Exhibit 10.5

EXECUTION VERSION

 

 

 

RECEIVABLES PURCHASE AGREEMENT

dated as of October 21, 2013

among

TRANSDIGM RECEIVABLES LLC,

as Seller,

TRANSDIGM INC.,

as Servicer,

PNC BANK, NATIONAL ASSOCIATION,

as a Purchaser and a Purchaser Agent

THE VARIOUS OTHER PURCHASERS AND PURCHASER AGENTS FROM TIME TO

TIME PARTY HERETO,

and

PNC BANK, NATIONAL ASSOCIATION,

as Administrator

 

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I

  AMOUNTS AND TERMS OF THE PURCHASES      1   

Section 1.1

  Purchase Facility      1   

Section 1.2

  Making Purchases      2   

Section 1.3

  Purchased Interest Computation      4   

Section 1.4

  Settlement Procedures      4   

Section 1.5

  Fees      9   

Section 1.6

  Payments and Computations, Etc      9   

Section 1.7

  Increased Costs      10   

Section 1.8

  Funding Losses      11   

Section 1.9

  Taxes      12   

Section 1.10

  Inability to Determine Euro-Rate; Change in Legality      15   

Section 1.11

  Extension of Termination Date      16   

ARTICLE II

  REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS      17   

Section 2.1

  Representations and Warranties; Covenants      17   

Section 2.2

  Termination Events      17   

ARTICLE III

  INDEMNIFICATION      19   

Section 3.1

  Indemnities by the Seller      19   

Section 3.2

  Indemnities by the Servicer      21   

ARTICLE IV

  ADMINISTRATION AND COLLECTIONS      21   

Section 4.1

  Appointment of the Servicer      21   

Section 4.2

  Duties of the Servicer      22   

Section 4.3

  Lock-Box Account Arrangements      23   

Section 4.4

  Enforcement Rights      23   

Section 4.5

  Responsibilities of the Seller      24   

Section 4.6

  Servicing Fee      25   

ARTICLE V

  THE AGENTS      25   

Section 5.1

  Appointment and Authorization      25   

Section 5.2

  Delegation of Duties      26   

Section 5.3

  Exculpatory Provisions      26   

Section 5.4

  Reliance by Agents      27   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

Section 5.5

  Notice of Termination Events      27   

Section 5.6

  Non-Reliance on Administrator, Purchaser Agents and Other Purchasers      28
  

Section 5.7

  Administrator, Purchasers, Purchaser Agents and Affiliates      28   

Section 5.8

  Indemnification      28   

Section 5.9

  Successor Administrator      29   

ARTICLE VI

  MISCELLANEOUS      29   

Section 6.1

  Amendments, Etc      29   

Section 6.2

  Notices, Etc      30   

Section 6.3

  Successors and Assigns; Participations; Assignments      30   

Section 6.4

  Costs, Expenses and Taxes      32   

Section 6.5

  No Proceedings; Limitation on Payments      33   

Section 6.6

  GOVERNING LAW AND JURISDICTION      34   

Section 6.7

  Confidentiality      34   

Section 6.8

  Execution in Counterparts      35   

Section 6.9

  Survival of Termination      35   

Section 6.10

  WAIVER OF JURY TRIAL      35   

Section 6.11

  Sharing of Recoveries      35   

Section 6.12

  Right of Setoff      36   

Section 6.13

  Entire Agreement      36   

Section 6.14

  Headings      36   

Section 6.15

  Purchaser Groups’ Liabilities      36   

Section 6.16

  USA Patriot Act      36   

 

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TABLE OF CONTENTS

(continued)

 

         Page EXHIBIT I   Definitions    EXHIBIT II   Conditions of Purchases   
EXHIBIT III   Representations and Warranties    EXHIBIT IV   Covenants   
EXHIBIT V   Termination Events    SCHEDULE I   [Intentionally Omitted]   
SCHEDULE II   Lock-Box Banks and Lock-Box Accounts    SCHEDULE III  
[Intentionally Omitted]    SCHEDULE IV   Addresses for Notice    SCHEDULE V  
Location of Records    ANNEX A   Form of Information Package    ANNEX B   Form
of Purchase Notice    ANNEX C   Form of Assumption Agreement    ANNEX D   Form
of Transfer Supplement    ANNEX E   Form of Paydown Notice    ANNEX F   Form of
Compliance Certificate   

 

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This RECEIVABLES PURCHASE AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”) is entered into as of
October 21, 2013, among TRANSDIGM RECEIVABLES LLC, a Delaware limited liability
company, as seller (the “Seller”), TRANSDIGM INC., a Delaware corporation
(together with its successors and permitted assigns, “TransDigm”), as initial
servicer (in such capacity, together with its successors and permitted assigns
in such capacity, the “Servicer”), PNC BANK, NATIONAL ASSOCIATION, as a
Committed Purchaser and as Purchaser Agent for its Purchaser Group, the various
other Purchasers and Purchaser Agents (in each case, as defined herein) from
time to time party hereto, and PNC BANK, NATIONAL ASSOCIATION, as Administrator
(in such capacity, together with its successors and assigns in such capacity,
the “Administrator”).

PRELIMINARY STATEMENTS. Certain terms that are capitalized and used throughout
this Agreement are defined in Exhibit I. References in the Exhibits, Schedules
and Annexes hereto to the “Agreement” refer to this Agreement, as amended,
supplemented or otherwise modified from time to time.

The Seller desires to sell, transfer and assign an ownership interest in a pool
of receivables, and the Purchasers desire to acquire such ownership interest, as
such percentage interest shall be adjusted from time to time based upon, in
part, reinvestment payments that are made by such Purchasers.

In consideration of the mutual agreements, provisions and covenants contained
herein, the sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

ARTICLE I

AMOUNTS AND TERMS OF THE PURCHASES

Section 1.1 Purchase Facility.

(a) On the terms and subject to the conditions hereof, the Seller may, from time
to time before the Facility Termination Date, request that (x) the Conduit
Purchasers ratably (based on the aggregate Commitments of the Committed
Purchasers in their respective Purchaser Groups) make purchases of and
reinvestments in, or (y) only if there is not a Conduit Purchaser in the
applicable Purchaser Group or if a Conduit Purchaser (i) denies a request to
purchase, (ii) is a Declining Conduit Purchaser or (iii) is otherwise unable or
unwilling to fund such purchase or reinvestment (and provides written notice of
such to the Seller, the Servicer, the Administrator and its Purchaser Agent),
the Committed Purchasers ratably (based on their respective Commitments) make
purchases of and reinvestments in the Purchased Interest from the Seller (each
such purchase or reinvestment is referred to herein as a “Purchase”). Subject to
Section 1.4(b) concerning reinvestments, at no time will a Conduit Purchaser
have any obligation to make a Purchase; provided, however, that the foregoing
shall not be construed to limit any Committed Purchaser’s obligation hereunder
to make any Purchase. Each Committed Purchaser severally hereby agrees, on the
terms and subject to the conditions hereof, to make purchases of and
reinvestments in the Purchased Interest from the Seller from time to time from
the Closing Date to (but excluding) the Facility Termination Date, based on the
applicable Purchaser Group’s Group Commitment Percentage of each Purchase
requested pursuant to Section 1.2(a) (and, in

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the case of each Committed Purchaser in a Purchaser Group, its Commitment
Percentage of such Purchaser Group’s Group Commitment Percentage of such
Purchase). Notwithstanding anything set forth in this Section 1.1(a) or
otherwise herein to the contrary, under no circumstances shall any Purchaser
make any purchase or reinvestment if, after giving effect to such Purchase:

(i) any event has occurred and is continuing, or would result from such
Purchase, that constitutes a Termination Event or an Unmatured Termination
Event;

(ii) the aggregate outstanding Capital of such Purchaser, when added to all
other Capital of all other Purchasers in such Purchaser’s Purchaser Group, would
exceed its Purchaser Group’s Group Commitment;

(iii) the Aggregate Capital would exceed the Purchase Limit; or

(iv) the Purchased Interest would exceed 100%.

(b) The Seller may, upon at least 30 days’ written notice to the Administrator
and each Purchaser Agent, terminate the purchase facility provided hereunder in
whole or reduce the unfunded portion of the Purchase Limit in whole or in part
(but not below the amount that would cause the Aggregate Capital to exceed the
Purchase Limit or would cause the Group Capital of any Purchaser Group to exceed
its Group Commitment, in either case, after giving effect to such reduction);
provided that each partial reduction shall be in the amount of at least
$5,000,000, or an integral multiple of $1,000,000 in excess thereof and that,
unless terminated in whole, the Purchase Limit shall in no event be reduced
below $75,000,000. In connection with each such reduction of the Purchase Limit,
the Commitment of each Purchaser and the Group Commitment of each Purchaser
Group shall automatically be ratably reduced by a proportionate amount. The
Administrator shall advise the Purchaser Agents of any notice received by it
pursuant to this Section 1.1(b); it being understood and agreed that no such
termination of the purchase facility provided hereunder shall be effective
unless and until (i) the Aggregate Capital is reduced to zero and (ii) all other
amounts then owed to the Administrator, the Purchaser Agents and the Purchasers
under the Transaction Documents have been paid in full.

Section 1.2 Making Purchases. (a) Each Purchase (other than a reinvestment
contemplated under Section 1.4(b)(ii)) (a “Funded Purchase”) shall be made upon
the Seller’s irrevocable written notice in the form of Annex B (each, a
“Purchase Notice”) delivered to the Administrator and each Purchaser Agent in
accordance with Section 6.2 (which notice must be received by the Administrator
and each Purchaser Agent before 2:00 p.m., New York City time) at least two
Business Days before the requested Purchase Date, which notice shall specify:
(A) the amount requested to be paid to the Seller (which amount shall not be
less than $ 1,000,000 (unless otherwise agreed by the Administrator) and shall
be in integral multiples of $100,000 in excess thereof) with respect to each
Purchaser Group in connection with such Funded Purchase, (B) the date of such
Funded Purchase (which shall be a Business Day) and (C) the pro forma
calculation of the Purchased Interest after giving effect to the increase in the
Aggregate Capital resulting from such Funded Purchase.

(b) Subject to the following paragraphs of this Section 1.2(b), on the requested
Purchase Date specified in the applicable Purchase Notice for each Funded
Purchase, each

 

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applicable Conduit Purchaser or Committed Purchaser, as the case may be in
accordance with Section 1.1(a), shall, upon satisfaction of the applicable
conditions set forth in Exhibit II, make available to the Seller in same day
funds, at PNC Bank, National Association, account number 4007800498,
ABA#041000124 (or such other account as may be designated in writing by the
Seller to the Administrator and each Purchaser Agent) an amount equal to the
portion of Capital to be funded by such Purchaser (as determined in accordance
with Sections 1.1(a) and 1.2(a).

Notwithstanding the foregoing paragraph, any Committed Purchaser may, in its
sole discretion by written notice (a “Deferred Funding Notice”) delivered to the
Seller and the Administrator, elect to fund its portion of the Capital of any
Funded Purchase requested by the Seller pursuant to Section 1.2(a) above on or
before the 35th day (or, if such day is not a Business Day, the next succeeding
Business Day) following the Seller’s delivery of the related Purchase Notice
(such day, the “Deferred Funding Date”), rather than on the Purchase Date
requested by the Seller in such Purchase Notice (any Committed Purchaser making
such an election, a “Deferring Purchaser”). Each Deferred Funding Notice shall
be delivered by the applicable Deferring Purchaser to the Seller and the
Administrator not later than one (1) Business Day prior to the Purchase Date
requested by the Seller in its related Purchase Notice and shall specify the
applicable Deferred Funding Date if earlier than the 35th day (or the next
succeeding Business Day) specified above.

No Deferring Purchaser (or, for the avoidance of doubt, its related Conduit
Purchaser) shall be obligated to fund its portion of the Capital of any such
Funded Purchase until the applicable Deferred Funding Date. A Deferring
Purchaser shall (or its related Conduit Purchaser may, in its sole discretion)
fund its portion of the Capital of each such Funded Purchase on the applicable
Deferred Purchase Date so long as all conditions precedent to such Funded
Purchase set forth herein (including, without limitation, those set forth in
Exhibit II) are satisfied on such Deferred Funding Date. The Seller shall be
obligated to accept the proceeds of any Capital when funded by a Deferring
Purchaser on the applicable Deferred Purchase Date in accordance with this
paragraph.

(c) Effective on the date of each Purchase, the Seller hereby sells and assigns
to the Administrator for the benefit of the Purchasers (ratably, based on the
Purchasers’ respective outstanding Capital at such time after giving effect to
such Purchase) an undivided percentage ownership interest in: (i) each Pool
Receivable then existing, (ii) all Related Security with respect to such Pool
Receivables, and (iii) all Collections with respect to, and other proceeds of,
such Pool Receivables and Related Security.

