Exhibit

10.27




 




	

   


  





 




AMENDED

AND RESTATED


CONTRIBUTION AND SALE AGREEMENT*




 




 






















 




 




between




 




 




WILLIS

LEASE FINANCE CORPORATION,




 




 




and




 




 




WILLIS

ENGINE FUNDING LLC




 




 






















 




 




Dated

as of




 




December

13, 2002




 






















*                                         Portions

of the material in this Exhibit have been redacted pursuant to a request for

confidential treatment, and the redacted material has been filed separately

with the Securities and Exchange Commission (the “Commission”).  An asterisk has been placed in the precise

places in this Agreement where we have redacted information, and the asterisk

is keyed to a legend which states that the material has been omitted pursuant

to a request for confidential treatment.




 




	

   


  





 





























 




TABLE OF CONTENTS




 




	

  ARTICLE I DEFINITIONS


  
	

   


  
	

   


  	

  Section 1.01.


  	

  Definitions.


  
	

   


  	

   


  	

   


  
	

  ARTICLE II TRANSFER OF ENGINES AND BENEFICIAL INTERESTS


  
	

   


  
	

   


  	

  Section 2.01.


  	

  Transfer of Initial Contributed Assets.


  
	

   


  	

  Section 2.02.


  	

  Conveyance and Reconveyance of Engines

  and Related Assets after the Initial Transfer Date.


  
	

   


  	

  Section 2.03.


  	

  Required Financing Statements; Marking of

  Records.


  
	

   


  	

  Section 2.04.


  	

  Servicing of Contributed Assets.


  
	

   


  	

  Section 2.05.


  	

  Security Agreement.


  
	

   


  	

  Section 2.06.


  	

  Additional Capital Contributions.


  
	

   


  	

  Section 2.07.


  	

  Contributed Engine Requirements.


  
	

   


  	

   


  	

   


  
	

  ARTICLE III REPRESENTATIONS AND WARRANTIES


  
	

   


  
	

   


  	

  Section 3.01.


  	

  Representations and Warranties of the

  Seller.


  
	

   


  	

  Section 3.02.


  	

  Representations and Warranties of the

  Issuer.


  
	

   


  	

   


  	

   


  
	

  ARTICLE IV COVENANTS OF THE SELLER AND THE

  ISSUER


  
	

   


  
	

   


  	

  Section 4.01.


  	

  Seller Covenants.


  
	

   


  	

  Section 4.02.


  	

  Issuer Covenants.


  
	

   


  	

  Section 4.03.


  	

  Transfer of Contributed Assets.


  
	

   


  	

   


  	

   


  
	

  ARTICLE V CONDITIONS PRECEDENT


  
	

   


  
	

   


  	

  Section 5.01.


  	

  Conditions to the Issuer’s Obligations.


  
	

   


  	

  Section 5.02.


  	

  Conditions to the Seller’s Obligations.


  
	

   


  	

   


  	

   


  
	

  ARTICLE VI TERMINATION


  
	

   


  
	

   


  	

  Section 6.01.


  	

  Termination.


  
	

   


  	

  Section 6.02.


  	

  Effect of Termination.


  
	

   


  	

   


  	

   


  
	

  ARTICLE VII MISCELLANEOUS PROVISIONS


  
	

   


  
	

   


  	

  Section 7.01.


  	

  Amendment.


  
	

   


  	

  Section 7.02.


  	

  Governing Law.


  
	

   


  	

  Section 7.03.


  	

  Notices.


  
	

   


  	

  Section 7.04.


  	

  Severability of Provisions.


  
	

   


  	

  Section 7.05.


  	

  Assignment.


  





 




i





























 




	

   


  	

  Section 7.06.


  	

  Further Assurances.


  
	

   


  	

  Section 7.07.


  	

  No Waiver; Cumulative Remedies.


  
	

   


  	

  Section 7.08.


  	

  Counterparts.


  
	

   


  	

  Section 7.09.


  	

  Binding Effect.


  
	

   


  	

  Section 7.10.


  	

  Merger and Integration.


  
	

   


  	

  Section 7.11.


  	

  Headings.


  
	

   


  	

  Section 7.12.


  	

  Schedules and Exhibits.


  
	

   


  	

  Section 7.13.


  	

  General Interpretive Principles.


  
	

   


  	

  Section 7.14.


  	

  Third-Party Beneficiaries.


  
	

   


  	

   


  	

   


  
	

   


  	

  EXHIBIT A


  	

  Initial

  List of Engines and Lease Agreements


  
	

   


  	

  EXHIBIT B


  	

  Form

  of Engine Transfer Certificate


  
	

   


  	

   


  	

   


  
	

   


  	

  SCHEDULE 1


  	

  Certain Terms


  
				





 




ii





























 




AMENDED AND RESTATED


CONTRIBUTION AND SALE AGREEMENT




 




THIS AMENDED AND RESTATED CONTRIBUTION AND SALE

AGREEMENT, dated as of December 13, 2002 (this “Agreement”), is entered into

between WILLIS LEASE FINANCE CORPORATION (the “Seller”), a company organized

and existing under the laws of Delaware located at 2320 Marinship Way,

Suite 300, Sausalito, California 94965 and WILLIS ENGINE FUNDING LLC (the

“Issuer”), a limited liability company organized and existing under the laws of

Delaware located at 2320 Marinship Way, Suite 300, Sausalito, California

94965.




 




W I T

N E S S E T H:




 




WHEREAS, the Seller and the Issuer are party to the

Contribution and Sale Agreement dated as of September 12, 2002, with Engine and Beneficial Interest Transfer

Certificate dated as of September 16, 2002 attached thereto, which was

recorded by the Federal Aviation Administration on December 6, 2002 and

assigned Conveyance No. J001810 (the “Original Sale Agreement”); and




 




WHEREAS, the Seller and the Issuer have agreed to

amend and restate the Original Sale Agreement as provided herein.




 




NOW, THEREFORE, in consideration of the mutual

covenants contained herein and other good and valuable consideration, the

receipt and adequacy of which is hereby acknowledged, the parties hereto agree

as follows:




 




ARTICLE I





DEFINITIONS




 




Section 1.01.                             Definitions.  Capitalized terms used in this Agreement but

not defined herein shall have the meaning assigned to such terms in Exhibit B

to the Indenture.  Otherwise, terms

defined herein shall have the following meanings and the definitions of such

terms shall be equally applicable to the singular and plural forms of such

terms:




 




Aggregate Net Purchase Price:  With respect to Contributed Assets conveyed

by the Seller to the Issuer on any Transfer Date means the sum of the aggregate

Net Purchase Price of the Contributed Engines and the net book value of the

Related Assets.




 




Contribution Percentage:  This term is defined in Schedule 1

attached hereto.




 




Engine Transfer Certificate:  An Engine Transfer Certificate,

substantially in the form of Exhibit B hereto, executed and delivered by the

Seller and the Issuer in accordance with the terms of this Agreement.




 




Engine Representations and Warranties:  With respect to each Engine, the

representations and warranties of the Seller as set forth in

paragraphs (o) through (ii) inclusive of Section 3.01 of




 




Schedule 2-1





























 




this Agreement; provided,

however, that with respect to any

Engine that is an Excess Asset, and only for so long as such Engine remains an

Excess Asset, the definition of “Engine Representation and Warranties” shall

not include paragraphs (r), (s), (u), (y), (bb), (cc), (dd), (ee), (hh)

and (ii) of Section 3.01.




 




Evidence of Filing:  This term is defined in Section 2.03(c).




 




Initial Transfer Date:  The date on which Engines were originally

contributed or sold by the Seller to the Issuer pursuant to the terms of the

Original Sale Agreement.




 




List of Engines:  A printed list of the Engines transferred by

the Seller to the Issuer and certified by an Authorized Signatory, which

includes a true and complete list of all Engines to be transferred on any

Transfer Date.  The List of Engines

delivered on the Initial Transfer Date is attached hereto as Exhibit A.




 




Released Assets:  Released Engines and Related Assets with

respect to such Released Engines.




 




Released Engine:  An Engine repurchased from the Issuer by the

Seller pursuant to Section 2.02(b).




 




Warranty Purchase Amount:  With respect to any Engine and Related

Assets repurchased from the Issuer by the Seller pursuant to Section 2.02(b)

hereof, the sum of the Net Purchase Price of such Engine and the net book value

of the Related Assets, in each case on the Transfer Date on which such Engine

and Related Assets were transferred by the Seller to the Issuer.




 




ARTICLE II





TRANSFER OF ENGINES AND BENEFICIAL INTERESTS




 




Section 2.01.                             Transfer

of Initial Contributed Assets.  On

the Initial Transfer Date, the Seller sold, transferred and conveyed to the

Issuer and the Issuer acquired from the Seller all of the Seller’s right, title

and interest in, to and under the initial Contributed Assets at a purchase

price equal to the Aggregate Net Purchase Price for such initial Contributed

Assets; provided,

however, that the excess of (x) the Aggregate Net Purchase

Price for such initial Contributed Assets over (y) the cash portion of the

purchase price of the initial Contributed Assets paid by the Issuer to the

Seller on the Initial Transfer Date constituted a capital contribution to the

Issuer.  The cash portion of the

purchase price of the initial Contributed Assets was equal to the Contribution

Percentage of the aggregate Net Book Value of the Contributed Engines.




