Document:

Exhibit

10.5

 

EMPLOYMENT

AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of

the 21st day of June, 2002, by and between Willis Lease Finance Corporation, a

Delaware corporation (“Employer”),

and Monica J. Burke (“Employee”).

 

RECITALS

 

WHEREAS, Employer desires to offer Employee the

position, compensation, amenities and other benefits set forth herein;

 

WHEREAS, Employee desires to be employed by Employer

and to assume the position of Executive Vice President and Chief Financial

Officer on the terms and conditions set forth herein; and

 

WHEREAS, Employee acknowledges that she has had an

opportunity to consider this Agreement and consult with independent advisors of

her choosing with regard to the terms of this Agreement, and enters this

Agreement voluntarily and with a full understanding of its terms.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing

recitals, the mutual promises of the parties and the mutual benefits they will

gain by the performance thereof, and other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, the parties hereby

agree as follows:

 

1.             Employment.  Employer hereby employs Employee and

Employee hereby accepts employment, upon the terms and conditions hereinafter

set forth, as the Executive Vice President and Chief Financial Officer of

Employer.  Employee shall devote her

full time and attention, with undivided loyalty, to the business and affairs of

Employer during the Employment Term. 

Employee shall not engage in any other business or job activity during

the Employment Term without Employer’s prior written consent.

 

2.             Term.

 

(a)           The

term of Employee’s employment under this Agreement shall be for a two (2) year period commencing on or about

July 15, 2002 (“Start Date”) and

ending on July 15, 2004 (as may be extended hereunder, the “Employment Term”), unless otherwise

terminated pursuant to the terms hereof. 

Each full twelve-month period Employee is employed by Employer shall be

referred to herein as an “Employment Year.”

 

(b)           After

the expiration of the initial Employment Term and until the Termination Date

(as defined below), Employee’s employment will automatically renew for a period

of one year, each year, on the same terms and conditions as are set forth

herein, modified

 

 

for any increases

to Employee’s salary which may be made from time to time, unless either party

gives the other written notice of nonrenewal at least six (6) months prior to

the end of the last applicable Employment Year.  Employee shall be entitled to the payments set forth in Section 7

or Section 8 hereof in the event either party gives the other such a notice of

nonrenewal.

 

(c)           Upon

the occurrence of a Change in Control, this Agreement shall be automatically

extended for a period equal to the greater of: (I) the remaining Employment

Term, or (II) the eighteen month period commencing on the date of the Change in

Control event and ending on the eighteen month anniversary of the Change in

Control event (the “Change in Control

Extension”).  “Change in Control” means the occurrence of

any of the following events: (i) any “person” (as such term is used in

Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended),

other than Charles F. Willis IV or an Affiliate (as defined in Section 13) of

Charles F. Willis IV, is or becomes the “beneficial owner” (as defined in Rule

13d-3 under said Act), directly or indirectly, of securities of Employer

representing at least fifty percent (50%) of the total voting power represented

by Employer’s then outstanding voting securities; or (ii) the stockholders of

Employer approve a merger or consolidation of Employer with any other

corporation, other than a merger or consolidation which would result in the

voting securities of Employer outstanding immediately prior thereto continuing

to represent (either by remaining outstanding or by being converted into voting

securities of the surviving entity) at least fifty (50%) of the total voting

power represented by the voting securities of Employer or such surviving entity

outstanding immediately after such a merger or consolidation, or the

stockholders of Employer approve a plan of complete liquidation or dissolution

of Employer or an agreement for the sale or disposition by Employer of all or

substantially all of Employer’s assets, provided, however, that if such merger,

consolidation, liquidation, dissolution, sale or disposition does not

subsequently close, a Change in Control shall not be deemed to have occurred;

or (iii) individuals who are directors of Employer as of the date hereof

cease for any reason to constitute a majority of Employer’s Board of Directors

(the “Board”) unless such

change(s) is approved by a majority of the directors of Employer as of the date

thereof.

 

3.             Duties.

 

(a)           Employee

shall in good faith perform those duties and functions as are required by her

position, including but not limited to responsibility for funding, treasury,

cash management, accounting, financial reporting, risk management, taxes,

management information systems (MIS), investor relations, and such other duties

as may be determined and assigned to her from time to time by the Chief

Executive Officer (“CEO”) or the President or Chief Operating Officer

(“COO”).  Notwithstanding the foregoing

or any other provision in this Agreement, Employer shall have the right to

modify from time to time the title and duties assigned to Employee so long as

such title and duties are consistent with the usual and customary expectations

of the type of position and function of Employee.

 

(b)           Employee

agrees to serve Employer faithfully and to the best of her ability; to devote

her full time and attention, with undivided loyalty, during normal business

hours to the business and affairs of Employer, except during reasonable

vacation periods and periods of illness and incapacity; and to perform such

duties as the CEO or his/her designate(s) may assign, such duties to be of a

character and dignity appropriate to the Executive Vice President and Chief

Financial Officer.  Employee shall not

engage in any other business or job

 

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activity during the Employment Term without Employer’s prior written

consent.  Notwithstanding the foregoing,

Employee may engage in civic and not-for-profit activities so long as such

activities do not materially interfere with Employee’s performance of her

duties hereunder.

 

4.             Compensation.  Employer agrees to provide as compensation

to Employee the following salary, incentive, and benefits in exchange for the

services described in Section 3 of this Agreement:

 

(a)           Base

Salary.  Employer agrees to pay to

Employee during the Employment Term an annual base salary in the amount of Two

Hundred Twenty-five Thousand Dollars ($225,000) per Employment Year less

payroll deductions and all required withholdings, or such higher amount as the

Compensation Committee of the Board shall from time to time determine.  Employee’s base salary shall be paid not

less frequently than semi-monthly in accordance with Employer’s usual payroll

practices.  The Compensation Committee

of the Board will review Employee’s base salary no less than once annually, and

shall have sole discretion to increase or decrease (subject to the next sentence

hereof) the base salary.  Employee’s base

salary only may be decreased in connection with a salary reduction program

approved by the Compensation Committee of the Board which affects all executive

officers of Employer.

 

(b)           Incentive Compensation.  In

addition to Employee’s base salary, Employee shall participate in and, to the

extent earned or otherwise payable thereunder, receive periodic incentive cash

bonuses pursuant to any incentive plans currently maintained or hereafter

established by Employer and applicable to an employee of Employee’s position,

which presently is the 2002 Incentive Compensation Plan.  Employee’s entitlement to incentive bonuses

is discretionary and shall be determined by the Compensation Committee of the

Board in good faith based upon the extent to which Employee’s individual

performance objectives and Employer’s performance objectives were achieved

during the applicable bonus period. 

Employee is eligible to receive a cash bonus of up to 50% of Employee’s

base salary (“Incentive Bonus”).  The first 70% of the Incentive Bonus shall

be conditioned upon Employer’s performance. 

The remaining 30% shall be conditioned upon achieving individual

milestones and/or objectives established by the CEO, the President, or COO for

Employee.  The Compensation Committee of

the Board will annually set the Employer’s performance targets and approve the

incentive compensation plan  For 2002

only, the Employee will be eligible to receive a pro-rated Incentive Bonus

based on the number of weeks she is employed from the Start Date through December

31, 2002 divided by the total number of weeks between July 1, 2002 and December

31, 2002.

 

5.             Benefits

and Perquisites.

 

(a)           Benefits.  Employer shall provide Employee such

employment benefits, equipment and support as are generally available to executive

officers of Employer, including without limitation reimbursement of reasonable

expenses incurred in performing her duties under this Agreement (including, but

not limited to, expenses for entertainment, long distance telephone calls,

lodging, meals, transportation and travel), coverage under medical, dental,

long-term

 

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disability and group life insurance plans, and rights and benefits for

which Employee is eligible under Employer’s 401(k) and employee stock purchase

plans.

 

(b)           Vacation

and Sick Pay.  Employee shall be

eligible for vacation and sick leave in accordance with the policies of

Employer in effect from time to time during the Employment Term.  Employee shall be entitled to a period of

annual vacation time equal to four (4) weeks during each Employment Year, to

accrue pro rata during the course of the Employment Term.  All accrued vacation and sick pay shall be

paid to Employee in a lump sum payment on the date of a Change in Control or

Retirement or termination of employment with Employer.  For purposes of this Agreement, “Retirement” means Employee’s voluntary

termination on a date after which Employee has reached the age of 55 and after

which Employee has provided Employer with at least 10 years of service.

