease, if
any, relating to such ACS Group Aircraft, be credited in a Lessee Funded Account
or the Security Deposit Account for the benefit of the next Lessee of the
relevant ACS Group Aircraft to the extent required under the terms of such
subsequent ACS Group Lease and, to the extent not so required, transferred to
the Collections Account.  When and as provided in the Administrative
Agency Agreement the Administrative Agent shall cause to be established such
additional Lessee Funded Accounts as requested by the Administrative Agent and
as are provided for in accordance with Section 3.01(a) hereof.

     

    (e)              Security Deposit
Account.  Any cash security deposits received from time to time
from any Lessee or pursuant to any Purchase Agreement (other than any cash
security deposit required to be Segregated Funds, which shall be deposited in
the related Lessee Funded Account) shall be transferred by the Operating Bank at
the written direction of the Administrative Agent from the Collections Account
into the Security Deposit Account.  No cash, Investment and other
property in the Security Deposit Account may be used to make payments, other
than as permitted under Section 3.07 hereof, in respect of the ACS Group
Loans or the Class E Securities at any time.  Any security deposits
relating to an expired ACS Group Lease that remain in the Security Deposit
Account after expiration or termination of such ACS Group Lease and that are not
due and owing to the relevant Lessee under such expired or terminated ACS Group
Lease shall, if so required under the terms of a subsequent ACS Group Lease, if
any, relating to such ACS Group Aircraft, be credited in the Security Deposit
Account or a Lessee Funded Account for the benefit of the next Lessee of the
relevant ACS Group Aircraft and, to the extent not so required, transferred to
the Collections Account.

     

    (f)              Expense
Account.  On each Payment Date, such amounts as are provided in
Section 3.08 hereof in respect of the Required Expense Amount and Permitted
Accruals shall be deposited into the Expense Account from the Collections
Account.  Expenses shall be paid from the Expense Account as provided
in Section 3.04 hereof.

     

    (g)              Rental
Accounts.  Unless the Administrative Agent reasonably
determines that for tax, regulatory or legal reasons or if a Lessee has
requested that such amounts shall be deposited into another Rental Account
(including any Non-Agent Account), with respect to any ACS Group Aircraft held
by the ACS Bermuda Group, all Rental Payments, Maintenance Reserves that are not
Segregated Funds and other amounts received pursuant to any Related Collateral
Document related to such ACS Group Aircraft shall be deposited into the Bermuda
Rental Account and, with respect to any ACS Group Aircraft held by the ACS
Ireland Group, all Rental Payments, Maintenance Reserves that are net Segregated
Funds and other amounts 

     

    
      
        
        

      

      
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    received
pursuant to any Related Collateral Document related to such ACS Group Aircraft
shall be deposited into the Irish Rental Account.  Except with respect
to amounts, if any, that for local tax or other regulatory or legal reasons must
be retained on deposit or as to the transfer of which the Administrative Agent
determines there is any substantial uncertainty all amounts shall be transferred
to the Collections Account within three Business Days of their receipt (or, with
respect to any Non-Agent Account or the Irish Rental Account, within three
Business Days of their receipt).  If the Administrative Agent
determines that, for any tax or other regulatory or legal reason, any such
Collections may not be deposited into an account in the name of the Collateral
Agent, or if a Lessee has requested that all Payments be made to an account in
the name of the applicable ACS Group Member, then, notwithstanding the
requirements of Section 3.01(a) hereof, the relevant ACS Group Member may
establish one or more Rental Accounts (each, a “Non-Agent Account”),
for such Collections in its own name or in the name of a nominee or Facility
Agent acting on its behalf (but subject to the direction and control of the
Administrative Agent on behalf of the Collateral Agent) at any Eligible
Institution provided that the ACS Group Member that is the lessor under the
relevant Lease is or becomes a party to a Security Document with respect to such
Account.  Notwithstanding anything to the contrary set forth in this
Section 3.01(g), if any ACS Group Member receives any “Rent Payment” or
“Maintenance Payment” (as defined in the Purchase Agreement) attributable to the
period prior to the Initial Closing Date, the Administrative Agent shall take
appropriate actions so that the amount so attributable is paid to the applicable
Seller.

     

    (h)              Repayment
Account.  Upon notice to it that any ACS Group Loans or any
Class E Securities are to be wholly or partially repaid pursuant to
Section 3.09 hereof or of the Guarantor Intercreditor Agreement, the
Administrative Agent shall cause the Operating Bank to establish and maintain a
Repayment Account pursuant to Section 3.01(a) hereof or of the Guarantor
Intercreditor Agreement in the name of the Collateral Agent for the benefit of
the Holders.  All amounts received for the purpose of any such
repayment shall be deposited in the Repayment Account.

     

    (i)              Aircraft Purchase
Accounts.  As and to the extent provided in Section 3.04
hereof, an amount equal to the Aircraft Allocation Amount for each Remaining
Aircraft acquired on the relevant Acquisition Date will be transferred from the
Collections Account out of the proceeds of the ACS Group Loans and the Class E
Securities to the Aircraft Purchase Account for such ACS Group
Aircraft.  The amount so deposited will be invested in Permitted
Account Investments until applied as provided in Section 3.04 or 3.05
hereof.  On each Payment Date an amount equal to the Monthly Principal
Payment Amount and Investment Earnings for each Remaining Aircraft that is not
part of the ACS Group Portfolio as of such Payment Date will be transferred to
the Collections Account by the Operating Bank at the written direction of the
Administrative Agent. The Borrower or the Guarantor, as applicable, shall notify
the Collateral Agent and the Administrative Agent of the satisfaction or waiver
(specifying which) of all conditions for the payment of the Aircraft Purchase
Price of any ACS Group Aircraft not acquired on a Closing Date.

     

    (j)              Aircraft Conversion
Account.  As and to the extent provided in Section 3.04(h),
Section 3.06(g) and Section 5.02(i) hereof, an amount equal to any expected ACS
Group Conversion Payment (or in the case of a Conversion Election, a portion
thereof) will be transferred from the Collections Account (i) from the Available
Holder Amount (or a portion 

     

    
      
        
        

      

      
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    thereof),
or (ii) out of contributions by the Holders of the Class E Securities or
Shareholders pursuant to Section 3.12 or the proceeds of additional Class E
Securities, in each case to the Aircraft Conversion Account.  The
amount so deposited will be held in the Aircraft Conversion Account and invested
in Permitted Account Investments until applied as provided in Section 3.04 or
3.08 hereof and upon payment of all ACS Group Conversion Payments required for
such Aircraft Conversion or upon a determination by the Borrowers that it no
longer intends to proceed with the contemplated Aircraft Conversion, any
remaining amounts in the Aircraft Conversion Account relating to the Aircraft
that shall have undergone such Aircraft Conversion or contemplated Aircraft
Conversion shall be promptly transferred (A) in the case of an Aircraft
Conversion, to the Securities Account for the Holders of the Class E
Securities, and (B) in the case of an Guarantor Aircraft Conversion, to the
Shareholders Account to be available, subject to corporate formalities, to fund
a dividend or distribution to the Shareholders.

     

    (k)              Maintenance Reserve
Account.  Pursuant to Section 3.01(g), all amounts consisting
of Maintenance Reserves on deposit in any Rental Account shall be transferred to
the Maintenance Reserves Account in the manner set forth in such section by the
Operating Bank at the written direction of the Administrative
Agent.  In addition, amounts shall be transferred from the Collections
Account to the Maintenance Reserve Account as provided in Section
3.07(k).  In addition, if the Administrative Agent (after consultation
with the Remarketing Servicer) reasonably determines as of any Business Day that
a Maintenance Reimbursement Expenditure is due and payable, the Administrative
Agent shall direct the Operating Bank in writing on such Business Day to
withdraw from the Maintenance Reserve Account the lesser of (A) an amount equal
to such Maintenance Reimbursement Expenditure and (B) the collected credit
balance of such Account, and distribute to the applicable Person the amount so
withdrawn in payment of such Maintenance Reimbursement Expenditure.

     

    (l)              Shareholders
Account.  Upon the transfer of any amounts to the Shareholders
Account for the Shareholders in accordance with Section 3.08 hereof, the
Facility Agent on the same day shall pay all such amounts to the
Shareholders.

     

    (m)              Irish VAT Refund
Account.  All payments of refunds with respect to Irish
value-added Tax and any similar amounts related to Irish Tax payments payable to
the Borrowers or any ACS Group Subsidiary shall be, when received, deposited in
the Irish VAT Refund Account.  Funds held in the Irish VAT Refund
Account shall be converted into U.S. dollars with a recognized foreign exchange
dealer or foreign commercial bank (which may be the bank where the Irish VAT
Refund Account is located or the Facility Agent or an affiliate).  The
conversion of currency into U.S. dollars shall be pursuant to the conversion
procedures set forth in Section 8.07.  Upon conversion and
receipt of U.S. dollars, the Administrative Agent shall cause such amounts to be
deposited from the Irish VAT Refund Account to the Collections Account as soon
as administratively practicable.  The cost and expense of any such
conversion shall be added to and reflected in the rate obtained for conversion
and in no event shall the Administrative Agent or any of its affiliates be
liable in respect of the exchange rate obtained for any such conversion or any
related cost or expense.

     

    All
amounts held in the Irish VAT Refund Account from time to time shall remain
uninvested pending conversion to U.S. dollars and transfer to the Collections
Account.

     

    
      
        
        

      

      
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    (n)              Liquidity Facility Reserve
Account.  Following the funding of the Liquidity Facility
Reserve Account with a Final Drawing or a Non-Extension Drawing, if the
Administrative Agent reasonably determines on any Calculation Date, after all
withdrawals and transfers are made with respect to the Payment Date related to
such Calculation Date, there will be insufficient funds in the Collections
Account (w) to transfer to the Maintenance Reserve Account an amount equal to
the Permitted Maintenance Reimbursement Expenditure Accrual for such Payment
Date, (x) to transfer to the Expense Account an amount such that the amount
on deposit therein is equal to the Required Expense Amount for such Payment
Date, (y) to pay Senior Hedge Payments to each applicable Hedge Provider
and (z) to pay the Interest Amount for the ACS Group Loans, in each case as
provided in Section 3.08 hereof, the Operating Bank shall withdraw from the
Liquidity Facility Reserve Account on such Payment Date the lesser of the amount
equal to the shortfall in making the payments set forth in clauses (w),
(x), (y) and (z) above and the amount on deposit therein in accordance with the
written direction of the Administrative Agent.  The amount so
withdrawn shall be applied in the following manner: first, in
no order of priority inter
se, but pro
rata, (A) to the Expense Account an amount such that the amount on
deposit therein is at least equal to the Required Expense Amount for such
Payment Date and (B) to the Maintenance Reserve Account, an amount equal to the
Permitted Maintenance Reimbursement Expenditure Accrual for such Payment Date,
and second, in
no order of priority inter
se, but pro
rata, (A) to the Loans Accounts for the ACS Group Loans, the
Interest Amount on each such class of ACS Group Loans in no order of priority
inter se, but pro rata according to the
amount of accrued and unpaid interest on the ACS Group Loans and (B) pro rata, to any Hedge
Provider, an amount equal to any Senior Hedge Payment due from any ACS Group
Member pursuant to any Hedge Agreement.

     

    (o)              Guarantor Intercreditor
Agreement.  For the avoidance of doubt, (a) references to this
Section 3.01 shall include reference to the equivalent Section 3.01 in the
Guarantor Intercreditor Agreement and (b) the Accounts under this Intercreditor
Agreement shall be the same accounts, with such names and for such purposes, as
the “Accounts” under the Guarantor Intercreditor Agreement.

     

    (p)              Loans
Account.  Upon the transfer of amounts to the Loans Account for
the Lenders, the Facility Agent on the same day shall pay all such amounts to
the Lenders.

     

    Section
3.02         Investments
of Cash.

     

    (a)              For
so long as any ACS Group Loans remain Outstanding, the Administrative Agent, on
behalf of the Collateral Agent, shall, or shall direct the Operating Bank in
writing to, invest and reinvest, at the written direction of the Borrowers, the
funds on deposit in the Accounts in Permitted Account Investments; provided, however, that the Liquidity
Facility Provider shall be entitled to direct the Administrative Agent to invest
the amounts standing (if any) in the Liquidity Facility Reserve Account in
Permitted Account Investments; provided further that
following the giving of a Default Notice or during the continuance of an
Acceleration Default, the Administrative Agent shall invest such amount at the
written direction of the Collateral Agent in Permitted Account Investments
described in clause (d) of the definition thereof (but in the case of a
Lessee Funded Account only to the extent any such 

     

    
      
        
        

      

      
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    investment
credited to such Lessee Funded Account is permitted by the ACS Group Lease
pursuant to which such funds were received) from the time of receipt thereof
until such time as such amounts are required to be distributed pursuant to the
terms of this Intercreditor Agreement and the Guarantor Intercreditor
Agreement.  The Administrative Agent shall make such investments and
reinvestments, and the Borrower, the Liquidity Facility Provider and/or the
Collateral Agent as specified in the immediately preceding sentence shall
provide such direction, in accordance with the terms of the following
provisions:

     

    (i)              the
Permitted Account Investments shall have maturities and other terms such that
sufficient funds shall be available to make required payments pursuant to this
Intercreditor Agreement and the Guarantor Intercreditor Agreement
(A) before the next Payment Date after which such investment is made, in
the case of investments of funds on deposit in the Collections Account, the
Maintenance Reserve Account and the Expense Account, or (B) in accordance
with a Written Notice provided by the Administrative Agent, the requirements of
the relevant ACS Group Lease or ACS Group Aircraft Agreement, in the case of
investments of funds on deposit in the Lessee Funded Accounts or the Security
Deposit Account; provided that an investment
maturing within one year of the date of investment shall nevertheless be a
Permitted Account Investment if it has been acquired with funds which are not
reasonably anticipated, at the discretion of the Administrative
Agent  to be required to be paid to any other Person or otherwise
transferred from the applicable Account prior to such maturity;

     

    (ii)              if
any funds to be invested are not received in the Accounts by 1:00 p.m. (New
York City time) on any Business Day, such funds shall, if possible, be invested
in overnight Permitted Account Investments described in clause (d) of the
definition thereof; provided that none of the
Facility Agent or the Collateral Agent shall be liable for any losses Incurred
in respect of the failure to invest funds not thereby received; and

     

    (iii)              if
required by the terms of an ACS Group Lease as set forth in a Written Notice
from the Administrative Agent to the Administrative Agent, any investments of
funds on deposit in a Lessee Funded Account or the Security Deposit Account
shall be made on behalf of the relevant Lessee in such investments as may be
required thereunder.

     

    (b)              In
no event shall the Administrative Agent be liable for the selection of
investments or for investment losses incurred thereon.  The
Administrative Agent shall have no liability in respect of losses incurred as a
result of the liquidation of any investment prior to its stated maturity or the
failure of Borrowers to provide timely written investment
direction.

     

    Section
3.03         Closing Date
Deposits, Withdrawals and Transfers.  The
Administrative Agent shall, on the Initial Closing Date, at the written
direction of the Borrower, upon the Operating Bank’s receipt thereof, make, or
direct the Operating Bank in writing to make, the following deposits and
transfers to the Accounts:

     

    (a)              (i)
deposit in the Collections Account the proceeds of the ACS Group Loans and Class
E Securities issued on the Initial Closing Date and the Net Maintenance Reserve
Amount received pursuant to the terms of the relevant ACS Group Purchase
Agreement, (ii) 

     

    
      
        
        

      

      
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    deposit
in the relevant Lessee Funded Accounts the amount of the initial Segregated
Funds, if any, received or deemed to have been received pursuant to the terms of
the relevant ACS Group Purchase Agreements and (iii) deposit in the Security
Deposit Account the amount of the initial security deposits that are not
Segregated Funds received or deemed to have been received pursuant to the terms
of the relevant ACS Group Purchase Agreements,

     

    (b)              after
making the deposits required by clause (a) above and in the following order
(i) transfer from the Collections Account to the Expense Account, an amount
equal to the Required Expense Amount for the initial Interest Period, (ii) pay
from the Collections Account to each relevant Seller an amount equal to the
respective Aircraft Allocation Amount for each ACS Group Aircraft, if any, being
acquired from such Seller on the Initial Closing Date pursuant to the Purchase
Agreement or the Guarantor Purchase Agreement, as applicable, minus the amount
of any security deposits that are not Segregated Funds held by an ACS Group
Member, minus the amount equal to any basic rent received by an ACS Group Member
attributable to the period after the Initial Closing Date minus the Net
Maintenance Reserve Amount (if any) required to be paid by each relevant Seller
to the Borrower, (iii) transfer from the Collections Account to the Maintenance
Reserve Account an amount equal to the Net Maintenance Reserve Amount paid by
each relevant Seller, and (iv) retain in the Collections Account the balance, if
any, remaining after making the foregoing transfers,

     

    (c)              transfer
to each applicable Aircraft Purchase Account from the Collections Account any
Aircraft Allocation Amount as to each ACS Group Aircraft not acquired on the
Initial Closing Date, and

     

    (d)              withdraw
from the Expense Account such amount as is needed to discharge any Expenses due
and payable on the Initial Closing Date and pay such amount to the appropriate
payees thereof as specified in a Written Notice of the Administrative
Agent.

     

    Section
3.04         Interim
Deposits, Transfers and Withdrawals.  On
any Business Day the Administrative Agent, upon the Operating Bank’s receipt
thereof, may make, or direct the Operating Bank in writing to make, without
duplication, the following deposits, transfers and withdrawals for the following
purposes, in each case after Written Notice from the Administrative Agent to the
Facility Agent (which Written Notice shall set forth the amounts of such
deposits, withdrawals and transfers), identifying the basis for such deposit,
transfer or withdrawal in reasonable detail:

     

    (a)              withdraw
from a Lessee Funded Account or the Security Deposit Account to the extent that
funds on deposit therein or available thereunder may be withdrawn or drawn
pursuant to the terms of the related ACS Group Lease for payment thereof, to
discharge any Expense then due and payable pursuant to such ACS Group Lease and
pay such amount to the appropriate payees thereof;

     

    (b)              withdraw
from the Expense Account (to the extent of funds on deposit therein) such amount
as is needed to discharge (i) any Primary Expenses and (ii) any ACS Group
Modification Payments in respect of which a Permitted Accrual was previously
effected by a deposit in the Expense Account (whether or not any such deposit
has been previously used to pay any other Primary Expense but excluding any
portion of such deposit previously used to pay any ACS
Group Modification Payments) then due and payable and pay such amount to the
appropriate payees thereof;

     

    
      
        
        

      

      
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    (c)              transfer
from the Collections Account from time to time (but in no event upon less than
one Business Day’s prior Written Notice to the Facility Agent (unless such one
Business Day’s notice requirement is waived by the Facility Agent)), other
amounts from the Collections Account to the Expense Account, in each case only
to the extent that such funds are to be applied to Primary Expenses that become
due and payable during such Interest Period and for the payment of which there
are insufficient funds in the Expense Account; provided that no such
transfer from the Collections Account in respect of Primary Expenses shall be
made prior to the next succeeding Payment Date if, in the reasonable judgment of
the Administrative Agent, such transfer would have a material adverse effect on
the ability of the Borrowers to make payments of accrued and unpaid interest on
the ACS Group Loans on the next Payment Date therefor in accordance with Section
3.08 hereof;

     

    (d)              transfer
from the Collections Account from time to time (but in no event upon less than
one Business Day’s prior Written Notice to the Facility Agent (unless such one
Business Day’s notice requirement is waived by the Facility Agent)), other
amounts from the Collections Account to the Maintenance Reserve Account, only to
the extent that such funds are to be applied to Maintenance Reimbursement
Expenditures that are projected to become due and payable during such Interest
Period and for the payment of which there are insufficient funds in the
Maintenance Reserve Account; provided that no such
transfer from the Collections Account in respect of Maintenance Reserves shall
be made prior to the next succeeding Payment Date if, in the reasonable judgment
of the Administrative Agent, such transfer would have a material adverse effect
on the ability of the Borrowers to make payments of accrued and unpaid interest
on the ACS Group Loans on the next Payment Date therefor in accordance with
Section 3.08 hereof;

     

    (e)              withdraw
Segregated Funds from a Lessee Funded Account or security deposits from the
Security Deposit Account or draw under or cause to be drawn under any applicable
Related Collateral Document, in any case to the extent required by or necessary
in connection with an ACS Group Lease or any documents related thereto and the
Related Collateral Documents, for deposit in the Collections Account to satisfy
any default in Rental Payments under any related ACS Group Lease;

     

    (f)              transfer
any Segregated Funds from the Collections Account to a Lessee Funded Account in
accordance with the terms of the relevant ACS Group Lease;

     

    (g)              transfer
any security deposits that are not Segregated Funds from the Collections Account
to the Security Deposit Account;

     

    (h)              subject
to Section 5.02(i) hereof, withdraw from the Aircraft Conversion Account an
amount equal to all or a portion of the ACS Group Conversion Payment for any ACS
Group Aircraft Conversion, to the extent the relevant ACS Group Conversion
Agreement requires payment on that or the next Business Day;

     

    
      
        
        

      

      
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    (i)              transfer
to the Collections Account, or any other applicable Account, any Contribution
Amounts;

     

    (j)              withdraw
from the Maintenance Reserve Account to the extent that funds on deposit therein
or available thereunder such amount as is needed to discharge any Maintenance
Reimbursement Expenditures then due and payable and pay such amount to the
appropriate payees thereof;

     

    (k)             withdraw
from the Conversion Account to the extent that funds on deposit therein or
available thereunder such amount as is needed to discharge any ACS Group
Conversion Payments then due and payable and pay such amount to the appropriate
payees thereof; and

     

    (l)              transfer
from the Conversion Account to the Securities Account and Shareholders Account
such amounts as provided for in Section 3.01(j).

     

    Section
3.05         Withdrawals
and Transfers Relating to the  Acquisition of Aircraft and Interim
Deposits and Withdrawals for Aircraft Sales.

     

    (a)              Acquisition.  On
the Acquisition Date (other than the Initial Closing Date) with respect to an
ACS Group Aircraft, the Administrative Agent may, following confirmation from
the Facility Agent of its satisfaction that the Required Conditions Precedent
for such ACS Group Aircraft (or related Aircraft Interest) have been satisfied,
make, or direct the Operating Bank in writing to make, the following deposits,
withdrawals and transfers to the Accounts, in each case as specified in a
Written Notice of the Administrative Agent to the Facility Agent, the Collateral
Agent and the Operating Bank stating that (i) the conditions to payment for an
ACS Group Aircraft (or related Aircraft Interest) specified in the applicable
ACS Group Purchase Agreement have been fulfilled and (ii) setting forth the
amounts of such deposits, withdrawals and transfers:

     

    (i)              deposit
into the relevant Lessee Funded Account, the amount of any Segregated Funds
received in respect of such ACS Group Aircraft under the applicable ACS Group
Purchase Agreement;

     

    (ii)              pay
out of the Aircraft Purchase Account for such ACS Group Aircraft to the
applicable Seller the Net Allocation Amount for such ACS Group Aircraft plus
Investment Earnings, if any, remaining in such Aircraft Purchase Account, minus
the amount of any security deposits that are not Segregated Funds held by an ACS
Group Subsidiary as lessor under the Lease with respect to such ACS Group
Aircraft minus the Net Maintenance Reserve Amount with respect to the Lease
associated with such ACS Group Aircraft;

     

    (iii)             transfer
from the Aircraft Purchase Account for such ACS Group Aircraft to the Security
Deposit Account the amount of any security deposits that are not Segregated
Funds held by an ACS Group Subsidiary as lessor under the ACS Group Lease with
respect to such ACS Group Aircraft; and

     

    
      
        
        

      

      
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    (iv)              transfer
from the Aircraft Purchase Account for such ACS Group Aircraft to the
Maintenance Reserves Account an amount equal to the Net Maintenance Reserves
Amount with respect to the Lease associated with such ACS Group
Aircraft.