 




Section 2.02.                             Conveyance

and Reconveyance of Engines and Related Assets after the Initial Transfer Date.




 




(a)                                  After

the Initial Transfer Date, (i) the Seller may sell, transfer and convey to

the Issuer additional Contributed Assets for consideration equal to the

Aggregate Net Purchase Price for such additional Contributed Assets; provided,

however, that the excess of (x) the Aggregate Net Purchase

Price for such Contributed Assets over (y) the cash portion of the

purchase price of such Contributed Assets paid by the Issuer to the Seller on

such Transfer Date shall constitute a




 




Schedule 2-2





























 




capital contribution to the Issuer and (ii) the

Seller may transfer and convey to the Issuer Excess Assets as capital

contributions to the Issuer; provided,

however, that at such time as any

Engine included in the Excess Assets shall qualify as an Eligible Engine, the

Issuer shall be obligated to pay the Seller consideration equal to the Net

Purchase Price of such Engine and the Net Book Value of the Related Assets and

such Engine and the Related Assets shall thereafter constitute Contributed

Assets.  The cash portion of the

purchase price of such Contributed Assets shall be equal to the Contribution

Percentage of the aggregate Net Book Value of the Contributed Engines.




 




(b)                                 Upon

discovery by the Seller or the Issuer (or any of its successors or assigns) of

a breach of any of the Engine Representations and Warranties relating to any

Engine, the party (including any such successor or assign) discovering such

breach shall give prompt written notice to the other party, the trustee of the

Owner Trust which owns the applicable Engine, the Indenture Trustee and the

Administrative Agent.  If such breach

materially and adversely affects the interest of the Issuer (or any of its

successors or assigns), the Owner Trust, the Noteholders or the Indenture

Trustee, then, unless such breach shall have been cured or waived by the

Control Party with respect to the related Supplement for a Series within ninety

days after the Seller’s discovery or receipt of written notice of such breach,

the Issuer shall reconvey to the Seller, and the Seller shall acquire the

applicable Engine and Related Assets for, in the case of Contributed

Engines only, either (A) consideration in cash equal to the aggregate Warranty

Purchase Amount for such Engine and Related Assets or (B) one or more

Engines and Related Assets which Engines in each such case (i) satisfy

each of the Engine Representations and Warranties as of such date of transfer,

(ii) have an aggregate Appraised Value that equals or exceeds such

aggregate Warranty Purchase Amount, (iii) will constitute Contributed

Engines upon such transfer and (iv) are satisfactory to the Administrative

Agent.  In the event of a repurchase of

an Engine and Related Assets the Seller shall deposit the cash portion of the

Warranty Purchase Amount for such Engine and Related Assets to be repurchased

in the Trust Account prior to 10:00 a.m. (New York City time) on the

ninetieth day after the Seller’s discovery of or receipt of written notice of,

any such breach.  The excess of such

Warranty Purchase Amount over the cash portion of such Warranty Purchase Amount

paid by the Seller to the Issuer shall constitute a dividend from the Issuer to

the Seller.  The cash portion of any

Warranty Purchase Amount shall equal the cash portion of the purchase price

paid by the Issuer to the Seller in connection with the Issuer’s acquisition of

such Engine and Related Assets from the Seller.




 




(c)                                  In

connection with any transfer of Contributed Assets, Excess Assets or Released

Assets pursuant to the terms of this Agreement on any Transfer Date, the Seller

and the Issuer shall execute (on such Transfer Date, in the case of clause (i)

below, and on or before the third Business Day following such Transfer Date, in

the case of clause (iii) below) each of the following:




 




(i)                                     A

completed Engine Transfer Certificate with respect to each Contributed Engine

and each Excess Asset being transferred to the Issuer and with respect to each

Released Engine and Related Assets being retransferred to the Seller;




 




(ii)                                  [Reserved];

and




 




Schedule 2-3





























 




(iii)                               A supplement to the List

of Engines setting forth the Manufacturer’s serial numbers of (A) each

Engine which is transferred to the Issuer by the Engine Transfer Certificate

and (B) each Engine which is a Released Engine or which is owned by an

Owner Trust, and identification of the Series to which such Released Engine, is

or was pledged.  Upon delivery of such

supplement, the List of Engines shall be deemed to have been amended to

incorporate the information contained in such supplement.




 




(d)                                 Each

Engine Transfer Certificate with respect to each Contributed Engine, Excess

Asset and each Released Engine, as the case may be, shall operate as an

assignment, without recourse, representation, or warranty, except (in the case

of transfers by the Seller) for the warranty of good title and other

representations and warranties specifically set forth in this Agreement, of all

the transferor’s right, title, and interest in and to such Contributed Assets,

Excess Assets or Released Assets, as the case may be, such assignment being an

outright assignment and not for security; and the transferee will thereupon own

such Contributed Assets, Excess Assets or Released Assets, as the case may be,

free of any claims of or further obligations to the transferor, in its capacity

as transferor, with respect thereto. 

All transfers of Released Assets by Issuer to Seller hereunder shall be

without recourse to, or representation or warranty of, Issuer of any kind.




 




Section 2.03.                             Required

Financing Statements; Marking of Records.




 




(a)                                  Reserved.




 




(b)                                 In

connection with all transfers on any Transfer Date, the Seller agrees to record

and file, at its own expense, on or before such Transfer Date, the following

UCC financing statements (and/or amendments to previously filed UCC financing

statements) and FAA recordations:




 




(i)                                     UCC

financing statements naming the Seller, as debtor/seller, the Issuer, as

secured party/purchaser, the Indenture Trustee, as assignee of the secured

party, and any “accounts”, “chattel paper” or “general intangible” (as defined

under the UCC) which are included in the Collateral transferred since the most

recent filing as collateral.  Such UCC

financing statements shall be filed in the appropriate filing offices as

required by the jurisdiction in which the Seller is “located” for purposes of

the UCC;




 




(ii)                                  UCC

financing statements naming the Issuer, as debtor, the Indenture Trustee, as

secured party, and the Collateral, as collateral.  Such UCC financing statements shall be filed in the appropriate

filing offices as required by the jurisdiction in which the Issuer is “located”

for purposes of the UCC;




 




(iii)                               UCC financing statements

naming the Owner Trust or the Owner Trustee, as the case may be under

applicable law, as debtor, the Indenture Trustee, as secured party, and the

Contributed Engines, Excess Assets and Related Assets as collateral.  Such UCC financing statements shall be filed

in the appropriate filing offices as required by the jurisdiction in which the

Owner Trust is “located” for purposes of the UCC.




 




(iv)                              Evidence

of recordation of (A) this Agreement, the Indenture, the Series 2002-1

Supplement and each Lease Agreement with respect to each Contributed Engine




 




Schedule 2-4





























 




transferred on such date, together with any amendments and supplements

hereto or thereto, with the FAA, and (B) with respect to Contributed

Engines leased to Lessees domiciled outside the United States, appropriate

documents with all Government Authorities of the country in which the chief

executive office of such Lessee is located, where necessary to perfect the lien

or security interest of the Indenture Trustee in such Contributed Engines;




 




(v)                                 UCC-1

financing statements naming each lease originator which is an Affiliate of the

Seller, as debtor, the Seller, as secured party, the Indenture Trustee, as

assignee of the secured party, and the Lease Agreements being transferred to

the Issuer after the Initial Transfer Date, as Collateral, in the appropriate

filing offices as required by the jurisdiction in which the lease originator is

“located” for purposes of the UCC;




 




(vi)                              any

other UCC-1 financing statements reasonably requested by the Deal Agent to

perfect the security interest of the Indenture Trustee in the Collateral; and




 




(vii)                           UCC financing statements

evidencing the termination of the security interest of any other Person with

respect to any of the Contributed Assets or Excess Assets being transferred to

the Issuer.




 




(c)                                  All

such UCC financing statements and recordations shall meet the requirements of

applicable law.  The Seller shall, on or

prior to the applicable Transfer Date, deliver to the Issuer (with copies to

the Indenture Trustee and the Administrative Agent), (i) with respect to such

UCC financing statements, a file-stamped copy of such UCC financing statements

or, in the event that a file-stamped copy of such UCC financing statements

cannot be obtained in any given jurisdiction, a certificate signed by the

relevant filing agent indicating that he/she filed such UCC financing

statements with the relevant governmental authority in such jurisdiction, and

(ii) with respect to such recordations, evidence of submission of the

applicable recorded documents.  Such

file-stamped copies of such UCC financing statements (or certificates signed by

the relevant filing agent, if applicable) and evidences of submission of the

applicable recorded documents delivered pursuant to the immediately preceding

sentence on any given Transfer Date shall constitute the “Evidence of Filing”

for such Transfer Date.  Nothing

contained in this Section 2.03 shall limit the Seller’s obligation to file

continuation or termination statements in accordance with Section 4.01(k)

of this Agreement and any applicable law.