 

6.             Stock

Options.

 

(a)           Employee

shall participate in Employer’s Stock Option Plan (“Plan”) on the same terms as are generally available to

executive officers of Employer and on terms which are in accordance with

comparative market practices.  At the

earliest possible date but not later than thirty (30) days after the Start

Date, Employer shall grant Employee options to purchase thirty-five thousand

(35,000) shares of the common stock of Employer (the “Option”) at an exercise price equal to the then current

market price of Employer’s common stock. 

One-fourth of the Option shall become vested and exercisable in equal

increments on each one-year anniversary of the Start Date through the fourth

such anniversary, provided that Employee is employed by Employer on each such

anniversary date.

 

(b)           The

parties agree that any additional grant of stock options under the Plan or any

similar plan is subject to the discretion of the Compensation Committee of the

Board based upon the duties of Employee’s position, the extent to which

Employee’s individual performance objectives and Employer’s profitability

objectives and other financial and non-financial objectives were achieved

during the applicable period, and comparative market practices.

 

(c)           In

addition to any rights Employee may have under the Plan or specific option

grants under the Plan, all stock options granted to Employee which would have

otherwise vested following the occurrence of a Change in Control shall

immediately vest and become exercisable in the event of a Change in Control.

 

7.             Termination/Nonrenewal

by Employer.  The date on which

Employee’s employment by Employer ceases, under any of the following

circumstances, shall be defined herein as the “Termination

Date.”  The employment of Employee

may be terminated by Employer or Employer may decide not to renew this

Agreement for any reason or no reason, with or without cause or justification,

subject to the following:

 

(a)           Termination

For Cause.  If (i) Employee’s

employment is terminated by Employer for Cause (as defined below), or

(ii) Employer gives Employee a notice of nonrenewal pursuant to Section

2(b) hereof for Cause, Employer’s total liability to Employee or her heirs

shall be limited to payment of any unpaid base salary and any annual incentive

compensation to

 

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which Employee is entitled as of the Termination Date, and accrued

vacation and sick pay, and Employee shall not be entitled to any further

compensation or benefits provided under this Agreement, including, without

limitation, any severance paymentsIf Employer adopts an incentive compensation

plan applicable to Employee’s position which provides for an annual payout, it

is understood that throughout this Agreement the words “any annual incentive

compensation to which Employee is entitled as of the Termination Date” shall

mean that Employee shall be eligible to receive, on a pro-rata basis, any

incentive compensation Employee would have received had Employee’s Termination

Date been December 31st of the year of termination, provided that

the actual Termination Date is after June 30th of the year of

termination and further provided that the maximum pro-rata incentive

compensation payment shall be limited to 50% of the annual incentive

compensation Employee would have received had Employee’s Termination Date been

December 31st of the year of termination, with the timing of any

such incentive compensation payment to be at the same time such incentive

compensation is paid to all other employees of Employer.  “Cause”

includes, but shall not be limited to: 

(1) Employee’s conviction of or plea of nolo contendere to any

felony or gross misdemeanor charges brought in any court of competent

jurisdiction; (2) any fraud, material misrepresentation or gross

misconduct by Employee against Employer; and (3) Employee’s breach of this

Agreement.

 

(b)           Termination

Without Cause.  If

(i) Employee’s employment is terminated by Employer without Cause, or

(ii) Employer provides Employee with a notice of nonrenewal pursuant to

Section 2(b) hereof without Cause, Employer will (A) in the case of

termination, provide not less than six (6) months notice of termination or an

amount equal to six (6) months of Employee’s base salary in lieu of notice, or

(B) in the case of nonrenewal, provide notice of nonrenewal at least six

(6) months prior to the end of the last applicable Employment Year or an amount

equal to six months base salary in lieu of notice.  In addition, in each of the foregoing scenarios, Employee will be

paid the severance which is described in Section 9 below.

 

8.             Termination/Nonrenewal

by Employee.  The employment of

Employee may be terminated by Employee or Employee may decide not to renew this

Agreement for any reason or no reason, with or without cause or justification,

subject to the following:

 

(a)           Voluntary

Resignation.  If (i) Employee’s

employment terminates by reason of Employee’s voluntary resignation (and is not

a resignation for Good Reason), or (ii) Employee gives Employer a notice

of nonrenewal pursuant to Section 2(b) hereof (which is not given for Good

Reason), Employer’s total liability to Employee shall be limited to payment of

any unpaid base salary and any annual incentive compensation to which Employee

is entitled as of the Termination Date, and accrued vacation and sick pay, and

Employee shall not be entitled to any further compensation or benefits provided

under this Agreement, including, without limitation, any severance payments.

 

(b)           Resignation

for Good Reason.  If (i) Employee’s

employment terminates by reason of Employee’s voluntary resignation for Good

Reason, or (ii) Employee provides Employer with a notice of nonrenewal

pursuant to Section 2(b) hereof for Good Reason, Employee will be paid the

severance which is described in Section 9 below.  “Good Reason”

means:  Employee’s voluntary termination

following (i) a reduction in compensation which is not in proportion to

any salary reduction program approved by the Compensation Committee of the

 

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Board which affects all executive officers of Employer; (ii) a

reduction in material benefits; (iii) not maintaining Employee’s

positions, title, duties and status or changing Employee’s reporting

obligations without Employee’s written consent; (iv) requiring Employee to

work at a location more than 25 “road” miles from the location of Employer’s

corporate headquarters as of the date of this Agreement; or (v) any

willful and material breach by Employer of its obligations under this Agreement.

 

Employee agrees to give Employer at least ninety (90)

days prior written notice of termination of her employment and at least six (6)

months prior written notice of nonrenewal of this Agreement.  Employer shall have the right in its sole

discretion to continue to employ Employee for ninety days or six months, as

applicable, or for a shorter period with pay in lieu of notice to Employee in

the amount to which Employee would have been entitled if employed for the

ninety-day or six month notice period.

 

9.             Severance

Payment.

 

(a)           Amount.  In the event severance is payable hereunder,

such severance shall be in an amount equal to

 

(i)            one-half times Employee’s annual

base salary at the time of termination, or if during a Change in Control

Extension, one times Employee’s annual base salary at the time of termination,

plus

 

(ii)           any unpaid base salary and any annual

incentive compensation to which Employee is entitled as of the Termination Date

and accrued vacation and sick pay, plus

 

(iii)          if during a Change in Control

Extension, one times the average annual incentives paid to Employee

attributable to the two years prior to the year of termination, plus

 

(iv)          distribution of unpaid deferred

compensation, plus

 

(v)           accelerated vesting of the stock

options scheduled to vest during the two (2) years following the Termination

Date, plus

 

(vi)          continued coverage under all group

benefit plans (e.g., medical, dental and life insurance) for a period of six

months following the Termination Date, or if during a Change in Control

Extension, continued coverage under all group benefit plans (e.g., medical,

dental and life insurance) for a period of twelve months following the

Termination Date, in each case at the same cost to Employee as prior to the

Termination Date.

 

(b)           Payment.  All cash components of the above-described

severance payments (with the exception of any payments pursuant to the words

“any annual incentive compensation” in Section 9 (a) (ii) above, which shall be

paid at the same time such incentive compensation is paid to all other

employees) shall be paid in a lump sum within thirty (30) days of the date of

termination of Employee’s employment or at the option of the Employee, in four

 

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equal installments, payable every three months, commencing on the date

that is 30 days after the date of termination of employment.

 

(c)           Limitation

on Payments.  If any payment or

benefit Employee would receive from Employer or otherwise (“Payment”) would (i) constitute a “parachute

payment” within the meaning of Section 280G of the Internal Revenue Code of

1986, as amended (the “Code”), and

(ii) but for this sentence, be subject to the excise tax imposed by

Section 4999 of the Code (the “Excise

Tax”), then such Payment shall be

reduced to the Reduced Amount.  The “Reduced Amount” shall be either

(x) the largest portion of the Payment that would result in no portion of

the Payment being subject to the Excise Tax or (y) the largest portion, up

to and including the total, of the Payment, whichever amount, after taking into

account all applicable federal, state and local employment taxes, income taxes,

and the Excise Tax (all computed at the highest applicable marginal rate),

results in Employee’s receipt, on an after-tax basis, of the greater amount of

the Payment notwithstanding that all or some portion of the Payment may be

subject to the Excise Tax.  If a

reduction in payments or benefits constituting “parachute payments” is

necessary so that the Payment equals the Reduced Amount, reduction shall occur

in the following order unless Employee elects in writing a different order (provided,

however, that such election shall be subject to Company approval if

made on or after the date on which the event that triggers the Payment occurs):  reduction of cash payments; cancellation of

accelerated vesting of stock awards; and reduction of employee benefits.  In the event that acceleration of vesting of

stock award compensation is to be reduced, such acceleration of vesting shall

be cancelled in the reverse order of the date of grant of Employee’s stock

awards unless Employee elects in writing a different order for cancellation.

