Exhibit

10.32




 




EXECUTION COPY




 




CUSTODIAL AGREEMENT




 




This Custodial Agreement, dated as of September 12,

2002 (this “Custodial Agreement”), is entered into by and among BNY

MIDWEST TRUST COMPANY, an Illinois corporation (the “Custodian”), WILLIS ENGINE

FUNDING LLC, a Delaware limited liability company (the “Issuer”), WILLIS

LEASE FINANCE CORPORATION, a Delaware corporation, as Servicer (the “Servicer”),

THE BANK OF NEW YORK, as Indenture Trustee (the “Indenture Trustee”) and

BARCLAYS BANK PLC , as Deal Agent (the “Deal Agent”) for the

Noteholders.




 




RECITALS




 




WHEREAS, Issuer, Servicer, the Purchasers, Deal Agent

and Indenture Trustee have entered into various agreements relating to the

issuance by the Issuer of the Series 2002-1 Notes pursuant to that certain Indenture

dated as of September 12, as supplemented by the Series 2002-1 Supplement dated

as of September 12, 2002 (the “Supplement”) (as supplemented by the

Supplement, the “Indenture”), including without limitation the Servicing

Agreement dated as of September 12, 2002 (the “Servicing Agreement”),

the Contribution and Sale Agreement dated as of September 12, 2002 (the “Contribution

Agreement”), and other documents and instruments ancillary thereto (the

Indenture, Supplement, Servicing Agreement, Contribution Agreement and such

other documents and instruments ancillary thereto, each as further amended,

restated, modified or supplemented from time to time, the “Securitization

Facility Agreements”);




 




WHEREAS, pursuant to the terms of the Securitization

Facility Agreements and other documents executed in connection therewith,

Issuer is obligated to deliver possession of each Deliverable, Deliverable

Package, the Collateral Files and the collateral therein and Possessory

Collateral (each as defined below), to Indenture Trustee and to perfect the

security interest of Indenture Trustee for the benefit of the Noteholders;




 




WHEREAS, Issuer and Indenture Trustee have requested

Custodian to serve as the bailee of Indenture Trustee with regard to the

Collateral Files and the collateral therein and Possessory Collateral during

the term of the Securitization Facility Agreements and to provide for

perfection of the security interest of Indenture Trustee according to the terms

and conditions of this Custodial Agreement;




 




WHEREAS, Custodian has agreed to serve as Custodian

for Indenture Trustee with regard to each Collateral File and the collateral

therein and Possessory Collateral;




 




WHEREAS, Custodian is a financial institution

regulated by the Comptroller of the Currency;




 




NOW, THEREFORE, in consideration of their mutual

agreements, the parties agree as follows:




 





























 




I.          Definitions.  Capitalized terms used in this Custodial

Agreement are used as defined in this Section I and are to be construed as

including the plural as well as the singular forms of such terms.  Additional definitions may be found

throughout this Custodial Agreement. 

Capitalized terms used, but not defined in this Custodial Agreement, are

used as defined in the Securitization Facility Agreements.




 




As used in this Custodial Agreement, the following

terms will have the following meanings:




 




“Alternative Delivery” shall mean any delivery

to a Lessee of an Engine or execution by a Lessee of any Lease that is not a

Funding or a Remarketing.




 




“Alternative Delivery Deliverable” shall mean

any item listed on Schedule 3 hereto and related to the applicable Engine.




 




“Alternative Delivery Package” shall mean an

Alternative Delivery Package delivered to Custodian and containing any

Alternative Delivery Deliverable required to be delivered to Custodian.




 




“Business Day” shall mean any day on which

banks are not authorized or required to close in New York City, New York,

Chicago, Illinois or San Francisco, California.




 




“Collateral File” shall mean, with respect to

any Funding, Remarketing or Alternative Delivery, all of the Deliverables

listed on the applicable Collateral Schedule, and any and all other documents

held by Custodian related to such Funding, Remarketing, or Alternative

Delivery.




 




“Collateral Schedule” shall mean a schedule

related to the applicable Engine containing the Deliverables set forth in

Schedule 1, Schedule 2 or Schedule 3 hereto, as applicable.




 




“Deliverable” shall mean any item listed on any

Collateral Schedule.




 




“Deliverable Package” shall mean any Funding

Package, Remarketing Package, Alternative Delivery Package or package

containing a Subsequent Deliverable, as the case may be.




 




“Funding” shall mean any financing of an Engine

to be owned by the Issuer or an Owner Trust the Beneficial Interest in which

will be owned by the Issuer.




 




“Funding Deliverable” shall mean any item

listed on Schedule 1 hereto and related to the applicable Engine.




 




“Funding Package” shall mean a Funding Package

delivered to Custodian and containing any Funding Deliverable required to be

delivered to Custodian.




 




“Obligations” shall mean all obligations and

liabilities of Issuer to Indenture Trustee under the Securitization Facility

Agreements and all documents executed in




 




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connection with the

Securitization Facility Agreements, as each may be amended, restated or

otherwise modified from time to time, including without limitation any

promissory notes executed in connection therewith, as such notes may be

amended, restated or otherwise modified from time to time.




 




“Possessory Collateral” shall mean any

instruments or security documents a security interest in which must be

perfected by control (as such term is defined in the applicable UCC) and which

serves as collateral for or evidences any Funding, Remarketing, or Alternative

Delivery.




 




“Remarketing” shall mean any Subsequent Lease

Transaction.




 




“Remarketing Deliverable” shall mean any item

listed in Schedule 2 hereto and related to the applicable Engine.




 




“Remarketing Package” shall mean a Remarketing

Package delivered to Custodian and containing any Remarketing Deliverable

required to be delivered to Custodian.




 




II.         Deliveries.




 




A.            Deliveries related to any Funding.




 




1.             In connection with each Funding, Issuer will deliver or

will cause to be delivered to Custodian a Collateral File relating to such

Funding, containing the deliverables identified in the Funding Deliverable

Schedule (the “Funding Deliverable Schedule”) attached hereto as

Schedule 1, each to be delivered within the applicable time period as set forth

on such schedule opposite the related Funding Deliverable under the column

titled “Due Date”.




