Document:

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                                                                     EXHIBIT 4.2

                           INDENTURE SUPPLEMENT NO. 1

                  INDENTURE SUPPLEMENT NO. 1, dated as of July 17, 2000 (the
"Indenture Supplement"), among AerCo LIMITED, a limited liability company
incorporated in Jersey, Channel Islands, as issuer of the Notes (the "Issuer"),
and BANKERS TRUST COMPANY, a New York banking corporation, as trustee of each
class of Notes (the "Trustee"), to the Indenture dated as of July 15, 1998,
between the Issuer and the Trustee (the "Indenture"). Capitalized terms used
herein but not defined herein shall have the meanings given to such terms in the
Indenture.

                              W I T N E S S E T H:

                  WHEREAS, the Issuer and one of its subsidiaries have agreed to
acquire certain aircraft-owning companies from AerFi Group plc and certain of
its subsidiaries;

                  WHEREAS, the Issuer intends to issue the Subclass A-3 Notes,
the Subclass A-4 Notes, the Subclass B-2 Notes, the Subclass C-2 Notes, the
Subclass D-2 Notes and the Subclass E-2 Notes (each of the terms "Subclass A-3
Notes," "Subclass A-4 Notes," "Subclass B-2 Notes," "Subclass C-2 Notes,"
"Subclass D-2 Notes" and "Subclass E-2 Notes," as defined below), in part, as
Issuer Additional Notes in accordance with Section 2.11 of the Indenture to
finance such acquisitions (the "July 2000 Additional Issuance") and in part, as
Refinancing Notes in accordance with Section 2.10 of the Indenture to refinance
the Subclass A-1 Notes and the Subclass D-1 Notes (the "July 2000 Refinancing
Issuance");

                  WHEREAS, in accordance with the Indenture, each class of Notes
to be issued in the July 2000 Additional Issuance and the July 2000 Refinancing
Issuance is intended to be entitled to all the rights and benefits appertaining
to the corresponding class of outstanding AerCo Group Notes under the Indenture;

                  WHEREAS, all of the conditions and requirements necessary to
make this Indenture Supplement, when duly executed and delivered, a legal, valid
and binding instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Indenture Supplement in the form and with the terms hereof have
been in all respects duly authorized.

                  NOW, THEREFORE, in consideration of the premises herein, it is
agreed between the Issuer and the Trustee as follows:

                                    ARTICLE I

                                   DEFINITIONS

 Section 1.01. Definitions. The following terms shall be applicable to this
Indenture Supplement and, where indicated, shall supplement defined terms in
the Indenture:

                  "Company" shall have the meaning given in such term in the New
Share Purchase Agreement.

                                       1
<PAGE>   2
                  "Delivered New Aircraft" means, as of any Payment Date, the
         New Aircraft with respect to which the Shares of the Company which owns
         such New Aircraft have been transferred to the relevant Purchaser.

                  "D Note Delivery Adjustment Factor" means, with respect to any
         Payment Date, a fraction of the numerator of which is the Initial
         Appraised Value (New Aircraft) of all New Aircraft that are Delivered
         New Aircraft as of the Calculation Date immediately preceding such
         Payment Date and the denominator of which is the Initial Appraised
         Value (New Aircraft) of all New Aircraft.

                  "Initial Appraised Value (New Aircraft)," in the case of each
         New Aircraft, means the average of the appraisals by each of BK
         Associates, Inc., Aircraft Information Services, Inc. and Airclaims
         Limited of the Base Value of such New Aircraft as of April 30, 2000
         and, in the case of any New Substitute Aircraft, the average of the
         appraisals of by each of the Appraisers of the Base Values of such New
         Substitute Aircraft as of a date not more than six months prior to the
         date such New Substitute Aircraft becomes a Delivered New Aircraft.

                  "July 2000 Closing Date" means July 17, 2000.

                  "New Aircraft" means each of the aircraft (including any
         related Engines) identified in Schedule __ hereto, and any New
         Substitute Aircraft.

                  "New Share Purchase Agreement" shall mean that certain Share
         Purchase Agreement, dated 17 July, 2000, among AerFi Group plc,
         Skyscape Limited, AerFi, Inc., Indigo Aviation AB, KP Flyplanet XII,
         the Issuer and AerCo USA, Inc., as in effect on the date hereof.

                  "New Substitute Aircraft" means an aircraft identified to
         replace a Remaining New Aircraft that has failed to be delivered to the
         AerCo Group; provided, that (a) such replacement aircraft (i) is no
         more than seven years old as of July 15, 2000 (ii) is subject to an
         operating lease contract, or letter of intent for an operating lease
         contract that will become effective within 90 days of the signing of
         such letter of intent, (iii) is of the same type as such undelivered
         Remaining New Aircraft and (iv) does not result in a Concentration
         Default and (b) the Issuer shall have received a Rating Agency
         Confirmation with respect to such substitution.

                  "Non-Delivery Adjustment Factor" means, with respect to any
         Payment Date, one minus a fraction the numerator of which is the
         Initial Appraised Value (New Aircraft) of all Non-Delivered Aircraft as
         of the Calculation Date immediately preceding such Payment Date and the
         denominator of which is the Initial Appraised Value (New Aircraft) of
         all New Aircraft.

                  "Non-Delivered Aircraft" means any New Aircraft with respect
         to which a Non-Delivery Event has occurred.

                  "Non-Delivery Event" shall have the meaning given such term in
         the New Share Purchase Agreement.

                  "Purchaser" shall have the meaning given such term in the New
         Share Purchase Agreement.

                                       2
<PAGE>   3
                  "Remaining New Aircraft" shall mean a New Aircraft that is a
         "Remaining Aircraft" as such term is defined in the New Share Purchase
         Agreement.

                  "Shares" shall have the meaning given in such term in the New
         Share Purchase Agreement.

                  "Subclass A-3 Notes" means the Subclass A-3 Floating Rate
         Notes, due July 15, 2025, of the Issuer in the initial aggregate
         principal amount of $565,000,000, substantially in the form of Exhibit
         A-3 hereto, including any note issued in replacement or substitution
         therefor, any Exchange Note issued in exchange for such Note pursuant
         to a Registration Rights Agreement and the Indenture and any
         Refinancing Notes designated in the form of such Refinancing Notes as
         being entitled to the rights and benefits of the Subclass A-3 Notes
         under the Indenture, in each case ranking pari passu in order of
         payment priority to the Subclass A-3 Notes.

                  "Subclass A-4 Notes" means the Subclass A-4 Floating Rate
         Notes, due July 15, 2025, of the Issuer in the initial aggregate
         principal amount of $250,000,000, substantially in the form of Exhibit
         A-4 hereto, including any note issued in replacement or substitution
         therefor, any Exchange Note issued in exchange for such Note pursuant
         to a Registration Rights Agreement and the Indenture and any
         Refinancing Notes designated in the form of such Refinancing Notes as
         being entitled to the rights and benefits of the Subclass A-4 Notes
         under the Indenture, in each case ranking pari passu in order of
         payment priority to the Subclass A-4 Notes.

                  "Subclass B-2 Notes" means the Subclass B-2 Floating Rate
         Notes, due July 25, 2025, of the Issuer in the initial aggregate
         principal amount of $80,000,000, substantially in the form of Exhibit
         B-2 hereto, including any note issued in replacement or substitution
         therefor, any Exchange Note issued in exchange for such Note pursuant
         to a Registration Rights Agreement and the Indenture and any
         Refinancing Notes designated in the form of such Refinancing Notes as
         being entitled to the rights and benefits of the Subclass B-2 Notes
         under the Indenture, in each case ranking pari passu in order of
         payment priority to the Subclass B-2 Notes.

                  "Subclass C-2 Notes" means the Subclass C-2 Floating Rate
         Notes, due July 25, 2025, of the Issuer in the initial aggregate
         principal amount of $80,000,000, substantially in the form of Exhibit
         C-2 hereto, including any note issued in replacement or substitution
         therefor, any Exchange Note issued in exchange for such Note pursuant
         to a Registration Rights Agreement and the Indenture and any
         Refinancing Notes designated in the form of such Refinancing Notes as
         being entitled to the rights and benefits of the Subclass C-2 Notes
         under the Indenture, in each case ranking pari passu in order of
         payment priority to the Subclass C-2 Notes.

                  "Subclass D-2 Notes" means the Subclass D-2 Notes, due July
         25, 2025, of the Issuer in the maximum aggregate principal amount of
         $100,000,000, substantially in the form of Exhibit D-2 hereto,
         including any note issued in replacement or substitution therefor and
         any Refinancing Notes designated in the form of such Refinancing Notes
         as being entitled to the rights and benefits of the Subclass D-2 Notes
         under the Indenture, in each case ranking pari passu in order of
         payment priority to the Subclass D-2 Notes.

                                       3
<PAGE>   4
                  "Subclass E-2 Notes" means the Subclass E-2 Notes, due July
         25, 2025, of the Issuer in the maximum aggregate principal amount of
         $105,000,000, substantially in the form of Exhibit E-2 hereto,
         including any note issued in replacement or substitution therefor and
         any Refinancing Notes designated in the form of such Refinancing Notes
         as being entitled to the rights and benefits of the Subclass E-2 Notes
         under the Indenture, in each case ranking pari passu in order of
         payment priority to the Subclass E-2 Notes.

                  "Termination Notice" shall have the meaning given such term in
         the New Share Purchase Agreement.

                                   ARTICLE II

                  ISSUER ADDITIONAL NOTES AND REFINANCING NOTES

                  Section 2.01. The Issuer Additional Notes and the Refinancing
Notes. There are hereby created Subclass A-3, Subclass A-4, Subclass B-2,
Subclass C-2, Subclass D-2 and Subclass E-2 Notes to be issued under the
Indenture on the date hereof. The terms and conditions applicable to the
Subclass A-3, Subclass A-4, Subclass B-2, Subclass C-2 , Subclass D-2 and
Subclass E-2 Notes are as follows:

                  (a) The aggregate principal amount of the Subclass A-3 Notes
         that shall be authenticated under the Indenture upon their issuance is
         $565,000,000, the aggregate principal amount of the Subclass A-4 Notes
         that shall be authenticated under the Indenture upon their issuance is
         $35,000,000, the aggregate principal amount of the Subclass B-2 Notes
         that shall be authenticated under the Indenture upon their issuance is
         $80,000,000, the aggregate principal amount of the Subclass C-2 Notes
         that shall be authenticated under the Indenture upon their issuance is
         $80,000,000, the maximum principal amount of the Subclass D-2 Notes
         that shall be authenticated under the Indenture upon their issuance is
         $100,000,000 and the maximum principal amount of the Subclass E-2 Notes
         that shall be authenticated under the Indenture upon their issuance is
         $105,000,000.

                  (b) The Excess Amortization Date shall be, with respect to (i)
         the Subclass A-3 Notes, February 15, 2006, (ii) the Subclass A-4 Notes,
         August 15, 2000, (iii) the Subclass B-2 Notes, August 15, 2000, (iv)
         the Subclass C-2 Notes, August 15, 2000 and (v) the Subclass D-2 Notes,
         July 15, 2010.

                  (c) The Expected Final Payment Date shall be, with respect to
         (i) the Subclass A-3 Notes, June 15, 2002, (ii) the Subclass A-4 Notes,
         May 15, 2011, (iii) the Subclass B-2 Notes, June 15, 2008, (iv) the
         Subclass C-2 Notes, June 15, 2008 and (v) the Subclass D-2 Notes, May
         15, 2014.

                  (d) The "Redemption Premium" in respect of the following
         subclasses of Notes on any date shall be the Redemption Premium
         indicated in the table below:

                                       4
<PAGE>   5
<TABLE>
<CAPTION>
                                                                  REDEMPTION PREMIUM
                                      -----------------------------------------------------------------------
                                       SUBCLASS         SUBCLASS       SUBCLASS      SUBCLASS        SUBCLASS
REDEMPTION DATE                        A-3 NOTES       A-4 NOTES      B-2 NOTES      C-2 NOTES      D-2 NOTES
---------------                        ---------       ---------      ---------      ---------      ---------
<S>                                    <C>             <C>            <C>            <C>            <C>

After July 17, 2000...............      101.00%         101.50%        101.75%        103.50%           -
On or after June 15, 2001.........      100.50%         101.00%        101.50%        103.00%           -
On or after June 15, 2002.........      100.00%         100.75%        101.25%        102.50%           -
On or after June 15, 2003.........         -            100.50%        101.00%        102.00%           -
On or after June 15, 2004.........         -            100.25%        100.75%        101.50%           -
On or after June 15, 2005.........         -            100.00%        100.50%        101.00%        105.25%
On or after June 15, 2006.........         -               -           100.25%        100.50%        104.50%
On or after June 15, 2007.........         -               -           100.25%        100.25%        103.75%
On or after June 15, 2008.........         -               -           100.00%        100.00%        103.00%
On or after June 15, 2009.........         -               -              -              -           102.25%
On or after June 15, 2010.........         -               -              -              -           101.50%
On or after June 15, 2011.........         -               -              -              -           100.75%
On or after June 15, 2012.........         -               -              -              -           100.00%
</TABLE>

                  (e) The "Redemption Price" shall be, with respect to (i) the
         Subclass A-3 Notes, the Subclass A-4 Notes, the Subclass B-2 Notes and
         the Subclass C-2 Notes, (A) to the extent that the redemption is funded
         other than out of the Available Collections Amount (including proceeds
         from Refinancing Notes and proceeds from third parties), the product of
         the applicable Redemption Premium and the Outstanding Principal Balance
         of the portion of such subclass of Notes being redeemed and (B) to the
         extent that the redemption is funded out of the Available Collections
         Amount, the Outstanding Principal Balance of the portion of such
         subclass of Notes being redeemed, without Redemption Premium and (ii)
         any portion of the Subclass D-2 Notes being redeemed, (x) to the extent
         that the redemption is funded other than out of the Available
         Collections Amount, (including proceeds from Refinancing Notes and
         proceeds from third parties), (a) if such redemption occurs prior to
         July 15, 2005, the higher of (1) the discounted present value of the
         Scheduled Principal Payment Amounts allocable in accordance with
         Section 3.09 of the Indenture in respect of, and interest on, such
         portion from the Redemption Date to, but not including, July 15, 2005,
         plus the product of the applicable Redemption Premium and the assumed
         Outstanding Principal Balance for July 15, 2005 of such portion,
         discounted at a rate equal to the Treasury Yield plus 1.00% and (2) the
         Outstanding Principal Balance of such portion and (b) if such
         redemption occurs on or after July 15, 2005, the product of the
         applicable Redemption Premium and the Outstanding Principal Balance of
         such portion and (y) to the extent that the redemption is funded out of
         the Available Collections Amount, the Outstanding Principal Balance of
         the portion of such subclass of Notes being redeemed, without
         Redemption Premium.

                  (f) The "Treasury Yield" shall be, with respect to any
         Redemption of the Subclass D-2 Notes on any Payment Date, a per annum
         rate (expressed as a monthly equivalent yield) determined to be the per
         annum rate equal to the semiannual yield to maturity of the 6.5% United
         States Treasury Notes maturing on August 15, 2005.

                  (g) The Subclass A-3 Notes, the Subclass A-4 Notes, the
         Subclass B-2 Notes, the Subclass C-2 Notes, the Subclass D-2 Notes and
         the Subclass E-2 Notes shall be in the form attached hereto as Exhibits
         A-3, A-4, B-2, C-2, D-2 and E-2, respectively.

                                       5
<PAGE>   6
                  Section 2.02.  Issuance of Notes.

                  On the date hereof, the Issuer shall execute and the Trustee
shall authenticate and deliver, (a) in the case of each of the Subclass A-3
Notes, the Subclass A-4 Notes, the Subclass B-2 Notes and the Subclass C-2
Notes, a permanent global Note in bearer form without interest coupons, in the
form set forth in the applicable Exhibit hereto, and (b) in the case of each of
the Subclass D-2 Notes and the Subclass E-2 Notes, Definitive Registered Notes,
in the form of the applicable Exhibit hereto upon the written order of the
Issuer, in authorized denominations.

                  Section 2.03.  Class Percentages.

                  In accordance with Section 3.11 of the Indenture, the Minimum
Class Percentages, Scheduled Class Percentages and Supplemental Class
Percentages for the AerCo Group Class A Notes and the AerCo Group Class B Notes
are hereby adjusted by substituting Appendix A hereto (Class A Class
Percentages) and Appendix B hereto (Class B Class Percentages) for Appendix A
(Class Percentages) of the Indenture.

                  Section 2.04.  Target Principal Balances.

                  In accordance with Section 3.11 of the Indenture, the Minimum
Target Principal Balances and Scheduled Target Principal Balances for the AerCo
Group Class C Notes and the AerCo Group Class D Notes are hereby adjusted as
follows:

         (a)      Minimum Target Principal Balance.  (i) The Minimum Target
                  Principal Balance of the AerCo Group Class C Notes on any
                  Payment Date shall be equal to the product of (A) the Minimum
                  Class Percentage for such Payment Date as set forth on
                  Appendix C hereto (Class C Class Percentages) and (B) the sum
                  of (1) the Outstanding Principal Balance of the Subclass C-1
                  Notes on the date of issuance of the Subclass C-2 Notes and
                  (2) the product of the Non-Delivery Adjustment Factor for
                  such Payment Date and $80,000,000, and (ii)  the Minimum
                  Target Principal Balance of the AerCo Group Class D Notes on
                  any Payment Date shall be equal to the product of (A) the
                  Minimum Class Percentage for such Payment Date as set forth
                  on Appendix D hereto (Class D Class Percentages) and (B) the
                  sum of (1) $80,000,000 and (2) the product of the D Note
                  Delivery Adjustment Factor for such Payment Date and
                  $20,000,000.