     

    (b)              Delivery Expiry
Date.  Upon Written Notice of the Administrative Agent to the
Facility Agent, the Collateral Agent and the Operating Bank that the Borrower or
Guarantor, as applicable, is no longer required, pursuant to the terms of the
applicable ACS Group Purchase Agreement, to purchase any ACS Group Aircraft
(whether by reason of the passing of the Delivery Expiry Date, the exercise by
the Borrower of any termination right under that ACS Group Purchase Agreement or
otherwise (any such event, a “Non-Delivery
Event”)), the Administrative Agent shall direct the Operating Bank in
writing to (i) transfer from the Aircraft Purchase Account for each ACS
Group Aircraft so affected to the Collections Account (for application in
accordance with Section 3.08 hereof) the Net Allocation Amount for such ACS
Group Aircraft, (ii) transfer to the Collections Account, an amount equal
to the Investment Earnings remaining (if any) in the Aircraft Purchase Account
for such ACS Group Aircraft.

     

    (c)              Aircraft Sales. The
Administrative Agent shall cause the Operating Bank to deposit any and all
proceeds received in respect of any Aircraft Sale by any ACS Group Member
(including any loss proceeds and any other amounts under the relevant ACS Group
Purchase Agreement), in each case in the Collections Account (other than in
connection with any sale of all or substantially all of the assets of the ACS
Bermuda Group or ACS Ireland Group, as applicable, in which case the
Administrative Agent shall deposit any and all proceeds of any thereof (together
with any Premium into the Repayment Account in connection with the repayment of
the Loans or Guarantor Loans, as applicable), in each case as specified in a
Written Notice of the Administrative Agent to the Facility Agent, the Collateral
Agent and the Operating Bank.  Any funds then on deposit in a Lessee
Funded Account, the Security Deposit Account or the Maintenance Reserve Account
related to the ACS Group Aircraft subject to such sale or other disposition
shall be applied on a basis consistent with the terms of the Lease related to
such ACS Group Aircraft, if any, or as otherwise provided by the relevant
agreements related to such sale or other disposition.  To the extent
that any amount on deposit in a Lessee Funded Account, the Security Deposit
Account or the Maintenance Reserve Account is retained by the ACS Group
following such sale and application as provided in the preceding sentence, such
amounts shall be deposited into the Collections Account.

     

    (d)              Aircraft
Conversions.  In the case of (x) a Closing Date for any Class E
Securities issued to finance any ACS Group Aircraft Conversion or (y) any
contribution made by the Holder of a Class E Security or any Shareholder
pursuant to Section 3.12, the Administrative Agent shall cause the Operating
Bank to transfer from the Collections Account to the Aircraft Conversion Account
such amounts so received in connection with such issuance or
contribution.

     

    Section
3.06         Calculation
Date Calculations.

     

    (a)              Calculation of Required
Amounts.  The Administrative Agent shall determine, as soon as
practicable after each Calculation Date, but in no event later than two Business
Days preceding the immediately succeeding Payment Date, based on information
known to the Administrative Agent or Relevant Information received by the
Administrative Agent no later than 10:00 a.m. (New York City time) on the day
after such Calculation Date 

     

    
      
        
        

      

      
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    setting
forth the amounts required for the calculations in such clauses provided to the
Administrative Agent, the Collections received during the period commencing on
the close of business on the preceding Calculation Date and ending on the close
of business on such Calculation Date and calculate the following
amounts:

     

    (i)              the
balance of funds on deposit in the Accounts on the Calculation Date and the
amount available under all Eligible Liquidity Facilities on such Calculation
Date;

     

    (ii)              the
amount of Maintenance Reserves received from Lessees since the next preceding
Calculation Date (less amounts transferred during such period pursuant to
Section 3.04(d)) to be transferred from the Collections Account to the
Maintenance Reserve Account;

     

    (iii)             after
giving effect to the amount calculated pursuant to Section 3.06(a)(ii) which are
to be transferred pursuant to Section 3.07(k)(i) the balance of funds on deposit
in the Maintenance Reserve Account and any amounts on deposit in the Maintenance
Reserve Account available to be transferred to the Collections Account on such
Calculation Date;

     

    (iv)             the
Required Expense Amount and any amount to be deposited in respect of Permitted
Accruals as of such Calculation Date as set forth in the Monthly Report prepared
by the Administrative Agent and provided to the Operating Bank;

     

    (v)             the
Available Collections on such Calculation Date (separately listing any amounts
scheduled to be received from a Hedge Provider on such Payment Date) (provided that, in making such
determination, the Administrative Agent may assume that any amount from a Hedge
Provider to be paid on such Payment Date pursuant to any Hedge Agreement will be
paid on such Payment Date);

     

    (vi)            the
net Segregated Funds on deposit in any Lessee Funded Account and any amounts on
deposit in the Security Deposit Account available to be transferred into the
Collections Account on such Calculation Date;

     

    (vii)            any
amounts to be transferred in respect of Eligible Liquidity Facilities under
clause (iii) of Section 3.08(a) hereof, clause (iii) of
Section 3.08(b) hereof or clause (iii) of Section 3.08(c)
hereof;

     

    (viii)           any
amount to be transferred from any Aircraft Purchase Account to the Collections
Account as provided in Section 3.05(b) hereof; and

     

    (ix)            the
Contribution Amounts, if any, made prior to such Calculation Date.

     

    (b)              Calculation of Interest
Amounts and fees of Liquidity Facility Provider.  The
Administrative Agent shall, not later than four Business Days prior to each
Payment Date, make the following calculations or determinations with respect to
Interest Amounts and fees of the Liquidity Facility Provider due on such Payment
Date:

     

    
      
        
        

      

      
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    (i)              based
on Relevant Information provided to it by the Facility Agent, the applicable
interest rate on the ACS Group Loans;

     

    (ii)             the
Interest Amount in respect of ACS Group Loans on such Payment Date;

     

    (iii)       
     the DSCR Aggregate Interest Amount for such
Payment Date; and

     

    (iv)            any
fees and Investment Earnings due and owing to the Liquidity Facility Provider on
such Payment Date.

     

    (c)              Calculation of Principal
Payment and Other Amounts.  The Administrative Agent shall, not
later than five Business Days prior to each Payment Date, calculate or determine
the following with respect to principal payments due on such Payment Date and
certain other amounts in respect of such Payment Date:

     

    (i)              the
Outstanding Principal Balance of the ACS Group Loans and Class E Securities on
such Payment Date immediately prior to any principal payment on such
date;

     

    (ii)              the
DSCR Available Cash on such Payment Date;

     

    (iii)             the
Scheduled Principal Payment Amount and Aggregate Scheduled Principal Payment
Amount on such Payment Date with respect to the ACS Group Loans;

     

    (iv)            the
Supplemental Principal Payment Amount on such Payment Date with respect to the
ACS Group Loans;

     

    (v)             the
Monthly Principal Payment Amount for each Undelivered Aircraft for such Payment
Date;

     

    (vi)            the
DSCR Aggregate Scheduled Principal Amount with respect to such Payment
Date;

     

    (vii)            the
DSCR on such Payment Date;

     

    (viii)           the
Applicable Allocation Percentage; and

     

    (ix)            the
Available Scheduled Principal Amount and the Available Refinancing
Amount.

     

    (d)              Calculation of Repayment
Amounts.  The Administrative Agent shall, not later than five
Business Days prior to each Payment Date on which a Repayment or Guarantor
Repayment of the ACS Group Loans or Class E Securities is scheduled to occur,
perform the calculations necessary to determine the Repayment Price and
Guarantor Repayment Price of and the accrued and unpaid interest on such
Obligations together with all other amounts then due.

     

    
      
        
        

      

      
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    (e)              Application of the Available
Collections.  The Administrative Agent shall, not later than
1:00 p.m. (New York City time) on the Business Day prior to each Payment
Date, determine the amounts to be applied on such Payment Date to make each of
the payments contemplated by Section 3.08(a), 3.08(b) or 3.08(c) (as
applicable) hereof setting forth separately, the amount to be applied on such
Payment Date pursuant to each clause of Section 3.08(a), 3.08(b) or 3.08(c)
(as applicable) hereof.

     

    (f)              Calculations in respect of
Liquidity Facility Drawings.  As soon as practicable after each
Calculation Date, but in no event later than 12:00 p.m. (New York City
time) on the date which is the fourth Business Day prior to the related Payment
Date, the Administrative Agent shall determine (after giving effect to the
application of Available Collections in accordance with the applicable payment
priorities set forth in Section 3.08 hereof), whether a shortfall exists as
of such Calculation Date in Available Collections (w) to pay on the next
succeeding Payment Date the Required Expense Amount due on such Payment Date
(any such shortfall in respect of the Required Expense Amount, a “Required Expenses
Shortfall”), (x) to transfer to the Maintenance Reserve Account on
such Payment Date an amount equal to the Permitted Maintenance Reimbursement
Expenditure Accrual for such Payment Date (any such shortfall in respect of the
Permitted Maintenance Reimbursement Expenditure Accruals, a “PMREA Shortfall”
therefor), (y) to pay in full the Senior Hedge Payments to each applicable
Hedge Provider due on such Payment Date (any such shortfall of Senior Hedge
Payments, the “Senior
Hedge Payments Shortfall”), and (z) to pay the Interest Amount due on the
ACS Group Loans on such Payment Date (any such shortfall in respect of the
Interest Amount due with respect to the ACS Group Loans, a “Liquidity Facility Interest
Shortfall”).

     

    (g)              Notification of Conversion
Election; Calculations in respect of Available Holder Amounts. If on or
prior to the third Business Day prior to the related Payment Date and so long as
a Default Notice has not been issued, an Acceleration Default has not occurred
and a DSCR Failure has not occurred and will not occur on the next succeeding
Payment Date, each of the Borrower and Guarantor have advised the Administrative
Agent that an ACS Group Aircraft will undergo an ACS Group Aircraft Conversion
and the conditions set forth in Section 5.02(i) have been satisfied (such event,
a “Conversion
Election”), the Administrative Agent shall provide notice to the Borrower
and the Guarantor of its calculations of the amount (the “Available Holder
Amount”) available (after giving effect to all Prior Ranking Amounts) to
pay the Holder of the Class E Securities and the Shareholders in accordance with
Section 3.08(a) for such Payment Date and whether such Available Holder Amount
(after giving effect to any prior transfers to the Aircraft Conversion Account
of Available Holder Amounts or contributions from the Holders of the Class E
Securities or the Shareholders in respect of such ACS Group Aircraft Conversion
and amounts in the Maintenance Reserve Account attributable to such ACS Group
Aircraft) is sufficient to fund the obligations in respect of such ACS Group
Aircraft Conversion in full.  As soon as practicable after receipt of
such calculations, but in no event later than 12:00 p.m. (New York City
time) on the date which is the second Business Day prior to the related Payment
Date, each of the Borrower and the Guarantor shall advise the Administrative
Agent as to whether the Available Holder Amount should be paid to the Holders of
the Class E Securities and the Shareholders pro rata according to the
Applicable Allocation Percentage for such Payment Date or should, in lieu of
such payment, be transferred in whole or in part to the Aircraft Conversion
Account to discharge any obligations in respect of such ACS Group Aircraft
Conversion. In the absence of a Conversion Election, the Available Holder Amount
shall not be transferred
to the Aircraft Conversion Account and shall be applied in accordance with the
payment priorities set forth in Section 3.08(a) hereof.

     

    
      
        
        

      

      
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    (h)              Notification of Calculations
in respect of Available Scheduled Principal Amounts.  Subject
to the consent of the Required Lenders to the applicable ACS Group Aircraft
Conversion, (x) following the delivery to the Facility Agent of a Conversion
Completion Certificate and (y) so long as a Default Notice has not been issued,
an Acceleration Default has not occurred and a DSCR Failure has not occurred and
will not occur on the next succeeding Payment Date, as soon as practicable after
the applicable Calculation Date, but in no event later than 12:00 p.m. (New York
City time) on the date which is the third Business Day prior to the related
Payment Date, the Administrative Agent shall provide notice to the Borrower, the
Guarantor and the Facility Agent of its calculations of (i) the amount (the
“Available Scheduled
Principal Amount”) available (after giving effect to all Prior Ranking
Amounts) to pay the Scheduled Principal Payment Amount and the Supplemental
Principal Payment Amount for the ACS Group Loans (for application in accordance
with Section 3.08(a)) for such Payment Date, and (ii) an amount (the “Available Refinancing
Amount”) equal to the Allocable Principal Conversion Amount with respect
to the costs of such ACS Group Aircraft Conversion.  On such Payment
Date, the Available Scheduled Principal Amount should be paid first, (A)
in the case of an Guarantor Aircraft Conversion, to the Securities Account for
the Holders of the Class E Securities, an amount equal to such Available
Refinancing Amount, and (B) in the case of an Aircraft Conversion, to the
Shareholders Account to be available, subject to corporate formalities, to fund
a dividend or distribution to the Shareholders an amount equal to such Available
Refinancing Amount, and second, as set forth in
Section 3.08(a) towards the Scheduled Principal Payment Amount and Supplemental
Principal Payment Amount payable for such Payment Date.  In the
absence of the satisfaction of the conditions set forth in clause (x) and (y)
above, the Available Scheduled Principal Amount shall not be transferred to the
Securities Account or the Shareholders Account, as applicable, and shall be
applied in accordance with the payment priorities set forth in Section 3.08(a)
hereof.  To the extent that the Available Scheduled Principal Amount
is less than the Available Refinancing Amount on any Payment Date, such
deficiency shall be paid to the Holders of the Class E Securities or the
Shareholders (as applicable) on subsequent Payment Dates pursuant to this
Section 3.06(h).

     

    (i)              Calculation of Permitted
Maintenance Reimbursement Expenditure Accrual.  As soon as
practicable after each Calculation Date, but in no event later than the close of
business on the date which is the fourth Business Day prior to the immediately
following Payment Date, the Administrative Agent shall, after consultation with
the Servicer, determine the Permitted Maintenance Reimbursement Expenditure
Accrual in respect of the Payment Date immediately following such Calculation
Date.

     

    Section
3.07         Payment Date
First Step Withdrawals and Transfers.  Two
Business Days prior to each Payment Date, the Administrative Agent shall make or
direct the Operating Bank in writing to make (such direction to be communicated
in computer file format or in such
other form as the Administrative Agent, the Operating Bank, the Facility Agent
and the Collateral Agent agree, provided that, in the case of communication in
computer file format or any other form other than a written tangible form, a
written tangible form thereof shall promptly thereafter be sent to the Operating
Bank), on such 

     

    
      
        
        

      

      
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    Payment
Date, the following withdrawals from and transfers to the Accounts in each case
as specified in a Written Notice of the Administrative Agent to the Facility
Agent, the Collateral Agent and the Operating Bank:

     

    (a)              transfer
any amounts on deposit in the Repayment Account in respect of any Repayment or
Guarantor Repayment to the Loans Account or Securities Account, as
applicable;

     

    (b)              transfer
from each Lessee Funded Account to the Security Deposit Account or the
Collections Account, as applicable, any available Segregated Funds that are no
longer required to be maintained in a segregated account under the applicable
ACS Group Leases;

     

    (c)              transfer
from the Security Deposit Account to the Collections Account any security
deposits relating to an expired or terminated ACS Group Lease that are not
required under the terms of a subsequent ACS Group Lease to be retained in the
Security Deposit Account;

     

    (d)              transfer
from the Collections Account to the relevant Lessee Funded Accounts the amount
of any Segregated Funds then on deposit in the Collections Account;

     

    (e)              transfer
from the Collections Account to the Security Deposit Account the amount of any
security deposits that are not Segregated Funds then on deposit in the
Collections Accounts;

     

    (f)          
    transfer from any Account (other than the Collections
Account, the Liquidity Facility Reserve Account, the Liquidity Payment Account,
and the Aircraft Conversion Account) to the Collections Account the amount of
Investment Earnings, if any, on investments of funds on deposit therein during
the preceding Interest Period, except that earnings on any portion of the funds
on deposit in any Account required under the terms of the related Lease to be
repaid to the related Lessee shall be retained therein;

     

    (g)              after
the giving of a Default Notice, during the continuation of an Acceleration
Default or following the Interest Period in which an Aircraft Sale occurs with
respect to the last remaining ACS Group Aircraft, transfer any amounts remaining
in the relevant Lessee Funded Account (other than amounts required to be
maintained in such account pursuant to the terms of the related ACS Group Lease
or ACS Group Aircraft Agreement) and the Security Deposit Account into the
Collections Account;

     

    (h)              transfer
from the Collections Account to the Aircraft Conversion Account any amounts
required to be transferred pursuant to Section 3.06(g) on such date in
connection with a Conversion Election;

     

    (i)           
   after payment in full of all ACS Group Conversion Payments to
be made for any ACS Group Aircraft Conversion or upon notice from the Borrower
to the Administrative Agent and the Facility Agent that it no longer intends to
proceed with the contemplated ACS Group Aircraft Conversion, transfer any
balance of the amount originally deposited in the Aircraft Conversion Account in
respect of such ACS Group Aircraft Conversion or contemplated 

     

    
      
        
        

      

      
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    ACS
Group Aircraft Conversion from the Aircraft Conversion Account (A) in the case
of an Guarantor Aircraft Conversion, to the Securities Account for the Holders
of the Class E Securities, and (B) in the case of an Aircraft Conversion,
to the Shareholders Account to be available, subject to corporate formalities,
to fund a dividend or distribution to the Shareholders;

     

    (j)          
     transfer from the Aircraft Purchase Account to the
Collections Account an amount equal to the sum of the Monthly Principal Payment
Amounts for all Undelivered Aircraft as of such Payment Date;

     

    (k)          
    (i) transfer from the Collections Account to the
Maintenance Reserve Account the aggregate amount of Maintenance Reserves
received from Lessees since the previous Calculation Date (less amounts
previously transferred during such period pursuant to Section 3.04(d)) and
(ii) after taking into account the amounts transferred pursuant to clause (i),
transfer from the Collections Account to the Maintenance Reserve Account such
additional amount equal to the Permitted Maintenance Reimbursement
Expenditure;

     

    (l)              
 make transfers from the Maintenance Reserve Account in accordance with
Sections 3.01(k) and 3.05(c); and

     

    (m)              withdraw
and transfer, as necessary, any funds deposited in error by any Lessee or
Service Provider.

     

    Section
3.08         Payment Date
Second Step Withdrawals.

     

    (a)       
       On each Payment Date, after the
withdrawals and transfers provided for in Section 3.07 hereof have been
made, the Administrative Agent shall distribute from the Collections Account (or
retain in the Collections Account, if so indicated in the relevant clause
below), or direct the Operating Bank in writing to do the same (such direction
to be communicated in computer
file format or in such other form as the Administrative Agent, the Operating
Bank, the Facility Agent and the Collateral Agent agree; provided that, in the case of communication in
computer file format or any other form other than a written tangible form, a
written tangible form thereof shall promptly thereafter be sent to the Operating
Bank), at least two Business Days prior to such Payment Date the amounts
set forth below in the order of priority set forth below but, in each case, only
to the extent that all amounts then required to be paid (or retained in the
Collections Account, as applicable) ranking prior thereto (“Prior Ranking
Amounts”) have been paid in full (provided that the amount to
be paid shall be reduced in inverse order of priority by the amount of any
payment by a Hedge Provider under a Hedge Agreement that was assumed pursuant to
Section 3.06(a)(v) to be, but has not in fact been, paid on such Payment
Date).  All payments of Available Collections to be made to or for the
account of Holders of any ACS Group Loans, pursuant to this Section 3.08
shall be made through a direct transfer of funds to the Loans
Account.  All payments of Available Collections to be made to or for
the account of Holders of any Class E Securities, pursuant to this Section 3.08
shall be made through a direct transfer of funds to the Securities
Account.  Payments shall be made in the following order of
priority:

     

    (i)              to
the Expense Account, an amount such that the amount on deposit therein is at
least equal to the Required Expense Amount;

     

    
      
        
        

      

      
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    (ii)              in
no order of priority inter
se, but pro rata
as to the amounts described in clauses (A) and (B) as follows: (A) to the
Loans Accounts for the ACS Group Loans, the Interest Amount on the ACS Group
Loans less the amount
of any Liquidity Facility Drawing in respect of the Interest Amount due on the
ACS Group Loans paid on or before such Payment Date to the extent not
theretofore reimbursed to the Liquidity Facility Provider as of such Payment
Date; and (B)  to any Hedge Provider,
an amount equal to any Senior Hedge Payment due from any ACS Group Member
pursuant to any Hedge Agreement;

     

    (iii)             (A)
first, to the Liquidity Facility Reserve Account (if applicable), such amount so
that the amount on deposit in such Account is equal to the Required Amount
therefor and (B) second, to any Persons providing any Eligible Liquidity
Facilities, any Liquidity Facility Advance Obligations payable to such Persons
under the terms of their respective Eligible Liquidity Facilities;

     

    (iv)            except
as otherwise set forth in Section 3.06(h), to the Loans Accounts for the ACS
Group Loans, an amount equal to the Aggregate Scheduled Principal Payment Amount
of the ACS Group Loans for such Payment Date and;

     

    (v)             except
as otherwise set forth in Section 3.06(h), to the Loans Accounts for the ACS
Group Loans, an amount equal to the Supplemental Principal Payment Amount of the
ACS Group Loans for such Payment Date;

     

    (vi)             payments
to Hedge Providers, pro rata
inter se, that are Hedge Termination Payments;

     

    (vii)            payments
to the applicable party, pro
rata inter se, of Special Indemnity Payments;

     

    (viii)           to
the Expense Account, such amount as an accrual (the “Permitted Accruals”)
in respect of any ACS Group Modification Payments as the Administrative Agent
shall determine;

     

    (ix)            to
the Irish Parent, the Charitable Trust Dividend, if any;

     

    (x)             in
no order of priority inter se
but pro rata,
not on account of any obligation or debt (A) to the Securities Account for the
Holders of the Class E Securities, an amount equal to the reimbursement to
the Holders of the Class E Securities of the Contribution Amounts (if any)
made by such Holders, and (B) to the Shareholders Account to be available,
subject to corporate formalities, to fund a dividend or distribution, an amount
equal to the reimbursement to the Shareholders of the Contribution Amounts (if
any) made by the Shareholders with respect to the Shares; and

     

    (xi)            the
balance, in no order of priority inter se but pro rata in accordance with
the Applicable Allocation Percentages, to the Securities Account for the Holders
of the Class E Securities and to the Shareholders Account for the
Shareholders.

