Employment Letter Agreement between Aircastle Advisor LLC and Mark Zeidman (Chief Financial Officer) dated February 3, 2005

  [Aircastle Investment Limited letterhead] February 3, 2005 Mr. Mark Zeidman Dear Mark: It is with great pleasure that we extend to you an offer to join Aircastle Advisor LLC or an affiliate, (together, the "Company" or "Aircastle") on the terms and conditions set forth below. Title: Chief Financial Officer Base Salary: Your base salary is as set forth in Exhibit A (the "Annual Salary"). Start Date: On or about March 7, 2005 ("Start Date") Location: US offices of Aircastle, currently at 1251 Avenue of the Americas, New York, NY Aircastle Incentive Subject to the terms of this Letter Agreement, you will Compensation: be paid an annual bonus equal to the percentage of the Net Aircastle Operating Results (as defined on Exhibit B hereto), if any, set forth as item 1 on Exhibit B hereto (subject to adjustment for fiscal years subsequent to 2006 as provided below), provided, that in respect of the calendar years 2005 and 2006, you shall be paid an annual bonus equal to the greater of (i) the percentage of the Net Aircastle Operating Results, and (ii) the Guaranteed Minimum Bonus. The Guaranteed Minimum Bonus is $550,000 (pro rated in respect of 2005 only in the event that your first date of work is not actually on or before March 15, 2005). For fiscal years subsequent to 2006, Fortress reserves the right, in its sole and absolute discretion, to raise or to lower your percentage interest in the Net Aircastle Operating Results. Any such change shall be set forth in a letter to you from Aircastle and will supercede item 1 on Exhibit B hereto. In addition, the Company may in its sole discretion decide to grant you additional compensation or a bonus; however this letter agreement does not entitle you to such a payment (other than, as provided above, any Guaranteed Minimum Bonus). Payment of additional compensation or a bonus in any given fiscal or calendar year does not entitle you to additional compensation or a bonus in any subsequent year.You must be actively employed by and not have given notice of your termination of your employment with the Company (or any affiliate of Aircastle for whom you may be employed on a full-time  basis at the time) at the time such bonus or additional compensation is to be paid in order to be eligible therefore. Equity Incentive Plan: In addition, Exhibit B hereto sets forth your co-investment rights and obligations with respect to Aircastle. Expense Reimbursement: The Company will reimburse business expenses incurred in the ordinary course of business. The Company will also reimburse customary and reasonable moving and relocation expenses (packing, storage, 1 flight for family to make the move, etc. (i.e., no house purchase or sale related costs)) in an amount not to exceed $40,000, based on receipts provided therefore. You will have use of one of the Company's apartments in New York City for a period of up to two months. Severance: In the event that the Company terminates your employment without cause (as defined below) prior to December 31, 2006 you shall receive, within 30 days of your termination, a single-sum payment equal to the difference, if positive, between (i) the aggregate amount that you would have been paid from the Start Date on the basis of your base salary and Guaranteed Minimum Bonus had your employment continued through December 31, 2006 and (ii) the aggregate amount you have been paid from the Start Date in salary and bonus through the date of such termination, provided you sign a separation agreement prepared by the Company which includes a general release of claims and subject to your compliance with the restrictive covenants set forth herein. However, severance shall not be payable (i) on account of termination by virtue of your death or disability and (ii) if you are offered employment by Aircastle or any of its or Fortress Investment Group LLC's respective affiliates direct or indirect subsidiaries or successors (or affiliate thereof including any subsidiary of any private equity fund managed by Fortress Investment Group LLC or any of its investment and advisory affiliates) on terms substantially comparable to the terms hereof (meaning that without your consent, there will be no diminution in the cash compensation terms of the employment relationship). Benefits: You (and your eligible dependents, if any) may at your election be covered under such health insurance plan as covers Aircastle employees, subject to applicable exclusions and limitations. You are eligible to participate in Aircastle's 401(k) plan, if any, subject to the terms of the plan. You are eligible to participate in all other perquisite and benefit arrangements generally made available by Aircastle to its employees in general, subject to the terms of such plans or programs. Each such benefit is subject to modification, including elimination, from to time, at Aircastle's sole discretion. You shall be entitled to vacation of 20 days per year in accordance with Aircastle's vacation policies. "Cause" For purposes of this Letter Agreement, "cause" means (i) your commission of an act of fraud or dishonesty in the course of your service; (ii) your indictment or entering of a