 




(d)                                 In

connection with each transfer and conveyance of Contributed Engines, Related

Assets and Excess Assets, the Seller shall, on or prior to each Transfer Date,

at its own expense (i) cause its computer records to be marked to show

that the Contributed Engines, Related Assets and Excess Assets have been

transferred to the Issuer and, in the case of Contributed Engines, Related

Assets and Excess Assets that have been transferred by the Issuer to Owner

Trusts, that the applicable Contributed Engines, Related Assets and Excess

Assets have been transferred to the applicable Owner Trusts and then pledged to

the Indenture Trustee and (ii) prepare and hold, in its capacity as

Servicer, the List of Engines.




 




(e)                                  In

connection with each transfer and conveyance of Engines and Related Assets, the

Seller shall take, and shall cause the Issuer to take, all steps necessary to

perfect the Issuer’s and the Indenture Trustee’s perfected first priority

interest in the Collateral under the laws of any applicable foreign

jurisdiction.




 




Schedule 2-5





























 




Section 2.04.                             Servicing

of Contributed Assets.  The Issuer

and the Seller intend that, following each conveyance of the Contributed Assets

and Excess Assets pursuant to this Agreement, the Contributed Assets, Excess

Assets and any assets owned by an Owner Trust the Beneficial Interest in which

is owned by the Issuer will be serviced by the Seller (and its successors and

assigns), as Servicer, pursuant to the terms of the Servicing Agreement.




 




Section 2.05.                             Security

Agreement.




 




(a)                                  The

Seller and the Issuer intend that the transfer by the Seller of the initial

Contributed Assets pursuant to Section 2.01 hereof and each subsequent

transfer by the Seller of additional Contributed Assets and Excess Assets

pursuant to Section 2.02 hereof shall each constitute a valid sale, transfer

and conveyance by the Seller of the Contributed Assets and Excess Assets and

that the Contributed Assets and Excess Assets shall not be part of the Seller’s

estate in the event of the insolvency or bankruptcy of the Seller.




 




(b)                                 The

Seller and the Issuer intend that their operations and business would not be

substantively consolidated in the event of the bankruptcy or insolvency of the

Seller and that the separate existence of the Seller and the Issuer would not

be disregarded in the event of the insolvency or the bankruptcy of the

Seller.  In the event that (i) any

such Contributed Assets or Excess Assets are held to be property of the

Seller’s bankruptcy estate or (ii) this Agreement is held or deemed to

create a security interest in the Contributed Assets and Excess Assets, then

(x) this Agreement shall constitute a security agreement within the

meaning of Article 8 and Article 9 of the UCC as in effect in the

State of New York and (y) the conveyances provided for in Section 2.01 and

Section 2.02 hereof shall constitute a grant by the Seller to the Issuer of a

valid first priority perfected security interest in all of the Seller’s right,

title and interest in and to the Contributed Assets and Excess Assets, which

security interest has been assigned to the Indenture Trustee pursuant to

Section 4.03 hereof and which security interest will be deemed to have

been granted directly to the Indenture Trustee from the Seller in the event of

the consolidation of the Seller and the Issuer in any Insolvency Proceeding.  In furtherance of the foregoing,

(i) the Issuer shall have all of the rights of a secured party with

respect to the Contributed Assets and Excess Assets pursuant to applicable law

and (ii) the Seller shall execute all documents, including but not limited

to UCC financing statements, as the Issuer may reasonably require to

effectively perfect and evidence the Issuer’s first priority security interest

in the Contributed Assets, Excess Assets and each Owner Trust’s ownership

interest in the Engines, Lease Agreements and other Related Assets owned or

purported to be owned by such Owner Trust. 

The Seller also covenants not to pledge, assign or grant any interest to

any other party in any Contributed Assets and Excess Assets other than the

leasehold interest which is granted to a Lessee pursuant to the applicable

Lease Agreement.




 




Section 2.06.                             Additional

Capital Contributions.  Any transfer

of cash or Excess Assets by the Seller to the Issuer (other than any such

transfers by the Seller as initial Servicer in accordance with the terms of the

Servicing Agreement) shall constitute a capital contribution to the

Issuer.  As of the date of any such

transfer of cash, the Seller shall not be insolvent under the Insolvency Law

and will not be rendered insolvent by any such transfer.




 




Section 2.07.                             Contributed

Engine Requirements.  Each

Contributed Engine and each Engine that is an Excess Asset must satisfy the

Engine Representations and Warranties.




 




Schedule 2-6





























 




ARTICLE III





REPRESENTATIONS AND WARRANTIES




 




Section 3.01.                             Representations

and Warranties of the Seller.  The

Seller hereby makes the following representations and warranties for the

benefit of the Indenture Trustee, the Noteholders and the Issuer, on which the

Issuer relies in accepting the conveyance of the Contributed Assets and Excess

Assets.  Such representations and

warranties are made as of each Transfer Date with respect to the Contributed

Assets and Excess Assets transferred to the Issuer on such date unless otherwise

indicated, but shall survive each transfer and conveyance of the respective

Contributed Assets and Excess Assets to the Issuer and the pledge of such

Contributed Assets and Excess Assets to the Indenture Trustee until the Notes

have been paid in full.




 




(a)                                  Organization

and Good Standing.  The Seller is a

company duly organized, validly existing and in compliance under the laws of

the state of its incorporation, with corporate power and authority to own its

properties and to conduct its business as such properties are currently owned

and such business is currently conducted, had at all relevant times, and now

has, power, authority, and legal right to acquire and to own the Contributed

Assets and Excess Assets and to perform its obligations hereunder and under any

Related Document to which it is a party, and has had the same legal name for

the past nine months and does not do business under any other name;




 




(b)                                 Due

Qualification.  The Seller is

qualified as a foreign corporation in each jurisdiction where failure to be so

qualified would have a material adverse effect upon its business and has

obtained all necessary licenses and approvals as required under Applicable Law,

in each case, where the failure to be so qualified, licensed or approved, could

adversely affect the ability of (i) the Seller to perform its obligations

under and comply with the terms of this Agreement and any other Related

Document to which it is a party or (ii) the Issuer to enforce its rights

under any Lease Agreement or with respect to any Contributed Assets or Excess

Assets or (iii) any Owner Trust to enforce its rights under any Lease

Agreement or with respect to any Engine or Related Asset owned or purportedly

owned by it;




 




(c)                                  Power

and Authority.  The Seller has the

corporate power and authority to execute and deliver this Agreement and any

other Related Documents to which it is a party and to carry out their terms;

the Seller has duly authorized the transfer and conveyance to the Issuer of the

Contributed Assets and Excess Assets by all necessary corporate action; the

execution, delivery, and performance of this Agreement, any other Related

Document and any Lease Agreement to which it is a party has been duly

authorized by the Seller by all necessary corporate action and this Agreement,

any other Related Document and any Lease Agreement to which it is a party have

been duly executed and delivered by the Seller and each applicable Owner Trust;




 




(d)                                 Valid

Assignment; Binding Obligations. 

This Agreement constitutes a valid sale, transfer and conveyance to the

Issuer of all right, title and interest of the Seller in, to and under the

Contributed Assets and Excess Assets and the Contributed Assets and Excess

Assets will be held by the Issuer free and clear of any Lien of any Person claiming

through or under the Seller, except for (i) Permitted Encumbrances,

(ii) the Lien created by the Indenture and (iii) Liens which may be

created under this Agreement; and this Agreement and each other Related




 




Schedule 2-7





























 




Document to which it is a party, when duly executed and delivered by

the other parties thereto, will constitute a legal, valid and binding

obligation of the Seller enforceable against the Seller in accordance with its

terms subject as to enforceability to applicable bankruptcy, reorganization,

insolvency, moratorium, fraudulent conveyance or other laws affecting

creditors’ rights generally and to general principles of equity (regardless of

whether enforcement is sought in a proceeding in equity or at law);




 




(e)                                  No

Violation.  The consummation of the

transactions contemplated by and the fulfillment of the terms of this Agreement

and the Related Documents to which the Seller is a party will not conflict

with, result in any breach of any of the terms and provisions of, or constitute

(with or without notice or lapse of time or both) a default under, the charter

documents or by-laws of the Seller, or any material term of any indenture,

agreement, mortgage, deed of trust, or other instrument to which the Seller is

a party or by which it is bound, or result in the creation or imposition of any

Lien upon any of its properties pursuant to the terms of any such indenture,

agreement, mortgage, deed of trust, or other instrument, other than this Agreement

and the Indenture, or violate any law or any order, rule, or regulation

applicable to the Seller of any court or of any federal or state regulatory

body, administrative agency, or other Governmental Authority having

jurisdiction over the Seller or any of its properties;