     

    
      
        
        

      

      
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    (b)              Anything
to the contrary contained in Section 3.08(a) hereof notwithstanding, (A)
for any Payment Date following the fifth anniversary of the Initial Closing Date
or (B) during the occurrence and continuance of either a DSCR Failure or a
Servicer Termination Event, the allocation of payments described in
Section 3.08(a) hereof shall not apply and the Administrative Agent shall
direct the Operating Bank in writing (such direction to be communicated in
computer file format or in such other form as the Administrative Agent, the
Operating Bank, the Facility Agent, and the Collateral Agent agree, provided that, in the case of
communication in computer file format or any other form other than a written
tangible form, a written tangible form thereof shall promptly thereafter be sent
to the Operating Bank) to cause all amounts on deposit in the Collections
Account and the Expense Account to be applied on each Payment Date in the
following order of priority:

     

    (i)              to
the Expense Account, an amount such that the amount on deposit therein is at
least equal to the Required Expense Amount;

     

    (ii)             in
no order of priority inter
se, but pro rata
as to the amounts described in clauses (A) and (B) as follows, (A) to the
Loans Accounts for the ACS Group Loans, the Interest Amount on the ACS Group
Loans less the amount
of any Liquidity Facility Drawing in respect of the Interest Amount due on the
ACS Group Loans paid on or before such Payment Date to the extent not
theretofore reimbursed to the Eligible Liquidity Facility Provider as of such
Payment Date; and (B) to any Hedge Provider, an amount equal to any Senior
Hedge Payment due from any ACS Group Member pursuant to any Hedge
Agreement;

     

    (iii)            (A)
first, to the Liquidity Facility Reserve Account (if applicable), such amount so
that the amount on deposit in such Account is equal to the Required Amount
therefor and (B) second, to any Persons providing any Eligible Liquidity
Facilities, any Liquidity Facility Advance Obligations payable to such Persons
under the terms of their respective Eligible Liquidity Facilities;

     

    (iv)            to
the Loans Account, an amount equal to the Aggregate Scheduled Principal Payment
Amount of the ACS Group Loans for such Payment Date;

     

    (v)             to
the Loans Account, an amount equal to the Supplemental Principal Payment Amount
of the ACS Group Loans for such Payment Date;

     

    (vi)            payments
to Hedge Providers, pro rata
inter se, that are Hedge Termination Payments;

     

    (vii)            to
the Loans Accounts for the ACS Group Loans, the Outstanding Principal Balance of
the ACS Group Loans together with all other amounts then due and payable in
connecting with such ACS Group Loans;

     

    (viii)           payments
to the applicable party, pro
rata inter se, of Special Indemnity Payments;

     

    (ix)            to
the Irish Parent, the Charitable Trust Dividend, if any;

     

    
      
        
        

      

      
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    (x)             in
no order of priority inter se
but pro rata,
not on account of any obligation or debt (A) to the Securities Account for the
Holders of the Class E Securities, an amount equal to the reimbursement to
the Holders of the Class E Securities of the Contribution Amounts (if any)
made by such Holders, and (B) to the Shareholders Account as a dividend or
distribution, an amount equal to the reimbursement to the Shareholders of the
Contribution Amounts (if any) made by the Shareholders with respect to the
Shares; and

     

    (xi)            the
balance, in no order of priority inter se but pro rata in accordance with
the Applicable Allocation Percentages, to the Securities Account for the Holders
of the Class E Securities and to the Shareholders Account for the
Shareholders.

     

    (c)              Anything
to the contrary contained in Section 3.08(a) or 3.08(b) hereof
notwithstanding during the occurrence and continuance of an Event of Default the
allocation of payments described in Section 3.08(a) or 3.08(b) hereof shall
not apply and the Administrative Agent shall direct the Operating Bank in
writing (such direction to be communicated in computer file format or in such
other form as the Administrative Agent, the Operating Bank, the Facility Agent,
and the Collateral Agent agree, provided that, in the case of
communication in computer file format or any other form other than a written
tangible form, a written tangible form thereof shall promptly thereafter be sent
to the Operating Bank) to cause all amounts on deposit in the Collections
Account and the Expense Account to be applied on each Payment Date or any other
date specified by the Facility Agent in the following order of
priority:

     

    (i)              to
the Expense Account, an amount such that the amount on deposit therein is at
least equal to the Required Expense Amount;

     

    (ii)             payments
to the applicable party, pro
rata inter se, of Special Indemnity Payments (other than Special
Indemnity Payments of the type specified in clause (c) of the definition
thereof);

     

    (iii)            to
any Persons providing any Eligible Liquidity Facilities, any Liquidity Facility
Advance Obligations payable to such Persons under the terms of their respective
Eligible Liquidity Facilities;

     

    (iv)            in
no order of priority inter
se, but pro rata
as to the amounts described in clauses (A) and (B) as follows, (A) to the
Loans Accounts for the ACS Group Loans, the Interest Amount on the ACS Group
Loans less the amount
of any Liquidity Facility Drawing in respect of the Interest Amount due on the
ACS Group Loans paid on or before such Payment Date to the extent not
theretofore reimbursed to the Eligible Liquidity Facility Provider as of such
Payment Date; and (B)  to any Hedge Provider,
an amount equal to any Senior Hedge Payment due from any ACS Group Member
pursuant to any Hedge Agreement;

     

    (v)             to
the Loans Account, an amount equal to the Aggregate Scheduled Principal Payment
Amount of the ACS Group Loans for such Payment Date;

     

    (vi)            to
the Loans Account, an amount equal to the Supplemental Principal Payment Amount
of the ACS Group Loans for such Payment Date;

     

    
      
        
        

      

      
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    (vii)      
     payments to Hedge Providers, pro rata inter se, that are
Hedge Termination Payments;

     

    (viii)           to
the Loans Accounts for the ACS Group Loans, the Outstanding Principal Balance of
the ACS Group Loans together with all other amounts then due and payable in
connection with such ACS Group Loan;

     

    (ix)            to
the Irish Parent, the Charitable Trust Dividend, if any;

     

    (x)             in
no order of priority inter
se, but pro rata
as to the amounts described in clauses (A), (B) and (C) as follows (A) to the applicable party,
pro rata inter se, of
Special Indemnity Payments of the type specified in clause (c) of the definition
thereof, (B) to the Securities Account for the Holders of the Class E
Securities, an amount equal to the reimbursement to the Holders of the
Class E Securities of the Contribution Amounts (if any) made by such
Holders, and (C) to the Shareholders Account as a dividend or distribution, an
amount equal to the reimbursement to the Shareholders of the Contribution
Amounts (if any) made by the Shareholders with respect to the Shares;
and

     

    (xi)            the
balance, in no order of priority inter se but pro rata in accordance with
the Applicable Allocation Percentages, to the Securities Account for the Holders
of the Class E Securities and to the Shareholders Account for the
Shareholders.

     

    Section
3.09         Certain
Repayments; Certain Premiums.

     

    (a)              Optional
Repayment.  On any Payment Date the Borrower may elect to repay
(such event, a “Repayment”) the ACS
Group Loans (subject to the last sentence of this Section 3.09(a)) in whole or
in part (but in no event less than an amount equal to $5,000,000 for any
individual Repayment), out of amounts available in the Repayment Account for
such purpose, if any, other than, in either such case, any funds constituting
part of the Available Collections, at the Repayment Price plus any accrued and
unpaid interest (after giving effect to any payment thereof on such Repayment
Date under Section 3.08 hereof) together with any LIBOR Break Costs on the
Loans to be repaid to the Repayment Date and after the giving of a Default
Notice or the Acceleration of any Loans, the Loans may be repaid only in whole
but not in part pursuant to this Section 3.09(a); provided further that Written
Notice of any such Repayment shall be given by the Borrower (or the
Administrative Agent on its behalf) to the Facility Agent not less than 5
Business Days prior to such Repayment.

     

    (b)              Method of
Repayment.  Upon receipt of notice from the Borrower or the
Administrative Agent under Section 3.09(a) hereof, the Facility Agent shall give
Written Notice in respect of any such Repayment to each Holder of Loans
affected, at least 5 Business Days before the Repayment Date for such
Repayment.  The Facility Agent shall not deliver any notice under this
Section 3.09(b) unless and until the Facility Agent shall have received
certification that all conditions precedent to such Repayment have been
satisfied and evidence satisfactory to it that the amounts required to be
deposited pursuant to this Section 3.09(b) hereof are, or will on or before
the Repayment Date be, deposited in the Repayment Account.  Each
notice in respect of a Repayment given pursuant to this Section 3.09(b)
shall state (i) the applicable Repayment Date, (ii) the Repayment
Price or the Outstanding Principal Balance of the Loans to be repaid,

     

    
      
        
        

      

      
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    and
all accrued and unpaid interest, and (iii) in the case of a Repayment of the
Loans in whole, that, unless the Borrower defaults in the payment of the
Repayment Price and any accrued and unpaid interest on the Loans to be repaid,
interest on the Loans shall cease to accrue on and after the Repayment
Date.

     

    (c)              Loans Payable on Repayment
Date.  After notice has been given under Section 3.09(a)
hereof, the Outstanding Principal Balance of the Loans to be repaid on such
Repayment Date shall become due and payable; provided that the Borrower may
rescind any such notice at any time prior to 2:00 p.m. (New York City time) on
such Repayment Date subject to the obligations of the Borrower to pay any LIBOR
Break Costs.  The Repayment Price or the Outstanding Principal Balance
(as applicable) of such Loan, together with accrued and unpaid interest as well
as all other amounts then due and payable thereof on such Loan shall be paid as
provided for in this Section 3.09.  If any Loan to be repaid
shall not be so paid upon, the amount in respect thereof shall continue to bear
interest until paid from the Repayment Date at the Stated Rate of
Interest.

     

    Section
3.10         Liquidity
Facility.

     

    (a)              Liquidity Facility
Drawings.  If the Administrative Agent determines in accordance
with Section 3.06(f) hereof that after making all withdrawals (after any
withdrawals from the Liquidity Facility Reserve Account) and transfers to be
made with respect to the applicable Payment Date, there is (w) a PMREA
Shortfall, (x) a Required Expenses Shortfall, (y) a Senior Hedge Payments
Shortfall and/or (z) a Liquidity Facility Interest Shortfall, in each case
as calculated in Section 3.06(f) hereof, the Administrative Agent shall so
notify the Facility Agent in writing and shall, no later than 1:00 p.m.
(New York City time) three Business Days prior to such Payment Date, request a
drawing (each such drawing, a “Liquidity Facility
Drawing”) under the Liquidity Facility, to be paid on or prior to such
Payment Date, in an amount equal to the lesser of (a) the aggregate amount
of the shortfall from clauses (w), (x), (y) and (z) above and (b) the
Available Amount under the Liquidity Facility.

     

    (b)              Application of Liquidity
Facility Drawings. The proceeds of any Liquidity Facility Drawing shall
be deposited into the Liquidity Payment Account and withdrawn by the Operating
Bank, upon receipt of Written Notice from the Administrative Agent, for
application on the applicable Payment Date in the following manner: first, in
no order of priority inter
se, but pro
rata, (1) to the Expense Account, an amount such that the amount on
deposit therein is at least equal to the Required Expense Amount for such
Payment Date and (2) to the Maintenance Reserve Account, an amount equal to the
Permitted Maintenance Reimbursement Expenditure Accrual for such Payment Date
and  second, in
no order of priority inter
se, but pro
rata, (1) to the Loans Accounts for the ACS Group Loans, the amount
of accrued and unpaid interest on the ACS Group Loans with respect to the
applicable Payment Date in no order of priority inter se, but pro rata; and (2) pro rata, to any Hedge
Provider, an amount equal to any Senior Hedge Payment due from any ACS Group
Member pursuant to any Hedge Agreement.

     

    (c)              Non-Extension
Drawings.  If the Liquidity Facility is scheduled to expire on
a date (the “Stated
Expiration Date”) prior to the date that is 15 days after the Final
Maturity Date with respect to the ACS Group Loans, then, no earlier than the
60th day and no later than the 30th day prior to the applicable Stated
Expiration Date then in effect, the Administrative 

     

    
      
        
        

      

      
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    Agent
shall request that the Liquidity Facility Provider extend the Stated Expiration
Date until the earlier of (i) the date which is 15 days after the Final
Maturity Date with respect to the ACS Group Loans and (ii) the date that is
immediately preceding the 364th day occurring after the Stated Expiration Date
then in effect (unless the obligations of the Liquidity Facility Provider under
the Liquidity Facility are earlier terminated in accordance with the Liquidity
Facility).  If on or before the date which is 10 days prior to the
Stated Expiration Date, (A) the Liquidity Facility shall not have been replaced
in accordance with Section 3.10(d) hereof or (B) the Liquidity Facility Provider
fails irrevocably and unconditionally to advise the Administrative Agent that
such Stated Expiration Date then in effect shall be so extended (whether or not
the Administrative Agent has in fact requested an extension), the Administrative
Agent shall immediately, in accordance with the terms of the Liquidity Facility
(a “Non-Extended
Facility”), request a drawing under such Liquidity Facility (such
drawing, a “Non-Extension
Drawing”) for the Available Amount thereunder.  Amounts drawn
pursuant to a Non-Extension Drawing shall be deposited into the Liquidity
Facility Reserve Account.

     

    (d)              Issuance of Replacement
Liquidity Facility.

     

    (i)              If
the Liquidity Facility Provider shall determine not to extend the Liquidity
Facility in accordance with Section 3.10(c) hereof, then either the Liquidity
Facility Provider, the Borrower or the Guarantor may, at their respective
options, arrange for a Replacement Liquidity Facility to replace the Liquidity
Facility during the period no earlier than 35 days and no later than 10 days
prior to the then effective Stated Expiration Date.

     

    (ii)              (A)  At
any time after the then Stated Expiration Date of the Liquidity Facility which
has been extended for a period in excess of a 364-day period, the Liquidity
Facility Provider may, at its option, arrange for a Replacement Liquidity
Facility to replace the Liquidity Facility.

     

    (B)           No
Replacement Liquidity Facility arranged by the Liquidity Facility Provider or
the Borrower or the Guarantor in accordance with clauses (d)(i) and
(d)(ii)(A) above shall become effective and no such Replacement Liquidity
Facility shall be deemed an Eligible Liquidity Facility under this Intercreditor
Agreement, unless and until (y) each of the conditions referred to in
subclause (C) below shall have been satisfied, and (z) in the case of
a Replacement Liquidity Facility arranged by the Liquidity Facility Provider,
such Replacement Liquidity Facility is acceptable to the Borrower and the
Guarantor.

     

    (C)           In
connection with the issuance of each Replacement Liquidity Facility,
(x) the Administrative Agent shall, prior to the issuance of such
Replacement Liquidity Facility, direct the Operating Bank pursuant to a Written
Notice of the Administrative Agent setting forth the amount of Liquidity
Facility Obligations then owing to the replaced Liquidity Facility Provider to
pay to the replaced Liquidity Facility Provider all Liquidity Facility
Obligations then owing to the replaced Liquidity Facility Provider and upon
receipt of such Written Notice, the Operating Bank shall pay such amount to the
Liquidity Facility Provider (which payment shall be made first from available
funds in the Liquidity Facility Reserve Account, and thereafter from any other
available source, 

     

    
      
        
        

      

      
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    including,
without limitation, a drawing under the Replacement Liquidity Facility) and
(z) the issuer of the Replacement Liquidity Facility shall deliver the
Replacement Liquidity Facility to the Administrative Agent, together with a
legal opinion opining that such Replacement Liquidity Facility has been duly
authorized, executed and delivered by, and is an enforceable obligation of, such
Replacement Liquidity Facility Provider, such legal opinion to be reasonably
satisfactory to the Facility Agent unless the legal opinion of counsel to the
Replacement Liquidity Facility Provider is in form and substance substantially
the same as the legal opinion of counsel to the Liquidity Facility Provider
delivered on the Initial Closing Date.

     

    (D)           Upon
satisfaction of the conditions set forth in clauses (B) and (C) of this
Section 3.10(d)(ii) with respect to a Replacement Liquidity Facility,
(w) the replaced Liquidity Facility shall terminate, (x) the
Administrative Agent shall, if and to the extent so requested by the Borrower or
the Guarantor or the Liquidity Facility Provider being replaced, execute and
deliver any certificate or other instrument furnished to it required in order to
terminate the replaced Liquidity Facility, shall surrender the replaced
Liquidity Facility to the Liquidity Facility Provider being replaced and shall
execute and deliver the Replacement Liquidity Facility, (y) each of the
parties hereto shall enter into any amendments to this Intercreditor Agreement,
the Guarantor Intercreditor Agreement and any other Related Documents necessary
to give effect to (1) the replacement of the applicable Liquidity Facility
Provider with the applicable Replacement Liquidity Facility Provider and
(2) the replacement of the applicable Liquidity Facility with the
applicable Replacement Liquidity Facility and (z) such Replacement
Liquidity Facility Provider shall be deemed to be an Eligible Provider with the
rights and obligations of the Liquidity Facility Provider hereunder and under
the other Related Documents and such Replacement Liquidity Facility shall be
deemed to be an Eligible Liquidity Facility (and, if so designated by a Board
Resolution and Guarantor Board Resolution, deemed to be the Liquidity Facility)
hereunder and under the other Related Documents.

     

    (e)              Liquidity Facility Reserve
Account; Withdrawals; Investments.  All amounts drawn under the
Liquidity Facility by the Administrative Agent pursuant to Section 3.10(c) or
3.10(h) hereof shall be deposited by the Administrative Agent into the Liquidity
Facility Reserve Account.  All amounts on deposit in the Liquidity
Facility Reserve Account, including any amount deposited in accordance with
clause (iii) of Section 3.08(a) hereof, shall be invested and
reinvested in accordance with Section 3.02 hereof.  Upon a
request by the Liquidity Facility Provider, the Administrative Agent shall
provide the Liquidity Facility Provider with the amount of Investment Earnings
held in the Liquidity Facility Reserve Account as of the applicable date of
determination.  On each Payment Date, the Administrative Agent shall
direct the Operating Bank in writing to pay to the Liquidity Facility Provider
all Investment Earnings on amounts on deposit in the Liquidity Facility Reserve
Account.  Amounts on deposit in the Liquidity Facility Reserve Account
shall be withdrawn by or at the direction of the Administrative Agent under the
following circumstances:

     

    (i)              in
accordance with Section 3.01(n) hereof;

     

    (ii)             on
any Payment Date, if the amount in the Liquidity Facility Reserve Account
exceeds the Required Amount therefor, then the Administrative Agent shall

     

    
      
        
        

      

      
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    direct
the Operating Bank to withdraw, upon Written Notice from the Administrative
Agent, from the Liquidity Facility Reserve Account such excess and pay such
amount to the Liquidity Facility Provider;

     

    (iii)             if
a Replacement Liquidity Facility is established following the date on which
funds have been deposited into the Liquidity Facility Reserve Account, the
Administrative Agent shall direct the Operating Bank to withdraw, upon Written
Notice from the Administrative Agent, all amounts on deposit in the Liquidity
Facility Reserve Account and shall pay such amounts to the replaced Liquidity
Facility Provider in an amount not exceeding that of all Liquidity Facility
Obligations owed to such Person, and shall deposit any remaining amount in the
Collections Account;

     

    (iv)             upon
the payment in full of the Outstanding Principal Balance of, and accrued and
unpaid interest on, the ACS Group Loans, the Administrative Agent shall direct
the Operating Bank to withdraw, upon Written Notice from the Administrative
Agent, all amounts from the Liquidity Facility Reserve Account and pay such
amounts to the Liquidity Facility Provider in an amount not exceeding that of
all Liquidity Facility Obligations owed to such Liquidity Facility Provider, and
shall deposit any remaining amount in the Collections Account; and

     

    (v)             15
days after the Final Maturity Date with respect to the ACS Group Loans, the
Operating Bank shall withdraw, upon receipt of Written Notice from the
Administrative Agent, all amounts on deposit in the Liquidity Facility Reserve
Account and pay such amounts to the Liquidity Facility Provider in an amount not
exceeding that of all Liquidity Facility Obligations owed to such Person, and
shall deposit any remaining amount in the Collections Account.

     

    (f)              Reinstatement.  With
respect to any Liquidity Facility Drawing under the Liquidity Facility, upon the
repayment to the Liquidity Facility Provider in full or in part of the amount of
such Liquidity Facility Drawing, together with any accrued interest thereon, the
Available Amount of the Liquidity Facility shall be reinstated by an amount
equal to the amount of such Liquidity Facility Drawing so repaid to the
Liquidity Facility Provider but not to exceed the Maximum Commitment; provided, however, that the Liquidity
Facility shall not be so reinstated in part or in full at any time if (x) a
Liquidity Facility Event of Default shall have occurred and be continuing or (y)
a Non-Extension Drawing or Final Drawing shall have occurred.

     

    (g)              Reimbursement.  The
amount of each Liquidity Facility Drawing under the Liquidity Facility and any
amounts withdrawn from the Liquidity Facility Reserve Account following a
Non-Extension Drawing or a Final Drawing shall be due and payable, together with
interest thereon, on the dates and at the rates, respectively, provided in the
Liquidity Facility but only to the extent that Available Collections are
sufficient to pay such amounts in the order of priority set forth in Section
3.08 hereof.

     

    (h)              Final
Drawing.  Upon receipt from the Liquidity Facility Provider of
a Termination Notice with respect to the Liquidity Facility, the Administrative
Agent shall, not later than the date specified in such Termination Notice, in
accordance with the terms of the 

     

    
      
        
        

      

      
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    Liquidity
Facility, request a drawing under the Liquidity Facility of the Available Amount
thereunder (a “Final
Drawing”).  Proceeds of a Final Drawing shall be deposited into
the Liquidity Facility Reserve Account for application in accordance with
Section 3.10(e) hereof.

     

    (i)              Liquidity Facility Provider
Consent.  To the extent that the Liquidity Facility Provider’s
consent or approval (including with respect to any amendment) is required under
this Intercreditor Agreement, the Guarantor Intercreditor Agreement or any other
Related Document, such consent is not required in the event that (x) no ACS
Group Loans are Outstanding and (y) no Liquidity Facility Advance
Obligations are due and owing to the Liquidity Facility Provider.

     

    Section
3.11         Contributions.  In
the event that the amounts available for distribution under Section 3.08
hereof and from any Eligible Liquidity Facility are insufficient to pay in full
any of the Secured Obligations or any other Obligations, the Borrower or
Guarantor may, out of funds provided to it by a Holder of a Class E Security or
a Shareholder (and not out of any amounts in the Collections Account or any
other Account or any other Collateral), pay such shortfall with respect to such
Obligations on the applicable Payment Date by giving Written Notice of its
intention to do so (specifying the amount thereof) to the Administrative Agent
and the Facility Agent at least two Business Days prior to such Payment Date by
transferring funds in such amount (the “Contribution
Amounts”) to the Facility Agent one Business Day prior to such Payment
Date for deposit into the applicable Account; provided that the Shareholders or
Holders of Class E Securities may exercise its right under this Section 3.11 and
Section 3.11 of the Guarantor Intercreditor Agreement to discharge the Borrower
or Guarantor’s obligations in respect of the Aggregate Scheduled Principal
Payment Amount or the Supplemental Principal Amount only once.  All
Contribution Amounts so deposited shall (a) be paid out of such Account to the
applicable Person or transferred to the applicable Account notwithstanding
Section 3.08 hereof, Article VI hereof or anything else to the
contrary contained in this Intercreditor Agreement or the Security Agreement and
(b) not constitute an obligation or debt of the Borrower.

     

    Section
3.12         Conversion
Contributions.  In
the event that a Conversion Election is in effect and there are insufficient
amounts in the Aircraft Conversion Account to discharge all obligations then due
and payable in respect of such ACS Group Aircraft Conversion, then the Borrower
or Guarantor may, out of funds provided to it by a Holder of a Class E Security
or a Shareholder, deposit in the Aircraft Conversion Account up to an amount
that would enable the Borrower or Guarantor, as applicable, to discharge such
obligations.  Any such amounts should not constitute an obligation or
debt of the Borrower.

     

    Section
3.13         DSCR
Failure.  In
the event that the Administrative Agent determines, in accordance with Section
3.06(c) hereof, that a DSCR Failure for the related Payment Date will occur, it
shall provide Written Notice thereof (not later than two Business Days prior to
such Payment Date) to the Borrower, the Guarantor, and the Facility
Agent.  During the occurrence and continuance of a DSCR Failure, all
proceeds on deposit in the Collections Account shall be applied in accordance
with Section 3.08(b) hereof.