plea of nolo contendere for a crime constituting a felony or in 2  respect of any act of fraud or dishonesty; (iii) your commission of an act which would make you (or Aircastle or Fortress Investment Group LLC or any of its affiliates (collectively, "Fortress")) subject to being enjoined, suspended, barred or otherwise disciplined for violation of federal or state securities laws, rules or regulations, including a statutory disqualification; (iv) your gross negligence or willful misconduct in connection with your employment by Aircastle; (v) your commission or omission of any act that would result in or might reasonably be a substantial factor resulting in the termination of Fortress or any of its affiliates, for cause under any of Fortress's, or any of its affiliates', material management, advisory or similar agreements; (vi) your willful failure to comply with any material policies or procedures of Aircastle (or, for so long as your place of work is co-located at Fortress offices, Fortress) as in effect from time to time provided that you shall have been delivered a copy of such policies or notice that they have been posted on an Aircastle (or Fortress) website prior to such compliance failure, and or (vii) your commission of any material breach of any of the provisions or covenants set forth herein, provided, however, that discharge pursuant to this clause (vii) shall not constitute discharge for "Cause" unless you shall have received written notice from Aircastle stating the nature of such breach and affording you an opportunity correct the act(s) or omission(s) complained of within ten (10) days of your receipt of such notice. Policies and You agree to comply fully with all of the Company's and Procedures: for so long as your place of work is co-located at Fortress offices, all Fortress policies and procedures, as amended from time to time. Termination: If your employment with the Company terminates for any reason, you hereby agree that you shall immediately resign from all positions (including, without limitation, any management, officer or director position) that you hold on the date of such termination with the Company or Fortress, or any of the their respective affiliates or with any entity in which the Company or any of its affiliates has made any investment. You hereby agree to execute and deliver such documentation reasonably required by the Company as may be necessary or appropriate to enable the Company or Fortress, any of the Company's affiliates or any entity in which the Company or any of its affiliates has made an investment to effectuate such resignation, and in any case, your execution of this Letter Agreement shall be deemed the grant by you to the officers of the Company of a limited power of attorney to sign in your name and on your behalf such documentation solely for the limited purposes of effectuating such resignation. Set-Off; Etc: You hereby acknowledge and agree, without limiting the rights of the Company otherwise available at law or in equity, that, to the extent permitted by law, any or all amounts or other consideration payable to you hereunder or any other agreement with Aircastle or Fortress (including any of its affiliates), 3  may be set-off against any or all amounts or other consideration payable by you to the Company under this Letter Agreement or to the Company or any of its affiliates under any other agreement between you and the Aircastle Fortress or any of their respective affiliates, including, without limitation, any obligation resulting from your breach of the terms hereof. Representation: You represent that you are free to be employed hereunder without any contractual restrictions, express or implied, with respect to any of your prior employers. You represent that you have not taken or otherwise misappropriated and you do not have in your possession or control any confidential and proprietary information belonging to any of your prior employers or connected with or derived from your services to prior employers. You represent that you have returned to all prior employers any and all such confidential and proprietary information. You further acknowledge that Aircastle and Fortress have informed you that you are not to use or cause the use of such confidential or proprietary information in any manner whatsoever in connection with your employment by Aircastle or any affiliate. You agree that you will not use such information. You represent that you understand that this Letter Agreement sets forth the terms and conditions of your employment relationship with Aircastle or an affiliate and as such, you have no express or implied right to be treated the same as or more favorably than any other employee of Aircastle or any of its affiliates with respect to any matter set forth herein based on the terms or conditions of such person's employment relationship with Aircastle or any of its affiliates. You further agree to keep the terms of this Letter Agreement confidential and not to disclose any of the terms or conditions hereof to any other person, including any employee of Aircastle or Fortress, except your attorney or accountant or, upon the advice of counsel after notice to Aircastle, as may be required by law or as may be required in order to enforce or defend against