 




(f)                                    No

Proceedings or Injunctions.  There

are (i) no proceedings or investigations pending, or, to the knowledge of

the Seller, threatened, before any court, regulatory body, administrative

agency, or other tribunal or Governmental Authority (A) asserting the

invalidity of this Agreement or any other Related Document to which it is a

party, (B) seeking to prevent the consummation of any of the transactions

contemplated by this Agreement or any other Related Document to which it is a

party or (C) seeking any determination or ruling that might materially and

adversely affect the performance by the Seller of its obligations under, or the

validity or enforceability of, this Agreement or any other Related Document to

which it is a party and (ii) no injunctions, writs, restraining orders or

other orders in effect against the Seller that would adversely affect its

ability to perform under this Agreement or any other Related Document to which

it is a party;




 




(g)                                 Insolvency.  The Seller is solvent and will not become

insolvent after giving effect to the transactions contemplated hereby.  At all times during this Agreement, the

Seller shall possess sufficient net capital and liquid assets (or ability to

access the same) to satisfy its obligations as they become due in the normal

course of business, and will not be rendered insolvent by the sale or other

transfer of any Contributed Assets or Excess Assets;




 




(h)                                 Principal

Place of Business and State of Incorporation.  As of the date hereof, the Seller’s principal place of business

and chief executive office are each at 2320 Marinship Way, Suite 300,

Sausalito, California 94965 and the Seller has maintained such addresses for

the immediately preceding four months. 

As of the date hereof, the Seller’s state of incorporation is the State

of Delaware.




 




(i)                                     Accounting

and Tax Treatment.  The Seller

(i) will treat the transfer of the Contributed Assets to the Issuer

pursuant to this Agreement as a capital contribution (in part) and sale (in

part) of such Contributed Assets (which allocation between capital contribution

and sale will be determined in accordance with Section 2.01 and

Section 2.02 hereof) for financial




 




Schedule 2-8





























 




reporting, accounting and all income tax purposes and (ii) will

treat the transfer of the Excess Assets to the Issuer pursuant to this

Agreement as a capital contribution for financial reporting, accounting and all

income tax purposes;




 




(j)                                     Approvals.  All approvals, authorizations, consents,

orders or other actions of any Person required to be obtained by the Seller or,

to the knowledge of the Seller, by any other party in connection with the

execution and delivery of this Agreement or any other Related Document to which

it is a party have been or will be taken or obtained on or prior to the date

hereof;




 




(k)                                  Financial

Statements.  The consolidated

balance sheet of the Seller at December 31, 2001 and the consolidated

statements of income, retained earnings and cash flows for the fiscal years

ended on such dates, are accompanied by reports thereon containing opinions

without qualification, except as therein noted, by the independent accountants,

have been prepared in accordance with generally accepted accounting principles

consistently applied, and present fairly the financial position of the Seller

and its subsidiaries as of such dates and the results of their operations for

such periods;




 




Since December 31, 2001, there has been no change

in the business or condition (financial or otherwise) of the Seller except

changes in the ordinary course of business, and those changes which were

reported in the Seller’s public filings with the Securities and Exchange

Commission, none of which individually or in the aggregate has been materially

adverse.  Neither the Seller nor any of

its subsidiaries (other than the Issuer) has any material liabilities or

obligations other than those disclosed in the financial statements referred to

in the preceding paragraph or for which adequate reserves are reflected in such

financial statements.  The Issuer does

not have any material liabilities or obligations other than under the Related

Documents;




 




(l)                                     Governmental

Consent.  With the exception of a

Current Report on Form 8-K which the Seller shall promptly file with the SEC

regarding the execution and delivery of this Agreement and the other

Transaction Documents to which it is a party, no consent, approval or

authorization of, or filing, registration or qualification with, any

Governmental Authority is or will be necessary or required on the part of the

Seller in connection with the execution and delivery of this Agreement or the

transfer and conveyance of the Contributed Assets and Excess Assets hereunder;




 




(m)                               Investment

Company.  The Seller is not an

“investment company” or a company “controlled” by an “investment company”

within the meaning of the Investment Company Act of 1940, as amended;




 




(n)                                 Valid

Business Purpose.  The Seller has

valid business reasons for selling, transferring and conveying the Contributed

Assets and Excess Assets to the Issuer;




 




(o)                                 Title

to Contributed Assets and Excess Assets. 

Immediately prior to the transfer of any Contributed Asset or any Excess

Asset to the Issuer pursuant to the terms of this Agreement, the Seller had

good and marketable title to such Contributed Asset or Excess Asset free and

clear of all Liens except Permitted Encumbrances, and as of the applicable

Transfer Date, the Seller shall convey to the Issuer good and marketable title

to each such Contributed




 




Schedule 2-9





























 




Asset and Excess Assets, free and clear of all Liens, except Permitted

Encumbrances and the Liens in favor of the Indenture Trustee;




 




(p)                                 Delivery

of Required Financing Statements. 

The Seller has filed on or prior to each Transfer Date all of the

filings pursuant to Sections 2.03(a) or (b), as the case may be, and (c)

hereof with respect to the Contributed Assets and Excess Assets for such

Transfer Date.




 




(q)                                 Casualty

Loss.  No Contributed Engine or

Excess Asset shall have suffered a Casualty Loss on or prior to the related

Transfer Date;




 




(r)                                    No

Violation of Lease Agreements.  The

transfer and conveyance to the Issuer of the Contributed Assets will not

violate the terms or provisions of any Lease Agreement or any other agreement

to which the Seller then is a party or by which it is bound;




 




(s)                                  Rights

to Lease Agreements are Assignable. 

The rights of the Seller with respect to each Lease Agreement

transferred pursuant to this Agreement are assignable by the Seller without the

consent of any Person other than consents which will have been obtained prior

to the related Transfer Date;




 




(t)                                    All

Necessary Action Taken.  Immediately

after each of the transfers and conveyances to the Issuer as contemplated in

this Agreement, (i) all necessary action will have been taken by the Seller to

validly transfer and convey to the Issuer free and clear of all Liens except

Permitted Encumbrances and, (A) all right, title and interest of the

Seller in and to each Lease Agreement and the payments due and to become due

thereunder to the extent related to a Contributed Engine and all scheduled

lease payments to become due thereunder which related to a Contributed Engine

and (B) all right, title and interest of the Seller in and to any

Contributed Engines, Related Assets and Excess Assets which are transferred

hereunder and (ii) all necessary action will have been taken by the relevant

parties to grant to the Indenture Trustee a perfected, first priority security

interest in the Collateral (except, with respect to Contributed Engines leased

to Lessees domiciled outside the United States, only to the extent reasonably

available);




 




(u)                                 Origination

and Collection Practices.  To the

best of the Seller’s knowledge, the origination, acquisition and collection

practices used by the Seller with respect to each Lease Agreement have been in

all respects legal, proper, prudent and in accordance with the standards it

uses for its own portfolio;




 




(v)                                 Reserved;




 




(w)                               Owner

Trust.  The Owner Trust that will

hold such Engine is duly organized, validly existing and in compliance under

the laws of the state of its formation, as indicated in the applicable Engine

Transfer Certificate, with all necessary power and authority to own its

properties and to conduct its business as such properties are currently owned

or contemplated to be owned and such business is currently or contemplated to

be conducted, had at all relevant times, and now has, power, authority, and

legal right to acquire and own the Engine and Lease owned by it, as described

in the applicable Engine Transfer Certificate and to perform its obligations

under any Related Document to which it is a party, and has not at any time had

any other legal name except as set forth in the applicable Engine Transfer

Certificate;




 




Schedule 2-10





























 




(x)                                   Reserved;




 




(y)                                 Ordinary

Course of Business.  All Lease

Agreements related to Contributed Engines and Contributed Beneficial Interests

were originated in the ordinary course of business of the Seller’s business;




 




(z)                                   No

Adverse Selection Procedures:  Eligible

Engines.  No adverse selection

procedures have been used by the Seller in selecting any Contributed Engine

(and related Lease Agreement) or Excess Asset and each Contributed Engine and

each Lease Agreement is an Eligible Engine and an Eligible Lease, respectively,

and each Excess Asset is an Eligible Engine except with respect to

clauses (1) and (2) of the definition thereof;




 




(aa)                            Ordinary

Course.  The transactions contemplated

by this Agreement are being consummated by the Seller in good faith and in

furtherance of the Seller’s ordinary business purposes and constitute a

practical and reasonable course of action by the Seller designed to improve the

financial position of the Seller, with no contemplation of insolvency and with

no intent to hinder, delay or defraud any of its present or future creditors;




 




(bb)                          To

the best of the Seller’s knowledge, each Lease Agreement and all accompanying

documents are complete and authentic and all signatures thereon are genuine;




 




(cc)                            Each

Lease Agreement arose from a bona fide transaction, complying with all

applicable laws and regulations of Governmental Authorities, with persons

having legal capacity to contract and was duly authorized, executed and

delivered by the Seller;