         (b)      Scheduled Target Principal Balance.  (i)  The Scheduled
                  Target Principal Balance of the AerCo Group Class C Notes on
                  any Payment Date shall be equal to the product of (A) the
                  Scheduled Class Percentage for such Payment Date as set forth
                  on Appendix C hereto and (B) the sum of (1) the Outstanding
                  Principal Balance of the Subclass C-1 Notes on the date of
                  issuance of the Subclass C-2 Notes and (2) the product of the
                  Non-Delivery Adjustment Factor for such Payment Date and
                  $80,000,000, and  (ii)  the Scheduled Target Principal
                  Balance of the AerCo Group Class D Notes on any Payment Date
                  shall be equal to the product of (A) the Scheduled Class
                  Percentage for such Payment Date as set forth on Appendix D
                  hereto and (B) the sum of (1) $80,000,000 and (2) the product
                  of the D Note Delivery Adjustment Factor for such Payment
                  Date and $20,000,000.

                                       6
<PAGE>   7
                                   ARTICLE III

                            DELIVERY OF NEW AIRCRAFT

                  Section 3.01.  Delivery of Remaining New Aircraft.

                  Upon receipt by the Trustee of a certificate executed by an
officer of the Issuer, stating (a) that a Remaining New Aircraft has been
delivered under and in accordance with the New Share Purchase Agreement, (b)
that no waiver of the conditions specified in Clauses 3(a), 3(b), 3(c) and 13.2
of the New Share Purchase Agreement has occurred with respect to such Remaining
New Aircraft (or the relevant Company) without the written consent of the
Trustee and receipt of a Rating Agency Confirmation, (c) the amount of the
increase in the principal amount of each of the Subclass D-2 Note and the
Subclass E-2 Note allocable to the purchase price of such Remaining New
Aircraft, as determined in accordance with the New Share Purchase Agreement and
(d) the amount of funds from the Aircraft Purchase Account allocable to the
purchase price of such Remaining New Aircraft, as determined in accordance with
the New Share Purchase Agreement, and wire instructions for the payment of such
funds, and upon presentation to the Trustee of each of the Subclass D-2 Note and
the Subclass E-2 Note, the Trustee shall (x) adjust the principal amount of the
Subclass D Note by completing the grid attached to the Subclass D Note to
reflect the increase in the principal amount thereof in the amount certified by
the Issuer with respect to each such Remaining New Aircraft and the decrease in
the principal amount of the Subclass D Note by the amount, if any, of principal
payments made on or prior to the date of delivery of such New Remaining Aircraft
(and not already reflected in such grid), (y) adjust the principal amount of the
Subclass E Note by completing the grid attached to the Subclass E Note to
reflect the increase in the principal amount thereof in the amount certified by
the Issuer with respect to each such Remaining New Aircraft and the decrease in
the principal amount of the Subclass E Note by the amount, if any, of principal
payments made on or prior to the date of delivery of such New Remaining Aircraft
(and not already reflected in such grid) and (z) transfer funds from the
Aircraft Purchase Account in the amount and in accordance with the instructions
provided by the Issuer.

                  Section 3.02.     Non-Delivery Event.

                  Immediately upon the occurrence of a Non-Delivery Event, the
Issuer shall deliver a certificate to the Trustee executed by an officer of the
Issuer (a) stating that a Non-Delivery Event has occurred, (b) specifying the
New Remaining Aircraft with respect to which such Non-Delivery Event has
occurred and (c) specifying the amount of funds from the Aircraft Purchase
Account allocable to the purchase price of such Remaining New Aircraft, as
determined in accordance with the New Share Purchase Agreement. Upon receipt of
such certificate, the Trustee shall transfer funds from the Aircraft Purchase
Account to the Collection Account in the amount specified in such certificate.

                                       7
<PAGE>   8
                                   ARTICLE IV

                                   THE TRUSTEE

                  Section 4.01.  The Trustee.

                  The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Indenture Supplement or
the due execution hereof by the Issuer, or for or in respect of the recitals and
statements contained herein, all of which recitals and statements are made
solely by the Issuer.

                  Except as herein otherwise provided, no duties,
responsibilities or liabilities are assumed, or shall be construed to be assumed
by the Trustee other than as set forth in the Indenture, and this Indenture
Supplement is executed and accepted on behalf of the Trustee, subject to all the
terms and conditions set forth in the Indenture, upon the effectiveness thereof,
as fully to all intents as if the same were herein set forth at length.

                                    ARTICLE V

                            MISCELLANEOUS PROVISIONS

                  Section 5.01.  Indenture Ratified.

                  Except and so far as herein expressly provided, all of the
provisions, terms and conditions of the Indenture are in all respects ratified
and confirmed; and the Indenture and this Indenture Supplement shall be taken,
read and construed as one and the same instrument.

                  Section 5.02.  Governing Law.

                  This Indenture Supplement, the Subclass A-3 Notes, the
Subclass A-4 Notes, the Subclass B-2 Notes, the Subclass C-2 Notes, the Subclass
D-2 Notes and the Subclass E-2 Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.

                  Section 5.03.  Execution in Counterparts.

                  This Indenture Supplement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.

                                       8

<PAGE>   9

                  IN WITNESS WHEREOF, the Trustee and the Issuer have caused
this Indenture Supplement to be duly executed as of the day and year first
written above.

                                      AERCO LIMITED, as Issuer

                                      By: ______________________________________

                                          Name:
                                          Title:

                                       BANKERS TRUST COMPANY, not in its
                                       individual capacity but solely as Trustee

                                      By: ______________________________________

                                          Name:
                                          Authorized Signatory

                                       9
<PAGE>   10
                                   APPENDIX A

                            CLASS A CLASS PERCENTAGES

                                       10

<PAGE>   11

                                   APPENDIX B

                            CLASS B CLASS PERCENTAGES

                                       11

<PAGE>   12

                                   APPENDIX C

                            CLASS C CLASS PERCENTAGES

                                       12

<PAGE>   13

                                   APPENDIX D

                            CLASS D CLASS PERCENTAGES

                                       13

<PAGE>   14

                       EXHIBIT A-3 TO INDENTURE SUPPLEMENT

                     FORM OF SUBCLASS A-3 FLOATING RATE NOTE

                                  AERCO LIMITED

                      SUBCLASS A-3 NOTE, due July 15, 2025

No. ____                                                     [CUSIP][ISIN][CCN]
$

                               BEARER GLOBAL NOTE

                  AERCO LIMITED, a limited liability company organized under the
laws of Jersey, Channel Islands (herein referred to as the "Issuer"), for value
received, hereby promises to pay to the BEARER, upon surrender hereof, the
principal sum set forth on the grid schedule attached hereto and made a part
hereof (provided, however, that the aggregate principal amount hereof and of all
other Subclass A-3 Notes outstanding, collectively, shall not exceed FIVE
HUNDRED SIXTY FIVE MILLION DOLLARS ($565,000,000)) on July 15, 2025 (the "Final
Maturity Date") and to pay interest monthly in arrears on the Outstanding
Principal Balance hereof at a fluctuating interest rate per annum equal to the
sum of LIBOR plus .46% per annum (the "Stated Interest Rate") from the date
hereof until the Outstanding Principal Balance hereof is paid or duly provided
for, payable on each Payment Date. Interest on this Subclass A-3 Note in each
Interest Accrual Period shall be calculated on the basis of a 360-day year and
the actual number of days elapsed in such Interest Accrual Period.

                  This Subclass A-3 Note is one of a duly authorized issue of
Notes of the Issuer, designated as its "Subclass A-3 Notes, due July 15, 2025",
issued under the Trust Indenture dated as of July 15, 1998 and supplemented by
an Indenture Supplement dated as of July 17, 2000 (as amended or supplemented
from time to time, the "Indenture"), between the Issuer and Bankers Trust
Company, as trustee (the "Trustee"). This Subclass A-3 Note is freely negotiable
and transfer of this Subclass A-3 Note shall be by delivery hereof. The
Indenture also provides for the issuance of Subclass A-2 Notes, Subclass A-4
Notes, Subclass B-1 Notes, Subclass B-2 Notes, Subclass C-1 Notes, Subclass C-2
Notes, Subclass D-2 Notes, Subclass E-1 Notes and Subclass E-2 Notes
(collectively with the Subclass A-3 Notes, the "Notes"). The Subclass A-3,
Subclass A-4, Subclass B-2, Subclass C-2, Subclass D-2 and Subclass E-2 Notes
are collectively referred to as the "New Notes". All capitalized terms used in
this Subclass A-3 Note and not defined herein shall have the respective meanings
assigned to such terms in the Indenture. Reference is made to the Indenture and
all indentures supplemental thereto for a statement of the respective rights and
obligations thereunder of the Issuer, the Trustee and the Subclass A-3
Noteholders. This Subclass A-3 Note is subject to all terms of the Indenture.

                  The Issuer will pay or redeem the Outstanding Principal
Balance of this Subclass A-3 Note prior to the Final Maturity Date on the
Payment Dates and in the amounts specified in the Indenture, subject to the
availability of the Available Collections Amount

<PAGE>   15

therefor after making payments entitled to priority under Sections 3.08 and 3.09
of the Indenture.

                  The Issuer may redeem all or part of the Outstanding Principal
Balance of this Subclass A-3 Note prior to the Final Maturity Date on the
Payment Dates, in the amounts and under the circumstances specified in the
Indenture.

                  Other than in the case of a redemption for taxation reasons
specified in the Indenture, upon any redemption of any amount of the Outstanding
Principal Balance of this Subclass A-3 Note (i) with the application of funds
other than the Available Collections Amount (including proceeds from Refinancing
Notes and proceeds from third parties), such amount shall be redeemed at a
Redemption Price equal to the product of the applicable Redemption Premium
applicable thereto and the Outstanding Principal Balance thereof and (ii) with
the application of the Available Collections Amount, such amount shall be
redeemed at a Redemption Price equal to the Outstanding Principal Balance
thereof.

                  Following the Expected Final Payment Date of this Subclass A-3
Note and until the Outstanding Principal Balance hereof is paid or duly provided
for, the Outstanding Principal Balance hereof shall bear additional interest
("Step-Up Interest") at the rate of 0.5% per annum, payable on each Payment
Date, subject to the availability of the Available Collections Amount therefor
after making payments entitled to priority under Sections 3.08 and 3.09 of the
Indenture.

                  Any amount of Redemption Premium or interest (including
Step-Up Interest) on this Subclass A-3 Note that is not paid when due shall, to
the fullest extent permitted by applicable law, bear interest at a fluctuating
interest rate per annum equal to the Stated Interest Rate plus, following the
Expected Final Payment Date of this Subclass A-3 Note, 0.5% per annum, from the
date when due until such amount is paid or duly provided for, payable on the
next succeeding Payment Date, subject, in the case of Step-Up Interest, to the
availability of the Available Collections Amount therefor after making payments
entitled to priority under Sections 3.08 and 3.09 of the Indenture.

                  If an exchange offer (the "Exchange Offer") registered under
the Securities Act is not consummated and a shelf registration statement (the
"Shelf Registration Statement") under the Securities Act with respect to resales
of the New Notes other than the Subclass D-2 and Subclass E-2 Notes is not
declared effective by the Commission, on or before April 12, 2001 in accordance
with the terms of the Registration Rights Agreement dated as of July 17, 2000,
among the Issuer, Morgan Stanley & Co. International Limited and Lehman Brothers
Inc., thereafter an additional incremental interest amount will accrue on each
subclass of New Notes other than the Subclass D-2 and Subclass E-2 Notes, at an
annual rate of 0.5%. Such additional incremental interest amounts on the New
Notes other than the Subclass D-2 and Subclass E-2 Notes will be payable in cash
on each Payment Date until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.

                  The indebtedness evidenced by the Subclass A-3 Notes is, to
the extent and in the manner provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Claims, and this
Subclass A-3 Note is issued subject to such provisions. Each Holder of this
Subclass A-3 Note, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take

                                       2

<PAGE>   16

such action as may be necessary or appropriate to effectuate the subordination
as provided in the Indenture and (c) appoints the Trustee his attorney-in-fact
for such purpose.

                  The maturity of this Subclass A-3 Note is subject to
acceleration upon the occurrence and during the continuance of the Events of
Default specified in the Indenture.

                  This Subclass A-3 Note is and will be secured, on a
subordinated basis, by the collateral pledged as security therefor as provided
in the Security Documents.

                  Subject to and in accordance with the terms of the Indenture,
there will be distributed monthly on each Payment Date commencing on August 15,
2000, to the Holder hereof, in the manner specified in Section 3.08 and Section
3.09 of the Indenture, such Holder's pro rata share (based on the aggregate
percentage of the Outstanding Principal Balance of the Subclass A-3 Notes held
by such Holder) of the aggregate amount distributable to all Holders of Subclass
A-3 Notes on such Payment Date.

                  All amounts payable in respect of this Subclass A-3 Note shall
be payable in U.S. dollars in immediately available funds in the manner provided
in the Indenture to the Holder hereof. The final payment with respect to this
Subclass A-3 Note, however, shall be made only upon presentation and surrender
of this Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice given by the
Trustee or Paying Agent with respect to such final payment. At such time, if
any, as this Subclass A-3 Note is issued in the form of one or more Definitive
Registered Notes, payments on a Payment Date shall be made by check mailed to
each Noteholder of such a Definitive Registered Note on the applicable Record
Date at its address appearing on the Register maintained with respect to
Subclass A-3 Notes. Alternatively, upon application in writing to the Trustee,
not later than the applicable Record Date, by a Noteholder of one or more
Definitive Registered Notes of Subclass A-3 having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Noteholder at a financial institution in New York,
New York. The final payment with respect to any such Definitive Registered Note,
however, shall be made only upon presentation and surrender of such Definitive
Registered Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice of such final
payment given by the Trustee or Paying Agent. Any reduction in the principal
amount of this Subclass A-3 Note (or any one or more predecessor Subclass A-3
Notes) effected by any payments made on any Payment Date shall be binding upon
all future Holders of this Subclass A-3 Note and of any Subclass A-3 Note issued
upon the exchange or in lieu of or upon the refinancing of this Subclass A-3
Note, whether or not noted hereon.

                  The Holder of this Subclass A-3 Note agrees, by acceptance
hereof, to pay over to the Cash Manager any money (including principal,
Redemption Premium and interest) paid to it in respect of this Subclass A-3 Note
in the event that the Cash Manager, acting in good faith, determines
subsequently that such monies were not paid in accordance with the priority of
payment provisions of the Indenture or as a result of any other mistake of fact
or law on the part of the Cash Manager in making such payment.

                  The Indenture permits the amendment or modification of the
Indenture and the Subclass A-3 Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that,
without the consent of each Swap Provider and each Holder of

                                       3

<PAGE>   17

any Notes affected thereby, no such amendment may (i) modify the provisions of
the Indenture or the Notes setting forth the frequency or the currency of
payment of, the maturity of, or the method of calculation of the amount of, any
interest, principal and Redemption Premium, if any, payable in respect of any
subclass of Notes, (ii) reduce the percentage of the aggregate Outstanding
Principal Balance of such subclass of Notes required to approve any amendment or
waiver of Section 9.01 of the Indenture or (iii) alter the manner or priority of
payment of such subclass of Notes (each, a "Basic Terms Modification"). Any such
amendment or modification shall be binding on every Holder hereof, whether or
not notation thereof is made upon this Subclass A-3 Note. The Indenture also
permits the Trustee to agree, without the consent of any Noteholder, (a) to any
modification (other than a Basic Terms Modification) of, or the waiver or
authorization of any breach or prospective breach of, any provision of any
Related Document or of the relevant Notes to correct a manifest error or an
error which is of a formal, minor or technical nature or (b) to modify the
provisions of the Indenture or the Cash Management Agreement relating to the
timing of movement of Rental Payments or other monies received or Expenses
incurred among the Accounts by the Cash Manager.

                  The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Noteholder of the subclass affected thereby and each Noteholder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.

                  The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class of Notes, on behalf of the Holders of all of the Subclass A-3
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver shall be conclusive and binding upon all present and
future Holders of this Subclass A-3 Note and of any Subclass A-3 Note issued
upon the exchange or in lieu of or upon the refinancing of this Subclass A-3
Note, whether or not notation of such consent or waiver is made upon this
Subclass A-3 Note.

                  The term "Issuer" as used in this Subclass A-3 Note includes
any successor to the Issuer under the Indenture.

                  The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Subclass A-3 Notes under the Indenture.

                  The Subclass A-3 Notes are issuable only in bearer form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

                  This Subclass A-3 Note 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.

                  Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Subclass A-3 Note

                                       4

<PAGE>   18

shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.

                  IN WITNESS WHEREOF, the Issuer has caused this Subclass A-3
Note to be signed manually or by facsimile by its Responsible Officer.

Date: ____________                                 AERCO LIMITED

                                                   By:_________________________
                                                      Name:
                                                      Title:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Subclass A-3 Notes due July 15, 2025
designated above and referred to in the within-mentioned Indenture.

Date: ___________                                  BANKERS TRUST COMPANY,
                                                   not in its individual
                                                   capacity but solely
                                                   as Trustee

                                                   By:________________________
                                                      Name:
                                                      Authorized Signatory

                                       5

<PAGE>   19

                  SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS
                       EVIDENCED BY THIS SUBCLASS A-3 NOTE

                 The initial principal amount of indebtedness evidenced by this
Subclass A-3 Note shall be $________. The following decreases/increases in the
principal amount evidenced by this Subclass A-3 Note have been made:

<TABLE>
<CAPTION>
                    Decrease in        Increase in       Total Principal Amount of
Date of Decrease/   Principal Amount   Principal         this Subclass A-3 Note       Notation Made
Increase            of this Subclass   Amount of this    Following such               by or on
                    A-3 Note           Subclass A-3      Decrease/Increase            Behalf of
                                       Note                                           Trustee
<S>                 <C>                <C>               <C>                          <C>
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
_________________   ________________   _______________   __________________________   _______________
</TABLE>

                                       6
<PAGE>   20
                                    APPENDIX

                     POOL FACTORS AND EXTENDED POOL FACTORS

The Pool Factor for this Subclass A-3 Note for any Payment Date shall be
determined as the product of (a) the Base Pool Factor for such Payment Date set
forth on Schedule 1 attached hereto and (b) the lesser of (1) one and (2) the
product of the Non-Delivery Adjustment Factor for such Payment Date and a
fraction, the numerator of which is 800 and the denominator of which is 565.

