ASSET PURCHASE AGREEMENT

Exhibit 2.1

ASSET PURCHASE AGREEMENT

(GAIF/AIRCASTLE)

dated as of January 21, 2007

by and among

THE SELLERS LISTED ON SCHEDULE 1 HERETO

and

AIRCASTLE INVESTMENT HOLDINGS 2 LIMITED

TABLE OF CONTENTS

LIST OF ATTACHMENTS

ASSET PURCHASE AGREEMENT

(GAIF/AIRCASTLE)

This ASSET PURCHASE AGREEMENT (GAIF/AIRCASTLE) (this " Agreement ") is dated as of January 21, 2007 by and among: (i)  the SELLERS listed on SCHEDULE 1 (individually, a " Seller " and, collectively, the " Sellers "), each of which is a direct or indirect subsidiary of Guggenheim Aviation Investment Fund, LP, a Delaware limited partnership (" GAIF "); and (ii) AIRCASTLE INVESTMENT HOLDINGS 2 LIMITED and any other subsidiary of Aircastle Limited which accedes to this Agreement pursuant to an Accession Agreement (individually, a " Purchaser " and, collectively, the " Purchasers "), each of which is a direct or indirect subsidiary of Aircastle Limited, a Bermuda exempted company (" Aircastle "). The Sellers and the Purchasers may be referred to herein, individually, as a " Party ", and collectively, as the " Parties ".

RECITALS

WHEREAS, the Sellers own or have the right to purchase, directly and indirectly, thirty-eight Aircraft, described in detail in Schedule 1 and Schedule 2 .

WHEREAS, the Sellers desire and intend to sell (i) such Aircraft, (ii) their rights to purchase such Aircraft, (iii) their rights under conversion and/or other agreements pertaining to such Aircraft and/or (iv) the Equity Interests in the Transferred Entities that own such Aircraft, have the right to purchase such Aircraft and/or have rights under the conversion agreements and/or other agreements pertaining to such Aircraft, and the Purchasers desire and intend to acquire (i) such Aircraft, (ii) the Sellers’ rights to purchase such Aircraft, (iii) the Sellers’ rights under the conversion agreements and/or other agreements pertaining to such Aircraft and/or (iv) the Equity Interests in the Transferred Entities that own such Aircraft, have the rights to purchase such Aircraft and/or have the rights under the conversion agreements and/or other agreements pertaining to such Aircraft, pursuant to the terms and subject to the conditions set forth in this Agreement.

WHEREAS, the Parties also have agreed to effectuate the transactions contemplated herein and to cause the closing of the sale and purchase or Transfer of the various Equity Interests and Independent Aircraft and the contracts related thereto on various different Transfer and Delivery Dates, depending upon the satisfaction of various conditions precedent set forth herein.

AGREEMENT

In consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I   

INTERPRETATION

Section 1.01.    Definitions.  For all purposes of this Agreement, unless otherwise provided herein, capitalized terms used herein are defined and shall have the meanings set forth in Annex I below.

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Section 1.02.    References.  In this Agreement, unless the contrary intention is stated, a reference to:

(a)    each of "BI Seller", "IA Seller", any "Seller", "Aircastle", "IA Purchaser", "BI Purchaser", any "Purchaser" or any other Person includes, without prejudice to the provisions of this Agreement, any successor in title to it or any permitted assignee;

(b)    words in the plural include the singular and vice versa;

(c)    any document includes that document as amended, modified, novated or supplemented, in each case, in accordance with its terms;

(d)    a Section, an Exhibit, a Schedule or a Disclosure Schedule is a reference to a section of, or an exhibit or a schedule to, this Agreement;

(e)    any reference to any Aircraft, Equity Interest or Transferred Entity being "related", "attributable", "relevant" (or words of like import) to any Seller or any Purchaser in this Agreement means such Aircraft, Equity Interest or Transferred Entity directly or indirectly owned by, to be purchased by or to be sold to such Seller or such Purchaser (as applicable); and any reference to a Closing being applicable to a particular Seller shall mean such Closing in respect of which such Seller is the "Seller" in respect of a Transfer of Purchased Assets, an Accelerated A320 Purchase, an Accelerated ERF Purchase or an Accelerated BCF Purchase to occur or which has occurred at such Closing;

(f)    the words "hereof," "herein" and "hereunder" and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and

(g)    "this Agreement" shall include all Schedules and Exhibits attached hereto and the other Operative Agreements and the documents to be delivered in accordance therewith.

Section 1.03.    Other Definitional and Interpretive Provisions.   The headings in this Agreement are to be ignored in construing this Agreement. All Exhibits and Schedules of this Agreement or referred to in this Agreement are hereby incorporated in and made a part of this Agreement as if set forth herein in full. Any capitalized terms used in any Exhibit or Schedule shall have the meaning set forth in this Agreement.

ARTICLE II   

SALE AND PURCHASE OF EQUITY INTERESTS

OR INDEPENDENT AIRCRAFT

Section 2.01.    Traditional Sales and Accelerated Payment Sales .  Subject to the terms and conditions set forth in this Agreement, the Sellers will sell to the Purchasers, and the Purchasers will purchase from the Sellers, all of the Aircraft or the rights to purchase certain Aircraft (a) by directly purchasing an Aircraft in accordance with Section 2.03, (b) indirectly through the purchase of a Transferred Entity which owns an Aircraft (and, in the case of each of the Leasing Intermediary Aircraft, the applicable Leasing Intermediary) in accordance with Section 2.02, (c) by accelerating the Transfer in respect of any Accelerated A320 Aircraft in accordance with Section 2.04(a), (d) by accelerating the Transfer in respect of any Accelerated ERF Aircraft in accordance with Section 2.04(b) and/or (e) by accelerating the Transfer in respect of any Accelerated BCF Aircraft in accordance with Section 2.04(c). The Transfer in respect of each Aircraft is expected to occur on or about the Scheduled Transfer Date for such Aircraft. If the Transfer in respect of any Aircraft shall not occur by the Termination Date in respect of such Aircraft (other than by reason of (i) the failure of any Purchaser to comply with Section 8.01 or (ii) a breach or default by any Purchaser hereunder or under any other Operative Agreement), then the applicable Purchaser may elect to terminate its obligation to purchase such Aircraft in accordance with Section 13.09(a).

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Section 2.02.    Sale and Purchase of Equity Interests.  On the applicable Transfer Date, upon and subject to the terms and conditions set forth in this Agreement, including the satisfaction of the conditions precedent with respect to the Transfer of the Equity Interests set forth in Section 9.01 and Section 10.01 , the applicable BI Seller will sell, assign and transfer to the applicable BI Purchaser and the applicable BI Purchaser agrees to purchase, accept and assume from each BI Seller, the Equity Interests in a Transferred Entity then owned by such BI Seller (and, in the case of each of the Leasing Intermediary Aircraft, the applicable Leasing Intermediary), in each case, free and clear from any and all Liens other than Purchaser Encumbrances. In consideration of the Transfer of such Equity Interests, the applicable BI Purchaser will pay the Beneficial Interest Purchase Price of such Equity Interests to the BI Seller thereof, as provided in Article IV .   In addition, on such Transfer Date, each BI Seller shall assign, transfer and deliver to the applicable BI Purchaser (i) any Security Deposit in respect of the applicable BI Aircraft, (ii) any Maintenance Reserve Transfer Amounts in respect of such BI Aircraft and (iii) any other TE Contract associated with such BI Aircraft, in each case, free and clear from any and all Liens other than Purchaser Encumbrances (but only to the extent that any of the items listed in clause (iii) of this Section 2.02 are not held in the name of the relevant Transferred Entity).

