Third Session, 45th

General Assembly

55 Elizabeth II,

BILL 58

AN ACT TO IMPLEMENT THE CONVENTION

ON INTERNATIONAL INTERESTS IN MOBILE AIRCRAFT EQUIPMENT

Received

and Read the First Time ...................................................................

Second

Reading ..............................................................................................

Committee ......................................................................................................

Third

Reading .................................................................................................

Royal

Assent ...................................................................................................

HONOURABLE THOMAS

W. MARSHALL , QC

Minister of Justice

and Attorney General

Ordered to be printed by

the Honourable House of Assembly

EXPLANATORY NOTE

The purpose of this Bill is to

implement the convention respecting the international interests in mobile

aircraft equipment. This Bill parallels similar Acts in other Canadian

provinces and arises from recommendations of the Uniform Law Conference of

Canada.

A BILL

AN ACT TO IMPLEMENT THE CONVENTION ON

INTERNATIONAL INTERESTS IN MOBILE AIRCRAFT EQUIPMENT

Analysis

Short title

Definitions

Inconsistency

Binding on Crown

Force of law

Court

Regulations

Publication

Commencement

Schedule

Schedule

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

Short title

1. This

Act may be cited as the International

Interests in Mobile Aircraft Equipment Act .

Definitions

(1) In

this Act

(a) "Aircraft Protocol" means the

Protocol to the Convention on International Interests in Mobile Equipment in

Matters Specific to Aircraft Equipment that was opened for signature at Cape

Town on November 16, 2001, the text of which is set out in

Schedule B;

(b) "Convention" means the Convention on

International Interests in Mobile Equipment that was opened for signature at

Cape Town on November 16, 2001, the text of which is set out in

Schedule A; and

(c) " minister "

means the minister appointed under the Executive

Council Act to administer this Act.

(2) Words and expressions used in this Act have

the same meaning as the corresponding words and expressions used in the

Convention and the Aircraft Protocol.

(3) In interpreting the Convention and the

Aircraft Protocol, recourse may be had to

(

a) the Explanatory Report and Commentary on the

Diplomatic Conference to Adopt a Mobile Equipment Convention and an Aircraft

Protocol, held under the joint auspices of the International Civil Aviation

Organization and the International Institute for the Unification of Private Law

at Cape Town from October 29 to November 16, 2001; and

(

b) the consolidated text

of the Convention and the Aircraft Protocol of which the Conference took note

in its Resolution No. 1.

Inconsistency

3. In

the event of an inconsistency between this Act and another law, this Act

prevails to the extent of the inconsistency.

Binding on Crown

4. This

Act binds the Crown.

Request to government

of Canada

(1) The

Article 52 of the Convention and

Article XXIX of the Aircraft Protocol, that

the Convention and the Aircraft Protocol extend to the province.

(2) The minister, at the time a request is made

declaration in accordance with

Article 39 of the Convention in respect of the

province.

(3) The minister, from time to time, may request

Article 57 of the Convention and

Article XXXIII of the Aircraft Protocol, in

relation to

Article 39 of the Convention, in respect of the province.

(4) The minister, at the time a request under

declaration in accordance with

Article 40 of the Convention in respect of the

province.

(5) The minister, from time to time, may request

Article 57 of the Convention and

Article XXXIII of the Aircraft Protocol, in

relation to

Article 40 of the Convention, in respect of the province.

Force of law

(1) The

Convention, other than Articles 49 to 59, 61 and 62, and the Aircraft Protocol,

other than paragraphs 1 and 2 of

Article IX, paragraphs 1 and 2 of

Article X

and Articles XIII and XXVI to XXXVII, have the force of law in the province.

(2) Subsection (1) applies on and after the day

the Convention and the Aircraft Protocol enter into force in accordance with

Articles 49 and 52 of the Convention and Articles XXVIII and XXIX of the Aircraft

Protocol.

Court

7. The

Trial Division is the relevant court for the purpose of

Article 53 of the

Convention.

Regulations

(1) The

Lieutenant-Governor in Council may make regulations that are necessary to give

effect to provisions that have the force of law under subsection 6(1), including

regulations

(

a) prescribing

categories of non-consensual rights and interests for the purpose of

Article 39

of the Convention; and

(

b) prescribing

categories of non-consensual rights and interests for the purpose of

Article 40

of the Convention.

(2) Regulations made under subsection (1) apply

(

a) in the case of regulations in relation to

declarations referred to in subsections 5(2) and (4), on and after the day on

which subsection 6(1) commences to apply as provided under subsection 6(2); and

(

b) in the case of regulations in relation to

subsequent declarations referred to in subsections 5(3) and (5), on and after

the day on which the subsequent declarations take effect as provided by

Article

57(2) of the Convention and

Article XXXIII(2) of the Aircraft Protocol.

Publication

(1) The

minister shall publish in

Part I of the Gazette a notice setting out the day on

which the Convention and the Aircraft Protocol enter into force in the province.

(2) The minister shall publish in

Part I of the Gazette the regulations referred to in

Article 17(2 )(

d) of the Convention, and amendments to

those regulations.

Commencement

10. This Act shall come into force on a date to be proclaimed

by the Lieutenant-Governor in Council.

Schedule A

CONVENTION ON INTERNATIONAL INTERESTS IN

MOBILE

EQUIPMENT

THE STATES PARTIES TO THIS CONVENTION

AWARE of the need to acquire and use mobile

equipment of high value or particular economic significance and to facilitate

the financing of the acquisition and use of such equipment in an efficient

manner,

RECOGNISING the advantages of asset-based

financing and leasing for this purpose and desiring to facilitate these types

of transaction by establishing clear rules to govern them,

MINDFUL of the need to ensure that interests

in such equipment are recognised and protected universally,

DESIRING to provide broad and mutual

economic benefits for all interested parties,

BELIEVING that such rules must reflect the

principles underlying asset-based financing and leasing and promote the

autonomy of the parties necessary in these transactions,

CONSCIOUS of the need to establish a legal

framework for international interests in such equipment and for that purpose to

create an international registration system for their protection,

TAKING INTO CONSIDERATION the objectives and

principles enunciated in existing Conventions relating to such equipment,

HAVE AGREED upon the following provisions:

CHAPTER I

SPHERE OF APPLICATION AND GENERAL PROVISIONS

Article 1 --

Definitions

In this Convention, except where the

context otherwise requires, the following terms are employed with the meanings

set out below:

(a) " agreement "

means a security agreement, a title reservation agreement or a leasing

agreement;

(b) " assignment "

means a contract which, whether by way of security or otherwise, confers on the

assignee associated rights with or without a transfer of the related

international interest;

(c) " associated

rights" means all rights to payment or other performance by a debtor under

an agreement which are secured by or associated with the object;

(d) " commencement of

the insolvency proceedings" means the time at which the insolvency

proceedings are deemed to commence under the applicable insolvency law;

(e) " conditional

buyer" means a buyer under a title reservation agreement;

(f) " conditional

seller" means a seller under a title reservation agreement;

(g) " contract of

sale" means a contract for the sale of an object by a seller to a buyer

which is not an agreement as defined in (

a) above;

(h) " court "

means a court of law or an administrative or arbitral tribunal established by a

Contracting State ;

( i ) " creditor " means a chargee

under a security agreement, a conditional seller under a title reservation

agreement or a lessor under a leasing agreement;

(j) "debtor" means a chargor

under a security agreement, a conditional buyer under a title reservation

agreement, a lessee under a leasing agreement or a person whose interest in an

object is burdened by a registrable non-consensual

right or interest;

(k) "insolvency administrator" means a

person authorised to administer the reorganization or liquidation, including

one authorised on an interim basis, and includes a debtor in possession if

permitted by the applicable insolvency law;

(l) " insolvency

proceedings" means bankruptcy, liquidation or other collective judicial or

administrative proceedings, including interim proceedings, in which the assets

and affairs of the debtor are subject to control or supervision by a court for

the purposes of reorganization or liquidation;

(m) " interested

persons" means:

(

i) the

debtor,

(ii) any person who, for the purpose of assuring

performance of any of the obligations in favour of the creditor, gives or

issues a suretyship or demand guarantee or a standby

letter of credit or any other form of credit insurance,

(iii) any other person

having rights in or over the object;

(n) "internal transaction" means a

transaction of a type listed in

Article 2(2)(

a) to (

c) where the centre of the

main interests of all parties to such transaction is situated, and the relevant

object located (as specified in the Protocol), in the same Contracting State at

the time of the conclusion of the contract and where the interest created by

the transaction has been registered in a national registry in that Contracting

State which has made a declaration under

Article 50(1);

(o) " international

interest" means an interest held by a creditor to which

Article 2 applies;

(p) "International Registry" means the

international registration facilities established for the purposes of this

Convention or the Protocol;

(q) " leasing

agreement" means an agreement by which one person (the lessor )

grants a right to possession or control of an object (with or without an option

to purchase) to another person (the lessee) in return for a rental or other

payment;

(r) " national

interest" means an interest held by a creditor in an object and created by

an internal transaction covered by a declaration under

Article 50(1);

(s) "non-consensual right or interest"

means a right or interest conferred under the law of a Contracting State which

has made a declaration under

Article 39 to secure the performance of an obligation,

including an obligation to a State, State entity or an intergovernmental or

private organization;

(t) " notice of a

national interest" means notice registered or to be registered in the

International Registry that a national interest has been created;

(u) " object "

means an object of a category to which

Article 2 applies;

(v) "pre-existing right or interest"

means a right or interest of any kind in or over an object created or arising

before the effective date of this Convention as defined by

Article 60(2)(a);

(w) " proceeds "

means money or non-money proceeds of an object arising from the total or

partial loss or physical destruction of the object or its total or partial

confiscation, condemnation or requisition;

(x) " prospective

assignment" means an assignment that is intended to be made in the future,

upon the occurrence of a stated event, whether or not the occurrence of the

event is certain;

(y) "prospective international interest"

means an interest that is intended to be created or provided for in an object

as an international interest in the future, upon the occurrence of a stated

event (which may include the debtor's acquisition of an interest in the

object), whether or not the occurrence of the event is certain;

(z) " prospective

sale" means a sale which is intended to be made in the future, upon the

occurrence of a stated event, whether or not the occurrence of the event is

certain;

( aa ) "Protocol" means, in respect of any category of object

and associated rights to which this Convention applies, the Protocol in respect

of that category of object and associated rights;

( bb ) " registered " means registered in the International

Registry pursuant to

Chapter V;

(cc) "registered interest" means an

international interest, a registrable non-consensual

right or interest or a national interest specified in a notice of a national

interest registered pursuant to

Chapter V;

( dd ) " registrable non-consensual right or

interest" means a non-consensual right or interest registrable

pursuant to a declaration deposited under

Article 40;

( ee ) "Registrar" means, in respect of the Protocol, the person

or body designated by that Protocol or appointed under

Article 17(2 )( b);

( ff ) " regulations " means regulations made or approved by the

Supervisory Authority pursuant to the Protocol;

( gg ) " sale " means a transfer of

ownership of an object pursuant to a contract of sale;

( hh ) " secured obligation" means an

obligation secured by a security interest;

(ii) "security agreement" means an

agreement by which a chargor grants or agrees to

grant to a chargee an interest (including an

ownership interest) in or over an object to secure the performance of any

existing or future obligation of the chargor or a

third person;

( jj ) " security interest" means an

interest created by a security agreement;

( kk ) "Supervisory Authority" means, in respect of the

Protocol, the Supervisory Authority referred to in

Article 17(1);

( ll ) "title reservation agreement" means an agreement for the

sale of an object on terms that ownership does not pass until fulfilment of the

condition or conditions stated in the agreement;

(mm) "unregistered interest" means a

consensual interest or non-consensual right or interest (other than an interest

to which

Article 39 applies) which has not been registered, whether or not it

is registrable under this Convention; and

( nn ) "writing" means a record of information (including information

communicated by teletransmission ) which is in

tangible or other form and is capable of being reproduced in tangible form on a

subsequent occasion and which indicates by reasonable means a person's approval

of the record.