The Extended Pool Factor for this Subclass A-3 Note for any Payment Date shall
be determined as the product of (a) the Base Extended Pool Factor for such
Payment Date set forth on Schedule 1 hereto and (b) the lesser of (1) one and
(2) the product of the Non-Delivery Adjustment Factor for such Payment Date and
a fraction, the numerator of which is 800 and the denominator of which is 565.

                                       7

<PAGE>   21

                            SCHEDULE 1 TO APPENDIX TO
                                SUBCLASS A-3 NOTE
                BASE POOL FACTORS AND EXTENDED BASE POOL FACTORS

<PAGE>   22

                       EXHIBIT A-4 TO INDENTURE SUPPLEMENT

                     FORM OF SUBCLASS A-4 FLOATING RATE NOTE

                                  AERCO LIMITED

                      SUBCLASS A-4 NOTE, due July 15, 2025

No. ____                                                     [CUSIP][ISIN][CCN]
$

                               BEARER GLOBAL NOTE

                  AERCO LIMITED, a limited liability company organized under the
laws of Jersey, Channel Islands (herein referred to as the "Issuer"), for value
received, hereby promises to pay to the BEARER, upon surrender hereof, the
principal sum set forth on the grid schedule attached hereto and made a part
hereof (provided, however that the aggregate principal amount hereof and of all
other Subclass A-4 Notes outstanding, collectively, shall not exceed TWO HUNDRED
THIRTY FIVE MILLION DOLLARS ($235,000,000)) on July 15, 2025 (the "Final
Maturity Date") and to pay interest monthly in arrears on the Outstanding
Principal Balance hereof at a fluctuating interest rate per annum equal to the
sum of LIBOR plus .52% per annum (the "Stated Interest Rate") from the date
hereof until the Outstanding Principal Balance hereof is paid or duly provided
for, payable on each Payment Date. Interest on this Subclass A-4 Note in each
Interest Accrual Period shall be calculated on the basis of a 360-day year and
the actual number of days elapsed in such Interest Accrual Period.

                  This Subclass A-4 Note is one of a duly authorized issue of
Notes of the Issuer, designated as its "Subclass A-4 Notes, due July 15, 2025",
issued under the Trust Indenture dated as of July 15, 1998 and supplemented by
an Indenture Supplement dated as of July 17, 2000 (as amended or supplemented
from time to time, the "Indenture"), between the Issuer and Bankers Trust
Company, as trustee (the "Trustee"). This Subclass A-4 Note is freely negotiable
and transfer of this Subclass A-4 Note shall be by delivery hereof. The
Indenture also provides for the issuance of Subclass A-2 Notes, Subclass A-3
Notes, Subclass B-1 Notes, Subclass B-2 Notes, Subclass C-1 Notes, Subclass C-2
Notes, Subclass D-2 Notes, Subclass E-1 Notes and Subclass E-2 Notes
(collectively with the Subclass A-4 Notes, the "Notes"). The Subclass A-3,
Subclass A-4, Subclass B-2, Subclass C-2, Subclass D-2 and Subclass E-2 Notes
are collectively referred to as the "New Notes". All capitalized terms used in
this Subclass A-4 Note and not defined herein shall have the respective meanings
assigned to such terms in the Indenture. Reference is made to the Indenture and
all indentures supplemental thereto for a statement of the respective rights and
obligations thereunder of the Issuer, the Trustee and the Subclass A-4
Noteholders. This Subclass A-4 Note is subject to all terms of the Indenture.

                  The Issuer will pay or redeem the Outstanding Principal
Balance of this Subclass A-4 Note prior to the Final Maturity Date on the
Payment Dates and in the amounts specified in the Indenture, subject to the
availability of the Available Collections Amount

<PAGE>   23

therefor after making payments entitled to priority under Sections 3.08 and 3.09
of the Indenture.

                  The Issuer may redeem all or part of the Outstanding Principal
Balance of this Subclass A-4 Note prior to the Final Maturity Date on the
Payment Dates, in the amounts and under the circumstances specified in the
Indenture.

                  Other than in the case of a redemption for taxation reasons
specified in the Indenture, upon any redemption of any amount of the Outstanding
Principal Balance of this Subclass A-4 Note (i) with the application of funds
other than the Available Collections Amount (including proceeds from Refinancing
Notes and proceeds from third parties), such amount shall be redeemed at a
Redemption Price equal to the product of the applicable Redemption Premium
applicable thereto and the Outstanding Principal Balance thereof and (ii) with
the application of the Available Collections Amount, such amount shall be
redeemed at a Redemption Price equal to the Outstanding Principal Balance
thereof.

                  Any amount of Redemption Premium or interest on this Subclass
A-4 Note that is not paid when due shall, to the fullest extent permitted by
applicable law, bear interest at a fluctuating interest rate per annum equal to
the Stated Interest Rate from the date when due until such amount is paid or
duly provided for, payable on the next succeeding Payment Date.

                  If an exchange offer (the "Exchange Offer") registered under
the Securities Act is not consummated and a shelf registration statement (the
"Shelf Registration Statement") under the Securities Act with respect to resales
of the New Notes other than the Subclass D-2 and Subclass E-2 Notes is not
declared effective by the Commission, on or before April 12, 2001 in accordance
with the terms of the Registration Rights Agreement dated as of July 17, 2000
among the Issuer, Morgan Stanley & Co. International Limited and Lehman Brothers
Inc., thereafter an additional incremental interest amount will accrue on each
subclass of New Notes other than the Subclass D-2 and Subclass E-2 Notes, at an
annual rate of 0.5%. Such additional incremental interest amounts on the New
Notes other than the Subclass D-2 and Subclass E-2 Notes will be payable in cash
on each Payment Date until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.

                  The indebtedness evidenced by the Subclass A-4 Notes is, to
the extent and in the manner provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Claims, and this
Subclass A-4 Note is issued subject to such provisions. Each Holder of this
Subclass A-4 Note, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
as provided in the Indenture and (c) appoints the Trustee his attorney-in-fact
for such purpose.

                  The maturity of this Subclass A-4 Note is subject to
acceleration upon the occurrence and during the continuance of the Events of
Default specified in the Indenture.

                  This Subclass A-4 Note is and will be secured, on a
subordinated basis, by the collateral pledged as security therefor as provided
in the Security Documents.

                  Subject to and in accordance with the terms of the Indenture,
there will be distributed monthly on each Payment Date commencing on August 15,
2000, to the Holder

                                       2

<PAGE>   24

hereof, in the manner specified in Section 3.08 and Section 3.09 of the
Indenture, such Holder's pro rata share (based on the aggregate percentage of
the Outstanding Principal Balance of the Subclass A-4 Notes held by such Holder)
of the aggregate amount distributable to all Holders of Subclass A-4 Notes on
such Payment Date.

                  All amounts payable in respect of this Subclass A-4 Note shall
be payable in U.S. dollars in immediately available funds in the manner provided
in the Indenture to the Holder hereof. The final payment with respect to this
Subclass A-4 Note, however, shall be made only upon presentation and surrender
of this Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice given by the
Trustee or Paying Agent with respect to such final payment. At such time, if
any, as this Subclass A-4 Note is issued in the form of one or more Definitive
Registered Notes, payments on a Payment Date shall be made by check mailed to
each Noteholder of such a Definitive Registered Note on the applicable Record
Date at its address appearing on the Register maintained with respect to
Subclass A-4 Notes. Alternatively, upon application in writing to the Trustee,
not later than the applicable Record Date, by a Noteholder of one or more
Definitive Registered Notes of Subclass A-4 having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Noteholder at a financial institution in New York,
New York. The final payment with respect to any such Definitive Registered Note,
however, shall be made only upon presentation and surrender of such Definitive
Registered Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice of such final
payment given by the Trustee or Paying Agent. Any reduction in the principal
amount of this Subclass A-4 Note (or any one or more predecessor Subclass A-4
Notes) effected by any payments made on any Payment Date shall be binding upon
all future Holders of this Subclass A-4 Note and of any Subclass A-4 Note issued
upon the exchange or in lieu of or upon the refinancing of this Subclass A-4
Note, whether or not noted hereon.

                  The Holder of this Subclass A-4 Note agrees, by acceptance
hereof, to pay over to the Cash Manager any money (including principal,
Redemption Premium and interest) paid to it in respect of this Subclass A-4 Note
in the event that the Cash Manager, acting in good faith, determines
subsequently that such monies were not paid in accordance with the priority of
payment provisions of the Indenture or as a result of any other mistake of fact
or law on the part of the Cash Manager in making such payment.

                  The Indenture permits the amendment or modification of the
Indenture and the Subclass A-4 Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that,
without the consent of each Swap Provider and each Holder of any Notes affected
thereby, no such amendment may (i) modify the provisions of the Indenture or the
Notes setting forth the frequency or the currency of payment of, the maturity
of, or the method of calculation of the amount of, any interest, principal and
Redemption Premium, if any, payable in respect of any subclass of Notes, (ii)
reduce the percentage of the aggregate Outstanding Principal Balance of such
subclass of Notes required to approve any amendment or waiver of Section 9.01 of
the Indenture or (iii) alter the manner or priority of payment of such subclass
of Notes (each, a "Basic Terms Modification"). Any such amendment or
modification shall be binding on every Holder hereof, whether or not notation
thereof is made upon this Subclass A-4 Note. The Indenture also permits the
Trustee to agree, without the consent of any Noteholder, (a) to any modification
(other than a Basic Terms Modification) of, or the waiver or authorization of
any breach or prospective breach

                                       3

<PAGE>   25

of, any provision of any Related Document or of the relevant Notes to correct a
manifest error or an error which is of a formal, minor or technical nature or
(b) to modify the provisions of the Indenture or the Cash Management Agreement
relating to the timing of movement of Rental Payments or other monies received
or Expenses incurred among the Accounts by the Cash Manager.

                  The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Noteholder of the subclass affected thereby and each Noteholder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.

                  The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class of Notes, on behalf of the Holders of all of the Subclass A-4
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver shall be conclusive and binding upon all present and
future Holders of this Subclass A-4 Note and of any Subclass A-4 Note issued
upon the exchange or in lieu of or upon the refinancing of this Subclass A-4
Note, whether or not notation of such consent or waiver is made upon this
Subclass A-4 Note.

                  The term "Issuer" as used in this Subclass A-4 Note includes
any successor to the Issuer under the Indenture.

                  The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Subclass A-4 Notes under the Indenture.

                  The Subclass A-4 Notes are issuable only in bearer form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

                  This Subclass A-4 Note 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.

                  Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Subclass A-4 Note shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.

                                       4

<PAGE>   26

                  IN WITNESS WHEREOF, the Issuer has caused this Subclass A-4
Note to be signed manually or by facsimile by its Responsible Officer.

Date: _____________                             AERCO LIMITED

                                                By:________________________
                                                   Name:
                                                   Title:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Subclass A-4 Notes due July 15, 2025 designated above and
referred to in the within-mentioned Indenture

Date: ____________                              BANKERS TRUST COMPANY,
                                                not in its individual capacity
                                                but solely as Trustee

                                                By:________________________
                                                   Name:
                                                   Authorized Signatory

                                       5

<PAGE>   27
                  SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS
                       EVIDENCED BY THIS SUBCLASS A-4 NOTE

                  The initial principal amount of indebtedness evidenced by this
Subclass A-4 Note shall be $________. The following decreases/increases in the
principal amount evidenced by this Subclass A-4 Note have been made:

<TABLE>
<CAPTION>
                    Decrease in        Increase in       Total Principal Amount of
Date of Decrease/   Principal Amount   Principal         this Subclass A-4 Note       Notation Made
Increase            of this Subclass   Amount of this    Following such               by or on
                    A-4 Note           Subclass A-4      Decrease/Increase            Behalf of
                                       Note                                           Trustee
<S>                <C>                 <C>               <C>                          <C>
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
________________   _________________   _______________   __________________________   ________________
</TABLE>

                                       6

<PAGE>   28

                          APPENDIX TO SUBCLASS A-4 NOTE

                     POOL FACTORS AND EXTENDED POOL FACTORS

The "Pool Factor" for this Subclass A-4 Note for any Payment Date shall be
determined as the product of (a) the Base Pool Factor for such Payment Date set
forth on Schedule 1 attached hereto and (b) the greater of (1) zero and (2) a
fraction, the numerator of which is (i) the product of the Non Delivery
Adjustment Factor for such Payment Date and $800,000,000, less (ii) $565,000,000
and the denominator of which is $235,000,000.

The "Extended Pool Factor" for this Subclass A-4 Note for any Payment Date shall
be determined as the product of (a) the Base Extended Pool Factor for such
Payment Date set forth on Schedule 1 attached hereto and (b) the greater of (1)
zero and (2) a fraction, the numerator of which is (i) the product of the Non
Delivery Adjustment Factor for such Payment Date and $800,000,000, less (ii)
$565,000,000, and the denominator of which $235,000,000.

                                       7

<PAGE>   29

                            SCHEDULE 1 TO APPENDIX TO
                                SUBCLASS A-4 NOTE
                BASE POOL FACTORS AND EXTENDED BASE POOL FACTORS

<PAGE>   30

                       EXHIBIT B-2 TO INDENTURE SUPPLEMENT

                     FORM OF SUBCLASS B-2 FLOATING RATE NOTE

                                  AERCO LIMITED

                      SUBCLASS B-2 NOTE, due July 15, 2025

No. ____                                                     [CUSIP][ISIN][CCN]
$

                            GLOBAL BEARER CERTIFICATE

                  AERCO LIMITED, a limited liability company organized under the
laws of Jersey, Channel Islands (herein referred to as the "Issuer"), for value
received, hereby promises to pay to the BEARER, upon surrender hereof, the
principal sum set forth on the grid schedule attached hereto and made a part
hereof (provided, however that the aggregate principal amount hereof and of all
other Subclass B-2 Notes outstanding, collectively, shall not exceed EIGHTY
MILLION DOLLARS ($80,000,000)) on July 15, 2025 (the "Final Maturity Date") and
to pay interest monthly in arrears on the Outstanding Principal Balance hereof
at a fluctuating interest rate per annum equal to the sum of LIBOR plus 1.05%
per annum (the "Stated Interest Rate") from the date hereof until the
Outstanding Principal Balance hereof is paid or duly provided for, payable on
each Payment Date. Interest on this Subclass B-2 Note in each Interest Accrual
Period shall be calculated on the basis of a 360-day year and the actual number
of days elapsed in such Interest Accrual Period.

                  This Subclass B-2 Note is one of a duly authorized issue of
Notes of the Issuer, designated as its "Subclass B-2 Notes, due July 15, 2025",
issued under the Trust Indenture dated as of July 15, 1998 and supplemented by
an Indenture Supplement dated as of July 17, 2000 (as amended or supplemented
from time to time, the "Indenture"), between the Issuer and Bankers Trust
Company, as trustee (the "Trustee"). This Subclass B-2 Note is freely negotiable
and transfer of this Subclass B-2 Note shall be by delivery hereof. The
Indenture also provides for the issuance of Subclass A-2 Notes, Subclass A-3
Notes, Subclass A-4 Notes, Subclass B-1 Notes, Subclass C-1 Notes, Subclass C-2
Notes, Subclass D-2 Notes, Subclass E-1 Notes and Subclass E-2 Notes
(collectively with the Subclass B-2 Notes, the "Notes"). The Subclass A-3,
Subclass A-4, Subclass B-2, Subclass C-2, Subclass D-2 and Subclass E-2 Notes
are collectively referred to as the "New Notes". All capitalized terms used in
this Subclass B-2 Note and not defined herein shall have the respective meanings
assigned to such terms in the Indenture. Reference is made to the Indenture and
all indentures supplemental thereto for a statement of the respective rights and
obligations thereunder of the Issuer, the Guarantor, the Trustee and the
Subclass B-2 Noteholders. This Subclass B-2 Note is subject to all terms of the
Indenture.

                  The Issuer will pay or redeem the Outstanding Principal
Balance of this Subclass B-2 Note prior to the Final Maturity Date on the
Payment Dates and in the amounts specified in the Indenture, subject to the
availability of the Available Collections Amount therefor after making payments
entitled to priority under Sections 3.08 and 3.09 of the Indenture.

<PAGE>   31

                  The Issuer may redeem all or part of the Outstanding Principal
Balance of this Subclass B-2 Note prior to the Final Maturity Date on the
Payment Dates, in the amounts and under the circumstances specified in the
Indenture.

                  Other than in the case of a redemption for taxation reasons
specified in the Indenture, upon any redemption of any amount of the Outstanding
Principal Balance of this Subclass B-2 Note (i) with the application of funds
other than the Available Collections Amount (including proceeds from Refinancing
Notes and proceeds from third parties), such amount shall be redeemed at a
Redemption Price equal to the product of the applicable Redemption Premium
applicable thereto and the Outstanding Principal Balance thereof and (ii) with
the application of the Available Collections Amount, such amount shall be
redeemed at a Redemption Price equal to the Outstanding Principal Balance
thereof.

                  Following the Expected Final Payment Date of this Subclass B-2
Note and until the Outstanding Principal Balance hereof is paid or duly provided
for, the Outstanding Principal Balance hereof shall bear additional interest
("Step-Up Interest") at the rate of 1.50% per annum, payable on each Payment
Date, subject to the availability of the Available Collections Amount therefor
after making payments entitled to priority under Sections 3.08 and 3.09 of the
Indenture.