 




(dd)                          All

amounts represented to be payable under each Lease Agreement are, in fact,

payable in accordance with the provisions of each Lease Agreement;




 




(ee)                            No

Event of Default (as defined in the Lease Agreement) has occurred under any

Lease Agreement;




 




(ff)                                Each

Engine conforms to the description thereof as set forth on the List of Engines

and any applicable Engine Transfer Certificate;




 




(gg)                          The

items in each Collateral File that are required to be delivered on the

applicable Transfer Date have been delivered to the Custodian and each of such

items delivered on the applicable Transfer Date complies with the terms herein

and in the Indenture;




 




(hh)                          Each

Lease Agreement requires Lessee to pay, and indemnify, defend and hold Lessor

and Lessor’s lender (which term includes the Noteholders and the Indenture

Trustee) harmless on a net after tax basis from and against any and all taxes

of whatever kind or nature, including costs or expenses incurred in connection

therewith, which may be assessed against, chargeable to or collectible from any

of Lessee, Lessor’s lender or lessor by any taxing authority, foreign, federal,

state or local, and which are based upon, levied or assessed with respect to

the lease of any Engine or the operation, possession or use of such Engine

while under any Lease, except taxes based on the net income of Lessor; and




 




Schedule 2-11





























 




(ii)                                  Each

Lease Agreement is non-cancelable by the Lessee during the term of such Lease

Agreement unless such requirement is waived in writing by the Administrative

Agent.




 




Section 3.02.                             Representations

and Warranties of the Issuer.  The

Issuer hereby makes the following representations and warranties, for the

benefit of the Seller, the Indenture Trustee, the Noteholders and any Series

Enhancer, if any, on which the Seller relies in transferring the Contributed

Assets and Excess Assets to the Issuer. 

Such representations and warranties speak as of each Transfer Date with

respect to the Contributed Assets and Excess Assets transferred to the Issuer

on such date, unless otherwise indicated, but shall survive each transfer and

conveyance of the respective Contributed Assets and Excess Assets to the Issuer

and the pledge of such Contributed Assets and Excess Assets to the Indenture

Trustee until the Notes have been paid in full.




 




(a)                                  Organization

and Good Standing.  The Issuer is a

limited liability company duly organized and validly existing in compliance

under the laws of Delaware, with full power and authority to own and operate

its properties and to conduct its business as presently conducted and to enter

into and perform its obligations under this Agreement and each other Related

Document to which it is a party and the transactions contemplated hereby and

thereby;




 




(b)                                 Due

Qualification.  The Issuer is duly

qualified to do business as a foreign limited liability company in good

standing, and has obtained all necessary licenses and approvals in all

jurisdictions in which the ownership or lease of property or the conduct of its

business requires such qualification, except to the extent that the failure to

be so qualified, licensed or approved would not, in the aggregate, materially

and adversely affect the ability of (i) the Issuer to perform its

obligations under and comply with the terms of this Agreement or any other

Related Documents to which it is a party or (ii) the Indenture Trustee to

enforce its rights under any Lease Agreement, this Agreement or any other Related

Document;




 




(c)                                  Power

and Authority.  The Issuer has the

power and authority to execute and deliver this Agreement and to carry out its

terms; and the execution, delivery and performance of this Agreement have been

duly authorized by the Issuer by all necessary action; the Issuer will have the

power and authority to acquire and will have acquired whatever right, title and

interest in the Contributed Assets and Excess Assets as was conveyed to it by

the Seller; and the Issuer will have duly authorized, executed and delivered

the Notes, this Agreement and the other Related Documents to which it is a

party;




 




(d)                                 Binding

Obligations.  This Agreement and

each other Related Document to which the Issuer is a party, when duly executed

and delivered by the other parties hereto or thereto, will constitute a legal,

valid and binding obligation of the Issuer enforceable in accordance with its

terms subject as to enforceability to applicable bankruptcy, reorganization,

insolvency, moratorium or other laws affecting creditors’ rights generally and

to general principles of equity (regardless of whether enforcement is sought in

a proceeding in equity or at law);




 




(e)                                  No

Violation.  The consummation of the

transactions contemplated by and the fulfillment of the terms of this Agreement

will not conflict with, result in any breach of any of the terms and provisions

of, or constitute (with or without notice or lapse of time) a default




 




Schedule 2-12





























 




under, the charter documents or by-laws of the Issuer, or any term of

any indenture to which the Issuer is a party or by which its assets may be

bound;




 




(f)                                    No

Proceedings or Injunctions.  There

are (i) no proceedings or investigations to which the Issuer, or any

Affiliate of the Issuer, is a party pending, or, to the knowledge of the

Issuer, threatened, before any court, regulatory body, administrative agency or

other tribunal or Governmental Authority (A) asserting the invalidity of

the Notes, this Agreement or the other Related Documents to which Issuer is a

party, (B) seeking to prevent the issuance of the Notes or the

consummation of any of the transactions contemplated by this Agreement or the

other Related Documents to which the Issuer is a party or (C) seeking any

determination or ruling that would materially and adversely affect (1) the

performance by the Issuer of its obligations under, or the validity or

enforceability of, the Notes, this Agreement or the other Related Documents to

which the Issuer is a party or (2) the ability of any Owner Trust, the

Indenture Trustee or any Series Enhancer, if any, to enforce its rights under

any Lease Agreement, this Agreement or any other Related Document and

(ii) no injunctions, writs, restraining orders or other orders in effect

against the Issuer that would adversely affect (1) its ability to perform

under the Notes, this Agreement or the other Related Documents to which it is a

party or (2) the ability of any Owner Trust, the Indenture Trustee or any

Series Enhancer, if any, to enforce its rights under any Lease Agreement, this

Agreement or any other Related Document;




 




(g)                                 Approvals.  All approvals, authorizations, consents,

orders or other actions of any Person required to be obtained by the Issuer or,

to the knowledge of the Issuer, by any other party in connection with the

execution and delivery of this Agreement or any other Related Document to which

it is a party have been or will be taken or obtained on or prior to the date

hereof;




 




(h)                                 Solvency.  The Issuer is not insolvent under the Insolvency

Law;




 




(i)                                     Principal

Place of Business and State of Formation; Trade Names.  The Issuer has only one place of business

and its chief executive office is located at the address set forth in the

preamble hereto.  The Issuer’s state of

formation is the State of Delaware.  The

Issuer has not been known by any name other than “Willis Engine Funding LLC”;




 




(j)                                     Subsidiaries.  Except for WLFC Funding (Ireland) Limited, a

corporation organized under the law of the Republic of Ireland, the Issuer has

no Subsidiaries; and




 




(k)                                  Ordinary

Course.  The transactions

contemplated by this Agreement are being consummated by the Issuer in good

faith and in furtherance of the Issuer’s ordinary business purposes and

constitute a practical and reasonable course of action by the Issuer designed

to improve the financial position of the Issuer, with no contemplation of

insolvency and with no intent to hinder, delay or defraud any of its present or

future creditors.




 




ARTICLE IV





COVENANTS OF THE SELLER AND THE ISSUER




 




Section 4.01.                             Seller

Covenants.  The Seller hereby

covenants and agrees with the Issuer, the Noteholders and the Indenture Trustee

as follows:




 




Schedule 2-13





























 




(a)                                  Merger

or Consolidation of, or Assumption of the Obligations of, the Seller.  Notwithstanding anything in this Agreement

to the contrary, any corporation (i) into which the Seller may be merged

or consolidated, (ii) resulting from any merger, conversion or

consolidation to which the Seller shall be party or (iii) succeeding to

the business of the Seller substantially as a whole, will be the successor to

the Seller under this Agreement, without the execution or filing of any

document or any further act on the part of any of the parties to this

Agreement; provided, however, that (x) immediately after giving effect to

such transaction, no Event of Default shall result therefrom and no

representation or warranty made pursuant to Section 3.01 shall have been

breached, (y) the Seller shall have delivered to the Issuer, the

Administrative Agent and each Rating Agency, if any, an Officer’s Certificate

and an Opinion of Counsel each stating that such consolidation, merger or

succession and such agreement of assumption comply with this Section 4.01

and that all conditions precedent, if any, provided for in this Agreement

relating to such transaction have been complied with and (z) the Seller

shall have delivered to the Issuer, the Administrative Agent and each Rating

Agency an Opinion of Counsel either (1) stating that, in the opinion of

such counsel, all UCC financing statements and amendments thereto have been

executed and filed that are necessary fully to preserve and protect the

interests of the Issuer, the Indenture Trustee and any Series Enhancer, if any,

in the Contributed Assets and Excess Assets, or (2) stating that, in the

opinion of such counsel, no such action shall be necessary to preserve and

protect such interests.




 




(b)                                 Limitation

on Liability of the Seller and Others. 