(d) To secure all of the Seller’s obligations (monetary or otherwise) under this
Agreement and the other Transaction Documents to which it is a party, whether
now or hereafter existing or arising, due or to become due, direct or indirect,
absolute or contingent, the Seller hereby grants to the Administrator (for the
benefit of the Administrator, the Purchasers and the Purchaser Agents and their
respective successors and permitted assigns), a security interest in all of the
Seller’s right, title and interest in, to and under all of the following,
whether now or hereafter owned, existing or arising: (i) all Pool Receivables,
(ii) all Related Security with respect to such Pool Receivables, (iii) all
Collections with respect to such Pool Receivables, (iv) the Lock-Box Accounts
and all amounts on deposit therein, and all certificates and instruments, if
any, from time to time evidencing such Lock-Box Accounts and amounts on deposit
therein,

 

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(v) all rights (but none of the obligations) of the Seller under the Second Tier
Purchase and Sale Agreement and the First Tier Purchase and Sale Agreement (as
assignee of TransDigm), (vi) all proceeds of, and all amounts received or
receivable under any or all of, the foregoing and (vii) all of its other
property (collectively, the “Pool Assets”). The Seller hereby authorizes the
Administrator to file financing statements naming the Seller as debtor or seller
and describing as the collateral covered thereby as “all of the debtor’s
personal property or assets” or words to that effect, notwithstanding that such
wording may be broader in scope than the collateral described in this Agreement.
The Administrator (for the benefit of the Administrator, the Purchasers and the
Purchaser Agents and their respective successors and permitted assigns) shall
have, with respect to the Pool Assets, and in addition to all the other rights
and remedies available to the Administrator, the Purchasers and the Purchaser
Agents, all the rights and remedies of a secured party under any applicable UCC.

(e) Each Committed Purchaser’s obligations hereunder shall be several, such that
the failure of any Committed Purchaser to make a payment in connection with any
Funded Purchase hereunder, shall not relieve any other Committed Purchaser of
its obligation hereunder to make payment for any Funded Purchase.

Section 1.3 Purchased Interest Computation. The Purchased Interest shall be
initially computed on the date of the initial Purchase hereunder. Thereafter,
until the Facility Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. On each Termination Day, the Purchased Interest shall be
deemed to be 100%. The Purchased Interest shall become zero on the Final Payout
Date.

Section 1.4 Settlement Procedures.

(a) The collection of the Pool Receivables shall be administered by the Servicer
in accordance with this Agreement. The Seller shall provide to the Servicer on a
timely basis all information needed for such administration, including notice of
the occurrence of any Termination Day and current computations of the Purchased
Interest.

(b) The Servicer shall, on each day on which Collections of Pool Receivables are
received (or deemed received) by the Seller or the Servicer:

(i) set aside and hold in trust (and shall, at the request of the Administrator,
segregate in a separate account approved by the Administrator) for the benefit
of each Purchaser Group, out of such Collections, an amount equal to the sum of
(w) the Aggregate Discount accrued through such day for each Portion of Capital
not previously set aside, (x) an amount equal to the Fees accrued and unpaid
through such day, (y) an amount equal to the Purchasers’ Share of the Servicing
Fee accrued through such day and not previously set aside and (z) all other
amounts then due and payable by the Seller under this Agreement to the
Purchasers, the Purchaser Agents, the Administrator, and any other Indemnified
Party or Affected Person;

(ii) subject to Section 1.4(f), if such day is not a Termination Day, remit to
the Seller, ratably, on behalf of the Purchasers, the remainder of such
Collections. Such

 

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remainder shall, to the extent representing a return on the Aggregate Capital,
be automatically reinvested, ratably according to each Purchaser’s Capital, in
Pool Receivables and in the Related Security, Collections and other proceeds
with respect thereto; provided, however, that if, after giving effect to any
such reinvestment, (x) the Purchased Interest would exceed 100%, or (y) the
Aggregate Capital would exceed the Purchase Limit then in effect, then the
Servicer shall not remit such remainder to the Seller or reinvest, but shall set
aside and hold in trust for the Administrator (for the benefit of the
Purchasers) (and shall, at the request of the Administrator, segregate in a
separate account approved by the Administrator) a portion of such Collections
that, together with the other Collections set aside pursuant to this paragraph,
shall equal the amount necessary to reduce the Purchased Interest to 100% or
cause the Aggregate Capital not to exceed the Purchase Limit, as the case may be
(determined as if such Collections set aside had been applied to reduce the
Aggregate Capital at such time), which amount shall be deposited ratably to each
Purchaser Agent’s account (for the benefit of its related Purchasers) for
distribution and application on the next Settlement Date in accordance with
Section 1.4(d); provided, further, that (x) in the case of any Purchaser that is
a Conduit Purchaser, if such Purchaser has provided notice (a “Declining
Notice”) to its Purchaser Agent, the Administrator, and the Servicer that such
Purchaser (a “Declining Conduit Purchaser”) no longer wishes Collections with
respect to any Portion of Capital funded or maintained by such Purchaser to be
reinvested pursuant to this clause (ii), and (y) in the case of any Purchaser
that has provided notice (an “Exiting Notice”) to its Purchaser Agent of its
refusal, pursuant to Section 1.12, to extend the then-scheduled Facility
Termination Date hereunder (an “Exiting Purchaser”) then in either case set
forth in subclauses (x) or (y), above, such Collections shall not be reinvested
and shall instead be held in trust for the benefit of such Purchaser and applied
in accordance with clause (iii) below; it being understood and agreed that the
foregoing shall not limit any obligation of any Committed Purchaser in a
Declining Conduit Purchaser’s Purchaser Group to make purchases and
reinvestments hereunder;

(iii) if such day is a Termination Day (or any day following the provision of a
Declining Notice or an Exiting Notice), set aside, segregate and hold in trust
(and shall, at the request of the Administrator, segregate in a separate account
approved by the Administrator) for the benefit of each Purchaser Group the
entire remainder of such Collections (or in the case of a Declining Conduit
Purchaser or an Exiting Purchaser an amount equal to such Purchaser’s ratable
share of such Collections based on its Capital; provided, that solely for the
purpose of determining such Purchaser’s ratable share of such Collections, such
Purchaser’s Capital shall be deemed to remain constant from the date of the
provision of a Declining Notice or an Exiting Notice, as the case may be, until
the date such Purchaser’s Capital has been paid in full; it being understood
that if such day is also a Termination Day, such Declining Conduit Purchaser’s
or Exiting Purchaser’s Capital shall be recalculated taking into account amounts
received by such Purchaser in respect of this parenthetical and thereafter
Collections shall be set aside for such Purchaser ratably in respect of its
Capital (as recalculated)); and

(iv) release to the Seller (subject to Section 1.4(f)) for its own account any
Collections in excess of: (w) amounts required to be reinvested in accordance
with clause (ii) plus (x) the amounts that are required to be set aside pursuant
to clause (i)

 

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above, pursuant to the proviso to clause (ii) above and pursuant to clause
(iii) above, plus (y) the Seller’s Share of the Servicing Fee accrued and unpaid
through such day.

(c) On each Settlement Date, the Servicer shall, in accordance with the
priorities set forth in Section 1.4(d), deposit into the account specified by
each Purchaser Agent Collections held for such Purchaser Agent (for the benefit
of its related Purchasers) pursuant to Section 1.4(b)(i) or 1.4(f) plus the
amount of Collections then held for such Purchaser Agent (for the benefit of its
related Purchasers) pursuant to Sections 1.4(b)(ii) and 1.4(b)(iii); provided,
that if TransDigm or an Affiliate thereof is the Servicer and such day is not a
Termination Day, TransDigm (or such Affiliate) may retain the portion of the
Collections set aside pursuant to Section 1.4(b)(i) that represents the
aggregate of the Purchasers’ Share of the Servicing Fee. On or prior to each
Settlement Date, each Purchaser Agent will notify the Servicer by electronic
mail of the amount of Discount accrued with respect to each Portion of Capital
during such related Settlement Period

(d) The Servicer shall distribute the amounts described (and at the times set
forth) in Section 1.4(c) on each Settlement Date, as follows:

(i) if such Settlement Date is not a Termination Day:

(A) first, if the Servicer has set aside amounts in respect of the Servicing Fee
pursuant to Section 1.4(b)(i) and has not retained such amounts pursuant to
Section 1.4(c), to the Servicer (payable in arrears on each Settlement Date) in
payment in full of the aggregate Purchasers’ Share of the accrued Servicing Fees
so set aside; and

(B) second, to each Purchaser Agent ratably according to the Discount and Fees
accrued during such Settlement Period (for the benefit of the relevant
Purchasers within such Purchaser Agent’s Purchaser Group) in payment in full of
all such accrued Discount with respect to each Portion of Capital maintained by
such Purchasers and all such accrued Fees owing to such Purchasers; it being
understood that each Purchaser Agent shall distribute such amounts to the
Purchasers within its Purchaser Group ratably according to Discount and Fees,
respectively; and

(ii) if such Settlement Date is a Termination Day:

(A) first, to the Servicer (if the Servicer is not TransDigm of an Affiliate
thereof), in payment in full of the Purchasers’ Share of all accrued Servicing
Fees;

(B) second to each Purchaser Agent ratably (based on the aggregate accrued and
unpaid Discount and Fees payable to all Purchasers at such time) (for the
benefit of the relevant Purchasers in such Purchaser Agent’s Purchaser Group) in
payment in full of all accrued Discount with respect to each Portion of Capital
funded or maintained by the Purchasers within such Purchaser Agent’s Purchaser
Group and all accrued Fees;

 

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(C) third to each Purchaser Agent ratably according to the aggregate of the
Capital of each Purchaser in each such Purchaser Agent’s Purchaser Group (for
the benefit of the relevant Purchasers in such Purchaser Agent’s Purchaser
Group) in payment in full of each Purchaser’s Capital; it being understood that
each Purchaser Agent shall distribute the amounts described in the first, second
and third clauses of this Section l.4(d)(ii) to the Purchasers within such
Purchaser Agent’s Purchaser Group ratably according to Discount, Fees and
Capital, respectively; and

(D) fourth, if the Aggregate Capital and accrued Aggregate Discount with respect
to each Portion of Capital for all Purchaser Groups have been reduced to zero,
and the aggregate of the Purchasers’ Share of all accrued Servicing Fees payable
to the Servicer have been paid in full, to each Purchaser Agent ratably, based
on the remaining amounts, if any, payable to each Purchaser in such Purchaser
Agent’s Purchaser Group (for the benefit of the relevant Purchasers in such
Purchaser Agent’s Purchaser Group), the Administrator and any other Indemnified
Party or Affected Person in payment in full of any other amounts owed thereto by
the Seller or the Servicer hereunder; and

(E) fifth, to the Servicer (if the Servicer is TransDigm or an Affiliate
thereof) in payment in full of the aggregate of the Purchasers’ Share of all
accrued Servicing Fees.

After the Aggregate Capital, Aggregate Discount, Fees and Servicing Fees with
respect to the Purchased Interest, and any other amounts payable by the Seller
to each Purchaser Group, the Administrator or any other Indemnified Party or
Affected Person hereunder, have been paid in full, all additional Collections
with respect to the Purchased Interest shall be paid to the Seller for its own
account.

(e) For the purposes of this Section 1.4:

(i) if on any day the Outstanding Balance of any Pool Receivable is reduced or
cancelled as a result of any defective, rejected, returned, or any revision,
cancellation, allowance, rebate, discount or other adjustment (other than as a
result of discharge in bankruptcy with respect to such Obligor) made by the
Seller or any Affiliate of the Seller, or by the Servicer or any Affiliate of
the Servicer, or any setoff or dispute between the Seller or any Affiliate of
the Seller, or the Servicer or any Affiliate of the Servicer and an Obligor, the
Seller shall be deemed to have received on such day a Collection of such Pool
Receivable in the amount of such reduction or adjustment and shall (i) if such
day is not a Termination Day, hold any and all such amounts in trust for the
benefit of the Purchasers and their assigns and, on the following Settlement
Date, apply such amounts in accordance with this Section 1.4 or (ii) if such day
is a Termination Day, immediately pay any and all such amounts in respect
thereof to a Lock-Box Account for the benefit of the Purchasers and their
assigns and for application pursuant to Section 1.4;

(ii) if on any day any of the representations or warranties in Sections l(j) or
3(a) of Exhibit III is not true with respect to any Pool Receivable, the Seller
shall be

 

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deemed to have received on such day a Collection of such Pool Receivable in full
and shall immediately pay the amount of such deemed Collection to a Lock-Box
Account (or as otherwise directed by the Administrator at such time) for the
benefit of the Purchasers and their assigns and for application pursuant to this
Section 1.4 (Collections deemed to have been received pursuant to clause (i) or
(ii) of this paragraph (e) are hereinafter sometimes referred to as “Deemed
Collections”);

(iii) except for Deemed Collections applied to specific Receivables pursuant
clause (i) or (ii) or as may be otherwise required by Applicable Law or by the
relevant Contract, all Collections received from an Obligor of any Receivable
shall be applied to the Receivables of such Obligor in the order of the age of
such Receivables, starting with the oldest such Receivable, unless such Obligor
designates in writing its payment for application to specific Receivables; and

(iv) if and to the extent the Administrator, any Purchaser Agent or any
Purchaser shall be required for any reason to pay over to an Obligor (or any
trustee, receiver, custodian or similar official in any Insolvency Proceeding)
any amount received by it hereunder, such amount shall be deemed not to have
been so received by such Person but rather to have been retained by the Seller
and, accordingly, such Person shall have a claim against the Seller for such
amount, payable when and to the extent that any distribution from or on behalf
of such Obligor is made in respect thereof.