 

The accounting firm engaged by Employer for general

audit purposes as of the day prior to the effective date of the event that

triggers the Payment shall perform the foregoing calculations.  If the accounting firm so engaged by

Employer is serving as accountant or auditor for the individual, entity or

group effecting the “change in ownership”

as described in Section 280G(b)(2)(A)(i) of the Code, Employer shall appoint a

nationally recognized accounting firm to make the determinations required

hereunder.  Employer shall bear all

expenses with respect to the determinations by such accounting firm required to

be made hereunder.

 

The accounting firm engaged to make the determinations

hereunder shall provide its calculations, together with detailed supporting

documentation, to Employer and Employee within fifteen (15) calendar days after

the date on which Employee’s right to a Payment is triggered (if requested at

that time by Employer or Employee) or such other time as requested by Employer

or Employee.  If the accounting firm

determines that no Excise Tax is payable with respect to a Payment, either

before or after the application of the Reduced Amount, it shall furnish

Employer and Employee with an opinion reasonably acceptable to Employee that no

Excise Tax will be imposed with respect to such Payment.  Any good faith determinations of the

accounting firm made hereunder shall be final, binding and conclusive upon

Employer and Employee.

 

10.           Benefits

Upon Termination.  Except as

otherwise expressly provided by this Agreement and without limiting any rights

granted to Employee hereunder, all insurance benefits provided under Section 5

of this Agreement shall be extended, at Employee’s election and cost, to the

extent permitted by Employer’s insurance policies and benefit plans, for one

year after

 

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Employee’s Termination Date, except (a) as required by law (e.g.,

COBRA health insurance continuation election) or (b) in the event of a

termination described in Section 7 or 8.

 

11.           Death/Disability.

 

(a)           In

the event (during the Employment Term) of Employee’s death, (i) this Agreement

shall terminate, (ii) Employer shall pay to Employee’s estate or heirs any

unpaid base salary and any annual incentive compensation to which Employee may

be entitled as of the Termination Date, and (iii) Employee’s estate and

heirs shall not be entitled to any severance payments hereunder.  In addition, the stock options scheduled to

vest during the two (2) years following the date of Employee’s death shall

receive accelerated vesting and shall become exercisable upon Employee’s

death.  Employee’s estate shall have the

right to exercise such options for the shorter of (i) two (2) years from

the date of death, and (ii) the term of the option.

 

(b)           In

the event (during the Employment Term) of Employee’s long term disability (as

defined in Employee’s Group Disability Plan) and the passing of the Elimination

Period (as defined in Employee’s Group Disability Plan), (i) this

Agreement shall terminate, (ii) Employer shall pay to Employee any unpaid

base salary and any annual incentive compensation to which Employee is entitled

as of the Termination Date, and (iii) Employee shall not be entitled to

any severance payments hereunder.  In

addition, the stock options scheduled to vest during the two (2) years after

the date of Employee’s disability shall receive accelerated vesting and shall

become exercisable upon the termination of this Agreement due to Employee’s

disability.  Employee shall have the

right to exercise such options for the shorter of (i) two (2) years from

the date of disability, and (ii) the term of the option.

 

12.           Maintenance

of Confidentiality and Duty of Loyalty.

 

(a)           General.  Employee acknowledges that, pursuant to her

employment with Employer, she will necessarily have access to trade secrets and

information that is confidential and proprietary to Employer in connection with

the performance of her duties.  In

consideration for the disclosure to Employee of, and the grant to Employee of

access to such valuable and confidential information and in consideration of

her employment, Employee shall comply in all respects with the provisions of

this Section 12.

 

(b)           Nondisclosure.  During the Employment Term and for a period

of three (3) years thereafter, Confidential and Proprietary Information of

Employer of which Employee gains knowledge during the Employment Term shall be

used by Employee only for the benefit of Employer in connection with Employee’s

performance of her employment duties, and Employee shall not, and shall not

allow any other person that gains access to such information in any manner to,

without the prior written consent of Employer, disclose, communicate, divulge

or otherwise make available, or use, any such information, other than for the

immediate benefit of Employer.  For

purposes of this Agreement, the term “Confidential

and Proprietary Information” means information not generally known

to the public and which is proprietary to Employer and relates to Employer’s

existing or reasonably foreseeable business or operations, including but not

limited to trade secrets, business plans, advertising or public relations

strategies, financial information, budgets, personnel information, customer

information and lists, and information pertaining to research, development,

manufacturing, engineering, processing,

 

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product designs (whether or not patented or patentable), purchasing and

licensing, and which may be embodied in reports or other writings or in blue

prints or in other tangible forms such as equipment and models.  Employee will refrain from any acts or

omissions that would jeopardize the confidentiality or reduce the value of any

Employer Confidential and Proprietary Information.

 

(c)           Covenant

of Loyalty.  During the Employment

Term, Employee shall not, on her own account or as an employee, agent,

promoter, consultant, partner, officer, director, or as a more than 1%

shareholder of any other person, firm, entity, partnership or corporation, own,

operate, lease, franchise, conduct, engage in, be connected with, have any

interest in, or assist any person or entity engaged in any business in the

continental United States that is in any way competitive with or similar to the

business that is conducted by Employer or is in the same general field or

industry as Employer.  Without limiting

the generality of the foregoing, Employee does hereby covenant that she will

not, during the Employment Term:

 

(i)            solicit, accept or receive any

compensation from any customer of Employer or any business competitive to that

of Employer; or

 

(ii)           contact, solicit or call upon any

customer or supplier of Employer on behalf of any person or entity other than

Employer for the purpose of selling, providing or performing any services of

the type normally provided or performed by Employer; or

 

(iii)          induce or attempt to induce any person

or entity to curtail or cancel any business or contracts which such person or

entity has with Employer; or

 

(iv)          induce or attempt to induce any person

or entity to terminate, cancel or breach any contract which such person or

entity has with Employer, or receive or accept any benefits from such

termination, cancellation or breach.

 

(d)           No

Solicitation.  During the Employment

Term and for a period of three (3) years thereafter, Employee agrees not to

interfere with the business of Employer or any Affiliate of Employer by

directly or indirectly soliciting, attempting to solicit, inducing or otherwise

causing any employee of Employer or any Affiliate of Employer to terminate his

or her employment with Employer in order to become an employee, consultant or

independent contractor to or for any other person or entity.

 

(e)           Injunctive

Relief.  Employee expressly agrees

that the covenants set forth in this Section 12 are reasonable and necessary to

protect Employer and its legitimate business interests, and to prevent the

unauthorized dissemination of Confidential and Proprietary Information to

competitors of Employer.  Employee also

agrees that Employer will be irreparably harmed and that damages alone cannot

adequately compensate Employer if there is a violation of this Section 12

by Employee, and that injunctive relief against Employee is essential for the

protection of Employer.  Therefore, in

the event of any such breach, it is agreed that, in addition to any other

remedies available, Employer shall be entitled as a matter of right to

injunctive relief in any court of competent jurisdiction, plus attorneys’ fees

actually incurred in seeking such relief. 

Furthermore, Employee agrees that Employer shall not be required to post

a

 

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bond or other collateral security with the court if Employer seeks

injunctive relief.  To the extent any

provision of this Section 12 is deemed unenforceable by virtue of its

scope or limitation, Employee and Employer agree that the scope and limitation

provisions shall nevertheless be enforceable to the fullest extent permissible

under the laws and public policies applied in such jurisdiction where

enforcement is sought.

 

13.           Affiliate.  “Affiliate”

means a person that, directly or indirectly, through one or more intermediaries

controls, is controlled by or is under common control with the first mentioned

person.