The Seller and any director, officer, employee or agent of the Seller

may rely in good faith on any document of any kind, prima  facie

properly executed and submitted by any Person respecting any matters arising

under this Agreement; provided, however, that any such limitation does not

affect the obligation of the Seller to accept reconveyance of certain

Contributed Engines and the Related Assets or Excess Assets and pay the

consideration therefor pursuant to Section 2.02 hereof.  The Seller shall not be under any obligation

to appear in, prosecute or defend any legal action that is not incidental to

its obligations as the transferor of the Contributed Assets and Excess Assets

under this Agreement, any Engine Transfer Certificate and that in its

reasonable opinion may involve it in any expense or liability.




 




(c)                                  Preservation

of Security Interest.  The Seller

shall execute and file such UCC financing statements in such manner and in such

places as may be required by law fully to preserve, maintain and protect the

interest of the Issuer under this Agreement and the security interest of the

Noteholders and the Indenture Trustee in the Contributed Assets and Excess

Assets.




 




(d)                                 Preservation

of Name, etc.  The Seller will not

change its name, identity or corporate structure in any manner unless

(i) the Seller shall have given the Issuer, the Indenture Trustee, each

Series Enhancer, if any, the Administrative Agent and the Noteholders at least

30 days’ prior written notice thereof and (ii) the Seller shall have filed

any necessary UCC financing statements necessary to continue the effectiveness

of any UCC financing statement referred to in paragraph (c) above.




 




(e)                                  Preservation

of Office.  The Seller will give the

Issuer, each Series Enhancer, if any, the Administrative Agent, the Indenture

Trustee and the Noteholders at least 30 days’ prior written notice of any

relocation of its chief executive office.




 




Schedule 2-14





























 




(f)                                    Books

and Records.  The Seller will, at

its own cost and expense, mark its books and records to the effect that each

Contributed Engine, Related Asset and Excess Asset has been transferred to

the Issuer and subsequently pledged to the Indenture Trustee pursuant to the

Indenture.




 




(g)                                 Obligations

with Respect to Engines and Beneficial Interests.  The Seller will do nothing to impair the

rights of the Issuer, the Owner Trusts, the Noteholders or the Indenture

Trustee in the Contributed Engines, the Related Assets and the Excess Assets,

as the case may be, other than as permitted by the Servicing Agreement.




 




(h)                                 Compliance

with Law.  The Seller will comply,

in all material respects, with all acts, rules, regulations, orders, decrees

and directions of any Governmental Authority applicable to the Contributed

Assets, Excess Assets or any part thereof, provided, however,

that the Seller may contest any act, rule, regulation, order, decree or

direction in any reasonable manner which shall not materially and adversely

affect the rights of the Issuer, the Noteholders or the Indenture Trustee in

any of the Contributed Assets or Excess Assets.




 




(i)                                     Conveyance

of Contributed Assets and Excess Assets; Security Interests.  Except for the transfers and conveyances

hereunder and the security interest created pursuant to the Indenture, the

Seller will not pledge, assign or transfer to any other Person, or grant,

create, incur, assume or suffer to exist any Lien other than Permitted

Encumbrances on, any Contributed Asset or Excess Asset (or any interest

therein) other than the rights of a lessee under a Lease Agreement and the

Seller shall defend the right, title and interest of the Issuer and its

successors and assigns in, to and under the Contributed Assets and Excess

Assets against all claims of third parties claiming through or under the

Seller.




 




(j)                                     Notification

of Breach.  The Seller will advise

the Issuer, the Administrative Agent and the Indenture Trustee promptly, in

reasonable detail, upon discovery of the occurrence of any breach by the Seller

of any of its representations, warranties and covenants contained herein.




 




(k)                                  Further

Assurances.  The Seller will make,

execute or endorse, acknowledge and file or deliver to the Issuer, the Owner

Trusts and each Series Enhancer, if any, from time to time such UCC financing

statements (including any termination or continuation statements), schedules,

confirmatory assignments, conveyances, transfer endorsements, powers of

attorney, certificates, reports and other assurances or instruments and take

such further steps relating to the Contributed Assets, Excess Assets and other

rights covered by this Agreement, as the Issuer, the Owner Trusts or each

Series Enhancer, if any, may request and reasonably require.  The Seller shall take all steps necessary to

perfect the Issuer’s and the Indenture Trustee’s interest in the Contributed

Assets and Excess Assets under any international perfection standards that may

be adopted after the date of this Agreement to the extent practicable and

without unreasonable cost.




 




(l)                                     Indemnification.  The Seller agrees to indemnify, defend and

hold the Issuer and the Owner Trusts harmless from and against any and all

loss, liability, damage, judgment, claim, deficiency or expense (including

interest, penalties, reasonable attorneys’ fees and amounts paid in settlement)

to which the Issuer or the Owner Trusts may become subject insofar as such

loss, liability, damage, judgment, claim, deficiency or expense arises out of

or is based upon a breach




 




Schedule 2-15





























 




by the Seller of its covenants contained in Section 4.01, or any

information certified in any schedule delivered by the Seller hereunder being

untrue in any material respect as of the date of such certification.  The obligations of the Seller under this

Section 4.01(l) shall be considered to have been relied upon by the Issuer, the

Owner Trusts, the Noteholders, the Administrative Agent and the Indenture

Trustee and shall survive the execution, delivery, and performance of this

Agreement regardless of any investigation made by the Issuer or on its behalf.




 




(m)                               Notice

of Liens.  The Seller shall notify

the Issuer promptly after becoming aware of any Lien other than Permitted

Encumbrances on the Contributed Assets or Excess Assets or on any assets owned

by any Owner Trust.




 




(n)                                 Transfer

Taxes.  The Seller shall,

immediately upon (i) receipt of notice from any applicable Governmental

Authority that a tax or related fine is due or (ii) the imposition of any

related Lien on any property of the Issuer, pay all taxes, related fines and

related expenses (including attorney’s fees) incurred or required to be paid by

the Seller or the Issuer in connection with or related to the conveyance of the

Contributed Assets from the Seller to the Issuer and from the Issuer to the

Owner Trusts, and acknowledges that the Issuer shall have no responsibility

with respect thereto.




 




(o)                                 No

Bankruptcy Petition Against the Issuer or the Owner Trusts.  The Seller will not, prior to the date that

is one year and one day after the payment in full of all amounts owing pursuant

to the Indenture, this Agreement and the Related Documents, institute against

the Issuer or any Owner Trust, or join any other Person in instituting against

the Issuer or any Owner Trust, any bankruptcy, reorganization, arrangement,

insolvency or liquidation proceedings or similar proceedings under the laws of

any applicable jurisdiction.  This

subsection 4.01(o) shall survive the termination of this Agreement.




 




(p)                                 ERISA.  The Seller agrees to indemnify, defend and

hold the Issuer and each Owner Trust harmless from and against any and all

loss, liability, damage, judgment, claim, deficiency or expense (including

interest, penalties, reasonable attorneys’ fees and amounts paid in settlement)

to which the Issuer or any Owner Trust may become subject insofar as such loss,

liability, damage, judgment, claim, deficiency or expense arises out of any

Plan.




 




(q)                                 Substantive

Consolidation.  The Seller will be

operated in such a manner so that it would not be substantively consolidated

with the Issuer or any Owner Trust, so that the separate existence of the

Seller, on the one hand, and the Issuer and each Owner Trust, on the other

hand, would not be disregarded in the event of a bankruptcy or insolvency of

the Seller or the Issuer or any Owner Trust, and in such regard, among other

things:




 




(i)                                     the

Seller, on the one hand, will not be involved in the day-to-day management of

the Issuer or any Owner Trust, on the other hand;




 




(ii)                                  the

Seller, on the one hand, will maintain separate corporate records and books of

account from the Issuer and each Owner Trust, on the other hand, and otherwise

will observe corporate formalities and have a separate area from the Issuer for

its business;




 




(iii)                               the financial statements

and books and records of the Seller will be prepared after the date of creation

of the Issuer to reflect and will reflect the separate existence of the Issuer

and each Owner Trust, provided, that the Issuer’s and the Owner Trust’s assets

and




 




Schedule 2-16





























 




liabilities may be included in a consolidated financial statement

issued by an Affiliate of the Issuer; provided, however, that any such

consolidated financial statement will make clear that the Issuer’s and the

Owner Trust’s assets are not available to satisfy the obligations of such

Affiliate;




 




(iv)                              the

Seller, on the one hand, will maintain its assets separately from the assets of

the Issuer and each Owner Trust, on the other hand (including through the

maintenance of a separate bank account), and the Seller’s assets, and records

relating thereto, have not been, are not and will not be, commingled with those

of the Issuer or any Owner Trust;




 




(v)                                 all

of the Seller’s business correspondence and other communications will be

conducted in the Seller’s own name and on its own respective stationery;




 




(vi)                              the

Seller does not act as an agent for the Issuer or any Owner Trust, other than

in its capacity as the Servicer, and in connection therewith, will present

itself to the public as an agent for the Issuer and each Owner Trust and as a

corporation separate from the Issuer and each Owner Trust;