     

    
      
        
        

      

      
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    ARTICLE
IV

    DEFAULT
AND REMEDIES

     

    Section
4.01         Events of
Default.  Each
of the following events shall constitute an “Event of Default”
hereunder with respect to the Loans or Class E Securities, and each such Event
of Default shall be deemed to exist and continue so long as, but only so long
as, it shall not have been remedied:

     

    (a)              failure
by the Borrower or Guarantor to pay when due interest on the Loans (without
regard to whether funds shall be available in the Collections Account in amounts
sufficient for such payment), and the continuance of such default unremedied for
a period of three Business Days after the same shall have become due and
payable;

     

    (b)              failure
by the Borrower or Guarantor to pay when due in full the Aggregate Scheduled
Principal Payment Amount or the Supplemental Principal Payment Amount for twelve
consecutive Payment Dates (without regard to whether funds shall be available in
the Collections Account in amounts sufficient for such payment); provided that,
for the purpose of this clause (b), the Aggregate Scheduled Principal Payment
Amount and the Supplemental Principal Amount shall be deemed paid on any Payment
Date to the extent that amounts that would have otherwise been applied to pay
such amounts are instead used to reimburse the Borrower for Conversion Payments
pursuant to Section 3.06(h);

     

    (c)              failure
by the Borrower or Guarantor to pay when due principal of any Loans or Class E
Securities on or before the Final Maturity Date;

     

    (d)              failure
by the Borrower or Guarantor to pay any amount (other than amounts referred to
in clauses (a), (b) and (c) above) when due and payable in connection with the
Loans to the extent that there are, on any Payment Date, amounts available for
such payment (and all Prior Ranking Amounts) in the Collections Account and the
continuance of such default for a period of five or more Business Days after
such Payment Date;

     

    (e)              failure
of any of the representations or warranties of the Borrower under this
Intercreditor Agreement to be true and correct or failure by the Borrower to
comply with any of the covenants, obligations, conditions or provisions binding
on it under this Intercreditor Agreement, the Warehouse Intercreditor Agreement
or the Credit Agreement (other than a payment default for which provision is
made in Section 4.01(a), (b), (c) or (d) above), if such failure or such
breach materially adversely affects the Holders of such Loans and continues for
a period of 30 days or more after written notice thereof has been given to the
Borrower by the Controlling Party or by the Required Lenders;

     

    (f)              a
court having jurisdiction in the premises enters a decree or order for (i)
relief in respect of the Borrower or the Guarantor or any direct or indirect
subsidiary thereof (other than a Non-Significant Subsidiary) under any
Applicable Law relating to bankruptcy, insolvency, receivership, winding-up,
liquidation, reorganization, examinership, relief of debtors or other similar
law now or hereafter in effect; (ii) appointment of a receiver, liquidator,
Irish law examiner, assignee, custodian, trustee, sequestrator or similar
official of the Borrower or the Guarantor or any direct or indirect subsidiary
thereof (other than a Non-Significant Subsidiary); 

     

    
      
        
        

      

      
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    or
(iii) the winding up or liquidation of the affairs of the Borrower or the
Guarantor or any direct or indirect subsidiary thereof (other than a
Non-Significant Subsidiary) and, in each case, such decree or order shall not be
contested by appropriate proceedings or remain unstayed or such writ or other
process shall not have been stayed or dismissed within 60 days from entry
thereof;

     

    (g)              the
Borrower or the Guarantor or any direct or indirect subsidiary thereof (other
than a Non-Significant Subsidiary) (i) commences a voluntary case under any
Applicable Law relating to bankruptcy, insolvency, receivership, winding-up,
liquidation, reorganization, examinership, relief of debtors or other similar
law now or hereafter in effect, or consents to the entry of an order for relief
in any involuntary case under any such law; (ii) consents to the appointment of
or taking possession by a receiver, liquidator, Irish law examiner, assignee,
custodian, trustee, sequestrator or similar official of the Borrower or the
Guarantor or any direct or indirect subsidiary thereof (other than a
Non-Significant Subsidiary) or for all or substantially all of the property and
assets of the Borrower or the Guarantor or any direct or indirect subsidiary
thereof (other than a Non-Significant Subsidiary); or (iii) effects any general
assignment for the benefit of creditors;

     

    (h)              an
encumbrancer takes possession of all or substantially all of the property and
assets of the Borrower or the Guarantor or any direct or indirect subsidiary
thereof (other than a Non-Significant Subsidiary) and, if such action is only in
respect of one ACS Group Member (other than the Borrower or the Guarantor), such
action shall not have been stayed or dismissed within 60 days of the
commencement of such action;

     

    (i)              one
or more judgments or orders for the payment of money that are in the aggregate
in excess of 1% of the Outstanding Principal Amount of the ACS Group Loans shall
be rendered against any ACS Group Member and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 10 consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; provided, however, that any such
judgment or order shall not be an Event of Default under this
Section 4.01(i) if and for so long as (x) the amount of such judgment
or order is covered by a valid and binding policy of insurance between the
defendant and the insurer covering payment thereof and (y) such insurer,
which shall be rated at least “A” by A.M. Best Company or any similar successor
entity, has been notified of, and has not disputed the claim made for payment
of, the amount of such judgment or order;

     

    (j)              the
constitutional documents creating the Borrower or the Guarantor cease to be in
full force and effect without replacement documents having the same terms being
in full force and effect;

     

    (k)             all
or a material part of the Related Documents becomes void, illegal or
unenforceable or are alleged to be so by the Borrower or Guarantor;

     

    (l)              an
Event of Default (as defined in the Guarantor Intercreditor Agreement) has
occurred and is continuing under the Guarantor Intercreditor Agreement;
or

     

    (m)            if
any security interest over a material portion of the Collateral shall for any
reason not to be a valid security interest (of the type and priority, and
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    obligations,
represented in Section 2.03 of the Security Agreement) on the Collateral
identified therein, subject to no other security interests except those
permitted pursuant to the terms of the Related Documents.

     

    For
the avoidance of doubt, any payment under an Eligible Liquidity Facility shall
be deemed to be a payment by the Borrower for purposes of clauses (a), (b), (c)
and (d) above.

     

    Section
4.02         Acceleration,
Rescission and Annulment.  (a) 
If an Event of Default (other than an Event of Default under
Section 4.01(f) or (g) hereof) occurs and is continuing, the Controlling
Party may, and (if the Controlling Party is the Facility Agent, upon the written
direction of  the Required Lenders, shall) give a Default Notice to
the Borrower, the Administrative Agent, the Collateral Agent, the Guarantor, the
Facility Agent and the Operating Bank, declaring the Outstanding Principal
Balance of the Loans and all accrued and unpaid interest thereon to be due and
payable.  If the Controlling Party is the Liquidity Facility Provider,
only it may give a Default Notice.  Upon delivery of a Default Notice,
such Outstanding Principal Balance and all accrued and unpaid interest thereon
shall be due and payable.  At any time after the Controlling Party has
declared the Outstanding Principal Balance of the Loans to be due and payable
and prior to the exercise of any other remedies pursuant to this
Article IV, the Controlling Party may (and if the Controlling Party is the
Facility Agent, upon the written direction of the Required Lenders, shall) by
Written Notice to the Borrower, the Facility Agent (if not the Controlling
Party), the provider of any Eligible Liquidity Facility (if not the Controlling
Party), the Administrative Agent, the Collateral Agent and the Facility Agent,
subject to Section 4.04(a) hereof, rescind and annul such declaration and
thereby annul its consequences if: (i) there has been paid to or deposited with
the Facility Agent an amount sufficient to pay all overdue installments of
interest on the Loans, and the principal or Repayment Price of the Loans,
together with all other amounts that would have become due otherwise than by
such declaration of acceleration, (ii) the rescission or annulment would not
conflict with any judgment or decree and (iii) all other Defaults and Events of
Default, other than nonpayment of interest and principal on the Loans that have
become due solely because of such acceleration, have been cured or
waived.  If the Controlling Party is the Liquidity Facility Provider,
only it may give a notice of annulment.  If an Event of Default under
Section 4.01(f) or (g) hereof occurs, the Outstanding Principal Balance of
the Loans and the Class E Securities and all accrued and unpaid interest thereon
shall automatically become due and payable without any further action by any
party.

     

    (b)              Notwithstanding
this Section 4.02 and Section 4.03 hereof, after the occurrence and during the
continuation of an Event of Default, no Holders of any Loans other than the
Senior Class may give or direct the giving of a Default Notice or exercise or
direct the exercise of any remedy in respect of such Event of Default, and no
Person other than the Controlling Party may give a Default Notice or exercise
any such remedy.

     

    Section
4.03         Other
Remedies.  If
an Event of Default occurs and is continuing, the Facility Agent (at the
direction of the Controlling Party if the Facility Agent is not the Controlling
Party) may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal or Repayment Price of, or interest on, the
Loans or to enforce the performance of any provision of the Loans or this
Intercreditor Agreement.

     

    
      
        
        

      

      
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    The
Facility Agent may maintain a proceeding even if it does not possess any of the
Loans or does not produce any of them in the proceeding.

     

    Section
4.04         Waiver; Cure
of Existing Defaults.  v)The
Controlling Party or (if the Controlling Party is the Facility Agent as
representative of the Holders of the Loans) the Required Lenders by notice to
the Facility Agent and the Borrower may waive any existing Default hereunder and
its consequences, except a Default:  (i) in the deposit or
distribution of any payment required to be made on any Loans, (ii) in the
payment of the interest on, principal of or premium, if any, with respect to any
Loans or (iii) in respect of a covenant or provision hereof which under Section
8.6 of the Credit Agreement cannot be modified or amended without the consent of
the Holders of all the Loans, which (in the case of such Defaults described in
clauses (i), (ii) and (iii)) may not be waived. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Intercreditor Agreement,
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.

     

    (b)              Any
written waiver of a Default or an Event of Default given by the Controlling
Party or the Holders to the Facility Agent and the Borrower in accordance with
the terms of this Intercreditor Agreement shall be binding upon the Facility
Agent and the other parties hereto.  Unless such writing expressly
provides to the contrary, any waiver so granted shall extend only to the
specific event or occurrence which gave rise to the Default or Event of Default
so waived and not to any other similar event or occurrence which occurs
subsequent to the date of such waiver.

     

    (c)              If
an Event of Default arises under Section 4.01 due to the action of a single ACS
Group Member then, if no other Event of Default has occurred and is continuing
or would arise from such transfer, the Borrower may cure such Event of Default
by transferring such ACS Group Member to a Person who is not an ACS Group
Member.

     

    Section
4.05         Restoration
of Rights and Remedies.  If
the Controlling Party has instituted any proceeding to enforce any right or
remedy under this Intercreditor Agreement, and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Facility Agent or such Holder, then in every such case the Borrower, the
Facility Agent and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Facility Agent and the
Holders shall continue as though no such proceeding has been
instituted.

     

    Section
4.06         Remedies
Cumulative.  Each
and every right, power and remedy herein given to the Facility Agent (or the
Controlling Party) specifically or otherwise in this Intercreditor Agreement
shall be cumulative and shall be in addition to every other right, power and
remedy herein specifically given or now or hereafter existing at law, in equity
or by statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by the Facility Agent (or the
Controlling Party), and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy.  No
delay or 

     

    
      
        
        

      

      
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    omission
by the Facility Agent (or the Controlling Party) in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any Default on the part of the
Borrower or to be an acquiescence therein.

     

    Section
4.07         Authority of
Courts Not Required.  The
parties hereto agree that, to the greatest extent permitted by law, the Facility
Agent shall not be obliged or required to seek or obtain the authority of, or
any judgment or order of, the courts of any jurisdiction in order to exercise
any of its rights, powers and remedies under this Intercreditor Agreement, and
the parties hereby waive any such requirement to the greatest extent permitted
by law.

     

    Section
4.08         Rights of
Holders to Receive Payment.  Notwithstanding
any other provision of this Intercreditor Agreement, the right of any Holder to
receive payment of principal or Repayment Price of, or interest or any other
amounts then due on its Loans on or after the respective due dates therefor
expressed in such Loans, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.

     

    Section
4.09         Facility
Agent May File Proofs of Claim.  The
Facility Agent may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Facility Agent
and of any Holder allowed in any judicial proceedings relating to any Borrower
on the Loans its creditors or its property.

     

    Section
4.10         Undertaking
for Costs.  All
parties to this Intercreditor Agreement agree, and each Holder by its acceptance
thereof shall be deemed to have agreed, that in any suit for the enforcement of
any right or remedy under this Intercreditor Agreement or in any suit against
the Facility Agent for any action taken or omitted by it as Facility Agent, a
court in its discretion may require the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defense made by the party litigant.  This
Section 4.10 does not apply to a suit instituted by the Facility Agent, a
suit instituted by any Holder of any Loan for the enforcement of the payment of
principal or Repayment Price of, or interest on its Loan on or after the
respective due dates expressed in such Loan, or a suit by the Required
Lenders.

     

    Section
4.11         Control by
Holders.  Subject
always to the provisions of this Article IV, the Controlling Party shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Facility Agent, or exercising any trust or power
conferred on the Facility Agent for such class under this Intercreditor
Agreement and other Related Documents; provided that, for such class
(a) such direction shall not be in conflict with any rule of law or with
this Intercreditor Agreement and would not involve the Facility Agent in
personal liability or expense; and (b) the Facility Agent may take any
other action deemed proper by the Facility Agent which is not inconsistent with
such direction.

     

    
      
        
        

      

      
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    ARTICLE
V

    REPRESENTATIONS,
WARRANTIES AND COVENANTS

     

    Section
5.01         Representations
and Warranties.  The
Borrower represents and warrants to the Facility Agent as follows:

     

    (a)              Due
Organization.  The Borrower is a Bermuda exempted company, and
each ACS Bermuda Subsidiary is a special purpose entity duly formed in its
respective jurisdiction of formation, in each case with full power and authority
to conduct its business; and none of the Borrower or any ACS Bermuda Subsidiary
is in liquidation, examinership, bankruptcy or suspension of
payments.

     

    (b)              Special Purpose
Status.  The Borrower has not engaged in any activities since
its organization (other than those incidental to its incorporation and other
appropriate steps and arrangements for the payment of fees to, and director’s
and officer’s insurance for, the Directors, the authorization and issuance of
the Loans, the execution of the Related Documents to which it is a party and the
activities referred to in or contemplated by such agreements), and the Borrower
has not paid any dividends or other distributions since its
organization.

     

    (c)              Non-Contravention.  The
purchase of the Aircraft and interests in the Initial Leases either directly or
through the purchase of Aircraft Interests pursuant to the Purchase Agreement,
the borrowing of the Loans and the execution and delivery by each ACS Bermuda
Group Member of, and compliance by it with the terms of each of the Related
Documents to which it is a party;

     

    (i)              do
not and will not at the Initial Closing Date or any Payment Date conflict with,
or result in a breach of any of the terms or provisions of, or constitute a
default under, the constitutional documents of the Borrower or the constituent
documents of any ACS Bermuda Subsidiary or with any existing law, rule or
regulation applying to or affecting the Borrower or any ACS Bermuda Subsidiary
or any judgment, order or decree of any government, governmental body or court
having jurisdiction over the Borrower or any ACS Bermuda Subsidiary;
and

     

    (ii)             do
not and will not at the Initial Closing Date or any Payment Date constitute a
default under, any deed, indenture, agreement or other instrument or obligation
to which the Borrower or any ACS Bermuda Subsidiary is a party or by which any
of them or any part of their undertaking, assets, property or revenues are
bound.

     

    (d)              Due
Authorization.  The purchase of the Aircraft and interests in
the Initial Leases, the borrowing of the Loans, the execution and issue or
delivery by the Borrower and each ACS Bermuda Subsidiary of the Related
Documents executed by it and the performance by each of them of their
obligations hereunder and thereunder and the arrangements contemplated hereby
and thereby to be performed by each of them have been duly authorized by each of
them.

     

    (e)              Validity and
Enforceability.  This Intercreditor Agreement constitutes, and
the Related Documents to which it is a party, when executed and delivered will
constitute valid, legally binding and (subject to general equitable principles,
insolvency, liquidation, examination, reorganization and other laws of general
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    concepts
of materiality, reasonableness, good faith and fair dealing) enforceable
obligations of the Borrower and each ACS Bermuda Subsidiary executing the
same.

     

    (f)          
    No
Defaults.  There exists no Default, Event of Default or event
which, had the Loans already been made or issued, would constitute a Default or
an Event of Default.

     

    (g)              No
Encumbrances.  Subject to the Security Interests created in
favor of the Collateral Agent and except for Permitted Encumbrances, there
exists no Encumbrance over the assets or undertaking of (i) the Borrower which
ranks prior to or pari
passu with the obligation to make payments on the Loans or (ii) any ACS
Bermuda Subsidiary.

     

    (h)              No
Consents.  All consents, approvals, authorizations or other
orders of all regulatory authorities required (excluding any required by the
other parties to the Related Documents) for or in connection with the execution
and performance of the Related Documents by the Borrower and each ACS Bermuda
Subsidiary and the borrowing, the issue and performance of the Loans by the
Borrower has been obtained and are in full force and effect and not contingent
upon fulfillment of any condition.

     

    (i)           
   No
Litigation.  There is no action, suit, investigation or
proceeding pending against, or to the knowledge of the Borrower, threatened
against or affecting, the Borrower or any ACS Bermuda Subsidiary before any
court or arbitrator or any governmental body, agency or official which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Intercreditor Agreement (including the
Exhibits and Schedules attached hereto) and the Related Documents or which could
reasonably be expected to have a material adverse effect on the ability of the
Borrower or any other ACS Bermuda Group Member to perform its obligations under
the Related Documents.

     

    (j)           
   Employees,
Subsidiaries.  The Borrower and each ACS Bermuda Subsidiary
have no employees.  Set forth in Schedule 2 hereto is a true and
complete list, as of the date hereof, of all ACS Bermuda Subsidiaries, together
with their jurisdictions of organization.

     

    (k)              Ownership.  The
Borrower or an ACS Bermuda Subsidiary is the legal and beneficial owner of the
Pledged Shares, the Pledged Debt, the Pledged Beneficial Interest and the
Non-Agent Accounts pledged by the Borrower or any such ACS Bermuda Subsidiary
pursuant to the Security Documents, free from all Encumbrances and claims
whatsoever other than Permitted Encumbrances.

     

    (l)           
   No
Filings.  Under the laws of Bermuda, the State of New York and
the Federal laws of the United States of America in force at the date hereof, it
is not necessary or desirable that this Intercreditor Agreement or any Related
Document to which an ACS Bermuda Subsidiary is a party (other than any filings
with respect to the Security Interests) be filed, recorded or enrolled with any
court or other authority in any such jurisdictions or that any stamp,
registration or similar tax be paid on or in relation to this Intercreditor
Agreement or any of the other Related Documents.

     

    (m)             Aircraft
Assets.  Schedule 1 contains a true and complete list of all
Aircraft as of the Initial Closing Date and each Person within the ACS Group
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    Aircraft
as of the applicable Delivery Date.  Except as otherwise set forth
therein, once each Aircraft listed in Schedule 1 has been delivered under the
ACS Group Purchase Agreement, each Person within the ACS Group listed as an
owner of an Aircraft on such Schedule will have such title to such Aircraft as
was conveyed to such Person, free and clear of all liens created by or through
such Person other than the lien arising out of the entering into of the Initial
Lease in respect of such Aircraft.  Each ACS Group Member that
directly owns an ACS Group Aircraft is organized in a jurisdiction that is a
Contracting State.

     

    (n)              Aircraft Assets Related
Documents.  Each Aircraft Assets Related Document is a legal,
valid and binding agreement of the Person within the ACS Group that is a party
thereto (including by way of assignment or novation) and is enforceable against
such Person within the ACS Group that is a party thereto in accordance with its
terms except where enforceability may be limited by general equitable
principles, insolvency, liquidation, reorganization and other laws of general
application relating to creditors’ rights or claims or the concepts of
materiality, reasonableness, good faith and fair dealing.  No Person
within the ACS Group has modified, amended or waived any provision of or
terminated any Aircraft Assets Related Documents referred to in Schedule 5.01(b)
of the Remarketing Services Agreements except as disclosed therein.

     

    (o)              Other
Representations.  The representations and warranties made by
the Borrower, the Guarantor, and each ACS Bermuda Subsidiary in each of the
other Related Documents are true and accurate.

     

    (p)              Insurance.  Each
Lessee under an Initial Lease carries War Risk Coverage in an amount at least
equal to the Current War Risk Coverage Amount set forth in Schedule 4
hereto with respect to such Lessee.

     

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

     

    (r)              Investment
Company.  No Borrower or other ACS Group Member is an
“investment company,” or “promoter” or “principal underwriter” for, an
“investment company”, as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. § 80a-1, et seq.).  The application
of the proceeds of the Loans and repayment thereof by each Borrower and the
performance by each Borrower and the other ACS Group Members’ of the
transactions contemplated by the Related Documents will not violate any
provision of said Act, or any rule, regulation or order issued by the Securities
and Exchange Commission thereunder, in each case as in effect on the date
hereof.

     

    (s)              Patents,
Etc.  Each Borrower and each other ACS Group Member owns or has
the right to use, under valid license agreements or otherwise, all material
patents, licenses, 

     

    
      
        
        

      

      
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    franchises,
trademarks, trademark rights, trade names, trade name rights, trade secrets and
copyrights necessary to or used in the conduct of its businesses as now
conducted and as contemplated by the Related Documents, without known conflict
with any patent, license, franchise, trademark, trade secret, trade name,
copyright, other proprietary right of any other Person.

     

    (t)              No Untrue
Statement.  Neither (i) this Intercreditor Agreement nor any
other Related Document or certificate or document executed and delivered by or
on behalf of any Borrower or any other ACS Group Member in accordance with or
pursuant to any Related Document nor (ii) any written statement, representation,
or warranty provided to the Facility Agent in connection with the negotiation or
preparation of the Related Documents contains any misrepresentation or untrue
statement of material fact.

     

    (u)              Employee Benefit
Plans.

     

    (i)              Neither
any Borrower nor any of their respective ERISA Affiliates has or has ever
sponsored any Single Employer Plan, been a participating employer in any
Multiemployer Plan, or had any obligation to fund any such plan;

     

    (ii)             Neither
any ACS Group Member nor any ERISA Affiliate thereof has incurred any
“accumulated funding deficiency” with respect to any Single Employer Plan or
failure to satisfy the minimum funding standards (within the meaning of Section
412 of the Code or Section 302 of ERISA) applicable to such Single Employer
Plan, whether or not waived; during the six-year period prior to the date on
which this representation is made or deemed made or any other liability to the
PBGC which remains outstanding, in each case, in an amount that would be
reasonably likely to have a Material Adverse Effect;

     

    (iii)            No
Termination Event has occurred during the six-year period prior to the date on
which this representation is made or deemed made or is reasonably expected to
occur with respect to any Single Employer Plan or Multiemployer Plan, neither
any ACS Group Member nor any ERISA Affiliate has incurred any unpaid withdrawal
liability with respect to any Multiemployer Plan that, in each case, could be
reasonably expected to have a Material Adverse Effect; and

     

    (iv)            The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Single Employer Plan) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made for each such plan, exceed the then current value of the
assets of such Single Employer Plan allocable to such benefits by a material
amount.

     

    (v)              Environmental
Laws.  Except as listed on Schedule 6, each Borrower and each
other ACS Group Member is in compliance with all applicable Environmental Laws
and has been issued and currently maintains all required federal, state and
local permits, licenses, certificates and approvals.  Except as listed
on Schedule 6, neither any Borrower nor any other ACS Group Member has been
notified of any pending or threatened action, suit, proceeding or investigation,
and neither any Borrower, any Guarantor nor any other ACS Group Member is

     

    
      
        
        

      

      
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    aware
of any facts, which (a) calls into question, or could reasonably be expected to
call into question, compliance by any Borrower or any other ACS Group Member
with any Environmental Laws, (b) seeks, or could reasonably be expected to form
the basis of a meritorious proceeding, to suspend, revoke or terminate any
license, permit or approval necessary for the operation of any Borrower’s, or
any other ACS Group Member’s business or facilities or for the generation,
handling, storage, treatment or disposal of any Hazardous Materials, or (c)
seeks to cause, or could reasonably be expected to form the basis of a
meritorious proceeding to cause, any property of any Borrower or any other ACS
Group Member to be subject to any restrictions on ownership, use, occupancy or
transferability under any Environmental Law.