 




2.             On or prior to 4:30 p.m. (New York time) on the Business

Day prior to each Funding, Servicer will execute and deliver or cause to be

delivered to Custodian, together with the related initial Funding Package, a

certificate from a duly authorized officer of the Servicer, certifying that (A)

it has delivered to the Custodian the Funding Deliverables numbered 1 and 2 on

Schedule 1 hereto, (B) any Funding Deliverable not contained in the initial

Funding Package will be delivered within the applicable time period set forth

on Schedule 1 hereto and (C) each Funding Deliverable delivered or to be

delivered relates or will relate to the applicable Engine (such Engine to be

clearly identified in such certificate by the Engine’s manufacturer’s serial

number) and is in form and substance required under the Securitization Facility

Agreements.




 




B.         Deliveries related to

any Remarketing.




 




1.             In connection with each Remarketing, Issuer will deliver

or will cause to be delivered to Custodian a Collateral File relating to such

Remarketing, containing the deliverables identified in the Remarketing

Deliverable Schedule (the “Remarketing Deliverable Schedule”) attached

hereto as Schedule 2, each to be delivered




 




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within the applicable time period as set forth on such

schedule opposite the related Remarketing Deliverable under the column titled

“Due Date”.




 




2.             On or prior to 4:30 p.m. (New York time) on the Business

Day prior to the date of each Remarketing, Servicer will execute and deliver or

cause to be delivered to Custodian, together with the related initial

Remarketing Package, a report from a duly designated representative of the

Servicer, stating that (A) it has delivered to the Custodian the Remarketing

Deliverable numbered 1 on Schedule 2 hereto, (B) any Remarketing Deliverable

not contained in the initial Remarketing Package will be delivered within the

applicable time period set forth on Schedule 2 hereto and (C) each Remarketing

Deliverable delivered or to be delivered relates or will relate to the

applicable Engine (such Engine to be clearly identified in such certificate by

the Engine’s manufacturer’s serial number) and is in form and substance

required under the Securitization Facility Agreements.




 




C.         Deliveries related to

any Alternative Delivery.




 




1.             In connection with each Alternative Delivery, Issuer

will deliver or will cause to be delivered to Custodian a Collateral File

relating to such Alternative Delivery, containing the deliverables identified

in the Alternative Delivery Deliverable Schedule attached hereto as

Schedule 3 or in such other schedule approved by the Deal Agent and delivered

by Issuer to Custodian one (1) Business Day prior to the related

Alternative Delivery (the “Alternative Delivery Deliverable Schedule”),

each to be delivered within the applicable time period as set forth on such

schedule opposite the related Alternative Delivery Deliverable under the column

titled “Due Date”.




 




2.             On or prior to 4:30 p.m. (New York time) on the Business

Day prior to each Alternative Delivery, Servicer will execute and deliver or

cause to be delivered to Custodian, together with the related initial

Alternative Delivery Package, a report from a duly designated representative of

the Servicer, stating that (A) it has delivered to the Custodian the

Alternative Delivery Deliverables required to be delivered on or prior to the

applicable Alternative Delivery as listed on Schedule 3 hereto, (B) any

Alternative Delivery Deliverable not contained in the initial Alternative

Delivery Package will be delivered within the applicable time period set forth

on Schedule 3 hereto and (C) each Alternative Delivery Deliverable delivered or

to be delivered relates or will relate to the applicable Engine (such Engine to

be clearly identified on such certificate by the Engine’s manufacturer’s serial

number) and is in form and substance required under the Securitization Facility

Agreements.




 




D.         Subsequent

Deliverables.  Subsequent to the

date of the receipt of any Deliverable Package, Issuer will deliver (or will

cause to be delivered) to Custodian subsequent documents, certificates or

instruments (each a “Subsequent Deliverable”) necessary to complete the

related Collateral File, together with a report (with copies of such report to

the Deal Agent and Indenture Trustee) from a duly designated representative of

the Servicer, stating that (A) the Subsequent Deliverable is being delivered

within the applicable time period set forth on the applicable Collateral

Schedule and (B) the Subsequent Deliverable relates to the applicable Engine

(such Engine to be




 




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clearly identified on

such certificate by the Engine’s manufacturer’s serial number) and is in form

and substance required under the Securitization Facility Agreements.




 




E.          Receipt Obligations

Concerning All Deliverables.




 




1.             Upon receipt of a Deliverable Package, Custodian shall

inventory all documents in such Deliverable Package together with any and all

other documents related to the applicable Engine, and, subject to paragraph 3

below, immediately notify in writing Indenture Trustee, Issuer, Servicer and

Deal Agent if (A) any Deliverable listed in the certificate of Servicer related

to such Deliverable Package is not contained in the applicable Deliverable

Package, (B) there are any discrepancies between the Deliverables listed in the

certificate of Servicer and the documents contained in the related Deliverable

Package or (C) Custodian, in its sole discretion, has any doubts relating to

any of the contents of the Deliverable Package.




 




2.             Indenture Trustee authorizes Issuer to deliver, or cause

to be delivered, full and complete possession of each Deliverable to Custodian,

and each Deliverable delivered or to be delivered together with all other items

required, but not delivered to Custodian, shall serve as security for the

payment of the Obligations and shall be subject to a perfected, first priority

lien pursuant to the terms of the Securitization Facility Agreements.




 




3.             If on any day the Custodian receives more than

five (5) Deliverable Packages, Custodian shall inventory all documents in

each Delivery Package together with any and all other documents related to each

of the applicable Engines, and, within five (5) Business Days, notify in

writing Indenture Trustee, Issuer, Servicer and Deal Agent if (A) any

Deliverable listed in any certificate of Servicer related to any of such

Deliverable Packages is not contained in the applicable Deliverable Package,

(B) there are any discrepancies between the Deliverables listed in any

certificate of Servicer and the documents contained in the related Deliverable

Package or (C) Custodian, in its sole discretion, has any doubts relating to

any of the contents of any Deliverable Package.