 




(vii)                           the Seller does not conduct

any of the business of the Issuer or any Owner Trust in the Seller’s name;




 




(viii)                        the Seller does not pay any

liabilities of the Issuer or any Owner Trust out of the Seller’s funds or

assets;




 




(ix)                                the

Seller maintains an arm’s-length relationship with the Issuer and each Owner

Trust except with respect to the making of the Guaranty;




 




(x)                                   the

Seller will not assume or guarantee or become obligated for the debts of the

Issuer or any Owner Trust or hold out its credit as being available to satisfy

the obligations of the Issuer or any Owner Trust except with respect to (A)

obligations of the Seller under the Guaranty and (B) obligations of the Seller

to Lessees arising by operation of law under Eligible Leases with respect to

which the consent of such Lessees has not been obtained prior to the transfer

of such Eligible Leases to Issuer by Seller pursuant to this Agreement;




 




(xi)                                the

Seller will not acquire obligations of the Issuer or any Owner Trust;




 




(xii)                             the Seller will allocate

fairly and reasonably overhead or other expenses that are properly shared with

the Issuer, including without limitation, shared office space;




 




(xiii)                          the Seller will identify and

hold itself out as a separate and distinct entity from the Issuer and each

Owner Trust;




 




(xiv)                         the Seller will correct any

known misunderstanding regarding its separate identity from the Issuer and each

Owner Trust;




 




(xv)                            the

Seller will not identify the Issuer or any Owner Trust as a division or part of

itself,




 




(xvi)                         the Seller will not enter

into, or be a party to, any transaction with the Issuer or any Owner Trust

except in the ordinary course of its business and on terms which are




 




Schedule 2-17





























 




intrinsically fair and are no less favorable to it than would be

obtained in a comparable arm’s-length transaction with an unrelated third

party, other than with respect to the making of the Guaranty; and




 




(xvii)                      the Seller does not pay the

salaries of the Issuer’s or any Owner Trust’s employees, if any.




 




Section 4.02.                             Issuer

Covenants.




 




(a)                                  Non-Consolidation.  The Issuer will be operated in such a manner

so that neither it nor any Owner Trust would be substantively consolidated with

the Seller, so that the separate existence of the Issuer and each Owner Trust,

on the one hand, and the Seller, on the other hand, would not be disregarded in

the event of a bankruptcy or insolvency of the Issuer, any Owner Trust, or the

Seller, and in such regard, among other things:




 




(i)                                     the

Issuer will not be involved in the day-to-day management of the Seller;




 




(ii)                                  the

Issuer (A) will, on its behalf and on behalf of each Owner Trust, maintain

separate records and books of account from the Seller and otherwise will

observe all formalities and have a separate area from the Seller for its

business and (B) will cause to be maintained, on behalf of each Owner Trust,

separate trust records and financial records which may be produced upon demand

identifying the assets, liabilities, revenues and expenses of such Owner Trust

separately from those of the Issuer and;




 




(iii)                               the financial statements

and books and records of the Issuer and the financial records of each Owner

Trust, on the one hand, will reflect its separate existence from the Seller, on

the other hand, provided, that the Issuer’s and the Owner Trust’s assets and

liabilities may be included in a consolidated financial statement issued by an

Affiliate of the Issuer; provided, however, that any such consolidated

financial statement will make clear that the Issuer’s and the Owner Trust’s

assets are not available to satisfy the obligations of such Affiliate;




 




(iv)                              the

Issuer will and will cause each Owner Trust to maintain its assets separately

from the assets of the Seller and records relating thereto, have not been, are

not and will not be commingled with those of the Seller’s assets;




 




(v)                                 all

of the Issuer’s and each Owner Trust’s business correspondence and other

communications will be conducted in its own name and on its own stationery;




 




(vi)                              the

Issuer will not and will not permit any Owner Trust to act as an agent of the

Seller in any capacity and will present itself to the public as a corporation

or Trust separate from the Seller;




 




(vii)                           the Issuer will and will

cause each Owner Trust to conduct its business solely in its own name;




 




(viii)                        the Issuer will and will cause

each Owner Trust to pay its own liabilities out of its own funds and assets;




 




Schedule 2-18





























 




(ix)                                the

Issuer will and will cause each Owner Trust to maintain an arm’s-length

relationship with its Affiliates;




 




(x)                                   the

Issuer will not and will not permit any Owner Trust to assume or guarantee or

become obligated for the debts of any other entity or hold out its credit as

being available to satisfy the obligation of any other entity, (in each case

other than guarantees or other obligations of any Owner Trust in respect of

obligations of the Issuer) and will not permit any other person to assume or

guarantee or become obligated for its debts or hold out its credit as being

available to satisfy its obligations, except with respect to (A) obligations of

the Seller under the Guaranty and (B) obligations of the Seller to Lessees

arising by operation of law under Eligible Leases with respect to which the

consent of such Lessees has not been obtained prior to the transfer of such

Eligible Leases to Issuer by Seller pursuant to this Agreement;




 




(xi)                                the

Issuer will not acquire obligations or securities of its stockholders;




 




(xii)                             the Issuer will allocate

fairly and reasonably overhead or other expenses that are properly shared with

any other person or entity, including without limitation, shared office space,

and use separate stationery, invoices and checks;




 




(xiii)                          the Issuer will and will

cause each Owner Trust to identify and hold itself out as a separate and

distinct entity under its own name and not as a division or part of any other

person or entity;




 




(xiv)                         the Issuer will and will cause

each Owner Trust to correct any known misunderstanding regarding its separate

identity;




 




(xv)                            the

Issuer will not and will not permit any Owner Trust to make loans to any person

or entity;




 




(xvi)                         the Issuer will not identify

its stockholders, or any Affiliates of any of them, as a division or part of

itself;




 




(xvii)                      the Issuer will not and will not

permit any Owner Trust to enter into, or be a party to, any transaction with

its stockholders or their Affiliates except in the ordinary course of its

business and on terms which are intrinsically fair and are no less favorable to

it than would be obtained in a comparable arm’s-length transaction with an

unrelated third party; and




 




(xviii)                   the Issuer will pay the salaries of

its own employees, if any, from its own funds.




 




Section 4.03.                             Transfer

of Contributed Assets.  The Seller

understands that the Issuer intends to assign the Contributed Assets, Excess

Assets and its rights under this Agreement to the Indenture Trustee under the

Indenture, and hereby consents to the assignment of all or any portion of this

Agreement by the Issuer to such Indenture Trustee.  The Seller agrees that upon such assignment the Indenture Trustee

may exercise the rights of the Issuer hereunder and shall be entitled to all of

the benefits of the Issuer hereunder.




 




Schedule 2-19





























 




ARTICLE V





CONDITIONS PRECEDENT




 




Section 5.01.                             Conditions

to the Issuer’s Obligations.  The

obligations of the Issuer to acquire Contributed Assets or Excess Assets on any

Transfer Date shall be subject to the satisfaction of the following conditions

(in addition to the procedures required by Section 2.02(d)):




 




(a)                                  All

representations and warranties of the Seller contained in this Agreement shall

be true and correct on the Transfer Date (including without limitation the

Engine Representations and Warranties) with the same effect as though such

representations and warranties had been made on such date;




 




(b)                                 All

information concerning the Contributed Assets and Excess Assets provided to the

Issuer shall be true and correct in all material respects;




 




(c)                                  The

Seller shall have performed all other obligations required to be performed by

the provisions of this Agreement and the other Related Documents;




 




(d)                                 All

corporate and legal proceedings and all instruments in connection with the

transactions contemplated by this Agreement shall be satisfactory in form and

substance to the Issuer, and the Issuer shall have received from the Seller

copies of all documents (including without limitation records of corporate

proceedings) relevant to the transactions herein contemplated as the Issuer may

reasonably have requested; and




 




(e)                                  No

Event of Default or Early Amortization Event shall have occurred and then be

continuing or result from the acquisitions of such Contributed Assets or Excess

Assets.




 




Section 5.02.                             Conditions

to the Seller’s Obligations.  The

obligations of the Seller to convey and contribute Contributed Assets or Excess

Assets on each Transfer Date shall be subject to the satisfaction of the

following conditions (in addition to the procedures required by section

2.02(d)):




 




(a)                                  All

representations and warranties of the Issuer contained in this Agreement shall

be true and correct with the same effect as though such representations and

warranties had been made on such date; and




 




(b)                                 All

limited liability company and legal proceedings and all instruments in

connection with the transactions contemplated by this Agreement shall be

satisfactory in form and substance to the Seller, and the Seller shall have

received from the Issuer copies of all documents (including without limitation

records of limited liability company proceedings) relevant to the transactions

herein contemplated as the Seller may reasonably have requested.




 




Schedule 2-20





























 




ARTICLE VI





TERMINATION




 




Section 6.01.                             Termination.  The respective obligations and

responsibilities of the Seller and the Issuer created by this Agreement shall

not terminate prior to payment in full of all Outstanding Obligations.