     

    (w)              Taxes.  Except
as set forth in Schedule 6 hereof, each Borrower and each other ACS Group Member
has filed or caused to be filed all federal, state, local and foreign Tax
returns that are required to be filed by it, and has paid or caused to be paid
all Taxes required to be paid, except to the extent that a failure to file or
pay would not have a Material Adverse Effect (individually or in the aggregate),
and except for the payment of Taxes being contested in good faith by appropriate
proceedings diligently conducted and against which reserves in accordance with
GAAP have been established.  The Borrower hereby represents that, as
of the date hereof and to its knowledge, assuming each Lender is a Qualifying
Lender, it is not required to withhold or deduct any Taxes from any payments
made by the Borrower to each Lender in respect of principal of, and interest on,
the Loans.

     

    (x)              OFAC
Restrictions.  Neither the Borrower, nor, to the Borrower’s
knowledge, any persons or entities holding any legal or beneficial interest
whatsoever in Borrower (whether directly or indirectly) (a) appear on the OFAC
SDN List; (b) are included in, owned by, controlled by, acting for or on behalf
of, providing assistance, support, sponsorship, or services of any kind to, or
otherwise associated with any of the persons or entities referred to or
described in the OFAC SDN List; or (c) have conducted business with or engaged
in any transaction with any person or entity named on any of the OFAC SDN List
or any person or entity included in, owned by, controlled by, acting for or on
behalf of, providing assistance, support, sponsorship, or services of any kind
to, or otherwise associated with any of the persons or entities referred to or
described in the OFAC SDN List.

     

    (y)              Use of
Proceeds.  The Borrower represents that it is the ultimate
beneficiary of the Loan contemplated hereunder and covenants that it will
promptly notify the Lenders (by written notice to the Facility Agent) if it
ceases to be the ultimate beneficiary.  Such written notice shall
disclose the name and the address of the new ultimate beneficiary.

     

    Section
5.02          General
Covenants.  The
Borrower covenants with the Facility Agent as follows:

     

    (a)              No Release of
Obligations.  The Borrower shall not take, or knowingly permit
any ACS Bermuda Subsidiary to take, any action which would amend, terminate
(other than any termination in connection with the replacement of such agreement
with an agreement on terms substantially no less favorable to the ACS Bermuda
Group than the agreement being terminated) or discharge or prejudice the
validity or effectiveness of this Intercreditor Agreement (other than as
permitted herein), the Security Agreement, the Purchase Agreement, the

     

    
      
        
        

      

      
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    Administrative
Agency Agreement, any organizational document of the Borrower or any ACS Bermuda
Subsidiary (unless such ACS Bermuda Subsidiary no longer holds any direct or
indirect interest in an Aircraft or a Lease), the Liquidity Facility (other than
as expressly permitted hereunder), the Bermudian Remarketing Services Agreement,
or any other Related Document to which the Borrower or any ACS Bermuda
Subsidiary (unless such ACS Bermuda Subsidiary no longer holds any interest in
an Aircraft or a Lease) is a party or permit any other party (other than an ACS
Group Member) to any such document to be released from such obligations, except,
in each case, as permitted or contemplated by the terms of such document, and
provided that such
actions may be taken or permitted and such releases may be permitted if the
prior written consent of the Facility Agent and the Liquidity Facility Provider
has been obtained; and provided further that, in any
case (i) the Borrower shall not take any action which would result in any
amendment or modification to the conflicts standard or duty of care in such
agreements and (ii) there must be at all times an administrative agent with
respect to the ACS Group Services (as defined in the Administrative Agency
Agreement) and a remarketing servicer with respect to all ACS Group
Aircraft.

     

    (b)              Limitation on
Encumbrances.  The Borrower shall not, and shall not permit any
ACS Bermuda Subsidiary to, create, Incur, assume or suffer to exist any
mortgage, pledge, lien, encumbrance, charge or security interest (in each case,
an “Encumbrance”),
including, without limitation, any conditional sale, any sale with recourse
against any ACS Bermuda Subsidiary or any Affiliate of any ACS Bermuda
Subsidiary, or any agreement to give any security interest over or with respect
to any of the Borrower’s or any ACS Bermuda Subsidiary’s assets (other than the
segregation of the Segregated Funds) including, without limitation, all shares
of capital stock, all beneficial interests in trusts, all ordinary shares and
preferred shares and any options, warrants and other rights to acquire such
shares or beneficial interests (“Ownership Interest”)
and any Indebtedness of any ACS Bermuda Subsidiary held by the Borrower or any
ACS Bermuda Subsidiary.

     

    Notwithstanding
the foregoing, the Borrower may create, Incur, assume or suffer to exist
(i) any Permitted Encumbrance, (ii) any security interest created or
required to be created under the Security Documents, (iii) Encumbrances
over rights in or derived from Leases upon the prior written consent of the
Facility Agent, (provided that any transaction
or series of transactions resulting in such Encumbrance, taken as a whole, does
not materially adversely affect the amount of Collections that would have been
received by the Borrower and any other ACS Bermuda Group Member from such Lease
had such Encumbrance not been created), (iv) any other Encumbrance the
validity or applicability of which is being contested in good faith in
appropriate proceedings by the Borrower or any ACS Bermuda Subsidiary and
enforcement of which is stayed or effectively bonded, (v) any Encumbrance
in connection with any transfer of title to or Lease of Aircraft (A) to or
in favor of a trust or an entity (which, in either case, is not an ACS Group
Member) for the purpose of registering the Aircraft under the laws of an
applicable jurisdiction so long as, however, the Borrower or any ACS Bermuda
Subsidiary retains the beneficial or economic ownership of the Aircraft or
(B) from such trust or entity to the Borrower or an ACS Bermuda Subsidiary
(subject in the case of this subclause (v) to the limitations set forth in
subclause (vi) of Section 5.02(g) below), and (vi) any lien created in
favor of the issuer of a surety bond, letter of credit or similar instrument to
be obtained by the Borrower or any ACS Bermuda Subsidiary in connection with the
repossession of an Aircraft or other enforcement action under a
Lease.

     

    
      
        
        

      

      
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    For
purposes of this Intercreditor Agreement, “Affiliate” means,
with respect to any Person, any other Person that, directly or indirectly,
Controls, is Controlled by or is under common control with, such Person or is a
director or officer of such Person; “Control” of a Person
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting Ownership Interest, by contract or otherwise.  For
the avoidance of doubt, each ACS Group Member shall be an “Affiliate” of each
other ACS Group Member.  For the purposes of this Intercreditor
Agreement, “Permitted
Encumbrance” means (i) any lien for Taxes not yet due and payable or
which are being contested in good faith by appropriate proceedings; (ii) in
respect of any Aircraft, any lien of a repairer, carrier or hangar keeper
arising in the ordinary course of business by operation of law or any engine or
parts-pooling arrangements or other similar lien; (iii) any permitted lien
or encumbrances on any Aircraft, Engines or Parts as defined under any Lease
thereof (other than liens or encumbrances for which the Lessor thereunder is
responsible to the Lessee thereunder); (iv) any lien created by or through
or arising from debt or liabilities or any act or omission of any Lessee in each
case either in contravention of the relevant Lease (whether or not such Lease
has been terminated) or without the consent of the relevant lessor (provided that if such lessor
becomes aware of any such lien, it shall use commercially reasonable efforts to
have any such lien lifted); (v) any head lease, lease, conditional sale
agreement, or Purchase Option under the Initial Lease of any Aircraft existing
on the date of acquisition of such Aircraft or otherwise existing on the
relevant Closing Date or Aircraft Agreement meeting the requirements of
clause (iii) of the second paragraph of Section 5.02(g) hereof and
disclosed on Schedule 7 to the Purchase Agreement; (vi) any lien for air
navigation authority, airport tending, gate or handling (or similar) charges or
levies; (vii) any lien created in favor of the Borrower, any ACS Bermuda
Subsidiary or the Collateral Agent; (viii) any Encumbrance arising under an
Eligible Liquidity Facility or a Conversion Agreement; (ix) any lien created by
Constitution Aircraft Leasing (Ireland) 4 Limited in favor of JPMorgan Chase
Bank, N.A. over the Excluded Leases or the Excluded Accounts or any proceeds
thereof; and (x) any other lien not referred to in clauses (i) through
(ix) of this paragraph which would not adversely affect the owner’s rights provided that the amount
secured by liens under this clause (x) does not exceed, individually, $250,000
per Aircraft or, in the aggregate, 0.25% of the Initial Appraised Value of the
ACS Group Portfolio.

     

    (c)              Limitation on Restricted
Payments.  The Borrower shall not, and shall not permit any ACS
Bermuda Subsidiary to (i) purchase, redeem, retire or otherwise acquire for
value any shares of Ownership Interest in the Borrower, the Guarantor, any ACS
Bermuda Subsidiary or ACS Ireland Subsidiary held by or on behalf of Persons
other than the Borrower or any ACS Bermuda Subsidiary or other ACS Group Member
other than as provided in Section 5.02(l)(ii)(B) hereof; (ii) make any payment
of principal, interest or premium, if any, on the Loans or the Class E
Securities or make any voluntary or optional repayment or other acquisition or
retirement for value of Indebtedness of the Borrower or such ACS Bermuda
Subsidiary that is not owed to the Borrower, the Guarantor, such ACS Bermuda
Subsidiary or such ACS Ireland Subsidiary or other ACS Group Member other than
in accordance with Articles II and III hereof, and otherwise provided for
in the Related Documents; or (iii) make any Investments (other than Permitted
Account Investments, Allowed Restructurings, Investments permitted under
Section 5.02(e) hereof and Investments in any ACS Bermuda Group Member and
any other ACS Group Member pursuant to the Purchase Agreement; provided that written
notification of the organization
or acquisition of each such ACS Bermuda Group Member shall have been given to
the Facility Agent and the Liquidity Facility Provider).

     

    
      
        
        

      

      
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    The
term “Investment” for
purposes of the above restriction means any loan or advance to a Person, any
purchase or other acquisition of any beneficial interest, capital stock,
warrants, rights, options, obligations or other securities of such Person, any
contribution to such Person or any other Investment in such
Person.  For the avoidance of doubt, “Investment” shall not include
any obligation of a purchaser of an Aircraft to make deferred or installment
payments pursuant to any Aircraft Agreement specified in clause (iii) or (v) of
the second paragraph of Section 5.02(g) hereof so long as the ACS Bermuda
Group retains a security interest in the relevant Aircraft until all such
obligations are discharged and shall not include any payment owing to a
Lessee.

     

    (d)              Limitation on Restrictions
on Dividends and Other Payments.  The Borrower shall not, and
shall not permit any ACS Bermuda Subsidiary to, create or otherwise suffer to
exist any consensual encumbrance or restriction of any kind on the ability of
any ACS Bermuda Subsidiary to (i) declare or pay dividends or make any
other distributions permitted by Applicable Law, or purchase, redeem or
otherwise acquire for value, the Ownership Interest of the Borrower or such ACS
Bermuda Subsidiary, as the case may be; (ii) pay any Indebtedness owed to the
Borrower or such ACS Bermuda Subsidiary; (iii) make loans or advances to the
Borrower or such ACS Bermuda Subsidiary; or (iv) transfer any of its property or
assets to the Borrower or any other ACS Bermuda Subsidiary.

     

    The
foregoing provisions shall not restrict any consensual encumbrances or other
restrictions:  (i) existing on the Initial Closing Date or, in the
case of any Aircraft, the Acquisition Date of such Aircraft, under any Related
Document and, in each case, disclosed to the Facility Agent on Schedule 6
hereto, and any amendments, extensions, refinancings, renewals or replacements
of such documents; provided that such consensual
encumbrances and restrictions in any such amendments, extensions, refinancings,
renewals or replacements are no less favorable in any material respect to the
Holders than those previously in effect and being amended, extended, refinanced,
renewed or replaced; or (ii) in the case of clause (iv) of the
preceding paragraph, that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease, license,
conveyance or contract or similar property or asset.

     

    (e)              Limitation on Engaging in
Business Activities.  The Borrower shall not, and shall not
permit any ACS Bermuda Subsidiary to, engage in any business or activity other
than:

     

    (i)              purchasing
or otherwise acquiring (subject to Section 5.02(h) hereof), owning,
holding, converting, maintaining, modifying (subject to Section 5.02(i) hereof),
managing, operating, leasing, re-leasing and, subject to the limitations set
forth in Section 5.02(g) hereof, selling or otherwise disposing of the
Aircraft and the Excluded Aircraft and entering into all contracts and engaging
in all related activities incidental thereto, including from time to time
accepting, exchanging, holding or permitting any ACS Bermuda Subsidiary to
accept, exchange, sell or hold promissory notes, contingent payment obligations
or equity interests, of Lessees or their Affiliates issued in connection with
the bankruptcy, reorganization or other similar process, or in settlement of
delinquent
obligations or obligations anticipated to be delinquent, of such Lessees or
their respective Affiliates in the ordinary course of business (an “Allowed
Restructuring”);

     

    
      
        
        

      

      
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    (ii)             providing
loans to, guaranteeing or otherwise supporting the obligations and liabilities
of any ACS Bermuda Group Member or any ACS Ireland Group Member, in each case
whether or not the Borrower or any ACS Bermuda Subsidiary derives a benefit
therefrom so long as such loans, guarantees or other supports are provided in
connection with the purposes set forth in clause (i) of this
Section 5.02(e); provided
further that written notification shall have been given to the Facility
Agent and the Liquidity Facility Provider of such loan, guarantee or other
support; provided that,
no such notice shall be required for any guarantee provided by an ACS Bermuda
Group Member with respect to any obligations of another ACS Bermuda Group Member
or an ACS Ireland Group Member;

     

    (iii)             financing
or refinancing the business activities described in clause (i) of this
Section 5.02(e) through the offer, sale and issuance of any securities of the
Borrower upon such terms and conditions as the Board sees fit, for cash or in
payment or in partial payment for any property purchased or otherwise acquired
by any ACS Bermuda Group Member;

     

    (iv)            engaging
in currency and interest rate exchange transactions for the purposes of
avoiding, reducing, minimizing, hedging against or otherwise managing the risk
of any loss, cost, expense or liability arising, or which may arise, directly or
indirectly, from any change or changes in any interest rate or currency exchange
rate or in the price or value of any of the Borrower’s or any ACS Bermuda
Subsidiary’s property or assets, within limits and with providers specified by
the Board Resolution providing therefor from time to time and submitted to the
Facility Agent and the Liquidity Facility Provider, including dealings, whether
involving purchases, sales or otherwise, in foreign currency, spot and forward
interest rate exchange contracts, forward interest rate agreements, caps, floors
and collars, futures, options, hedges and any other currency, interest rate and
other similar hedging arrangements and such other instruments as are similar to,
or derivatives of, any of the foregoing; provided, that, at all times
after 10 days after each Delivery Date, the Borrower and the Guarantor,
collectively, shall enter into such hedging arrangements so as to result in at
least 80% of their liabilities being hedged for a period corresponding to the
average life of the fixed rate leases; provided, that, no hedging arrangement
shall be required to extend beyond the Final Maturity Date; provided, however, that the Borrower
shall not, and will not permit any ACS Bermuda Subsidiary to, enter into any
such hedging arrangements or other instruments that (x) are not entered into
solely for hedging interest rate or currency risks associated with the Loans
and/or the Leases or (y) are not U.S. dollar-denominated interest rate hedges,
hedges, currency hedges, Swaptions, caps or floors (except in instances where
the hedging instrument is entered into substantially to hedge risks associated
with a non-U.S. dollar-denominated Lease) without the prior written consent of
the Facility Agent; provided further that the Borrower
shall not, and shall not permit any ACS Bermuda Subsidiary to (unless with
respect to any action permitted under Section 5.02(g) and Section 5.02(j)), (A)
terminate or transfer such hedging arrangements without the prior written
consent of the Facility Agent and (B) enter into any Hedge Agreement after the

     

    
      
        
        

      

      
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    Initial
Closing Date without the prior written consent of the Facility Agent unless such
Hedge Agreement contains the Material Hedge Agreement Terms that are no less
favorable to the Borrower, any applicable ACS Bermuda Subsidiary and the
Facility Agent than those contained in the Initial Hedge
Agreements;

     

    (v)             (A)
establishing, promoting and aiding in promoting, constituting, forming or
organizing companies, trusts, syndicates, partnerships or other entities of all
kinds in any part of the world for the purposes set forth in clause (i)
above; provided that
written notification shall have been given to the Facility Agent and the
Liquidity Facility Provider that such company, trust, syndicate, partnership or
other entity is set up in compliance with this Intercreditor Agreement;
(B) acquiring, holding and disposing of shares, securities and other
interests in any such trust, company, syndicate, partnership or other entity and
(C) disposing of shares, securities and other interests in, or causing the
dissolution of, any existing subsidiary; provided that any such
disposition which results in the disposition of an Aircraft meets the
requirements set forth in Section 5.02(g) hereof;

     

    (vi)            taking
out, acquiring, surrendering and assigning policies of insurance and assurances
with any insurance company or companies which the Borrower or any ACS Bermuda
Subsidiary may think fit and to pay the premiums thereon; and

     

    (vii)           engaging
in the transactions contemplated by the Liquidity Facility.

     

    (f)              Limitation on
Indebtedness.   The Borrower shall not, and shall not
permit any ACS Bermuda Subsidiary to, incur, create, issue, assume, guarantee or
otherwise become liable for or with respect to, or become responsible for, the
payment of, contingently or otherwise, whether present or future (in any such
case, to “Incur”),
Indebtedness.

     

    Notwithstanding
the foregoing, the Borrower and any ACS Bermuda Subsidiary may Incur each and
all of the following:

     

    (i)             
Indebtedness in respect of the Loans or the guarantee of the Borrower in respect
of the Guarantor Loans and the Class E Securities;

     

    (ii)             Indebtedness
in respect of guarantees by any ACS Bermuda Group Member that are in the
ordinary course of the aircraft operating leasing business and related to the
Aircraft and within the reasonable commercial practice of a leading aircraft
operating lessor;

     

    (iii)            obligations
to each Seller under each Purchase Agreement and any related lease assignment
and assumption agreements and obligations to Lessees and others under the
documents related thereto, including any Indebtedness owed to any Lessee (or
lessee under an Excluded Lease) and pertaining to the Aircraft or the Excluded
Aircraft under any such agreement or the Lease or Excluded Lease with respect to
maintenance contributions, redelivery condition adjustment payments or any other
obligation to a Lessee (or lessee under an Excluded Lease) incurred in the
ordinary course of the aircraft operating leasing business and within the
reasonable commercial practice of a leading aircraft operating lessor of the
Borrower or any ACS Bermuda Subsidiary;

     

    
      
        
        

      

      
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    (iv)            obligations
under any Conversion Agreement and any other documents related thereto entered
into to consummate an Aircraft Conversion in accordance with Section 5.02(i)
hereof;

     

    (v)             contributions
permitted under Sections 3.11 and 3.12 of the Intercreditor Agreement or the
Guarantor Intercreditor Agreement.

     

    (vi)             Indebtedness
under any agreements between the Borrower or any ACS Bermuda Subsidiary and any
other ACS Bermuda Group Member or other ACS Group Member (each, an “Intercompany Loan”);
provided that such
Indebtedness shall be evidenced in writing, which may be in electronic form,
and, written notification shall have been given to the Facility Agent and the
Liquidity Facility Provider of the Incurrence of such Indebtedness on behalf of
the Borrower;

     

    (vii)            Indebtedness
of the issuer under any Eligible Liquidity Facility, provided that the prior
written consent of the Facility Agent is obtained prior to entering into an
Eligible Liquidity Facility not in existence on the Initial Closing
Date;

     

    (viii)           Indebtedness
required in connection with repossession of an Aircraft or any Engine;
and

     

    (ix)            Indebtedness
in favor of the issuer of a surety, letter of credit or similar instrument to be
obtained by Borrower or any ACS Bermuda Subsidiary in connection with the
repossession or detention of an Aircraft or other enforcement action under a
Lease.

     

    For
the purposes of this Intercreditor Agreement, “guarantee” means any
obligation, contingent or otherwise, of any Person directly or indirectly
guaranteeing any Indebtedness or other obligation of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation of such other Person or (ii) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term
“guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.  The term “guarantee” when used as a verb
has a corresponding meaning.

     

    (g)              Limitation on Aircraft
Dispositions.  The Borrower shall not, and shall not permit any
ACS Bermuda Subsidiary to, sell, transfer or otherwise dispose of any Aircraft
or any interest therein, directly or indirectly, other than as provided in the
Bermudian Remarketing Services Agreement.

     

    In
addition, and notwithstanding any provision of the Bermudian Remarketing
Services Agreement, the Borrower and any ACS Bermuda Subsidiary shall only be
permitted to sell, transfer or otherwise dispose of, directly or indirectly, (a)
any Engine or Part purchased on the date such Aircraft is acquired, (b) any
Engine or Part in connection with the replacement of such Engine or Part in
accordance with the applicable Lease or otherwise in the ordinary course of
business, (c) one or more Aircraft or an interest therein (i) pursuant to a
Purchase Option or 

     

    
      
        
        

      

      
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    other
agreements of a similar character existing with respect to the Aircraft on the
Initial Closing Date and disclosed on Schedule 6 hereto or, with respect to any
Substitute Aircraft ten Business Days prior to the Closing Date therefor, (ii)
within or among the Borrower and the ACS Bermuda Subsidiaries and other ACS
Group Members without limitation, and among the Borrower and/or any other ACS
Bermuda Group Member and any other ACS Group Member provided that no such sale,
transferor or other disposition shall be made if such sale, transfer or
disposition would materially adversely affect the Holders as confirmed by a
certification of the Borrower; provided further that written
notification shall have been given to the Facility Agent of such sale, transfer
or disposition, (iii) pursuant to any Aircraft Agreement (including a Purchase
Option); provided that
such sale does not result in a Concentration Default and the net present value
of the cash Net Sale Proceeds is not less than 110% of the Allocable Debt Amount
for such Aircraft; provided
further that the aggregate Initial Appraised Value of Aircraft sold
pursuant to this clause (iii) and under the corresponding clause (iii) of the
Guarantor Intercreditor Agreement shall not exceed 15% of the Initial Appraised
Value of the ACS Group Portfolio without the prior written consent of the
Facility Agent, (iv) pursuant to receipt of insurance proceeds in connection
with an event of loss, or (v) in connection with a transfer of title or
another interest in an Aircraft (A) to or in favor of a trust or another
entity which, in either case, is not an ACS Group Member for the purposes of
registering the Aircraft under the laws of an applicable jurisdiction where the
Borrower or an ACS Bermuda Subsidiary retains the beneficial or economic
ownership of the Aircraft or (B) from such trust or entity to the Borrower
or an ACS Bermuda Subsidiary, except that without the consent of the Facility
Agent at any time not more than an aggregate total of two Aircraft may be
subject to the arrangements described in this subclause (v) and subclause (v) of
the second paragraph of Section 5.02(b) hereof and the corresponding clause of
the Guarantor Intercreditor Agreement.

     

    For
the purpose of this Section 5.02(g), the net present value of the cash Net
Sale Proceeds of any sale, transfer or other disposition of any Aircraft means
the present value of all payments received or to be received by the Borrower or
any ACS Bermuda Subsidiary from the date of execution or option granting date,
as the case may be, of the relevant Aircraft Agreement through and including the
date of transfer of title to such Aircraft, discounted back to the date of
execution or option granting date, as the case may be, of such Aircraft
Agreement at the weighted average cost of funds of the Borrower (based on the
cost of funds represented by the Loans and taking into account any Hedge
Agreements).

     

    (h)              Limitation on Aircraft
Acquisitions.  The Borrower shall not, and shall not permit any
ACS Bermuda Subsidiary to, purchase or otherwise acquire any aircraft other than
the Aircraft or any interest therein.