                  Any amount of Redemption Premium or interest (including
Step-Up Interest) on this Subclass B-2 Note that is not paid when due shall, to
the fullest extent permitted by applicable law, bear interest at a fluctuating
interest rate per annum equal to the Stated Interest Rate plus, following the
Expected Final Payment Date of this Subclass B-2 Note, .5% per annum from the
date when due until such amount is paid or duly provided for, payable on the
next succeeding Payment Date, subject, in the case of Step-Up Interest, to the
availability of the Available Collections Amount therefor after making payments
entitled to priority under Section 3.08 and Section 3.09 of the Indenture.

                  If an exchange offer (the "Exchange Offer") registered under
the Securities Act is not consummated and a shelf registration statement (the
"Shelf Registration Statement") under the Securities Act with respect to resales
of the New Notes other than the Subclass D-2 and Subclass E-2 Notes is not
declared effective by the Commission, on or before April 12, 2001 in accordance
with the terms of the Registration Rights Agreement dated as of July 17, 2000
among the Issuer, Morgan Stanley & Co. International Limited and Lehman Brothers
Inc., thereafter an additional incremental interest amount will accrue on each
subclass of New Notes other than the Subclass D-2 and Subclass E-2 Notes, at an
annual rate of 0.5%. Such additional incremental interest amounts on the New
Notes other than the Subclass D-2 and Subclass E-2 Notes will be payable in cash
on each Payment Date until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.

                  The indebtedness evidenced by the Subclass B-2 Notes is, to
the extent and in the manner provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Claims, and this
Subclass B-2 Note is issued subject to such provisions. Each Holder of this
Subclass B-2 Note, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
as provided in the Indenture and (c) appoints the Trustee his attorney-in-fact
for such purpose.

                                       2

<PAGE>   32

                  The maturity of this Subclass B-2 Note is subject to
acceleration upon the occurrence and during the continuance of the Events of
Default specified in the Indenture. The Subclass B-2 Noteholders shall not be
permitted to deliver a Default Notice or to exercise any remedy in respect of
any such Event of Default until all interest and principal on the Class A Notes
have been paid in full.

                  This Subclass B-2 Note is and will be secured, on a
subordinated basis, by the collateral pledged as security therefor as provided
in the Security Documents.

                  Subject to and in accordance with the terms of the Indenture,
there will be distributed monthly on each Payment Date commencing on August 15,
2000 to the Holder hereof, in the manner specified in Section 3.08 of the
Indenture, such Holder's pro rata share (based on the aggregate percentage of
the Outstanding Principal Balance of the Subclass B-2 Notes held by such Holder)
of the aggregate amount distributable to all Holders of Subclass B-2 Notes on
such Payment Date.

                  All amounts payable in respect of this Subclass B-2 Note shall
be payable in U.S. dollars in immediately available funds in the manner provided
in the Indenture to the Holder hereof. The final payment with respect to this
Subclass B-2 Note, however, shall be made only upon presentation and surrender
of this Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice given by the
Trustee or Paying Agent with respect to such final payment. At such time, if
any, as this Subclass B-2 Note is issued in the form of one or more Definitive
Registered Notes, payments on a Payment Date shall be made by check mailed to
each Noteholder of such a Definitive Registered Note on the applicable Record
Date at its address appearing on the Register maintained with respect to
Subclass B-2 Notes. Alternatively, upon application in writing to the Trustee,
not later than the applicable Record Date, by a Noteholder of one or more
Definitive Registered Notes of Subclass B-2 having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Noteholder at a financial institution in New York,
New York. The final payment with respect to any such Definitive Registered Note,
however, shall be made only upon presentation and surrender of such Definitive
Registered Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice of such final
payment given by the Trustee or Paying Agent. Any reduction in the principal
amount of this Subclass B-2 Note (or any one or more predecessor Subclass B-2
Notes) effected by any payments made on any Payment Date shall be binding upon
all future Holders of this Subclass B-2 Note and of any Subclass B-2 Note issued
upon the exchange or in lieu of or upon the refinancing of this Subclass B-2
Note, whether or not noted hereon.

                  The Holder of this Subclass B-2 Note agrees, by acceptance
hereof, to pay over to the Cash Manager any money (including principal,
Redemption Premium and interest) paid to it in respect of this Subclass B-2 Note
in the event that the Cash Manager, acting in good faith, determines
subsequently that such monies were not paid in accordance with the priority of
payment provisions of the Indenture or as a result of any other mistake of fact
or law on the part of the Cash Manager in making such payment.

                  The Indenture permits the amendment or modification of the
Indenture and the Subclass B-2 Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as

                                       3

<PAGE>   33
a single class); provided that, without the consent of each Swap Provider and
each Holder of any Notes affected thereby, no such amendment may (i) modify the
provisions of the Indenture or the Notes setting forth the frequency or the
currency of payment of, the maturity of, or the method of calculation of the
amount of, any interest, principal and Redemption Premium, if any, payable in
respect of such subclass of Notes, (ii) reduce the percentage of the aggregate
Outstanding Principal Balance of such subclass of Notes required to approve any
amendment or waiver of Section 9.01 of the Indenture or (iii) alter the manner
or priority of payment of any subclass of Notes (each, a "Basic Terms
Modification"). Any such amendment or modification shall be binding on every
Holder hereof, whether or not notation thereof is made upon this Subclass B-2
Note. The Indenture also permits the Trustee to agree, without the consent of
any Noteholder, (a) to any modification (other than a Basic Terms Modification)
of, or the waiver or authorization of any breach or prospective breach of, any
provision of any Related Document or of the relevant Notes to correct a manifest
error or an error which is of a formal, minor or technical nature or (b) to
modify the provisions of the Indenture or the Cash Management Agreement relating
to the timing of movement of Rental Payments or other monies received or
Expenses incurred among the Accounts by the Cash Manager.

                  The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Noteholder of the subclass affected thereby and each Noteholder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.

                  The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class of Notes, on behalf of the Holders of all of the Subclass B-2
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver shall be conclusive and binding upon all present and
future Holders of this Subclass B-2 Note and of any Subclass B-2 Note issued
upon the exchange or in lieu of or upon the refinancing of this Subclass B-2
Note, whether or not notation of such consent or waiver is made upon this
Subclass B-2 Note.

                  The term "Issuer" as used in this Subclass B-2 Note includes
any successor to the Issuer under the Indenture.

                  The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Subclass B-2 Notes under the Indenture.

                  The Subclass B-2 Notes are issuable only in bearer form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

                  This Subclass B-2 Note 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.

                  Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Subclass B-2 Note

                                       4
<PAGE>   34

shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.

                  IN WITNESS WHEREOF, the Issuer has caused this Subclass B-2
Note to be signed manually or by facsimile by its Responsible Officer.

Date: _________                                   AERCO LIMITED

                                                  By:________________________
                                                     Name:
                                                     Title:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Subclass B-2 Notes due July 15, 2025
designated above and referred to in the within-mentioned Indenture.

Date: _________                                      BANKERS TRUST COMPANY,
                                                     not in its individual
                                                     capacity but solely
                                                     as Trustee

                                                     By:________________________
                                                        Name:
                                                        Authorized Signatory

                                       5

<PAGE>   35

                  SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS
                       EVIDENCED BY THIS SUBCLASS B-2 NOTE

                  The initial principal amount of indebtedness evidenced by this
Subclass B-2 Note shall be $________. The following decreases/increases in the
principal amount evidenced by this Subclass B-2 Note have been made:

<TABLE>
<CAPTION>
                    Decrease in         Increase in       Total Principal Amount of
Date of Decrease/   Principal Amount    Principal         this Subclass B-2 Note      Notation Made
Increase            of this Subclass    Amount of this    Following such              by or on
                    B-2 Note            Subclass B-2      Decrease/Increase           Behalf of
                                        Note                                          Trustee
<S>                 <C>                 <C>               <C>                         <C>
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
_________________   _________________   _______________   _________________________   _______________
</TABLE>

                                       6
<PAGE>   36
                                    APPENDIX

                     POOL FACTORS AND EXTENDED POOL FACTORS

The "Pool Factor" for this Subclass B-2 Note for any Payment Date shall be
determined as the product of (a) the Base Pool Factor for such Payment Date set
forth on Schedule 1 attached hereto and (b) the Non-Delivery Adjustment Factor
for such Payment Date.

The "Extended Pool Factor" for this Subclass B-2 Note for any Payment Date shall
be determined as the product of (a) the Base Extended Pool Factor for such
Payment Date set forth on Schedule 1 attached hereto and (b) the Non-Delivery
Adjustment Factor for such Payment Date.

                                       7

<PAGE>   37

                            SCHEDULE 1 TO APPENDIX TO
                                SUBCLASS B-2 NOTE
                         BASE POOL FACTORS AND EXTENDED
                                BASE POOL FACTORS

<PAGE>   38

                       EXHIBIT C-2 TO INDENTURE SUPPLEMENT

                     FORM OF SUBCLASS C-2 FLOATING RATE NOTE

                                  AERCO LIMITED

                      SUBCLASS C-2 NOTE, due July 15, 2025

No. ____                                                      [CUSIP][ISIN][CCN]
$

                            GLOBAL BEARER CERTIFICATE

                  AERCO LIMITED, a limited liability company organized under the
laws of Jersey, Channel Islands, (herein referred to as the "Issuer") for value
received, hereby promises to pay to the BEARER, upon surrender hereof, the
principal sum set forth on the grid schedule attached hereto and made a part
hereof (provided, however that the aggregate principal amount hereof and of all
other Subclass C-2 Notes outstanding, collectively, shall not exceed EIGHTY
MILLION DOLLARS ($80,000,000)) on July 15, 2025 (the "Final Maturity Date") and
to pay interest monthly in arrears on the Outstanding Principal Balance hereof
at a fluctuating interest rate per annum equal to the sum of LIBOR plus 2.05%
per annum (the "Stated Interest Rate") from the date hereof until the
Outstanding Principal Balance hereof is paid or duly provided for, payable on
each Payment Date. Interest on this Subclass C-2 Note in each Interest Accrual
Period shall be calculated on the basis of a 360-day year and the actual number
of days elapsed in such Interest Accrual Period.

                  This Subclass C-2 Note is one of a duly authorized issue of
Notes of the Issuer, designated as its "Subclass C-2 Notes, due July 15, 2025",
issued under the Trust Indenture dated as of July 15, 1998 and supplemented by
an Indenture Supplement dated as of July 17, 2000 (as amended or supplemented
from time to time, the "Indenture"), between the Issuer and Bankers Trust
Company, as trustee (the "Trustee"). This Subclass C-2 Note is freely negotiable
and transfer of this Subclass C-2 Note shall be by delivery hereof. The
Indenture also provides for the issuance of Subclass A-2 Notes, Subclass A-3
Notes, Subclass A-4 Notes, Subclass B-1 Notes, Subclass B-2 Notes, Subclass C-1
Notes, Subclass D-2 Notes, Subclass E-1 Notes and Subclass E-2 Notes
(collectively with the Subclass C-2 Notes, the "Notes"). The Subclass A-3,
Subclass A-4, Subclass B-2, Subclass C-2, Subclass D-2 and Subclass E-2 Notes
are collectively referred to as the "New Notes". All capitalized terms used in
this Subclass C-2 Note and not defined herein shall have the respective meanings
assigned to such terms in the Indenture. Reference is made to the Indenture and
all indentures supplemental thereto for a statement of the respective rights and
obligations thereunder of the Issuer, the Trustee and the Subclass C-2
Noteholders. This Subclass C-2 Note is subject to all terms of the Indenture.

                  The Issuer will pay or redeem the Outstanding Principal
Balance of this Subclass C-2 Note prior to the Final Maturity Date on the
Payment Dates and in the amounts specified in the Indenture, subject to the
availability of the Available Collections Amount therefor after making payments
entitled to priority under Sections 3.08 and 3.09 of the Indenture.

<PAGE>   39

                  The Issuer may redeem all or part of the Outstanding Principal
Balance of this Subclass C-2 Note prior to the Final Maturity Date on the
Payment Dates, in the amounts and under the circumstances specified in the
Indenture.

                  Other than in the case of a redemption for taxation reasons
specified in the Indenture, upon any redemption of any amount of the Outstanding
Principal Balance of this Subclass C-2 Note (i) with the application of funds
other than the Available Collections Amount (including proceeds from Refinancing
Notes and proceeds from third parties), such amount shall be redeemed at a
Redemption Price equal to the product of the applicable Redemption Premium
applicable thereto and the Outstanding Principal Balance thereof and (ii) with
the application of the Available Collections Amount, such amount shall be
redeemed at a Redemption Price equal to the Outstanding Principal Balance
thereof.

                  Following the Expected Final Payment Date of this Subclass C-2
Note and until the Outstanding Principal Balance hereof is paid or duly provided
for, the Outstanding Principal Balance hereof shall bear additional interest
("Step-Up Interest") at the rate of 2.50% per annum, payable on each Payment
Date, subject to the availability of the Available Collections Amount therefor
after making payments entitled to priority under Sections 3.08 and 3.09 of the
Indenture.

                  Any amount of Redemption Premium or interest (including
Step-Up Interest) on this Subclass C-2 Note that is not paid when due shall, to
the fullest extent permitted by applicable law, bear interest at a fluctuating
interest rate per annum equal to the Stated Interest Rate plus, following the
Expected Final Payment Date of this Subclass C-2 Note, .5% per annum from the
date when due until such amount is paid or duly provided for, payable on the
next succeeding Payment Date, subject, in the case of Step-Up Interest, to the
availability of the Available Collections Amount therefor after making payments
entitled to priority under Section 3.08 and Section 3.09 of the Indenture.

                  If an exchange offer (the "Exchange Offer") registered under
the Securities Act is not consummated and a shelf registration statement (the
"Shelf Registration Statement") under the Securities Act with respect to resales
of the New Notes other than the Subclass D-2 and Subclass E-2 Notes is not
declared effective by the Commission, on or before April 12, 2001 in accordance
with the terms of the Registration Rights Agreement dated as of July 17, 2000
among the Issuer, Morgan Stanley & Co. International Limited and Lehman Brothers
Inc., thereafter an additional incremental interest amount will accrue on each
subclass of New Notes other than the Subclass D-2 and Subclass E-2 Notes, at an
annual rate of 0.5%. Such additional incremental interest amounts on the New
Notes other than the Subclass D-2 and Subclass E-2 Notes will be payable in cash
on each Payment Date until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.

                  The indebtedness evidenced by the Subclass C-2 Notes is, to
the extent and in the manner provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Claims and this
Subclass C-2 Note is issued subject to such provisions. Each Holder of this
Subclass C-2 Note, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
as provided in the Indenture and (c) appoints the Trustee his attorney-in-fact
for such purpose.

                                       2
<PAGE>   40

                  The maturity of this Subclass C-2 Note is subject to
acceleration upon the occurrence and during the continuance of the Events of
Default specified in the Indenture. The Subclass C-2 Noteholders shall not be
permitted to deliver a Default Notice or to exercise any remedy in respect of
any such Event of Default until all interest and principal on the Class A Notes
and the Class B Notes have been paid in full.

                  This Subclass C-2 Note is and will be secured, on a
subordinated basis, by the collateral pledged as security therefor as provided
in the Security Documents.

                  Subject to and in accordance with the terms of the Indenture,
there will be distributed monthly on each Payment Date commencing on August 15,
2000, to the Holder hereof, in the manner specified in Section 3.08 and Section
3.09 of the Indenture, such Holder's pro rata share (based on the aggregate
percentage of the Outstanding Principal Balance of the Subclass C-2 Notes held
by such Holder) of the aggregate amount distributable to all Holders of Subclass
C-2 Notes on such Payment Date.

                  All amounts payable in respect of this Subclass C-2 Note shall
be payable in U.S. dollars in immediately available funds in the manner provided
in the Indenture to the Holder hereof. The final payment with respect to this
Subclass C-2 Note, however, shall be made only upon presentation and surrender
of this Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice given by the
Trustee or Paying Agent with respect to such final payment. At such time, if
any, as this Subclass C-2 Note is issued in the form of one or more Definitive
Registered Notes, payments on a Payment Date shall be made by check mailed to
each Noteholder of such a Definitive Registered Note on the applicable Record
Date at its address appearing on the Register maintained with respect to
Subclass C-2 Notes. Alternatively, upon application in writing to the Trustee,
not later than the applicable Record Date, by a Noteholder of one or more
Definitive Registered Notes of Subclass C-2 having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Noteholder at a financial institution in New York,
New York. The final payment with respect to any such Definitive Registered Note,
however, shall be made only upon presentation and surrender of such Definitive
Registered Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice of such final
payment given by the Trustee or Paying Agent. Any reduction in the principal
amount of this Subclass C-2 Note (or any one or more predecessor Subclass C-2
Notes) effected by any payments made on any Payment Date shall be binding upon
all future Holders of this Subclass C-2 Note and of any Subclass C-2 Note issued
upon the exchange or in lieu of or upon the refinancing of this Subclass C-2
Note, whether or not noted hereon.

                  The Holder of this Subclass C-2 Note agrees, by acceptance
hereof, to pay over to the Cash Manager any money (including principal,
Redemption Premium and interest) paid to it in respect of this Subclass C-2 Note
in the event that the Cash Manager, acting in good faith, determines
subsequently that such monies were not paid in accordance with the priority of
payment provisions of the Indenture or as a result of any other mistake of fact
or law on the part of the Cash Manager in making such payment.

                  The Indenture permits the amendment or modification of the
Indenture and the Subclass C-2 Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as

                                       3
<PAGE>   41

a single class); provided that, without the consent of each Swap Provider and
each Holder of any Notes affected thereby, no such amendment may (i) modify the
provisions of the Indenture and the Notes setting forth the frequency or the
currency of payment of, the maturity of, or the method of calculation of the
amount of, any interest, principal and Redemption Premium, if any, payable in
respect of such subclass of Notes, (ii) reduce the percentage of the aggregate
Outstanding Principal Balance of such subclass of Notes required to approve any
amendment or waiver of Section 9.01 of the Indenture or (iii) alter the manner
or priority of payment of such subclass of Notes (each, a "Basic Terms
Modification"). Any such amendment or modification shall be binding on every
Holder hereof, whether or not notation thereof is made upon this Subclass C-2
Note. The Indenture also permits the Trustee to agree, without the consent of
any Noteholder, (a) to any modification (other than a Basic Terms Modification)
of, or the waiver or authorization of any breach or prospective breach of, any
provision of any Related Document or of the relevant Notes to correct a manifest
error or an error which is of a formal, minor or technical nature or (b) to
modify the provisions of the Indenture or the Cash Management Agreement relating
to the timing of movement of Rental Payments or other monies received or
Expenses incurred among the Accounts by the Cash Manager.