 

14.           Notices.  Any notice which either party may wish or be

required to give to the other party pursuant to this Agreement shall be in

writing and shall be either personally served or deposited in the United States

mail, registered or certified, and with proper postage prepaid.  Mailed notices to Employee shall be

addressed to Employee at the home address which Employee most recently

communicated to Employer in writing.  In

the case of Employer, mailed notices shall be addressed to its corporate

headquarters, and all notices shall be directed to the attention of corporate

counsel.  Notice given by personal

service shall be deemed effective upon service.  Notice given by registered or certified mail shall be deemed

effective three (3) days after deposit in the mail.

 

15.           Binding

Effect.  This Agreement shall be

binding upon and inure to the benefit of the parties hereto, their respective

legal representatives, and their successors and assigns.  As used in this Agreement, the term “successor” shall include any person, firm,

corporation or other business entity which at any time, whether by merger,

purchase, consolidation, or otherwise, acquired all or substantially all of the

assets or business of Employer.  This

Agreement shall be deemed to be willfully breached by Employer if any such

successor does not absolutely and unconditionally assume all of Employer’s

obligations under this Agreement and agree expressly to perform the obligations

in the same manner and to the same extent as Employer would be required to

perform such obligations in the absence of the succession.  Employee may not assign any of her duties

hereunder and she may not assign any of her rights hereunder without the

written consent of Employer, which shall not be unreasonably withheld.

 

16.           Entire

Agreement.  This Agreement contains

the entire agreement of the parties and supersedes and replaces all prior

agreements and understandings between the parties relating to the subject

matter hereof.

 

17.           Governing

Law.  This Agreement shall be

governed by and construed in accordance with the internal laws (without

reference to choice or conflict of laws) of the State of California.

 

18.           Arbitration.  Employer and Employee agree that, to the

extent permitted by law and to the extent that the enforceability of this

Agreement is not thereby impaired, any and all disputes, controversies or

claims between Employee and Employer that arise with respect to this agreement,

except disputes concerning the use or disclosure of trade secrets, proprietary

and/or confidential information, or otherwise arising under Section 12

hereof, shall be determined exclusively by final and binding arbitration in the

County of San Francisco, California, in accordance with the employment rules of

the American Arbitration Association then in effect.

 

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The controversy or claim shall be submitted to three arbitrators, one

of whom shall be chosen by Employer, one of whom shall be chosen by Employee,

and the third of whom shall be chosen by the two arbitrators so selected.  The party desiring arbitration shall give

written notice to the other party of its desire to arbitrate the particular

matter in question, naming the arbitrator selected by it.  If the other party shall fail within a

period of 15 days after such notice shall have been given to reply in writing

naming the arbitrator selected by it, then the party not in default may apply

to the American Arbitration Association for the appointment of the second

arbitrator.  If the two arbitrators

chosen as above shall fail within 15 days after their selection to agree upon a

third arbitrator, then either party may apply to the American Arbitration

Association for the appointment of an arbitrator to fill the place so remaining

vacant.  Employer shall pay the fees of

the arbitrators so selected.  The

decision of any two of the arbitrators shall be final and binding upon the

parties hereto and shall be delivered in writing signed in triplicate by the

concurring arbitrators to each of the parties hereto.  The parties agree that both parties will be allowed to engage in

adequate discovery consistent with the nature of the claims in dispute.  The arbitrators shall have the authority to

entertain a motion to dismiss and/or a motion for summary judgment by any party

and shall apply the standards governing such motions under the Federal Rules of

Civil Procedure.  The arbitrators shall

have discretion to award monetary and other damages, or no damages, and to

fashion such other relief as the arbitrators deem appropriate.  The arbitrators also shall have discretion

to award the prevailing party reasonable costs and attorneys’ fees incurred in

bringing or defending an action under this Section 18, as permitted by

applicable law.  Judgment on the award

rendered by the arbitrators may be entered in any court having jurisdiction.

 

Nothing in this Section 18 shall limit the

Employer’s ability to seek injunctive relief for any violation of Employee’s

obligations concerning nondisclosure, loyalty and nonsolicitation as set forth

in Section 12 hereof.  Any such

injunctive relief proceeding shall be without prejudice to any rights Employer

or Employee may have under this Agreement to obtain relief in arbitration with

respect to such matters.

 

19.           Severability.  Whenever possible, each provision of this

Agreement shall be interpreted in such a manner as to be effective and valid

under applicable law, but if any provision of this Agreement is held to be

invalid, illegal or unenforceable in any respect under any applicable law or

rule in any jurisdiction, such invalidity, illegality or unenforceability shall

not affect any other provision or any other jurisdiction, but this Agreement

shall be reformed, construed and enforced in such jurisdiction as if such

invalid, illegal or unenforceable provisions had never been contained herein.

 

20.           Amendments

and Waivers.  This Agreement may be

modified only by a written instrument duly executed by each party hereto.  No breach of any covenant, agreement,

warranty or representation shall be deemed waived unless expressly waived in

writing by the party who might assert such breach.  No waiver of any right hereunder shall operate as a waiver of any

other right or of the same or a similar right on another occasion.

 

21.           Counterparts.  This Agreement may be executed by the

parties in separate counterparts, each of which when so executed and delivered

shall be an original, but all such counterparts shall together constitute but

one and the same instrument.

 

11

 

22.           Section

Headings.  The headings of each

Section, subsection or other subdivision of this Agreement are for reference

only and shall not limit or control the meaning thereof.

 

12

 

IN WITNESS WHEREOF, the parties hereto have executed

this Agreement as of the date first above written.

 

	

   

  	

  “Employer”

  
	

   

  	

   

  	

   

  
	

   

  	

  WILLIS LEASE FINANCE CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  Charles F. Willis, IV

  
	

   

  	

   

  	

  President and Chief Executive Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  “Employee”

  
	

   

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Monica J. Burke

  
					

 

13Exhibit 10.23*

 

AMENDED AND RESTATED EIGHTH AMENDMENT TO

AMENDED AND RESTATED SERIES 1997-1

SUPPLEMENT*

 

This AMENDED

AND RESTATED EIGHTH AMENDMENT TO AMENDED AND RESTATED SERIES 1997-1 SUPPLEMENT,

dated as of May 3, 2002 (this “Eighth Amendment”), is entered into by and among

WLFC FUNDING CORPORATION, as issuer (the “Issuer”) and THE BANK OF NEW YORK, as

indenture trustee (the “Indenture Trustee”). 

Capitalized terms used and not otherwise defined herein are used as

defined in the Supplement (as defined below).

 

WHEREAS, the

parties hereto entered into that certain Amended and Restated

Series 1997-1 Supplement, dated as of February 11, 1999, as amended

by a First Amendment, dated as of May 12, 1999, a Second Amendment, dated

as of February 9, 2000, a Third Amendment, dated as of February 7,

2001, a Fourth Amendment, dated as of May 31, 2001, a Fifth Amendment,

dated as of February 5, 2002, a Sixth Amendment, dated as of March 5,

2002 and a Seventh Amendment, dated as of April 5, 2002 (the

“Supplement”);

 

WHEREAS, the

parties hereto entered into an Eighth Amendment, dated as of May 3, 2002 (the

“Original Eighth Amendment”); and

 

WHEREAS, the

parties hereto desire to amend and restate the Original Eighth Amendment so as

to amend the Supplement in certain respects as provided herein;

 

NOW THEREFORE,

in consideration of the premises and the other mutual covenants contained

herein, the parties hereto agree as follows:

 

SECTION 1.           Amendments.

 

(a)           The following definition is hereby

added in its entirety to Section 1.l of the Supplement:

 

“Amended and Restated Eighth

Amendment Date” shall mean the date on which the Amended and

Restated Eighth Amendment to this Supplement shall become effective.

 

*              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 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.

 

(b)           The definition of “Conversion Date”

in Section 1.1 of the Supplement is hereby amended and restated to read in

its entirety as follows:

 

“Conversion Date” means February 5,

2003; provided, however, that such Conversion Date may be

extended for a period of no longer than 364 days, if approved by all of the

Holders of the Class A Notes.