 




4.             On the fourth (4th) Business Day, the 46th

day, the 91st day and the 121st day, after the

Custodian’s receipt of any initial Deliverable Package, Custodian shall use its

best efforts to deliver to Servicer, Indenture Trustee, Issuer and Deal Agent

on such date (but in no event later than one (1) Business Day thereafter) a

certificate (the “Certification”) in the form attached hereto as Exhibit

A to the effect that, except as listed in such Certification (each, an “Excepted

Item”), Custodian has a complete Collateral File with respect to the

related Engine; provided, that after a Certification has been delivered

indicating that the Custodian has in its actual possession the complete

Collateral File with respect to the related Engine, no further Certification as

to such Collateral File shall be required. 

It is expressly understood and agreed by the parties hereto that the

Custodian shall not be liable to any party hereto for incorrectly listing any

Excepted Item in a Certification, so long as such listing is based on the

Custodian’s good faith and reasonable belief that such Excepted Item is not in

its actual possession on the date of such Certification.




 




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III.        Custody of Collateral

Files and Possessory Collateral.




 




1.             Custodian agrees to hold each Deliverable, each

Deliverable Package, each Collateral File and the collateral contained therein

and Possessory Collateral in trust for the benefit of and on behalf of

Indenture Trustee as perfected, first priority lien holder, and as its agent in

accordance with the provisions of this Custodial Agreement.  Custodian shall, during the term of this

Custodial Agreement, segregate and maintain continuous actual custody,

possession and control of each Deliverable, each Deliverable Package, each

Collateral File and the collateral contained therein and Possessory Collateral

deposited with it for and on behalf of Indenture Trustee as perfected, first

priority lien holder.  Upon written

notice from the Indenture Trustee (at the direction of the Deal Agent),

Custodian shall release any Deliverable, any Deliverable Package, any Collateral

File and the collateral contained therein and Possessory Collateral to

Indenture Trustee, or its designee, as required in this Custodial

Agreement.  The possession of any

Deliverable, any Deliverable Package, any Collateral File and the collateral

contained therein and Possessory Collateral by Custodian and any rights therein

of Issuer are subject to all terms and provisions of this Custodial Agreement,

the perfected, first priority security interest of Indenture Trustee and the

rights and obligations of Indenture Trustee under this Custodial Agreement.




 




2.             Custodian shall, at its own expense, maintain at all

times during the existence of this Custodial Agreement and keep in full force

and effect, (1) fidelity insurance, (2) theft of documents insurance

and (3) forgery insurance subject to deductibles, each in amounts

customary and standard in the industry and with insurance companies reasonably

acceptable to Indenture Trustee.  Upon

written request, Indenture Trustee shall be entitled to receive a certificate

from the respective insurer that such insurance is in full force and effect.




 




IV.        Duty of Custodian.  Except as otherwise provided herein,

Custodian shall maintain custody of each Deliverable, each Deliverable Package,

each Collateral File and the collateral contained therein and Possessory

Collateral until Indenture Trustee, in writing, requests delivery of any

portion or all of any Deliverable, Deliverable Package, Collateral File and the

collateral contained therein and Possessory Collateral to Indenture Trustee or

its designee.  Custodian agrees that,

except as otherwise required herein or otherwise required by law, it will not

release any portion or all of any Deliverable, any Deliverable Package, any

Collateral File and the collateral contained therein or any Possessory Collateral

to any person or entity, whatsoever, without the prior written consent of

Indenture Trustee.  Custodian agrees

that it will look solely to Issuer for payment of its services as Custodian

under this Custodial Agreement and Issuer hereby agrees and acknowledges that

it shall be solely responsible for the same and shall promptly pay the same.




 




V.         Delivery and Location.  Each Deliverable, each Deliverable Package,

each Collateral File and the collateral contained therein and Possessory

Collateral shall be delivered to Custodian at and shall be maintained by

Custodian in a segregated and divided space in secure and fireproof facilities,

at Custodian’s place of business at 2 North LaSalle Street, Lower Level,

Chicago, Illinois 60602, provided, however, that with




 




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the prior written consent of Indenture Trustee, each

of the Deliverables, Deliverable Packages, the Collateral Files and the

collateral contained therein and Possessory Collateral in Custodian’s actual possession

may be transferred to a similarly segregated and divided space in a secure and

fireproof facility at a location notified to Indenture Trustee and Deal Agent

in writing.




 




VI.        Inspections.  Upon no less than two (2) Business Days’

prior written notice to Custodian, Indenture Trustee, Deal Agent, Issuer,

Servicer or any of their respective agents, accountants, attorneys and auditors

will be permitted during normal business hours to examine Custodian’s

documents, records and other papers in possession of or under the control of

Custodian relating to any Deliverable, any Deliverable Package, any Collateral

File and the collateral contained therein and any Possessory Collateral.




 




VII.       Continuation of Custody.  Until such time as Indenture Trustee notifies

Custodian in writing that the Obligations have been satisfied, Custodian’s

custody of each Deliverable, each Deliverable Package, each Collateral File and

the collateral contained therein and Possessory Collateral shall continue, and

neither Issuer nor Servicer shall have the right to retake or request delivery

to a third party of any Deliverable, any Deliverable Package, any Collateral

File and the collateral contained therein or any Possessory Collateral or any

of the documents therein or related thereto. 

Subject to Section VIII hereof, upon the written request of Indenture

Trustee, Custodian shall release any portion or all of any Deliverable, any

Deliverable Package, any Collateral File and the collateral contained therein

or any Possessory Collateral to Indenture Trustee or any third party designated

by Indenture Trustee.  After the

Obligations of Issuer to Indenture Trustee have been fully paid and satisfied,

Indenture Trustee shall give written notice to Custodian and Custodian shall

return any Deliverable, any Deliverable Package, any Collateral File and the

collateral contained therein or any Possessory Collateral to Issuer or its

designee.




 




VIII.      Release for Servicing or

Foreclosure.  From time to time as

appropriate for servicing or foreclosure of any Deliverable, any Deliverable

Package, any Collateral File and the collateral contained therein or Possessory

Collateral, Custodian  shall, upon

written request from Servicer in the form of Exhibit B attached hereto,

and with the prior written consent of Indenture Trustee, deliver to Servicer

such Deliverable or Deliverables as requested by Servicer and consented to in

writing by Indenture Trustee for, including, but not limited to, the

prosecution of any foreclosure or collection proceeding or for Remarketing.  Upon the receipt of the released Deliverable

or Deliverables, Servicer shall execute a trust receipt, in the form of Exhibit

C attached hereto (a “Trust Receipt”), indicating the purpose of the

release of the Deliverable or Deliverables and acknowledging the continuing

application of the security interest of Indenture Trustee in the Deliverables,

Deliverable Packages, the Collateral Files and the collateral contained therein

and Possessory Collateral and any proceeds thereof.