the enforcement of this Letter Agreement. Restrictive Covenants: You shall not, directly or indirectly, without prior written consent of Aircastle, provide consultative services to, own, manage, operate, join, control, participate in, be engaged in, be employed by or be connected with, any business, individual, partner, firm, corporation or other entity, including without limitation any business, individual, partner, firm, corporation, or other entity that directly or indirectly competes with (any such action, individually, and in the aggregate, to "compete with"), Aircastle or any of its affiliates, at any time during your employment. In the case where your employment with the Company is terminated by you for any reason or by your employer for cause, such restrictions shall apply for twelve (12) months after the effective date of such termination solely as to any aircraft leasing and/or aircraft finance business managed by Aircastle or Fortress or any of their affiliates. Notwithstanding anything else herein, the mere "beneficial ownership" by you, either individually or as a member of a "group" (as such 4  terms are used in Rule 13(d) issued under the Securities Exchange Act of 1934) of not more than 5% of the voting stock of any public company shall not be deemed in violation of this Letter Agreement. These restrictions shall not apply following the termination of your employment if, Fortress has lowered your interest in the Net Aircastle Operating Results for any calendar year below the percentage set forth as item 1 on Exhibit B as of the date hereof (or such lower percentage as may at any time be set forth as item 1 on Exhibit B from time to time in accordance with the terms of this Letter Agreement) and you resign because of and within ninety (90) days of this event; or (ii) Fortress terminates your employment without cause. You shall keep secret and retain in strictest confidence, and shall not use for your benefit or the benefit of others, except in connection with the business and affairs of the Company (which, for purposes of and in each instance used in this paragraph and the next paragraph, shall include Fortress (including (i) any fund managed by Fortress or any of its affiliates during or prior to the period of your employment with the Company and (ii) the Company's other affiliates, including, without limitation, portfolio investments of the private equity business of Fortress)), all confidential information of and confidential matters (whether made available in written, electronic form or orally) relating to (x) the Company's business and the Company (including, without limitation, the actual investments of the Company, the contemplated investments of the Company, the financial performance of Aircastle or any fund managed by Fortress or of any investment thereof, and the identity of the equity investors in the Company or in any of the funds or businesses Fortress or any of its affiliates manages), (y) all corporations or other business organizations in which the Company has or has had an investment and (z) third parties, learned by you heretofore or hereafter directly or indirectly in connection with your employment or from the Company (the "Confidential Company Information"). In consideration of, and as a condition to, continued access to Confidential Company Information, and without prejudice to or limitation on any other confidentiality obligation imposed by agreement or law, you hereby undertake to use and protect Confidential Company Information in accordance with restrictions placed on its use or disclosure. Without limiting the foregoing, you shall not disclose such Confidential Company Information to any director, officer, partner, employee or agent of the Company unless, in your reasonable good faith judgment, such person has a need to know such Confidential Company Information in furtherance of the business of the Company and you shall not disclose Confidential Company Information to anyone outside of the Company except with the Company's express written consent. The foregoing restrictions shall not apply to Confidential Company Information which (i) is at the time of receipt or thereafter becomes publicly known other than a result of your having breached this Letter Agreement or (ii) is received by you from a third party not under an obligation to any person to keep such information confidential, subject to your use of your reasonable best efforts to obtain (and to cooperate 5  with the Company's efforts to obtain) judicial approval for such information to be disclosed under seal or subject to other confidentiality orders. All memoranda, notes, lists, records, property and any other tangible product and documents (and all copies and excerpts thereof), whether visually perceptible, machine-readable or otherwise, made, produced or compiled by you or made available to you concerning the business of the Company, (i) shall at all times be the property of the Company and shall be delivered to the Company at any time upon its request, and (ii) upon your termination of employment, shall be immediately returned to the Company. The foregoing shall not limit any other confidentiality obligations imposed by agreement or by law. From the date hereof through the end of the one-year period