Article 2 -- The international interest

1. This

Convention provides for the constitution and effects of an international

interest in certain categories of mobile equipment and associated rights.

2. For

the purposes of this Convention, an international interest in mobile equipment

is an interest, constituted under

Article 7, in a uniquely identifiable object

of a category of such objects listed in paragraph 3 and designated in the

Protocol:

(

a) granted by the chargor under a security agreement;

(

b) vested in a person

who is the conditional seller under a title reservation agreement; or

(

c) vested in a person

who is the lessor under a leasing agreement.

An interest falling within sub-paragraph

(

a) does not also fall within sub-paragraph (

b) or (c).

3. The

categories referred to in the preceding paragraphs are:

(

a) airframes , aircraft

engines and helicopters;

(

b) railway rolling

stock; and

(

c) space assets.

4. The applicable law determines whether an interest to which paragraph

2 applies falls within sub-paragraph (a), (

b) or (

c) of that paragraph.

5. An international interest in an object extends to proceeds of that

object.

Article 3 -- Sphere of application

1. This Convention applies when, at the time of the conclusion of the

agreement creating or providing for the international interest, the debtor is

situated in a Contracting State .

2. The fact that the creditor is situated in a non-Contracting State

does not affect the applicability of this Convention.

Article 4 -- Where debtor is situated

1. For the purposes of

Article 3(1), the debtor is situated in any Contracting State :

(

a) under the law of

which it is incorporated or formed;

(

b) where it has its

registered office or statutory seat;

(

c) where it has its

centre of administration; or

(

d) where it has its

place of business.

2. A reference in sub-paragraph (

d) of the preceding paragraph to the

debtor's place of business shall, if it has more than one place of business,

mean its principal place of business or, if it has no place of business, its

habitual residence.

Article 5 --

Interpretation and

applicable law

1. In the

interpretation of this Convention, regard is to be had to its

purposes as set forth in the

preamble, to its international character and to

the need to promote uniformity and predictability in its application.

2. Questions concerning matters governed by this Convention which are

not expressly settled in it are to be settled in conformity with the general

principles on which it is based or, in the absence of such principles, in

conformity with the applicable law.

3. References to the applicable law are to the domestic rules of the

law applicable by virtue of the rules of private international law of the forum State .

4. Where a State comprises several territorial units, each of which has

its own rules of law in respect of the matter to be decided, and where there is

no indication of the relevant territorial unit, the law of that State decides

which is the territorial unit whose rules shall govern .

In the absence of any such rule, the law of the territorial unit with which the

case is most closely connected shall apply.

Article 6 -- Relationship between the

Convention and the Protocol

1. This Convention and the Protocol shall be read and interpreted

together as a single instrument.

2. To the extent of any inconsistency between this Convention and the

Protocol, the Protocol shall prevail.

CHAPTER II

CONSTITUTION OF AN INTERNATIONAL INTEREST

Article 7 -- Formal requirements

An interest is constituted as an

international interest under this Convention where the agreement creating or

providing for the interest:

(

a) is in writing;

(

b) relates to an object

of which the chargor , conditional seller or lessor has power to dispose;

(

c) enables the object to

be identified in conformity with the Protocol; and

(

d) in the case of a

security agreement, enables the secured obligations to be determined, but without

the need to state a sum or maximum sum secured.

CHAPTER III

DEFAULT REMEDIES

Article 8 -- Remedies of chargee

1. In the event of default as provided in

Article 11, the chargee may, to the extent that the chargor

has at any time so agreed and subject to any declaration that may be made by a Contracting State under

Article 54, exercise any one or more of the following remedies:

(

a) take possession or

control of any object charged to it;

(

b) sell or grant a lease

of any such object;

(

c) collect or receive

any income or profits arising from the management or use of any such object.

2. The chargee may alternatively apply for a

court order authorising or directing any of the acts referred to in the

preceding paragraph.

3. Any remedy set out in sub-paragraph (a), (

b) or (

c) of paragraph 1

or by

Article 13 shall be exercised in a commercially reasonable manner. A

remedy shall be deemed to be exercised in a commercially reasonable manner

where it is exercised in conformity with a provision of the security agreement

except where such a provision is manifestly unreasonable.

4. A chargee proposing to sell or grant a

lease of an object under paragraph 1 shall give reasonable prior notice in

writing of the proposed sale or lease to:

(

a) interested persons

specified in

Article 1(m)(

i) and (ii); and

(

b) interested persons

specified in

Article 1(m)(iii) who have given notice of their rights to the chargee within a reasonable time prior to the sale or

lease.

5. Any sum collected or received by the chargee

as a result of exercise of any of the remedies set out in paragraph 1 or 2

shall be applied towards discharge of the amount of the secured obligations.

6. Where the sums collected or received by the chargee

as a result of the exercise of any remedy set out in paragraph 1 or 2 exceed

the amount secured by the security interest and any reasonable costs incurred

in the exercise of any such remedy, then unless otherwise ordered by the court

the chargee shall distribute the surplus among holders

of subsequently ranking interests which have been registered or of which the chargee has been given notice, in order of priority, and

pay any remaining balance to the chargor .

Article 9 -- Vesting of object in

satisfaction; redemption

1. At any time after default as provided in

Article 11, the chargee and all the interested persons may agree that ownership

of (or any other interest of the chargor in) any

object covered by the security interest shall vest in the chargee

in or towards satisfaction of the secured obligations.

2. The court may on the application of the chargee

order that ownership of (or any other interest of the chargor

in) any object covered by the security interest shall vest in the chargee in or towards satisfaction of the secured obligations.

3. The court shall grant an application under the preceding paragraph

only if the amount of the secured obligations to be satisfied by such vesting

is commensurate with the value of the object after taking account of any

payment to be made by the chargee to any of the interested

persons.

4. At any time after default as provided in

Article 11 and before sale

of the charged object or the making of an order under paragraph 2, the chargor or any interested person may discharge the security

interest by paying in full the amount secured, subject to any lease granted by

the chargee under

Article 8(1 )(

b) or ordered under

Article 8(2). Where, after such default, the payment of the

amount secured is made in full by an interested person other than the debtor,

that person is subrogated to the rights of the chargee .

5. Ownership or any other interest of the chargor

passing on a sale under

Article 8(1 )(

b) or passing

under paragraph 1 or 2 of this

Article is free from any other interest over

which the chargee's security interest has priority

under the provisions of

Article

Article 10 -- Remedies of conditional

seller or lessor

In the event of default under a title

reservation agreement or under a leasing agreement as provided in

Article 11,

the conditional seller or the lessor , as the case may

be, may:

(

a) subject to any declaration that may be made by

a Contracting State under

Article 54, terminate the agreement and take

possession or control of any object to which the agreement relates; or

(

b) apply for a court order

authorising or directing either of these acts.

Article 11 -- Meaning of default

1. The debtor and the creditor may at any time agree in writing as to

the events that constitute a default or otherwise give rise to the rights and

remedies specified in Articles 8 to 10 and 13.

2. Where the debtor and the creditor have not so agreed, " default " for the purposes of Articles 8 to 10 and 13

means a default which substantially deprives the creditor of what it is

entitled to expect under the agreement.

Article 12 -- Additional remedies

Any additional remedies permitted by the

applicable law, including any remedies agreed upon by the parties, may be

exercised to the extent that they are not inconsistent with the mandatory

provisions of this

Chapter as set out in

Article

Article 13 -- Relief pending final

determination

1. Subject to any declaration that it may make under

Article 55, a Contracting

State shall ensure that a creditor who adduces evidence of default by the

debtor may, pending final determination of its claim and to the extent that the

debtor has at any time so agreed, obtain from a court speedy relief in the form

of such one or more of the following orders as the creditor requests:

(

a) preservation of the

object and its value;

(

b) possession , control

or custody of the object;

(

c) immobilisation of the

object; and

(

d) lease or, except

where covered by sub-paragraphs (

a) to (c), management of the object and the

income therefrom .

2. In making any order under the preceding paragraph, the court may

impose such terms as it considers necessary to protect the interested persons

in the event that the creditor:

(

a) in implementing any

order granting such relief, fails to perform any of its obligations to the

debtor under this Convention or the Protocol; or

(

b) fails to establish

its claim, wholly or in part, on the final determination of that claim.

3. Before making any order under paragraph 1, the court may require

notice of the request to be given to any of the interested persons.

4. Nothing in this

Article affects the application of

Article 8(3) or

limits the availability of forms of interim relief other than those set out in

paragraph

Article 14 -- Procedural requirements

Subject to

Article 54(2), any remedy

provided by this

Chapter shall be exercised in conformity with the procedure

prescribed by the law of the place where the remedy is to be exercised.

Article 15 -- Derogation

In their relations with each other, any

two or more of the parties referred to in this

Chapter may at any time, by

agreement in writing, derogate from or vary the effect of any of the preceding

provisions of this

Chapter except Articles 8(3) to (6), 9(3) and (4), 13(2) and

CHAPTER IV

THE INTERNATIONAL REGISTRATION SYSTEM

Article 16 -- The International Registry

1. An International Registry shall be established for registrations of:

(

a) international

interests, prospective international interests and registrable

non-consensual rights and interests;

(

b) assignments and

prospective assignments of international interests;

(

c) acquisitions of

international interests by legal or contractual subrogations

under the applicable law;

(

d) notices of national

interests; and

(

e) subordinations of

interests referred to in any of the preceding sub-paragraphs.

2. Different international registries may be established for different

categories of object and associated rights.

3. For the purposes of this

Chapter and

Chapter V, the term "registration"

includes, where appropriate, an amendment, extension or discharge of a

registration.

Article 17 -- The Supervisory Authority

and the Registrar

1. There shall be a Supervisory Authority as provided by the Protocol.

2. The Supervisory Authority shall:

(

a) establish or provide

for the establishment of the International Registry;

(

b) except as otherwise

provided by the Protocol, appoint and dismiss the Registrar;

(

c) ensure that any

rights required for the continued effective operation of the International

Registry in the event of a change of Registrar will vest in or be assignable to

the new Registrar;

(

d) after consultation

with the Contracting States, make or approve and ensure the publication of

regulations pursuant to the Protocol dealing with the operation of the

International Registry;

(

e) establish administrative

procedures through which complaints concerning the operation of the

International Registry can be made to the Supervisory Authority;

(

f) supervise the

Registrar and the operation of the International Registry;

(

g) at the request of the

Registrar, provide such guidance to the Registrar as the Supervisory Authority

thinks fit;

(

h) set and periodically

review the structure of fees to be charged for the services and facilities of

the International Registry;

(

i) do

all things necessary to ensure that an efficient notice-based electronic

registration system exists to implement the objectives of this Convention and

the Protocol; and

(

j) report periodically

to Contracting States concerning the discharge of its obligations under this

Convention and the Protocol.

3. The Supervisory Authority may enter into any agreement requisite for

the performance of its functions, including any agreement referred to in

Article 27(3).

4. The Supervisory Authority shall own all proprietary rights in the data

bases and archives of the International Registry.

5. The Registrar shall ensure the efficient operation of the International

Registry and perform the functions assigned to it by this Convention, the

Protocol and the regulations.