                  The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Noteholder of the subclass affected thereby and each Noteholder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.

                  The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class of Notes, on behalf of the Holders of all of the Subclass C-2
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver shall be conclusive and binding upon all present and
future Holders of this Subclass C-2 Note and of any Subclass C-2 Note issued
upon the exchange or in lieu of or upon the refinancing of this Subclass C-2
Note, whether or not notation of such consent or waiver is made upon this
Subclass C-2 Note.

                  The term "Issuer" as used in this Subclass C-2 Note includes
any successor to the Issuer under the Indenture.

                  The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Subclass C-2 Notes under the Indenture.

                  The Subclass C-2 Notes are issuable only in bearer form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

                  This Subclass C-2 Note 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.

                  Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Subclass C-2 Note

                                       4
<PAGE>   42

shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.

                  IN WITNESS WHEREOF, the Issuer has caused this Subclass C-2
Note to be signed manually or by facsimile by its Responsible Officer.

Date: _________                                  AERCO LIMITED

                                                 By:________________________
                                                    Name:
                                                    Title:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Subclass C-2 Notes due July 15, 2025 designated
above and referred to in the within-mentioned Indenture.

Date: _________                                  BANKERS TRUST COMPANY,
                                                 not in its individual capacity
                                                 but solely as Trustee

                                                 By:________________________
                                                    Name:
                                                    Authorized Signatory

                                       5
<PAGE>   43

                  SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS
                       EVIDENCED BY THIS SUBCLASS C-2 NOTE

                  The initial principal amount of indebtedness evidenced by this
Subclass C-2 Note shall be $________. The following decreases/increases in the
principal amount evidenced by this Subclass C-2 Note have been made:

<TABLE>
<CAPTION>

Date of             Decrease in          Increase in         Total Principal Amount   Notation Made
Decrease/           Principal Amount     Principal Amount    of this Subclass C-2     by or on
Increase            of this Subclass     of this Subclass    Note Following such      Behalf of
                    C-2 Note             C-2 Note            Decrease/Increase        Trustee
<S>                 <C>                  <C>                 <C>                      <C>
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
_________           ________________     ________________    ______________________   _____________
</TABLE>

                                       6
<PAGE>   44

                                    APPENDIX

                     POOL FACTORS AND EXTENDED POOL FACTORS

The "Pool Factor" for this Subclass C-2 Note for any Payment Date shall be
determined as the product of (a) the Base Pool Factor for such Payment Date set
forth on Schedule 1 attached hereto and (b) the Non-Delivery Adjustment Factor
for such Payment Date.

The "Extended Pool Factor" for this Subclass C-2 Note for any Payment shall be
determined as the product of (a) the Base Extended Pool Factor for such Payment
Date set forth on Schedule 1 attached hereto and (b) the Non Delivery Adjustment
Factor for such Payment Date.

                                       7

<PAGE>   45
                      EXHIBIT D-2 TO INDENTURE SUPPLEMENT

                      FORM OF SUBCLASS D-2 FIXED RATE NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY IN
ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY THIS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATIONS
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NO, WITHIN THE TIME PERIOD
REFERRED TO IN RULE 144(K) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(D)
IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE
TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO
AERCO LIMITED OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 OF REGULATIONS UNDER THE SECURITIES ACT, (D) PURSUANT TO AN
EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE (A) THROUGH (E) ABOVE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
TRANSFER NOTICE ATTACHED HERETO AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
<PAGE>   46
                                  AERCO LIMITED

                   ____% SUBCLASS D-2 NOTE, due July 15, 2025

No. ____

                                                            Dated:______________

                  AERCO LIMITED, a limited liability company organized under the
laws of Jersey, Channel Islands (herein referred to as the "Issuer"), for value
received, hereby promises to pay to AERFI GROUP PLC, the principal sum set forth
on Appendix B hereto, but in no event to exceed ONE HUNDRED MILLION DOLLARS
($100,000,000) on July 15, 2025 (the "Final Maturity Date") and to pay interest
monthly in arrears on the Outstanding Principal Balance hereof at the rate of
8.5% per annum (the "Stated Interest Rate") from the date hereof until the
Outstanding Principal Balance hereof is paid or duly provided for, payable on
each Payment Date. Interest on this Subclass D-2 Note for each Interest Accrual
Period shall be calculated on the basis of a 360-day year and one-twelfth of an
annual interest payment and, in the case of a payment other than on an Interest
Payment Date, on the basis of a 360-day year consisting of twelve 30-day months.

                  This Subclass D-2 Note is one of a duly authorized issue of
Notes of the Issuer, designated as its "Subclass D-2 Notes, due July 15, 2025",
issued under the Trust Indenture dated as of July 15, 1998 and supplemented by
an Indenture Supplement dated as of July 17, 2000 (as amended or supplemented
from time to time, the "Indenture"), between the Issuer and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Subclass A-2 Notes, Subclass A-3 Notes, Subclass A-4 Notes, Subclass
B-1 Notes, Subclass B-2 Notes, Subclass C-1 Notes, Subclass C-2 Notes, Subclass
E-1 Notes and Subclass E-2 Notes (collectively with the Subclass D-2 Notes, the
"Notes"). All capitalized terms used in this Subclass D-2 Note and not defined
herein shall have the respective meanings assigned to such terms in the
Indenture. Reference is made to the Indenture and all indentures supplemental
thereto for a statement of the respective rights and obligations thereunder of
the Issuer, the Trustee and the Subclass D-2 Noteholders. This Subclass D-2 Note
is subject to all terms of the Indenture.

                  The maximum principal balance of this Subclass D-2 Note shall
be the amount recorded by the Trustee in accordance with the terms of Indenture
on the grid attached hereto.

                  The Issuer will pay or redeem the Outstanding Principal
Balance of this Subclass D-2 Note prior to the Final Maturity Date on the
Payment Dates and in the amounts specified in the Indenture, subject to the
availability of the Available Collections Amount

<PAGE>   47

therefor after making payments entitled to priority under Sections 3.08 and
3.09 of the Indenture.

                  The Issuer may redeem all or part of the Outstanding Principal
Balance of this Subclass D-2 Note prior to the Final Maturity Date on the
Payment Dates, in the amounts and under the circumstances specified in the
Indenture.

                  Other than in the case of a redemption for taxation reasons
specified in the Indenture, upon any redemption of any amount of the Outstanding
Principal Balance of this Subclass D-2 Note (i) prior to July 15, 2005, such
amount shall be redeemed at a Redemption Price equal to the higher of (A) the
discounted present value of the Scheduled Principal Payment Amounts allocable in
accordance with Section 3.09 of the Indenture in respect of, and interest from
the Redemption Date to, but not including, July 15, 2005, plus the product of
the Redemption Premium applicable thereto and the assumed Outstanding Principal
Balance thereof on July 15, 2005, discounted at a rate equal to the Treasury
Yield plus 1.00% and (B) the Outstanding Principal Balance thereof and (ii) on
or after July 15, 2005, such amount shall be redeemed at a Redemption Price
equal to the product of the Redemption Premium applicable thereto and the
Outstanding Principal Balance thereof.

                  Any amount of Redemption Premium or interest on this Subclass
D-2 Note that is not paid when due shall, to the fullest extent permitted by
applicable law, bear interest at an interest rate per annum equal to the Stated
Interest Rate from the date when due until such amount is paid or duly provided
for, payable on the next succeeding Payment Date, subject to the availability of
the Available Collections Amount therefor after making payments entitled to
priority under Section 3.08 of the Indenture.

                  The indebtedness evidenced by the Subclass D-2 Notes is, to
the extent and in the manner provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Claims, and this
Subclass D-2 Note is issued subject to such provisions. Each Holder of this
Subclass D-2 Note, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
as provided in the Indenture and (c) appoints the Trustee his attorney-in-fact
for such purpose.

                  The maturity of this Subclass D-2 Note is subject to
acceleration upon the occurrence and during the continuance of the Events of
Default specified in the Indenture. The Subclass D-2 Noteholders shall not be
permitted to deliver a Default Notice or to exercise any remedy in respect of
any such Event of Default until all interest and principal on the Class A Notes,
the Class B Notes and the Class C Notes have been paid in full.

                  This Subclass D-2 Note is and will be secured, on a
subordinated basis, by the collateral pledged as security therefor as provided
in the Security Trust Agreement.

                                       2

<PAGE>   48
                  Subject to and in accordance with the terms of the Indenture,
there will be distributed monthly on each Payment Date commencing on August 15,
2000, to the Holder hereof, in the manner specified in Section 3.08 and 3.09 of
the Indenture, such Holder's pro rata share (based on the aggregate percentage
of the Outstanding Principal Balance of the Subclass D-2 Notes held by such
Holder) of the aggregate amount distributable to all Holders of Subclass D-2
Notes on such Payment Date.

                  All amounts payable in respect of this Subclass D-2 Note shall
be payable in U.S. dollars in immediately available funds in the manner provided
in the Indenture to the Holder hereof. The final payment with respect to this
Subclass D-2 Note, however, shall be made only upon presentation and surrender
of this Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice given by the
Trustee or Paying Agent with respect to such final payment. At such time, if
any, as this Subclass D-2 Note is issued in the form of one or more Definitive
Registered Notes, payments on a Payment Date shall be made by check mailed to
each Noteholder of such a Definitive Registered Note on the applicable Record
Date at its address appearing on the Register maintained with respect to
Subclass D-2 Notes. Alternatively, upon application in writing to the Trustee,
not later than the applicable Record Date, by a Noteholder of one or more
Definitive Registered Notes of Subclass D-2 having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Noteholder at a financial institution in New York,
New York. The final payment with respect to any such Definitive Registered Note,
however, shall be made only upon presentation and surrender of such Definitive
Registered Note by the Noteholder or its agent at the Corporate Trust Office or
agency of the Trustee or Paying Agent specified in the notice of such final
payment given by the Trustee or Paying Agent. Any reduction in the principal
amount of this Subclass D-2 Note (or any one or more predecessor Subclass D-2
Notes) effected by any payments made on any Payment Date shall be binding upon
all future Holders of this Subclass D-2 Note and of any Subclass D-2 Note issued
upon the exchange or in lieu of or upon the refinancing of this Subclass D-2
Note, whether or not noted hereon.

                  The Holder of this Subclass D-2 Note agrees, by acceptance
hereof, to pay over to the Cash Manager any money (including principal,
Redemption Premium and interest) paid to it in respect of this Subclass D-2 Note
in the event that the Cash Manager, acting in good faith, determines
subsequently that such monies were not paid in accordance with the priority of
payment provisions of the Indenture or as a result of any other mistake of fact
or law on the part of the Cash Manager in making such payment.

                  This Subclass D-2 Note is issuable only in registered form. A
Holder may transfer this Note only by written application to the Registrar
stating the name of the proposed transferee and otherwise complying with the
terms of the Indenture. No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the transfer by the Registrar in the Register. When this
Subclass D-2 Note is presented to the Registrar with a request to register the
transfer or to exchange it for an equal principal amount of Subclass D-2 Notes
of other authorized denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such transactions are met
(including, in the case of a transfer, that such

                                       3
<PAGE>   49
Note is duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Trustee and Registrar duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder). No service charge shall be made for any registration of transfer or
exchange of this Subclass D-2 Note, but the party requesting such new Note or
Notes may be required to pay a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith.

                  Prior to the registration of transfer of this Subclass D-2
Note, the Issuer and the Trustee may deem and treat the Person in whose name
this Subclass D-2 Note (as of the day of determination or as of such other date
as may be specified in the Indenture) is registered as the absolute owner and
Holder hereof for the purpose of receiving payment of all amounts payable with
respect of this Subclass D-2 Note and for all other purposes, and neither the
Issuer nor the Trustee shall be affected by notice to the contrary.

                  The Indenture permits the amendment or modification of the
Indenture and the Subclass D-2 Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that,
without the consent of each Swap Provider and each Holder of any Notes affected
thereby, no such amendment may (i) modify the provisions of the Indenture or the
Notes setting forth the frequency or the currency of payment of, the maturity
of, or the method of calculation of the amount of, any interest, principal and
Redemption Premium, if any, payable in respect of such subclass of Notes, (ii)
reduce the percentage of the aggregate Outstanding Principal Balance of any
subclass of Notes required to approve any amendment or waiver of Section 9.01 of
the Indenture or (iii) alter the manner or priority of payment of any subclass
of Notes (each, a "Basic Terms Modification"). Any such amendment or
modification shall be binding on every Holder hereof, whether or not notation
thereof is made upon this Subclass D-2 Note. The Indenture also permits the
Trustee to agree, without the consent of any Noteholder, (a) to any modification
(other than a Basic Terms Modification) of, or the waiver or authorization of
any breach or prospective breach of, any provision of any Related Document or of
the relevant Notes to correct a manifest error or an error which is of a formal,
minor or technical nature or (b) to modify the provisions of the Indenture or
the Cash Management Agreement relating to the timing of movement of Rental
Payments or other monies received or Expenses incurred among the Accounts by the
Cash Manager.

                  The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Noteholder of the subclass affected thereby and each Noteholder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.

                  The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class of Notes, on behalf of the Holders of all of the Subclass D-2
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their

                                       4
<PAGE>   50
consequences. Any such consent or waiver shall be conclusive and binding upon
all present and future Holders of this Subclass D-2 Note and of any Subclass D-2
Note issued upon the registration of transfer of, in exchange or in lieu of or
upon the refinancing of this Subclass D-2 Note, whether or not notation of such
consent or waiver is made upon this Subclass D-2 Note.

                  The term "Issuer" as used in this Subclass D-2 Note includes
any successor to the Issuer under the Indenture.

                  The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Subclass D-2 Notes under the Indenture.

                  The Subclass D-2 Notes are issuable only in bearer form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

                  This Subclass D-2 Note 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.

                  Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Subclass D-2 Note shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.

                                       5

<PAGE>   51

                  IN WITNESS WHEREOF, the Issuer has caused this Subclass D-2
Note to be signed manually or by facsimile by its Responsible Officer.

Date: _________                              AERCO LIMITED

                                             By:________________________
                                                Name:
                                                Title:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Subclass D-2 Notes due July 15, 2025
designated above and referred to in the within-mentioned Indenture.

Date: _________                             BANKERS TRUST COMPANY,
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:________________________
                                               Name:
                                               Authorized Signatory

                                       6

<PAGE>   52
                                  APPENDIX A

                     POOL FACTORS AND EXTENDED POOL FACTORS

The "Pool Factor" and "Extended Pool Factor" for this Subclass D-2 Note shall be
as set forth on Schedule 1 attached hereto.

                                       7

<PAGE>   53
                                  APPENDIX B

                       INCREASES AND PAYMENTS OF PRINCIPAL

<TABLE>
<CAPTION>

         DATE             AMOUNT OF PRINCIPAL    AMOUNT OF INCREASE     UNPAID PRINCIPAL       NOTATION MADE
                            PAID OR PREPAID         OF PRINCIPAL             BALANCE                BY
<S>                      <C>                     <C>                    <C>                    <C>
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________
___________________      _____________________   ___________________    _________________      ______________

</TABLE>
                                       8
<PAGE>   54
                         FORM OF CERTIFICATE OF TRANSFER

AerCo Limited
22 Grenville Street
St. Helier
Jersey JE4 8PX
Channel Islands

Bankers Trust Company
Four Albany Street
Mail Stop 5091
New York, New York 10006
USA

                  Re: __% Subclass D-2 Notes of AerCo Limited

                  Reference is hereby made to the Indenture, dated as of July
15, 1998, between AerCo Limited, as issuer (the "Company"), and Bankers Trust
Company, as trustee, as supplemented by an Indenture Supplement dated as of July
15, 2000 (the "Indenture"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

                  ________________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $____________ in such Note[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:

                             [CHECK ALL THAT APPLY]

1. o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF DEFINITIVE REGISTERED NOTES
PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Book-Entry Interests or Definitive Registered Notes are being
transferred to a Person that the Transferor reasonably believes is purchasing
the Book-Entry Interests or Definitive Registered Notes for its own account, or
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a "qualified
institutional

<PAGE>   55

buyer" within the meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
Book-Entry Interest or Definitive Registered Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Note and/or the Definitive Registered Note and in the Indenture
and the Securities Act.

2. o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN
DEFINITIVE REGISTERED NOTES PURSUANT TO REGULATION S. The Transfer is being
effected pursuant to and in accordance with Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 904(b) of Regulation S under the Securities Act and (iii) the transaction
is not part of a plan or scheme to evade the registration requirements of the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred Book-Entry Interest or Definitive
Registered Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note and/or the
Definitive Registered Note and in the Indenture and the Securities Act.

3. o CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States, and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred Book-Entry Interests or Definitive
Registered Notes will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Definitive Registered Notes bearing the Private Placement Legend and
in the Indenture.

4. o CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being
effected pursuant to and in compliance with an exemption from the registration
requirements of the Securities Act other than Rule 144 and in compliance with
the transfer restrictions contained in the Indenture and any applicable blue sky
securities laws of any State of the United States and (ii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the

                                       2

<PAGE>   56

Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred Book-Entry Interests or Definitive
Registered Notes will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Definitive Registered Notes bearing the Private Placement Legend and in the
Indenture.

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.