 




Section 6.02.                             Effect

of Termination.  No termination or

rejection or failure to assume the executory obligations of this Agreement in

the bankruptcy of the Seller or the Issuer shall be deemed to impair or affect

the obligation pertaining to any executed conveyance or executed obligations,

including without limitation breaches of representations and warranties by the

Seller or the Issuer occurring prior to the date of such termination.  Without limiting the foregoing, prior to

termination, neither the failure of the parties to execute and to deliver an

Engine Transfer Certificate pursuant to Section 2.02, nor the failure of

the Seller to pay in cash or kind the compensation therefor shall render such

transfer or obligation executory, nor shall the continued duties of the parties

pursuant to Article 4 or Section 7.06 of this Agreement render an

executed conveyance executory.




 




ARTICLE VII





MISCELLANEOUS PROVISIONS




 




Section 7.01.                             Amendment.  This Agreement may be amended from time to

time by the Seller and the Issuer only with the prior written consent of the

Indenture Trustee as directed by each Control Party of each Series and upon

prior notice to each Rating Agency, if any. 

The Issuer shall forward copies of any amendment to this Agreement to

the Administrative Agent and the Rating Agencies, if any.




 




Section 7.02.                             Governing

Law.  This Agreement and any

amendment hereof pursuant to Section 7.01 shall be construed in accordance

with and governed by the substantive laws of New York (without regard to choice

of law principles) applicable to agreements made and to be performed therein

and the obligations, rights and remedies of the parties under this Agreement

shall be determined in accordance with such laws.




 




Section 7.03.                             Notices.  All demands, notices and communications

under this Agreement shall be in writing personally delivered, or sent by

facsimile (with subsequent telephone confirmation of receipt thereof) or sent

by overnight courier service, at the following address:  (a) Seller, at its address at Willis

Lease Finance Corporation, 2320 Marinship Way, Suite 300, Sausalito,

California 94965; (b) Issuer, at its address at Willis Engine Funding LLC,

2320 Marinship Way, Suite 300, Sausalito, California 94965 and (c) the

Indenture Trustee, the Noteholders, the Rating Agencies and the Series

Enhancer, if any, and Administrative Agent at their respective addresses set

forth in the related Supplement.  Notice

shall be effective and deemed received (a) two days after being delivered

to the courier service, if sent by courier, (b) upon receipt of

confirmation of transmission, if sent by facsimile or (c) when delivered,

if delivered by hand.  Either party may

alter the address to which communications are to be sent by




 




Schedule 2-21





























 




giving notice of such change of address in conformity with the

provisions of this Section 7.03 for giving notice and by otherwise

complying with any applicable terms of this Agreement.




 




Wherever notice or a report is required to be given or

delivered to or from any party pursuant to this Agreement, a copy of such

notice or report shall also be given or delivered to the Administrative Agent.




 




Section 7.04.                             Severability

of Provisions.  If any one or more

of the covenants, agreements, provisions or terms of this Agreement shall be

for any reason whatsoever held invalid, then such covenants, agreements,

provisions or terms shall be deemed severable from the remaining covenants,

agreements, provisions or terms of this Agreement and shall in no way affect

the validity or enforceability of the other covenants, agreements, provisions

or terms of this Agreement.




 




Section 7.05.                             Assignment.  Notwithstanding anything to the contrary

contained in this Agreement, this Agreement may not be assigned by the Seller

except as provided in Section 4.01(a), without the prior written consent

(which consent shall not be unreasonably withheld) of the Issuer and the

Indenture Trustee at the direction of each Control Party of each Series and,

except as provided in Section 4.03, this Agreement may not be assigned by

the Issuer without the prior written consent (which consent shall not be

unreasonably withheld) of each Control Party of each Series.  Whether or not expressly stated, all

representations, warranties, covenants and agreements of the Seller (whether as

the Seller or as Servicer) and the Issuer in this Agreement, or in any document

delivered by any of them in connection with this Agreement, shall be for the

benefit of, and shall be exercisable by, the Indenture Trustee, each Series

Enhancer, if any, and the Noteholders.




 




Section 7.06.                             Further

Assurances.  Each of the Seller and

the Issuer agrees to do such further acts and things and to execute and deliver

such additional assignments, agreements, powers and instruments as are

reasonably required to carry into effect the purposes of this Agreement or to

better assure and confirm unto the Indenture Trustee, the Series Enhancers, if

any, or the Noteholders their rights, powers and remedies hereunder.




 




Section 7.07.                             No

Waiver; Cumulative Remedies.  No

failure to exercise and no delay in exercising, on the part of the Issuer or

the Seller, any right, remedy, power or privilege hereunder, shall operate as a

waiver thereof, nor shall any single or partial exercise of any right, remedy,

power or privilege hereunder preclude any other or further exercise hereof or

the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges

herein provided are cumulative and not exhaustive of any rights, remedies,

powers and privileges provided by law.




 




Section 7.08.                             Counterparts.  This Agreement may be executed in two or

more counterparts (and by different parties on separate counterparts), each of

which shall be an original, but all of which shall constitute one and the same

instrument.




 




Section 7.09.                             Binding

Effect.  This Agreement will inure

to the benefit of and be binding upon the parties hereto and, upon the transfer

contemplated by Section 4.03 hereof, the Indenture Trustee, the

Noteholders and their respective successors and permitted assigns.




 




Schedule 2-22





























 




Section 7.10.                             Merger

and Integration.  Except as

specifically stated otherwise herein, this Agreement sets forth the entire

understanding of the parties relating to the subject matter hereof, and all

prior understandings, written or oral, are superseded by this Agreement.  This Agreement may not be modified, amended,

waived or supplemented except as provided herein.




 




Section 7.11.                             Headings.  The headings herein are for purposes of

reference only and shall not otherwise affect the meaning or interpretation of

any provision hereof




 




Section 7.12.                             Schedules

and Exhibits.  The schedules and

exhibits attached hereto and referred to herein shall constitute a part of this

Agreement and are incorporated into this Agreement for all purposes.




 




Section 7.13.                             General

Interpretive Principles.  For

purposes of this Agreement except as otherwise expressly provided or unless the

context otherwise requires:




 




(a)                                  the

terms defined in this Agreement have the meanings assigned to them in this

Agreement and include the plural as well as the singular, and the use of any

gender herein shall be deemed to include the other gender;




 




(b)                                 accounting

terms not otherwise defined herein have the meanings assigned to them in

accordance with generally accepted accounting principles as in effect on the

date hereof;




 




(c)                                  references

herein to “Articles”, “Sections”, “Subsections”, “paragraphs” and other

subdivisions without reference to a document are to designated Articles,

Sections, Subsections, paragraphs and other subdivisions of this

Agreement;




 




(d)                                 a

reference to a Subsection section without further reference to a

Section is a reference to such Subsection section as contained in the same

Section in which the reference appears, and this rule shall also apply to

paragraphs and other subdivisions;




 




(e)                                  the

words “herein”, “hereof”, “hereunder” and other words of similar import refer

to this Agreement as a whole and not to any particular provision; and




 




(f)                                    the

term “include” or “including” shall mean without limitation by reason of

enumeration.




 




Section 7.14.                             Third-Party

Beneficiaries.  This Agreement will

inure to the benefit of and be binding upon the parties hereto, the Indenture

Trustee and the Noteholders, and their respective successors and permitted

assigns.




 




Section 7.15.                             Effect

on Original Sale Agreement.  The

Seller and the Issuer hereby agree that as of the Effective Date the terms and

provisions of the Original Sale Agreement shall be and hereby are amended and

restated in their entirety by the terms and provisions of this Agreement.




 




Schedule 2-23





























 




IN WITNESS WHEREOF, the Seller and the Issuer have

caused this Amended and Restated Contribution and Sale Agreement to be duly

executed by their respective officers as of the day and year first above

written.




 




	

   


  	

  WILLIS LEASE FINANCE

  CORPORATION


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

   


  	

  /s/ DONALD A. NUNEMAKER


  	

   


  
	

   


  	

  Name:


  	

   


  	

  Donald A. Nunemaker


  	

   


  
	

   


  	

  Title:


  	

   


  	

  Executive Vice

  President


  	

   


  
	

   


  	

   


  	

  Chief Operating Officer


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  WILLIS ENGINE FUNDING

  LLC


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

   


  	

  /s/ MONICA J. BURKE


  	

   


  
	

   


  	

  Name:


  	

   


  	

  Monica J. Burke


  	

   


  
	

   


  	

  Title:


  	

   


  	

  Chief Financial Officer


  	

   


  
							





 




Schedule 2-24





























 




SCHEDULE 1 to


Amended and Restated Contribution And Sale Agreement




 




“Contribution

Percentage” means

                       

percent (    %).*




 






















*                                         This redacted

material has been omitted pursuant to a request for confidential treatment, and

the material has been filed separately with the Commission.




 




Schedule 1-1