CHAPTER V

OTHER MATTERS RELATING TO REGISTRATION

Article 18 -- Registration requirements

1. The Protocol and regulations shall specify the requirements,

including the criteria for the identification of the object:

(

a) for effecting a

registration (which shall include provision for prior electronic transmission

of any consent from any person whose consent is required under

Article 20);

(

b) for making searches

and issuing search certificates, and, subject thereto;

(

c) for ensuring the

confidentiality of information and documents of the International Registry

other than information and documents relating to a registration.

2. The Registrar shall not be under a duty to enquire whether a consent to registration under

Article 20 has in fact been

given or is valid.

3. Where an interest registered as a prospective international interest

becomes an international interest, no further registration shall be required

provided that the registration information is sufficient for a registration of

an international interest.

4. The Registrar shall arrange for registrations to be entered into the

International Registry data base and made searchable in chronological order of

receipt, and the file shall record the date and time of receipt.

5. The Protocol may provide that a Contracting State may designate

an entity or entities in its territory as the entry point or entry points

through which the information required for registration shall or may be

transmitted to the International Registry. A Contracting State making

such a designation may specify the requirements, if any, to be satisfied before

such information is transmitted to the International Registry.

Article 19 -- Validity and time of

registration

1. A registration shall be valid only if made in conformity with

Article 20.

2. A registration, if valid, shall be complete upon entry of the required

information into the International Registry data base so as to be searchable.

3. A registration shall be searchable for the purposes of the preceding

paragraph at the time when:

(

a) the International

Registry has assigned to it a sequentially ordered file number; and

(

b) the registration

information, including the file number, is stored in durable form and may be

accessed at the International Registry.

4. If an interest first registered as a prospective international interest

becomes an international interest, that international interest shall be treated

as registered from the time of registration of the prospective international

interest provided that the registration was still current immediately before

the international interest was constituted as provided by

Article 7.

5. The preceding paragraph applies with necessary modifications to the

registration of a prospective assignment of an international interest.

6. A registration shall be searchable in the International Registry

data base according to the criteria prescribed by the Protocol.

Article 20 -- Consent to registration

1. An international interest, a prospective international interest or

an assignment or prospective assignment of an international interest may be

registered, and any such registration amended or extended prior to its expiry,

by either party with the consent in writing of the other.

2. The subordination of an international interest to another international

interest may be registered by or with the consent in writing at any time of the

person whose interest has been subordinated.

3. A registration may be discharged by or with the consent in writing

of the party in whose favour it was made.

4. The acquisition of an international interest by legal or contractual

subrogation may be registered by the subrogee .

5. A registrable non-consensual right or

interest may be registered by the holder thereof.

6. A notice of a national interest may be registered by the holder

thereof.

Article 21 -- Duration of registration

Registration of an international interest

remains effective until discharged or until expiry of the period specified in

the registration.

Article 22 -- Searches

1. Any person may, in the manner prescribed by the Protocol and

regulations, make or request a search of the International Registry by

electronic means concerning interests or prospective international interests

registered therein.

2. Upon receipt of a request therefor , the

Registrar, in the manner prescribed by the Protocol and regulations, shall

issue a registry search certificate by electronic means with respect to any

object:

(

a) stating all

registered information relating thereto, together with a statement indicating

the date and time of registration of such information; or

(

b) stating that there is

no information in the International Registry relating thereto.

3. A search certificate issued under the preceding paragraph shall

indicate that the creditor named in the registration information has acquired

or intends to acquire an international interest in the object but shall not

indicate whether what is registered is an international interest or a prospective

international interest, even if this is ascertainable from the relevant

registration information.

Article 23 -- List of declarations and

declared non-consensual rights or interests

The Registrar shall maintain a list of

declarations, withdrawals of declaration and of the categories of

non-consensual right or interest communicated to the Registrar by the Depositary

as having been declared by Contracting States in conformity with Articles 39 and 40 and the date of each such

declaration or withdrawal of declaration. Such list shall be recorded and

searchable in the name of the declaring State and shall be made available as

provided in the Protocol and regulations to any person requesting it.

Article 24 -- Evidentiary value of

certificates

A document in the form prescribed by the

regulations which purports to be a certificate issued by the International

Registry is prima facie proof:

(

a) that it has been so

issued; and

(

b) of the facts recited

in it, including the date and time of a registration.

Article 25 -- Discharge of registration

1. Where the obligations secured by a registered security interest or

the obligations giving rise to a registered non-consensual right or interest

have been discharged, or where the conditions of transfer of title under a

registered title reservation agreement have been fulfilled, the holder of such

interest shall, without undue delay, procure the discharge of the registration

after written demand by the debtor delivered to or received at its address

stated in the registration.

2. Where a prospective international interest or a prospective assignment

of an international interest has been registered, the intending creditor or

intending assignee shall, without undue delay, procure the discharge of the

registration after written demand by the intending debtor or assignor which is

delivered to or received at its address stated in the registration before the

intending creditor or assignee has given value or incurred a commitment to give

value.

3. Where the obligations secured by a national interest specified in a

registered notice of a national interest have been discharged, the holder of

such interest shall, without undue delay, procure the discharge of the

registration after written demand by the debtor delivered to or received at its

address stated in the registration.

4. Where a registration ought not to have been made or is incorrect,

the person in whose favour the registration was made shall, without undue

delay, procure its discharge or amendment after written demand by the debtor

delivered to or received at its address stated in the registration.

Article 26 -- Access to the

international registration facilities

No person shall be denied access to the

registration and search facilities of the International Registry on any ground

other than its failure to comply with the procedures prescribed by this

Chapter.

CHAPTER VI

PRIVILEGES AND IMMUNITIES OF THE SUPERVISORY AUTHORITY AND THE REGISTRAR

Article 27 -- Legal personality;

immunity

1. The Supervisory Authority shall have international legal personality

where not already possessing such personality.

2. The Supervisory Authority and its officers and employees shall enjoy

such immunity from legal or administrative process as is specified in the

Protocol.

3. (

a) The

Supervisory Authority shall enjoy exemption from taxes and such other privileges

as may be provided by agreement with the host State.

(

b) For the purposes of this paragraph, "host

State" means the State in which the Supervisory Authority is situated.

4. The assets, documents, data bases and archives of the International

Registry shall be inviolable and immune from seizure or other legal or

administrative process.

5. For the purposes of any claim against the Registrar under

Article

28(1) or

Article 44, the claimant shall be entitled to access to such

information and documents as are necessary to enable the claimant to pursue its

claim.

6. The Supervisory Authority may waive the inviolability and immunity

conferred by paragraph 4.

CHAPTER VII

LIABILITY OF THE REGISTRAR

Article 28 -- Liability and financial

assurances

1. The Registrar shall be liable for compensatory damages for loss

suffered by a person directly resulting from an error or omission of the

Registrar and its officers and employees or from a malfunction of the

international registration system except where the malfunction is caused by an

event of an inevitable and irresistible nature, which could not be prevented by

using the best practices in current use in the field of electronic registry design

and operation, including those related to back-up and systems security and

networking.

2. The Registrar shall not be liable under the preceding paragraph for

factual inaccuracy of registration information received by the Registrar or

transmitted by the Registrar in the form in which it received that information

nor for acts or circumstances for which the Registrar and its officers and

employees are not responsible and arising prior to receipt of registration

information at the International Registry.

3. Compensation under paragraph 1 may be reduced to the extent that the

person who suffered the damage caused or contributed to that damage.

4. The Registrar shall procure insurance or a financial guarantee

covering the liability referred to in this

Article to the extent determined by

the Supervisory Authority, in accordance with the Protocol.

CHAPTER VIII

EFFECTS OF AN INTERNATIONAL INTEREST AS AGAINST THIRD PARTIES

Article 29 -- Priority of competing

interests

1. A registered interest has priority over any other interest subsequently

registered and over an unregistered interest.

2. The priority of the first-mentioned interest under the preceding

paragraph applies:

(

a) even if the

first-mentioned interest was acquired or registered with actual knowledge of

the other interest; and

(

b) even as regards

value given by the holder of the first-mentioned interest with such knowledge.

3. The buyer of an object acquires its interest in it:

(

a) subject to an

interest registered at the time of its acquisition of that interest; and

(

b) free from an

unregistered interest even if it has actual knowledge of such an interest.

4. The conditional buyer or lessee acquires its interest in or right

over that object:

(

a) subject to an

interest registered prior to the registration of the international interest

held by its conditional seller or lessor ; and

(

b) free from an interest

not so registered at that time even if it has actual knowledge of that

interest.

5. The priority of competing interests or rights under this

Article may

be varied by agreement between the holders of those interests, but an assignee

of a subordinated interest is not bound by an agreement to subordinate that

interest unless at the time of the assignment a subordination had been

registered relating to that agreement.

6. Any priority given by this

Article to an interest in an object extends

to proceeds.

7. This Convention:

(

a) does not affect the rights of a person in an

item, other than an object, held prior to its installation on an object if

under the applicable law those rights continue to exist after the installation;

and

(

b) does not prevent the

creation of rights in an item, other than an object, which has previously been

installed on an object where under the applicable law those rights are created.

Article 30 -- Effects of insolvency

1. In insolvency proceedings against the debtor an international

interest is effective if prior to the commencement of the insolvency

proceedings that interest was registered in conformity with this Convention.

2. Nothing in this

Article impairs the effectiveness of an international

interest in the insolvency proceedings where that interest is effective under

the applicable law.

3. Nothing in this

Article affects:

(

a) any rules of law

applicable in insolvency proceedings relating to the avoidance of a transaction

as a preference or a transfer in fraud of creditors; or

(

b) any rules of

procedure relating to the enforcement of rights to property which is under the

control or supervision of the insolvency administrator.

CHAPTER IX

ASSIGNMENTS OF ASSOCIATED RIGHTS AND INTERNATIONAL INTERESTS;

RIGHTS OF SUBROGATION

Article 31 -- Effects of assignment

1. Except as otherwise agreed by the parties, an assignment of associated

rights made in conformity with

Article 32 also transfers to the assignee:

(

a) the related

international interest; and

(

b) all the interests and

priorities of the assignor under this Convention.

2. Nothing in this Convention prevents a partial assignment of the

assignor's associated rights. In the case of such a partial assignment the

assignor and assignee may agree as to their respective rights concerning the

related international interest assigned under the preceding paragraph but not

so as adversely to affect the debtor without its consent.

3. Subject to paragraph 4, the applicable law shall determine the

defences and rights of set-off available to the debtor against the assignee.

4. The debtor may at any time by agreement in writing waive all or any

of the defences and rights of set-off referred to in the preceding paragraph other

than defences arising from fraudulent acts on the part of the assignee.

5. In the case of an assignment by way of security, the assigned

associated rights revest in the assignor, to the

extent that they are still subsisting, when the obligations secured by the

assignment have been discharged.

Article 32 -- Formal requirements of

assignment

1. An assignment of associated rights transfers the related international

interest only if it:

(

a) is in writing;

(

b) enables the

associated rights to be identified under the contract from which they arise;

and

(

c) in the case of an

assignment by way of security, enables the obligations secured by the

assignment to be determined in accordance with the Protocol but without the

need to state a sum or maximum sum secured.

2. An assignment of an international interest created or provided for

by a security agreement is not valid unless some or all related associated

rights also are assigned.

3. This Convention does not apply to an assignment of associated rights

which is not effective to transfer the related international interest.