                                                  [Insert Name of Transferor]

                                                   By:________________________
                                                      Name:
                                                      Title:

Dated____________, ________

                                       3
<PAGE>   57

                         FORM OF ANNEX A TO CERTIFICATE
                                   OF TRANSFER

1.       The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (a) OR (b)]

         (a)      o        Book-Entry Interests in the

                  (i)      o 144A Global Note (CUSIP _______), or
                  (ii)     o Regulation S Global Note (CUSIP _______), or

         (b)      o        Definitive Registered Note.

2.       that the Transferee will hold:

                                   [CHECK ONE]

         (a)      o        Book-Entry Interests in the:

                  (i)      o 144A Global Note (CUSIP _______), or
                  (ii)     o Regulation S Global Note (CUSIP _______), or
                  (iii)    o Unrestricted Global Note (CUSIP _________); or

         (b)      o        Restrictive Definitive Registered Notes;

         (c)      o        Definitive Registered Note that does not bear the
                           Private Placement Legend;

         in accordance with the terms of the Indenture.

                                       4

<PAGE>   58
                       EXHIBIT E-2 TO INDENTURE SUPPLEMENT

                      FORM OF SUBCLASS E-2 FIXED RATE NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY IN
ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY THIS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144a UNDER
THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATIONS UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NO, WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k)
(TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) IF APPLICABLE) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO AERCO LIMITED OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144a UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATIONS
UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN
ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN
EACH CASE (A) THROUGH (E) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE ATTACHED HERETO AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATIONS UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.

<PAGE>   59

                                 AERCO LIMITED

                  _______% SUBCLASS E-2 NOTE, due July 15, 2025

No.___

                                                               Dated:__________

                  AERCO LIMITED, a limited liability company organized under the
laws of Jersey, Channel Islands (herein referred to as the "Issuer"), for value
received, hereby promises to pay to AERFI GROUP PLC, the principal sum set forth
on Appendix A hereto, but in no event to exceed ONE HUNDRED AND FIVE MILLION
DOLLARS ($105,000,000) on July 15, 2025 (the "Final Maturity Date"), and to pay
interest monthly in arrears on the Outstanding Principal Balance hereof,
initially at the rate of [8.5]% per annum (subject to adjustment as discussed
below) from the date hereof until the Outstanding Principal Balance is paid or
duly provided for, payable on each Payment Date; provided, however, that the
obligation of the Issuer to pay interest hereon is subject to the availability
of Available Collections therefor after making payments entitled to priority
under Section 3.08 of the Indenture.

                  Interest on this Subclass E-2 Note in each Interest Accrual
Period shall be calculated on the basis of a 360-day year and one-twelfth of an
annual interest payment and, in the case of a payment other than on a Payment
Date, on the basis of a 360-day year consisting of twelve 30-day months.

                  This Subclass E-2 Note is one of a duly authorized issue of
Notes of the Issuer, designated as its "Subclass E-2 Notes due July 15, 2025",
issued under the Indenture dated as of July 15, 1998 and supplemented by an
Indenture Supplement dated as of July 17, 2000 (as amended or supplemented from
time to time, the "Indenture"), among the Issuer and Bankers Trust Company, as
trustee (the "Trustee"). The Indenture also provides for the issuance of
Subclass A-2 Notes, Subclass A-3 Notes, Subclass A-4 Notes, Subclass B-1 Notes,
Subclass B-2 Notes, Subclass C-1 Notes, Subclass C-2 Notes, Subclass D-2 Notes
and Subclass E-1 Notes (collectively with the Subclass E-2 Notes, the "Initial
Notes"). All capitalized terms used in this Subclass E-2 Note and not defined
herein shall have the respective meanings assigned to such terms in the
Indenture. Reference is made to the Indenture and all indentures supplemental
thereto for a statement of the respective rights and obligations thereunder of
the Issuer, the Trustee and the Subclass E-2 Noteholders. This Subclass E-2 Note
is subject to all terms of the Indenture.

<PAGE>   60

                  The maximum principal balance of this Subclass E-2 Note shall
be the amount recorded by the Trustee in accordance with the terms of Indenture
on the grid attached hereto.

                  Subject as provided below, the amount of interest accruing in
respect of this Subclass E-2 Note on each Payment Date shall be the amount as
referred to above multiplied by the Index (as defined below) applicable to the
month in which such Payment Date falls divided by the Base Index and calculated
to four decimal places. If interest is required to be calculated for a period
not ending on a Payment Date such interest shall be multiplied by the Index
applicable to the month in which such interest accrues divided by the Base Index
and calculated to four decimal places.

                  "Index" means, subject as provided below, the United States
Consumer Price Index for all Urban Consumers published by the United States
Department of Labor (1982-84 = 100). Any reference to the Index applicable to a
particular month (the "relevant month") shall be construed as a reference to the
Index issued in the month prior to the relevant month.

                  "Base Index" means namely the Index issued in ________ 2000 or
such other value as shall be substituted for this as provided below.

                  If at any time and from time to time the Index shall be
changed by the substitution of a new base therefor (so that the base of 100
ceases to be the base for 1982-84 or such other date or month as may already
have been substituted) then with effect from the date or month as from and
including which such substitution takes effect:

                  (a) the definition of Index shall be deemed to refer to the
new date or month in substitution for 1982-84 (or as the case may be for such
other date or month as may have been substituted); and

                  (b) the definition of "Base Index" shall be amended in such
manner as in the opinion of the Trustee after consultation with the Issuer is
most appropriate to implement such change.

                  The Issuer will pay or redeem the Outstanding Principal
Balance of this Subclass E-2 Note prior to the Final Maturity Date on the
Payment Dates and in the amounts specified in the Indenture, subject to the
availability of the Available Collections Amount therefor after making payments
entitled to priority under Sections 3.08 and 3.09 of the Indenture.

                  The Issuer may redeem all or part of the Outstanding Principal
Balance of this Subclass E-2 Note prior to the Final Maturity Date on the
Payment Dates, in the amounts and under the circumstances specified in the
Indenture.

                                       2

<PAGE>   61

                  Upon any redemption of any amount of the Outstanding Principal
Balance of this Subclass E-2 Note, such amount shall be redeemed at a Redemption
Price equal to the Outstanding Principal Balance thereof, without premium or
penalty.

                  Any amount of interest on this Subclass E-2 Note that is not
paid when due shall, to the fullest extent permitted by applicable law, accrue
and bear interest at an interest rate per annum as stated herein, payable on the
next succeeding Payment Date under priority (xxvii) under Section 3.08 of the
Indenture, subject to the availability of the Available Collections Amount
therefor after making payments entitled to priority thereunder.

                  The indebtedness evidenced by the Subclass E-2 Notes is, to
the extent and in the manner provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Claims (as
defined in the Indenture), and this Subclass E-2 Note is issued subject to such
provisions. Each Holder of this Subclass E-2 Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints the
Trustee his attorney-in-fact for such purpose.

                  The maturity of this Subclass E-2 Note is subject to
acceleration upon the occurrence and during the continuance of Events of Default
specified in the Indenture. The Class E Noteholders shall not be permitted to
deliver a Default Notice or to exercise any remedy in respect of any such Event
of Default until all interest and principal on the Class A Notes, the Class B
Notes, the Class C Notes and the Class D Notes have been paid in full.

                  This Subclass E-2 Note is and will be secured, on a
subordinated basis, by the collateral pledged as security therefor as provided
in the Security Documents.

                  Subject to and in accordance with the terms of the Indenture,
there will be distributed monthly in arrears on each Payment Date commencing on
August 15, 2000, to the Holder hereof, in the manner specified in Section 3.08
of the Indenture, such Holder's pro rata share (based on the aggregate
percentage of the Outstanding Principal Balance of the Subclass E-2 Notes held
by such Holder) of the aggregate amount distributable to all Holders of Subclass
E-2 Notes on such Payment Date.

                  All amounts payable in respect of this Subclass E-2 Note shall
be payable in U.S. dollars in immediately available funds at the Corporate Trust
Office of the Trustee or as otherwise directed in the manner provided in the
Indenture to the Holder hereof. Any reduction in the principal amount of this
Subclass E-2 Note (or any one or more predecessor Subclass E-2 Notes) effected
by any payments made on any Payment Date shall be binding upon all future
Holders of this Subclass E-2 Note and of any Subclass E-2 Note issued upon the
exchange or in lieu of or upon the refinancing of this Subclass E-2 Note,
whether or not noted hereon.

                                       3

<PAGE>   62

                  The Holder of this Subclass E-2 Note agrees, by acceptance
hereof, to pay over to the Cash Manager any money (including principal,
Redemption Premium and interest) paid to it in respect of this Subclass E-2 Note
in the event that the Cash Manager, acting in good faith, determines
subsequently that such monies were not paid in accordance with the priority of
payment provisions of the Indenture or as a result of any other mistake of fact
or law on the part of the Cash Manager in making such payment.

                  This Subclass E-2 Note is issuable only in registered form. A
Holder may transfer this Note only by written application to the Registrar
stating the name of the proposed transferee and otherwise complying with the
terms of the Indenture. No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the transfer by the Registrar in the Register. When this
Subclass E-2 Note is presented to the Registrar with a request to register the
transfer or to exchange it for an equal principal amount of Subclass E-2 Notes
of other authorized denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such transactions are met
(including, in the case of a transfer, that such Note is duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder). No service charge
shall be made for any registration of transfer or exchange of this Subclass E-2
Note, but the party requesting such new Note or Notes may be required to pay a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.

                  Prior to the registration of transfer of this Subclass E-2
Note, the Issuer and the Trustee may deem and treat the Person in whose name
this Subclass E-2 Note (as of the day of determination or as of such other date
as may be specified in the Indenture) is registered as the absolute owner and
Holder hereof for the purpose of receiving payment of all amounts payable with
respect of this Subclass E-2 Note and for all other purposes, and neither the
Issuer nor the Trustee shall be affected by notice to the contrary.

                  The Indenture permits the amendment or modification of the
Indenture and the Subclass E-2 Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that,
without the consent of each Swap Provider and each Holder of any Notes affected
thereby, no such amendment may (i) modify the provisions of the Indenture or the
Notes setting forth the frequency or the currency of payment of, the maturity
of, or the method of calculation of the amount of, any interest, principal and
Redemption Premium, if any, payable in respect of any subclass of Notes, (ii)
reduce the percentage of the aggregate Outstanding Principal Balance of any
subclass of Notes required to approve any amendment or waiver of Section 9.01 of
the Indenture or (iii) alter the manner or priority of payment of such subclass
of Notes (each, a "Basic Terms Modification"). Any such amendment or
modification shall be binding on every Holder hereof, whether or not notation
thereof is made upon this Subclass E-2 Note. The Indenture also permits the
Trustee to agree, without the consent of any Noteholder, (a) to any modification
(other than a Basic Terms Modification) of, or the waiver or authorization of
any breach or prospective breach of, any provision of any Related Document or of
the relevant Notes to correct a manifest error

                                       4

<PAGE>   63

or an error which is of a formal, minor or technical nature or (b) to modify the
provisions of the Indenture or the Cash Management Agreement relating to the
timing of movement of Rental Payments or other monies received or Expenses
incurred among the Accounts by the Cash Manager.

                  The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Noteholder of any subclass affected thereby and each
Noteholder of any subclass of Notes ranking senior thereto. In no event shall
the provisions set forth in Section 3.08 of the Indenture relating to the
priority of the Expenses, Swap Payments and payments under all Credit Facilities
be amended or modified.

                  The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class of Notes, on behalf of the Holders of all of the Subclass E-2
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver shall be conclusive and binding upon all present and
future Holders of this Subclass E-2 Note and of any Subclass E-2 Note issued
upon the registration of transfer of, in exchange or in lieu of or upon the
refinancing of this Subclass E-2 Note, whether or not notation of such consent
or waiver is made upon this Subclass E-2 Note.

                  Each Holder of this Subclass E-2 Note, by acceptance hereof,
appoints and authorizes AerFi Group plc (together with its successors hereunder,
the "Class E Note Representative") to take such action on its behalf and to
exercise such powers and discretion under this Subclass E-2 Note, the Indenture
and the other Related Documents as are delegated to the Class E Note
Representative by the terms hereof and thereof, together with such powers and
discretion as are reasonably incidental thereto. As to any matters not expressly
provided for by this Subclass E-2 Note or the Indenture, the Class E Note
Representative 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 Holders of Class E Notes aggregating not less than a majority of the
Outstanding Principal Balance of the Class E Notes (the "Required Holders"), and
each Holder of this Subclass E-2 Note, by acceptance hereof, agrees that such
instructions shall be binding upon it and all Holders of Class E Notes;
provided, however, that nothing contained in this paragraph shall affect in any
way the right of the Holder hereof to vote in favor of taking or refraining from
taking any action in respect of, or any amendment or modification of, this
Subclass E-2 Note or the Indenture which, by the terms of this Subclass E-2 Note
or the Indenture, requires the consent of each Class E Noteholder.

                  The Class E Note Representative may resign at any time by
giving written notice thereof to each Class E Noteholder, the Trustee and the
Security Trustee and may be removed at any time with or without cause by the
Required Holders. Upon any such resignation or removal, the Required Holders
shall have the right to appoint a successor Class E Note Representative. If no
successor Class E Note Representative shall have been so appointed by the
Required Holders, and shall have accepted such appointment, within 30

                                       5

<PAGE>   64

days after the retiring Class E Note Representative's giving of notice of
resignation or the Required Holders' removal of the retiring Class E Note
Representative, then the retiring Class E Note Representative may, on behalf of
the Class E Noteholders, appoint a successor Class E Note Representative, which
shall be the Holder at such time of the largest aggregate principal amount of
Class E Notes then Outstanding. Upon the acceptance of any appointment as Class
E Note Representative hereunder by a successor Class E Note Representative, such
successor Class E Note Representative shall so notify in writing each Class E
Noteholder, the Trustee and the Security Trustee and thereupon succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring Class E Note Representative hereunder and under the other Related
Documents, and the retiring Class E Note Representative shall be discharged from
its duties and obligations under this Subclass E-2 Note, the Indenture and the
other Related Documents.

                  The term "Issuer" as used in this Subclass E-2 Note includes
any successor to the Issuer under the Indenture.

                  The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Subclass E-2 Notes under the Indenture.

                  The Subclass E-2 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

                  This Subclass E-2 Note 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.

                  Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual signature, this
Subclass E-2 Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.

                                       6

<PAGE>   65

                  IN WITNESS WHEREOF, the Issuer has caused this Subclass E-2
Note to be signed manually or by facsimile by its Responsible Officer.

Date: ____________                              AERCO LIMITED

                                                By:________________________
                                                   Name:
                                                   Title:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Subclass E-2 Notes due July 15, 2025
designated above and referred to in the within-mentioned Indenture.

Date: _________                                 BANKERS TRUST COMPANY,
                                                not in its individual
                                                capacity but solely as Trustee

                                                By:________________________
                                                   Name:
                                                   Authorized Signatory

                                       7

<PAGE>   66

                                   APPENDIX A

                             PRINCIPAL BALANCE GRID

<TABLE>
<CAPTION>
         DATE             AMOUNT OF PRINCIPAL    AMOUNT OF INCREASE     UNPAID PRINCIPAL       NOTATION MADE BY
                            PAID OR PREPAID         OF PRINCIPAL             BALANCE
<S>                      <C>                    <C>                   <C>                    <C>
------------------------ ---------------------- --------------------- ---------------------- ---------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

------------------------ ---------------------- --------------------- ---------------------- ---------------------
</TABLE>

<PAGE>   67

                         FORM OF CERTIFICATE OF TRANSFER

AerCo Limited
22 Grenville Street
St. Helier
Jersey JE4 8PX
Channel Islands

Bankers Trust Company
Four Albany Street
Mail Stop 5091
New York, New York 10006
USA

                  Re: __% Subclass E-2 Notes of AerCo Limited

                  Reference is hereby made to the Indenture, dated as of July
15, 1998, between AerCo Limited, as issuer (the "Company"), and Bankers Trust
Company, as trustee, as supplemented by an Indenture Supplement dated July 15,
2000 (the "Indenture"). Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.

                  ________________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $____ in such Note[s] or interests (the "Transfer"), to
__________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN
DEFINITIVE REGISTERED NOTES PURSUANT TO RULE 144A. The Transfer is being
effected pursuant to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Book-Entry Interests or Definitive
Registered Notes are being transferred to a Person that the Transferor
reasonably believes is purchasing the Book-Entry Interests or Definitive
Registered Notes for its own account, or for one or more accounts with respect
to which such Person exercises sole investment discretion, and such Person and
each such

<PAGE>   68

account is a "qualified institutional buyer" within the meaning of Rule 144A in
a transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred Book-Entry Interest or Definitive
Registered Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the 144A Global Note and/or the
Definitive Registered Note and in the Indenture and the Securities Act.

2. o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF BOOK-ENTRY INTERESTS IN
DEFINITIVE REGISTERED NOTES PURSUANT TO REGULATION S. The Transfer is being
effected pursuant to and in accordance with Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 904(b) of Regulation S under the Securities Act and (iii) the transaction
is not part of a plan or scheme to evade the registration requirements of the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred Book-Entry Interest or Definitive
Registered Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note and/or the
Definitive Registered Note and in the Indenture and the Securities Act.

3. o CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States, and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred Book-Entry Interests or Definitive
Registered Notes will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Definitive Registered Notes bearing the Private Placement Legend and
in the Indenture.

4. o CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being
effected pursuant to and in compliance with an exemption from the registration
requirements of the Securities Act other than Rule 144 and in compliance with
the transfer restrictions contained in the Indenture and any applicable blue sky
securities laws of any State of the United States and (ii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the

                                       2

<PAGE>   69

Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred Book-Entry Interests or Definitive
Registered Notes will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Definitive Registered Notes bearing the Private Placement Legend and in the
Indenture.

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.

                                                   [Insert Name of Transferor]

                                                   By:________________________
                                                      Name:
                                                      Title:

Dated_____________, _________

                                       3

<PAGE>   70

                         FORM OF ANNEX A TO CERTIFICATE

                                   OF TRANSFER

1.       The Transferor owns and proposes to transfer the following:

                                           [CHECK ONE OF (a) OR (b)]

         (a)      o        Book-Entry Interests in the

                  (i)      o 144A Global Note (CUSIP _______), or
                  (ii)     o Regulation S Global Note (CUSIP _______), or

         (b)      o        Definitive Registered Note.