    Section 2.03.    Sale and Purchase of Independent Aircraft.  On the applicable Transfer Date, upon and subject to the terms and conditions set forth in this Agreement, including the satisfaction of the conditions precedent with respect to the Independent Aircraft set forth in Section 9.01 and Section 10.02 , each IA Seller will sell, assign and transfer to the applicable IA Purchaser, and such IA Purchaser agrees to purchase, accept and assume from such IA Seller, the Independent Aircraft then owned by such IA Seller, in each case, free and clear from any and all Liens other than Permitted Encumbrances. In consideration of the Transfer of such Independent Aircraft, the applicable IA Purchaser will pay the Aircraft Purchase Price of such Independent Aircraft to the IA Seller thereof as provided in Article IV . In addition, on such Transfer Date, each IA Seller shall assign, transfer and deliver to the applicable IA Purchaser all of such IA Seller’s other interests, rights and properties relating to such Independent Aircraft, including, without limitation, (i) the related Lease, (ii) the other related Lease Documents, (iii) the related Aircraft Documents, (iv) any Security Deposit in respect of such Independent Aircraft, (v) any Maintenance Reserve Transfer Amounts in respect of such Independent Aircraft and (vi) any other IA Contract associated with such Independent Aircraft (all of the foregoing, collectively, the " Assigned IA Property ") in each case, free and clear from any and all Liens other than Purchaser Encumbrances (and, in the case of the transfer of such Independent Aircraft itself, free and clear of any and all Liens other than Permitted Encumbrances).

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Section 2.04.    Accelerated Purchases

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(a)    Accelerated A320 Purchase . Subject to the terms and conditions set forth in this Agreement (including, without limitation, the satisfaction of the conditions precedent set forth in Section 10.03 ), with respect to any Accelerated A320 Aircraft, upon the entering into of the ANA Purchase Agreement Assignment with respect to such Accelerated A320 Aircraft, in lieu of purchasing such Accelerated A320 Aircraft (or the related Transferred Entity) in accordance with Section 2.01(a) or (b) , the applicable Purchaser shall pay to the applicable Seller the Accelerated A320 Purchase Price in respect of such Accelerated A320 Aircraft.

(b)    Accelerated ERF Purchase . Subject to the terms and conditions set forth in this Agreement (including, without limitation, the satisfaction of the conditions precedent set forth in Section 10.04 ), with respect to any Accelerated ERF Aircraft, upon either (which shall be selected by the applicable Seller in a Notice of Transfer provided by such applicable Seller to the applicable Purchaser at least three (3) Business Days prior to the applicable Closing Date) (i) the entering into of the Boeing Freighter Purchase Agreement Assignment with respect to such Accelerated ERF Aircraft (except in the case of the Aircraft with manufacturer’s serial number 35233) or (ii) the Transfer to the applicable Purchaser of 100% of the Membership Interests in GAP 21 (or in the case of the Aircraft with manufacturer’s serial number 35233, GAP 22) in accordance with Section 3.08 , in lieu of purchasing such Aircraft (or the related Transferred Entity) in accordance with Section 2.01(a) or (b) , the applicable Purchaser shall pay to the applicable Seller the Accelerated ERF Purchase Price in respect of such Accelerated ERF Aircraft.

(c)    Accelerated BCF Purchase . Subject to the terms and conditions set forth in this Agreement (including, without limitation, the satisfaction of the conditions precedent

(d)    set forth in Sections 10.01 or 10.02, and Section 10.05 ), with respect to any Accelerated BCF Aircraft, upon either (which shall be selected by the applicable Seller in a Notice of Transfer provided by such applicable Seller to the applicable Purchaser at least three (3) Business Days prior to the applicable Closing Date) (i) the entering into of the Boeing Conversion Contract Assignment with respect to such Accelerated BCF Aircraft or (ii) the Transfer to the applicable Purchaser of 100% of the legal and beneficial ownership interest in GAP Conversion Party in accordance with Section 3.08 , (x) such Purchaser shall purchase such Accelerated BCF Aircraft (or the Equity Interests in the Transferred Entity which owns such Accelerated BCF Aircraft) notwithstanding the fact that the conversion of such Accelerated BCF Aircraft from passenger to freighter configuration in accordance with the terms of the Boeing Conversion Contract shall not have been completed, (y), the purchase price in respect of such Accelerated BCF Aircraft shall be the Accelerated BCF Purchase Price and (z) except as otherwise provided in this Section 2.04(c) , the Transfer, Delivery and Closing in respect of such Accelerated BCF Aircraft shall be subject to the same terms, conditions and procedures set forth in the Agreement as would be applicable to any Transfer, Delivery and Closing of any non-Accelerated BCF Aircraft.

Section 2.05.    Aircraft Subject to the Risk Allocation Agreements.  The Parties hereto acknowledge, consent and agree that from and after the Delivery Date therefore or the payment of the Accelerated ERF Purchase Price or the Accelerated BCF Purchase Price in respect thereto, GAIF shall provide certain services to the applicable Purchasers with respect to each of the Risk Allocation Aircraft as set forth in one or more Risk Allocation Agreements, and on the terms and conditions provided therein. Each Party hereto further agrees that from and after the entering into of any Risk Allocation Agreement it shall reasonably cooperate with GAIF in connection with the performance of its obligations under the Risk Allocation Agreements with respect to such Risk Allocation Aircraft.

ARTICLE III   

TRANSFER, DELIVERY AND ACCEPTANCE

Section 3.01.    Transfer of Equity Interests.  Upon the satisfaction of the conditions precedent with respect to any particular Equity Interests set forth in Section 9.01 and Section 10.01 (and, if applicable, Section 10.05 ), the BI Seller thereof shall deliver to the applicable BI Purchaser a Notice of Transfer stating that a Closing of the Transfer of such Equity Interests shall occur within three (3) Business Days after delivery of such Notice of Transfer, unless a Purchaser provides notice to such BI Seller that it is postponing the Transfer Date for such Equity Interests until a date on which it can purchase such Equity Interests free of Transfer Taxes (which shall be no more than 30 days after the proposed Closing Date specified in such Notice of Transfer). At the Closing, and concurrently with the payment of the Beneficial Interest Purchase Price therefor, each BI Seller will Transfer such Equity Interests by delivering to the applicable BI Purchaser an Assignment of Equity Interests (together with, in the case of any Equity Interests consisting of capital stock, certificated membership interests or certificated beneficial interests in trusts, certificates representing such Equity Interests, duly issued and registered in the name of such Purchaser (with all required stock transfer or similar

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Taxes having being paid by such Purchaser)) conveying to such Purchaser outright and unconditionally all of such BI Seller’s ownership interest in such Transferred Entity, in each case, free and clear from any and all Liens, and on and subject to the terms and conditions set forth in this Agreement. In addition, each BI Seller shall acknowledge and confirm to the applicable Purchaser that the relevant Transferred Entity beneficially owns and possesses, directly or indirectly, all material interests, rights and properties relating to the relevant BI Aircraft, as set forth on Schedule 1, including, without limitation, (i) the related Lease, (ii) the related other Lease Documents, (iii) the related Aircraft Documents and (iv) any other TE Contract associated with such BI Aircraft (all of the foregoing, collectively, the " BI Aircraft Property "); reserving , however , to such BI Seller all claims for indemnities payable to any of GAIF or any of its Affiliates, such BI Seller or any other Seller Indemnified Party (in each case, other than the applicable Transferred Entity) under the related Lease(s) in respect of any act or omission or events occurring prior to the Transfer Date (the " BI Retained Rights "). Simultaneously with the Transfer of any Equity Interest in a Transferred Entity in respect of a Novation Aircraft, the Lease related thereto shall be novated or assigned pursuant to a Lease Novation or Assignment of Lease (as the case may be).