Article 33 -- Debtor's duty to assignee

1. To the extent that associated rights and the related international

interest have been transferred in accordance with Articles 31 and 32, the

debtor in relation to those rights and that interest is bound by the assignment

and has a duty to make payment or give other performance to the assignee, if

but only if:

(

a) the debtor has been

given notice of the assignment in writing by or with the authority of the

assignor; and

(

b) the notice identifies

the associated rights.

2. Irrespective of any other ground on which payment or performance by

the debtor discharges the latter from liability, payment or performance shall

be effective for this purpose if made in accordance with the preceding

paragraph.

3. Nothing in this

Article shall affect the priority of competing

assignments.

Article 34 -- Default remedies in

respect of assignment by way of security

In the event of default by the assignor

under the assignment of associated rights and the related international

interest made by way of security, Articles 8, 9 and 11 to 14 apply in the

relations between the assignor and the assignee (and, in relation to associated

rights, apply in so far as those provisions are capable of application to

intangible property) as if references:

(

a) to the secured

obligation and the security interest were references to the obligation secured

by the assignment of the associated rights and the related international

interest and the security interest created by that assignment;

(

b) to the chargee or creditor and chargor

or debtor were references to the assignee and assignor;

(

c) to the holder of the

international interest were references to the assignee; and

(

d) to the object were

references to the assigned associated rights and the related international

interest.

Article 35 -- Priority of competing

assignments

1. Where there are competing assignments of associated rights and at

least one of the assignments includes the related international interest and is

registered, the provisions of

Article 29 apply as if the references to a

registered interest were references to an assignment of the associated rights

and the related registered interest and as if references to a registered or

unregistered interest were references to a registered or unregistered assignment.

Article 30 applies to an assignment of associated rights as if the

references to an international interest were references to an assignment of the

associated rights and the related international interest.

Article 36 -- Assignee's priority with

respect to associated rights

1. The assignee of associated rights and the related international

interest whose assignment has been registered only has priority under

Article

35(1) over another assignee of the associated rights:

(

a) if the contract under

which the associated rights arise states that they are secured by or associated

with the object; and

(

b) to the extent that

the associated rights are related to an object.

2. For the purposes of sub-paragraph (

b) of the preceding paragraph,

associated rights are related to an object only to the extent that they consist

of rights to payment or performance that relate to:

(

a) a sum advanced and

utilised for the purchase of the object;

(

b) a sum advanced and

utilised for the purchase of another object in which the assignor held another

international interest if the assignor transferred that interest to the

assignee and the assignment has been registered;

(

c) the price payable for

the object;

(

d) the rentals payable

in respect of the object; or

(

e) other obligations

arising from a transaction referred to in any of the preceding sub-paragraphs.

3. In all other cases, the priority of the competing assignments of the

associated rights shall be determined by the applicable law.

Article 37 -- Effects of assignor's

insolvency

The provisions of

Article 30 apply to

insolvency proceedings against the assignor as if references to the debtor were

references to the assignor.

Article 38 -- Subrogation

1. Subject to paragraph 2, nothing in this Convention affects the

acquisition of associated rights and the related international interest by

legal or contractual subrogation under the applicable law.

2. The priority between any interest within the preceding paragraph and

a competing interest may be varied by agreement in writing between the holders

of the respective interests but an assignee of a subordinated interest is not

bound by an agreement to subordinate that interest unless at the time of the

assignment a subordination had been registered relating to that agreement.

CHAPTER X

RIGHTS OR INTERESTS SUBJECT TO DECLARATIONS BY CONTRACTING STATES

Article 39 -- Rights having priority

without registration

1. A Contracting State may at any time, in a declaration deposited with the Depositary of

the Protocol declare, generally or specifically:

(

a) those categories of non-consensual right or

interest (other than a right or interest to which

Article 40 applies) which

under that State's law have priority over an interest in an object equivalent

to that of the holder of a registered international interest and which shall

have priority over a registered international interest, whether in or outside

insolvency proceedings; and

(

b) that nothing in this Convention shall affect

the right of a State or State entity, intergovernmental organization or other

private provider of public services to arrest or detain an object under the

laws of that State for payment of amounts owed to such entity, organization or

provider directly relating to those services in respect of that object or

another object.

2. A declaration made under the preceding paragraph may be expressed to

cover categories that are created after the deposit of that declaration.

3. A non-consensual right or interest has priority over an international

interest if and only if the former is of a category covered by a declaration

deposited prior to the registration of the international interest.

4. Notwithstanding the preceding paragraph, a Contracting State may, at

the time of ratification, acceptance, approval of, or accession to the

Protocol, declare that a right or interest of a category covered by a

declaration made under sub-paragraph (

a) of paragraph 1 shall have priority

over an international interest registered prior to the date of such ratification,

acceptance, approval or accession.

Article 40 -- Registrable

non-consensual rights or interests

A Contracting State may at

any time in a declaration deposited with the Depositary of the Protocol list

the categories of non-consensual right or interest which shall be registrable under this Convention as regards any category

of object as if the right or interest were an international interest and shall

be regulated accordingly. Such a declaration may be modified from time to time.

CHAPTER XI

APPLICATION OF THE CONVENTION TO SALES

Article 41 -- Sale and

prospective sale

This Convention shall apply to the sale or

prospective sale of an object as provided for in the Protocol with any modifications

therein.

CHAPTER XII

JURISDICTION

Article 42 -- Choice of forum

1. Subject to Articles 43 and 44, the courts of a Contracting State chosen

by the parties to a transaction have jurisdiction in respect of any claim

brought under this Convention, whether or not the chosen forum has a connection

with the parties or the transaction. Such jurisdiction shall be exclusive

unless otherwise agreed between the parties.

2. Any such agreement shall be in writing or otherwise concluded in

accordance with the formal requirements of the law of the chosen forum.

Article 43 -- Jurisdiction under

Article

1. The courts of a Contracting State chosen by the parties and the courts of the Contracting State on the

territory of which the object is situated have jurisdiction to grant relief

under

Article 13(1 )( a), (b), (

c) and

Article 13(4) in

respect of that object.

2. Jurisdiction to grant relief under

Article 13(1 )(

d) or other interim relief by virtue of

Article 13(4) may be exercised either:

(

a) by the courts chosen

by the parties; or

(

b) by the courts of a Contracting State on the

territory of which the debtor is situated, being relief which, by the terms of

the order granting it, is enforceable only in the territory of that Contracting State .

3. A court has jurisdiction under the preceding paragraphs even if the

final determination of the claim referred to in

Article 13(1) will or may take

place in a court of another Contracting State or by arbitration.

Article 44 -- Jurisdiction to make

orders against the Registrar

1. The courts of the place in which the Registrar has its centre of

administration shall have exclusive jurisdiction to award damages or make

orders against the Registrar.

2. Where a person fails to respond to a demand made under

Article 25

and that person has ceased to exist or cannot be found for the purpose of

enabling an order to be made against it requiring it to procure discharge of

the registration, the courts referred to in the preceding paragraph shall have

exclusive jurisdiction, on the application of the debtor or intending debtor,

to make an order directed to the Registrar requiring the Registrar to discharge

the registration.

3. Where a person fails to comply with an order of a court having

jurisdiction under this Convention or, in the case of a national interest, an

order of a court of competent jurisdiction requiring that person to procure the

amendment or discharge of a registration, the courts referred to in paragraph 1

may direct the Registrar to take such steps as will give effect to that order.

4. Except as otherwise provided by the preceding paragraphs, no court

may make orders or give judgments or rulings against or purporting to bind the

Registrar.

Article 45 -- Jurisdiction in respect of

insolvency proceedings

The provisions of this

Chapter are not

applicable to insolvency proceedings.

CHAPTER XIII

RELATIONSHIP WITH OTHER CONVENTIONS

Article 45 bis -- Relationship with the

United Nations Convention on the Assignment of Receivables in International

Trade

This Convention shall prevail over the

United Nations Convention on the Assignment of Receivables in International

Trade, opened for signature in New York on 12 December 2001, as it relates to

the assignment of receivables which are associated rights related to

international interests in aircraft objects, railway rolling stock and space

assets.

Article 46 -- Relationship with the UNIDROIT

Convention on International Financial Leasing

The Protocol may determine the

relationship between this Convention and the UNIDROIT Convention on

International Financial Leasing, signed at Ottawa on 28 May 1988 .

CHAPTER XIV

FINAL PROVISIONS

Article 47 -- Signature, ratification,

acceptance, approval or accession

1. This Convention shall be open for signature in Cape Town on 16 November 2001 by States participating in the Diplomatic Conference to Adopt a

Mobile Equipment Convention and an Aircraft Protocol held at Cape Town from 29

October to 16

November 2001 . After 16 November 2001 , the Convention shall be open to all States for signature at the

Headquarters of the International Institute for the Unification of Private Law

(UNIDROIT) in Rome until it enters into force in accordance with

Article 49.

2. This Convention shall be subject to ratification, acceptance or

approval by States which have signed it.

3. Any State which does not sign this Convention may accede to it at

any time.

4. Ratification, acceptance, approval or accession is effected by the

deposit of a formal instrument to that effect with the Depositary.

Article 48 -- Regional Economic

Integration Organizations

1. A Regional Economic Integration Organization which is constituted by

sovereign States and has competence over certain matters governed by this

Convention may similarly sign, accept, approve or accede to this Convention.

The Regional Economic Integration Organization shall in that case have the

rights and obligations of a Contracting State , to the extent that that Organization has competence over matters

governed by this Convention. Where the number of Contracting States is relevant

in this Convention, the Regional Economic Integration Organization shall not

count as a Contracting State in addition to its Member States which are Contracting States.

2. The Regional Economic Integration Organization shall, at the time of

signature, acceptance, approval or accession, make a declaration to the

Depositary specifying the matters governed by this Convention in respect of

which competence has been transferred to that Organization by its Member States.

The Regional Economic Integration Organization shall promptly notify the

Depositary of any changes to the distribution of competence, including new

transfers of competence, specified in the declaration under this paragraph.

3. Any reference to a "Contracting State" or

"Contracting States" or "State Party" or "States

Parties" in this Convention applies equally to a Regional Economic

Integration Organization where the context so requires.

Article 49 -- Entry into force

1. This Convention enters into force on the first day of the month

following the expiration of three months after the date of the deposit of the

third instrument of ratification, acceptance, approval or accession but only as

regards a category of objects to which a Protocol applies:

(

a) as from the time of

entry into force of that Protocol;

(

b) subject to the terms

of that Protocol; and

(

c) as between States

Parties to this Convention and that Protocol.

2. For other States this Convention enters into force on the first day

of the month following the expiration of three months after the date of the

deposit of their instrument of ratification, acceptance, approval or accession

but only as regards a category of objects to which a Protocol applies and

subject, in relation to such Protocol, to the requirements of sub-paragraphs

(a), (

b) and (

c) of the preceding paragraph.

Article 50 -- Internal transactions

1. A Contracting State may, at the time of ratification, acceptance, approval of, or accession

to the Protocol, declare that this Convention shall not apply to a transaction

which is an internal transaction in relation to that State with regard to all

types of objects or some of them.

2. Notwithstanding the preceding paragraph, the provisions of Articles

8(4), 9(1), 16,

Chapter V,

Article 29, and any provisions of this Convention

relating to registered interests shall apply to an internal transaction.

3. Where notice of a national interest has been registered in the

International Registry, the priority of the holder of that interest under

Article 29 shall not be affected by the fact that such interest has become

vested in another person by assignment or subrogation under the applicable law.