 




IX.        Release of Collateral

File upon Instruction.  Upon written

notice from Indenture Trustee for the release of a Collateral File (or any

portion thereof), Custodian




 




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shall, within two (2) Business Days following receipt of such notice,

release such Collateral File (or portion thereof) to Issuer or its designee.




 




X.         Reports.  In addition to Certifications required

pursuant to the terms of this Custodial Agreement, Custodian shall provide the

Issuer, Servicer, Indenture Trustee and Deal Agent, within five (5) Business

Days following the end of each calendar month, a monthly written report as of

the last day of such calendar month, which report shall set forth each Engine

in the portfolio and with respect to each Engine (A) each Deliverable related

to such Engine not in Custodian’s actual possession as of the date of such

report and (B) each Deliverable related to such Engine released for including,

but not limited to, the purpose of servicing and foreclosure.




 




XI.        Removal of Custodian.  Indenture Trustee, with or without cause,

shall (at the direction of the Deal Agent) and upon at least sixty (60) days’

prior written notice to Custodian (with a copy to Issuer and Deal Agent),

remove and discharge Custodian from the performance of its duties under this

Custodial Agreement.  Having given such

notice of removal, Indenture Trustee promptly shall appoint a successor

custodian to act on behalf of Indenture Trustee and Issuer, as their respective

rights appear herein.  Such successor custodian

shall accept such appointment by executing and delivering a written instrument

similar in form and substance to this Custodial Agreement and satisfactory to

both of Issuer and Deal Agent, which such instrument shall be acknowledged by

Indenture Trustee and Servicer.  So long

as no Event of Default (as defined in the Securitization Facility Agreements)

shall have occurred and be continuing, Issuer shall have the right to consent

to the appointment of a successor custodian pursuant to this Section XI, which

consent shall not be unreasonably withheld. 

In the event of any such removal, Custodian shall promptly transfer to

the successor custodian, as directed by Indenture Trustee, and at the expense

of Issuer, all of the Deliverables, any Deliverable Package, any Collateral

File and the collateral contained therein and Possessory Collateral then in, or

in the case of Subsequent Deliverables thereafter coming into, Custodian’s

actual possession.  In the event of any

such removal, Issuer shall promptly pay Custodian its outstanding fees and

expenses, if any, incurred in connection with this Custodial Agreement.  In the event of any appointment of a

successor custodian, Issuer shall be responsible for the fees and expenses of

the Custodian and the successor custodian.




 




XII.       Termination of Custodian.  Custodian may resign or terminate its

obligations under this Custodial Agreement upon at least sixty (60) days’ prior

written notice to Issuer, Deal Agent and Indenture Trustee.  In the event of such termination or

resignation, Indenture Trustee shall appoint a successor custodian, such

appointment to occur in no event later than 60 days after Indenture Trustee’s

receipt of Custodian’s notice of resignation or termination.  Such successor custodian shall accept such

appointment by executing and delivering a written instrument similar in form

and substance to this Custodial Agreement and satisfactory to Deal Agent, which

such instrument shall be acknowledged by Issuer, Indenture Trustee and

Servicer.  Upon such acceptance,

Custodian shall promptly transfer to the successor custodian, as directed by

Indenture Trustee and at the expense of Issuer, all of the Deliverables, any

Deliverable Package, any Collateral Files and the collateral contained therein

and Possessory




 




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Collateral then in, or in the case of Subsequent

Deliverables thereafter coming into, Custodian’s actual possession.  The termination or resignation of Custodian

pursuant to this Section XII shall not become effective until a successor

custodian has accepted its appointment pursuant to this Section XII, and the

Custodian’s obligations hereunder shall survive until the successor custodian

has confirmed in writing to the Indenture Trustee, Deal Agent, Servicer, Issuer

and Custodian that each Deliverable in Custodian’s actual possession on the

date of its notice of termination or resignation, as the case may be, is in the

successor custodian’s actual possession (provided that the acceptance thereof,

shall have occurred within 120 days following the appointment of the successor

custodian).  The payment of such

successor custodian’s fees and expenses shall be solely the responsibility of

Issuer.




 




XIII.      Representations,

Warranties and Covenants of Custodian. 

With respect to each Certification, Custodian hereby represents and

warrants to, and covenants with Indenture Trustee that as of the date such

Certification is provided:




 




(a)           Custodian is duly organized, validly

existing and in good standing under the laws of the United States;




 




(b)           Custodian has the full power and

authority to hold each Deliverable, Deliverable Package, Collateral File and

the collateral contained therein and Possessory Collateral (whether acting

alone or through an agent) and to execute, deliver and perform, and to enter

into and consummate all transactions contemplated by this Custodial Agreement,

has duly authorized the execution, delivery and performance of this Custodial

Agreement, has duly executed and delivered this Custodial Agreement and this

Custodial Agreement constitutes a legal, valid and binding obligation of

Custodian, enforceable against it in accordance with its terms, except as

enforcement of such terms may be limited by bankruptcy, insolvency or similar

laws affecting the enforcement of creditors’ rights generally and by the

availability of equitable remedies; and




 




(c)           Custodian is a separate and

independent entity from Issuer and Servicer, does not own a controlling

interest in Issuer or Servicer either directly or through affiliates and no

director or officer of Custodian is also a director or officer of Issuer or

Servicer.