2.       that the Transferee will hold:

                                   [CHECK ONE]

         (a)      o        Book-Entry Interests in the:

                  (i)      o 144A Global Note (CUSIP _______), or
                  (ii)     o Regulation S Global Note (CUSIP _______), or
                  (iii)    o Unrestricted Global Note (CUSIP _________); or

         (b)      o        Restrictive Definitive Registered Notes;

         (c)      o        Definitive Registered Note that does not bear the
                           Private Placement Legend;

         in accordance with the terms of the Indenture.

                                       4<PAGE>   1
                                                                     EXHIBIT 4.5

                          REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made
and entered into July 17, 2000, between AERCO LIMITED, a Jersey limited
liability company (the "ISSUER"), and MORGAN STANLEY & CO. INTERNATIONAL LIMITED
and LEHMAN BROTHERS INC., as representatives of the several Initial Purchasers
referred to below (together, the "REPRESENTATIVES").

                  This Agreement is made pursuant to the Purchase Agreement,
dated as of July 12, 2000 (the "PURCHASE AGREEMENT"), among the Issuer and the
Representatives, on behalf of themselves and the several other initial
purchasers named in Schedule I thereto (collectively, the "INITIAL PURCHASERS"),
which provides for the issue and sale by the Issuer to the Initial Purchasers of
$960,000,000 aggregate principal amount of the Issuer's notes in the class and
subclass designations and in the respective aggregate principal amounts set
forth in Schedule I thereto (the "NOTES"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Issuer has agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution of this Agreement
is a condition to the closing under the Purchase Agreement.

                  In consideration of the foregoing, the parties hereto agree as
follows:

                  1.       Definitions.

                  As used in this Agreement, the following capitalized defined
         terms shall have the following meanings:

                  "1933 ACT" shall mean the Securities Act of 1933, as amended
         from time to time.

                  "1934 ACT" shall mean the Securities Exchange Act of 1934, as
         amended from time to time.

                  "CLOSING DATE" shall mean the Closing Date as defined in the
         Purchase Agreement.

                  "ISSUER" shall have the meaning set forth in the preamble and
         shall also include the Issuer's successors.

                  "EXCHANGE OFFER" shall mean the exchange offer by the Issuer
         of Exchange Notes for Registrable Notes pursuant to Section 2(a)
         hereof.

                  "EXCHANGE OFFER REGISTRATION" shall mean a registration under
         the 1933 Act effected pursuant to Section 2(a) hereof.

                  "EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an
         exchange offer registration statement on Form S-4 (or, if applicable,
         on another appropriate form) and all amendments and supplements to
         such registration statement, in each case including

                                       1
<PAGE>   2

         the Prospectus contained therein, all exhibits thereto and all
         material incorporated by reference therein.

                  "EXCHANGE NOTES" shall mean the subclasses of securities
         issued by the Issuer under a supplement to the Indenture, containing
         terms identical to the subclasses of Notes (except that (i) interest
         thereon shall accrue from the last date on which interest was paid on
         the Notes or, if no such interest has been paid, from July 17, 2000,
         and (ii) the interest rate per annum on each subclass of the Exchange
         Notes shall be the applicable interest rate set forth in the form of
         such subclass of Notes without giving effect to any increase in such
         interest rate pursuant to the definition of "Stated Interest Rate"
         contained in the Indenture) and to be offered to Holders of
         Registrable Notes in exchange for Registrable Notes pursuant to the
         Exchange Offer.

                  "HOLDER" shall mean each of the Initial Purchasers, for so
         long as it owns any Registrable Notes, and each of its successors,
         assigns and direct and indirect transferees who become registered
         owners of Registrable Notes under the Indenture; provided that for
         purposes of Sections 4 and 5 of this Agreement, the term "Holder" shall
         include Participating Broker-Dealers (as defined in Section 4(a)).

                  "INDENTURE" shall mean the Indenture relating to the Notes
         dated as of July 15, 1998 between the Issuer and Bankers Trust Company,
         as trustee, as amended by Supplement No. 1 thereto dated as of the date
         hereof and as the same may be amended, supplemented or otherwise
         modified from time to time in accordance with the terms thereof.

                  "INITIAL PURCHASERS" shall have the meaning set forth in the
         preamble.

                  "MAJORITY HOLDERS" shall mean the Holders of a majority of the
         aggregate principal amount of outstanding Registrable Notes; provided
         that whenever the consent or approval of Holders of a specified
         percentage of Registrable Notes is required hereunder, Registrable
         Notes held by the Issuer shall not be counted in determining whether
         such consent or approval was given by the Holders of such required
         percentage or amount.

                  "REPRESENTATIVES" shall have the meaning set forth in the
         preamble.

                  "PERSON" shall mean an individual, partnership, corporation,
         trust or unincorporated organization, or a government or agency or
         political subdivision thereof.

                  "PURCHASE AGREEMENT" shall have the meaning set forth in the
         preamble.

                  "PROSPECTUS" shall mean the prospectus included in a
         Registration Statement, including any preliminary prospectus, and any
         such prospectus as amended or supplemented by any prospectus
         supplement, including a prospectus supplement with respect to the terms
         of the offering of any portion of the Registrable Notes covered by a
         Shelf Registration Statement, and by all other amendments and
         supplements to such prospectus, and in each case including all material
         incorporated by reference therein.

                  "REGISTRABLE NOTES" shall mean the Notes; provided, however,
         that the Notes shall cease to be Registrable Notes (i) when a
         Registration Statement with respect to

                                       2
<PAGE>   3

         such Notes shall have been declared effective under the 1933 Act and
         such Notes shall have been disposed of pursuant to such Registration
         Statement, (ii) when such Notes have been sold to the public pursuant
         to Rule 144(k) (or any similar provision then in force, but not Rule
         144A) under the 1933 Act or (iii) when such Notes shall have ceased to
         be outstanding.

                  "REGISTRATION EXPENSES" shall mean any and all expenses
         incident to performance of or compliance by the Issuer with this
         Agreement, including without limitation: (i) all SEC, stock exchange or
         National Association of Securities Dealers, Inc. registration and
         filing fees, (ii) all fees and expenses incurred in connection with
         compliance with state securities or "blue sky" laws (including
         reasonable fees and disbursements of counsel for any underwriters or
         Holders in connection with "blue sky" qualification of any of the
         Exchange Notes or Registrable Notes), (iii) all expenses of any Persons
         in preparing or assisting in preparing, word processing, printing and
         distributing any Registration Statement, any Prospectus, any amendments
         or supplements thereto, any underwriting agreements, securities sales
         agreements and other documents relating to the performance of and
         compliance with this Agreement, (iv) all rating agency fees, (v) all
         fees and disbursements relating to the qualification of the Indenture
         under applicable securities laws, (vi) the fees and disbursements of
         the Trustee and its counsel, (vii) the fees and disbursements of
         counsel for the Issuer and, in the case of a Shelf Registration
         Statement, the fees and disbursements of one counsel for the Holders
         which counsel shall be counsel for the Initial Purchasers and (viii)
         the fees and disbursements of the independent public accountants of the
         Issuer, including the expenses of any special audits or "cold comfort"
         letters required by or incident to such performance and compliance, but
         excluding fees and expenses of counsel to the underwriters (other than
         fees and expenses set forth in clause (ii) above) or the Holders and
         underwriting discounts and commissions and transfer taxes, if any,
         relating to the sale or disposition of Registrable Notes by a Holder.

                  "REGISTRATION STATEMENT" shall mean any registration statement
         of the Issuer that covers any of the Exchange Notes or Registrable
         Notes pursuant to the provisions of this Agreement and all amendments
         and supplements to any such Registration Statement, including
         post-effective amendments, in each case including the Prospectus
         contained therein, all exhibits thereto and all material incorporated
         by reference therein.

                  "SEC" shall mean the Securities and Exchange Commission.

                  "SHELF REGISTRATION" shall mean a registration effected
         pursuant to Section 2(b) hereof.

                  "SHELF REGISTRATION STATEMENT" shall mean a "shelf"
         registration statement of the Issuer pursuant to the provisions of
         Section 2(b) of this Agreement which covers all of the Registrable
         Notes (but no other securities unless approved by the Holders whose
         Registrable Notes are covered by such Shelf Registration Statement) on
         an appropriate form under Rule 415 under the 1933 Act, or any similar
         rule that may be adopted by the SEC, and all amendments and supplements
         to such registration statement, including post-effective amendments, in
         each case including the Prospectus contained therein, all exhibits
         thereto and all material incorporated by reference therein.

                                       3
<PAGE>   4

                  "TRUSTEE" shall mean the trustee with respect to the Notes
         under the Indenture.

                  "UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall
         mean a registration in which Registrable Notes are sold to an
         Underwriter (as hereinafter defined) for reoffering to the public.

                  2.       Registration Under the 1933 Act.

                  (a) To the extent not prohibited by any applicable law or
applicable interpretation of the Staff of the SEC, the Issuer shall use its best
efforts to cause to be filed an Exchange Offer Registration Statement covering
the offer by the Issuer to the Holders to exchange all of the Registrable Notes
for Exchange Notes and to have such Registration Statement remain effective
until the closing of the Exchange Offer. The Issuer shall commence the Exchange
Offer promptly after the Exchange Offer Registration Statement has been declared
effective by the SEC and use its best efforts to have the Exchange Offer
consummated not later than 60 days after such effective date. The Issuer shall
commence the Exchange Offer by mailing the related exchange offer Prospectus and
accompanying documents to each Holder stating, in addition to such other
disclosures as are required by applicable law:

                  (i)      that the Exchange Offer is being made pursuant to
         this Agreement and that all Registrable Notes validly tendered will be
         accepted for exchange;

                  (ii)     the dates of acceptance for exchange (which shall be
         a period of not less than 20 business days commencing from the date
         such notice is mailed) (the "EXCHANGE DATES");

                  (iii)    that any Registrable Security not tendered will
         remain outstanding and continue to accrue interest, but will not
         retain any rights under this Agreement;

                  (iv)     that Holders electing to have a Registrable Security
         exchanged pursuant to the Exchange Offer will be required to surrender
         such Registrable Security, together with the enclosed letters of
         transmittal, to the institutions and at the addresses (located in the
         Borough of Manhattan, The City of New York and in Luxembourg) specified
         in the notice prior to the close of business on the last Exchange Date;
         and

                  (v)      that Holders will be entitled to withdraw their
         election, not later than the close of business on the last Exchange
         Date, by sending to the applicable institution and at the address
         (located in either the Borough of Manhattan, The City of New York or
         Luxembourg) specified in the notice a telegram, telex, facsimile
         transmission or letter setting forth the name of such Holder, the
         principal amount of Registrable Notes delivered for exchange and a
         statement that such Holder is withdrawing his election to have such
         Notes exchanged.

                  As soon as practicable after the last Exchange Date, the
         Issuer shall:

                  (i)      accept for exchange Registrable Notes or portions
         thereof tendered and not validly withdrawn pursuant to the Exchange
         Offer; and

                  (ii)     deliver, or cause to be delivered, to the Trustee for
         cancellation all Registrable Notes or portions thereof so accepted for
         exchange by the Issuer and

                                       4
<PAGE>   5

         issue, and cause the Trustee to promptly authenticate and mail to each
         Holder, Exchange Notes equal in principal amount to the principal
         amount of the Registrable Notes surrendered by such Holder.

                  The Issuer shall use its best efforts to complete the Exchange
Offer as provided above and shall comply with the applicable requirements of the
1933 Act, the 1934 Act and other applicable laws and regulations in connection
with the Exchange Offer. The Exchange Offer shall not be subject to any
conditions, other than that the Exchange Offer does not violate applicable law
or any applicable interpretation of the Staff of the SEC. The Issuer shall
inform the Representatives of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Representatives shall have the right, subject to
applicable law, to contact such Holders and otherwise facilitate the tender of
Registrable Notes in the Exchange Offer.

                  (b) In the event that (i) the Issuer determines that the
Exchange Offer Registration provided for in Section 2(a) above is not available
or may not be consummated as soon as practicable after the last Exchange Date
because it would violate applicable law or the applicable interpretations of the
Staff of the SEC, (ii) the Exchange Offer is not for any other reason
consummated by the date that is 270 days after the Closing Date or (iii) the
Exchange Offer has been completed and in the opinion of counsel for the Initial
Purchasers a Registration Statement must be filed and a Prospectus must be
delivered by the Representatives in connection with any offering or sale of
Registrable Notes, the Issuer shall use its best efforts to cause to be filed as
soon as practicable after such determination, date or notice of such opinion of
counsel is given to the Issuer, as the case may be, a Shelf Registration
Statement providing for the sale by the Holders of all of the Registrable Notes
and to have such Shelf Registration Statement declared effective by the SEC. The
Issuer agrees to use its best efforts to keep the Shelf Registration Statement
continuously effective until the second anniversary of the Closing Date or such
shorter period that will terminate when all of the Registrable Notes covered by
the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement. The Issuer further agrees to supplement or amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Issuer for such
Shelf Registration Statement or by the 1933 Act or by any other rules and
regulations thereunder for shelf registration or if reasonably requested by a
Holder with respect to information relating to such Holder, and to use its best
efforts to cause any such amendment to become effective and such Shelf
Registration Statement to become usable as soon as thereafter practicable. The
Issuer agrees to furnish to the Holders of Registrable Notes copies of any such
supplement or amendment promptly after its being used or filed with the SEC.

                  (c) The Issuer shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or Section 2(b). Each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable Notes
pursuant to the Shelf Registration Statement.

                  (d) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b)
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that, if, after it has been declared
effective, the offering of Registrable Notes pursuant to a Shelf Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have become effective during the
period of such

                                       5
<PAGE>   6

interference until the offering of Registrable Notes pursuant to such
Registration Statement may legally resume. As provided for in the Indenture,
from and after the date that is 270 days after the Closing Date, the interest
rate on each subclass of Notes will be increased by 0.50% per annum until the
completion of an Exchange Offer or the date a Shelf Registration Statement is
declared effective by the SEC, whereupon the interest rate on each subclass of
Notes will permanently decrease to the applicable interest rate provided for
such subclass of Note.

                  (e) Without limiting the remedies available to the
Representatives and the Holders, the Issuer acknowledges that any failure by the
Issuer to comply with its obligations under Section 2(a) and Section 2(b) hereof
may result in material irreparable injury to the Representatives or the Holders
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Representatives or any Holder may obtain such relief as may be
required to specifically enforce the Issuer's obligations under Section 2(a) and
Section 2(b) hereof.

                  3.       Registration Procedures.

                  In connection with the obligations of the Issuer with respect
to the Registration Statements pursuant to Section 2(a) and Section 2(b) hereof,
the Issuer shall as expeditiously as possible:

                  (a) prepare and file with the SEC a Registration Statement on
         the appropriate form under the 1933 Act, which form (x) shall be
         selected by the Issuer and (y) shall, in the case of a Shelf
         Registration, be available for the sale of the Registrable Notes by the
         selling Holders thereof and (z) shall comply as to form in all material
         respects with the requirements of the applicable form and include all
         financial statements required by the SEC to be filed therewith, and use
         its best efforts to cause such Registration Statement to become
         effective and remain effective in accordance with Section 2 hereof;

                  (b) prepare and file with the SEC such amendments and
         post-effective amendments to each Registration Statement as may be
         necessary to keep such Registration Statement effective for the
         applicable period and cause each Prospectus to be supplemented by any
         required prospectus supplement and, as so supplemented, to be filed
         pursuant to Rule 424 under the 1933 Act; to keep each Prospectus
         current during the period described under Section 4(3) and Rule 174
         under the 1933 Act that is applicable to transactions by brokers or
         dealers with respect to the Registrable Notes or Exchange Notes;

                  (c) in the case of a Shelf Registration, furnish to each
         Holder of Registrable Notes, to counsel for the Representatives, to
         counsel for the Holders and to each Underwriter of an Underwritten
         Offering of Registrable Notes, if any, without charge, as many copies
         of each Prospectus, including each preliminary Prospectus, and any
         amendment or supplement thereto and such other documents as such Holder
         or Underwriter may reasonably request, in order to facilitate the
         public sale or other disposition of the Registrable Notes; and the
         Issuer consents to the use of such Prospectus and any amendment or
         supplement thereto in accordance with applicable law by each of the
         selling holders of Registrable Notes and any such Underwriters in
         connection with the offering and sale of the Registrable Notes covered
         by and in the

                                       6
<PAGE>   7

         manner described in such Prospectus or any amendment or supplement
         thereto in accordance with applicable law;

                  (d) use its best efforts to register or qualify the
         Registrable Notes under all applicable state securities or "blue sky"
         laws of such jurisdictions as any Holder of Registrable Notes covered
         by a Registration Statement shall reasonably request in writing by the
         time the applicable Registration Statement is declared effective by the
         SEC, to cooperate with such Holders in connection with any filings
         required to be made with the National Association of Securities
         Dealers, Inc. and do any and all other acts and things which may be
         reasonably necessary or advisable to enable such Holder to consummate
         the disposition in each such jurisdiction of such Registrable Notes
         owned by such Holder; provided, however, that the Issuer shall not be
         required to (i) qualify as a foreign corporation or as a dealer in
         securities in any jurisdiction where it would not otherwise be required
         to qualify but for this Section 3(d), (ii) file any general consent to
         service of process or (iii) subject itself to taxation in any such
         jurisdiction if it is not so subject;