 

(c)           Clause (A) of the definition of

“Class A Note Principal Payment” in Section 1.1 of the Supplement is

hereby amended and restated to read in its entirety as follows:

 

(A)          (i) If no Early Amortization Event has

occurred or is continuing on such Payment Date, an amount equal to the excess,

if any, of (1) the Class A Note Principal Balance over (2) the

Asset Base; plus

 

(ii) On or after the Conversion Date, if no Early Amortization Event

has occurred or is continuing on such Payment Date, an amount equal to the

excess, if any, of (1) the sum of (A) the product of (i) ninety

percent (90%) and (ii) all Engine Revenues actually received by, or on

behalf of, the Issuer during the related Collection Period with respect to the

Series 1997-1 Engines and (B) the product of (x) a fraction,

expressed as a percentage, the numerator of which shall equal the Class A

Note Principal Balance (prior to giving effect to any payments of principal on

such Payment Date) and the denominator of which shall equal the sum of the Net

Book Values of all Series 1997-1 Engines (calculated as of the last day of the

immediately preceding month) and (y) the greater of (i) the sum of

the Net Book Values of all Series 1997-1 Engines sold during the related

Collection Period (which Net Book Values will be determined as of the last day

of the month immediately preceding such sale), and (ii) the aggregate

Sales Proceeds of all Series 1997-1 Engines sold during the related Collection

Period, over (2)  the amount paid pursuant to

clauses (A) through (G) inclusive, of Section 3.2(I) hereof

minus the amount as calculated pursuant to clause (A)(i) above; or

 

(d)           Clause 16 of the definition of

“Eligible Engine” in Section 1.1 of the Supplement is hereby amended and

restated to read in its entirety as follows:

 

“(16) Non-U.S.

Lessees.  If the Lessee of such

Engine is domiciled or principally located in a non-U.S. jurisdiction,

(a) such Engine shall be owned by and leased from an Owner Trustee (acting

under a Trust Agreement), (b) such Owner Trustee shall have executed and

delivered to the Collateral Custodian a facsimile copy of an Owner Trustee

Guaranty (the original counterpart of which shall be delivered to the

Collateral Custodian within ten Business Days after such execution and

delivery), (c) such Owner Trustee shall have executed and delivered to the

Collateral Custodian a facsimile copy of an Owner Trustee Mortgage covering,

among other things, such Engine and Lease Agreement (the original counterpart

of which shall be delivered to the Collateral Custodian within three (3)

Business Days after the filing thereof with the FAA), and (d) the Issuer

 

2

 

shall have

executed and delivered to the Collateral Custodian a facsimile copy of a

Beneficial Interest Pledge Agreement covering, among other things, the Issuer’s

beneficial interest in the Owner Trust (the original counterpart of which shall

be delivered to the Collateral Custodian within ten Business Days after such

execution and delivery), provided that this clause (16) shall only apply

to Subsequent Lease Transactions.”

 

(e)           The definition of “Final Payment

Date” in Section 1.1 of the Supplement is hereby amended and restated to

read in its entirety as follows:

 

“Final Payment Date” means,

with respect to Series 1997-1 Notes, the date which is the fifth anniversary of

the Conversion Date, or if such date is not a Business Day, the Business Day

immediately succeeding such date.

 

(f)            The definition of “Issuer Fee

Letter” in Section 1.1 of the Supplement is hereby amended and restated to

read in its entirety as follows:

 

“Issuer Fee Letter” means

the Third Amended and Restated Issuer Fee Letter, dated May 3, 2002,

between the Issuer and the Deal Agent.

 

(g)           The definition of “Subsequent Lease

Transactions” in Section 1.1 of the Supplement is hereby amended and

restated to read in its entirety as follows:

 

“Subsequent Lease Transactions”

shall mean those Leases of any Engine, which Leases shall, on or after the

Amendment Date, be added to the Asset Base.

 

(h)           The following definition is hereby

added in its entirety to Section 1.1 of the Supplement:

 

“Collateral Custodian”

shall mean BNY Midwest Trust Company, an Illinois corporation, or any successor

thereto satisfactory to the Deal Agent.

 

(i)            The following definition is hereby

added in its entirety to Section 1.1 of the Supplement:

 

“Collateral Custody Agreement”

shall mean a custodial agreement among the Collateral Custodian, the Issuer,

the Servicer, the Indenture Trustee and the Deal Agent, as amended from time to

time, relating to the transactions contemplated hereby.

 

(j)            The following definition is hereby

added in its entirety to Section 1.1 of the Supplement:

 

“FAA Counsel” shall

mean McAfee & Taft or such other reputable counsel with offices in

Oklahoma City, OK as Issuer and Servicer may from time to time select.

 

3

 

(k)           The following definition is hereby

added in its entirety to Section 1.1 of the Supplement:

 

“Step-Up Program Fee”

shall have the meaning assigned to such term in the Issuer Fee Letter.

 

(l)            The following definition is hereby

added in its entirety to Section 1.1 of the Supplement:

 

“Step-Up Program Fee Rate”

shall have the meaning assigned to such term in the Issuer Fee Letter.

 

(m)          Section 3.2 of the Supplement is

hereby amended and restated to read in its entirety as follows:

 

“Section 3.2  Distributions from Series 1997-1 Series Account on each

Payment Date.

 

On each Payment Date, the Indenture Trustee shall, in accordance with

the Servicer Report, distribute funds then on deposit in the Series 1997-1 Series Account

to the following Persons and in the following order of priority:

 

(I)            If an Early Amortization Event shall

not then be continuing:

 

(A)          To the Indenture

Trustee by wire transfer of immediately available funds, all Indenture

Trustee’s Fees then due and payable for Series 1997-1 to the extent not paid by

the Servicer;

 

(B)           (i)            if the Indenture Trustee has

received the Servicer Report for the related Collection Period, to the Servicer

by wire transfer of immediately available funds, an amount equal to the sum of

any (x) Servicing Fee Arrearage and (y) Servicing Fee then due and

payable and (ii) to the Servicer by wire transfer of immediately available

funds, an amount equal to the Servicer Advance then due and payable;

 

(C)           To the

Administrative Agent, any fees and expenses then payable to the Administrative

Agent approved by the Requisite Global Majority pursuant to

Section 405(b) of the Indenture;

 

(D)          To an Interest Rate

Hedge Provider, any payments owing under an Interest Rate Hedge Agreement other

than termination payments;

 

(E)           To each Holder of a

Class A Note on the immediately preceding Determination Date, an amount

equal to its pro rata portion of

first, any Class A Note Interest Arrearage, and second, the Class A

Note Interest Payment for such Payment Date, excluding in each case any portion

thereof representing the 2.0% margin described in clause (ii) of the

definition of Overdue Rate;

 

4

 

(F)           To the Series 1997-1

Restricted Cash Account, an amount sufficient so that the total amount on

deposit therein is equal to the Series 1997-1 Restricted Cash Amount for such

Payment Date;

 

(G)           (i)            To the Deal Agent an amount equal to

the sum of (x) the Facility Fee and the Program Fee then due and payable

and (y) any unpaid Facility Fee and Program Fee from all prior Payment

Dates and (ii) to the Administrative Agent an amount equal to the sum of

(x) the Administrative Agent Fee then due and payable and (y) any

unpaid Administrative Agent Fee from all prior Payment Dates;

 

(H)          To each Holder of a

Class A Note on the immediately preceding Determination Date, an amount

equal to its pro rata portion of

prepayments on the Notes deposited in the Series 1997-1 Series Account for

the related Collection Period;

 

(I)            To each Holder of a

Class A Note on the immediately preceding Determination Date, an amount

equal to its pro rata portion of

the Class A Note Principal Payment;

 

(J)            To the Deal Agent

an amount equal to the sum of (x) the Step-Up Program Fee then due and

payable and (y) any unpaid Step-Up Program Fee from all prior Payment

Dates;

 

(K)          To each Holder of a

Class A Note on the immediately preceding Determination Date, pro rata, the portion of any Default

Interest then due and payable which represents the 2% margin described in

clause (ii) of the definition of Overdue Rate;

 

(L)           To each Holder of a

Class A Note on the immediately preceding Determination Date, pro rata, an amount equal to Taxes, Other

Taxes, Increased Costs and amounts due pursuant to Sections 2.5, 2.6 and

2.7 hereof, if any, then due and payable with respect to such Class A Note

and any other costs, expenses, taxes and indemnities payable by the Issuer

pursuant to the Class A Note Purchase Agreement;

 

(M)         To an Interest Rate

Hedge Provider any termination payments owing under any Interest Rate Hedge

Agreement;

 

(N)          To the Indenture

Trustee for distribution pursuant to Section 401(d) of the Indenture, as

Excess Cash Available for Distribution, to the extent that any Deficient Series

is Outstanding on such Payment Date; and

 

(O)          To the Issuer by wire

transfer of immediately available funds, any remaining amount on deposit in the

Series 1997-1 Series Account on such Payment Date.