 




XIV.      Notices.  All demands, notices and communications

hereunder, except as otherwise provided herein, shall be in writing and shall

be effective upon receipt to:




 




(a)           in the case of Custodian:




 




BNY Midwest Trust Company




2 North LaSalle

Street




Lower Level




Chicago, Illinois

60602




Attention:  Ms. Diane Moser




Fax No.:  (312) 827-8588




Telephone

No.:  (312) 827-8680




 




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(b)           in the case of Issuer:




 




Willis Engine

Funding LLC




2320 Marinship

Way, Suite 300




Sausalito,

California 94965




Attention:  Counsel




Fax No.:  (415) 331-5167




Telephone

No.:  (415) 331-5281




 




(c)           in the case of Servicer:




 




Willis Lease

Finance Corporation




2320 Marinship

Way, Suite 300




Sausalito,

California 94965




Attention:  Counsel




Fax No.:  (415) 331-5167




Telephone

No.:  (415) 331-5281




 




(d)           in the case of Deal Agent:




 




Barclays Bank PLC




200 Park Avenue




New York, New York

10166




Fax No.:  (212) 412-6846




Telephone

No.:  (212) 412-2932




 




(e)           in the case of Indenture Trustee:




 




The Bank of New

York




101 Barclay Street




8th

Floor West




New York, New York

10286




Attention:  Asset Backed Securities Unit




Fax No.:  (212) 815-2493




Telephone

No.:  (212) 815-8332




 




XV.       Facsimile Notices.  All parties to this Custodial Agreement

agree that where any written consent or notice is required of any party that a

facsimile transmission signed on behalf of such party will be sufficient to

serve as such written consent or notice. 

Custodian may act upon any instrument or other writing believed by it in

good faith to be genuine and signed or presented by the proper person.  Each party to this Custodial Agreement shall

provide Custodian with the names of persons authorized, subject to change by

subsequent notice received in writing by Custodian, to receive the Collateral

Files, to sign consents and notices or otherwise act on behalf of those

respective parties.  Each party shall

additionally provide sample signatures for such authorized persons.




 




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XVI.      Governing Law and

Jurisdiction; Waiver of Jury Trial. 

This Custodial Agreement shall be construed in accordance with the laws

of the State of New York governing agreements made and to be performed therein,

and the obligations, rights and remedies of the parties hereunder shall be

determined in accordance with such laws. 

The parties hereto agree to submit to personal jurisdiction in the State

of New York in any action or proceeding arising out of this Custodial

Agreement.  The parties hereto each

hereby waive the right to trial by jury in any proceeding in connection with or

arising out of this Custodial Agreement.




 




XVII.     Prior Agreements.  This Custodial Agreement supersedes all

prior and contemporaneous agreements and understandings, written or oral,

relating to the subject matter hereof. 

The provisions of this Custodial Agreement may not be amended, modified,

waived, discharged or terminated orally, but rather only by an instrument in writing

signed by the parties hereto.




 




XVIII.    Charges and Expenses.  Issuer will pay all fees of Custodian in

connection with the performance of its duties hereunder in accordance with the

fee schedule attached hereto as Schedule 4 (the “Custodial Fee Schedule”)

and also the reasonable legal fees, costs and expenses incurred by Custodian in

connection herewith; provided, however, that (i) Custodian shall

in no event acquire and hereby agrees not to assert any lien upon any

Deliverable, any Deliverable Package, Collateral File, any collateral contained

therein or Possessory Collateral deposited under this Custodial Agreement and

(ii) in the event Issuer fails to pay the fees and expenses of Custodian as set

forth herein, Custodian shall have no obligation to take actions or incur costs

in connection with this Custodial Agreement unless Servicer, Issuer or another

Person has made adequate provision for payment of Custodian’s fees and

expenses.




 




XIX.      No Adverse Interests.  Custodian covenants and warrants to Indenture

Trustee and Issuer that:  (i) as of the

date hereof, and as of each Certification, Custodian does not and shall not

hold any adverse interest, by way of security or otherwise, in any Deliverable,

any Deliverable Package, Collateral File, any collateral contained therein or

Possessory Collateral; and (ii) the execution of this Custodial Agreement and

the creation of the custodial relationship hereunder does not create any

interest, by way of security or otherwise of Custodian in or to any

Deliverable, any Deliverable Package, Collateral File and any collateral

contained therein or Possessory Collateral, other than Custodian’s rights as

custodian hereunder.




 




XX.       Assignment; Time.  Custodian shall not delegate, assign or

sub-contract any of its rights or obligations under this Custodial

Agreement.  Issuer may not assign its

rights or obligations under this Custodial Agreement.  Indenture Trustee may assign its rights and obligations under

this Custodial Agreement.  Time is of

the essence with respect to all dates, terms and conditions of this Custodial

Agreement.  All references to time

herein shall be deemed to refer to New York City time unless otherwise

provided.




 




XXI.      Termination of

Obligations of Custodian.  Subject

to Section XII, Custodian’s obligations under this Custodial Agreement shall

cease upon the earliest to occur of the following:  (a) delivery or surrender of all of the Deliverables, Deliverable






 




11





























 




Packages, Collateral Files and the collateral

contained therein and Possessory Collateral in Custodian’s actual possession to

Indenture Trustee; (b) delivery or surrender of all of the Deliverables,

Deliverable Packages, Collateral Files and the collateral contained therein and

Possessory Collateral in Custodian’s actual possession to any third–party

custodian designated in writing by Indenture Trustee (at the direction of Deal

Agent); and (c) following the receipt by Custodian of written notice from

Indenture Trustee of the payment in full and satisfaction of the Issuer’s

Obligations to Indenture Trustee under the Securitization Facility Agreements,

receipt by Servicer of each Collateral File (or portion thereof).




 




XXII.     Custodian.  (a) 

In the absence of bad faith on the part of Custodian, Custodian may

conclusively rely, as to the truth of the statements and the correctness of the

opinions expressed therein, upon any request, instructions, certificate,

opinion or other document furnished to Custodian, reasonably believed by

Custodian to be genuine and to have been signed or presented by the proper

party or parties and conforming to the requirements of this Custodial

Agreement; but in the case of any request, instruction, document or certificate

which by any provision hereof is specifically required to be furnished to the

Custodian, the Custodian shall be under a duty to examine the same to determine

whether or not it conforms to the requirements of this Custodial Agreement.




 




(b)           Custodian shall not be liable for any

error in judgment made in good faith by any officer or officers of Custodian,

unless it shall be conclusively determined by a court of competent jurisdiction

that Custodian was grossly negligent in ascertaining the pertinent facts.