Section 3.02.    Transfer of Independent Aircraft.  Upon the satisfaction of the conditions precedent with respect to any particular Independent Aircraft set forth in Section 9.01 and Section 10.02 (and, if applicable, Section 10.05 ), the IA Seller thereof shall deliver to the applicable IA Purchaser a Notice of Transfer stating that a Closing of the Transfer of such Independent Aircraft shall occur within three (3) Business Days after delivery of such Notice of Transfer unless a Purchaser provides notice to such IA Seller that it is postponing the Transfer Date for such Independent Aircraft until a date on which it can purchase such Independent Aircraft free of Transfer Taxes (which shall be no more than 30 days after the proposed Closing Date specified in such Notice of Transfer). At the Closing and concurrently with the payment of the Aircraft Purchase Price therefor, each IA Seller will Transfer the Independent Aircraft to the applicable IA Purchaser, by delivering to the applicable IA Purchaser a Bill of Sale (together with an Assignment of Warranties, and any other Delivery documents required hereunder for such Independent Aircraft) conveying to such Purchaser outright and unconditionally all of such IA Seller’s ownership interest in such Independent Aircraft and the Assigned IA Property related thereto, as set forth on Schedule 1 , in each case, free and clear from any and all Liens other than Permitted Encumbrances, and subject to the terms and conditions set forth in this Agreement; reserving , however , to such IA Seller all claims for indemnities payable to any of GAIF or any of its Affiliates, such IA Seller, or any other Seller Indemnified Party under the related Lease(s) in respect of any act or omission or events occurring prior to the Transfer Date (the " IA Retained Rights "). Simultaneously with delivery of the Bill of Sale therefor (as the case may be), title to the Aircraft Documents therefor shall pass to such IA Purchaser without any further action and the Lease related thereto shall be novated or assigned pursuant to a Lease Novation or Assignment of Lease (as the case may be). Thereupon, full legal and beneficial title to such Independent Aircraft and the Assigned IA Property shall pass from the IA Seller thereof to the IA Purchaser, free and clear from any and all Liens other than Permitted Encumbrances.

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Section 3.03.    Delivery Location.  Each Seller of Equity Interests in a Transferred Entity shall use Reasonable Efforts to cause the Delivery Location for the BI Aircraft owned by such Transferred Entity to be in an Approved Delivery Location. Each Seller of an Independent Aircraft shall use Reasonable Efforts to cause the Delivery Location for such Aircraft to be in an Approved Delivery Location. The relevant Seller shall advise the applicable Purchaser as to the whereabouts and Delivery Location of each BI Aircraft and of each Independent Aircraft on the proposed Transfer Date thereof. If by reason of a change of Law which shall occur after the date of this Agreement, the Delivery of an Aircraft at an Approved Delivery Location therefor could reasonably be expected to result in a Transfer Tax being payable, the applicable Seller will cooperate with the applicable Purchaser (at such Purchaser’s sole cost and expense) so that the Delivery of such Aircraft may occur without a Transfer Tax being payable; provided that, if notwithstanding such cooperation, a Transfer Tax continues to be payable, such Purchaser shall continue to be obligated to purchase such Aircraft and such Purchaser shall be obligated to pay such Transfer Tax to the extent required by Section 14.01(b) . The Seller’s agreement and obligation hereunder to cooperate with any Purchaser with respect to the Delivery Location of any Aircraft hereunder shall not create or otherwise be deemed to impose any obligation or liability whatsoever for GAIF or any other Seller or any of their respective Affiliates with respect to Transfer Taxes in connection with the Transfer and Delivery of any Equity Interests, Membership Interests or Aircraft hereunder.

Section 3.04.    Aircraft Delivery

(a)    BI Aircraft . For each BI Aircraft, subject to the satisfaction of the conditions precedent set forth in Section 9.01 and Section 10.01 (and, if applicable, Section 10.05 ), the BI Seller of the Equity Interests in the Transferred Entity that directly or indirectly owns such BI Aircraft shall cause such Transferred Entity to tender to the applicable BI Purchaser evidence of Delivery of such BI Aircraft on or before the Closing for the Transfer of such Equity Interests. The Transfer of any Equity Interests shall be deemed to take place on the Closing Date thereof while the related BI Aircraft are located at their respective Delivery Locations. Upon Delivery of such BI Aircraft, and at the Closing, the applicable BI Purchaser shall execute and deliver to the BI Seller thereof an Acknowledgement of Delivery with respect to such BI Aircraft.

(b)    Independent Aircraft . For each Independent Aircraft, subject to satisfaction of the conditions precedent set forth in Section 9.01 and Section 10.02 (and, if applicable, Section 10.05 ), the IA Seller thereof shall tender such Aircraft for Delivery on or before the Closing for the Transfer of such Independent Aircraft. Delivery and acceptance of any Independent Aircraft hereunder shall take place while such Aircraft is located at the Delivery Location therefor, by such IA Seller executing and delivering to such IA Purchaser a Bill of Sale for such Aircraft. Upon Delivery of such Independent Aircraft, and at the Closing, the IA Purchaser thereof shall execute and deliver to the IA Seller thereof an Acknowledgement of Delivery with respect to such Independent Aircraft.

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Section 3.05.    Risk of Loss.  Except as otherwise provided herein, the risk of loss of, or damage to, each Aircraft and the Aircraft Documents relating thereto shall pass (i) in the case of an Independent Aircraft, from the IA Seller thereof to the IA Purchaser thereof upon the Transfer thereof, and (ii) in the case of a BI Aircraft, from the BI Seller thereof to the BI Purchaser upon the Transfer of the related Transferred Entity.

Section 3.06.    Acceptance and Assumption.  Subject to satisfaction or waiver of the conditions precedent set forth in Articles IX and X applicable thereto and the other provisions of this Agreement, each Purchaser of an Aircraft or of the related Equity Interests in a Transferred Entity that is the direct or indirect legal (beneficial) owner of an Aircraft shall accept such IA Aircraft (and all Assigned IA Property related thereto) or Equity Interests and BI Aircraft (and all BI Aircraft Property related thereto) for all purposes hereunder upon Transfer and Delivery thereof by the applicable Seller, in accordance with this Article III and the other provisions of this Agreement, and, other than in respect of Reserved Obligations, BI Retained Rights, IA Retained Rights and such other liabilities, debts and obligations as are expressly payable by a Seller pursuant to this Agreement, each such Purchaser shall assume, agree to pay in full, perform, discharge and be responsible for any and all liabilities, debts and obligations relating to such IA Aircraft (and all Assigned IA Property related thereto) or of such Transferred Entity and BI Aircraft (and all BI Aircraft Property related thereto) attributable to or arising in periods beginning on and after the Transfer of the applicable IA Aircraft (and all Assigned IA Property related thereto) or BI Aircraft (and all BI Aircraft Property related thereto) of any kind or nature whatsoever.