(f) If at any time the Seller shall wish to cause the reduction of Aggregate
Capital (but not to commence the liquidation, or reduction to zero, of the
entire Aggregate Capital) the Seller may do so as follows:

(i) the Seller shall give the Administrator and each Purchaser Agent written
notice in the form of Annex E (each, a “Paydown Notice”) at least two Business
Days prior to the date of such reduction and each such Paydown Notice shall
include, among other things, the amount of such proposed reduction and the
proposed date on which such reduction will commence;

(ii) on the proposed date of the commencement of such reduction and on each day
thereafter, the Servicer shall cause Collections not to be reinvested until the
amount thereof not so reinvested shall equal the amount of such proposed
reduction specified in the Paydown Notice; and

(iii) the Servicer shall hold such Collections in trust for the benefit of each
Purchaser ratably according to its Capital, for payment to each such Purchaser
(or its related Purchaser Agent for the benefit of such Purchaser) on the next
Settlement Date (or such other date as agreed to by the Administrator and
Seller) with respect to any Portions of Capital maintained by such Purchaser
immediately following the related current Settlement Period, and the Aggregate
Capital (together with the Capital of any related Purchaser) shall be deemed
reduced in the amount to be paid to such Purchaser (or its related Purchaser
Agent for the benefit of such Purchaser) only when in fact finally so paid;

 

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provided, that:

(A) the amount of any such reduction shall be not less than $1,000,000 for each
Purchaser Group and shall be an integral multiple of $100,000 in excess thereof,
and unless reduced to zero, the entire Aggregate Capital after giving effect to
such reduction shall be not less than $1,000,000; and

(B) with respect to any Portion of Capital, the Seller shall choose a reduction
amount, and the date of commencement thereof, so that to the extent practicable
such reduction shall commence and conclude on the following Settlement Date.

Section 1.5 Fees. The Seller shall pay to the Administrator, Purchaser Agents
and Purchasers certain fees in the amounts and on the dates set forth in one or
more fee letter agreements, in each case entered into from time to time by and
among the Seller, (the Servicer if applicable) and the applicable Purchaser
Agent and/or the Administrator (as any such fee letter agreement may be amended,
restated, supplemented or otherwise modified from time to time, each, a “Fee
Letter”).

Section 1.6 Payments and Computations, Etc.

(a) All amounts to be paid or deposited by the Seller or the Servicer hereunder
or under any other Transaction Document shall be made without reduction for
offset or counterclaim and shall be paid or deposited no later than 2:00 p.m.
(New York City time) on the day when due in same day funds to the account for
each Purchaser maintained by the applicable Purchaser Agent (or such other
account as may be designated from time to time by such Purchaser Agent to the
Seller and the Servicer). All amounts received after 2:00 p.m. (New York City
time) will be deemed to have been received on the next Business Day. Except as
expressly set forth herein, each Purchaser Agent shall distribute the amounts
paid to it hereunder for the benefit of the Purchasers in its Purchaser Group to
the Purchasers within its Purchaser Group ratably (x) in the case of such
amounts paid in respect of Discount and Fees, according to the Discount and Fees
payable to such Purchasers and (y) in the case of such amounts paid in respect
of Capital (or in respect of any other obligations other than Discount and
Fees), according to the outstanding Capital funded by such Purchasers.

(b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate per
annum equal to the sum of 2.50% per annum plus the greater of the Base Rate at
such time and the Euro-Rate at such time, payable on demand; provided, that
Discount accruing on Capital shall accrue and be calculated in accordance with
the definition thereof (including the definition of any defined term comprising
a component thereof).

(c) All computations of interest under Section 1.6(b) and all computations of
Discount, Fees and other amounts hereunder shall be made on the basis of a year
of 360 (or 365 or 366, as applicable, with respect to Discount or other amounts
calculated by reference to the Base Rate) days for the actual number of days
elapsed. Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall

 

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be made on the next Business Day and such extension of time shall be included in
the computation of such payment or deposit.

Section 1.7 Increased Costs.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, liquidity,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Affected Person (except any such reserve included in the calculation of the
Euro-Rate through the Eurodollar Rate Reserve Percentage);

(ii) subject any Affected Person to any Taxes (except to the extent such Taxes
are Indemnified Taxes for which relief is sought under Section 1.9, Taxes
described in clauses (b) through (d) of the definition of “Excluded Taxes” or
Connection Income Taxes) on its loans, loan principal, letters of credit,
commitments or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto; or

(iii) impose on any Affected Person any other condition, cost or expense (other
than Taxes) affecting this Agreement, the Purchased Interest, any Portion of
Capital or any Discount;

and the result of any of the foregoing shall be to increase the cost to such
Affected Person of (A) acting as Administrator, a Purchaser Agent or a Purchaser
hereunder or as a Program Support Provider with respect to the transactions
contemplated hereby, (B) purchasing, funding or maintaining the ownership of the
Purchased Interest (or interests therein) or any Portion of Capital or
(C) maintaining its obligation to fund or maintain such ownership or any such
Portion of Capital, or to reduce the amount of any sum received or receivable by
such Affected Person hereunder, then, upon request of such Affected Person (or
its Purchaser Agent), the Seller will pay to such Affected Person such
additional amount or amounts as will compensate such Affected Person for such
additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Affected Person determines that any Change in
Law affecting such Affected Person or any lending office of such Affected Person
or such Affected Person’s holding company, if any, regarding capital or
liquidity requirements, has or would have the effect of reducing the rate of
return on such Affected Person’s capital or on the capital of such Affected
Person’s holding company, if any, as a consequence of (A) this Agreement,
(B) the commitments of such Affected Person hereunder or under any related
Program Support Agreement or (C) the ownership of the Purchased Interest (or
interests therein) or any Portion of Capital, to a level below that which such
Affected Person or such Affected Person’s holding company could have achieved
but for such Change in Law (taking into consideration such Affected Person’s
policies and the policies of such Affected Person’s holding company with respect
to capital adequacy and liquidity), then from time to time, upon request of such
Affected Person (or its Purchaser Agent), the Seller will pay to such Affected
Person such additional amount or amounts as will compensate such Affected Person
or such Affected Person’s holding company for any such reduction suffered.

 

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(c) Adoption of Changes in Law. The Seller acknowledges that any Affected Person
may institute measures in anticipation of a Change in Law (including, without
limitation, the imposition of internal charges on such Affected Person’s
interests or obligations under any Transaction Document or Program Support
Agreement), and may commence allocating charges to or seeking compensation from
the Seller under this Section 1.7 in connection with such measures, in advance
of the effective date of such Change in Law, and the Seller agrees to pay such
charges or compensation to such Affected Person, following demand therefor in
accordance with the terms of this Section 1.7, without regard to whether such
effective date has occurred.

(d) Certificates for Reimbursement. A certificate of an Affected Person (or its
Purchaser Agent on its behalf) setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Affected Person as specified in
clause (a) or (b) of this Section and delivered to the Seller, shall be
conclusive absent manifest error. The Seller shall, subject to the priorities
for payment set forth in Sections 1.4, pay such Affected Person, as the case may
be, the amount shown as due on any such certificate on the first Settlement Date
occurring after the Seller’s receipt of such certificate. In determining such
amounts, the Affected Person will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable.

(e) Delay in Requests. Failure or delay on the part of any Affected Person to
demand compensation pursuant to this Section shall not constitute a waiver of
such Affected Person’s right to demand such compensation; provided that the
Seller shall not be required to compensate an Affected Person pursuant to this
Section for any increased costs incurred or reductions suffered more than 180
days prior to the date that such Affected Person notifies the Seller of the
Change in Law giving rise to such increased costs or reductions and of such
Affected Person’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).

Section 1.8 Funding Losses.

(a) The Seller will compensate each Purchaser in accordance with the terms of
this Section 1.8 for all losses, expenses and liabilities (including any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Purchaser in order to fund or maintain
any Portion of Capital hereunder) as a result of (i) any repayment (in whole or
in part) of any Portion of Capital of such Purchaser on any day other than a
Settlement Date or (ii) any Funded Purchase not being completed by the Seller in
accordance with its request therefor pursuant to Section 1.2. Such losses,
expenses and liabilities will include the amount, if any, by which (A) the
additional Discount that would have accrued had such repayment or failure to
Purchase not have occurred, exceeds (B) the income, if any, received by the
applicable Purchaser.

(b) A certificate of a Purchaser (or its related Purchaser Agent) setting forth
in reasonable detail the basis for calculating the additional amounts owed to
such Affected Person as specified in clause (a) of this Section and delivered to
the Seller and the Administrator, shall be conclusive absent manifest error. The
Seller shall pay such Purchaser’s related Purchaser Agent (for the account of
such Purchaser) the amount shown as due on each Settlement Date

 

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occurring after the Seller’s receipt of such certificate. In determining such
amounts, the Affected Person will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable.

Section 1.9 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Seller under any Transaction Document shall be made without
deduction or withholding for any Taxes, except as required by Applicable Law. If
any Applicable Law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with Applicable Law, and, if such Tax is an Indemnified Tax, then the sum
payable by the Seller shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section), the
applicable Affected Person receives an amount equal to the sum it would have
received had no such deduction or withholding been made. In addition, each
Affected Person shall promptly notify the Seller and the Servicer upon becoming
aware of any circumstances as a result of which the Seller is or would be
required to make any deduction or withholding from any sum payable hereunder.

(b) Payment of Other Taxes by the Seller. The Seller shall timely pay to the
relevant Governmental Authority in accordance with Applicable Law, or, at the
option of the Administrator, timely reimburse it for the payment of, any Other
Taxes.

(c) Indemnification by the Seller. The Seller hereby indemnifies each Affected
Person, within ten days after demand therefor, for the full amount of any
(A) Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Affected Person or required to be withheld or deducted from a payment to such
Affected Person and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority
and (B) Taxes that arise because a Purchase is not treated for U.S. federal,
state, local or franchise tax purposes as intended under Section 1.9(k) (such
indemnification will include any U.S. federal, state or local income and
franchise taxes necessary to make such Affected Person whole on an after-tax
basis taking into account the taxability of receipt of payments under this
clause (B) and any reasonable expenses (other than Taxes) arising out of,
relating to, or resulting from the foregoing). Promptly upon having knowledge
that any such Indemnified Taxes have been levied, imposed or assessed, and
promptly upon notice by the Administrator or any Affected Person (or its related
Purchaser Agent), the Seller shall pay such Indemnified Taxes directly to the
relevant taxing authority or Governmental Authority, provided that neither the
Administrator nor any Affected Person shall be under any obligation to provide
any such notice to the Seller. A certificate setting forth in reasonable detail
the amount of such payment or liability delivered to the Seller by an Affected
Person (with a copy to the Administrator), or by the Administrator on its own
behalf or on behalf of an Affected Person, shall be conclusive absent manifest
error.

 

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(d) Indemnification by the Purchasers. Each Purchaser (other than the Conduit
Purchasers) shall severally indemnify the Administrator, within ten days after
demand therefor, for (i) any Indemnified Taxes attributable to such Purchaser,
its related Conduit Purchaser or any of their respective Affiliates that are
Affected Persons (but only to the extent that the Seller, TransDigm and their
Affiliates have not already indemnified the Administrator for such Indemnified
Taxes and without limiting any obligation of the Seller, TransDigm or their
Affiliates to do so), (ii) any Taxes attributable to the failure of such
Purchaser, its related Conduit Purchaser or any of their respective Affiliates
that are Affected Persons to comply with the second paragraph of Section 6.3(b)
relating to the maintenance of a Participant Register and (iii) any Excluded
Taxes attributable to such Purchaser, its related Conduit Purchaser or any of
their respective Affiliates that are Affected Persons, in each case, that are
payable or paid by the Administrator in connection with any Transaction
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Purchaser (or its Purchaser Agent) by the
Administrator shall be conclusive absent manifest error. Each Purchaser hereby
authorizes the Administrator to set off and apply any and all amounts at any
time owing to such Purchaser, its related Conduit Purchaser or any of their
respective Affiliates that are Affected Persons under any Transaction Document
or otherwise payable by the Administrator to such Purchaser, its related Conduit
Purchaser or any of their respective Affiliates that are Affected Persons from
any other source against any amount due to the Administrator under this clause
(d).