 




(c)           None of the provisions of this

Custodial Agreement shall require Custodian to expend or risk its own funds or

otherwise to incur any liability, financial or otherwise, in the performance of

any of its duties hereunder, or in the exercise of any of its rights or powers,

if it shall have reasonable grounds for believing that repayment of such funds

or indemnity satisfactory to it against such risk or liability is not assumed

to it.




 




(d)           Whenever, in the administration of

the provisions of this Custodial Agreement, Custodian shall deem it necessary

or desirable that a matter be proved or established prior to taking or

suffering any action to be taken hereunder, such matter (unless other evidence

in respect thereof be herein specifically prescribed) may, in the absence of

gross negligence, willful misconduct or bad faith on the part of Custodian, be

deemed to be conclusively proved and established by a certificate signed by one

of Indenture Trustee’s or the Issuer’s officers, as the case may be, and

delivered to Custodian and such certificate, in the absence of gross

negligence, willful misconduct or bad faith on the part of Custodian, shall be

full warrant to Custodian for any action taken, suffered or omitted by it under

the provisions of this Custodial Agreement upon the faith thereof.




 




(e)           Custodian may consult with counsel

and the advice or any opinion of counsel shall be full and complete

authorization and protection in respect of any action taken or omitted by it

hereunder in good faith and in accordance with such advice or opinion of

counsel.




 




12





























 




(f)            Except as expressly stated in this

Custodial Agreement, Custodian shall not be bound to make any investigation

into the facts or matters stated in any resolution, certificate, statement,

instrument, opinion, report, notice, request, consent, entitlement order,

approval or other paper or document.




 




(g)           Custodian may execute any of the

trusts or powers hereunder or perform any duties hereunder either directly or

by or through agents, attorneys, custodians or nominees appointed by it with

due care, and shall not be responsible for any willful misconduct or gross

negligence on the part of any agent, attorney, custodian or nominee so

appointed.




 




XXIII.    Indemnification  (a) 

Servicer agrees to indemnify and hold Custodian and its directors,

officers, agents and employees harmless against any and all liabilities,

obligations, losses, damages, penalties, actions, judgments, suits, costs,

expenses or disbursements of any kind or nature whatsoever, including

reasonable attorney’s fees and expenses, that may be imposed on, incurred by,

or asserted against it or them in any way relating to or arising out of this

Custodial Agreement or any action taken or not taken by it or them hereunder

unless such liabilities, obligations, losses, damages, penalties, actions,

judgments, suits, costs, expenses or disbursements (other than special,

indirect, punitive or consequential damages, which shall in no event be paid by

Custodian) were imposed on, incurred by or asserted against Custodian relating

to or arising out of gross negligence, bad faith or willful misconduct on the

part of Custodian or any of its directors, officers, agents and employees.  The foregoing indemnification shall survive

any resignation or removal of Custodian or the termination or assignment of

this Custodial Agreement.




 




(b)           Neither Custodian nor any of its

officers, directors, employees or agents shall be liable for any action taken

or omitted under this Custodial Agreement or in connection herewith except to

the extent caused by such person’s gross negligence, willful misconduct or bad

faith, as determined by the final judgment of a court of competent

jurisdiction, no longer subject to appeal or review.




 




XXIV.    No Adverse Interest of

Custodian.  By execution of this

Custodial Agreement, Custodian warrants that it currently does not hold and

during the existence of this Custodial Agreement shall not hold, any adverse

interest, by way of security or otherwise, in any Deliverable, Deliverable

Package, Collateral File and the collateral contained therein or Possessory

Collateral.




 




XXV.     Counterparts.  This Custodial Agreement may be executed in

any number of counterparts and by the parties hereto in separate counterparts,

each of which when so executed and delivered shall be deemed to be an original,

and all of which taken together shall constitute but one and the same

instrument.




 




XXVI.    Force Majeure.  No party hereto shall be liable for failure

to perform, in whole or in material part (including, without limitation, the

failure to deliver any Deliverable in a timely manner as required by this

Custodial Agreement), its obligations under this Custodial Agreement if such

failure is caused by any event or condition not




 




13





























 




existing as of the date of this Custodial Agreement

and not reasonably within the control of the affected party, including, but

without limitation, by fire, flood, typhoon, earthquake, explosion, strikes,

labor troubles or other industrial disturbances, unavoidable accidents, war

(declared or undeclared), acts of terrorism, sabotage, embargoes, blockage,

acts of governmental authorities, riots, insurrections, or any other cause

beyond the control of the parties hereto; provided that the affected

party promptly notifies each of the other parties hereto of the occurrence of

the event of force majeure and takes all reasonable steps necessary to the

performance of its obligations so interfered with, as soon as practicable.




 




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INTENTIONALLY LEFT BLANK]




 




14





























 




The parties to this Custodial Agreement have caused it

to be executed by their duly authorized officers as of the date first written

above.




 




	

  CUSTODIAN


  	

  BNY MIDWEST TRUST COMPANY


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/


  	

  DIANE MOSER


  
	

   


  	

   


  	

  Name: Diane Moser 


  
	

   


  	

   


  	

  Title: Vice President


  
	

   


  	

   


  	

   


  
	

  ISSUER


  	

  WILLIS ENGINE FUNDING LLC


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/


  	

  MONICA J. BURKE 


  
	

   


  	

   


  	

  Name: Monica J. Burke 


  
	

   


  	

   


  	

  Title: Chief Financial Officer


  
	

   


  	

   


  	

   


  
	

  SERVICER


  	

  WILLIS LEASE FINANCE CORPORATION


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/


  	

  DONALD A. NUNEMAKER 


  
	

   


  	

   


  	

  Name: Donald A. Nunemaker 


  
	

   


  	

   


  	

  Title: Executive Vice

  President,


  Chief Operating Officer


  
	

   


  	

   


  	

   


  
	

  DEAL

  AGENT


  	

  BARCLAYS BANK PLC


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/


  	

  PIERRE DULEYRIE 


  
	

   


  	

   


  	

  Name: Pierre Duleyrie 


  
	

   


  	

   


  	

  Title: Director


  
	

   


  	

   


  	

   


  
	

  INDENTURE

  TRUSTEE


  	

  THE BANK OF NEW YORK


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/


  	

  SCOTT J. TEPPER 


  
	

   


  	

   


  	

  Name: Scott J. Tepper 


  
	

   


  	

   


  	

  Title: Assistant Vice President


  





 




15





























 




SCHEDULE 1




 




Funding Deliverables




 




	

  ITEM


  	

   


  	

  RECIPIENTS


  	

   


  	

  DUE DATE


  
	

  1.