Section 3.07.    Transfer and Delivery Expenses.  The applicable Purchaser shall pay all (a) registration, filing and similar costs and expenses and (b) the fees and expenses of Lessee’s counsel, in each case in connection with the Transfer of any Independent Aircraft and any assignment and novation with respect to any related Lease (other than costs and expenses incurred in connection with the repayment of any existing Debt or other financing arrangements and the release of related Liens with respect to such Independent Aircraft). If any Transfer Tax is incurred by GAIF or any other Seller or by Aircastle or any other Purchaser in connection with the Transfer and/or Delivery of any Equity Interests or Independent Aircraft hereunder, then such Transfer Tax shall be solely and exclusively for the applicable Purchaser’s account and such Purchaser (i) shall promptly pay and discharge any and all such Transfer Taxes, in full, as and when due, and (ii) to the extent provided for in Article XIV , shall indemnify, save and hold harmless GAIF and the Seller thereof and any of their respective Affiliates from and against any and all Transfer Taxes related to the Transfer and/or Delivery of such Equity Interests or Aircraft; provided , however , that no Purchaser shall be obligated to complete any sale where such Transfer Taxes would be imposed upon or indemnified by the applicable Purchaser unless the Transfer of such Equity Interests or Aircraft is effected at an Approved Delivery Location.

Section 3.08.    Transfer of Membership Interests.  In the event that GAIF delivers to the applicable Purchaser a written notice stating that it desires to Transfer to such Purchaser 100% of the Membership Interests in GAP 21, GAP 22 and/or GAP Conversion Party in accordance with Section 2.01(c) or (d) , then, within three (3) Business Days after delivery of such notice of Transfer, GAIF will, concurrently with the payment by the applicable Purchaser of the Accelerated ERF Purchase Price and/or Accelerated BCF Purchase Price with respect to the applicable Aircraft, Transfer such Membership Interests to the applicable Purchaser by delivering to such Purchaser an Assignment of Membership Interest (together with, in the case of any certified Membership Interests, certificates representing such Membership Interests, duly issued and registered in the name of such Purchaser), conveying to such Purchaser outright and unconditionally all of GAIF’s ownership interest in GAP 21, GAP 22 and/or GAP Conversion Party, as applicable, in each case, free and clear from any and all Liens other than Purchaser Encumbrances, and on and subject to the terms and conditions set forth in this Agreement.

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ARTICLE IV  

PAYMENTS

Section 4.01.    Payment of Purchase Price.  On any Closing Date, subject to the terms and conditions of this Agreement, including without limitation the satisfaction of the conditions precedent thereto set forth in Articles IX and X applicable thereto (and, if applicable, Section 10.05 ), (i) with respect to any Equity Interests for which a Notice of Transfer shall have been delivered hereunder, the applicable BI Purchaser will pay to the applicable BI Seller the Beneficial Interest Purchase Price for such Equity Interests on such Closing Date, (ii) with respect to any Independent Aircraft for which a Notice of Transfer shall have been delivered hereunder, the applicable IA Purchaser will pay to the applicable IA Seller the Aircraft Purchase Price for such Independent Aircraft on such Closing Date, (iii) with respect to the any Accelerated A320 Purchase, Accelerated BCF Purchase or Accelerated ERF Purchase for which a Notice of Transfer shall have been delivered hereunder, the applicable Purchaser will pay to the applicable Seller, the Accelerated A320 Purchase Price, the Accelerated BCF Purchase Price or the Accelerated ERF Purchase Price, subject, in each case of clauses (i),(ii) and (iii) above, to a reduction by the netting of any amounts due and owing by the applicable Seller on account of the transfer of any Security Deposits (to the extent held in cash) and/or Maintenance Reserve Transfer Amounts pursuant to Section 4.04 and Section 4.05 and any prepaid rent payable by the applicable Seller pursuant to Section 4.08 .

At any Closing, the applicable Purchaser will pay the relevant Purchase Price (as so reduced), as applicable, by wire transfer of immediately available funds to such account as the applicable Seller may reasonably direct by written notice delivered to such Purchaser by such Seller at least two (2) Business Days prior to the Closing Date.

Section 4.02.    Pricing Adjustments.  The Parties hereto hereby agree that the Unadjusted Aircraft Purchase Price for each of the Aircraft to be acquired by the Purchasers pursuant to this Agreement, whether indirectly, through a Transfer of Equity Interests in the Transferred Entity that is the direct or indirect legal (beneficial) owner of such Aircraft, or directly, through a Transfer of Independent Aircraft, shall be the amount in Dollars set forth for such Aircraft on Schedule 3-A . The Parties hereto further agree that the Beneficial Interest Purchase Price or Aircraft Purchase Price to be paid at any Closing hereunder by any Purchaser of Equity Interests or Independent Aircraft pursuant to Section 4.01 shall be an amount equal to the Unadjusted Aircraft Purchase Price thereof, subject to the applicable upward or downward adjustment, if any, for the Aircraft Purchase Adjustment Amount to be made in accordance with the stipulated specific, limited criteria and conditions set forth in Schedule 3-B ; provided that, with respect to any Accelerated A320 Aircraft, any Accelerated ERF Aircraft or any Accelerated BCF Aircraft subject to an Accelerated A320 Purchase, an Accelerated ERF Purchase or an Accelerated BCF Purchase (as the case may be), the Aircraft Purchase Price shall be the Accelerated A320 Purchase Price, the Accelerated ERF Purchase Price or the Accelerated BCF Purchase Price (as the case may be) therefore as set forth on Schedule 3-C . The applicable Seller shall initially calculate any Aircraft Purchase Adjustment Amount or the amount set forth on Schedule 3-C (as applicable) in respect of any Aircraft and shall include such amount (together with details as to how such amount was determined) in the Notice of Transfer to be delivered hereunder with respect thereto. Upon receipt of a Notice of Transfer, the applicable Purchaser shall review such Seller’s calculation of the Aircraft Purchase Adjustment Amount or the amount set forth on Schedule 3-C (as applicable) and shall confirm to such Seller whether it agrees with such calculation. If such Purchaser shall not agree with such calculation, then such Purchaser and Seller shall work together in good faith to agree to the amount of the Aircraft Purchase Adjustment Amount or the amount set forth on Schedule 3-C (as applicable).

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Section 4.03.    Purchaser LOC; Seller LOCs.

(a)    No later than the earlier of (i) January 26, 2007 and (ii) the initial Closing Date, the Purchasers shall deliver to GAIF a letter of credit for the benefit of GAIF issued by the Purchaser LOC Bank in the amount of the Purchaser LOC Amount and otherwise in form and substance satisfactory to GAIF (the " Purchaser LOC "). The Parties hereby agree that the Purchaser LOC Amount shall secure the Purchasers’ obligations hereunder to acquire from the Sellers the various Equity Interests and Aircraft, if and when so obliged, pursuant to this Agreement. Upon the termination of this Agreement by any Seller in accordance with Section 13.09(b)(i) , GAIF shall be entitled to draw down upon the Purchaser LOC in an amount equal to the full Purchaser LOC Amount by delivering to Aircastle and the Purchaser LOC Bank a Notice of Drawdown in the manner and form stipulated therefor in the Purchaser LOC. The Parties hereto also agree that the Purchaser LOC Amount shall be automatically reduced from time to time, upon the occurrence of any one or more of the following events (each an " Purchaser LOC Reduction Event "): (1) (A) the Transfer of any Equity Interests or Independent Aircraft, or the payment of

(b)    any Accelerated A320 Purchase Price, Accelerated ERF Purchase Price or Accelerated BCF Purchase Price in respect of any Aircraft, in each case pursuant to this Agreement or (B) the termination of the Purchaser obligation to purchase an Aircraft or a Transferred Entity in accordance with Section 13.09 (a) ; in any and each case, such reduction to be in an amount equal to four percent (4%) of the related Unadjusted Aircraft Purchase Price or (2) upon the termination of this Agreement by any Purchaser in accordance with Section 13.09(b)(ii) , in which case GAIF shall be required to surrender the Purchaser LOC to the Purchaser LOC Bank for cancellation.