Article 51 -- Future Protocols

1. The Depositary may create working groups, in co-operation with such

relevant non-governmental organizations as the Depositary considers

appropriate, to assess the feasibility of extending the application of this

Convention, through one or more Protocols, to objects of any category of

high-value mobile equipment, other than a category referred to in

Article 2(3),

each member of which is uniquely identifiable, and associated rights relating

to such objects.

2. The Depositary shall communicate the text of any preliminary draft

Protocol relating to a category of objects prepared by such a working group to

all States Parties to this Convention, all member States of the Depositary,

member States of the United Nations which are not members of the Depositary and

the relevant intergovernmental organizations, and shall invite such States and

organizations to participate in intergovernmental negotiations for the

completion of a draft Protocol on the basis of such a preliminary draft

Protocol.

3. The Depositary shall also communicate the text of any preliminary

draft Protocol prepared by such a working group to such relevant

non-governmental organizations as the Depositary considers appropriate. Such

non-governmental organizations shall be invited promptly to submit comments on

the text of the preliminary draft Protocol to the Depositary and to participate

as observers in the preparation of a draft Protocol.

4. When the competent bodies of the Depositary adjudge such a draft

Protocol ripe for adoption, the Depositary shall convene a diplomatic

conference for its adoption.

5. Once such a Protocol has been adopted, subject to paragraph 6, this

Convention shall apply to the category of objects covered thereby.

Article 45 bis

of this Convention applies to such a Protocol only if

specifically provided for in that Protocol.

Article 52 -- Territorial units

1. If a Contracting State has territorial units in which different systems

of law are applicable in relation to the matters dealt with in this Convention,

it may, at the time of ratification, acceptance, approval or accession, declare

that this Convention is to extend to all its territorial units or only to one

or more of them and may modify its declaration by submitting another

declaration at any time.

2. Any such declaration shall state expressly the territorial units to

which this Convention applies.

3. If a Contracting State has not made any declaration under paragraph 1, this Convention

shall apply to all territorial units of that State.

4. Where a Contracting State extends this Convention to one or more of its territorial units,

declarations permitted under this Convention may be made in respect of each

such territorial unit, and the declarations made in respect of one territorial

unit may be different from those made in respect of another territorial unit.

5. If by virtue of a declaration under paragraph 1, this Convention

extends to one or more territorial units of a Contracting State :

(

a) the debtor is considered to be situated in a

Contracting State only if it is incorporated or formed under a law in force in

a territorial unit to which this Convention applies or if it has its registered

office or statutory seat, centre of administration, place of business or

habitual residence in a territorial unit to which this Convention applies;

(

b) any reference to the

location of the object in a Contracting State refers to the location of the object in a territorial unit to which

this Convention applies; and

(

c) any reference to the

administrative authorities in that Contracting State shall be

construed as referring to the administrative authorities having jurisdiction in

a territorial unit to which this Convention applies.

Article 53 -- Determination of courts

A Contracting State may, at

the time of ratification, acceptance, approval of, or accession to the Protocol,

declare the relevant "court" or "courts" for the purposes

Article 1 and

Chapter XII of this Convention.

Article 54 -- Declarations regarding

remedies

1. A Contracting State may, at the time of ratification, acceptance,

approval of, or accession to the Protocol, declare that while the charged

object is situated within, or controlled from its territory the chargee shall not grant a lease of the object in that

territory.

2. A Contracting State shall, at the time of ratification, acceptance, approval of, or

accession to the Protocol, declare whether or not any remedy available to the

creditor under any provision of this Convention which is not there expressed to

require application to the court may be exercised only with leave of the court.

Article 55 -- Declarations regarding

relief pending final determination

A Contracting State may, at

the time of ratification, acceptance, approval of, or accession to the

Protocol, declare that it will not apply the provisions of

Article 13 or

Article 43, or both, wholly or in part. The declaration shall specify under

which conditions the relevant

Article will be applied, in case it will be

applied partly, or otherwise which other forms of interim relief will be

applied.

Article 56 -- Reservations and declarations

1. No reservations may be made to this Convention but declarations

authorised by Articles 39, 40, 50, 52, 53, 54, 55, 57, 58 and 60 may be made in

accordance with these provisions.

2. Any declaration or subsequent declaration or any withdrawal of a

declaration made under this Convention shall be notified in writing to the

Depositary.

Article 57 -- Subsequent declarations

1. A State Party may make a subsequent declaration, other than a

declaration authorised under

Article 60, at any time after the date on which

this Convention has entered into force for it, by notifying the Depositary to

that effect.

2. Any such subsequent declaration shall take effect on the first day

of the month following the expiration of six months after the date of receipt of

the notification by the Depositary. Where a longer period for that declaration

to take effect is specified in the notification, it shall take effect upon the

expiration of such longer period after receipt of the notification by the

Depositary.

3. Notwithstanding the previous paragraphs, this Convention shall

continue to apply, as if no such subsequent declarations had been made, in

respect of all rights and interests arising prior to the effective date of any

such subsequent declaration.

Article 58 -- Withdrawal of declarations

1. Any State Party having made a declaration under this Convention,

other than a declaration authorised under

Article 60, may withdraw it at any

time by notifying the Depositary. Such withdrawal is to take effect on the

first day of the month following the expiration of six months after the date of

receipt of the notification by the Depositary.

2. Notwithstanding the previous paragraph, this Convention shall

continue to apply, as if no such withdrawal of declaration had been made, in

respect of all rights and interests arising prior to the effective date of any

such withdrawal.

Article 59 -- Denunciations

1. Any State Party may denounce this Convention by notification in

writing to the Depositary.

2. Any such denunciation shall take effect on the first day of the

month following the expiration of twelve months after the date on which

notification is received by the Depositary.

3. Notwithstanding the previous paragraphs, this Convention shall

continue to apply, as if no such denunciation had been made, in respect of all

rights and interests arising prior to the effective date of any such

denunciation.

Article 60 -- Transitional provisions

1. Unless otherwise declared by a Contracting State at any

time, the Convention does not apply to a pre-existing right or interest, which

retains the priority it enjoyed under the applicable law before the effective

date of this Convention.

2. For the purposes of

Article 1(

v) and of determining priority under

this Convention:

(a) "effective date of this Convention"

means in relation to a debtor the time when this Convention enters into force

or the time when the State in which the debtor is situated becomes a

Contracting State, whichever is the later; and

(

b) the debtor is situated in a State where it has

its centre of administration or, if it has no centre of administration, its

place of business or, if it has more than one place of business, its principal

place of business or, if it has no place of business, its habitual residence.

3. A Contracting State may in its declaration under paragraph 1 specify

a date, not earlier than three years after the date on which the declaration

becomes effective, when this Convention and the Protocol will become

applicable, for the purpose of determining priority, including the protection

of any existing priority, to pre-existing rights or interests arising under an

agreement made at a time when the debtor was situated in a State referred to in

sub-paragraph (

b) of the preceding paragraph but only to the extent and in the

manner specified in its declaration.

Article 61 -- Review Conferences,

amendments and related matters

1. The Depositary shall prepare reports yearly or at such other time as

the circumstances may require for the States Parties as to the manner in which

the international regimen established in this Convention has operated in

practice. In preparing such reports, the Depositary shall take into account the

reports of the Supervisory Authority concerning the functioning of the

international registration system.

2. At the request of not less than twenty-five per cent of the States

Parties, Review Conferences of States Parties shall be convened from time to

time by the Depositary, in consultation with the Supervisory Authority, to

consider:

(

a) the practical

operation of this Convention and its effectiveness in facilitating the

asset-based financing and leasing of the objects covered by its terms;

(

b) the judicial

interpretation given to, and the application made of the terms of this Convention

and the regulations;

(

c) the functioning of the international

registration system, the performance of the Registrar and its oversight by the

Supervisory Authority, taking into account the reports of the Supervisory

Authority; and

(

d) whether any

modifications to this Convention or the arrangements relating to the

International Registry are desirable.

3. Subject to paragraph 4, any amendment to this Convention shall be

approved by at least a two-thirds majority of States Parties participating in

the Conference referred to in the preceding paragraph and shall then enter into

force in respect of States which have ratified, accepted or approved such

amendment when ratified, accepted, or approved by three States in accordance

with the provisions of

Article 49 relating to its entry into force.

4. Where the proposed amendment to this Convention is intended to apply

to more than one category of equipment, such amendment shall also be approved

by at least a two-thirds majority of States Parties to each Protocol that are

participating in the Conference referred to in paragraph

Article 62 -- Depositary and its

functions

1. Instruments of ratification, acceptance, approval or accession shall

be deposited with the International Institute for the Unification of Private

Law (UNIDROIT), which is hereby designated the

Depositary.

2. The Depositary shall:

(

a) inform all

Contracting States of:

(

i) each

new signature or deposit of an instrument of ratification, acceptance, approval

or accession, together with the date thereof,

(ii) the date of entry

into force of this Convention,

(iii) each declaration made

in accordance with this Convention, together with the date thereof,

(iv) the withdrawal or

amendment of any declaration, together with the date thereof, and

(

v) the notification of

any denunciation of this Convention together with the date thereof and the date

on which it takes effect;

(

b) transmit certified

true copies of this Convention to all Contracting States;

(

c) provide the Supervisory Authority and the

Registrar with a copy of each instrument of ratification, acceptance, approval

or accession, together with the date of deposit thereof, of each declaration or

withdrawal or amendment of a declaration and of each notification of denunciation,

together with the date of notification thereof, so that the information contained

therein is easily and fully available; and

(

d) perform such other

functions customary for depositaries.

IN WITNESS WHEREOF the undersigned

Plenipotentiaries, having been duly authorised, have signed this Convention.

DONE at Cape Town, this sixteenth day of

Chinese, French, Russian and Spanish languages, all texts being equally authentic,

such authenticity to take effect upon verification by the Joint Secretariat of

the Conference under the authority of the President of the Conference within

ninety days hereof as to the conformity of the texts with one another.

Schedule B

PROTOCOL TO THE CONVENTION ON

INTERNATIONAL INTERESTS IN MOBILE EQUIPMENT

IN MATTERS SPECIFIC TO AIRCRAFT EQUIPMENT

THE STATES PARTIES TO THIS PROTOCOL,

CONSIDERING it necessary to implement the

Convention on International Interests in Mobile Equipment (hereinafter referred

to as "the Convention") as it relates to aircraft equipment, in the

light of the purposes set out in the

preamble to the Convention,

MINDFUL of the need to adapt the Convention

to meet the particular requirements of aircraft finance and to extend the sphere

of application of the Convention to include contracts of sale of aircraft

equipment,

MINDFUL of the principles and objectives of

the Convention on International Civil Aviation, signed at Chicago on 7 December 1944 ,

HAVE AGREED upon the following provisions

relating to aircraft equipment:

CHAPTER I

SPHERE OF APPLICATION AND GENERAL PROVISIONS

Article I -- Defined terms

1. In this Protocol, except where the context otherwise requires, terms

used in it have the meanings set out in the Convention.