 

5

 

Notwithstanding the foregoing, the amounts set forth in clause (O)

shall be payable only at such times as no Deficient Series then exists.

 

(II)           If an Early Amortization Event shall

then be continuing:

 

(A)          To the Indenture

Trustee by wire transfer of immediately available funds, all Indenture

Trustee’s Fees then due and payable for Series 1997-1 to the extent not paid by

the Servicer;

 

(B)           (i)            If the Indenture Trustee has

received the Servicer Report for the related Collection Period, to the Servicer

by wire transfer of immediately available funds, an amount equal to the sum of

any (x) Servicer Fee Arrearage and (y) Servicer Fee then due and

payable and (ii) to the Servicer by wire transfer of immediately available

funds, an amount equal to the Servicer Advance then due and payable;

 

(C)           To the

Administrative Agent, any fees and expenses then payable to the Administrative

Agent approved by the Requisite Global Majority pursuant to

Section 405(b) of the Indenture;

 

(D)          To an Interest Rate

Hedge Provider, any payments owing under an Interest Rate Hedge Agreement other

than termination payments;

 

(E)           To each Holder of a

Class A Note on the immediately preceding Determination Date, an amount

equal to its pro rata portion of

first, any Class A Note Interest Arrearage and second, the Class A

Note Interest Payment for such Payment Date excluding any portion thereof

representing Default Interest calculated at the Overdue Rate;

 

(F)           (i)            to the Deal Agent, an amount equal

to the sum of (x) the Facility Fee and Program Fee then due and payable

and (y) any unpaid Facility Fee and Program Fee from all prior Payment

Dates and (ii) to the Administrative Agent an amount equal to the sum of

(x) the Administrative Agent Fee then due and payable and (y) any

unpaid Administrative Agent Fee from all prior Payment Dates;

 

(G)           To each Holder of a

Class A Note on the immediately preceding Determination Date, an amount

equal to its pro rata portion of

prepayments on the Notes deposited in the Series 1997-1 Series Account for

the related Collection Period;

 

(H)          To each Holder of a

Class A Note on the immediately preceding Determination Date, an amount

equal to its pro rata portion of

the Class A Note Principal Payment;

 

(I)            To the Deal Agent,

an amount equal to the sum of (x) the Step-Up Program Fee then due and

payable and (y) any unpaid Step-Up

 

6

 

Program Fee

from all prior Payment Dates, including any portion of Default Interest thereon

calculated at the Overdue Rate;

 

(J)            To each Holder of a

Class A Note on the immediately preceding Determination Date, pro rata, an amount equal to Taxes, Other

Taxes, Increased Costs and amounts due pursuant to Sections 2.5, 2.6 and

2.7 hereof, if any, then due and payable with respect to such Class A Note

and any other costs, expenses, taxes and indemnities payable by the Issuer

pursuant to the Class A Note Purchase Agreement;

 

(K)          To an Interest Rate

Hedge Provider any termination payments owing under any Interest Rate Hedge

Agreement;

 

(L)           To the Indenture

Trustee for distribution pursuant to Section 401(d) of the Indenture, as

Excess Cash Available for Distribution, to the extent that any Deficient Series

is Outstanding on such Payment Date; and

 

(M)         To the Issuer by wire

transfer of immediately available funds, any remaining amount on deposit in the

Series 1997-1 Series Account on such Payment Date.

 

Notwithstanding the foregoing, if an Event of Default has occurred and

the Indenture Trustee has sold or otherwise liquidated any

Series Collateral or any other asset of the Issuer, then solely with

respect to funds realized by the Indenture Trustee from such sale or

liquidation, the amounts set forth in clause (K) shall be payable pari

passu with the amounts set forth in clause (I) in proportion to the

amounts due under clauses (K) and (I), respectively.

 

Any amounts payable to a Purchaser shall be made by wire transfer of

immediately available funds to the account that such Noteholder has designated

to the Indenture Trustee in writing on or prior to the Business Day immediately

preceding the Payment Date.”

 

(n)           Section 3.5(b) of the

Supplement is hereby amended and restated to read in its entirety as follows:

 

“(b)         The Issuer shall

maintain (or shall cause the Servicer to maintain) records that will identify

amounts on deposit in the Series 1997-1 Engine Reserve Account to a specific

Eligible Engine.  The Servicer shall be

entitled to withdraw funds from the Series 1997-1 Engine Reserve Account for

the payment of maintenance expenses with respect to the related Eligible Engine,

at the times and subject to the further conditions set forth in the Servicing

Agreement; provided, however, that the Servicer may not make any such

withdrawal in an amount greater than $1,000,000 unless the Deal Agent

determines (or is deemed to determine) that the use of proceeds of such

withdrawal complies with the Maintenance Reserve Withdrawal Conditions (as

defined below).

 

7

 

The Servicer shall give the Indenture Trustee and the Deal Agent prior

written notice of any such requested withdrawal in excess of $1,000,000,

accompanied by supporting documentation showing compliance with the Maintenance

Reserve Withdrawal Conditions.  Such

request shall be accompanied by a notice in the form of Exhibit E to this

Supplement, duly completed (a “Withdrawal Notice”).  The Indenture Trustee shall, upon receipt of

such notice of a requested withdrawal and supporting documentation, transmit

copies thereof by telecopy to the Deal Agent. 

If such notice and documentation are received by the Indenture Trustee

prior to 2:00 p.m. (New York time) on any Business Day, the Indenture

Trustee will telecopy the same to the Deal Agent at (704) 383-7851 on the same

Business Day.  In all other cases the

Indenture Trustee will telecopy such notice and documentation to the Deal Agent

at such telecopy number on the next Business Day following the Indenture

Trustee’s receipt thereof.  If the Deal

Agent determines that such supporting documentation does not show that such

drawing complies with the Maintenance Reserve Withdrawal Conditions or that it

has received insufficient supporting documentation to show such compliance, it

will so indicate by signing the applicable Withdrawal Notice in the space

provided, and sending such signed Withdrawal Notice to the Indenture Trustee

and the Servicer no later than 5:00 p.m. (New York time) on the second

Business Day after the day on which the Deal Agent received such telecopy from

the Indenture Trustee.  Such notice by

the Deal Agent, if given, will be sent to the Indenture Trustee by telecopy at

(212) 328–7623.  If the

Indenture Trustee does not receive such notice by 5:00 p.m. (New York time) on

such second Business Day at such telecopy number, the Deal Agent will be deemed

to have determined that such withdrawal complies with the Maintenance Reserve

Withdrawal Conditions.  If the Indenture

Trustee timely receives such Withdrawal Notice signed by the Deal Agent, it

will not permit the applicable withdrawal from the Series 1997-1 Engine Reserve

Account.  If the Indenture Trustee does

not timely receive such Withdrawal Notice signed by the Deal Agent, it will

permit the applicable withdrawal.

 

The “Maintenance Reserve Withdrawal Conditions” applicable to any

Withdrawal Notice are that

 

(i)            the amount

requested to be withdrawn must be no greater than the aggregate amount of the

invoices for work done on the applicable Eligible Engine, copies of which are

delivered as part of the supporting documentation for such Withdrawal Notice,

and

 

(ii)           the amount

requested to be withdrawn must be no greater than the aggregate amount of all

Maintenance Reserve Payments on deposit in the Series  1997-1 Engine

Reserve Account which were shown as being allocated to the applicable Eligible

Engine in the most recently delivered Servicer Report.

 

Notwithstanding the foregoing, so long as a Servicer Default is then in

effect, the Servicer shall not be entitled to make any such withdrawal

(irrespective

 

8

 

of the amount

thereof) except upon presentation of supporting documentation reasonably

determined by the Deal Agent to comply with the Maintenance Reserve Withdrawal

Conditions and the terms of the applicable Lease Agreement (which shall

evidence its determination by written instrument delivered to the Indenture

Trustee).”