(e) Evidence of Payments. As soon as practicable after any payment of Taxes by
the Seller to a Governmental Authority pursuant to this Section 1.9, the Seller
shall deliver to the Administrator the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrator.

(f) Status of Affected Persons. (i) Any Affected Person that is entitled to an
exemption from or reduction of withholding Tax with respect to payments made
under any Transaction Document shall deliver to the Seller and the
Administrator, at the time or times reasonably requested by the Seller or the
Administrator, such properly completed and executed documentation reasonably
requested by the Seller or the Administrator as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any
Affected Person, if reasonably requested by the Seller or the Administrator,
shall deliver such other documentation prescribed by Applicable Law or
reasonably requested by the Seller or the Administrator as will enable the
Seller or the Administrator to determine whether or not such Affected Person is
subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Sections 1.9(f)(ii)(A) and (ii)(B) and 1.9(g) below)
shall not be required if, in the Affected Person’s reasonable judgment, such
completion, execution or submission would subject such Affected Person to any
material unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Affected Person.

(ii) Without limiting the generality of the foregoing:

 

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(A) an Affected Person that is a U.S. Person shall deliver to the Seller and the
Administrator from time to time upon the reasonable request of the Seller or the
Administrator, executed originals of Internal Revenue Service Form W-9
certifying that such Affected Person is exempt from U.S. federal backup
withholding tax;

(B) any Affected Person that is not a U.S. Person shall, to the extent it is
legally entitled to do so, deliver to the Seller and the Administrator (in such
number of copies as shall be requested by the Affected Person) from time to time
upon the reasonable request of the Seller or the Administrator, whichever of the
following is applicable:

(1) in the case of such an Affected Person claiming the benefits of an income
tax treaty to which the United States is a party, (x) with respect to payments
of interest under any Transaction Document, executed originals of Internal
Revenue Service Form W-8BEN establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “interest” article of such tax
treaty and (y) with respect to any other applicable payments under any
Transaction Document, Internal Revenue Service Form W-8BEN establishing an
exemption from, or reduction of, U.S. federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;

(2) executed originals of Internal Revenue Service Form W-8ECI;

(3) in the case of such an Affected Person claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Internal Revenue
Code, (x) a certificate to the effect that such Affected Person is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10
percent shareholder” of the Seller within the meaning of Section 881(c)(3)(B) of
the Internal Revenue Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of Internal Revenue Service Form
W-8BEN; or

(4) to the extent such Affected Person is not the beneficial owner, executed
originals of Internal Revenue Service Form W-8IMY, accompanied by Internal
Revenue Service Form W-8ECI, Internal Revenue Service Form W-8BEN, a U.S. Tax
Compliance Certificate, Internal Revenue Service Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided
that, if such Affected Person is a partnership and one or more direct or
indirect partners of such Affected Person are claiming the portfolio interest
exemption, such Affected Person may provide a U.S. Tax Compliance Certificate on
behalf of each such direct and indirect partner; and

 

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(C) any Affected Person that is not a U.S. Person shall, to the extent it is
legally entitled to do so, deliver to the Seller and the Administrator (in such
number of copies as shall be requested by the recipient), from time to time upon
the reasonable request of the Seller or the Administrator, executed originals of
any other form prescribed by Applicable Law as a basis for claiming exemption
from or a reduction in U.S. federal withholding Tax, duly completed, together
with such supplementary documentation as may be prescribed by Applicable Law to
permit the Seller or the Administrator to determine the withholding or deduction
required to be made.

(g) Documentation Required by FATCA. If a payment made to an Affected Person
under any Transaction Document would be subject to U.S. federal withholding Tax
imposed by FATCA if such Affected Person were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in
Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such
Affected Person shall deliver to the Seller and the Administrator at the time or
times prescribed by law and at such time or times reasonably requested by the
Seller or the Administrator such documentation prescribed by Applicable Law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue
Code) and such additional documentation reasonably requested by the Seller or
the Administrator as may be necessary for the Seller and the Administrator to
comply with their obligations under FATCA and to determine that such Affected
Person has complied with such Affected Person’s obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (g), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement and any fiscal or regulatory legislation, rules
or practices adopted pursuant to any intergovernmental agreement entered into in
connection with FATCA.

(h) Survival. Each party’s obligations under this Section 1.9 shall survive the
resignation or replacement of the Administrator or any assignment of rights by,
or the replacement of, a Purchaser or any other Affected person, the termination
of the Commitments and the repayment, satisfaction or discharge of all the
Seller’s and the Servicer’s obligations hereunder.

(i) Updates. Each Affected Person agrees that if any form or certification it
previously delivered pursuant to this Section 1.9 expires or becomes obsolete or
inaccurate in any respect, it shall update such form or certification or
promptly notify the Seller and the Administrator in writing of its legal
inability to do so.

(j) Intended Tax Treatment. Notwithstanding anything to the contrary herein or
in any other Transaction Document, all parties to this Agreement covenant and
agree to treat any Transfer and purchase of each Purchased Interest under this
Agreement as debt (and all Discount and Yield as interest) for all federal,
state, local and franchise tax purposes and agree not to take any position on
any tax return inconsistent with the foregoing.

Section 1.10 Inability to Determine Euro-Rate; Change in Legality.

 

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(a) If any Purchaser Agent shall have determined (which determination shall be
conclusive and binding upon the parties hereto) before the first day of any
Settlement Period, by reason of circumstances affecting the interbank Eurodollar
market, either that: (i) dollar deposits in the relevant amounts and for the
relevant Settlement Period or day, as applicable, are not available,
(ii) adequate and reasonable means do not exist for ascertaining the Euro-Rate
for such Settlement Period or day, as applicable, or (iii) the Euro-Rate
determined pursuant hereto does not accurately reflect the cost to the
applicable Affected Person (as conclusively determined by such Purchaser Agent)
of maintaining any Portion of Capital during such Settlement Period or day, as
applicable, such Purchaser Agent shall promptly give telephonic notice of such
determination, confirmed in writing, to the Seller before the first day of any
Settlement Period. Upon delivery of such notice: (i) no Portion of Capital shall
be funded thereafter at the Bank Rate determined by reference to the Euro-Rate
unless and until such Purchaser Agent shall have given notice to the Seller that
the circumstances giving rise to such determination no longer exist, and
(ii) with respect to any outstanding Portion of Capital then funded at the Bank
Rate determined by reference to the Euro-Rate, such Bank Rate shall
automatically be converted to the Bank Rate determined by reference to the Base
Rate on the last day of the then-current Settlement Period.

(b) If, on or before the first day of any Settlement Period, any Purchaser Agent
shall have been notified by any Affected Person that such Affected Person has
determined (which determination shall be final and conclusive) that any Change
in Law, or compliance by such Affected Person with any Change in Law, shall make
it unlawful or impossible for such Affected Person to fund or maintain any
Portion of Capital at or by reference to the Euro-Rate, such Purchaser Agent
shall notify the Seller, the Administrator and each other Purchaser Agent
thereof. Upon receipt of such notice, until the applicable Purchaser Agent
notifies the Seller, the Administrator and each other Purchaser Agent that the
circumstances giving rise to such determination no longer apply, (i) no Portion
of Capital shall be funded at or by reference to the Euro-Rate and (ii) the
Discount for any outstanding Portions of Capital then funded at the Bank Rate
determined by reference to the Euro-Rate shall be converted to the Bank Rate
determined by reference to the Base Rate either (x) on the last day of the
then-current Settlement Period, only if such Affected Person may lawfully
continue to maintain such Portion of Capital at or by reference to the Euro-Rate
prior to such conversion, or (y) immediately, if such Affected Person may not
lawfully continue to maintain such Portion of Capital at or by reference to the
Euro-Rate during such period.

Section 1.11 Mitigation. Notwithstanding anything herein to the contrary, if
(i) an Affected Person requests a material amount of compensation under
Section 1.7, (ii) the Seller is required to pay any material additional amount
to any Affected Person or any Governmental Authority for the account of any
Lender or Agent pursuant to Section 1.9, (iii) an Affected Person makes a demand
pursuant to Section 1.9 for payment of an amount which is material or (iv) an
Affected Person is required to compensate an Affected Person in respect of any
such occurrence under Section 1.7 by an amount which is material, then such
Affected Person shall use reasonable efforts to designate a different lending
office (if such Affected Person has multiple lending offices) for funding and
booking its Purchases or liquidity requirements related thereto or to assign its
rights and obligations hereunder to any other of its offices, branches or
affiliates (if such Affected Person has multiple offices, branches or lending
affiliates, as applicable), if, in the reasonable judgment of such Affected
Person, such designation or

 

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assignment (A) would eliminate or reduce amounts payable pursuant to Section 1.7
or Section 1.9, as the case may be, in the future, and (B) in each case, would
not subject such Affected Person to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Affected Person.

Section 1.12 Extension of Termination Date.

Provided that no Termination Event or Unmatured Termination Event has occurred
and is continuing, the Seller may request, in a written notice given to the
Administrator and each Purchaser Agent not less than 60 days and not more than
120 days prior to the then current Facility Termination Date, that the date set
forth in clause (a) of the then-current definition of “Facility Termination
Date” be extended to the date that is 364 days after such then-current date. In
the event that the Purchasers are all agreeable to such extension, the
Administrator shall so notify the Seller and the Servicer in writing (it being
understood that the Purchasers may accept or decline such a request in their
sole discretion and on such terms as they may elect) not less than 30 days prior
to the then current Facility Termination Date and the Seller, the Servicer, the
Administrator, the Purchaser Agents and the Purchasers shall enter into such
documents as the Purchasers may deem necessary or appropriate to reflect such
extension, and all reasonable costs and expenses incurred by the Purchasers, the
Administrator and the Purchaser Agents in connection therewith (including
reasonable Attorney Costs) shall be paid by the Seller. In the event any
Purchaser declines the request for such extension, such Purchaser (or the
applicable Purchaser Agent on its behalf) shall so notify the Administrator and
the Administrator shall so notify the Seller of such determination; provided,
that the failure of the Administrator to notify the Seller of the determination
to decline such extension shall not affect the understanding and agreement that
the applicable Purchasers shall be deemed to have refused to grant the requested
extension in the event the Administrator fails to affirmatively notify the
Seller, in writing, of their agreement to accept the requested extension.

ARTICLE II

REPRESENTATIONS AND WARRANTIES; COVENANTS;

TERMINATION EVENTS

Section 2.1 Representations and Warranties; Covenants. Each of the Seller and
the Servicer hereby makes the representations and warranties, and hereby agrees
to perform and observe the covenants, applicable to it as set forth in Exhibits
III and IV, respectively.

Section 2.2 Termination Events. If any of the Termination Events set forth in
Exhibit V shall occur, the Administrator may or, at the direction of the
Majority Purchaser Agents, shall, by notice to the Seller, declare the Facility
Termination Date to have occurred (in which case the Facility Termination Date
shall be deemed to have occurred); provided, that automatically upon the
occurrence of any event (without any requirement for the passage of time or the
giving of notice) described in paragraph (f) of Exhibit V, the Facility
Termination Date shall occur. Upon any such occurrence or deemed occurrence of
the Facility Termination Date, the Administrator, each Purchaser Agent and each
Purchaser shall have, in addition to the rights and remedies that they may have
under this Agreement, all other rights and remedies provided to secured parties

 

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after default under the UCC and under other Applicable Law, which rights and
remedies shall be cumulative.