  	

  Owner Trustee Guaranty executed by Owner Trustee


  	

   


  	

  Custodian


  	

   


  	

  At least 2 Business Days prior to the applicable

  Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  2.


  	

  Beneficial Interest Pledge Agreement, executed by

  the Issuer


  	

   


  	

  Custodian


  	

   


  	

  At least 2 Business Days prior to the applicable

  Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  3.


  	

  Asset Base Certificate


  	

   


  	

  Custodian, Deal Agent, Sheffield


  	

   


  	

  At least 1 day prior to the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  4.


  	

  Notice of Request for a Loan


  	

   


  	

  Custodian, Deal Agent, Sheffield


  	

   


  	

  On or prior to the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  5.


  	

  Servicer Certificate


  	

   


  	

  Deal Agent and Custodian


  	

   


  	

  On or prior to the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  6.


  	

  Compliance Certificate


  	

   


  	

  Custodian, Deal Agent, Sheffield


  	

   


  	

  On or prior to the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  7.


  	

  Appraisals


  	

   


  	

  Custodian, Deal Agent


  	

   


  	

  On or prior to the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  8.


  	

  Certified Board resolutions of the Owner Trustee


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the third Business Day following the

  applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  9.


  	

  Incumbency certificate of the Owner Trustee


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the third Business Day following the

  applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  10.


  	

  Legal opinion as to execution of Loan Documents by

  the Owner Trustee


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the third Business Day following the

  applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  11.


  	

  Engine and Beneficial Interest Transfer Certificate


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  12.


  	

  Supplement to List of Engines


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the third Business Day following the

  applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  13.


  	

  Any “chattel paper” original of each Lease Agreement


  	

   


  	

  Custodian


  	

   


  	

  To be provided to FAA Counsel, acting as agent for

  the Indenture Trustee, on or prior to any transfer.  FAA Counsel agrees to provide to Custodian within 3 Business

  days of the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  14.


  	

  Owner Trustee Mortgage executed by Owner Trustee


  	

   


  	

  Custodian


  	

   


  	

  To be provided to FAA Counsel on or prior to any

  transfer.  FAA Counsel agrees to

  provide to Custodian within 3 Business days of the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  15.


  	

  Opinion of FAA Counsel as to filing perfection and

  priority with respect to the FAA of Indenture Trustee’s security interest in

  the Collateral


  	

   


  	

  Custodian


  	

   


  	

  Within 3 Business Days after the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  16.


  	

  Certificates of insurance coverage or such other

  evidence of insurance coverage acceptable to the Deal Agent


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  17.


  	

  Consent and Agreement


  	

   


  	

  Custodian


  	

   


  	

  Within 90 days of the applicable Funding


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  18.


  	

  Evidence of filing Engine or Beneficial Interest

  registration with requisite Governmental Authority


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  19.


  	

  File-stamped copies of UCC-1 financing statements

  naming WLFC as Debtor/Seller; the Issuer as Secured Party/Purchaser; and BNY

  as Assignee of Secured Party


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  20.


  	

  File-stamped copies of UCC-1 financing statements naming

  the Issuer as Debtor and BNY as Secured Party


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  21.


  	

  Filed-stamped copies of FAA recordations of the

  Contribution and Sale Agreement, Indenture, Series 2002-1 Supplement and each

  Lease Agreement for each Engine and Contributed Beneficial Interest


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  22.


  	

  File-stamped copies of Security filings, if any,

  required by the Governmental Authority of the country of any foreign Lessee’s

  chief executive office


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  23.


  	

  File-stamped copies of UCC-1 financing statements

  covering any Lease Agreements being transferred and naming the lease

  originator as Debtor; the Issuer as Secured Party and BNY as Assignee of

  Secured Party


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  24.


  	

  File-stamped copies of UCC termination statements

  covering the security interest of any other Person with respect to

  Contributed Assets or Beneficial Interests in assets being transferred.


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  25.


  	

  File-stamped copies of UCC-1 financing statements

  naming the Owner Trustee as debtor and the Indenture Trustee as secured

  party.


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  





 




16





























 




SCHEDULE 2




Remarketing

Deliverables




 




	

  ITEM


  	

   


  	

  RECIPIENTS


  	

   


  	

  DUE DATE


  
	

  1.


  	

  Certificates of insurance coverage or such other

  evidence of insurance coverage acceptable to the Deal Agent


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the date of applicable Remarketing


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  2.


  	

  Servicer Certificate


  	

   


  	

  Deal Agent and Custodian


  	

   


  	

  On or prior to the third Business Day following the

  applicable Remarketing


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  3.


  	

  Supplement to List of Engines


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the third Business Day following the

  applicable Remarketing


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  4.


  	

  Any “chattel paper” original of each Lease Agreement


  	

   


  	

  Custodian


  	

   


  	

  To be provided to FAA Counsel, acting as agent for

  the Indenture Trustee, on or prior to any transfer.  FAA Counsel agrees to provide to Custodian within 3 Business

  days of the applicable Remarketing


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  5.


  	

  Opinion of FAA Counsel as to filing perfection and

  priority with respect to the FAA of Indenture Trustee’s security interest in

  the Collateral


  	

   


  	

  Custodian


  	

   


  	

  Within three Business Days after the applicable

  Remarketing


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  6.


  	

  Consent and Agreement


  	

   


  	

  Custodian


  	

   


  	

  Within 90 days of the applicable Remarketing


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  7.


  	

  Evidence of filing Engine or Beneficial Interest

  registration with requisite Governmental Authority


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  8.


  	

  File-stamped copies of UCC-1 financing statements

  naming WLFC as Debtor/Seller; the Issuer as Secured Party/Purchaser; and BNY

  as Assignee of Secured Party


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  9.


  	

  File-stamped copies of UCC-1 financing statements

  naming the Issuer as Debtor and BNY as Secured Party


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  10.