(c)    No later than the initial Closing in respect of any Accelerated A320 Purchase, any Accelerated ERF Purchase or any Accelerated BCF Purchase, the Sellers shall deliver to Aircastle a letter of credit for the benefit of Aircastle issued by the Seller Accelerated Payments LOC Bank in the amount of the Seller Accelerated Payments LOC Amount and otherwise in form and substance satisfactory to Aircastle (the " Seller Accelerated Payments LOC "). The Parties hereby agree that the Seller Accelerated Payments LOC Amount shall secure the Sellers’ obligations under Section 4.09 . Upon the failure of the applicable Seller to pay any amount payable to a Purchaser under Section 4.09 , Aircastle shall be entitled to draw down such amount under the Seller Accelerated Payments LOC by delivering to GAIF and the Seller Accelerated Payments LOC Bank a Notice of Drawdown in the manner and form stipulated therefor in the Seller Accelerated Payments LOC.

(d)    No later than the initial Closing, the Sellers shall arrange to have delivered to GAIF a letter of credit for the benefit of GAIF issued by the Seller General LOC Bank in the amount of the Seller General LOC Amount and otherwise in form and substance satisfactory to Aircastle (the " Seller General LOC "). The Parties hereby agree that the Seller General LOC Amount shall provide GAIF with liquidity so that GAIF may fund Sellers’ obligations hereunder to (i) sell to the Purchasers the various Equity Interests and Aircraft, if and when so obliged, pursuant to this Agreement and (ii) indemnify the Purchasers in accordance with Article XIII .

Section 4.04.    Transfer of Security Deposit .  On each Transfer Date, the applicable Seller (i) shall pay to the applicable Purchaser any Security Deposit relating to the applicable Aircraft to the extent such Security Deposit is in cash, and (ii) to the extent that such Security Deposit is in the form of a letter of credit, guarantee or other instrument, shall cause such letter of credit, guarantee or other instrument to be duly endorsed, amended or reissued in favor of the relevant Purchaser (or, if applicable, the relevant Transferred Entity) and shall take such other actions as may be reasonably necessary to effectuate the assignment of all right, title and interest of the Existing Lessor in and to such letter of credit, guarantee or instrument to the relevant Purchaser (or, if applicable, the relevant Transferred Entity); provided that, in the case of a Transfer of the Equity Interests in a Transferred Entity, if such letter of credit, guarantee or instrument is already in favor of, and for the benefit of, such Transferred Entity, then the applicable Seller shall provide the original of such letter of credit, guarantee or instrument to the applicable Purchaser.

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Section 4.05.    Maintenance Reserve Transfer Amount.  On each Transfer Date, the applicable Seller shall pay an amount equal to the Maintenance Reserve Transfer Amount relating to the applicable Aircraft to the applicable Purchaser.

Section 4.06.    Payment Instructions.  All amounts payable under this Agreement will be made on the due date therefor in Dollars in immediately available funds (and to the extent not expressly provided herein) to such account as (in the case of any payment due to GAIF or any Seller) GAIF or such Seller may request in writing, or as (in the case of any payment due to Aircastle or any Purchaser) Aircastle or such Purchaser may request in writing.

Section 4.07.    Failure to Make Payment.  If the Party making a payment hereunder (the " Paying Party ") fails to pay any amount payable under this Agreement on the due date therefor, the Paying Party will pay on demand from time to time to the Party entitled to receive such payment (the " Receiving Party ") interest (both before and after judgment) on that amount, from the due date to the date of payment in full by the Paying Party to the Receiving Party, at a rate equal to 6% per annum. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360-day year.

Section 4.08.    Risk of Nonpayment or Late Payment Under Leases.  Except as otherwise provided in Section 4.09 , risk of nonpayment or late payment of any charges, fees, consideration or other payments of any kind or nature due from any Lessee under any Lease for Aircraft, including, without limitation, Basic Rent, Security Deposits, Maintenance Reserves and any Lessee indemnity payments, shall pass from the Seller thereof to the Purchaser thereof on the Delivery Date therefor. Without limiting the foregoing, (a) any such payments received by the relevant Seller or Existing Lessor with respect to the period commencing on or after the Delivery Date shall be for the account of the applicable Purchaser and upon the receipt thereof by any such Seller or Existing Lessor promptly (and in any event, within three (3) Business Days) paid over to such Purchaser in accordance with Section 4.06 and until so paid held in trust for such Purchaser and (b) the applicable Seller shall pay to the applicable Purchaser on the Closing Date with respect to any Aircraft (or Transferred Entity related thereto) any amounts of Basic Rent that have been paid in respect of any Lease related to such Aircraft on or prior to such Closing Date which are attributable to the period on and after such Closing Date (prorated based on the actual number of days in the applicable rental period).

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Section 4.09.    Unwind of Accelerated Payments and Excess Payments

(a)    Accelerated A320 Purchase Unwinds . If (i) any Accelerated A320 Purchase Price in respect of an Accelerated A320 Aircraft shall have been paid by a Purchaser to a Seller pursuant to Section 2.01(b) and (ii) such Accelerated A320 Aircraft shall not have been sold by ANA to such Purchaser or an Affiliate thereof pursuant to the ANA Purchase Agreement on or prior to the Termination Date in respect of such Accelerated A320 Aircraft (other than by reason of (A) the failure of any Purchaser to comply with Section 8.01 or (B) a breach or default by any Purchaser hereunder or under the ANA Purchase Agreement), then, upon the written notice by such Purchaser to such Seller, such Purchaser may elect to terminate any further obligations in respect of such Accelerated A320 Aircraft, in which case (x) such Seller shall, within three (3) Business Days of the receipt of such notice, pay to such Purchaser an amount equal to the sum of such Accelerated A320 Purchase Price and all amounts paid by such Purchaser or any of its Affiliates to ANA under the ANA Purchase Agreement in respect of such Accelerated A320 Aircraft, together with interest from the date any such amounts were paid by such Purchaser or any of its Affiliates until such amounts are reimbursed to such Purchaser at an interest rate of 6.0% per annum and (y) such Purchaser shall transfer, or cause to be transferred, to such Seller any remaining rights, and Seller shall assume any remaining obligations, under the ANA Purchase Agreement in respect of such Accelerated A320 Aircraft.

(b)    Accelerated ERF Purchase Unwinds and Excess Payments .

(i)    If (A) any Accelerated ERF Purchase Price in respect of an Accelerated ERF Aircraft shall have been paid by a Purchaser to a Seller pursuant to Section 2.01(c) and (B) such Accelerated ERF Aircraft shall not (x) have been sold by Boeing to such Purchaser or an Affiliate thereof pursuant to the Boeing Freighter Purchase Agreement on or prior to the Termination Date in respect of such Accelerated ERF Aircraft (other than by reason of (A) a failure of any Purchaser to comply with Section 8.01 or (B) a breach or default by any Purchaser hereunder or under the Boeing Freighter Purchase Agreement (unless directly attributable to a breach or default by GAIF under any Risk Allocation Agreement), (y) comply with the delivery conditions required by the applicable Lease or (z) unless due to a breach or default by the applicable Purchaser (unless directly attributable to a breach or default by GAIF under any Risk Allocation Agreement), the Boeing Freighter Purchase Agreement shall terminate in respect of such Accelerated ERF Aircraft, then, upon the written notice by such Purchaser to such Seller, such Purchaser may elect to terminate any further obligations in respect of such Accelerated ERF Aircraft, in which case (x) such Seller shall, within three (3) Business Days of the receipt of such notice, pay to such Purchaser an amount equal to the sum of such Accelerated ERF Purchase Price and all other amounts paid by such Purchaser or any of its Affiliates in respect of such Accelerated ERF Aircraft to any Person, including without limitation, any payments to Boeing under the Boeing Freighter Purchase Agreement and any payments to Calyon in respect of the Calyon Financing Facility, in each case together with interest from the date any such amounts were paid by such Purchaser or any of its Affiliates until such amounts are reimbursed to such Purchaser at an interest rate of 6.0% per annum and (y) such Purchaser shall transfer, or cause to be transferred, to such Seller any remaining rights, and Seller shall assume any remaining obligations, under the Boeing Freighter Purchase Agreement in respect of such Accelerated ERF Aircraft.