Section 2.3 Exclusion and Removal of Originators. The Seller may from time to
time designate any Originator (other than TransDigm) to be removed as a party
from the First Tier Purchase and Sale Agreement (each, an “Excluded Originator”)
in connection with the sale or other disposition of such Originator by TransDigm
or its Subsidiaries by providing thirty (30) days’ prior written notice to the
Administrator and each Purchaser Agent, which notice shall specify the effective
date of such removal (the “Exclusion Effective Date” for such Excluded
Originator). Any such designation and removal of an Excluded Originator shall be
subject to satisfaction of each of the following conditions, and the Seller
shall be deemed to represent and warrant that each such condition is satisfied
as of the applicable Exclusion Effective Date:

(i) as of the date such notice is delivered by the Seller and as of the
Exclusion Effective Date, no Termination Event or Unmatured Termination Event
has occurred and is continuing or would occur as a result of such designation or
removal;

(ii) either (x) the Administrator and the Majority Purchaser Agents shall have
provided their prior written consent to such designation and removal, or (y) the
aggregate Outstanding Balances of Receivables originated by such Originator
reflected in the most recently delivered Information Package, when added to the
aggregate Outstanding Balances of Receivables that were excluded from the
Collateral by the designation of any other Excluded Originators pursuant to this
Section 2.3 during the previous 12 months (measured as at the time of their
respective exclusion from the Collateral), is less than 10% of the average
monthly aggregate Outstanding Balances of Receivables during the previous 12
months; and

(iii) not later than five Business Days prior to the Exclusion Effective Date,
the Servicer shall have delivered to the Administrator and each Purchaser Agent
a pro forma Information Package as of the last day of the most recently ended
calendar month demonstrating the status and performance of the Pool Receivables
excluding the Receivables of the applicable Excluded Originator.

Subject to satisfaction of the foregoing conditions, an Excluded Originator
shall cease to be a party to the First Tier Purchase and Sale Agreement
effective as of the applicable Exclusion Effective Date in accordance with
Section 4.4 of the First Tier Purchase and Sale Agreement and, on and after such
Exclusion Effective Date, no further Receivables shall be sold or otherwise
transferred by such Excluded Originator pursuant to the First Tier Purchase and
Sale Agreement; provided, however, that for the avoidance of doubt, (x) all
Receivables sold by such Excluded Originator pursuant to the First Tier Purchase
and Sale Agreement prior to such Exclusion Effective Date shall remain the
property of the Seller (as assignee of TransDigm but subject to the rights of
the Purchasers and the Administrator therein under this Agreement), and (y) all
representations, warranties, covenants and liabilities of such Excluded
Originator with respect to any Receivables sold by it under the First Tier
Purchase and Sale Agreement prior to such Exclusion Effective Date, together
with any indemnification and other obligations that by their express terms
survive termination of the First Tier Purchase and Sale Agreement, shall survive
the Exclusion Effective Date. The parties hereto shall work together in good
faith to

 

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effectuate the designation and removal of an Originator as an Excluded
Originator in accordance with this Section at the sole expense of the Seller.

ARTICLE III

INDEMNIFICATION

Section 3.1 Indemnities by the Seller. Without limiting any other rights any
such Person may have hereunder or under Applicable Law, the Seller hereby
indemnifies and holds harmless, on an after-tax basis, the Administrator, each
Purchaser Agent, each Liquidity Provider, each Program Support Provider and each
Purchaser and their respective officers, directors, agents and employees (each
an “Indemnified Party”) from and against any and all damages, losses, claims,
liabilities, penalties, Taxes, costs and expenses (including reasonable
attorneys’ fees and court costs) (all of the foregoing collectively, the
“Indemnified Amounts”) at any time imposed on or incurred by any Indemnified
Party arising out of or otherwise relating to any Transaction Document, the
transactions contemplated thereby or the acquisition of any portion of the
Purchased Interest, or any action taken or omitted by any of the Indemnified
Parties (including any action taken by the Administrator as attorney-in-fact for
the Seller, the Servicer or any Originator hereunder or under any other
Transaction Document), whether arising by reason of the acts to be performed by
the Seller hereunder or otherwise, excluding only Indemnified Amounts to the
extent (a) a final judgment of a court of competent jurisdiction holds that such
Indemnified Amounts resulted from gross negligence or willful misconduct of the
Indemnified Party seeking indemnification, (b) due to the credit risk of the
Obligor and for which reimbursement would constitute recourse to any Originator,
the Seller or the Servicer for uncollectible Receivables or (c) such Indemnified
Amounts include Taxes imposed or based on, or measured by, the gross or net
income or receipts of such Indemnified Party by the jurisdiction under the laws
of which such Indemnified Party is organized (or any political subdivision
thereof); provided, however, that nothing contained in this sentence shall limit
the liability of the Seller or the Servicer or limit the recourse of any
Indemnified Party to the Seller or the Servicer for any amounts otherwise
specifically provided to be paid by the Seller or the Servicer hereunder.
Without limiting the foregoing indemnification, but subject to the limitations
set forth in clauses (a), (b) and (c) of the previous sentence, the Seller shall
indemnify each Indemnified Party for Indemnified Amounts (including losses in
respect of uncollectible Receivables, regardless, for purposes of these specific
matters, whether reimbursement therefor would constitute recourse to the Seller
or the Servicer) relating to or resulting from any of the following:

(i) the failure of any Receivable included in the calculation of the Net
Receivables Pool Balance as an Eligible Receivable to be an Eligible Receivable
as of the date of such calculation, the failure of any information contained in
any Information Package to be true and correct, or the failure of any other
information provided to any Purchaser or the Administrator with respect to the
Receivables or this Agreement to be true and correct;

(ii) the failure of any representation, warranty or statement made or deemed
made by the Seller (or any employee, officer or agent of the Seller) under or in
connection with this Agreement, any other Transaction Document, or any
Information

 

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Package or any other information or report delivered by or on behalf of the
Seller pursuant hereto to have been true and correct as of the date made or
deemed made;

(iii) the failure by the Seller to comply with any Applicable Law with respect
to any Receivable or the related Contract, or the nonconformity of any
Receivable or related Contract with any such Applicable Law;

(iv) the failure of the Seller to vest and maintain vested in the Administrator,
for the benefit of the Purchasers, a first priority perfected ownership or
security interest in the Purchased Interest and the property conveyed hereunder,
free and clear of any Adverse Claim;

(v) any commingling of funds to which the Administrator, any Purchaser Agent or
any Purchaser is entitled hereunder with any other funds;

(vi) the failure to have filed, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other Applicable Laws with respect to any Receivables in, or
purporting to be in, the Receivables Pool and the other Pool Assets, whether at
the time of any Purchase or at any subsequent time;

(vii) any failure of a Lock-Box Bank to comply with the terms of the applicable
Lock-Box Agreement;

(viii) any dispute, claim, offset or defense (other than discharge in bankruptcy
of the Obligor) of the Obligor to the payment of any Receivable (including
without limitation a defense based on such Receivable or the related Contract
not being a legal, valid and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other claim resulting from the
sale or lease of goods or the rendering of services related to such Receivable
or the furnishing or failure to furnish any such goods or services or other
similar claim or defense not arising from the financial inability of any Obligor
to pay undisputed indebtedness;

(ix) any failure of the Seller (or any of its Affiliates) to perform its duties
or obligations in accordance with the provisions of this Agreement, any Contract
or any other Transaction Document to which it is a party;

(x) any action taken by the Administrator as attorney-in-fact for the Seller or
any Originator pursuant to this Agreement or any other Transaction Document;

(xi) any reduction in Capital as a result of the distribution of Collections
pursuant to Section 1.4(d), if all or a portion of such distributions shall
thereafter be rescinded or otherwise must be returned for any reason;

(xii) the use of proceeds of any Purchase; or

(xiii) any environmental liability claim, products liability claim or personal
injury or property damage suit or other similar or related claim or action of
whatever sort,

 

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arising out of or in connection with any Receivable or any other suit, claim or
action of whatever sort relating to any of the Transaction Documents.

Section 3.2 Indemnities by the Servicer. Without limiting any other rights that
any Indemnified Party may have hereunder or under Applicable Law, the Servicer
hereby agrees to indemnify each Indemnified Party from and against any and all
Indemnified Amounts arising out of or resulting from (whether directly or
indirectly): (a) the failure of any information contained in any Information
Package to be true and correct, or the failure of any other information provided
to such Indemnified Party by, or on behalf of, the Servicer to be true and
correct, (b) the failure of any representation, warranty or statement made or
deemed made by the Servicer (or any of its officers) under or in connection with
this Agreement or any other Transaction Document to which it is a party to have
been true and correct as of the date made or deemed made when made, (c) the
failure by the Servicer to comply with any Applicable Law with respect to any
Pool Receivable or the related Contract, (d) any dispute, claim, offset or
defense of the Obligor (other than as a result of discharge in bankruptcy with
respect to such Obligor) to the payment of any Receivable in, or purporting to
be in, the Receivables Pool resulting from or related to the collection
activities with respect to such Receivable or (e) any failure of the Servicer to
perform its duties or obligations in accordance with the provisions hereof or
any other Transaction Document to which it is a party.

ARTICLE IV

ADMINISTRATION AND COLLECTIONS

Section 4.1 Appointment of the Servicer.

(a) The servicing, administering and collection of the Pool Receivables shall be
conducted by the Person so designated from time to time as the Servicer in
accordance with this Section 4.1. Until the Administrator gives notice to
TransDigm (in accordance with this Section 4.1) of the designation of a new
Servicer, TransDigm is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms hereof. If a
Termination Event has occurred and has not been waived in accordance with
Section 6.1, the Administrator may (with the consent of the Majority Purchaser
Agents) or shall (at the direction of the Majority Purchaser Agents) terminate
TransDigm as the Servicer and designate any Person (including itself) as
successor Servicer to succeed TransDigm, on the condition in each case that any
such Person so designated shall agree to perform the duties and obligations of
the Servicer pursuant to the terms hereof.

(b) Upon the designation of a successor Servicer as set forth in clause (a),
TransDigm agrees that it will terminate its activities as Servicer hereunder in
a manner that the Administrator reasonably determines will facilitate the
transition of the performance of such activities to the new Servicer, and
TransDigm shall cooperate with and assist such new Servicer. Such cooperation
shall include access to and transfer of related records (including all
Contracts) and use by the new Servicer of all licenses (or the obtaining of new
licenses), hardware or software necessary or reasonably desirable to collect the
Pool Receivables and the Related Security.

 

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(c) TransDigm acknowledges that, in making its decision to execute and deliver
this Agreement, the Administrator and each member in each Purchaser Group have
relied on TransDigm’s agreement to act as Servicer hereunder. Accordingly,
TransDigm agrees that it will not voluntarily resign as Servicer unless it is no
longer permissible under Applicable Law for TransDigm to act as Servicer;
provided, however, that no such resignation shall (i) be effective until such
time as a replacement Servicer acceptable to the Administrator and each
Purchaser Agent (in their sole discretion) has agreed in writing to act as
Servicer hereunder in accordance with the terms hereof or (ii) release or
otherwise limit TransDigm’s obligation (in its capacity as Performance
Guarantor) to cause the Receivables to be serviced in accordance with the terms
hereof.

(d) The Servicer may delegate its duties and obligations hereunder to any
subservicer (each a “Sub-Servicer”); provided, that, in each such delegation:
(i) if such Sub-Servicer is not an Originator, such Sub-Servicer shall agree in
writing to perform the delegated duties and obligations of the Servicer pursuant
to the terms hereof, (ii) the Servicer shall remain liable for the performance
of the duties and obligations so delegated, (iii) the Seller, the Administrator
and each Purchaser Group shall have the right to look solely to the Servicer for
performance, (iv) the terms of any agreement with any Sub-Servicer that is not
an Originator shall provide that the Administrator may terminate such agreement
upon the termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer (and the Servicer shall provide
appropriate notice to each such Sub-Servicer) and (v) if such Sub-Servicer is
not an Affiliate of TransDigm, the Administrator shall have consented in writing
in advance to such delegation.

Section 4.2 Duties of the Servicer.

(a) The Servicer shall take or cause to be taken all such action as may be
necessary or reasonably advisable to administer and collect each Pool Receivable
from time to time, all in accordance with this Agreement and all Applicable
Laws, with reasonable care and diligence, and in accordance with the Credit and
Collection Policy. The Servicer shall set aside for the accounts of the Seller
and each Purchaser Group the amount of Collections to which each such Purchaser
Group is entitled in accordance with Article I hereof. Subject to the provisions
of Section 1.4(e), the Servicer may, in accordance with the applicable Credit
and Collection Policy, extend, waive, amend or otherwise modify the terms of any
Pool Receivable, or amend, waive or otherwise modify in any material respect any
term or condition of any Contract related thereto, as the Servicer may
reasonably determine to be appropriate to maximize Collections thereof or
reflect adjustments permitted under the Credit and Collection Policy or as
expressly required under Applicable Laws or the applicable Contract; provided,
that for purposes of this Agreement: (i) such extension, waiver, amendment or
other modification shall not, and shall not be deemed to, change the number of
days such Pool Receivable has remained unpaid from the date of the original due
date related to such Pool Receivable, (such extension, waiver, amendment or
other modification shall not alter the status of such Pool Receivable as a
Delinquent Receivable or a Defaulted Receivable and (ii) if a Termination Event
has occurred and is continuing and TransDigm or an Affiliate thereof is serving
as the Servicer, TransDigm or such Affiliate may take such action only upon the
prior written approval of the Administrator. The Seller shall deliver to the
Servicer and the Servicer shall hold for the benefit of the Seller and the
Administrator (individually and for the benefit of each Purchaser Group), in
accordance with

 

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their respective interests, all records and documents (including computer tapes
or disks) with respect to each Pool Receivable. Notwithstanding anything to the
contrary contained herein, if a Termination Event has occurred and is
continuing, the Administrator may direct the Servicer (whether the Servicer is
TransDigm or any other Person) to commence or settle any legal action to enforce
collection of any Pool Receivable or to foreclose upon or repossess any Related
Security.