2. In this Protocol the following terms are employed with the meanings

set out below:

(a) " aircraft "

means aircraft as defined for the purposes of the Chicago Convention which are

either airframes with aircraft engines installed thereon or helicopters;

(b) " aircraft

engines" means aircraft engines (other than those used in military,

customs or police services) powered by jet propulsion or turbine or piston

technology and:

(

i) in

the case of jet propulsion aircraft engines, have at least 1750 lb of thrust or

its equivalent, and

(ii) in the case of

turbine-powered or piston-powered aircraft engines, have at least 550 rated

take-off shaft horsepower or its equivalent,

together with all modules and other

installed, incorporated or attached accessories, parts and equipment and all

data, manuals and records relating thereto;

(c) " aircraft

objects" means airframes, aircraft engines and helicopters;

(d) " aircraft

register" means a register maintained by a State or a common mark

registering authority for the purposes of the Chicago Convention;

(e) " airframes "

means airframes (other than those used in military, customs or police services)

that, when appropriate aircraft engines are installed thereon, are type

certified by the competent aviation authority to transport:

(

i) at

least eight (8) persons including crew, or

(ii) goods in excess of

2750 kilograms,

together with all installed, incorporated or attached accessories, parts and

equipment (other than aircraft engines), and all data, manuals and records

relating thereto;

(f) " authorised

party" means the party referred to in

Article XIII(3);

(g) "Chicago Convention" means the

Convention on International Civil Aviation, signed at Chicago on 7 December 1944 , as amended, and its Annexes;

(h) "common mark registering authority"

means the authority maintaining a register in accordance with

Article 77 of the

Chicago Convention as implemented by the Resolution adopted on 14 December 1967

by the Council of the International Civil Aviation Organization on nationality

and registration of aircraft operated by international operating agencies;

( i ) " de-registration of the aircraft" means deletion or removal

of the registration of the aircraft from its aircraft register in accordance

with the Chicago Convention;

(j) " guarantee

contract" means a contract entered into by a person as guarantor;

(k) "guarantor" means a person who, for

the purpose of assuring performance of any obligations in favour of a creditor

secured by a security agreement or under an agreement, gives or issues a suretyship or demand guarantee or a standby letter of

credit or any other form of credit insurance;

(l) "helicopters" means heavier-than-air

machines (other than those used in military, customs or police services)

supported in flight chiefly by the reactions of the air on one or more

power-driven rotors on substantially vertical axes and which are type certified

by the competent aviation authority to transport:

(

i) at

least five (5) persons including crew, or

(ii) goods in excess of

450 kilograms,

together with all installed, incorporated or attached accessories, parts and

equipment (including rotors), and all data, manuals and records relating

thereto;

(m) "insolvency-related event" means:

(

i) the

commencement of the insolvency proceedings, or

(ii) the declared intention to suspend or actual suspension

of payments by the debtor where the creditor's right to institute insolvency

proceedings against the debtor or to exercise remedies under the Convention is

prevented or suspended by law or State action;

(n) "primary insolvency jurisdiction"

means the Contracting State in which the centre of the debtor's main interests

is situated, which for this purpose shall be deemed to be the place of the

debtor's statutory seat or, if there is none, the place where the debtor is

incorporated or formed, unless proved otherwise;

(o) " registry

authority" means the national authority or the common mark registering

authority, maintaining an aircraft register in a Contracting State and

responsible for the registration and de-registration of an aircraft in

accordance with the Chicago Convention; and

(p) "State of registry" means, in

respect of an aircraft, the State on the national register of which an aircraft

is entered or the State of location of the common mark registering authority

maintaining the aircraft register.

Article II -- Application of Convention

as regards aircraft objects

1. The Convention shall apply in relation to aircraft objects as provided

by the terms of this Protocol.

2. The Convention and this Protocol shall be known as the Convention on

International Interests in Mobile Equipment as applied to aircraft objects.

Article III -- Application of

Convention to sales

The following provisions of the Convention

apply as if references to an agreement creating or providing for an

international interest were references to a contract of sale and as if

references to an international interest, a prospective international interest,

the debtor and the creditor were references to a sale, a prospective sale, the

seller and the buyer respectively:

Articles 3 and 4;

Article 16(1 )( a);

Article 19(4);

Article 20(1) (as regards registration of a

contract of sale or a prospective sale);

Article 25(2) (as regards a prospective

sale); and

Article 30.

In addition, the general provisions of

Article 1,

Article 5, Chapters IV to VII ,

Article 29 (other than

Article 29(3) which is replaced by

Article

XIV(1) and (2)),

Chapter X,

Chapter XII (other than

Article 43),

Chapter XIII

and

Chapter XIV (other than

Article 60) shall apply to contracts of sale and

prospective sales.

Article IV -- Sphere of application

1. Without prejudice to

Article 3(1) of the Convention, the Convention

shall also apply in relation to a helicopter, or to an airframe pertaining to

an aircraft, registered in an aircraft register of a Contracting State which is

the State of registry, and where such registration is made pursuant to an

agreement for registration of the aircraft it is deemed to have been effected

at the time of the agreement.

2. For the purposes of the definition of "internal transaction"

Article 1 of the Convention:

(

a) an airframe is

located in the State of registry of the aircraft of which it is a part;

(

b) an aircraft engine is

located in the State of registry of the aircraft on which it is installed or,

if it is not installed on an aircraft, where it is physically located; and

(

c) a helicopter is

located in its State of registry, at the time of the conclusion of the

agreement creating or providing for the interest.

3. The parties may, by agreement in writing, exclude the application of

Article XI and, in their relations with each other, derogate from or vary the

effect of any of the provisions of this Protocol except

Article IX( 2) - (4).

Article V -- Formalities, effects and

registration of contracts of sale

1. For the purposes of this Protocol, a contract of sale is one which:

(

a) is in writing;

(

b) relates to an

aircraft object of which the seller has power to dispose; and

(

c) enables the aircraft

object to be identified in conformity with this Protocol.

2. A contract of sale transfers the interest of the seller in the aircraft

object to the buyer according to its terms.

3. Registration of a contract of sale remains effective indefinitely.

Registration of a prospective sale remains effective unless discharged or until

expiry of the period, if any, specified in the registration.

Article VI -- Representative capacities

A person may enter into an agreement or a

sale, and register an international interest in, or a sale of, an aircraft object,

in an agency, trust or other representative capacity. In such case, that person

is entitled to assert rights and interests under the Convention.

Article VII -- Description of

aircraft objects

A description of an aircraft object that

contains its manufacturer's serial number, the name of the manufacturer and its

model designation is necessary and sufficient to identify the object for the

purposes of

Article 7(

c) of the Convention and

Article V(1)(

c) of this

Protocol.

Article VIII -- Choice of law

1. This

Article applies only where a Contracting State has made

a declaration pursuant to

Article XXX( 1).

2. The parties to an agreement, or a contract of sale, or a related

guarantee contract or subordination agreement may agree on the law which is to

govern their contractual rights and obligations, wholly or in part.

3. Unless otherwise agreed, the reference in the preceding paragraph to

the law chosen by the parties is to the domestic rules of law of the designated

State or, where that State comprises several territorial units, to the domestic

law of the designated territorial unit.

CHAPTER II

DEFAULT REMEDIES, PRIORITIES AND ASSIGNMENTS

Article IX -- Modification of default

remedies provisions

1. In addition to the remedies specified in

Chapter III of the Convention,

the creditor may, to the extent that the debtor has at any time so agreed and

in the circumstances specified in that Chapter:

(

a) procure the

de-registration of the aircraft; and

(

b) procure the export

and physical transfer of the aircraft object from the territory in which it is

situated.

2. The creditor shall not exercise the remedies specified in the preceding

paragraph without the prior consent in writing of the holder of any registered

interest ranking in priority to that of the creditor.

Article 8(3) of the Convention shall not apply to aircraft objects.

Any remedy given by the Convention in relation to an aircraft object shall be

exercised in a commercially reasonable manner. A remedy shall be deemed to be

exercised in a commercially reasonable manner where it is exercised in

conformity with a provision of the agreement except where such a provision is

manifestly unreasonable.

4. A chargee giving ten or more working days'

prior written notice of a proposed sale or lease to interested persons shall be

deemed to satisfy the requirement of providing "reasonable prior

notice" specified in

Article 8(4) of the Convention. The foregoing shall

not prevent a chargee and a chargor

or a guarantor from agreeing to a longer period of prior notice.

5. The registry authority in a Contracting State shall,

subject to any applicable safety laws and regulations, honour a request for

de-registration and export if:

(

a) the request is

properly submitted by the authorised party under a recorded irrevocable

de-registration and export request authorization; and

(

b) the authorised party certifies to the registry

authority, if required by that authority, that all registered interests ranking

in priority to that of the creditor in whose favour the authorization has been

issued have been discharged or that the holders of such interests have

consented to the de-registration and export.

6. A chargee proposing to procure the de-registration and export of an aircraft under

paragraph 1 otherwise than pursuant to a court order shall give reasonable

prior notice in writing of the proposed de-registration and export to:

(

a) interested persons

specified in

Article 1(m)(

i) and (ii) of the

Convention; and

(

b) interested persons

specified in

Article 1(m)(iii) of the Convention who have given notice of their

rights to the chargee within a reasonable time prior

to the de-registration and export.

Article X -- Modification of provisions

regarding relief pending final determination

1. This

Article applies only where a Contracting State has made

a declaration under

Article XXX( 2) and to the extent

stated in such declaration.

2. For the purposes of

Article 13(1) of the Convention,

"speedy" in the context of obtaining relief means within such number

of working days from the date of filing of the application for relief as is

specified in a declaration made by the Contracting State in which

the application is made.

Article 13(1) of the Convention applies with the following being

added immediately after sub-paragraph (d):

(

e) if at any time the

debtor and the creditor specifically agree, sale and application of proceeds therefrom , and

Article 43 (2) applies with the insertion

after the words "Article 13(1)(d)" of the words "and (e)".

4. Ownership or any other interest of the debtor passing on a sale

under the preceding paragraph is free from any other interest over which the

creditor's international interest has priority under the provisions of

Article

29 of the Convention.

5. The creditor and the debtor or any other interested person may agree

in writing to exclude the application of

Article 13(2) of the Convention.

6. With regard to the remedies in

Article IX( 1):

(

a) they shall be made available by the registry

authority and other administrative authorities, as applicable, in a Contracting

State no later than five working days after the creditor notifies such

authorities that the relief specified in

Article IX( 1)

is granted or, in the case of relief granted by a foreign court, recognised by

a court of that Contracting State, and that the creditor is entitled to procure

those remedies in accordance with the Convention; and

(

b) the applicable

authorities shall expeditiously co-operate with and assist the creditor in the

exercise of such remedies in conformity with the applicable aviation safety

laws and regulations.

7. Paragraphs 2 and 6 shall not affect any applicable aviation safety

laws and regulations.

Article XI -- Remedies on insolvency

1. This

Article applies only where a Contracting State that is

the primary insolvency jurisdiction has made a declaration pursuant to

Article XXX( 3).

Alternative A

2. Upon the occurrence of an insolvency-related event, the insolvency

administrator or the debtor, as applicable, shall, subject to paragraph 7, give

possession of the aircraft object to the creditor no later than the earlier of:

(

a) the end of the

waiting period; and

(

b) the date on which the

creditor would be entitled to possession of the aircraft object if this

Article

did not apply.

3. For the purposes of this Article, the "waiting period"

shall be the period specified in a declaration of the Contracting State which is

the primary insolvency jurisdiction.

4. References in this

Article to the "insolvency administrator"

shall be to that person in its official, not in its personal, capacity.

5. Unless and until the creditor is given the opportunity to take

possession under paragraph 2:

(

a) the insolvency

administrator or the debtor, as applicable, shall preserve the aircraft object

and maintain it and its value in accordance with the agreement; and

(

b) the creditor shall be

entitled to apply for any other forms of interim relief available under the

applicable law.

6. Sub-paragraph (

a) of the preceding paragraph shall not preclude the

use of the aircraft object under arrangements designed to preserve the aircraft

object and maintain it and its value.

7. The insolvency administrator or the debtor, as applicable, may

retain possession of the aircraft object where, by the time specified in

paragraph 2, it has cured all defaults other than a default constituted by the

opening of insolvency proceedings and has agreed to perform all future obligations

under the agreement. A second waiting period shall not apply in respect of a

default in the performance of such future obligations.