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(ii)    If any Accelerated ERF Purchase Price in respect of an Accelerated ERF Aircraft shall have been paid by a Purchaser to a Seller pursuant to Section 2.01(c) , and thereafter any amount actually paid by the applicable Purchaser under the Boeing Freighter Purchase Agreement, the Calyon Financing Facility or otherwise in respect of such Accelerated ERF Aircraft is greater than the amount expected to be paid in respect of such Accelerated ERF Aircraft as set forth on Schedule 3-C (whether by reason of escalation or otherwise, unless (A) such additional amount is incurred at the request of, or with the approval of, the applicable Purchaser and is not made to satisfy any delivery condition under the Boeing Freighter Purchase Agreement or any other Boeing Freighter Purchase Agreement Document or under the applicable Lease or (B) such additional amount is required to be incurred under the applicable Lease and results in an increase in the Basic Rent payable under such Lease), then such Purchaser shall provide a notice to the applicable Seller of the amount of such excess and such Seller shall pay to such Purchaser an amount equal to such excess within five (5) Business Days of the receipt of such notice.

(c)    Accelerated BCF Purchase Unwinds and Excess Payments .

(i)    If (A) any Accelerated BCF Aircraft shall have been purchased by a Purchaser from a Seller pursuant to Section 2.01(d) and (B) such Accelerated BCF Aircraft shall not (x) have been converted from passenger to freighter configuration in accordance with the terms of the Boeing Conversion Contract on or prior to the Termination Date in respect of such Accelerated BCF Aircraft (other than by reason of (A) a failure of any Purchaser to comply with Section 8.01 or (B) a breach or default by any Purchaser hereunder or under the Boeing Conversion Contract (unless attributable to a breach or default by GAIF under any Risk Allocation Agreement)), (y) comply with the delivery conditions required by the applicable Lease or (z) unless due to a default or breach by the applicable Purchaser (unless attributable to a breach or default by GAIF under any Risk Allocation Agreement), the Boeing Conversion Contract shall terminate in respect of such Accelerated BCF Aircraft, then, upon the written notice by such Purchaser to such Seller, such Purchaser may elect to re-sell such Accelerated BCF Aircraft to such Seller, in which case (x) such Seller shall, within three (3) Business Days of the receipt of such notice, pay to such Purchaser an amount equal to the sum of the Accelerated BCF Purchase Price for such Accelerated BCF Aircraft and all other amounts paid by such Purchaser or any of its Affiliates in respect of such Accelerated BCF Aircraft to any Person, including, without limitation, to Boeing under the Boeing Conversion Contract, in each case together with interest from the date any such amounts were paid by such Purchaser or any of its Affiliates until such amounts are reimbursed to such Purchaser at an interest rate of 6.0% per annum and (y) such Purchaser shall transfer, or cause to be transferred, to such Seller the same title to such Accelerated BCF Aircraft as was conveyed to such Purchaser (or its Affiliate) free and clear of all Liens attributable to such Purchaser (and its Affiliates) other than any lien that Boeing may have on such Accelerated BCF Aircraft attributable to the Boeing Conversion Contract.

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(ii)    If any Accelerated BCF Aircraft shall have been purchased by a Purchaser from a Seller pursuant to Section 2.01(d) , and thereafter any amount actually paid by the applicable Purchaser under the Boeing Conversion Contract or otherwise in respect of such Accelerated BCF Aircraft is greater than the amount expected to be paid in respect of such Accelerated BCF Aircraft as set forth on Schedule 3-C (whether by reason of escalation or otherwise, unless (A) such additional amount is incurred at the request of, or with the approval of, the applicable Purchaser and is not made to satisfy any delivery condition under the Boeing Conversion Contract or any other Boeing Conversion Contract Document or the applicable Lease or (B) such additional amount is required to be incurred under the applicable Lease and results in an increase in Basic Rent payable under such Lease), then such Purchaser shall provide a notice to the applicable Seller of the amount of such excess and such Seller shall pay to such Purchaser an amount equal to such excess within five (5) Business Days of the receipt of such notice.

(iii)  The Parties have calculated the Accelerated BCF Aircraft Purchase Price for each Accelerated BCF Aircraft (A) taking into account monthly Basic Rent and monthly Maintenance Reserves, in each case, estimated to be received as set forth on Schedule 3-C during the term of the related Lease after the Transfer and prior to induction at the Boeing conversion facility and (B) based upon the maintenance condition assumptions for such Accelerated BCF Aircraft set forth in Schedule 3-D .  Upon the delivery of such Accelerated BCF Aircraft from the Boeing conversion facility upon the completion of the conversion thereof, the applicable Purchaser and the applicable Seller shall (y) reconcile the actual amounts received by such Purchaser after the Transfer of such Accelerated BCF Aircraft in respect of Basic Rent and Maintenance Reserves and the timing of such receipts against the estimated amount and anticipated dates of such receipts on Schedule 3-C used by the Parties in calculating the Accelerated BCF Aircraft Purchase Price, and such Seller shall pay to such Purchaser the positive amount, if any, by which the net present value (calculated using the methodology set forth in Schedule 3-C ) of such anticipated receipts exceeds the net present value (calculated using the methodology set forth in Schedule 3-C ) of such actual receipts, and  the Purchaser shall pay to the Seller the positive amount, if any, by which the net present value (calculated using the methodology set forth in Schedule 3-C ) of such actual receipts exceeded the net present value (calculated using the methodology set forth in Schedule 3-C ) of such anticipated receipts and (z) determine the Aircraft Purchase Adjustment Amount for such Accelerated BCF Aircraft pursuant to Schedule 3-D , and if it is a positive amount such Purchaser shall pay such amount to such Seller or if it is a negative amount such Seller shall pay the positive equivalent to such Purchaser.    

        (iv)  If (A) any Accelerated BCF Aircraft shall have been purchased by a Purchaser from a Seller pursuant to Section 2.04(c) and (B) such Accelerated BCF Aircraft shall suffer a Material Loss, then, (y) such Seller shall pay to such Purchaser an amount equal to the sum of the Accelerated BCF Purchase Price for such Accelerated BCF Aircraft and all other amounts paid by such Purchaser or any of its Affiliates in respect of such Accelerated BCF Aircraft to any Person, including, without limitation, to Boeing under

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the Boeing Conversion Contract, in each case together with interest from the date any such amounts were paid by such Purchaser or any of its Affiliates until such amounts are reimbursed to such Purchaser at an interest rate of 6.0% per annum and (z) such Purchaser shall pay to the Seller of such Accelerated BCF Aircraft the amount of all hull insurance proceeds received by such Purchaser with respect to such Accelerated BCF Aircraft.  

ARTICLE V   

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Representations and Warranties of Each Seller . Each Seller represents and warrants to each Purchaser, as of the date hereof and as of the Closing Date for any Closing applicable to such Seller, that:

Section 5.01.    Organization and Good Standing.    Seller and each Transferred Entity related thereto has been duly formed, incorporated or organized and is validly existing as a corporation, limited liability company, partnership, limited partnership, business trust or other business entity in good standing under the laws of the jurisdiction of its formation, incorporation or organization, as applicable, with requisite power and authority to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted, and had at all relevant times and now has requisite power, authority and legal right to acquire and own Aircraft, Leases, other Aircraft Assets and, if applicable, Equity Interests of its Subsidiaries which are Transferred Entities.