(b) The Servicer’s obligations hereunder shall terminate on the Final Payout
Date. After such termination, if TransDigm or an Affiliate thereof was not the
Servicer on the date of such termination, the Servicer shall promptly deliver to
the Seller all books, records and related materials that the Seller previously
provided to the Servicer, or that have been obtained by the Servicer, in
connection with this Agreement.

Section 4.3 Lock-Box Account Arrangements. Prior to the Closing Date, the Seller
shall have entered into Lock-Box Agreements with all of the Lock-Box Banks and
delivered executed counterparts of each to the Administrator. Upon the
occurrence and during the continuance of a Termination Event or Unmatured
Termination Event, the Administrator may (with the consent of the Majority
Purchaser Agents) or shall (upon the direction of the Majority Purchaser Agents)
at any time thereafter give notice to each Lock-Box Bank that the Administrator
is exercising its rights under the Lock-Box Agreements to do any or all of the
following: (a) to have the exclusive ownership and control of the Lock-Box
Accounts transferred to the Administrator (for the benefit of the Administrator,
the Purchaser Agents and the Purchasers) and to exercise exclusive dominion and
control over the funds deposited therein, (b) to have the proceeds that are sent
to the respective Lock-Box Accounts redirected pursuant to the Administrator’s
instructions rather than deposited in the applicable Lock-Box Account, and
(c) to take any or all other actions permitted under the applicable Lock-Box
Agreement. The Seller hereby agrees that if the Administrator at any time takes
any action set forth in the preceding sentence, the Administrator shall have
exclusive control (for the benefit of the Administrator, the Purchaser Agents
and the Purchasers) of the proceeds (including Collections) of all Pool
Receivables and the Seller hereby further agrees to take any other action that
the Administrator or any Purchaser Agent may request to transfer such control.
Any Collections received by the Seller or the Servicer thereafter shall be sent
immediately to, or as otherwise instructed by, the Administrator.

Section 4.4 Enforcement Rights.

(a) At any time following the occurrence and during the continuation of a
Termination Event:

(i) the Administrator may direct the Obligors that payment of all amounts
payable under any Pool Receivable is to be made directly to the Administrator or
its designee,

(ii) the Administrator may instruct the Seller or the Servicer to give notice of
the Purchaser Groups’ interest in Pool Receivables to each Obligor, which notice
shall direct that payments be made directly to the Administrator or its designee
(on behalf of such Purchaser Groups), and the Seller or the Servicer, as the
case may be, shall give

 

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such notice at the expense of the Seller or the Servicer, as the case may be;
provided, that if the Seller or the Servicer, as the case may be, fails to so
notify each Obligor, the Administrator (at the Seller’s or the Servicer’s, as
the case may be, expense) may so notify the Obligors;

(iii) the Administrator may request the Servicer to, and upon such request the
Servicer shall: (A) assemble all of the records necessary or desirable to
collect the Pool Receivables and the Related Security, and transfer or license
to a successor Servicer the use of all software necessary or desirable to
collect the Pool Receivables and the Related Security, and make the same
available to the Administrator or its designee (for the benefit of the
Purchasers) at a place selected by the Administrator, and (B) segregate all
cash, checks and other instruments received by it from time to time constituting
Collections in a manner reasonably acceptable to the Administrator and, promptly
upon receipt, remit all such cash, checks and instruments, duly endorsed or with
duly executed instruments of transfer, to the Administrator or its designee; and

(iv) the Administrator may collect any amounts due from an Originator under, and
otherwise enforce any and all rights of the Seller under, the Second Tier
Purchase and Sale Agreement and the First Tier Purchase and Sale Agreement.

(b) The Seller hereby authorizes the Administrator (on behalf of each Purchaser
Group), and irrevocably appoints the Administrator as its attorney-in-fact with
full power of substitution and with full authority in the place and stead of the
Seller, which appointment is coupled with an interest, to take any and all steps
in the name of the Seller and on behalf of the Seller necessary or desirable, in
the determination of the Administrator, after the occurrence and during the
continuation of a Termination Event, to collect any and all amounts or portions
thereof due under any and all Pool Assets, including endorsing the name of the
Seller on checks and other instruments representing Collections and enforcing
such Pool Assets. Notwithstanding anything to the contrary contained in this
subsection, none of the powers conferred upon such attorney-in-fact pursuant to
the preceding sentence shall subject such attorney-in-fact to any liability if
any action taken by it shall prove to be inadequate or invalid, nor shall they
confer any obligations upon such attorney-in-fact in any manner whatsoever.

Section 4.5 Responsibilities of the Seller.

(a) Anything herein to the contrary notwithstanding, the Seller shall:
(i) perform all of its obligations, if any, under the Contracts related to the
Pool Receivables to the same extent as if interests in such Pool Receivables had
not been transferred hereunder, and the exercise by the Administrator, the
Purchaser Agents or the Purchasers of their respective rights hereunder shall
not relieve the Seller from such obligations, and (ii) pay when due any taxes,
including any sales taxes payable in connection with the Pool Receivables and
their creation and satisfaction. None of the Administrator, the Purchaser Agents
or any of the Purchasers shall have any obligation or liability with respect to
any Pool Asset, nor shall any of them be obligated to perform any of the
obligations of Seller, Servicer, TransDigm or any Originator thereunder.

(b) TransDigm hereby irrevocably agrees that if at any time it shall cease to be
the Servicer hereunder, it shall act (if the then-current Servicer so requests)
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agent of the Servicer and, in such capacity, TransDigm shall conduct the
data-processing functions of the administration of the Receivables and the
Collections thereon in substantially the same way that TransDigm conducted such
data-processing functions while it acted as the Servicer.

Section 4.6 Servicing Fee. (a) Subject to clause (b), the Servicer shall be paid
a fee (the “Servicing Fee”) equal to 1.00% per annum (the “Servicing Fee Rate”)
of the daily average aggregate Outstanding Balance of the Pool Receivables. The
Purchasers’ Share of the Servicing Fee shall be paid through the distributions
contemplated by Section 1.4(d) or retained by the Servicer in accordance with
Section 1.4(c), and the Seller’s Share of the Servicing Fee shall be paid by the
Seller from its own funds on each Settlement Date.

(b) If the Servicer ceases to be TransDigm or an Affiliate thereof, the
Servicing Fee shall be the greater of: (i) the amount calculated pursuant to
clause (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.

ARTICLE V

THE AGENTS

Section 5.1 Appointment and Authorization. (a) Each Purchaser and Purchaser
Agent hereby irrevocably designates and appoints PNC Bank, National Association,
as the “Administrator” hereunder and authorizes the Administrator to take such
actions and to exercise such powers as are delegated to the Administrator hereby
and to exercise such other powers as are reasonably incidental thereto. The
Administrator shall have no duties or responsibilities except those expressly
set forth in this Agreement or in the other Transaction Documents. The duties of
the Administrator shall be mechanical and administrative in nature. At no time
shall the Administrator have any duty or responsibility to any Person to
investigate or confirm the correctness or accuracy of any information or
documents delivered to it in its role as Administrator hereunder or any
obligation in respect of the failure of any Person (other than the
Administrator) to perform any obligation hereunder or under any other
Transaction Document. The Administrator shall not have, by reason of this
Agreement, a fiduciary relationship in respect of any Purchaser Agent,
Purchaser, the Seller, the Servicer or any Originator. Nothing in this Agreement
or any of the Transaction Documents, express or implied, is intended to or shall
be construed to impose upon the Administrator any obligations in respect of this
Agreement or any of the Transaction Documents except as expressly set forth
herein or therein. The Administrator shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Purchaser or Purchaser
Agent with any credit or other information with respect to the Seller, any
Originator, TransDigm or their Affiliates, whether coming into its possession
before the Closing Date or at any time or times thereafter.

(b) Each Purchaser hereby irrevocably designates and appoints the respective
institution identified as the Purchaser Agent for such Purchaser’s Purchaser
Group on the signature pages hereto or in the Assumption Agreement or Transfer
Supplement pursuant to which such Purchaser becomes a party hereto, and each
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such action on its behalf under the provisions of this Agreement and to exercise
such powers and perform such duties as are expressly delegated to such Purchaser
Agent by the terms of this Agreement, if any, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Purchaser Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser or other Purchaser Agent or the Administrator,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of such Purchaser Agent shall be read into this
Agreement or otherwise exist against such Purchaser Agent.

(c) Except as otherwise specifically provided in this Agreement, the provisions
of this Article V are solely for the benefit of the Purchaser Agents, the
Administrator and the Purchasers, and none of the Seller or Servicer shall have
any rights as a third-party beneficiary or otherwise under any of the provisions
of this Article V, except that this Article V shall not affect any obligations
which any Purchaser Agent, the Administrator or any Purchaser may have to the
Seller or the Servicer under the other provisions of this Agreement.
Furthermore, no Purchaser shall have any rights as a third-party beneficiary or
otherwise under any of the provisions hereof in respect of a Purchaser Agent
which is not the Purchaser Agent for such Purchaser.

(d) In performing its functions and duties hereunder, the Administrator shall
act solely as the agent of the Purchasers and the Purchaser Agents and does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Seller or Servicer or any of their successors
and assigns. In performing its functions and duties hereunder, each Purchaser
Agent shall act solely as the agent of its respective Purchaser and does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Seller, the Servicer, any other Purchaser, any
other Purchaser Agent or the Administrator, or any of their respective
successors and assigns.

Section 5.2 Delegation of Duties. The Administrator may execute any of its
duties through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrator
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

Section 5.3 Exculpatory Provisions. None of the Purchaser Agents, the
Administrator or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted (i) with the consent
or at the direction of the Majority Purchaser Agents (or in the case of any
Purchaser Agent, the Purchasers within its Purchaser Group that have a majority
of the aggregate Commitments of such Purchaser Group) or (ii) in the absence of
such Person’s gross negligence or willful misconduct. The Administrator shall
not be responsible to any Purchaser, Purchaser Agent or other Person for (i) any
recitals, representations, warranties or other statements made by the Seller,
the Servicer, any Originator or any of their Affiliates, (ii) the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any
Transaction Document, (iii) any failure of the Seller, the Servicer, any
Originator or any of their Affiliates to perform any obligation hereunder or
under the other Transaction Documents to which it is a party (or under any
Contract), or (iv) the satisfaction of any condition specified in Exhibit II.
The Administrator shall not have any obligation to any Purchaser or Purchaser
Agent to ascertain or inquire about the observance or performance of any
agreement contained in any

 

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Transaction Document or to inspect the properties, books or records of the
Seller, the Servicer, any Originator or any of their respective Affiliates.

Section 5.4 Reliance by Agents. (a) Each Purchaser Agent and the Administrator
shall in all cases be entitled to rely, and shall be fully protected in relying,
upon any document or other writing or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person and upon
advice and statements of legal counsel (including counsel to the Seller),
independent accountants and other experts selected by the Administrator. Each
Purchaser Agent and the Administrator shall in all cases be fully justified in
failing or refusing to take any action under any Transaction Document unless it
shall first receive such advice or concurrence of the Majority Purchaser Agents
(or in the case of any Purchaser Agent, the Purchasers within its Purchaser
Group that have a majority of the aggregate Commitment of such Purchaser Group),
and assurance of its indemnification, as it deems appropriate.

(b) The Administrator shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the
Majority Purchaser Agents or the Purchaser Agents, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all
Purchasers, the Administrator and Purchaser Agents.

(c) The Purchasers within each Purchaser Group with a majority of the
Commitments of such Purchaser Group shall be entitled to request or direct the
related Purchaser Agent to take action, or refrain from taking action, under
this Agreement on behalf of such Purchasers. Such Purchaser Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of such Majority Purchaser Agents, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of such Purchaser Agent’s Purchasers.