     

    Notwithstanding
the foregoing, the Borrower may, and may permit any ACS Bermuda Subsidiary to,
so long as such acquisition does not result in a Default or a Concentration
Default, acquire, as a contribution from a Shareholder an additional aircraft,
provided that, the
representations and warranties with respect to Aircraft set forth in Section
5.01 hereof shall be made on the date of such acquisition; and provided further that (i) the
ACS Group may only acquire aircraft pursuant to this paragraph one time
(although more than one aircraft may be acquired at such time), (ii) each such
aircraft shall be not more than 15 years old (from the date of manufacture
thereof), (iii) the model and variant of each such aircraft is in production as
of the date of this Intercreditor Agreement, (iv) each such aircraft shall be
subject to a lease 

     

    
      
        
        

      

      
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    with
not less than 24 months remaining on the lease terms (which lease term is not
subject to cancellation by the lessee) and (v) any lease to which such
additional aircraft is subject contains the Core Lease Provisions.

     

    (i)              Limitation on Modification
Payments and Capital Expenditures.  Except for provisions for
capital expenditures existing in Initial Leases on the related Closing Date
under the terms hereof disclosed on Schedule 6 hereto, the Borrower shall not,
and shall not permit any ACS Bermuda Subsidiary to, make any capital
expenditures for the purpose of effecting any optional improvement or
modification of any Aircraft, including without limitation the optional
conversion (an “Aircraft Conversion”)
of any Aircraft from a passenger aircraft to a freighter or mixed-use aircraft,
or for the purpose of purchasing or otherwise acquiring any Engines or Parts
outside of the ordinary course of business, excluding any capital expenditure
made in the ordinary course of business in connection with a new lease of such
Aircraft (each such non-excluded expenditure, a “Modification
Payment”, and each Modification Payment in respect of an Aircraft
Conversion, a “Conversion
Payment”).

     

    Notwithstanding
the foregoing, the Borrower may, and may permit any ACS Bermuda Subsidiary to:
(y) make Conversion Payments from any amounts on deposit in the Aircraft
Conversion Account as a result of one or more Conversion Elections; provided
that; (i) the full amount of the cost of such Aircraft Conversion is on deposit
in the Aircraft Conversion Account prior to any Conversion Payments for such
Aircraft Conversion being made (other than any deposit or similar amount)
(ii)(a) the Borrower has provided an information memorandum containing
information and analysis with respect to the related Aircraft Conversion to the
Facility Agent and (b) the Borrower has provided written notification to the
Facility Agent and Liquidity Facility Provider at least five Business Days prior
to making a Conversion Election; (iii) the Aircraft Conversion will not result
in a Concentration Default; (iv) not more than three Aircraft Conversions with
respect to any narrowbody aircraft for all ACS Group Members may be made without
the prior written consent of the Facility Agent and no Aircraft Conversions with
respect to any widebody aircraft for all of the ACS Group Members may be made
without obtaining the prior written consent of the Lenders having 100% of all
Credit Exposures; (v) after the fifth anniversary of the Initial Closing Date,
or in the event a DSCR Failure has occurred, no Aircraft Conversions may be made
(which begin after the fifth anniversary of the Initial Closing Date or the
occurrence of a DSCR Failure) without obtaining the prior written consent of the
Lenders having 100% of all Credit Exposures; (vi) a scheduled conversion slot
has been obtained by the relevant ACS Bermuda Group Member and (vii) an executed
letter of intent has been entered into with a lessee with respect to such
Aircraft; and (z) make Modification Payments if the prior written consent of the
Facility Agent has been obtained (other than with respect to any Conversion
Payments); provided that (i) each Modification Payment (other than Conversion
Payments), together with all other Modification Payments (other than Conversion
Payments) made after the Initial Closing Date pursuant to this Section 5.02(i)
with respect to any single Aircraft, do not exceed the aggregate amount of funds
that would be necessary to perform one incidence of heavy maintenance (as
described in the Bermudian Remarketing Services Agreement) on such Aircraft,
including the airframe and the related Engines thereof; and (ii) (A) such
Modification Payment is included in the annual operating budget of the ACS
Bermuda Group, (B) the amount of funds necessary to make such Modification
Payment shall have been accrued in advance as a Permitted Accrual in the Expense
Account through transfers into the Expense Account pursuant to Section 3.08(a)
hereof or otherwise allowed to be paid under Section
5.02(f) hereof or (C) the amount of funds to make such Modification Payment is
in the Aircraft Conversion Account.

     

    
      
        
        

      

      
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    (j)              Limitation on Amalgamation,
Consolidation, Merger and Transfer of Assets.  The Borrower
shall not, and shall not permit any ACS Bermuda Subsidiary to, amalgamate,
consolidate or merge with or into, or sell, convey, transfer, lease or otherwise
dispose of its property and assets (as an entirety or substantially an entirety
in one transaction or in a series of related transactions) to, any other Person,
or permit any other Person to amalgamate, consolidate or merge with or into the
Borrower or any ACS Bermuda Subsidiary, unless (i) the resulting entity is a
special purpose entity, the constitutional documents of which is substantially
similar to those of the Borrower or the equivalent constitutional documents of
such ACS Bermuda Subsidiary, as the case may be, and, after such amalgamation,
consolidation, merger, sale, conveyance, transfer, lease or other disposition,
payments from such resulting entity to the Holders do not give rise to any
withholding tax payments less favorable to the Holders than the amount of any
withholding tax payments which would have been required had such event not
occurred, (ii) in the case of any amalgamation, consolidation, merger or
transfer by the Borrower, the shares of the Borrower shall remain outstanding or
new Ownership Interests shall be issued in exchange therefor having
substantially the same terms and conditions as the exchanged shares of the
Borrower and the surviving successor or transferee entity shall expressly assume
all of the obligations of the Borrower under this Intercreditor Agreement and
each other Related Document to which the Borrower is then a party, and in the
case of any amalgamation, consolidation, merger or transfer by any ACS Bermuda
Subsidiary, the surviving successor or transferee entity shall expressly assume
all of the obligations of such ACS Bermuda Subsidiary under each Related
Document to which it is then a party, (iii) the Borrower receives the prior
written consent of the Liquidity Facility Provider (unless a Liquidity Facility
Non-Consent Event has occurred) (such consent not to be unreasonably withheld),
(iv) the Borrower receives the prior written consent of the Facility Agent (such
consent not to be unreasonably withheld), (v) such transaction does not
result in a recognition of gain or loss by the Holders for U.S. federal income
tax purposes, (vi) immediately after giving effect to such transaction, no Event
of Default shall have occurred and be continuing, and (vii) the Borrower
delivers to the Facility Agent an Officer’s Certificate and an opinion of
counsel, in each case stating that such amalgamation, consolidation, merger or
transfer and such supplement to this Intercreditor Agreement shall comply with
the above criteria and, if applicable, Section 5.02(g) hereof and that all
conditions precedent provided for herein relating to such transaction have been
complied with; provided
that this covenant shall not apply to any such amalgamation, consolidation,
merger, sale, conveyance, transfer, lease or disposition (a) within and among
the ACS Bermuda Group or ACS Group if such amalgamation, consolidation, merger,
sale, conveyance, transfer, lease or disposition, as the case may be, would not
materially adversely affect the Holders and written notification is given to the
Facility Agent and to the Liquidity Facility Provider by the Borrower or its
agent and is otherwise consistent with Sections 5.02(p) and (q) hereof, (b)
complying with the terms of Section 5.02(g) hereof or (c) effected as part
of a single transaction providing for the repayment or defeasance of Securities
in accordance with Section 3.09 hereof.

     

    (k)              Limitation on Transactions
with Affiliates.  The Borrower shall not, and shall not permit
any ACS Bermuda Subsidiary, directly or indirectly, to enter into, renew or
extend any transaction (including, without limitation, the purchase, sale, lease
or exchange of property or assets, or the rendering of any service) with any
Affiliate of the Borrower or any 

     

    
      
        
        

      

      
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    ACS
Bermuda Subsidiary, except upon fair and reasonable terms no less favorable to
the Borrower or such ACS Bermuda Subsidiary than could be obtained, at the time
of such transaction or at the time of the execution of the agreement providing
therefor, in a comparable arm’s-length transaction with a Person that is not
such an Affiliate and pursuant to enforceable agreements.

     

    The
foregoing limitation does not limit, and shall not apply to: (i) any transaction
in connection with the establishment of the ACS Ireland Group or ACS Bermuda
Group pursuant to the Related Documents and the borrowing or issuance of the
Loans and the Class E Securities by the Borrower and the guarantee by the
Borrower of the Guarantor Loans; (ii) any Contribution Amount or any
contribution in the form of any additional aircraft pursuant to the terms of
this Intercreditor Agreement made by any Holder of a Class E Security or any
Shareholder, (iii) the payment by the Borrower of reasonable and customary fees
to, and the provision of reasonable and customary liability insurance in respect
of, the Directors; or (iii) sale of the Borrower or any ACS Bermuda Subsidiaries
as part of a single transaction providing for the repayment of all of the
Obligations in accordance with Section 3.09 hereof.

     

    (l)              Limitation on the Issuance,
Delivery and Sale of Equity Interests. The Borrower shall not (i) issue,
deliver or sell any shares, interests, participations or other equivalents
(however designated, whether voting or non-voting, other than beneficial
interests, shares, participations or other equivalents existing on the Initial
Closing Date) in equity of the Borrower, or (ii) sell, or permit any ACS Bermuda
Subsidiary, directly or indirectly, to issue, deliver or sell, any shares,
interests, participations or other equivalents in equity (however designated,
whether voting or non-voting, other than beneficial interests, shares,
participations or other equivalents existing on the Initial Closing Date and
disclosed on Schedule 6 hereto), except (A) the issuance, sale, delivery,
transfer or pledge of Ownership Interest in any ACS Bermuda Group Member to or
for the benefit of any other ACS Bermuda Group Member or other ACS Group Member,
(B) issuances or sales of shares of Ownership Interest of foreign ACS Bermuda
Subsidiaries to nationals in the jurisdiction of incorporation or organization
of such ACS Bermuda Subsidiary, as the case may be, to the extent required by
applicable law or necessary in the determination of the Board to avoid adverse
tax consequences or to facilitate the registration or leasing of Aircraft; provided that the prior
written consent of the Facility Agent has been obtained in connection therewith,
(C) the pledge of the Pledged Shares and Pledged Beneficial Interests pursuant
to the Security Documents, and (D) the sale of any Ownership Interest in an ACS
Group Subsidiary in order to effect the sale of all Aircraft owned by such ACS
Group Subsidiary in compliance with Section 5.02(g) hereof.

     

    (m)              Bankruptcy and Insolvency;
Corporate Governance.  The Borrower (i) shall promptly provide
the Facility Agent and the Liquidity Facility Provider with written notice of
the institution of any proceeding by or against the Borrower or any ACS Bermuda
Subsidiary, as the case may be, seeking to adjudicate any of them bankrupt or
insolvent, or seeking liquidation, examinership, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of their debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, Irish law examiner, trustee or other similar official for it or for
any substantial part of its property; (ii) shall not take any action to waive,
repeal, amend, vary, supplement or otherwise modify its constitutional documents
that would adversely affect the rights, privileges 

     

    
      
        
        

      

      
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    or
preferences of any Holder of the Loans or the Liquidity Facility Provider, as
determined by the Board; and (iii) shall not, without an affirmative unanimous
Board Resolution, take any action to waive, repeal, amend, vary, supplement or
otherwise modify (A) the provisions of its constitutional documents which
require a unanimous resolution of the shareholders of the Borrower, or limits
the actions of beneficial interest holders, with respect to voluntary insolvency
proceedings or consents to involuntary insolvency proceedings or (B) any similar
provisions of the constitutional documents of the ACS Bermuda Subsidiaries. The
Borrower shall have at least two Independent Directors and any Independent
Director appointed to replace an Independent Director with respect to the
Borrower shall be subject to the prior written consent of the Facility Agent
(except that if such consent is not provided or expressly denied by the Facility
Agent within 15 days after request therefor, then such consent shall be deemed
to have been given).

     

    (n)              Payment of Principal,
Premium, if any, and Interest.  The Borrower shall duly and
punctually pay the principal, premium, if any, and interest on the Loans in
accordance with the terms of this Intercreditor Agreement and the Credit
Agreement.

     

    (o)              Limitation on
Employees.  The Borrower shall not, and shall not permit any
ACS Bermuda Subsidiary to, employ or maintain any employees other than as
required by any provisions of local law; provided that directors shall
not be deemed to be employees for purposes of this
Section 5.02(o).

     

    (p)              Compliance and
Agreement.  The Borrower shall comply, and shall cause each ACS
Bermuda Subsidiary to comply, with the provisions of the Related
Documents.  The Borrower shall ensure that title to each Aircraft
shall be held in a special purpose bankruptcy remote entity whose constitutional
documents contain restrictions similar to the restrictions (including, but not
limited to, the provisions regarding limited purpose, maintaining separateness
from other entities and bankruptcy remoteness) contained in the constitutional
documents of the ACS Group Subsidiaries existing on the Initial Closing Date.
The constitutional documents of the ACS Group Subsidiaries shall contain
provisions requiring the ACS Group Subsidiaries to comply with the provisions of
the Related Documents and any amendment to such provision shall be subject to
the prior written consent of the Facility Agent.

     

    (q)              Maintenance of Separate
Existence.  Except to the extent provided in this Intercreditor
Agreement or the other Related Documents or as otherwise contemplated by the
Related Documents, the Borrower shall, and shall cause each ACS Bermuda
Subsidiary to, maintain certain policies and procedures relating to its
existence as a separate corporation, company or other legal entity as
follows:

     

    (i)              The
Borrower acknowledges its receipt of a copy of that certain opinion letter
issued by Conyers Dill & Pearman, dated as of the Initial Closing Date
addressed to, among others, the Facility Agent and the Liquidity Facility
Provider and addressing the issue of substantive consolidation as it may relate
to the Borrower and each ACS Bermuda Subsidiary (which is incorporated under the
laws of Bermuda), on the one hand, and Aircastle Limited and each of its
subsidiaries (other than any ACS Group Member), on the other.  The
Borrower hereby agrees to maintain, and to cause each ACS Bermuda Subsidiary to
maintain, in place all policies and procedures, and take and continue to take
all actions, described in the factual assumptions set forth in such opinion
letter and 

     

    
      
        
        

      

      
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    relating
to the Borrower or such ACS Bermuda Subsidiaries, as applicable; provided, however, that the Borrower or
any such ACS Bermuda Subsidiary may cease to maintain any policy or procedure if
and to the extent that the Borrower or such ACS Bermuda Subsidiary delivers to
the Facility Agent and the Liquidity Facility Provider an opinion of counsel
reasonably acceptable to the Facility Agent, and the Liquidity Facility Provider
providing that such policy or procedure is no longer necessary, due to a change
in law or otherwise, for the rendering of such earlier opinion relating to the
issue of substantive consolidation.

     

    (ii)             The
Borrower shall, and shall cause each ACS Bermuda Subsidiary to:

     

    (A)           maintain
its own books and records and bank accounts separate from those of each
Aircastle Entity and any other Person except as otherwise contemplated by the
constitutional documents of the ACS Group Members;

     

    (B)        
   maintain its assets in such a manner that it is not difficult
to segregate, identify or ascertain such assets;

     

    (C)        
   except with respect to any U.S. Trust, have a board of
directors separate from that of each Aircastle Entity and any other Person;
provided that the
individuals serving as directors of each board of directors may be the same
individuals on each board of directors;

     

    (D)         
  except with respect to any U.S. Trust, cause its board of directors
to meet at least quarterly or act pursuant to written consent and keep minutes
of such meetings and actions and observe all other corporate and other legal
formalities;

     

    (E)      
     hold itself out to creditors and the public as a
legal entity separate and distinct from each Aircastle Entity and any other
Person;

     

    (F)          
 prepare separate financial statements and separate Tax returns, and if
separate returns for the Borrower and each Aircastle Entity are required under
applicable Tax law, or if part of a consolidated group, then it will be shown as
a separate member of such group, and pay any Taxes required to be paid under
applicable Tax law;

     

    (G)        
   allocate and charge fairly and reasonably any common overhead
shared with Affiliates;

     

    (H)      
     conduct business in its own name, use separate
invoices, stationery and checks and strictly comply with all organizational
formalities to maintain its separate existence;

     

    (I)       
     not commingle its assets or funds with those of any
other Person (including any Aircastle Entity);

     

    (J)         
   not hold out its credit or assets as being available to satisfy the
obligations of others;

     

    
      
        
        

      

      
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    (K)       
    not assume, guarantee or pay the debts or obligations of
any other Person or otherwise pledge its assets for the benefit of any other
Person;

     

    (L)       
    correct any known misunderstanding regarding its
separate identity;

     

    (M)       
   other than as expressly contemplated by Sections 3.08, 3.11
and 3.12, pay its own liabilities only out of its own funds other than where
indemnified by another party as contemplated by the Related
Documents;

     

    (N)        
   not acquire the securities of any Aircastle Entity;
and

     

    (O)        
   cause its Board and any officers, managers, agents and other
representatives of the Borrower or such ACS Bermuda Subsidiary, as applicable,
to act at all times with respect to the Borrower or such ACS Bermuda Subsidiary,
as the case may be, consistently and in furtherance of the foregoing and in
compliance with applicable law.

     

    (r)              Independent
Director.  The Borrower shall cause each ACS Bermuda Subsidiary
(except any trust of which the Borrower or an ACS Bermuda Subsidiary is the
holder of the legal and beneficial interest or any limited liability company
that is managed by the Borrower as managing member) to have at least two
Independent Directors.

     

    (s)              Registered
Office.  The Borrower shall cause each ACS Bermuda Subsidiary
that is incorporated under the laws of Ireland to, (a) maintain its registered
office in Ireland in accordance with the Irish Companies Acts 1963 to 2006, (b)
maintain its centre of main interests (as that phrase is used in Article 3(l) of
the Regulation) in Ireland and (c) maintain its primary insolvency jurisdiction
(as that term is defined in the Cape Town Convention on International Interests
in Mobile Equipment and the Aircraft Equipment Protocol thereto) in
Ireland.

     

    (t)              Compliance with Anti-Money
Laundering and OFAC Laws.

     

    (i)              The
Borrower shall comply at all times with the requirements of all Anti-Money
Laundering Laws.

     

    (ii)             The
Borrower shall provide Lender any information regarding the Borrower and any
other ACS Group Member necessary for Lender to comply with all Anti-Money
Laundering Laws.

     

    (iii)            The
Borrower shall comply at all times with the requirements of all OFAC
Laws.

     

    (iv)            The
Borrower shall not, and shall cause any ACS Group Member and any persons or
entities holding any legal or beneficial interest whatsoever therein (whether
directly or indirectly) not to, conduct business with or engage in any
transaction with any person or entity named in the OFAC SDN List or any person
or entity included in, owned by, controlled by, acting for or on behalf of,
providing assistance, support, sponsorship, or
services of any kind to, or otherwise associated with any of the persons or
entities referred to or described in the OFAC SDN List.

     

    
      
        
        

      

      
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    (v)              If
the Borrower obtains actual knowledge or receives any written notice that the
Borrower, any other ACS Group Member or any person or entity holding any legal
or beneficial interest whatsoever therein (whether directly or indirectly) is
named on the OFAC SDN List (such occurrence, an “OFAC Violation”), the
Borrower shall immediately (i) give written notice to Lender of such OFAC
Violation, and (ii) comply with all applicable laws with respect to such OFAC
Violation (regardless of whether the party included on the OFAC SDN List is
located within the jurisdiction of the United States of America), including the
OFAC Laws, and the Borrower hereby authorizes and consents to Lender’s taking
any and all steps Lender deems necessary, in its sole discretion, to comply with
all applicable laws with respect to any such OFAC Violation, including the
requirements of the OFAC Laws (including the “freezing” and/or “blocking” of
assets and reporting such action to OFAC).

     

    (vi)              Upon
Lender’s request from time to time, the Borrower shall deliver a certification
confirming its compliance with the covenants set forth in this Section
5.02(t).

     

    Section
5.03         Operating
Covenants.  The
Borrower covenants with the Facility Agent as follows:

     

    (a)              Concentration
Limits.  Without the prior written consent of the Facility
Agent, the Borrower shall not permit any ACS Bermuda Subsidiary to lease or
re-lease any Aircraft if entering into such proposed Lease would cause the ACS
Group Portfolio to exceed any of the Concentration Limits set forth in Exhibit C
hereto (as such limits may be adjusted by from time to time with the consent of
the Facility Agent, the “Concentration
Limits”); provided that the Borrower or
any ACS Bermuda Subsidiary shall be entitled to renew or extend any Lease to the
existing Lessee thereunder irrespective of the effect of such renewal or
extension on the Concentration Limits.  The Borrower shall not, and
shall not permit any ACS Bermuda Subsidiary to, (i) lease (including any renewal
or extension of any existing Lease) any Aircraft to any Lessee habitually based
or domiciled in any of the jurisdictions set forth as “Prohibited” in the last
section of the Concentration Limits as set forth on Exhibit C hereto and as
amended from time to time upon the receipt of the prior written consent of the
Facility Agent (each such jurisdiction, a “Prohibited Country”),
(ii) enter into any Lease (including any renewal or extension of any existing
Lease) that expressly permits the Lessee to sublease an Aircraft to a sublessee
habitually based or domiciled in a Prohibited Country, or (iii) consent to a
sublease of an Aircraft to a sublessee habitually based or domiciled in a
Prohibited Country.

     

    (b)              Compliance with Law,
Maintenance of Permits.  The Borrower shall (i) comply, and
cause each ACS Bermuda Subsidiary to comply, in all material respects with all
Applicable Laws, (ii) obtain, and cause each ACS Bermuda Subsidiary to obtain,
all material governmental (including regulatory) registrations, certificates,
licenses, permits and authorizations required for the use and operation of the
Aircraft owned by it, including, without limitation, a current certificate of
airworthiness for each such Aircraft (issued by the Applicable Aviation
Authority and in the appropriate category for the nature of the operations of
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    Aircraft),
except that (A) no certificate of airworthiness shall be required for any
Aircraft (x) during any period when such Aircraft is undergoing maintenance,
modification or repair or (y) following the withdrawal or suspension by such
Applicable Aviation Authority of certificates of airworthiness in respect of all
aircraft of the same model or period of manufacture as such Aircraft (in which
case the Borrower shall comply, and cause each ACS Bermuda Subsidiary to comply,
with all directions of such Applicable Aviation Authority in connection with
such withdrawal or suspension), (B) no registrations, certificates, licenses,
permits or authorizations required for the use or operation of any Aircraft need
be obtained with respect to any period when such Aircraft is not being operated
and (C) no such registrations, certificates, licenses, permits or authorizations
shall be required to be maintained for any Aircraft that is not the subject of a
Lease, except to the extent required under Applicable Laws, (iii) not cause or
knowingly permit, directly or indirectly, through any ACS Bermuda Subsidiary,
any Lessee to operate any Aircraft under any Lease in any material respect
contrary to any Applicable Law and (iv) not knowingly permit, directly or
indirectly, through any ACS Bermuda Subsidiary, any Lessee not to obtain all
material governmental (including regulatory) registrations, certificates,
licenses, permits and authorizations required for such Lessee’s use and
operation of any Aircraft under any operating Lease except as provided, mutatis mutandis, in
clauses (ii)(A) and (ii)(B) above.

     

    Notwithstanding
the foregoing, no breach of this Section 5.03(b) shall be deemed to have
occurred by virtue of any act or omission of a Lessee or sub-lessee, or of any
Person which has possession of the Aircraft or any Engine for the purpose of
repairs, maintenance, modification or storage, or by virtue of any requisition,
seizure, or confiscation of the Aircraft (other than seizure or confiscation
arising from a breach by the Borrower or an ACS Bermuda Subsidiary of this
Section 5.03(b)) (each, a “Third Party Event”);
provided that (i)
neither the Borrower nor any ACS Bermuda Subsidiary consents or has consented to
such Third Party Event; and (ii) the Borrower or ACS Bermuda Subsidiary which is
the lessor or owner of such Aircraft promptly and diligently takes such
commercially reasonable actions as any leading international aircraft operating
lessor would reasonably take in respect of such Third Party Event, including, as
deemed appropriate (taking into account, inter alia, the laws of the
jurisdictions in which the Aircraft are located), seeking to compel such Lessee
or other relevant Person to remedy such Third Party Event or seeking to
repossess the relevant Aircraft or Engine.