commencing with your termination of employment with the Company, you shall not, without the Company's prior written consent, directly or indirectly, (i) solicit or encourage to leave the employment or other service of the Company or any of its affiliates any employee or independent contractor thereof or (ii) hire (on behalf of yourself or any other person or entity) any employee or independent contractor who has left the employment or other service of the Company or any of its affiliates within the one-year period which follows the termination of such employee's or independent contractor's employment or other service with the Company or any such affiliate. From the date hereof through the end of the two-year period commencing with your termination of employment with the Company you shall not, whether for your own account or for the account of any other person, firm, corporation or other business organization, intentionally interfere with Aircastle or Fortress's relationship with, or endeavor to entice away from Aircastle or Fortress or any fund, business or account managed by Fortress, any investor in Aircastle Fortress or any fund, business or account managed by Fortress. Any breach by you of any of the provisions of the four foregoing paragraphs (the "Restrictive Covenants") shall entitle Aircastle (including each of its affiliates) to cease making any payments to you under any agreement, including this Letter Agreement, pursuant to which you are entitled to monies from Aircastle, or Fortress (or any such affiliate). In addition, you acknowledge and agree that any breach by you of the Restrictive Covenants would result in irreparable injury and damage for which money damages would not provide an adequate remedy. Therefore, if you breach, or threaten to commit a breach of, any of the provisions of the Restricted Covenants, the Company shall have the right and remedy, in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity (including, without limitation, the recovery of damages), to have the Restrictive Covenants specifically enforced (without posting bond and without the need to prove damages) by any court having equity jurisdiction, 6  including, without limitation, the right to an entry against you of restraining orders and injunctions (preliminary, mandatory, temporary and permanent) against violations, threatened or actual, and whether or not then continuing, of the Restrictive Covenants. You acknowledge and agree that the Restrictive Covenants are reasonable in geographical and temporal scope and in all other respects. If it is determined that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect, without regard to the invalid portions. If any court or other decision-maker of competent jurisdiction determines that any provision of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, then, after such determination has become final and unappealable, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced. Notwithstanding anything in this Letter Agreement to the contrary, the provisions of this and the five foregoing paragraphs shall survive any termination of this Letter Agreement and any termination of your employment. Employment You are an at-will employee. This letter is not a Relationship: contract of employment for any specific period of time, and your employment may be terminated by you or by the Company at any time for any reason or no reason whatsoever. Notwithstanding the foregoing, you agree to provide the Company with at least 30 days advance written notice of your termination. In each case where the term Company is used in this Letter Agreement it shall mean, in addition to the Company, any affiliate of Aircastle or Fortress for whom you may be employed on a full-time basis at the applicable time. The Company shall be entitled, in connection with its investment structuring, tax planning, business organization or other reasons, to terminate your employment in connection with an invitation from another affiliate of Aircastle or Fortress, including, without limitation, a direct or indirect subsidiary of any private equity fund managed by Fortress Investment Group LLC or any of its investment advisory affiliates, to accept employment with such affiliate in which case the terms and conditions hereof shall apply to your employment relationship with such entity mutatis mutandis. For the sake of clarity, any termination of your employment under such circumstances in which you are not offered employment with another affiliate of Fortress shall be a termination without Cause. Entire Agreement: This Letter Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto. Without limiting the foregoing, any prior offer letter is hereby superceded in its entirety. YOU REPRESENT THAT IN EXECUTING THIS LETTER AGREEMENT YOU HAVE NOT RELIED UPON ANY 7  REPRESENTATION OR STATEMENT NOT SET FORTH HEREIN. Without limiting the foregoing, you represent that you understand that you shall not be entitled to any equity interest, profits interest or other interest in the Company (including any of its affiliates, including any fund or other business managed by any of them) except as set forth in a writing signed by the Company. The Company's affiliates are intended beneficiaries under this Letter Agreement Governing