Section 5.02.    Authorization and Enforceability.  Such Seller has the requisite power and authority to execute, deliver, and perform its obligations under this Agreement and each of the other Operative Agreements to which it is a Party. This Agreement and the relevant other Operative Agreements to which such Seller and/or each Transferred Entity related thereto is a Party have been duly executed and delivered by such Seller and each such Transferred Entity, and assuming the due authorization, execution and delivery in each case by the other Parties hereto and thereto, will constitute the legal, valid and binding obligations of such Seller and each such Transferred Entity, enforceable in accordance with their respective terms, except as such enforceability may be limited by the General Enforceability Exceptions.

Section 5.03.    No Default.  There is no existing default under any Governance Document to which such Seller and/or each Transferred Entity related thereto is a Party or any Organizational Document of such Seller or any Transferred Entity related thereto or any event which, with the giving of notice or passage of time or both, would constitute a default by any Party thereunder. No Material Lease Default has occurred and is continuing under the Lease (if any) related to any Aircraft sold on such Closing Date by such Seller hereunder or owned by any Transferred Entity, the Equity Interests in which are being sold on such Closing Date by such Seller hereunder. Neither such Seller nor the relevant Transferred Entity is in material breach of any Contract to which it is a Party.

Section 5.04.    No Violation. . The consummation of the transactions contemplated by this Agreement and the other Operative Agreements to which such Seller and/or any Transferred Entity related thereto is a Party, and the fulfillment of the terms of this Agreement and such other Operative Agreements, shall not (A) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a breach under or default under, the Governance Documents or Organizational Documents of such Seller or such Transferred Entity, or any breach under any indenture, agreement, mortgage, deed of trust or other instrument to which such Seller and/or such Transferred Entity is a Party or by which it is bound or any of its properties are subject, or (B) result in the creation or imposition of any Lien upon such Seller and/or such Transferred Entity or any of its Aircraft or Aircraft Assets under any Contract to which such Seller and/or such Transferred Entity is a party or by which any of its Aircraft or Aircraft Assets are bound or (C) violate any Law applicable to such Seller and/or such Transferred Entity or any writ, order, judgment or decree binding on or affecting such Seller and/or such Transferred Entity of any court or of any Government Entity having jurisdiction over such Seller and/or such Transferred Entity or their respective properties.

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Section 5.05.    Applicable Law.  The provisions of Article XVI concerning Applicable Law, service of process and jurisdiction are valid and binding on such Seller and each Transferred Entity related thereto under the laws of its jurisdiction of formation or incorporation, as applicable, and no provision of this Agreement or any other applicable Operative Agreement purporting to be binding on such Seller or such Transferred Entity is prohibited, unlawful or unenforceable under the laws of the state of formation or incorporation, as applicable, of such Seller or Transferred Entity.

Section 5.06.    No Legal Proceedings. . There are no proceedings or investigations pending or, to the Seller’s Knowledge, threatened, against such Seller or any Transferred Entity related thereto, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over such Seller or any Existing Lessor or Transferred Entity related thereto or any of their respective properties (A) that reasonably could be expected to result in the issuance of an order restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or any of the other Operative Agreements, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the other Operative Agreements, (C) seeking any determination or ruling that reasonably could be expected to adversely affect the performance by such Seller or such Transferred Entity of any of its obligations under, or the validity or enforceability of, this Agreement or any of the other Operative Agreements, (D) that reasonably could be expected to have a material adverse effect on such Seller, the relevant Purchaser, Aircastle or such Transferred Entity or any of the related Aircraft or Leases, or any other Purchased Assets of such Seller or such Transferred Entity or (E) that relate to any Aircraft, Transferred Entity or Lease.

Section 5.07.    No Consents.  Neither such Seller nor any Transferred Entity related thereto is required to obtain any Third Party Consent or Governmental Consent which is required to be made or obtained by such Person in connection with the execution, delivery and performance by such Person of this Agreement and the other Operative Agreements to which such Person is a Party and the consummation of the transactions contemplated hereby and thereby.

Section 5.08.    Tax Matters. 

(a)    Such Seller of Equity Interests and each Transferred Entity related thereto has filed on a timely basis (or, with respect to Tax Returns respecting periods ending on or before the Transfer Date for a Transferred Entity, that do not have to be filed on or before such Transfer Date, will file on a timely basis) all income and other material Tax Returns (including, without limitation, foreign, federal, state, local and otherwise) required to be filed with respect to all periods ending on or before the applicable Transfer Date for each Transferred Entity, no Transferred Entity is liable for Taxes payable by any other Person and each Transferred Entity has paid all Taxes, assessments and other governmental charges shown as due on any such Tax Return. All such Tax Returns were, or when filed will be, true, complete and correct in all material respects.

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(b)    No jurisdiction in which such Seller of Equity Interests and each Transferred Entity related thereto has not filed a specific Tax Return has asserted that such Seller or such Transferred Entity is required to file such Tax Return in such jurisdiction. Schedule 1 lists all jurisdictions in which such Transferred Entity files any Tax Returns and indicates in the case of income, franchise and doing business Tax filings whether such filings are made on a consolidated, combined or unitary   basis and, if applicable, the allocation or apportionment factors for the most recent taxable year for which Tax filings have been made.

(c)    No tax lien or similar Lien has been filed, and no claim is being asserted, with respect to any Tax, assessment or other governmental charge payable by such Seller of Equity Interests or by a Transferred Entity related thereto.

(d)    Such Seller of Equity Interests and each Transferred Entity related thereto has complied with all applicable laws, rules, and regulations relating to the payment and withholding of Taxes and has, within the time and in the manner prescribed by law, paid over to the proper governmental authorities all amounts withheld.

(e)    No related Transferred Entity has requested (and no request has been made on its behalf for) any extension of time within which to file any Tax Return. No related Transferred Entity has executed any outstanding waivers or comparable consents

(f)    regarding the application of the statute of limitations for any Taxes or Tax Returns (and no extensions have been executed on such Transferred Entity’s behalf).

(g)    No audits or other administrative proceedings or court proceedings are presently pending or to the knowledge of such Seller of Equity Interests threatened with regard to any Taxes or Tax Returns of such Seller or any Transferred Entity related thereto.

(h)    No power of attorney currently in force has been granted by such Seller of Equity Interests or any Transferred Entity related thereto concerning any Tax matter.

(i)    Neither such Seller of Equity Interests nor any Transferred Entity related thereto has received any written ruling of a taxing authority relating to Taxes payable by such Transferred Entity, or any other written and legally binding agreement with a taxing authority relating to any such Taxes.

(j)    Such Seller of Equity Interests and each Transferred Entity related thereto has made available (or, in the case of Tax Returns to be filed on or before the Closing Date, will make available) to the applicable Purchaser complete and accurate copies of all of such Seller’s material Tax Returns and all Tax Returns of each Transferred Entity (including the associated work papers related to all such Tax Returns) filed by or on behalf of such Seller of Equity Interests and each Transferred Entity related thereto for all taxable years ending on or prior to the Closing.

(k)    The relevant Transferred Entity does not now have and did not formerly have any employees or subsidiaries.

(l)    The relevant Transferred Entity is, and has been since its inception, an entity disregarded from its owner for United States federal income tax purposes.