     

    (c)              Maintenance of
Assets.  The Borrower shall (i) with respect to each Aircraft
and Engine that is subject to a Lease, cause, directly or indirectly, through
any ACS Bermuda Subsidiary, such Aircraft and Engine to be maintained in a state
of repair and condition consistent with the reasonable commercial practice of
any leading international aircraft operating lessor with respect to similar
aircraft under lease, taking into consideration, among other things, the
identity of the relevant Lessee (including the credit standing and operating
experience thereof), the age and condition of the Aircraft and the jurisdiction
in which such Aircraft will be operated or registered under such Lease and (ii)
with respect to each Aircraft that is not subject to a Lease, maintain, and
cause each ACS Bermuda Subsidiary to maintain, such Aircraft in a state of
repair and condition consistent with the reasonable commercial practice of any
leading international aircraft operating lessor with respect to aircraft not
under lease.  Notwithstanding the foregoing, no breach of this
Section 5.03(c) shall be deemed to have occurred by virtue of any Third
Party Event; provided
that (i) neither the Borrower nor any ACS Bermuda Subsidiary consents or has
consented to such Third Party Event; and (ii) the Borrower or such ACS

     

    
      
        
        

      

      
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    Bermuda
Subsidiary which is the lessor or owner of such Aircraft promptly and diligently
takes such commercially reasonable actions as any leading international aircraft
operating lessor would reasonably take in respect of such Third Party Event,
including as deemed appropriate, seeking to compel such Lessee or other relevant
Person to remedy such Third Party Event or seeking to repossess the relevant
Aircraft or Engine.

     

    (d)              Notification of Facility
Agent, Holders, Liquidity Facility Provider and Administrative
Agent.  The Borrower shall notify the Facility Agent, the
Holders, the Liquidity Facility Provider, and the Administrative Agent in
writing as soon as the Borrower or any ACS Bermuda Subsidiary becomes aware of
any loss, theft, damage, confiscation, requisition or destruction to any
Aircraft or Engine if the potential cost of repair or replacement of such asset
(without regard to any insurance claim related thereto) may exceed the greater
of $2,000,000 and the damage notification threshold contained in the applicable
Lease.

     

    (e)              Leases.  The
Borrower shall adopt and shall cause the Bermudian Remarketing Servicer to
utilize the pro forma lease in the form provided to the Borrower on the Initial
Closing Date as such pro forma lease agreement or agreements may be revised for
purposes of the ACS Bermuda Group specifically or generally from time to time by
the Bermudian Remarketing Servicer (the “Bermudian Remarketing
Servicer’s Pro Forma Lease”) in a manner consistent with the Bermudian
Remarketing Servicer’s “Standard of Care” and the Bermudian Remarketing
Servicer’s “Conflicts Standard” (as each term is defined in the Bermudian
Remarketing Services Agreement), for use by the Bermudian Remarketing Servicer
on behalf of the Borrower, any ACS Bermuda Subsidiary as a starting point in the
negotiation of Future Leases with Persons who are not ACS Bermuda Group Members;
provided, however, that with respect to
any Future Lease entered into in connection with (x) the renewal or extension of
an Initial Lease, (y) the leasing of an Aircraft to a Person that is or was a
Lessee under an Initial Lease or (z) the leasing of an Aircraft to a Person that
is or was the lessee under an operating lease of an aircraft that is being
managed or serviced by the Bermudian Remarketing Servicer (such Future Lease, a
“Renewal
Lease”), a form of lease substantially similar to such Initial Lease or
operating lease (a “Precedent Lease”), as
the case may be, may be used by the Bermudian Remarketing Servicer in lieu of
the Bermudian Remarketing Servicer’s Pro Forma Lease on behalf of the Borrower
or any ACS Bermuda Subsidiary as a starting point in the negotiation of such
Future Lease with Persons who are not ACS Bermuda Group Members and provided further, however, that if the Board
determines, in an annual review of the Bermudian Remarketing Servicer’s Pro
Forma Lease on or before each anniversary of the relevant Closing Date, that any
revision to the Bermudian Remarketing Servicer’s Pro Forma Lease made from time
to time since the preceding review by the Board (or, with respect to the first
anniversary of the Initial Closing Date, since the Initial Closing Date) is
substantially inconsistent with the core lease provisions of the Borrower set
forth in Exhibit F to this Intercreditor Agreement (as such provisions may be
amended from time to time, the “Core Lease
Provisions”) in a manner and to such a degree as to have a material
adverse effect on the Holders, taking into consideration, inter alia, such revision and
any risk that the Aircraft might not be able to be leased on terms consistent
with the provisions of the Bermudian Remarketing Servicer’s Pro 

     

    
      
        
        

      

      
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    Forma
Lease without such revisions, then the Board shall direct the Bermudian
Remarketing Servicer not to include such revision in the Bermudian Remarketing
Servicer’s Pro Forma Lease to be used thereafter as the starting point in the
negotiation of any Future Lease with respect to the Aircraft.  If the
Board determines that any such revision to the Bermudian Remarketing Servicer’s
Pro Forma Lease will not have a material adverse effect on the Holders, then the
Board shall (i) amend the applicable Core Lease Provisions to incorporate such
revisions (ii) notify the Facility Agent and the Liquidity Facility Provider of
any Future Lease entered into the terms of which are materially less favorable
from the point of view of the lessor than any of the Leases then in effect,
including without limitation, changes to the Core Lease Provisions; provided that every Lease
shall contain the Core Lease Provisions and the Core Lease Provisions may not be
amended without the prior written consent of the Facility Agent.

     

    The Borrower shall not enter into, and
shall not permit any ACS Bermuda Subsidiary to enter into, any Future Lease the
Rental Payments under which are denominated in a currency other than U.S.
dollars unless the Borrower receives the prior written consent of the Facility
Agent; provided, that the Borrower may
enter any Future Lease the Rental Payments under which are denominated in euros
if (a) the sum of the Adjusted Appraised Values as of the Payment Date
immediately preceding any date of determination of each ACS Group Aircraft
subject to leases the Rental Payments under which are denominated in euros does
not exceed 10% of the sum of the Adjusted Appraised Values as of such Payment
Date of all ACS Group Aircraft and (b) the currency exposure is hedged in
accordance with the Borrower’s hedging policy.

     

    (f)              Opinions.  The
Borrower shall not enter into, and shall not permit any ACS Bermuda Subsidiary
to enter into, any Future Lease with any Person that is not an ACS Bermuda Group
Member or change the jurisdiction of registration of any Aircraft that is
subject to a Lease, unless, upon entering into such Future Lease or changing the
jurisdiction or registration of such Aircraft (or within a commercially
reasonable period thereafter), the Bermudian Remarketing Servicer obtains such
legal opinions, if any, with regard to compliance with the registration
requirements of the relevant jurisdiction, enforceability of the Future Lease,
matters relating to the Cape Town Convention and such other matters customary
for such transactions to the extent that receiving such legal opinions is
consistent with the reasonable commercial practice of any leading international
aircraft operating lessor.

     

    (g)              Insurance.   The
Borrower shall maintain or cause, directly or indirectly through the ACS Bermuda
Subsidiaries, to be maintained with reputable and responsible insurers or,
provided that the applicable reinsurance policy contains a cut-through clause
requiring the reinsurers to pay the insured directly (other than if and to the
extent local law requirements mandate otherwise), with reputable and responsible
insurers that maintain relevant reinsurance with reputable and responsible
reinsurers (i) airline hull insurance for each Aircraft in an amount at least
equal to the Allocable Debt Amount for such Aircraft (or the equivalent thereof
from time to time if such insurance is denominated in a currency other than U.S.
dollars) and (ii) airline liability insurance for each Aircraft and occurrence
in an amount at least equal to the relevant amount set forth on Exhibit D hereto
for each model of aircraft and as amended from time to time with the prior
written consent of the Facility Agent and (iii) airline repossession insurance
(“Repossession
Insurance”) for each Aircraft subject to a Lease to a Lessee habitually
based in a jurisdiction set forth under the “Repossession Guidelines” set forth
in Exhibit C hereto, which may be amended from time to time only upon the
receipt of the prior written consent of the Facility Agent, in an amount at
least equal to the Allocable Debt Amount (or the equivalent thereof from time to
time if such insurance is denominated in a currency other than U.S. dollars),
for such Aircraft; provided, however, that with respect to
any such insurance for 

     

    
      
        
        

      

      
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    any
Aircraft subject to a Lease, such insurance may be subject to commercially
reasonable deductible and self-insurance arrangements  and may take
into account any customary reductions in limits for Aircraft in storage and not
in operation (in each case taking into account, inter alia, the
creditworthiness and experience of the Lessee, if any, the type of aircraft and
market practices in the aircraft insurance industry generally) and provided, further that, in no
event shall the aggregate Adjusted Appraised Value of all Aircraft in respect of
which insurance is denominated in a currency other than U.S. dollars exceed 10%
of the sum of the Adjusted Appraised Value of all ACS Group
Aircraft.  The coverage and terms (including endorsements, deductibles
and self-insurance arrangements) of any insurance maintained with respect to any
Aircraft not subject to a Lease shall be substantially consistent with the
reasonable commercial practices of any leading international aircraft operating
lessor regarding similar aircraft.

     

    In
determining the amount of insurance required to be maintained by this
Section 5.03(g), the Borrower may take into account any indemnification
from, or insurance provided by, any governmental, supranational or
inter-governmental authority or agency (other than, with respect to Repossession
Insurance, any governmental authority or agency of any jurisdiction for which
Repossession Insurance must be obtained), the sovereign foreign currency debt of
which is rated at least A, or the equivalent, by at least one of Moody’s or
Standard and Poor’s, against any risk with respect to an Aircraft at least in an
amount which, when added to the amount of insurance against such risk maintained
by the Borrower (or which the Borrower has caused to be maintained), shall be at
least equal to the amount of insurance against such risk otherwise required by
this Section 5.03(g) (taking into account self-insurance permitted by this
Section 5.03(g)).  Any such indemnification or insurance provided
by such government shall provide substantially similar protection as the
insurance required by this Section 5.03(g).

     

    The
Borrower shall cause, or shall cause the applicable ACS Group Subsidiary to
cause, each Lessee to be obligated under its respective Lease to maintain War
Risk Coverage as part of the insurance requirements in such
Lease.  The Borrower shall cause, or shall cause the applicable ACS
Group Subsidiary to cause, each Lessee to maintain War Risk Coverage in
accordance with the requirements set forth in Exhibit D
hereto.  In the event that a Lessee does not maintain such requisite
level of War Risk Coverage or allows such War Risk Coverage to lapse, the
Borrower shall cause the applicable ACS Group Subsidiary lessor to immediately
bring enforcement proceedings against the applicable Lessee under the terms of
the applicable Lease to repossess the applicable Aircraft and use commercially
reasonable efforts of a leading international aircraft operating lessor to
ensure that such Aircraft does not operate without War Risk Coverage at such
required levels; provided, however, that so long as the
Borrower is in compliance with the requirements set forth in the next succeeding
sentence and the applicable Lessee is not otherwise in default under the related
Lease, the Borrower shall have 180 days to cause, or to cause the
applicable ACS Group Subsidiary lessor to cause, the Lessee to comply with the
insurance requirements set forth herein and under the Lease prior to bringing
any such enforcement proceedings; provided further that if, for any
reason, neither the Borrower nor the applicable ACS Group Subsidiary lessor has
a right under the applicable Lease to require a Lessee to maintain War Risk
Coverage at the requisite levels, the Borrower shall nevertheless be obligated
to cause such Lessee to maintain War Risk Coverage at the requisite levels
described in Exhibit D hereto (by negotiating in good faith with such
Lessee or otherwise) or shall otherwise cause War Risk Coverage to be maintained
at the requisite levels described in Exhibit D hereto, subject only to the
additional time provided in the immediately preceding proviso if the

     

    
      
        
        

      

      
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    Borrower
is in compliance with requirements set forth in the next succeeding sentence and
the applicable Lessee is not otherwise in default under the related
Lease.  The Borrower shall carry contingent and excess War Risk
Coverage in accordance with the requirements set forth in Exhibit D
hereto.

     

    The
obligations set forth in the foregoing paragraph shall be waived if the Facility
Agent shall have provided a written consent to such waiver.

     

    (h)              Indemnity.  The
Borrower shall, and shall cause each ACS Bermuda Subsidiary to, include in each
Lease between the Borrower or such ACS Bermuda Subsidiary and a Person who is
not an ACS Bermuda Group Member an indemnity from such Person in respect of any
losses or liabilities arising from the use or operation of the Aircraft during
the term of such Lease, subject to such exceptions, limitations and
qualifications as are consistent with the reasonable commercial practice of any
leading international aircraft operating lessor.

     

    (i)              Appraisal of
Aircraft.  The Borrower shall deliver, at least once a year
each year and in no event later than with the Monthly Report in respect of May
of each year (commencing in 2009), to the Facility Agent, the Guarantor, the
Administrative Agent and the Liquidity Facility Provider for inclusion in its
next Monthly Report an Appraisal in respect of each Aircraft in the ACS Group
Portfolio.

     

    (j)              Aircraft
Owner.  At no time shall the Borrower directly own an
Aircraft.

     

    Section
5.04         Compliance
Through Agents.  The
Borrower shall be entitled to delegate the performance of any of its covenants
hereunder to one or more Service Providers pursuant to one or more Related
Documents entered into in accordance with the terms of this Intercreditor
Agreement so long as each such Related Document is subject to the Lien of the
Security Agreement.  Nothing in this Section 5.04 is intended to,
or shall, relieve the Borrower from any liability or consequences hereunder
arising from the failure of the Borrower or any such Service Provider to perform
any such covenant strictly in accordance with the terms of this Intercreditor
Agreement.

     

    Section
5.05         Consent of
Administrative Agent.  Unless
otherwise specified in this Article V, any consent or approval required from the
Facility Agent shall be provided upon the instruction of the Required
Lenders.

     

     

    ARTICLE
VI

    SUBORDINATION

     

    Section
6.01         Subordination
of the Securities and Other Subordinated Obligations.

     

    (a)              
The Borrower, each Lender (by its accession to the Credit Agreement or the
execution of an Assignment and Assumption) and each other Secured Party (by its
acceptance of the benefits of the Security Agreement) agree that (i) the
Loans and the other Obligations shall be subject to the provisions of this
Article VI and, in the case of the Secured 

     

    
      
        
        

      

      
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    Obligations,
to the provisions of Article VII of the Security Agreement and
(ii) each Subordinated Claimant (and each Subordinated Representative of
any thereof) agree for the benefit of each Senior Claimant (and the Controlling
Party and the Facility Agent acting therefor) that each Subordinated Claim shall
be subordinated fully in right of payment to each Senior Claim as provided in
Section 3.08 hereof, this Article VI and Article VII of the
Security Agreement.

     

    (b)              For
the purposes of this Intercreditor Agreement, no Senior Claims shall be deemed
to have been paid in full until and unless the Senior Claimant of such Senior
Claims shall have received payment in full in cash of such Senior
Claims.

     

    (c)              All
payments or distributions upon or with respect to any Obligations that are
received by any Subordinated Claimant (or any Subordinated Representative
thereof) contrary to the provisions of this Intercreditor Agreement or in excess
of the amounts to which such Subordinated Claimant is entitled under Section
3.08 hereof shall be received for the benefit of the Senior Claimant, shall be
segregated from other funds and property held by such Subordinated Claimant (or
any Subordinated Representative therefor) and shall be forthwith paid over to
the Facility Agent in the same form as so received (with any necessary
endorsement) to be applied (in the case of cash) to or held as collateral (in
the case of non-cash property or securities) for the payment or prepayment of
the Senior Claims in accordance with the terms hereof.

     

    (d)              Notwithstanding
anything contained herein to the contrary, payments (or the proceeds thereof)
(i) drawn under any Eligible Liquidity Facility, or (ii) deposited in the
Repayment Account in respect of a Repayment under Section 3.09 hereof shall
not be subordinated to the prior payment of any Senior Claimants in respect of
any Senior Claims or subject to any other restrictions set forth in this
Article VI and Article VII of the Security Agreement, and none of the
Holders shall be obligated to pay over any payments from any such property to
the Collateral Agent or any other creditor of any of the Grantors (as defined in
the Security Agreement).

     

    (e)              The
Facility Agent is hereby authorized to demand specific performance of the
provisions of this Article VI at any time when any Subordinated Claimant
(or any Subordinated Representative thereof) shall have failed to comply with
any of such provisions applicable to them.  The Subordinated Claimants
(and each Subordinated Representative of any thereof) hereby irrevocably waive
any defense based on the adequacy of a remedy at law that might be asserted as a
bar to such remedy of specific performance.

     

    (f)              In
any proceeding under any Bankruptcy Law relating to any Borrower, the
Subordinated Claimants agree that the Senior Claimants shall be entitled to
receive payment in full in cash of all Obligations (including all interest and
expenses accruing after the commencement of a proceeding under any Bankruptcy
Law, whether or not constituting an allowed claim in such proceeding(“Post-Petition
Interest”)) before such Subordinated Claimant receives payment of any
Obligations.

     

    
      
        
        

      

      
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      (g)              After
the occurrence and during the continuance of any Event of Default, each
Subordinated Claimant shall, if the Facility Agent so requests, collect, enforce
and receive 
payments on account of the Obligations as trustee for
the Senior Claimants and deliver such payments to the Facility Agent on account
of the Obligations (including all Post-Petition Interest), together with any
necessary endorsements or other instruments of transfer, but without reducing or
affecting in any manner the liability of such Subordinated Claimant under the
other provisions of this Indenture and the Related Documents.

     

    Section
6.02         Rights of
Subrogation. 
The Subordinated Claimants (and each Subordinated Representative of any thereof)
agree that no payment or distribution to any Senior Claimant (or the Facility
Agent therefor) pursuant to the provisions of this Intercreditor Agreement shall
entitle any Subordinated Claimant (or any Subordinated Representative thereof)
to exercise any rights of subrogation in respect thereof until all Obligations
constituting Senior Claims with respect to such Person shall have been finally
and indefeasibly paid in full.

     

    Section
6.03         Further
Assurances of Subordinated Representatives.  Each
of the Subordinated Representatives shall, at the expense of the Borrower, at
any time and from time to time promptly execute and deliver all further
instruments and documents, and take all further action, that the Controlling
Party may reasonably request, in order to effectuate the provisions of this
Article VI.

     

    Section
6.04         Enforcement.  Each
Subordinated Claimant (and the Subordinated Representative therefor) agrees that
the provisions of this Article VI shall be enforceable against it under all
circumstances, including without limitation in any proceeding referred to in
Sections 4.01(f) and 4.01(g) hereof.

     

    Section
6.05         Continued
Effectiveness.  The
provisions of this Article VI shall continue to be effective or shall be
revived or reinstated, as the case may be, if at any time any payment of any of
the Senior Claims is rescinded or must otherwise be returned by any Senior
Claimant upon the insolvency, bankruptcy or reorganization of any ACS Bermuda
Group Member, or otherwise, all as though such payment had not been
made.

    

    Section
6.06         Senior
Claims and Subordinated Claims Unimpaired.  Nothing
in this Article VI shall impair, as between the Borrower and any Senior
Claimant or any Subordinated Claimant, the obligations of the Borrower to such
Person, including without limitation the Senior Claims and the Subordinated
Claims; provided that
it is understood that the enforcement of rights and remedies shall be subject to
the terms of this Intercreditor Agreement and the Security
Agreement.

     

    Section
6.07         Ranking of
the Guarantee.  The
Guarantor’s Guarantee of the Loans (pursuant to Article VII) shall rank pari passu with its
obligation to make payments on or otherwise perform in accordance with the terms
of the Guarantor Loans.

     

    ARTICLE
VII

    GUARANTEE

     

    Section
7.01         Guarantee.  The
Guarantor hereby fully and unconditionally guarantees to each Holder of Loans,
the Facility Agent on behalf of such Holder, 

     

    
      
        
        

      

      
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    each
Service Provider, the Liquidity Facility Provider, any Hedge Provider and each
other Secured Party (each, a “Guaranteed Party”
and, collectively, the “Guaranteed Parties”),
in each case, the due and punctual performance of all obligations of the
Borrower to each Guaranteed Party under this Intercreditor Agreement and the
Related Documents (the “Guaranteed
Obligations”), all in accordance with this Intercreditor Agreement and
the other Related Documents.  The liability of the Guarantor under
this Guarantee is limited to the maximum amount that will result in the
obligations of the Guarantor not constituting a fraudulent conveyance or
fraudulent transfer under Applicable Law.

     

    This
Guarantee shall be a Guarantee of payment and performance and not merely of
collection only.  The Guarantor hereby agrees that it shall not be
required that any Guaranteed Party assert or enforce any rights against the
Borrower or any other person before or as a condition to the obligation of the
Guarantor subject to this Guarantee.

     

    The
Guarantor hereby waives diligence, presentment, filing of claims with a court in
the event of merger or bankruptcy of the Borrower or any other ACS Bermuda Group
Member, any right to require a proceeding first against the Borrower or any
other ACS Bermuda Group Member, the benefit of discussion, protest or notice and
all demands whatsoever (except as specified above), and covenants that this
Article VII shall not be discharged as to any such Loan except by payment
in full of the Guaranteed Obligations.  The maturity of the Loans and
related obligations guaranteed hereby may be accelerated as provided in
Article IV for the purposes of this Article VII.  In the
event of any declaration of acceleration of such obligations as provided in
Article IV of this Intercreditor Agreement, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantor for
the purpose of this Article VII.  In addition, without limiting
the foregoing provisions, upon the effectiveness of an acceleration under
Article IV of this Intercreditor Agreement, the Facility Agent shall be
entitled to make a demand for payment on the Loans under the Guarantee provided
for in this Article VII.

     

    The
Guarantor hereby waives any claim or other claim or other rights which it may
now or hereafter acquire against the Borrower or any other ACS Bermuda Group
Member that arise from the existence, payment, performance or enforcement of
such Guarantor’s obligations under this Intercreditor Agreement, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, any right to participate in any claim or remedy
of a Guaranteed Party against the Borrower or any other ACS Bermuda Group
Member, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Borrower or any other ACS Bermuda Group Member,
directly or indirectly, in cash or other property or in any other manner,
payment or security on account of such claim or other rights, until all of the
Guarantor’s obligations under this Intercreditor Agreement have been
satisfied.  If any amount shall be paid to the Guarantor in violation
of the preceding sentence and the Guaranteed Obligations shall not have been
paid in full, such amount shall be deemed to have been paid to the Guarantor for
the benefit of, and held in trust for the benefit of, such Guaranteed Party, and
shall forthwith be paid to such Guaranteed Party.  The Guarantor
acknowledges that it will receive direct and indirect benefits from the issuance
of the Loans and that the waiver set forth in this paragraph is knowingly made
in contemplation of such benefits.

     

    
      
        
        

      

      
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    Any
right which at any time the Guarantor has under the existing or future laws of
Bermuda and Ireland to require that recourse be had to the assets of the
Borrower or any other ACS Bermuda Group Member before any claim is enforced
against the Guarantor in respect of the obligations hereby assumed by the
Guarantor, is hereby abandoned and waived and the Guarantor undertakes that if
at any time any Guaranteed Party sues the Guarantor in respect of any such
obligations and the Borrower or any other ACS Bermuda Group Member is not sued
also, the Guarantor shall not claim that the Borrower or any other ACS Bermuda
Group Member be made a party to the proceedings and the Guarantor agrees to be
bound by this guarantee whether or not the Guarantor is made party to legal
proceedings for the recovery of the amount due or owing to such Guaranteed Party
as aforesaid by the Borrower and whether the formalities required by any law of
Bermuda whether existing or future in regard to the rights or obligations of
sureties shall or shall not have been observed.