8. With regard to the remedies in

Article IX( 1):

(

a) they shall be made available by the registry

authority and the administrative authorities in a Contracting State, as applicable,

no later than five working days after the date on which the creditor notifies

such authorities that it is entitled to procure those remedies in accordance

with the Convention; and

(

b) the applicable

authorities shall expeditiously co-operate with and assist the creditor in the

exercise of such remedies in conformity with the applicable aviation safety

laws and regulations.

9. No

exercise of remedies permitted by the Convention or this Protocol may be

prevented or delayed after the date specified in paragraph 2.

10 . No obligations of the debtor under the

agreement may be modified without the consent of the creditor.

11. Nothing in the preceding paragraph shall be construed to affect the

authority, if any, of the insolvency administrator under the applicable law to

terminate the agreement.

12. No rights or interests, except for non-consensual rights or interests

of a category covered by a declaration pursuant to

Article 39(1), shall have

priority in insolvency proceedings over registered interests.

13 . The Convention as modified by

Article IX of

this Protocol shall apply to the exercise of any remedies under this Article.

Alternative

2. Upon the occurrence of an

insolvency-related event, the insolvency administrator or the debtor, as

applicable, upon the request of the creditor, shall give notice to the creditor

within the time specified in a declaration of a Contracting State pursuant to

Article XXX(3) whether it will:

(

a) cure all defaults other than a default

constituted by the opening of insolvency proceedings and agree to perform all future

obligations, under the agreement and related transaction documents; or

(

b) give the creditor the

opportunity to take possession of the aircraft object, in accordance with the

applicable law.

3. The applicable law referred to in sub-paragraph (

b) of the preceding

paragraph may permit the court to require the taking of any additional step or

the provision of any additional guarantee.

4. The creditor shall provide evidence of its claims and proof that its

international interest has been registered.

5. If the insolvency administrator or the debtor, as applicable, does

not give notice in conformity with paragraph 2, or when the insolvency

administrator or the debtor has declared that it will give the creditor the

opportunity to take possession of the aircraft object but fails to do so, the

court may permit the creditor to take possession of the aircraft object upon

such terms as the court may order and may require the taking of any additional

step or the provision of any additional guarantee.

6. The aircraft object shall not be sold pending a decision by a court

regarding the claim and the international interest.

Article XII -- Insolvency assistance

1. This

Article applies only where a Contracting State has made

a declaration pursuant to

Article XXX( 1).

2. The courts of a Contracting State in which an aircraft object is situated shall, in accordance with

the law of the Contracting State , co-operate to the maximum extent possible with foreign courts and

foreign insolvency administrators in carrying out the provisions of

Article XI.

Article XIII -- De-registration and

export request authorization

1. This

Article applies only where a Contracting State has made

a declaration pursuant to

Article XXX( 1).

2. Where the debtor has issued an irrevocable de-registration and

export request authorization substantially in the form annexed to this Protocol

and has submitted such authorization for recordation to the registry authority,

that authorization shall be so recorded.

3. The person in whose favour the authorization has been issued (the

"authorised party") or its certified designee shall be the sole

person entitled to exercise the remedies specified in

Article IX(1) and may do

so only in accordance with the authorization and applicable aviation safety

laws and regulations. Such authorization may not be revoked by the debtor

without the consent in writing of the authorised party. The registry authority

shall remove an authorization from the registry at the request of the

authorised party.

4. The registry authority and other administrative authorities in

Contracting States shall expeditiously co-operate with and assist the

authorised party in the exercise of the remedies specified in

Article IX.

Article XIV -- Modification of priority

provisions

1. A buyer of an aircraft object under a registered sale acquires its

interest in that object free from an interest subsequently registered and from

an unregistered interest, even if the buyer has actual knowledge of the

unregistered interest.

2. A buyer of an aircraft object acquires its interest in that object

subject to an interest registered at the time of its acquisition.

3. Ownership of or another right or interest in an aircraft engine shall

not be affected by its installation on or removal from an aircraft.

Article 29(7) of the Convention applies to an item, other than an

object, installed on an airframe, aircraft engine or helicopter.

Article XV -- Modification of assignment

provisions

Article 33(1) of the Convention applies as

if the following were added immediately after sub-paragraph (b):

" and (

c) the

debtor has consented in writing, whether or not the consent is given in advance

of the assignment or identifies the assignee."

Article XVI -- Debtor provisions

1. In the absence of a default within the meaning of

Article 11 of the

Convention, the debtor shall be entitled to the quiet possession and use of the

object in accordance with the agreement as against:

(

a) its creditor and the holder of any interest

from which the debtor takes free pursuant to

Article 29(4) of the Convention

or, in the capacity of buyer,

Article XIV(1) of this Protocol, unless and to

the extent that the debtor has otherwise agreed; and

(

b) the holder of any interest to which the

debtor's right or interest is subject pursuant to

Article 29(4) of the Convention

or, in the capacity of buyer,

Article XIV(2) of this Protocol, but only to the

extent, if any, that such holder has agreed.

2. Nothing in the Convention or this Protocol affects the liability of

a creditor for any breach of the agreement under the applicable law in so far

as that agreement relates to an aircraft object.

CHAPTER III

REGISTRY PROVISIONS RELATING TO

INTERNATIONAL INTERESTS IN AIRCRAFT OBJECTS

Article XVII -- The Supervisory

Authority and the Registrar

1. The Supervisory Authority shall be the international entity designated

by a Resolution adopted by the Diplomatic Conference to Adopt a Mobile

Equipment Convention and an Aircraft Protocol.

2. Where the international entity referred to in the preceding paragraph

is not able and willing to act as Supervisory Authority, a Conference of

Signatory and Contracting States shall be convened to designate another Supervisory Authority.

3. The Supervisory Authority and its officers and employees shall enjoy

such immunity from legal and administrative process as is provided under the

rules applicable to them as an international entity or otherwise.

4. The Supervisory Authority may establish a commission of experts,

from among persons nominated by Signatory and Contracting States and

having the necessary qualifications and experience, and entrust it with the

task of assisting the Supervisory Authority in the discharge of its functions.

5. The first Registrar shall operate the International Registry for a

period of five years from the date of entry into force of this Protocol.

Thereafter, the Registrar shall be appointed or reappointed at regular

five-yearly intervals by the Supervisory Authority.

Article XVIII -- First regulations

The first regulations shall be made by the

Supervisory Authority so as to take effect upon the entry into force of this

Protocol.

Article XIX -- Designated entry points

1. Subject to paragraph 2, a Contracting State may at any time designate

an entity or entities in its territory as the entry point or entry points

through which there shall or may be transmitted to the International Registry

information required for registration other than registration of a notice of a

national interest or a right or interest under

Article 40 in either case

arising under the laws of another State.

2. A designation made under the preceding paragraph may permit, but not

compel, use of a designated entry point or entry points for information

required for registrations in respect of aircraft engines.

Article XX -- Additional modifications

to Registry provisions

1. For the purposes of

Article 19(6) of the Convention, the search

criteria for an aircraft object shall be the name of its manufacturer, its

manufacturer's serial number and its model designation, supplemented as

necessary to ensure uniqueness. Such supplementary information shall be

specified in the regulations.

2. For the purposes of

Article 25(2) of the Convention and in the

circumstances there described, the holder of a registered prospective

international interest or a registered prospective assignment of an international

interest or the person in whose favour a prospective sale has been registered

shall take such steps as are within its power to procure the discharge of the

registration no later than five working days after the receipt of the demand

described in such paragraph.

3. The fees referred to in

Article 17(2 )(

h) of

the Convention shall be determined so as to recover the reasonable costs of

establishing, operating and regulating the International Registry and the

reasonable costs of the Supervisory Authority associated with the performance

of the functions, exercise of the powers, and discharge of the duties contemplated

Article 17(2) of the Convention.

4. The centralised functions of the International Registry shall be

operated and administered by the Registrar on a twenty-four hour basis. The

various entry points shall be operated at least during working hours in their

respective territories.

5. The amount of the insurance or financial guarantee referred to in

Article 28(4) of the Convention shall, in respect of each event, not be less

than the maximum value of an aircraft object as determined by the Supervisory

Authority.

6. Nothing in the Convention shall preclude the Registrar from

procuring insurance or a financial guarantee covering events for which the

Registrar is not liable under

Article 28 of the Convention.

CHAPTER IV

JURISDICTION

Article XXI -- Modification of

jurisdiction provisions

For the purposes of

Article 43 of the

Convention and subject to

Article 42 of the Convention, a court of a Contracting State also has

jurisdiction where the object is a helicopter, or an airframe pertaining to an

aircraft, for which that State is the State of registry.

Article XXII -- Waivers of sovereign

immunity

1. Subject to paragraph 2, a waiver of sovereign immunity from

jurisdiction of the courts specified in

Article 42 or

Article 43 of the

Convention or relating to enforcement of rights and interests relating to an

aircraft object under the Convention shall be binding and, if the other

conditions to such jurisdiction or enforcement have been satisfied, shall be

effective to confer jurisdiction and permit enforcement, as the case may be.

2. A waiver under the preceding paragraph must be in writing and

contain a description of the aircraft object.

CHAPTER V

RELATIONSHIP WITH OTHER CONVENTIONS

Article XXIII -- Relationship with the

Convention on the International Recognition of Rights in Aircraft

The Convention shall, for a Contracting State that is

a party to the Convention on the International Recognition of Rights in

Aircraft, signed at Geneva on 19 June 1948 , supersede that

Convention as it relates to aircraft, as defined in this Protocol, and to

aircraft objects. However, with respect to rights or interests not covered or

affected by the present Convention, the Geneva Convention shall not be

superseded.

Article XXIV -- Relationship with the

Convention for the Unification of Certain Rules Relating to the Precautionary

Attachment of Aircraft

1. The Convention shall, for a Contracting State that is

a Party to the Convention for the Unification of Certain Rules Relating to the

Precautionary Attachment of Aircraft, signed at Rome on 29 May 1933 , supersede that Convention as it relates to aircraft, as defined in

this Protocol.

2. A Contracting State Party to the above Convention may declare, at the time of ratification,

acceptance, approval of, or accession to this Protocol, that it will not apply

this Article.

Article XXV -- Relationship with the UNIDROIT

Convention on International Financial Leasing

The Convention shall supersede the UNIDROIT

Convention on International Financial Leasing signed at Ottawa on 28 May 1988 , as it relates to aircraft objects.

CHAPTER VI

FINAL PROVISIONS

Article XXVI -- Signature, ratification,

acceptance, approval or accession

1. This Protocol shall be open for signature in Cape Town on 16 November 2001 by States participating in the Diplomatic Conference to Adopt a

Mobile Equipment Convention and an Aircraft Protocol held at Cape Town from 29

October to 16

November 2001 . After 16 November 2001 , this Protocol shall be open to all States for signature at the

Headquarters of the International Institute for the Unification of Private Law

(UNIDROIT) in Rome until it enters into force in accordance with

Article XXVIII.

2. This Protocol shall be subject to ratification, acceptance or approval

by States which have signed it.

3. Any State which does not sign this Protocol may accede to it at any

time.

4. Ratification, acceptance, approval or accession is effected by the

deposit of a formal instrument to that effect with the Depositary.

5. A State may not become a Party to this Protocol unless it is or

becomes also a Party to the Convention.