Section 5.09.    Compliance with Laws.   Such Seller and each Transferred Entity related thereto is not in violation of or in default under any Law applicable to any Aircraft Asset related to such Seller. Neither such Seller nor any Transferred Entity related thereto is engaged in or has engaged in any course of conduct that reasonably could be expected to subject any of their respective properties to any Lien, seizure or other forfeiture under any criminal law, racketeer influenced and corrupt organizations law, civil or criminal, or other similar Laws, whether foreign or domestic.

Section 5.10.    [Intentionally Omitted]

Section 5.11.    Lease Documents

. The Lease Documents listed in Schedule 2 constitute the whole agreement between the relevant lessor and the relevant Lessee relating to the applicable Aircraft and include a complete list (other than the other Operative Agreements) of all amendments, supplements, side letters,

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novations, and written consents, approvals and waivers relevant to the Lease, and there are no oral waivers in effect that would modify or amend the terms thereof. The provisions of any Lease for each applicable Aircraft (or Transferred Entity related thereto) sold hereunder by such Seller relating to the granting of any Security Deposit thereunder remain in full force and effect. No event has occurred or act or thing has been done or omitted to be done by such Seller or applicable Transferred Entity pursuant to which or as a result of which the Lease (if any) for any Aircraft can be terminated or the obligations of any Party thereunder would be rendered invalid or unenforceable. There are no claims which have been asserted by the Lessee of the applicable Aircraft against GAP, GAIF, any Seller, any Existing Lessor or any Transferred Entity or any Affiliate of any thereof related thereto arising out of the relevant Lease. Except as set forth in Schedule 6 , (a) the applicable Aircraft is not subject to any sub-lease from the relevant Lessee and (b) there are no exceptions to the relevant Lessee’s unqualified acceptance of the applicable Aircraft under any applicable Lease. Prior to any Transfer, the applicable Seller or Existing Lessor shall have paid to the relevant Lessee all amounts then due and payable to such Lessee. The information and statements as to and relating to each Aircraft on Schedules 1 and 2 are complete and correct.

To such Seller’s Knowledge, there are no Lessee Encumbrances (other than Permitted Encumbrances) related to any Aircraft owned by such Seller or any Transferred Entity related thereto.

Section 5.12.    Permits.  Save to the extent that same is the responsibility of the Lessee under the relevant Lease, the relevant Transferred Entity has obtained and is maintaining all Permits necessary to enable it to own the relevant Aircraft and otherwise carry on its business as currently conducted and all such Permits are in full force and effect.

Section 5.13.    Title and Equity Interests .

(a)    Equity Interests . Such BI Seller has full legal and beneficial title to the Equity Interests in each Transferred Entity that is being sold by such BI Seller hereunder, free and clear from any Liens, and each such Transferred Entity has (i) except in the case of any Leasing Intermediary, full legal and beneficial title to each Aircraft that is indicated on Schedule 1 as being owned thereby, free and clear from any Liens other than Permitted Encumbrances, (ii) full legal and beneficial title to the Equity Interests in any other Transferred Entity that is indicated on Schedule 1 as being owned thereby, free and clear from any Liens, and the sale of such Equity Interests is not voidable or otherwise subject to rescission by reason of any claim of any other Person (including any prior transferor thereof or of the related Aircraft or any Person acting on behalf of or claiming through any such transferor) and (iii) full ownership of the Equity Interests, beneficially and of record, free and clear of all Liens, and the Equity Interests are duly authorized, validly issued, outstanding, fully paid and nonassessable. The sale of such Equity Interests contemplated hereby constitutes a valid and final transfer of such Equity Interests to the Purchaser thereof and after Delivery of such Equity Interests such BI

(b)    Seller shall retain no right, title or interest in such Equity Interests. Except as otherwise disclosed on Schedule 2, no options to purchase any BI Aircraft or to extend or terminate the relevant Lease have been exercised on or before the Closing Date by the relevant Lessee under the relevant Lease. The information provided by such BI Seller to the applicable BI Purchaser as to the identities of all of the Transferred Entity’s predecessors in title to such BI Aircraft thereof is complete and accurate. To Seller’s Knowledge, there are no Lessee Encumbrances (other than Permitted Encumbrances) related to any Aircraft owned by such BI Seller or any Transferred Entity related thereto.

(c)    Membership Interests . With respect to only the transfer of the Membership Interests in GAP 21, Gap 22 or the GAP Conversion Party, GAIF has full legal and beneficial title to 100% of the outstanding Membership Interests in GAP 21, GAP 22 or GAP Conversion Party (as the case may be), free and clear from any Liens, and each such entity has (i) in the case of GAP 21, the right to purchase the Accelerated ERF Aircraft (other than the Aircraft with manufacturer’s serial number 35233) pursuant to the Boeing Freighter Purchase Agreement, (ii) in the case of GAP 22, the right to purchase the Accelerated ERF Aircraft with manufacturer’s serial number 35233 pursuant to the Boeing Freighter Purchase Agreement, (iii) in the case of the GAP Conversion Party, the right to have the Accelerated BCF Aircraft reconfigured from passenger configuration to cargo configuration pursuant to the Boeing Conversion Contract and (iv) full ownership of such Membership Interests, beneficially and of record, free and clear of all Liens other than any Purchaser Encumbrance, and such Membership Interests are duly authorized, validly issued, outstanding, fully paid and nonassessable. With respect to only the transfer of the Membership Interests in GAP 21, Gap 22 or the GAP Conversion Party, the sale of such Membership Interests contemplated hereby constitutes a valid and final transfer of such Membership Interests to the Purchaser thereof and after Delivery of such Membership Interests GAIF shall retain no right, title or interest in such Membership Interests.

(d)    Independent Aircraft . Such Seller has full legal and beneficial title to the applicable Aircraft, free and clear from any Liens other than Permitted Encumbrances, and the Bill of Sale is effective to convey good and valid title to the applicable IA Purchaser with respect to such Aircraft and the transfer of such Aircraft hereunder is not voidable or otherwise subject to rescission by reason of any claim of any other Person (including any prior transferor thereof or any Person acting on behalf of or claiming through any such transferor). No options to purchase any Aircraft sold hereunder by such Seller or to extend or terminate the relevant Lease (if any) have been exercised on or before the Closing Date by the relevant Lessee under the relevant Lease. The information provided by such Seller to the applicable IA Purchaser as to the identities of all of such Seller’s predecessors in title to the applicable Aircraft is complete and accurate. The sale of each Aircraft sold hereunder by such Seller constitutes a valid transfer of such Aircraft to the Purchaser thereof and after Delivery of such Aircraft such Seller shall retain no right, title or interest in such Aircraft. To Seller’s Knowledge, there are no Lessee Encumbrances (other than Permitted Encumbrances) related to any Aircraft owned by such IA Seller.

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Section 5.14.    Voting.  With respect only to the Transfer of the Membership Interests in GAP 21, GAP 22 or the GAP Conversion Party, there are no voting trusts, membership agreements, proxies or other understandings in effect with respect to the voting or Transfer of any Equity Interests or any of the Membership Interests in GAP 21, GAP 22 or GAP Conversion Party, as applicable.

Section 5.15.    Books and Records.  Complete and accurate copies of any membership register, minute book or stock register with respect to the relevant Transferred Entity have been provided to Aircastle.

Section 5.16.    No Undisclosed Liabilities.  No Transferred Entity related to such Seller has any Liabilities except as disclosed on Schedule 11 .

Section 5.17.    Contracts.  Schedule 5 sets forth a list of (a) all TE Contracts to which the relevant Transferred Entity is a Party as of the Transfer Date and (b) all IA Contracts to which the relevant IA Seller is a Party and relating to the relevant Independent Aircraft to be transferred h