 

(o)           Section 4.6 of the Supplement is

hereby amended and restated to read in its entirety as follows:

 

“Section 4.6          Insurance.  Within 45 days of the Closing Date or the

Transfer Date related to the transfer of any additional Transferred Assets, in

the case of any Transferred Assets received from an Affiliate of the Issuer,

and on or before such Closing Date or Transfer Date, in the case of all other

Transferred Assets, and on the date of the applicable Subsequent Lease

Transaction, the Issuer shall deliver to the Collateral Custodian certificates

evidencing the applicable Lessee’s insurance coverage (in addition to any

insurance coverage required under the Servicing Agreement), which shall be

satisfactory to the Deal Agent, and shall name the Indenture Trustee on behalf

of the Series 1997-1 Noteholders as contract party or additional loss payee, as

the case may be, in the case of casualty insurance, and as additional insured

in the case of liability insurance.”

 

(p)           The following new Section 4.9 is

hereby added to the Supplement:

 

“Section 4.9.  Filing of Leases with FAA.  The Issuer will cause each Lease to be duly

filed with the FAA, together with any Lease assignment which may be necessary

to perfect the Indenture Trustee’s security interest in such Lease, no later

than the Transfer Date of the applicable Engine and, in the case of any Lease

executed and delivered after such Transfer Date, no later than the date of such

execution and delivery, and will deliver, or will cause to be delivered,

evidence of such filing together with any “chattel paper” original of such

Lease to the Collateral Custodian within three Business Days of such filing.”

 

(q)           The first paragraph of

Section 5.2 is hereby amended and restated to read in its entirety as

follows:

 

“Section 5.2 Advances on

Class A Notes.  The

obligation of a Purchaser to make any Loans pursuant to its Class A Note

Commitment under this Supplement and the Class A Note Purchase Agreement

is subject to the following further conditions; provided, however, that the

Deal Agent may waive in writing those conditions set forth in

subdivisions (o), (r), (s), (v) and (w) of this Section 5.2:”

 

(r)            Section 5.2(c) of the

Supplement is hereby amended by deleting the word “Purchasers” and substituting

the words “Collateral Custodian, Deal Agent and VFCC” therefor.

 

(s)           Section 5.2(d) of the

Supplement is hereby amended by deleting the word “Purchasers” and substituting

the words “Collateral Custodian, Deal Agent and VFCC” therefor

 

9

 

and is further amended by

deleting the words “three (3)” and substituting the words “one (1)” therefor.

 

(t)            Section 5.2(f) of the

Supplement is hereby amended by deleting the words “Deal Agent” and substituting

the words “Collateral Custodian” therefor.

 

(u)           Section 5.2(g) of the

Supplement is hereby amended by adding the words “shall have been delivered to

the Collateral Custodian” immediately after the words “Servicing Agreement”.

 

(v)           Section 5.2(h) of the

Supplement is hereby amended and restated to read in its entirety as follows:

 

“(h) Opinions of Counsel. 

The Collateral Custodian shall have received Opinions of Counsel to the

Issuer, other than counsel employed by the Issuer, the Seller or the Servicer,

as to the filing with the FAA of the Indenture Trustee’s security interest in

the Collateral, and the perfection and priority of such security interest with

respect to FAA matters in form and substance satisfactory to the Series 1997-1

Noteholder.”

 

(w)          Section 5.2(i) is hereby

amended by deleting the words “Deal Agent shall have received evidence to its

satisfaction” and substituting the words “Collateral Custodian shall have

received evidence satisfactory to the Deal Agent” therefor.

 

(x)            Section 5.2(j) is hereby

amended by adding the words “Collateral Custodian and the” immediately before

the first instance of the words “Deal Agent” therein.

 

(y)           Section 5.2(k) of the Supplement

is hereby amended and restated to read in its entirety as follows:

 

“(k) Chattel Paper. 

Any original counterpart of each Lease Agreement (other than the one

held by the Lessee or filed with any relevant Governmental Authority) that will

be the subject of a Loan that constitutes “chattel paper” for purposes of the

UCC as in effect in the jurisdiction whose law governs the Lease Agreement has

been delivered in escrow to the Issuer’s FAA Counsel on or prior to the

effectiveness of such Lease Agreement, and shall have been filed with the FAA

on or before the date of such Loan, provided, however, that FAA Counsel shall

deliver such “chattel paper” original counterpart to the Collateral Custodian

within three (3) Business Days after such filing.”

 

(z)            Section 5.2(s) of the

Supplement is hereby amended and restated to read in its entirety as follows:

 

“(s) Concentration of Engines for Wide Body Aircraft.  After giving effect to the transfer of all

Engines which are transferred on any Transfer Date, the sum of the Net Book

Values of all Eligible Engines designed to power Wide Body Aircraft shall not

exceed an amount equal to the product (A) the Wide Body Aircraft

Percentage and (B) the Aggregate Net Book Value.”

 

10

 

(aa)         Section 5.2(y) of the

Supplement is hereby deleted in its entirety and replaced with the word

“Reserved.”

 

(bb)         Section 5.2(aa) of the Supplement

is hereby amended and restated to read in its entirety as follows:

 

“(aa) Owner Trustee Documents.  With respect to each Engine owned by an Owner Trustee, the

Collateral Custodian shall have received from such Owner Trustee within

three (3) Business Days of the transfer of such Engine to such Owner

Trustee (i) a copy of the resolutions of the Board of Directors of the

Owner Trustee, in its individual capacity, certified by the Secretary or an

Assistant Secretary of the Owner Trustee, duly authorizing the execution,

delivery and performance by the Owner Trustee of each of the Related Documents

to which the Owner Trustee is or will be a party; (ii) an incumbency

certificate of Owner Trustee, as to the persons authorized to execute and

deliver the Related Documents to which it is or will be a party and the

signatures of such person or persons; and (iii) a legal opinion of counsel

to the Owner Trustee with respect to the due authorization, execution and

delivery by the Owner Trustee of the Related Documents to which it is or will

be a party.”

 

(cc)         Section 5.2 of the Supplement is

amended to add the following Section (bb) at the end thereof:

 

“(bb) Collateral Custody Agreement.  The Issuer, the Servicer, the Indenture

Trustee and the Deal Agent shall have entered into a Collateral Custody

Agreement in form and substance satisfactory to the Deal Agent with the

Collateral Custodian and, on or before the date of the applicable Loan, the

Collateral Custodian shall have confirmed to the Deal Agent in writing that the

Collateral Custodian has received the documents required by Schedule I

(attached hereto as Exhibit F) of such Collateral Custody Agreement to be

delivered on or before the date of such applicable Loan.”

 

(dd)         The following new Section 5.3 is

hereby added to the Supplement:

 

“5.3        Deliveries.  The Issuer will timely file and deliver each

document which is required to be filed or delivered hereunder or under any

Related Document, or the filing or delivery of which is listed as a condition

to the making of any Loan in Section 5.2 but which is permitted to be

filed or delivered after the date of such Loan, strictly within the time period

set forth herein for such filing or delivery.”

 

(ee)         Section 6.19 of the Supplement is

hereby amended and restated to read in its entirety as follows:

 

“6.19      Subsidiaries.  At all times on or prior to the Effective

Date, the Issuer has had no Subsidiaries other than WLFC Funding (Ireland)

Limited, a corporation organized under the law of the Republic of Ireland.”

 

11

 

(ff)           The Supplement is hereby amended by

adding a new Exhibit F immediately following Exhibit E thereto, which Exhibit F

shall read in its entirety as follows:

 

Exhibit F

 

Funding Deliverables

 

	

  ITEM

  	

   

  	

  RECIPIENTS

  	

   

  	

  DUE DATE

  
	

  Asset Base

  Certificate

  	

   

  	

  Collateral

  Custodian, Deal Agent, VFCC

  	

   

  	

  At least

  1 day prior to the funding of any loan

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Notice of

  Request for a Loan

  	

   

  	

  Collateral

  Custodian, Deal Agent, VFCC

  	

   

  	

  On or prior

  to the funding of any loan

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Compliance

  Certificate

  	

   

  	

  Collateral

  Custodian Deal Agent, VFCC

  	

   

  	

  On or prior

  to the funding of any loans

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Appraisal

  	

   

  	

  Collateral

  Custodian, Deal Agent

  	

   

  	

  On or prior

  to the funding of any loans

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Certified

  Board resolutions of the Owner Trustee

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  On or prior

  to the third Business Day following any transfer

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Incumbency

  certificate of the Owner Trustee

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  On or prior

  to the third Business Day following any transfer

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Legal

  opinion as to execution of Loan Documents by the Owner Trustee

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  On or prior

  to the third Business Day following any transfer

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Any “chattel

  paper” original of each Lease Agreement

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  To be

  provided to FAA Counsel on or prior to any transfer.  FAA Counsel agrees to provide to