     

    Any
right which the Guarantor may have under the existing or future laws of Ireland
and Bermuda to require that any liability under this Guarantee be divided or
apportioned with any other person or reduced in any manner whatsoever is hereby
abandoned and waived.

     

    The
guarantees given by the Guarantor to the Guaranteed Parties pursuant to this
Section 7.01 are, for purposes of this Article VII, hereinafter referred to
as the “Guarantee”.

     

    Section
7.02         Reinstatement.  The
Guarantor hereby agrees that the guarantee provided for in Section 7.01 hereof
shall continue to be effective or be reinstated, as the case may be, if at any
time, payment, or any part thereof, of any obligations guaranteed or interest
thereon is rescinded or must otherwise be restored by a Guaranteed Party to the
Borrower upon the bankruptcy, reorganization or insolvency of the Borrower or
the Guarantor or otherwise.

     

    Section
7.03         Unconditional
Nature of Guarantee.  The
Guarantor hereby agrees that its obligations under the Guarantee shall be
irrevocable and unconditional, irrespective of the validity, regularity or
enforceability of the Credit Agreement or this Intercreditor Agreement or any
other Related Document against the Borrower or any other ACS Bermuda Group
Member, the absence of any action to enforce the Borrower’s or any other ACS
Bermuda Group Member’s obligations under the Credit Agreement, this
Intercreditor Agreement or any other Related Document, any waiver or consent by
a Holder with respect to any provisions thereof or any provisions of this
Intercreditor Agreement and the Related Documents, any amendment to the terms
under which the Loans are advanced, any release of collateral related to the
Loans or the Borrower’s or any other ACS Bermuda Group Member’s obligations
under this Intercreditor Agreement or any other Related Document, the bankruptcy
of the Borrower or any other ACS Bermuda Group Member or any circumstance with
might otherwise constitute a legal or equitable discharge or defense of a
guarantor; provided, however, that the Guarantor
shall be entitled to exercise any right that the Borrower could have exercised
under this Intercreditor Agreement to cure any default in respect of its
obligations under this Intercreditor Agreement or the Credit Agreement, if any,
but only to the extent such right, if any, is provided to the Borrower under
this Intercreditor Agreement or the Credit Agreement.

     

    
      
        
        

      

      
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      The
Guarantor hereby waives each of the following to the fullest extent of the law:
(i) all statutes of limitation as a defense to any action brought by any party
against the Guarantor in connection
with this Guarantee, (ii) any defense based upon (a) the lack of perfection or
failure of priority of any security for the Guaranteed Obligations; (b) any act
or omission of any Guaranteed Party that directly or indirectly results in the
discharge or release of any Borrower or any other Person, or any of the
obligations subject to this Guarantee or any security therefor; or (c) any other
defense of the Borrower or any other Person with respect to the Guaranteed
Obligations, whether consensual or arising by operation of law or any
bankruptcy, insolvency or debtor-relief proceeding, or from any other cause,
(iii) any right (whether now or hereafter existing) to require any Guaranteed
Party, as a condition to the enforcement of this Guarantee, to (a) accelerate
the Borrower’s obligations, (b) give notice to the Guarantor of the terms, time
and place of any public or private sale of any security for the Guaranteed
Obligations; or (c) exhaust any security for the Guaranteed Obligations, (iv)
any right to presentment, demand, protest and notice of any kind, including,
without limitation, notices of default and notices of acceptance of this
Guarantee, (v) all suretyship defenses and rights of every nature otherwise
available under New York law and the laws of any other jurisdiction, and (vi)
all other rights and defenses, the assertion or exercise of which would in any
way diminish the liability of the Guarantor hereunder.

    

     

    ARTICLE
VIII

    MISCELLANEOUS

     

    Section
8.01         Right of
Facility Agent to Perform.  If
the Borrower for any reason fails to observe or punctually to perform any of its
obligations to the Facility Agent, whether under this Intercreditor Agreement or
any of the other Related Documents or otherwise, the Facility Agent shall have
power (but shall have no obligation), on behalf of or in the name of the
Borrower or otherwise, to perform such obligations and to take any steps which
the Facility Agent may, in its absolute discretion, consider appropriate with a
view to remedying, or mitigating the consequences of, such failure by the
Borrower; provided that
no exercise or failure to exercise this power by the Facility Agent shall in any
way prejudice the Facility Agent’s other rights under this Intercreditor
Agreement or any of the other Related Documents.

     

    Section
8.02         Waiver.  Any
waiver by any party of any provision of this Intercreditor Agreement or any
right, remedy or option hereunder shall only prevent and estop such party from
thereafter enforcing such provision, right, remedy or option if such waiver is
given in writing and only as to the specific instance and for the specific
purpose for which such waiver was given. The failure or refusal of any party
hereto to insist in any one or more instances, or in a course of dealing, upon
the strict performance of any of the terms or provisions of this Intercreditor
Agreement by any party hereto or the partial exercise of any right, remedy or
option hereunder shall not be construed as a waiver or relinquishment of any
such term or provision, but the same shall continue in full force and effect. No
failure on the part of the Facility Agent to exercise, and no delay on its part
in exercising, any right or remedy under this Intercreditor Agreement will
operate as a waiver thereof, nor will any single or partial exercise of any
right or remedy preclude any other or further exercise thereof or the exercise
of any other right or remedy. The rights and remedies provided in this
Intercreditor Agreement are cumulative and not exclusive of any rights or
remedies provided by law.

     

    
      
        
        

      

      
        -
102 -

        
          

        

      

      
        
        

      

    

     

    Section
8.03         Severability.  In
the event that any provision of this Intercreditor Agreement or the application
thereof to any party hereto or to any circumstance or in any jurisdiction
governing this Intercreditor Agreement shall, to any extent, be invalid or
unenforceable under any applicable statute, regulation or rule of law, then such
provision shall be deemed inoperative to the extent that it is invalid or
unenforceable and the remainder of this Intercreditor Agreement, and the
application of any such invalid or unenforceable provision to the parties,
jurisdictions or circumstances other than to whom or to which it is held invalid
or unenforceable, shall not be affected thereby nor shall the same affect the
validity or enforceability of this Intercreditor Agreement. The parties hereto
further agree that the holding by any court of competent jurisdiction that any
remedy pursued by the Facility Agent hereunder is unavailable or unenforceable
shall not affect in any way the ability of the Facility Agent to pursue any
other remedy available to it.

     

    Section
8.04         Restrictions
on Exercise of Certain Rights.           

     

    (a)              
Each of the parties hereto and each Holder hereby agrees that it will not take
any steps against the Borrower or the Guarantor seeking the liquidation, winding
up, examination, insolvent reorganisation or bankruptcy of the Borrower or the
Guarantor or seek an order for the appointment of a trustee, liquidator, Irish
law examiner or other similar official in respect of all or part of their assets
save that nothing in this Section 8.04 shall prevent or limit (x) the Collateral
Agent, on behalf of the Secured Parties from (i) appointing a receiver or taking
any action to appoint a receiver under any Security Document or at law or from
exercising any rights ancillary thereto; or (ii) exercising its power of sale
under any Security Document or at law; or (iii) making a claim, proving or
otherwise participating in any examinership, liquidation or other bankruptcy or
insolvency proceedings instituted by any Person (other than a Secured Party)
against the Borrower or the Guarantor; or (y) subject to the limited recourse
provision in (b) below, the Facility Agent or the Collateral Agent from making a
claim and/or suing for the recovery of, or taking any other steps or proceedings
for the purposes of recovering any of the obligations hereunder or any other
debts or liabilities whatsoever owing to it by the Borrower or the Guarantor
hereunder or under any other Related Documents.

     

    (b)              After
the occurrence and continuance of an Event of Default, the obligations of the
Borrower in respect of the Loans and the Class E Securities and any other claims
of any Secured Party will be limited to the net proceeds of the disposal and/or
realization of the Collateral by the Collateral Agent pursuant to the provisions
of the Intercreditor Agreement and the Security Documents and thereafter to the
extent that the net proceeds of such disposal and/or realizations are
insufficient to pay in full the claims of the Secured Parties then the Secured
Parties shall have no further claims against the Borrower or the Guarantor in
respect of such unpaid amount and any such claims shall be
extinguished.

     

    Section
8.05         Notices.  All
notices, demands, certificates, requests, directions, instructions and
communications hereunder (“Notices”) shall be in
writing and shall be effective (a) upon receipt when sent through the mails,
registered or certified mail, return receipt requested, postage prepaid, with
such receipt to be effective the date of delivery indicated on the return
receipt, or (b) one Business Day after delivery to an overnight courier, or (c)
on the date personally delivered to an authorized officer of the party to which
sent, or (d) on the date transmitted by legible telecopier transmission with a
confirmation of receipt, in all cases addressed to the recipient as
follows:

     

    
      
        
        

      

      
        -
103 -

        
          

        

      

      
        
        

      

    

     

    if
to the Borrower, to:

     

    ACS
2008-1 Limited

    Clarendon
House

    2
Church Street

    Hamilton
HM11

    Bermuda

    Attention:  The
Company Secretary

    Fax:  +1
(441) 292-6720

     

    with
a copy to:

     

    Aircastle
Advisor LLC

    300
First Stamford Place, 5th Floor

    Stamford,
CT  06902

    Attention:  Lease
Management

    Fax:  (203)
504-1021

     

    if
to the Guarantor, to:

     

    ACS
Aircraft Finance Ireland 3 Limited

    25/28
North Wall Quay

    International
Financial Services Centre

    Dublin
1

    Ireland

    Attention:  Secretary

    Fax:  +353
(1) 649-2649

     

    with
a copy to:

     

    Aircastle
Advisor LLC

    300
First Stamford Place, 5th Floor

    Stamford,
CT  06902

    Attention:  Lease
Management

    Fax:  (203)
504-1021

     

    if
to the Administrative Agent, to:

     

    Aircastle
Advisor LLC

    300
First Stamford Place, 5th Floor

    Stamford,
CT  06902

    Attention:  Lease
Management

    Fax:  (203)
504-1021

     

    if
to the Irish Remarketing Servicer, to:

     

    Aircastle
Advisor (Ireland) Limited

    8
FitzWilliam Place

     

    
      
        
        

      

      
        -
104 -

        
          

        

      

      
        
        

      

    

     

    Dublin
2

    Ireland

    Fax:
+353 (1) 6565-0801

     

    if
to the Bermudian Remarketing Servicer, to:

     

    Aircastle
Advisor LLC

    300
First Stamford Place, 5th Floor

    Stamford,
CT  06902

    Attention:  Lease
Management

    Fax:  (203)
504-1021

     

    if
to the Facility Agent, the Liquidity Facility Provider or the Collateral Agent,
to:

     

    Calyon
New York Branch

    Calyon
Transportation Group

    1301
Avenue of the Americas

    New
York, New York 10019

    Attention:  Brian
Bolotin, Managing Director

    Telephone:  (212)
261-3815

    Facsimile:  (212)
261-7368

     

    with
a copy to

     

    Attention:  Agnes
Castillo/Jai Sanichar/Client Banking Services at the same address,
Telephone:  (212) 261-7669, Facsimile:  (212)
261-3345

     

    if
to the Operating Bank, to:

     

    Deutsche
Bank Trust Company Americas

    60
Wall Street, 26th Floor

    New
York, New York 10005

    Attn:
Structured Finance Services/Trust & Securities Services

    Fax:
(212) 553-2459

     

    A
copy of each notice given hereunder to any party hereto shall also be given to
each of the other parties hereto. Each party hereto may, by notice given in
accordance herewith to each of the other parties hereto, designate any further
or different address to which subsequent Notices shall be sent.

     

    Section
8.06         Assignments;
Third Party Beneficiary.  This
Intercreditor Agreement shall be a continuing obligation of the Borrower and
shall (i) be binding upon the Borrower and its successors and assigns and (ii)
inure to the benefit of and be enforceable by the Facility Agent, and by its
successors, transferees and assigns. The Borrower may not assign any of its
obligations under this Intercreditor Agreement, or delegate any of its duties
hereunder.  Each Hedge Provider and each provider of an Eligible
Liquidity Facility shall be a third party beneficiary of this Intercreditor
Agreement.

     

    
      
        
        

      

      
        -
105 -

        
          

        

      

      
        
        

      

    

     

    Section
8.07         Currency
Conversion.

     

    (a)              If
any amount is received or recovered by the Collateral Agent or the Facility
Agent in respect of this Intercreditor Agreement or any part thereof (whether as
a result of the enforcement of the security created under the Security Agreement
or pursuant to this Intercreditor Agreement or any judgment or order of any
court or in the liquidation or dissolution of the Borrower or by way of damages
for any breach of any obligation to make any payment under or in respect of the
Borrower’s obligations hereunder or any part thereof or otherwise) in a currency
(the “Received
Currency”) other than the currency in which such amount was expressed to
be payable (the “Agreed Currency”),
then the amount in the Received Currency actually received or recovered by the
Facility Agent or the Collateral Agent shall, to the fullest extent permitted by
Applicable Law, only constitute a discharge to the Borrower to the extent of the
amount of the Agreed Currency which the Collateral Agent or the Facility Agent
was or would have been able in accordance with its normal procedures to purchase
on the date of actual receipt or recovery (or, if that is not practicable, on
the next date on which it is so practicable), and, if the amount of the Agreed
Currency which the Collateral Agent or Facility Agent is or would have been so
able to purchase is less than the amount of the Agreed Currency which was
originally payable by the Borrower, the Borrower shall pay to the Collateral
Agent such amount as the Collateral Agent shall determine to be necessary to
indemnify the Facility Agent and the Collateral Agent against any Loss sustained
by it as a result (including the cost of making any such purchase and any
premiums, commissions or other charges paid or Incurred in connection therewith)
and so that such indemnity, to the fullest extent permitted by Applicable Law,
(i) shall constitute a separate and independent obligation of the Borrower
distinct from its obligation to discharge the amount which was originally
payable by the Borrower and (ii) shall give rise to a separate and
independent cause of action and apply irrespective of any indulgence granted by
the Collateral Agent or the Facility Agent and continue in full force and effect
notwithstanding any judgment, order, claim or proof for a liquidated amount in
respect of the amount originally payable by the Borrower or any judgment or
order and no proof or evidence of any actual loss shall be
required.

     

    (b)              For
the purpose of or pending the discharge of any of the moneys and liabilities
hereby secured either the Facility Agent or the Collateral Agent may convert any
moneys received, recovered or realized by the Collateral Agent under this
Intercreditor Agreement (including the proceeds of any previous conversion under
this Section 8.07) from their existing currency of denomination into the
currency of denomination (if different) of such moneys and liabilities and any
conversion from one currency to another for the purposes of any of the foregoing
shall be made at the Facility Agent’s or the Collateral Agent’s then prevailing
spot selling rate at its office by which such conversion is made.  If
not otherwise required to be applied in the Received Currency, the Collateral
Agent shall promptly convert any moneys in such Received Currency other than
U.S. dollars into U.S. dollars.  Each previous reference in this
section to a currency extends to funds of that currency and funds of one
currency may be converted into different funds of the same
currency.

     

    
      
        
        

      

      
        -
106 -

        
          

        

      

      
        
        

      

    

     

    Section
8.08         Application
to Court.  The
Facility Agent may at any time after the service of a Default Notice apply to
any court of competent jurisdiction for an order that the terms of this
Intercreditor Agreement be carried into execution under the direction of such
court and for the appointment of a Receiver of the Collateral or any part
thereof and for any other order in relation to the administration of this
Intercreditor Agreement as the Facility Agent shall deem fit and it may assent
to or approve any application to any court of competent jurisdiction made at the
instigation of any of the Holders and shall be indemnified by the Borrower
against all costs, charges and expenses Incurred by it in relation to any such
application or proceedings.

     

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

     

    Section
8.10         Jurisdiction.

     

    (a)              Each
of the parties hereto agrees that the United States federal and New York State
courts located in The City of New York shall have jurisdiction to hear and
determine any suit, action or proceeding, and to settle any disputes, which may
arise out of or in connection with this Intercreditor Agreement and, for such
purposes, submits to the jurisdiction of such courts.  Each of the
parties hereto waives any objection which it might now or hereafter have to the
United States federal or New York State courts located in The City of New York
being nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in connection
with this Intercreditor Agreement and agrees not to claim that any such court is
not a convenient or appropriate forum.  Each of the parties hereto
(except for the Facility Agent and the Liquidity Facility Provider) agrees that
the process by which any suit, action or proceeding is begun may be served on it
by being delivered in connection with any suit, action or proceeding in The City
of New York to Corporation Service Company, with an office on the date hereof at
1133 Avenue of the Americas, Suite 3100, New York, New York 10036 and each of
the parties hereby appoints Corporation Service Company, its designee, appointee
and agent to receive, accept and acknowledge for and on its behalf such service
of legal process, with the exception of the Facility Agent, the Liquidity
Facility Provider, who hereby consents to receive any such service of process
directly at the address set forth in Section 8.05 herein.

     

    (b)              The
submission to the jurisdiction of the courts referred to in Section 8.10(a)
hereof shall not (and shall not be construed so as to) limit the right of the
Facility Agent to take proceedings against the Borrower in any other court of
competent jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not.

     

    (c)              Each
of the parties hereto hereby consents generally in respect of any legal action
or proceeding arising out of or in connection with this Intercreditor Agreement
to the giving of any relief or the issue of any process in connection with such
action or proceeding, including the making, enforcement or execution against any
property whatsoever (irrespective of its
use or intended use) of any order or judgment which may be made or given in such
action or proceeding.

     

    
      
        
        

      

      
        -
107 -

        
          

        

      

      
        
        

      

    

     

    Section
8.11         Integration.  This
Intercreditor Agreement, together with the Related Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and thereof and supersedes all prior agreements, written or oral, on such
subject matter; provided that, for the avoidance of doubt, the Commitment Letter
(to the extent provided therein) and the Fee Letter shall not be superseded, but
in the case of any conflict between any Related Document and any such letter,
such Related Document shall govern.  In the event of any conflict
between the provisions of this Intercreditor Agreement and those of any other
Related Document, the Commitment Letter, the provisions of this Intercreditor
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Collateral Agent or the Facility Agent or the Holders
in any other Related Document shall not be deemed a conflict with this
Intercreditor Agreement.  Each Related Document was drafted with the
joint participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.

     

    Section
8.12         WAIVER OF
JURY TRIAL.  EACH
OF THE BORROWER, THE GUARANTOR, THE COLLATERAL AGENT, THE FACILITY AGENT, THE
LIQUIDITY FACILITY PROVIDER AND THE ADMINISTRATIVE AGENT IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE RELATED
DOCUMENTS, THE LOANS OR THE ACTIONS OF ANY FACILITY AGENT, THE COLLATERAL AGENT,
THE LIQUIDITY FACILITY PROVIDER, THE BORROWER, THE GUARANTOR, ADMINISTRATIVE
AGENT OR ANY LENDER  IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
OR ENFORCEMENT THEREOF.

     

    Section
8.13         Counterparts.  This
Intercreditor Agreement may be executed in two or more counterparts by the
parties hereto, and each such counterpart shall be considered an original and
all such counterparts shall constitute one and the same instrument.

     

    Section
8.14         Table of
Contents, Headings, Etc.  The
Table of Contents and headings of the Articles and Sections of this
Intercreditor Agreement have been inserted for convenience of reference only,
are not to be considered a part hereof and shall in no way modify or restrict
any of the terms and provisions hereof.

     

    Section
8.15         Compliance
with Applicable Anti-Terrorism and Anti-Money Laundering Regulations.  In
order to comply with the laws, rules, regulations and executive orders in effect
from time to time applicable to banking institutions, including those relating
to the funding of terrorist activities and money laundering (collectively,
“Applicable
Regulations”), the Facility Agent or the Operating Bank is required to
obtain, verify and record certain information relating to individuals and
entities which maintain a business relationship with the Facility Agent or the
Operating Bank.  Accordingly, each of the parties agrees to provide to
each of the Facility Agent and the Operating Bank upon its request from time to
time such identifying information and documentation as may be available for such
party
in order to enable the Facility Agent or the Operating Bank to comply with such
Applicable Regulations

     

    
      
        
        

      

      
        -
108 -

        
          

        

      

      
        
        

      

    

     

    Section
8.16         Rights of
the Operating Bank.

     

    (a)              The
Operating Bank shall be afforded all of the rights, protections, immunities and
indemnities afforded to the Operating Bank pursuant to the terms of the Security
Agreement as if such rights, protections, immunities and indemnities were set
forth herein.

     

    (b)              Notwithstanding
anything contained herein to the contrary, it is expressly understood and agreed
by the parties hereto that in no event shall the Operating Bank be liable for
verifying the completeness or accuracy of any information contained in any
direction, document, notice or statement it receives pursuant to this Agreement
or any Related Document.  Further, the Operating Bank shall have no
duty or obligation to complete, correct or recalculate any information contained
in any direction, document, notice or statement it receives pursuant to this
Agreement or any Related Document.

     

    (c)              No amendment or modification to this agreement that
could affect any duties, powers, rights, immunities or indemnities of the
Operating Bank under this Agreement or any Related Document may be made without
the prior written consent of the Operating Bank.

     

     

    
      
        
        

      

      
        -
109 -

        
          

        

      

      
        
        

      

    

     

    
       

      IN
WITNESS WHEREOF, the parties hereto have caused this Intercreditor Agreement to
be duly executed, all as of the date first written above.

       

    
      	 
    	
              ACS
      2008-1 LIMITED,

            
	 
    	
              as
      the Borrower

            
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	
              By

            	 
    
	 
    	 
    	
              Name:

            
	 
    	 
    	
              Title:

            

    

     

     

     

    
      
        
        

      

      
        -
110 -

        
          

        

      

      
        
        

      

    

    
 

    
      	 
    	
              SIGNED
      SEALED AND DELIVERED

            
	 
    	 
    
	 
    	
              On
      behalf of

            
	 
    	 
    
	 
    	 
    
	 
    	
              ACS
      AIRCRAFT FINANCE IRELAND 3 LIMITED,

            
	 
    	 
    	
              as
      the Guarantor

            
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	
              by
      its duly appointed attorney

            
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	
              By

            	 
    
	 
    	 
    	
              Name:

            
	 
    	 
    	
              Title:

            
	 
    	 
    	 
    
	 
    	
              in
      the presence of:

            
	 
    	 
    	 
    
	 
    	
              By

            	 
    
	 
    	 
    	
              Name:

            
	 
    	 
    	
              Title:

            

    

     

     

    
      
        
        

      

      
        -
111 -

        
          

        

      

      
        
        

      

    

    
 

    
      	 
    	
              CALYON
      NEW YORK BRANCH,

            
	 
    	 
    	
              as
      the Facility Agent, the Collateral Agent and the Liquidity Facility
      Provider

            
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	
              By

            	 
    
	 
    	 
    	
              Name:

            
	 
    	 
    	
              Title:

            
	 
    	 
    	 
    
	 
    	
              By

            	 
    
	 
    	 
    	
              Name:

            
	 
    	 
    	
              Title:

            
	 
    	 
    	 
    
	 
    	
              AIRCASTLE
      ADVISOR LLC,

            
	 
    	 
    	
              as the Administrative
      Agent

            
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	
              By

            	 
    
	 
    	 
    	
              Name:

            
	 
    	 
    	
              Title:

            
	 
    	 
    	 
    
	 
    	
              By

            	 
    
	 
    	 
    	
              Name:

            
	 
    	 
    	
              Title:

            
	 	 
	 
    	
              DEUTSCHE
      BANK TRUST COMPANY AMERICAS,

            
	 
    	 
    	
              as
      the Operating Bank

            
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	
              By

            	 
    
	 
    	 
    	
              Name:

            
	 
    	 
    	
              Title:

            
	 
    	 
    	 
    
	 
    	
              By

            	 
    
	 
    	 
    	
              Name:

            
	 
    	 
    	
              Title:

            

    

     

     

     

    - 112 -

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