(d) Unless otherwise advised in writing by a Purchaser Agent or by any Purchaser
on whose behalf such Purchaser Agent is purportedly acting, each party to this
Agreement may assume that (i) such Purchaser Agent is acting for the benefit of
each of the Purchasers in respect of which such Purchaser Agent is identified as
being the “Purchaser Agent” in the definition of “Purchaser Agent” hereto, as
well as for the benefit of each assignee or other transferee from any such
Person, and (ii) each action taken by such Purchaser Agent has been duly
authorized and approved by all necessary action on the part of the Purchasers on
whose behalf it is purportedly acting. Each Purchaser Agent and its Purchaser(s)
shall agree amongst themselves as to the circumstances and procedures for
removal, resignation and replacement of such Purchaser Agent.

Section 5.5 Notice of Termination Events. Neither any Purchaser Agent nor the
Administrator shall be deemed to have knowledge or notice of the occurrence of
any Termination Event or Unmatured Termination Event unless the Administrator
and the Purchaser Agents have received notice from any Purchaser, the Servicer
or the Seller stating that a Termination Event or an Unmatured Termination Event
has occurred hereunder and describing such Termination Event or Unmatured
Termination Event. In the event that the Administrator receives such a notice,
it shall promptly give notice thereof to each Purchaser Agent whereupon each
such Purchaser Agent shall promptly give notice thereof to its related
Purchasers. In the event that a Purchaser Agent receives such a notice (other
than from the Administrator), it shall

 

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promptly give notice thereof to the Administrator. The Administrator shall take
such action concerning a Termination Event or an Unmatured Termination Event as
may be directed by the Majority Purchaser Agents (unless such action otherwise
requires the consent of all Purchasers), but until the Administrator receives
such directions, the Administrator may (but shall not be obligated to) take such
action, or refrain from taking such action, as the Administrator deems advisable
and in the best interests of the Purchasers and the Purchaser Agents.

Section 5.6 Non-Reliance on Administrator, Purchaser Agents and Other
Purchasers. Each Purchaser expressly acknowledges that none of the
Administrator, the Purchaser Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrator, or any
Purchaser Agent hereafter taken, including any review of the affairs of the
Seller, TransDigm, the Servicer or any Originator, shall be deemed to constitute
any representation or warranty by the Administrator or such Purchaser Agent, as
applicable. Each Purchaser represents and warrants to the Administrator and the
Purchaser Agents that, independently and without reliance upon the
Administrator, Purchaser Agents or any other Purchaser and based on such
documents and information as it has deemed appropriate, it has made and will
continue to make its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of the Seller, TransDigm, the Servicer or any Originator, and
the Receivables and its own decision to enter into this Agreement and to take,
or omit, action under any Transaction Document. Except for items specifically
required to be delivered hereunder, the Administrator shall not have any duty or
responsibility to provide any Purchaser Agent with any information concerning
the Seller, TransDigm, the Servicer or any Originator or any of their Affiliates
that comes into the possession of the Administrator or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.

Section 5.7 Administrator, Purchasers, Purchaser Agents and Affiliates. Each of
the Administrator, the Purchasers and the Purchaser Agents and any of their
respective Affiliates may extend credit to, accept deposits from and generally
engage in any kind of banking, trust, debt, equity or other business with the
Seller, TransDigm, the Servicer or any Originator or any of their Affiliates.
With respect to the acquisition of the Eligible Receivables pursuant to this
Agreement, each of the Purchaser Agents and the Administrator shall have the
same rights and powers under this Agreement as any Purchaser and may exercise
the same as though it were not such an agent, and the terms “Purchaser” and
“Purchasers” shall include, to the extent applicable, each of the Purchaser
Agents and the Administrator in their individual capacities.

Section 5.8 Indemnification. Each Committed Purchaser shall indemnify and hold
harmless the Administrator (but solely in its capacity as Administrator) and its
respective officers, directors, employees, representatives and agents (to the
extent not reimbursed by the Seller, the Servicer or any Originator and without
limiting the obligation of the Seller, the Servicer or any Originator to do so),
ratably (based on its Commitment) from and against any and all liabilities,
obligations, losses, damages, penalties, judgments, settlements, costs, expenses
and disbursements of any kind whatsoever (including in connection with any
investigative or threatened proceeding, whether or not the Administrator or such
Person shall be designated a party thereto) that may at any time be imposed on,
incurred by or asserted against the Administrator or such Person as a result of,
or related to, any of the transactions contemplated by the Transaction Documents
or the execution, delivery or performance of the Transaction

 

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Documents or any other document furnished in connection therewith (but excluding
any such liabilities, obligations, losses, damages, penalties, judgments,
settlements, costs, expenses or disbursements resulting solely from the gross
negligence or willful misconduct of the Administrator or such Person as
determined by final non-appealable judgment of a court of competent
jurisdiction).

Section 5.9 Successor Administrator. The Administrator may, upon at least thirty
(30) days’ prior written notice to the Seller, each Purchaser and Purchaser
Agent, resign as Administrator. Such resignation shall not become effective
until (x) a successor Administrator is appointed by the Majority Purchaser
Agents and has accepted such appointment and (y) so long as no Termination Event
has occurred and is continuing, the Seller shall have consented to such
successor Administrator (such consent not to be unreasonably withheld or
delayed). Upon such acceptance of its appointment as Administrator hereunder by
a successor Administrator, such successor Administrator shall succeed to and
become vested with all the rights and duties of the retiring Administrator, and
the retiring Administrator shall be discharged from its duties and obligations
under the Transaction Documents. After any retiring Administrator’s resignation
hereunder, the provisions of Sections 3.1 and 3.2 and this Article V shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
the Administrator.

ARTICLE VI

MISCELLANEOUS

Section 6.1 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Transaction Document, or consent to any departure by the
Seller or the Servicer therefrom, shall be effective unless in a writing signed
by the Administrator, the Majority Purchaser Agents, and, in the case of an
amendment, by the Seller and the Servicer; provided, however, that no such
amendment or waiver shall, (a) without the consent of each affected Purchaser,
(i) extend the date of any payment or deposit of Collections by the Seller or
the Servicer or decrease the outstanding amount of or rate of Discount or extend
the repayment of or any scheduled payment date for the payment of any Discount
in respect of any Portion of Capital or any fees owed to a Purchaser;
(ii) reduce any fees payable pursuant to the applicable Fee Letter,
(iii) forgive or waive or otherwise excuse any repayment of Capital or change
either the amount of Capital of any Purchaser or any Purchaser’s pro rata share
of the Purchased Interest; (iv) increase the Commitment of any Purchaser;
(v) amend or modify the provisions of this Section 5.1 or the definition of
“Capital”, “Eligible Receivables”, “Facility Termination Date” (other than
pursuant to an extension thereof in accordance with Section 1.12 hereof),
“Majority Purchaser Agents”, “Net Receivables Pool Balance”, “Purchased
Interest”, “Termination Day” or “Total Reserves”; (vi) release all or
substantially all of the Pool Assets from the security interest granted by the
Seller to the Administrator hereunder; or (vii) amend or modify any defined term
(or any term used directly or indirectly in such defined term) used in clauses
(i) through (v) above in a manner that would circumvent the intention of the
restrictions set forth in such clauses and (b) without the consent of the
Majority Purchaser Agents, amend, waive or modify any provision expressly
requiring the consent of the Majority Purchaser Agents. Each such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No failure on the part of any Purchaser
Agent, any Purchaser or the Administrator to exercise, and no delay in
exercising any right hereunder shall

 

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operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.

Section 6.2 Notices, Etc. All notices, demands and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile and email communications) and shall be personally delivered or sent by
facsimile or email, or by overnight mail, to the intended party at the mailing
or email address or facsimile number of such party set forth on Schedule IV
hereto (or in any other document or agreement pursuant to which it is or became
a party hereto), or at such other address or facsimile number as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective (i) if delivered by overnight
mail, when received, and (ii) if transmitted by facsimile or email, when sent,
receipt confirmed by telephone or electronic means.

Section 6.3 Successors and Assigns; Participations; Assignments.

(a) Successors and Assigns. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
assigns of such party; all covenants, promises and agreements by or on behalf of
any parties hereto that are contained in this Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and assigns.
Except as otherwise provided in Section 4.1(d), neither the Seller nor the
Servicer may assign or transfer any of its rights or delegate any of its duties
hereunder or under any Transaction Document without the prior written consent of
the Administrator and each Purchaser Agent.

(b) Participations. Except as otherwise specifically provided herein, any
Purchaser may sell to one or more Persons (each a “Participant”) participating
interests in the interests of such Purchaser hereunder; provided, that no
Purchaser shall grant any participation under which the Participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Transaction Document. Such Purchaser shall remain solely responsible for
performing its obligations hereunder, and the Seller, the Servicer, each
Purchaser Agent and the Administrator shall continue to deal solely and directly
with such Purchaser in connection with such Purchaser’s rights and obligations
hereunder. A Purchaser shall not agree with a Participant to restrict such
Purchaser’s right to agree to any amendment hereto, except amendments that
require the consent of all Purchasers. Any such Participant shall not have any
rights hereunder or under the Transaction Documents.

Each Purchaser (or its Purchaser Agent on its behalf) that sells a participation
shall, acting solely for this purpose as an agent of the Seller, maintain a
register on which it enters the name and address of its Participants and the
amounts of each such Participant’s interest in the Capital, Commitments or other
rights or obligations hereunder (the “Participant Register”); provided that no
Purchaser or Purchaser Agent shall have any obligation to disclose all or any
portion of the Participant Register (including the identity of any Participant
or any information relating to a Participant’s interest in the Capital,
Commitments or other rights or obligations hereunder) to any Person except to
the extent that such disclosure is necessary to establish that such Capital,
Commitments or other rights or obligations hereunder is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such
Purchaser shall treat each Person

 

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whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary. For the avoidance of doubt, the Administrator (in its capacity as
Administrator) shall have no responsibility for maintaining a Participant
Register.

(c) Assignments by Certain Committed Purchasers. Any Committed Purchaser may
assign to one or more Persons (each a “Purchasing Committed Purchaser”),
reasonably acceptable to the Administrator and the related Purchaser Agent in
its sole discretion, any portion of its Commitment pursuant to a supplement
hereto, substantially in the form of Annex D with any changes as have been
approved by the parties thereto (each, a “Transfer Supplement”), executed by
each such Purchasing Committed Purchaser, such selling Committed Purchaser, such
related Purchaser Agent and the Administrator and with the consent of the Seller
(provided, that the consent of the Seller shall not be unreasonably withheld or
delayed and that no such consent shall be required if a Termination Event or
Unmatured Termination Event has occurred and is continuing; provided, further,
that no consent of the Seller shall be required if the assignment is made by any
Committed Purchaser to the Administrator, to any other Committed Purchaser, to
any Affiliate of the Administrator or any Committed Purchaser, which Affiliate
is a bank or similar financial institution, to any Program Support Provider,
which Program Support Provider is a bank or similar financial institution. Any
such assignment by Committed Purchaser cannot be for an amount less than
$10,000,000. Upon (i) the execution of the Transfer Supplement, (ii) delivery of
an executed copy thereof to the Seller, the Servicer, such related Purchaser
Agent and the Administrator and (iii) payment by the Purchasing Committed
Purchaser to the selling Committed Purchaser of the agreed purchase price, if
any, such selling Committed Purchaser shall be released from its obligations
hereunder to the extent of such assignment and such Purchasing Committed
Purchaser shall for all purposes be a Committed Purchaser party hereto and shall
have all the rights and obligations of a Committed Purchaser hereunder to the
same extent as if it were an original party hereto. The amount of the Commitment
of the selling Committed Purchaser allocable to such Purchasing Committed
Purchaser shall be equal to the amount of the Commitment of the selling
Committed Purchaser transferred regardless of the purchase price, if any, paid
therefor. The Transfer Supplement shall be an amendment hereof only to the
extent necessary to reflect the addition of such Purchasing Committed Purchaser
as a “Committed Purchaser” and any resulting adjustment of the selling Committed
Purchaser’s Commitment.

(d) Assignments to Liquidity Providers and other Program Support Providers. Any
Conduit Purchaser may at any time grant to one or more of its Liquidity
Providers or other Program Support Providers, participating interests in its
portion of the Purchased Interest. In the event of any such grant by such
Conduit Purchaser of a participating interest to a Liquidity Provider or other
Program Support Provider, such Conduit Purchaser shall remain responsible for
the performance of its obligations hereunder. The Seller agrees that each
Liquidity Provider and Program Support Provider of any Conduit Purchaser
hereunder shall be entitled to the benefits of Sections 1.7, 1.8 and 1.9.