Law; This Letter Agreement shall be governed by and Jurisdiction: construed in accordance with the laws of the State of New York without regard to the principles of conflicts of law thereof. THE PARTIES AGREE THAT EXCLUSIVE JURISDICTION WILL BE IN A COURT OF COMPETENT JURISDICTION IN THE CITY OF NEW YORK AND HEREBY WAIVE OBJECTION TO THE JURISDICTION OR TO THE LAYING OF VENUE IN ANY SUCH COURT. * * * * We look forward to a successful employment relationship with you. If the foregoing terms of employment are acceptable, please so indicate in the space provided below. Very truly yours, Aircastle Investment Limited By: /s/ Wesley R. Edens ------------------------- Wesley R. Edens Accepted and agreed to: /s/ Mark Zeidman - ----------------------------- Mark Zeidman 8  EXHIBIT A This is Exhibit A to the Letter Agreement between Mark Zeidman and Aircastle Advisor LLC, dated as of February 3, 2005 (the "Letter Agreement"). When executed by both parties, the terms of this Exhibit A are intended to be incorporated by reference into the Letter Agreement. Annual Salary: $200,000 per annum Aircastle Advisor LLC By: /s/ Wesley R. Edens -------------------------- Wesley R. Edens /s/ Mark Zeidman - ----------------------------- Mark Zeidman 9  EXHIBIT B This is Exhibit B to the Letter Agreement between Mark Zeidman and Aircastle Advisor LLC dated as of February 3, 2005 (the "Letter Agreement"). When executed by both parties, the terms of this Exhibit B are intended to be incorporated by reference into the Letter Agreement. 1. PERCENTAGE OF NET AIRCASTLE OPERATING RESULTS: 3.50% (subject to adjustment for fiscal years subsequent to 2006). Your percentage of the Net Aircastle Operating Results (as defined below) will be paid to you as soon as practicable after results of Aircastle Investment Limited ("Aircastle") for the applicable fiscal year have been determined, but no later than 90 days after the end of such fiscal year (unless the audited financials therefore have not yet then been completed, in which case at least 90% of the estimated amount shall be paid no later than such 90th day and the remainder paid promptly upon completion of such audit). For fiscal years subsequent to 2006, Fortress reserves the right, in its sole and absolute discretion, to raise or to lower your percentage interest in the Net Aircastle Operating Results. In no event will you be entitled to receive any of the Net Aircastle Operating Results described above if you are not actively employed by or have given notice of your termination of your employment with the Company (or any affiliate of Aircastle for whom you may be employed on a full-time basis at the time) at the time such compensation is to be paid. The "NET AIRCASTLE OPERATING RESULTS" equals (i) 1.5% of Aircastle Investment Limited's average book equity for the current year ending December 31 of the relevant year plus an incentive fee of approximately 25% of Aircastle's return on equity in excess of a preferred return of 8% (net of rebates thereof with respect to investments by Fortress affiliates or other investors entitled to rebates) minus (ii) the sum of (x) (A) all compensation costs (including discretionary bonuses that may be paid to employees of Aircastle and its affiliates providing services for Aircastle), (B) rent and (C) other operating expenses (including reserves), in each case which are incurred by or allocable to [Aircastle Advisor LLC and applicable affiliates] and (y) any taxes payable in respect of the amounts set forth in (i) above. Determinations of allocable shares of each category of expense set forth in clause (ii)(x) above (which allocations may vary by category) will be made by Fortress, in its sole and absolute discretion. 2. AIRCASTLE OPTIONS. In connection with each Aircastle common stock equity financing (for cash), you shall receive a number of options for shares of common stock of Aircastle equal to (i) the aggregate number of shares of common stock issued in such offering multiplied by (ii) (x) ten percent of (y) your percentage at such time of the Net Aircastle Operating Results as set forth above. Each option grant shall have a vesting schedule pursuant to which 25% of the shares subject to such option will vest on the first, second, third and fourth anniversaries of the date of grant, as well as such other terms and conditions as Fortress has, as manager of other companies, imposed in respect option grants. 3. AIRCASTLE EQUITY COMMITMENT. You agree to make an equity commitment in Aircastle (the specific amount designated by you in accordance with the next sentence, the "Aircastle Commitment") on terms substantially similar to other investors in Aircastle in the amount of 10  between $100,000 and $200,000; provided, however, that the form of such investment may be restructured on mutually acceptable terms for tax structuring or other reasons. You shall confirm the specific Aircastle Commitment you have elected, by executing and delivering the Aircastle subscription agreement or such other documentation deemed by Fortress or Aircastle to be necessary and appropriate to evidence such commitment. Aircastle Advisor LLC By: /s/ Joseph P. Adams, Jr. ------------------------- Joseph P. Adams, Jr. /s/ Mark Zeidman - ----------------------------- Mark Zeidman. 11