  	

  File-stamped copies of FAA recordations of the

  Contribution and Sale Agreement, Indenture, Series 2002-1 Supplement and each

  Lease Agreement for each Engine and Contributed Beneficial Interest


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  11.


  	

  File-stamped copies of Security filings, if any,

  required by the Governmental Authority of the country and of any foreign

  Lessee’s chief executive office


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  12.


  	

  File-stamped copies of UCC-1 financing statements

  covering any Lease Agreements being transferred and naming the lease

  originator as Debtor; the Issuer as Secured Party and BNY as Assignee of

  Secured Party


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  13.


  	

  File-stamped copies of UCC termination statements covering

  the security interest of any other Person with respect to Contributed Assets

  or Beneficial Interests in assets being transferred


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  14.


  	

  File-stamped copies of UCC-1 financing statements

  naming the Owner Trustee as debtor and the Indenture Trustee as secured

  party.


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  





 




17





























 




SCHEDULE

3




 




Alternative

Delivery Deliverables




 




	

  ITEM


  	

   


  	

  RECIPIENTS


  	

   


  	

  DUE DATE


  
	

  1.


  	

  Certificates of insurance coverage or such other

  evidence of insurance coverage acceptable to the Deal Agent


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the date of applicable Alternative

  Delivery


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  2.


  	

  Servicer Certificate


  	

   


  	

  Deal Agent and Custodian


  	

   


  	

  On or prior to the date of applicable Alternative

  Delivery


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  3.


  	

  Supplement to List of Engines


  	

   


  	

  Custodian


  	

   


  	

  On or prior to the third Business Day following the

  applicable Alternative Delivery


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  4.


  	

  Any “chattel paper” original of each Lease Agreement


  	

   


  	

  Custodian


  	

   


  	

  To be provided to FAA Counsel, acting as agent for

  the Indenture Trustee, on or prior to any transfer.  FAA Counsel agrees to provide to Custodian within 3 Business

  days of the applicable Alternative Delivery


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  5.


  	

  Opinion of FAA Counsel as to filing perfection and

  priority with respect to the FAA of Indenture Trustee’s security interest in

  the Collateral


  	

   


  	

  Custodian


  	

   


  	

  Within three Business Days after the applicable

  Alternative Delivery


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  6.


  	

  Consent and Agreement


  	

   


  	

  Custodian


  	

   


  	

  Within 90 days of the applicable Remarketing


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  7.


  	

  Opinions of Foreign Local Counsel as to perfection,

  if necessary (only for foreign Lessees not set up with an Owner Trust

  structure)


  	

   


  	

  Custodian


  	

   


  	

  Within 120 days of the applicable Alternative

  Delivery


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  8.


  	

  Evidence of filing Engine or Beneficial Interest

  registration with requisite Governmental Authority


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  9.


  	

  File-stamped copies of UCC-1 financing statements

  naming WLFC as Debtor/Seller; the Issuer as Secured Party/Purchaser; and BNY

  as Assignee of Secured Party


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  10.


  	

  File-stamped copies of UCC-1 financing statements

  naming the Issuer as Debtor and BNY as Secured Party


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  11.


  	

  File-stamped copies of FAA recordations of the

  Contribution and Sale Agreement, Indenture, Series 1997-1 Supplement and each

  Lease Agreement for each Engine and Contributed Beneficial Interest


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  12.


  	

  File-stamped copies of Security filings, if any,

  required by the Governmental Authority of the country and of any foreign

  Lessee’s chief executive office


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  13.


  	

  File-stamped copies of UCC-1 financing statements

  covering any Lease Agreements being transferred and naming the lease

  originator as Debtor; the Issuer as Secured Party and BNY as Assignee of

  Secured Party


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  14.


  	

  File-stamped copies of UCC termination statements

  covering the security interest of any other Person with respect to

  Contributed Assets or Beneficial Interests in assets being transferred


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  15.


  	

  File-stamped copies of UCC-1 financing statements

  naming the Owner Trustee as debtor and the Indenture Trustee as secured

  party.


  	

   


  	

  Custodian


  	

   


  	

  Promptly upon receipt


  





 




18





























 




SCHEDULE

4




 




Custodial Fee Schedule




 




Proposal for




Willis

Engine Funding, LLC




 




Custodian

Services




 




September

4, 2002




 




	

  Acceptance

  Fee:


  	

   


  	

  $2,500 upfront


  





 




•  Review of the

agreement and all supporting documents 




•  Initial

establishment of the account (s)




 




 




	

  Annual

  Administration Fee:


  	

   


  	

  $5,000 per year


  





 




This fee is payable in

advance and subsequently, on each anniversary date. Fees include the following

services:




 




•  Final Review Certification/Reinstatement 




•  File/document Releases 




•  Safekeeping of files 




•  Trailing Documentation   




 




Miscellaneous Fees:  




 




	

  Photocopying of Documents:


  	

   


  	

  $0.20 per page


  





 




 




Out-of Pocket Expenses  




 




Fees quoted do not

include any out-of-pocket expenses including, but not limited to travel,

facsimile, overnight courier, and messenger costs. These expenses will be

billed, at out cost, when incurred. In the event the transaction terminates

before closing, all out-of-pocket expenses incurred, including our counsel

fees, if applicable will be billed to the account.




 




19





























 




External Counsel Fees




 




Fees quoted do not

include external counsel fees. A bill for counsel fees incurred up to closing

will be presented for payment on the closing date.




 




Miscellaneous Services




 




The charges for

performing services not contemplated at the time of the execution of the

documents not specifically covered elsewhere in the schedule will be determined

by appraisal in amounts commensurate with the service.  




 




Terms of Proposal




 




BNY

Midwest Trust Company’s final acceptance of this appointment is subject

to the full review and approval of all related documentation and financials and

our conflict investigation. This offer shall be deemed terminated if we do not

enter into a written agreement within three months from the date of

transmittal. Fees will be subject for review, if volumes increase beyond

initial activity.




 




	

  Willis

  Engine Funding, LLC


  
	

   


  
	

   


  	

  Name


  	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  Signature


  	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  Date


  	

   


  	

   


  
								





 




20