  Collateral Custodian within 3 business days

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Owner

  Trustee Guaranty executed by Owner Trustee

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  On or prior

  to any transfer

  

 

12

 

	

  ITEM

  	

   

  	

  RECIPIENTS

  	

   

  	

  DUE DATE

  
	

  Owner

  Trustee Mortgage executed by Owner Trustee

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  To be

  provided to FAA Counsel on or prior to any transfer.  FAA Counsel agrees to provide to

  Collateral Custodian within 3 business days

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Beneficial

  Interest Pledge Agreement, executed by WLFC Funding Corporation

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  On or prior

  to any transfer

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Engine and

  Beneficial Interest Transfer Certificate

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  On or prior

  to the third Business Day following any transfer

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Evidence of

  filing Engine or Beneficial Interest registration with requisite Governmental

  Authority

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Promptly

  upon receipt

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Supplement

  to List of Engines

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  On or prior

  to the third Business Day following any transfer

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  File-stamped

  copies of UCC-1 financing statements naming WLFC as Debtor/Seller; Funding

  Corp. as Secured Party/Purchaser; and BONY as Assignee of Secured Party

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Promptly

  upon receipt

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  File-stamped

  copies of UCC-1 financing statements naming Funding Corp. as Debtor and BONY

  as Secured Party

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Promptly

  upon receipt

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  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

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Promptly

  upon receipt

  

 

13

 

	

  ITEM

  	

   

  	

  RECIPIENTS

  	

   

  	

  DUE DATE

  
	

  File-stamped

  copies of Security filings, if any, required by the Governmental Authority of

  the country of any foreign Lessee’s chief executive office

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Promptly

  upon receipt

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  File-stamped

  copies of UCC-1 financing statements covering any Lease Agreements being

  transferred and naming the lease originator as Debtor; WLFC as Secured Party

  and BONY as Assignee of Secured Party

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Promptly

  upon receipt

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  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

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Promptly

  upon receipt

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Certificates

  of insurance coverage

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Within 45

  days of the Transfer Date for Engines transferred from an Affiliate of

  Issuer; on the date of the applicable Loan for all other transfers and on the

  date of the Subsequent Lease Transaction

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Consent and

  Agreement

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Within 90

  days of the Transfer Date and within 90 days of the date of the Subsequent

  Lease Transaction

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Servicer

  Certificate

  	

   

  	

  Deal Agent

  and Collateral Custodian

  	

   

  	

  On the date

  of the applicable Loan

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Opinions of

  Foreign Local Counsel as to perfection, if necessary (only for foreign

  Lessees not set up with an Owner Trust structure)

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Within

  120 days of Transfer Date

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Opinion of

  FAA Counsel as to filing perfection and priority with respect to the FAA of

  Indenture Trustee’s security interest in the Collateral

  	

   

  	

  Collateral

  Custodian

  	

   

  	

  Within three

  Business Days after the applicable Transfer Date

  

 

14

 

(gg)         The definition of “Single Lessee

Percentage” in Schedule 1 to the Supplement is hereby amended and restated

to read in its entirety as follows:

 

“Single Lessee Percentage”

means * percent (*%); provided, however that with respect to any lessee which

is located in an Emerging Market the Single Lessee Percentage shall mean *

percent (*%).

 

(hh)         The definition of “Three Lessee

Percentage” in Schedule 1 to the Supplement is hereby amended and restated

to read in its entirety as follows:

 

“Three Lessee Percentage”

means * percent (*%).

 

(ii)           Section 3 of Schedule 1 of

the Supplement, entitled “Geographic Concentration Table” is hereby amended and

restated to read in its entirety as follows:

 

“Section 3:  Geographic

Concentration Table”

 

	

  Geographic Region

  	

   

  	

  Maximum Geographic Percentage

  	

   

  
	

  Africa/Middle East/Europe

  	

   

  	

  *

  	

  %

  
	

  Emerging Asia

  	

   

  	

  *

  	

  %

  
	

  China

  	

   

  	

  *

  	

  %

  
	

  Developed Asia/Pacific Rim

  	

   

  	

  *

  	

  %

  
	

  Developed Europe

  	

   

  	

  *

  	

  %

  
	

  North America

  	

   

  	

  *

  	

  %

  
	

  Latin/South America

  	

   

  	

  *

  	

  %

  
	

  Total Emerging Markets

  	

   

  	

  *

  	

  %

  

 

(jj)           Exhibit B to the Supplement is hereby

replaced in its entirety by Exhibit B to this Eighth Amendment.

 

(kk)         Exhibit D to the Supplement is hereby

replaced in its entirety with Exhibit D to this Eighth Amendment.

 

*              The redacted material on this

Schedule has been omitted pursuant to a request for confidential treatment and

the material has been filed separately

 

15

 

(ll)           Exhibit E to this Eighth Amendment is

hereby added in its entirety to the Supplement as Exhibit E to the Supplement.

 

SECTION 2.           Supplement in Full Force and

Effect as Amended.  Except as

specifically amended hereby, the Supplement shall remain in full force and

effect.  All references to the

Supplement shall be deemed to mean the Supplement as modified hereby.  This Eighth Amendment shall not constitute a

novation of the Supplement, but shall constitute an amendment thereof.  The parties hereto agree to be bound by the

terms and conditions of the Supplement, as amended by this Eighth Amendment, as

though such terms and conditions were set forth herein.

 

SECTION 3.           Effectiveness of Eighth Amendment.  This Eighth Amendment shall become effective

on the date (the “Amended and Restated Eighth Amendment Date”) as of which all

the parties hereto have executed the signature pages hereto.

 

 

SECTION 4.           Miscellaneous.

 

(a)           This Eighth Amendment may be executed

in any number of counterparts, and by the different parties hereto on the same

or separate counterparts, each of which shall be deemed to be an original

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

agreement.

 

(b)           The descriptive headings of the

various sections of this Eighth Amendment are inserted for convenience of

reference only and shall not be deemed to affect the meaning or construction of

any of the provisions hereof.

 

(c)           This Eighth Amendment may not be

amended or otherwise modified except as provided in the Supplement.

 

(d)           THIS

EIGHTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS

EIGHTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN

ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS

CONFLICT OF LAWS PROVISIONS.

 

(e)           First Union Securities, Inc.

certifies by acknowledgment hereof that it is the sole Noteholder.

 

[Remainder of Page Intentionally Left Blank]

 

16

 

IN WITNESS WHEREOF,

the parties have caused this Amended and Restated Eighth Amendment to the

Amended and Restated Series 1997-1 Supplement to be executed by their

respective officers thereunto duly authorized, as of the date first

above-written.

 

	

   

  	

  WLFC FUNDING

  CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ DONALD

  A. NUNEMAKER

  
	

   

  	

  Name:

  	

  Donald A. Nunemaker

  	

   

  
	

   

  	

  Title:

  	

  Executive Vice President

  Chief Operating Officer

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  THE BANK OF

  NEW YORK, as Indenture Trustee

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ SCOTT J.

  TEPPER

  
	

   

  	

  Name:

  	

  Scott J. Tepper

  	

   

  
	

   

  	

  Title:

  	

  Assistant Vice President

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  THE BANK OF

  NEW YORK, as Securities Intermediary

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ SCOTT J.

  TEPPER

  
	

   

  	

  Name:

  	

  Scott J. Tepper

  	

   

  
	

   

  	

  Title:

  	

  Assistant Vice President

  	

   

  
												

 

	

  Consented

  and agreed to:

  
	

   

  	

   

  	

   

  
	

  FIRST UNION

  SECURITIES, INC.,

  
	

   

  	

  as the sole

  Noteholder on

  
	

   

  	

  behalf of

  the Purchasers

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ DANIEL

  MILLER

  	

   

  
	

  Name:

  	

  Daniel Miller

  	

   

  
	

  Title:

  	

  Director

  	

   

  
								

 

1

 

	

  Consented

  and agreed to:

  
	

   

  	

   

  	

   

  
	

  FORTIS BANK

  [NEDERLAND] N.V.,

  
	

   

  	

  as Control

  Party

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ M.P.A.

  ZONDAG 

  	

   

  
	

  Name:

  	

  M.P.A.

  Zondag

  
	

  Title:

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ P.R.G.

  ZAMAN

  	

   

  
	

  Name:

  	

  P.R.G. Zaman

  
	

  Title:

  	

   

  
												

 

2

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