(e) Other Assignment by Conduit Purchasers. Each party hereto agrees and
consents (i) to any Conduit Purchaser’s assignment, participation, grant of
security interests in or other transfers of any portion of, or any of its
beneficial interest in, the Purchased Interest (or portion thereof), including
without limitation to any collateral agent in connection with its commercial

 

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paper program and (ii) to the complete assignment by any Conduit Purchaser of
all of its rights and obligations hereunder to any other Person, and upon such
assignment such Conduit Purchaser shall be released from all obligations and
duties, if any, hereunder; provided, that such Conduit Purchaser may not,
without the prior consent of its Committed Purchasers, make any such transfer of
its rights hereunder unless the assignee (x) is a commercial paper conduit that
(i) is principally engaged in the purchase of assets similar to the assets being
purchased hereunder, (ii) has as its Purchaser Agent the Purchaser Agent of the
assigning Conduit Purchaser, (iii) issues commercial paper or other Notes with
credit ratings substantially comparable to the ratings of the assigning Conduit
Purchaser and (iv) has been consented to by the Seller or (y) is a Committed
Purchaser or Liquidity Provider for such Conduit Purchaser. Any assigning
Conduit Purchaser shall deliver to any assignee a Transfer Supplement with any
changes as have been approved by the parties thereto, duly executed by such
Conduit Purchaser, assigning any portion of its interest in the Purchased
Interest to its assignee. Such Conduit Purchaser shall promptly (i) notify each
of the other parties hereto of such assignment and (ii) take all further action
that the assignee reasonably requests in order to evidence the assignee’s right,
title and interest in such interest in the Purchased Interest and to enable the
assignee to exercise or enforce any rights of such Conduit Purchaser hereunder.
Upon the assignment of any portion of its interest in the Purchased Interest,
the assignee shall have all of the rights hereunder with respect to such
interest (except that the Discount therefor shall thereafter accrue at the rate,
determined with respect to the assigning Conduit Purchaser unless the Seller,
the related Purchaser Agent and the assignee shall have agreed upon a different
Discount).

(f) Certain Pledges. Without limiting the right of any Purchaser to sell or
grant interests, security interests or participations to any Person as otherwise
described in this Section 6.3, any Purchaser may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure its obligations as a Purchaser hereunder, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Purchaser from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Purchaser as a party hereto.

(g) Register. The Administrator shall, acting solely for this purpose as an
agent of the Seller, maintain at its address referred to on Schedule IV (or such
other address determined by the Collateral Agent in its sole discretion with
notice thereof to the Seller and each Funding Agent) a copy of each Assignment
Agreement and Transfer Supplement delivered to and accepted by it hereunder and
a register for the recordation of the names and addresses of the Purchasers, the
Commitment of each Purchaser Group and the aggregate outstanding Capital (and
stated interest, if any, thereon) of each Purchaser from time to time (the
“Register”). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the parties hereto may treat each Person
whose name is recorded in the Register as a Purchaser under this Agreement for
all purposes hereof. The Register shall be available for inspection by the
parties hereto at any reasonable times and from time to time upon reasonable
prior notice.

Section 6.4 Costs, Expenses and Taxes. (a) Without limiting any of the Seller’s
other obligations hereunder or under any other Transaction Document (including,
without limitation, its obligations under Sections 1.5, 1.7, 1.8, 1.9 and 3.1 of
this Agreement and under Section 1(e) of Exhibit IV of this Agreement), the
Seller shall pay to the Administrator, each Purchaser Agent and each Purchaser
on demand all costs and expenses (including, without limitation, rating

 

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agency fees and Attorney Costs) in connection with (i) the preparation,
execution, delivery and administration of this Agreement or the other
Transaction Documents and the other documents and agreements to be delivered
hereunder and thereunder (and all reasonable costs and expenses in connection
with any amendment, waiver or modification of any thereof), (ii) the sale of the
Purchased Interest (or any portion thereof), (iii) the perfection (and
continuation) of the Administrator’s rights in the Receivables, Collections and
other Pool Assets, (iv) the enforcement by the Administrator, any Purchaser
Agent or any member of any Purchaser Group of the obligations of the Seller, the
Servicer or any Originator under the Transaction Documents or of any Obligor
under a Receivable and (v) the maintenance by the Administrator of the Lock-Box
Accounts (and any related lock-box or post office box), including Attorney Costs
for the Administrator, the Purchaser Agents and the Purchasers relating to any
of the foregoing or to advising the Administrator or any member of any Purchaser
Group (including, any related Liquidity Provider or any other related Program
Support Provider) about its rights and remedies under any Transaction Document
or any other document, agreement or instrument related thereto and all costs and
expenses (including Attorney Costs) of the Administrator, any Purchaser Agent
and any Purchaser in connection with the enforcement or administration of the
Transaction Documents or any other document, agreement or instrument related
thereto. The Administrator and each member of a Purchaser Group agree, however,
that unless a Termination Event has occurred and is continuing, the Seller shall
be liable only for the fees, costs and expenses of legal counsel for the
Administrator (which legal counsel may represent any or all of the Administrator
and the Purchaser Groups and Liquidity Provider). The Seller shall, subject to
the provisos in clause (e) of each of Sections 1 and 2 of Exhibit IV, reimburse
the Administrator, each Purchaser Agent and each Purchaser for the cost of such
Person’s auditors (which may be employees of such Person) auditing the books,
records and procedures of the Seller or the Servicer.

(b) In addition, the Seller shall pay on demand any and all stamp, franchise and
other taxes and fees payable in connection with the execution, delivery, filing
and recording of this Agreement or the other documents or agreements to be
delivered hereunder, and agrees to save each Indemnified Party and Affected
Person harmless from and against any liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes and fees.

Section 6.5 No Proceedings; Limitation on Payments. (a) Each of the Seller,
TransDigm, the Servicer, the Administrator, the Purchaser Agents, the
Purchasers, each assignee of the Purchased Interest or any interest therein, and
each Person that enters into a commitment to purchase the Purchased Interest or
interests therein, hereby covenants and agrees that it will not institute
against, or join any other Person in instituting against, any Conduit Purchaser
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and one day after the latest maturing Note issued by such
Conduit Purchaser is paid in full.

(b) Each party hereto agrees that it will not institute against, or join any
Person in instituting against, the Seller any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or any other proceeding under
any federal or state bankruptcy or similar law, for one year and one day after
the Final Payout Date; provided that the Administrator may take any such action
with the prior written consent of the Majority Purchaser Agents.

 

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(c) Notwithstanding any provisions contained in this Agreement to the contrary,
no Conduit Purchaser shall or shall be obligated to, pay any amount, if any,
payable by it pursuant to this Agreement or any other Transaction Document
unless (i) such Conduit Purchaser has received funds which may be used to make
such payment and which funds are not required to repay the Notes when due and
(ii) after giving effect to such payment, either (x) such Conduit Purchaser
could issue Notes to refinance all outstanding Notes (assuming such outstanding
Notes matured at such time) in accordance with the program documents governing
such Conduit Purchaser’s securitization program or (y) all Notes are paid in
full. Any amount which such Conduit Purchaser does not pay pursuant to the
operation of the preceding sentence shall not constitute a claim (as defined in
§101 of the Bankruptcy Code) against or company obligation of such Conduit
Purchaser for any such insufficiency unless and until such Conduit Purchaser
satisfies the provisions of clauses (i) and (ii) above.

(d) The provisions of this Section 6.5 shall survive any termination of this
Agreement.

Section 6.6 GOVERNING LAW AND JURISDICTION.

(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT
THE EFFECT OF PERFECTION OR PRIORITY OF A SECURITY INTEREST, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY NEW YORK LAW.

Section 6.7 Confidentiality. Unless otherwise required by Applicable Law, each
of the Seller and the Servicer agrees to maintain the confidentiality of this
Agreement and the other Transaction Documents (and all drafts thereof) in
communications with third parties and otherwise; provided, that this Agreement
may be disclosed (a) to third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance

 

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reasonably satisfactory to the Administrator and each Purchaser Agent and (b) to
the Seller’s and Servicer’s legal counsel and auditors if they agree to hold it
confidential. Unless otherwise required by Applicable Law, the Administrator,
the Purchaser Agents and the Purchasers agree to maintain the confidentiality of
non-public financial information regarding the Seller, the Servicer and any
Originator; provided, that such information may be disclosed (i) to third
parties to the extent such disclosure is made pursuant to a written agreement of
confidentiality, (ii) to legal counsel and auditors of the Purchasers, the
Purchaser Agents or the Administrator if they agree to hold it confidential,
(iii) to any nationally recognized statistical rating organization, (iv) to any
Program Support Provider or potential Program Support Provider (if they agree to
hold it confidential), (v) to any placement agency placing the Notes, and (vi)
to any regulatory authorities having jurisdiction over the Administrator, the
Purchaser Agents, any Purchaser, any Program Support Provider or any Liquidity
Provider.

Section 6.8 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which, when so executed, shall be deemed to be
an original, and all of which, when taken together, shall constitute one and the
same agreement.

Section 6.9 Survival of Termination. The provisions of Sections 1.7, 1.8, 1.9,
3.1, 3.2, 6.4, 6.5, 6.6, 6.7, 6.10 and 6.15 shall survive any termination of
this Agreement.

Section 6.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

Section 6.11 Sharing of Recoveries. Each Purchaser agrees that if it receives
any recovery, through set-off, judicial action or otherwise, on any amount
payable or recoverable hereunder in a greater proportion than should have been
received hereunder or otherwise inconsistent with the provisions hereof, then
the recipient of such recovery shall purchase for cash an interest in amounts
owing to the other Purchasers (as return of Capital or otherwise), without
representation or warranty except for the representation and warranty that such
interest is being sold by each such other Purchaser free and clear of any
Adverse Claim created or granted by such other Purchaser, in the amount
necessary to create proportional participation by the Purchaser in such
recovery. If all or any portion of such amount is thereafter recovered from the

 

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recipient, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.

Section 6.12 Right of Setoff. Each Purchaser is hereby authorized at any time
during the continuance of a Termination Event (in addition to any other rights
it may have) to setoff, appropriate and apply (without presentment, demand,
protest or other notice which are hereby expressly waived) any deposits and any
other indebtedness held or owing by such Purchaser (including by any branches or
agencies of such Purchaser) to, or for the account of, the Seller against
amounts owing by the Seller hereunder (even if contingent or unmatured).

Section 6.13 Entire Agreement. This Agreement and the other Transaction
Documents embody the entire agreement and understanding between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof.

Section 6.14 Headings. The captions and headings of this Agreement and any
Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.

Section 6.15 Purchaser Groups’ Liabilities. The obligations of each Purchaser
Agent and each Purchaser under the Transaction Documents are solely the
corporate obligations of such Person. Except with respect to any claim arising
out of the willful misconduct or gross negligence of the Administrator, any
Purchaser Agent or any Purchaser, no claim may be made by the Seller or the
Servicer or any other Person against the Administrator, any Purchaser Agent or
any Purchaser or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any other Transaction Document, or any act, omission or event occurring in
connection therewith; and each of Seller and Servicer hereby waives, releases,
and agrees not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

Section 6.16 USA Patriot Act. Each of the Administrator and each of the
Purchasers hereby notifies the Seller and the Servicer that pursuant to the
requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the “PATRIOT Act”), the Administrator and the Purchasers
may be required to obtain, verify and record information that identifies the
Seller, the Servicer and the Performance Guarantor, which information includes
the name, address, tax identification number and other information regarding the
Seller, the Servicer and the Performance Guarantor that will allow the
Administrator and the Purchasers to identify the Seller, the Servicer and the
Performance Guarantor in accordance with the PATRIOT Act. This notice is given
in accordance with the requirements of the PATRIOT Act. Each of the Seller and
the Servicer agrees to provide the Administrator and the Purchasers, from time
to time, with all documentation and other information required by bank
regulatory authorities under “know your customer” and anti-money laundering
rules and regulations, including, without limitation, the PATRIOT Act.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective signatories thereunto duly authorized, as of the date first
above written.

THE SELLER:

 

TRANSDIGM RECEIVABLES LLC, as Seller By:   LOGO [g640363g88p68.jpg] Name:  
Gregory Rufus Title:   Secretary and Treasurer

TransDigm Receivables LLC

Receivables Purchase Agreement

 

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THE SERVICER:

 

TRANSDIGM INC., as Servicer By:   LOGO [g640363g13f20.jpg] Name:   Gregory Rufus
Title:   Executive Vice President, Chief Financial Officer and Secretary

TransDigm Receivables LLC

Receivables Purchase Agreement

 

S-2

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PNC BANK, NATIONAL ASSOCIATION’S PURCHASER GROUP:

 

PNC BANK, NATIONAL ASSOCIATION, as Purchaser Agent, as a Committed Purchaser and
as Administrator By:  

LOGO [g640363g19r16.jpg]

Name:   Mark Falcione Title:   Executive Vice President Commitment: $225,000,000
Group Commitment: $225,000,000

TransDigm Receivables LLC

Receivables Purchase Agreement

 

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