Article XXVII -- Regional Economic

Integration Organizations

1. A Regional Economic Integration Organization which is constituted by

sovereign States and has competence over certain matters governed by this

Protocol may similarly sign, accept, approve or accede to this Protocol. The

Regional Economic Integration Organization shall in that case have the rights

and obligations of a Contracting State , to the extent that that Organization has competence over matters

governed by this Protocol. Where the number of Contracting States is relevant

in this Protocol, the Regional Economic Integration Organization shall not

count as a Contracting State in addition to its Member States which are Contracting States.

2. The Regional Economic Integration Organization shall, at the time of

signature, acceptance, approval or accession, make a declaration to the

Depositary specifying the matters governed by this Protocol in respect of which

competence has been transferred to that Organization by its Member States. The

Regional Economic Integration Organization shall promptly notify the Depositary

of any changes to the distribution of competence, including new transfers of

competence, specified in the declaration under this paragraph.

3. Any reference to a "Contracting State" or

"Contracting States" or "State Party" or "States

Parties" in this Protocol applies equally to a Regional Economic

Integration Organization where the context so requires.

Article XXVIII -- Entry into force

1. This Protocol enters into force on the first day of the month following

the expiration of three months after the date of the deposit of the eighth

instrument of ratification, acceptance, approval or accession, between the

States which have deposited such instruments.

2. For other States this Protocol enters into force on the first day of

the month following the expiration of three months after the date of the

deposit of its instrument of ratification, acceptance, approval or accession.

Article XXIX -- Territorial units

1. If a Contracting State has territorial units in which different systems

of law are applicable in relation to the matters dealt with in this Protocol,

it may, at the time of ratification, acceptance, approval or accession, declare

that this Protocol is to extend to all its territorial units or only to one or

more of them and may modify its declaration by submitting another declaration

at any time.

2. Any such declaration shall state expressly the territorial units to

which this Protocol applies.

3. If a Contracting State has not made any declaration under paragraph 1, this Protocol shall

apply to all territorial units of that State.

4. Where a Contracting State extends this Protocol to one or more of its territorial units,

declarations permitted under this Protocol may be made in respect of each such

territorial unit, and the declarations made in respect of one territorial unit

may be different from those made in respect of another territorial unit.

5. If by virtue of a declaration under paragraph 1, this Protocol

extends to one or more territorial units of a Contracting State :

(

a) the debtor is considered to be situated in a

Contracting State only if it is incorporated or formed under a law in force in

a territorial unit to which the Convention and this Protocol apply or if it has

its registered office or statutory seat, centre of administration, place of

business or habitual residence in a territorial unit to which the Convention

and this Protocol apply;

(

b) any reference to the

location of the object in a Contracting State refers to the location of the object in a territorial unit to which

the Convention and this Protocol apply; and

(

c) any reference to the administrative

authorities in that Contracting State shall be construed as referring to the

administrative authorities having jurisdiction in a territorial unit to which

the Convention and this Protocol apply and any reference to the national

register or to the registry authority in that Contracting State shall be

construed as referring to the aircraft register in force or to the registry

authority having jurisdiction in the territorial unit or units to which the Convention

and this Protocol apply.

Article XXX -- Declarations relating to

certain provisions

1. A Contracting State may, at the time of ratification, acceptance, approval of, or accession

to this Protocol, declare that it will apply any one or more of Articles VIII,

XII and XIII of this Protocol.

2. A Contracting State may, at the time of ratification, acceptance, approval of, or

accession to this Protocol, declare that it will apply

Article X of this

Protocol, wholly or in part. If it so declares with respect to

Article X( 2), it shall specify the time-period required thereby.

3. A Contracting State may, at the time of ratification, acceptance,

approval of, or accession to this Protocol, declare that it will apply the

entirety of Alternative A, or the entirety of Alternative B of

Article XI and,

if so, shall specify the types of insolvency proceeding, if any, to which it

will apply Alternative A and the types of insolvency proceeding, if any, to

which it will apply Alternative B. A Contracting State making a

declaration pursuant to this paragraph shall specify the time-period required

Article XI.

4. The courts of Contracting States shall apply

Article XI in conformity

with the declaration made by the Contracting State which is

the primary insolvency jurisdiction.

5. A Contracting State may, at the time of ratification, acceptance, approval of, or accession

to this Protocol, declare that it will not apply the provisions of

Article XXI,

wholly or in part. The declaration shall specify under which conditions the

relevant

Article will be applied, in case it will be applied partly, or otherwise

which other forms of interim relief will be applied.

Article XXXI -- Declarations under the

Convention

Declarations made under the Convention,

including those made under Articles 39, 40, 50, 53, 54, 55, 57, 58 and 60 of

the Convention, shall be deemed to have also been made under this Protocol

unless stated otherwise.

Article XXXII -- Reservations and

declarations

1. No reservations may be made to this Protocol but declarations

authorised by Articles XXIV, XXIX, XXX, XXXI, XXXIII and XXXIV may be made in

accordance with these provisions.

2. Any declaration or subsequent declaration or any withdrawal of a

declaration made under this Protocol shall be notified in writing to the

Depositary.

Article XXXIII -- Subsequent

declarations

1. A State Party may make a subsequent declaration, other than a

declaration made in accordance with

Article XXXI under

Article 60 of the

Convention, at any time after the date on which this Protocol has entered into

force for it, by notifying the Depositary to that effect.

2. Any such subsequent declaration shall take effect on the first day

of the month following the expiration of six months after the date of receipt

of the notification by the Depositary. Where a longer period for that

declaration to take effect is specified in the notification, it shall take

effect upon the expiration of such longer period after receipt of the notification

by the Depositary.

3. Notwithstanding the previous paragraphs, this Protocol shall

continue to apply, as if no such subsequent declarations had been made, in

respect of all rights and interests arising prior to the effective date of any

such subsequent declaration.

Article XXXIV -- Withdrawal of

declarations

1. Any State Party having made a declaration under this Protocol, other

than a declaration made in accordance with

Article XXXI under

Article 60 of the

Convention, may withdraw it at any time by notifying the Depositary. Such

withdrawal is to take effect on the first day of the month following the

expiration of six months after the date of receipt of the notification by the

Depositary.

2. Notwithstanding the previous paragraph, this Protocol shall continue

to apply, as if no such withdrawal of declaration had been made, in respect of

all rights and interests arising prior to the effective date of any such

withdrawal.

Article XXXV -- Denunciations

1. Any State Party may denounce this Protocol by notification in

writing to the Depositary.

2. Any such denunciation shall take effect on the first day of the

month following the expiration of twelve months after the date of receipt of

the notification by the Depositary.

3. Notwithstanding the previous paragraphs, this Protocol shall

continue to apply, as if no such denunciation had been made, in respect of all

rights and interests arising prior to the effective date of any such

denunciation.

Article XXXVI -- Review Conferences,

amendments and related matters

1. The Depositary, in consultation with the Supervisory Authority,

shall prepare reports yearly, or at such other time as the circumstances may

require, for the States Parties as to the manner in which the international

regime established in the Convention as amended by this Protocol has operated

in practice. In preparing such reports, the Depositary shall take into account

the reports of the Supervisory Authority concerning the functioning of the

international registration system.

2. At the request of not less than twenty-five per cent of the States

Parties, Review Conferences of the States Parties shall be convened from time

to time by the Depositary, in consultation with the Supervisory Authority, to

consider:

(

a) the practical

operation of the Convention as amended by this Protocol and its effectiveness

in facilitating the asset-based financing and leasing of the objects covered by

its terms;

(

b) the judicial

interpretation given to, and the application made of the terms of this Protocol

and the regulations;

(

c) the functioning of the international

registration system, the performance of the Registrar and its oversight by the

Supervisory Authority, taking into account the reports of the Supervisory

Authority; and

(

d) whether any

modifications to this Protocol or the arrangements relating to the

International Registry are desirable.

3. Any amendment to this Protocol shall be approved by at least a

two-thirds majority of States Parties participating in the Conference referred

to in the preceding paragraph and shall then enter into force in respect of

States which have ratified, accepted or approved such amendment when it has

been ratified, accepted or approved by eight States in accordance with the

provisions of

Article XXVIII relating to its entry into force.

Article XXXVII -- Depositary and its

functions

1. Instruments of ratification, acceptance, approval or accession shall

be deposited with the International Institute for the Unification of Private

Law (UNIDROIT), which is hereby designated the

Depositary.

2. The Depositary shall:

(

a) inform all

Contracting States of:

(

i) each

new signature or deposit of an instrument of ratification, acceptance, approval

or accession, together with the date thereof,

(ii) the date of entry

into force of this Protocol,

(iii) each declaration made

in accordance with this Protocol, together with the date thereof,

(iv) the withdrawal or

amendment of any declaration, together with the date thereof, and

(

v) the notification of

any denunciation of this Protocol together with the date thereof and the date

on which it takes effect;

(

b) transmit certified

true copies of this Protocol to all Contracting States;

(

c) provide the Supervisory Authority and the

Registrar with a copy of each instrument of ratification, acceptance, approval

or accession, together with the date of deposit thereof, of each declaration or

withdrawal or amendment of a declaration and of each notification of

denunciation, together with the date of notification thereof, so that the

information contained therein is easily and fully available; and

(

d) perform such other

functions customary for depositaries.

IN WITNESS WHEREOF the undersigned

Plenipotentiaries, having been duly authorised, have signed this Protocol.

DONE at Cape Town, this sixteenth day of

Chinese, French, Russian and Spanish languages, all texts being equally

authentic, such authenticity to take effect upon verification by the Joint

Secretariat of the Conference under the authority of the President of the Conference

within ninety days hereof as to the conformity of the texts with one another.

ANNEX

FORM OF IRREVOCABLE DE-REGISTRATION AND EXPORT REQUEST

AUTHORIZATION

Annex referred to in

Article XIII

[Insert Date]

To: [Insert Name of Registry Authority]

Re: Irrevocable De-Registration and Export

Request Authorization

The undersigned is the registered

[operator] [owner]* of the [insert the airframe/helicopter manufacturer name

and model number] bearing manufacturers serial number [insert manufacturer's

serial number] and registration [number] [mark] [insert registration

number/mark] (together with all installed, incorporated or attached accessories,

parts and equipment, the "aircraft").

This instrument is an irrevocable

de-registration and export request authorization issued by the undersigned in

favour of [insert name of creditor] ("the authorised party") under

the authority of

Article XIII of the Protocol to the Convention on

International Interests in Mobile Equipment on Matters specific to Aircraft

Equipment. In accordance with that Article, the undersigned hereby requests:

(

i) recognition

that the authorised party or the person it certifies as its designee is the

sole person entitled to:

(

a) procure the de-registration of the aircraft

from the [insert name of aircraft register] maintained by the [insert name of

registry authority] for the purposes of

Chapter III of the Convention on

International Civil Aviation, signed at Chicago, on 7 December 1944, and

(

b) procure the export

and physical transfer of the aircraft from [insert name of country]; and

(ii) confirmation that the authorised party or the

person it certifies as its designee may take the action specified in clause (

i) above on written demand without the consent of the

undersigned and that, upon such demand, the authorities in [insert name of country]

shall co-operate with the authorised party with a view to the speedy completion

of such action.

The rights in favour of the authorised party

established by this instrument may not be revoked by the undersigned without

the written consent of the authorised party.

* Select the term that reflects the

relevant nationality registration criterion.

Please acknowledge your agreement to this

request and its terms by appropriate notation in the space provided below and

lodging this instrument in [insert name of registry authority].

[ insert name of operator/owner]

________________________

Agreed to and

lodged this [insert date]

By: [insert name

of signatory]

Its: [insert title

of signatory]

Earl G. Tucker,

Queen's Printer