                  (e) in the case of a Shelf Registration, notify each Holder of
         Registrable Notes, counsel for the Holders and counsel for the
         Representatives promptly and, if requested by any such Holder or
         counsel, confirm such advice in writing (i) when a Registration
         Statement has become effective and when any post-effective amendment
         thereto has been filed and becomes effective, (ii) of any request by
         the SEC or any state securities authority for amendments and
         supplements to a Registration Statement and Prospectus or for
         additional information after the Registration Statement has become
         effective, (iii) of the issuance by the SEC or any state securities
         authority of any stop order suspending the effectiveness of a
         Registration Statement or the initiation of any proceedings for that
         purpose, (iv) if, between the effective date of a Registration
         Statement and the closing of any sale of Registrable Notes covered
         thereby, the representations and warranties of the Issuer contained in
         any underwriting agreement, securities sales agreement or other similar
         agreement, if any, relating to the offering cease to be true and
         correct in all material respects or if the Issuer receives any
         notification with respect to the suspension of the qualification of the
         Registrable Notes for sale in any jurisdiction or the initiation of any
         proceeding for such purpose, (v) of the happening of any event during
         the period a Shelf Registration Statement is effective which makes any
         statement made in such Registration Statement or the related Prospectus
         untrue in any material respect or which requires the making of any
         changes in such Registration Statement or Prospectus in order to make
         the statements therein not misleading and (vi) of any determination by
         the Issuer that a post-effective amendment to a Registration Statement
         would be appropriate;

                  (f) make every reasonable effort to obtain the withdrawal of
         any order suspending the effectiveness of a Registration Statement at
         the earliest possible moment and provide immediate notice to each
         Holder of the withdrawal of any such order;

                  (g) in the case of a Shelf Registration, furnish to each
         Holder of Registrable Notes, without charge, at least one conformed
         copy of each Registration Statement and any post-effective amendment
         thereto (without documents incorporated therein by reference or
         exhibits thereto, unless requested);

                                       7
<PAGE>   8

                  (h) in the case of a Shelf Registration, cooperate with the
         selling Holders of Registrable Notes to facilitate the timely
         preparation and delivery of certificates representing Registrable Notes
         to be sold and not bearing any restrictive legends and enable such
         Registrable Notes to be in such denominations (consistent with the
         provisions of the Indenture) and registered in such names as the
         selling Holders may reasonably request at least two business days prior
         to the closing of any sale of Registrable Notes;

                  (i) in the case of a Shelf Registration, upon the occurrence
         of any event contemplated by Section 3(e)(v) hereof, use its best
         efforts to prepare and file with the SEC a supplement or post-effective
         amendment to a Registration Statement or the related Prospectus or any
         document incorporated therein by reference or file any other required
         document so that, as thereafter delivered to the purchasers of the
         Registrable Notes, such Prospectus will not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements therein, in light of the circumstances under
         which they were made, not misleading; the Issuer agrees to notify the
         Holders to suspend use of the Prospectus as promptly as practicable
         after the occurrence of such an event, and the Holders hereby agree to
         suspend use of the Prospectus until the Issuer has amended or
         supplemented the Prospectus to correct such misstatement or omission;

                  (j) a reasonable time prior to the filing of any Registration
         Statement, any Prospectus, any amendment to a Registration Statement or
         amendment or supplement to a Prospectus or any document which is to be
         incorporated by reference into a Registration Statement or a Prospectus
         after initial filing of a Registration Statement, provide copies of
         such document to the Representatives and their counsel (and, in the
         case of a Shelf Registration Statement, the Holders and their counsel)
         and make such of the Representatives of the Issuer as shall be
         reasonably requested by the Representatives or their counsel (and, in
         the case of a Shelf Registration Statement, the Holders or their
         counsel) available for discussion of such document, and shall not at
         any time file or make any amendment to the Registration Statement, any
         Prospectus or any amendment of or supplement to a Registration
         Statement or a Prospectus or any document which is to be incorporated
         by reference into a Registration Statement or a Prospectus, of which
         the Representatives and their counsel (and, in the case of a Shelf
         Registration Statement, the Holders and their counsel) shall not have
         previously been advised and furnished a copy or to which the
         Representatives or their counsel (and, in the case of a Shelf
         Registration Statement, the Holders or their counsel) shall object;

                  (k) obtain a CUSIP number and such other identification
         numbers as may be necessary for all Exchange Notes or Registrable
         Notes, as the case may be, not later than the effective date of a
         Registration Statement;

                  (l) use its best efforts to list the Exchange Notes, if any,
         on the Luxembourg Stock Exchange not later than the Effective Date of
         an Exchange Offer Registration Statement;

                  (m) cause the Indenture to be qualified under the Trust
         Indenture Act of 1939, as amended (the "TIA"), in connection with the
         registration of the Exchange Notes or Registrable Notes, as the case
         may be, cooperate with the Trustee and the Holders to effect such
         changes to the Indenture as may be required for the Indenture

                                       8
<PAGE>   9

         to be so qualified in accordance with the terms of the TIA and execute,
         and use its best efforts to cause the Trustee to execute, all documents
         as may be required to effect such changes and all other forms and
         documents required to be filed with the SEC to enable the Indenture to
         be so qualified in a timely manner;

                  (n) in the case of a Shelf Registration, make available for
         inspection by the Representatives of the Holders of the Registrable
         Notes, any Underwriter participating in any disposition pursuant to
         such Shelf Registration Statement, and attorneys and accountants
         designated by the Holders, at reasonable times and in a reasonable
         manner, all financial and other records, pertinent documents and
         properties of the Issuer, and cause the respective officers, directors
         and employees of the Issuer to supply all information reasonably
         requested by any such Representative, Underwriter, attorney or
         accountant in connection with a Shelf Registration Statement;

                  (o) in the case of a Shelf Registration, use its best efforts
         to cause all Registrable Notes to be listed on any securities exchange
         or any automated quotation system on which similar securities issued by
         the Issuer are then listed if requested by the Majority Holders, to the
         extent such Registrable Notes satisfy applicable listing requirements;

                  (p) use its best efforts to cause the Exchange Notes or
         Registrable Notes, as the case may be, to be rated by Standard Poor's
         Ratings Group, Moody's Investors Service, Inc. and Fitch or two other
         nationally recognized statistical rating organizations (as such term is
         defined in Rule 436(g)(2) under the 1933 Act);

                  (q) if reasonably requested by any Holder of Registrable Notes
         covered by a Registration Statement, (i) promptly incorporate in a
         Prospectus supplement or post-effective amendment such information with
         respect to such Holder as such Holder reasonably requests to be
         included therein and (ii) make all required filings of such Prospectus
         supplement or such post-effective amendment as soon as the Issuer has
         received notification of the matters to be incorporated in such filing;
         and

                  (r) in the case of a Shelf Registration, enter into such
         customary agreements and take all such other actions in connection
         therewith (including those requested by the Holders of a majority of
         the Registrable Notes being sold) in order to expedite or facilitate
         the disposition of such Registrable Notes including, but not limited
         to, an Underwritten Offering and in such connection, (i) to the extent
         possible, make such representations and warranties to the Holders and
         any Underwriters of such Registrable Notes with respect to the business
         of the Issuer and its subsidiaries, the Registration Statement,
         Prospectus and documents incorporated by reference or deemed
         incorporated by reference, if any, in each case, in form, substance and
         scope as are customarily made by issuers to underwriters in
         underwritten offerings and confirm the same if and when requested,
         (ii) obtain opinions of counsel to the Issuer (which counsel and
         opinions, in form, scope and substance, shall be reasonably
         satisfactory to the Holders and such Underwriters and their respective
         counsel) addressed to each selling Holder and Underwriter of
         Registrable Notes, covering the matters customarily covered in
         opinions requested in underwritten offerings, (iii) obtain "cold
         comfort" letters from the independent certified public accountants of
         the Issuer (and, if necessary, any other certified public accountant
         of any subsidiary of the Issuer, or of any business acquired by the
         Issuer for which financial statements

                                       9
<PAGE>   10

         and financial data are or are required to be included in the
         Registration Statement) addressed to each selling Holder and
         Underwriter of Registrable Notes, such letters to be in customary form
         and covering matters of the type customarily covered in "cold comfort"
         letters in connection with underwritten offerings, and (iv) deliver
         such documents and certificates as may be reasonably requested by the
         Holders of a majority in principal amount of the Registrable Notes
         being sold or the Underwriters, and which are customarily delivered in
         underwritten offerings, to evidence the continued validity of the
         representations and warranties of the Issuer made pursuant to clause
         (i) above and to evidence compliance with any customary conditions
         contained in an underwriting agreement.

                  In the case of a Shelf Registration Statement, the Issuer may
require each Holder of Registrable Notes to furnish to the Issuer such
information regarding the Holder and the proposed distribution by such Holder of
such Registrable Notes as the Issuer may from time to time reasonably request in
writing.

                  In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Issuer of the happening of any
event of the kind described in Section 3(e)(v) hereof, such Holder will
forthwith discontinue disposition of Registrable Notes pursuant to a
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if
so directed by the Issuer, such Holder will deliver to the Issuer (at its
expense) all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Notes
current at the time of receipt of such notice. If the Issuer shall give any such
notice to suspend the disposition of Registrable Notes pursuant to a
Registration Statement, the Issuer shall extend the period during which the
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions. The Issuer may give any such notice only twice during any 365
day period and any such suspensions may not exceed 30 days for each suspension
and there may not be more than two suspensions in effect during any 365 day
period.

                  The Holders of Registrable Notes covered by a Shelf
Registration Statement who desire to do so may sell such Registrable Notes in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "UNDERWRITERS") that will
administer the offering will be selected by the Majority Holders of the
Registrable Notes included in such offering.

                  4.       Participation of Broker-Dealers in Exchange Offer.

                  (a) The Staff of the SEC has taken the position that any
broker-dealer that receives Exchange Notes for its own account in the Exchange
Offer in exchange for Notes that were acquired by such broker-dealer as a result
of market-making or other trading activities (a "PARTICIPATING BROKER-DEALER"),
may be deemed to be an "underwriter" within the meaning of the 1933 Act and must
deliver a prospectus meeting the requirements of the 1933 Act in connection with
any resale of such Exchange Notes.

                  The Issuer understands that it is the Staff's position that if
the Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution

                                       10
<PAGE>   11

containing a statement to the above effect and the means by which Participating
Broker-Dealers may resell the Exchange Notes, without naming the Participating
Broker-Dealers or specifying the amount of Exchange Notes owned by them, such
Prospectus may be delivered by Participating Broker-Dealers to satisfy their
prospectus delivery obligation under the 1933 Act in connection with resales of
Exchange Notes for their own accounts, so long as the Prospectus otherwise meets
the requirements of the 1933 Act.

                  (b) In light of the above, notwithstanding the other
provisions of this Agreement, the Issuer agrees that the provisions of this
Agreement as they relate to a Shelf Registration shall also apply to an Exchange
Offer Registration to the extent, and with such reasonable modifications thereto
as may be reasonably requested by the Representatives or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Notes by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above; provided that:

                  (i) the Issuer shall not be required to amend or supplement
         the Prospectus contained in the Exchange Offer Registration Statement,
         as would otherwise be contemplated by Section 3(i), for a period
         exceeding 180 days after the last Exchange Date (as such period may be
         extended pursuant to the penultimate paragraph of Section 3 of this
         Agreement) and Participating Broker-Dealers shall not be authorized by
         the Issuer to deliver and shall not deliver such Prospectus after such
         period in connection with the resales contemplated by this Section 4;
         and

                  (ii) the application of the Shelf Registration procedures set
         forth in Section 3 of this Agreement to an Exchange Offer Registration,
         to the extent not required by the positions of the Staff of the SEC or
         the 1933 Act and the rules and regulations thereunder, will be in
         conformity with the reasonable request to the Issuer by the
         Representatives or with the reasonable request in writing to the Issuer
         by one or more broker-dealers who certify to the Representatives and
         the Issuer in writing that they anticipate that they will be
         Participating Broker-Dealers; and provided further that, in connection
         with such application of the Shelf Registration procedures set forth in
         Section 3 to an Exchange Offer Registration, the Issuer shall be
         obligated (x) to deal only with one entity representing the
         Participating Broker-Dealers, which shall be the Representatives unless
         it elects not to act as such Representatives, (y) to pay the fees and
         expenses of only one counsel representing the Participating
         Broker-Dealers, which shall be counsel to the Representatives unless
         such counsel elects not to so act and (z) to cause to be delivered only
         one, if any, "cold comfort" letter with respect to the Prospectus in
         the form existing on the last Exchange Date and with respect to each
         subsequent amendment or supplement, if any, effected during the period
         specified in clause (i) above.

                  (c) The Representatives shall have no liability to the Issuer
or any Holder with respect to any request that it may make pursuant to Section
4(b) above.

                  5.       Indemnification and Contribution.

                  (a) The Issuer agrees to indemnify and hold harmless the
Initial Purchasers, each Holder and each person, if any, who controls any
Initial Purchaser or any Holder within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act, or is under common control with, or is
controlled by, any Initial Purchaser or any Holder, from and against all losses,
claims, damages and liabilities (including, without

                                       11
<PAGE>   12

limitation, any legal or other expenses reasonably incurred by any Initial
Purchaser, any Holder or any such controlling or affiliated person in connection
with defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which Exchange
Notes or Registrable Notes were registered under the 1933 Act, including all
documents incorporated therein by reference, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus (as amended or supplemented if the Issuer shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to an Initial Purchaser or any Holder furnished to the
Issuer in writing by such Initial Purchaser through the Representatives or any
selling Holder expressly for use therein. In connection with any Underwritten
Offering permitted by Section 3, the Issuer will also indemnify the
Underwriters, if any, selling brokers, dealers and similar securities industry
professionals participating in the distribution, their officers and directors
and each Person who controls such Persons (within the meaning of the Securities
Act and the Exchange Act) to the same extent as provided above with respect to
the indemnification of the Holders, if requested in connection with any
Registration Statement.

                  (b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Issuer, the Initial Purchasers and the other
selling Holders, and each of their respective trustees, directors, officers who
sign the Registration Statement and each Person, if any, who controls the
Issuer, any Initial Purchaser and any other selling Holder within the meaning of
either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same
extent as the foregoing indemnity from the Issuer to the Initial Purchasers and
the Holders, but only with reference to information relating to such Holder
furnished to the Issuer in writing by such Holder expressly for use in any
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).

                  (c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above,
such person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Initial Purchasers and all
persons, if any, who control any Initial Purchaser within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and
expenses of more than one separate firm

                                       12
<PAGE>   13

(in addition to any local counsel) for the Issuer, its directors, its officers
who sign the Registration Statement and each person, if any, who controls the
Issuer within the meaning of either such Section and (c) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Holders and all persons, if any, who control any Holders within the meaning of
either such Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In such case involving any Initial Purchaser and persons who
control any Initial Purchaser, such firm shall be designated in writing by the
Representatives. In such case involving the Holders and such persons who control
Holders, such firm shall be designated in writing by the Majority Holders. In
all other cases, such firm shall be designated by the Issuer. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but, if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which such indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.

                  (d) If the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 4 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the Issuer
and the Holders shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Issuer or by the Holders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Holders' respective obligations to contribute pursuant to this Section 5(d)
are several in proportion to the respective number of Registrable Notes of such
Holder that were registered pursuant to a Registration Statement.

                  (e) The Issuer, the Initial Purchasers and each other Holder
agree that it would not be just or equitable if contribution pursuant to this
Section 5 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages and liabilities referred to in paragraph
(d) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, no Holder shall be required to
indemnify or contribute any amount in excess of the amount by which the total
price at which Registrable Notes were sold by such Holder exceeds the amount of
any damages that such Holder has otherwise been required to pay by

                                       13
<PAGE>   14

reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 5 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.

                  The indemnity and contribution provisions contained in this
Section 5 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Initial Purchasers, any Holder or any person controlling the
Representatives or any Holder, or by or on behalf of the Issuer, its officers or
directors or any person controlling the Issuer, (iii) acceptance of any of the
Exchange Notes and (iv) any sale of Registrable Notes pursuant to a Shelf
Registration Statement.

                  6.       Miscellaneous.

                  (a) No Inconsistent Agreements. The Issuer has not entered
into, and on or after the date of this Agreement will not enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of the
Issuer's other issued and outstanding securities under any such agreements.

                  (b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Issuer has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Notes affected by such amendment, modification, supplement, waiver
or consent; provided, however, that no amendment, modification, supplement,
waiver or consents to any departure from the provisions of Section 5 hereof
shall be effective as against any Holder of Registrable Notes unless consented
to in writing by such Holder.

                  (c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Issuer by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Representatives,
the address set forth in the Purchase Agreement; and (ii) if to the Issuer,
initially at the Issuer's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 6(c).

                  All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.

                                       14
<PAGE>   15

                  Copies of all such notices, demands, or other communications
shall be concurrently delivered by the person giving the same to the Trustee, at
the address specified in the Indenture.

                  (d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Notes in violation of the terms of the Purchase Agreement. If any transferee of
any Holder shall acquire Registrable Notes, in any manner, whether by operation
of law or otherwise, such Registrable Notes shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Notes such
person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement and such person shall be
entitled to receive the benefits hereof. The Representatives (in their capacity
as Representatives) shall have no liability or obligation to the Issuer with
respect to any failure by a Holder to comply with, or any breach by any Holder
of, any of the obligations of such Holder under this Agreement.

                  (e) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Issuer, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.

                  (f) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  (g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                  (h) Governing Law. This Agreement shall be governed by and
construed in  accordance with the internal laws of the State of New York.

                  (i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.

                                            AERCO LIMITED

                                            By
                                               ---------------------------------
                                               Name:
                                               Title:

                                       15
<PAGE>   16

Confirmed and accepted as of
the date first above written:

MORGAN STANLEY & CO. INTERNATIONAL
   LIMITED
LEHMAN BROTHERS INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
FIRST UNION SECURITIES, INC.
SALOMON SMITH BARNEY INC.

By:  MORGAN STANLEY & CO. INTERNATIONAL
         LIMITED

      By
         -----------------------------
         Name:
         Title:

By:  LEHMAN BROTHERS INC.

      By
         -----------------------------
         Name:
         Title:

                                       16

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